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• Full report - Financial Management in the Home Office

The Home Office has made substantial improvements in its financial management since 2006, when the Comptroller and Auditor General disclaimed an opinion on its 2004-05 Resource Accounts. Further sustained improvement will still be needed over the next few years, so that good financial management becomes “business as usual” across all of the Department’s operations, which will help the Department maximise the value for money of its service delivery.

The Department has increased the number of professionally qualified finance staff, particularly in senior finance roles, and has improved financial governance and leadership. Improvements are also evident in the Department’s financial planning and decision making; budgeting; financial monitoring and forecasting; and financial reporting. The unqualified audit opinion on its 2007-08 Resource Accounts was an important symbol of the progress made.

There are areas for further improvement. The strategic management of the Department’s capital programme has not been responsive enough to avoid large underspends, which amounted to £725 million over the 5 years to 31 March 2008. The Treasury has capped access to these funds at £292 million and the Department will need to deliver on the plans it has in place to use them by 2010-11. The Department also needs to develop further its understanding of the cost of its activities and the relationship between resource consumption and service outcomes. The Department recognises these issues and has been undertaking work with the aim of improving capital programme management and the basis on which decisions are made for funding allocations.

Tim Burr, head of the National Audit Office, said today:

"The Home Office has made considerable progress in strengthening its financial management which, after the problems experienced in recent years, was much needed. It still needs to establish clearer links between the use of resources and service delivery outcomes. Similarly, the Home Office has to improve individual project oversight and management of its broader capital programme so that it can identify funds which are no longer needed, then release them to be deployed elsewhere."

Notes for Editors: 

1. This report is the second in a series of reports from the NAO on financial management.  The first report, on financial management in the Department for Children, Schools and Families, was published in April this year.  Over the next few years the NAO are planning a cycle of reports on financial management in all major departments.
2. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk.  Hard copies can be obtained from The Stationery Office on 0845 702 3474.
3. The Comptroller and Auditor General, Tim Burr, is the head of the National Audit Office which employs some 850 staff.  He and the NAO are totally independent of Government.  He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.