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Full report: Social Fund White Paper Account 2012-13

The Social Fund White Paper Account records payments made to customers in accordance with Directions issued by the Secretary of State for Work and Pensions.

Regularity

Each year since 2010-11, the Comptroller and Auditor General (C&AG), Amyas Morse, has found a clear and sustained reduction in the level of error in Social Fund payments. With a further reduction in errors in 2012-13, he has concluded that the level of error is now no longer material to the Account and that the Department for Work and Pensions has made Social Fund payments materially in accordance with Parliament’s intentions.

In consequence, he has decided not to qualify his opinion on regularity for the account.

The Department now needs to maintain and, if possible, improve further the reduction of the error rate. It needs to take care that the Social Fund reforms from 2013-14 do not disrupt this.

Debt

However, the Department still faces a number of significant challenges in relation to debt balances.

In previous years, the C&AG has reported on the Department’s difficulties in reconciling the debt balance recorded on its accounting system with supporting customer records. While the Department has made good progress in addressing these issues in 2012-13, it is still unable to provide adequate assurance that the debt balance disclosed in the 2012-13 account is complete or that debts recorded actually exist or are appropriately valued.

As a result, the C&AG has limited the scope of his audit opinion over the Social Fund debt balances. He will continue to monitor progress on the debt issues and will provide an update in his report on the 2013-14 Social Fund White Paper account.

Notes for Editors

1.           The Department for Work and Pensions is responsible for controlling and managing the Social Fund under the Social Security Administration Act 1992. The Social Fund White Paper Account records payments made to customers in accordance with Directions issued by the Secretary of State for Work and Pensions under the Social Security Contributions and Benefits Act 1992.  These payments can be split into Discretionary Awards and Regulated Awards.

2.            Regularity

In 2012-13, the Social Fund made payments of some £3,067 million including Budgeting Loans, Crisis Loans and Community Care Grants. The National Audit Office identified an estimated £20.9 million of payments which were not made in accordance with Parliament’s intentions. This represents 0.68 per cent of total payments made (2011-12: £45.63 million, 1.47 per cent).

3.            Debt

As at 31 March 2013, there is a gross difference of £23.15m (31 March 2012: £36.28m) between the accounting system and the supporting debt administration systems. There are, however, opposing movements in the underlying loan types (Budgeting Loans, Crisis Loans and Funeral Expenses Payments), which means that in net terms, the difference is reduced to £1.55m (31 March 2012: £17.08m).

4.            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.

5.            The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 867 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of almost £1.2 billion in 2012.