WIREDGOV

Amyas Morse, Comptroller and Auditor General, has once again been unable to give a full sign off to the Client Funds Account of the Child Maintenance and Enforcement Commission.

While the 2010-11 accounts properly present the amounts received and paid, he has qualified his opinions on the regularity of receipts and payments because of the level of error in maintenance assessments. He has also given adverse opinions on the truth and fairness of the outstanding maintenance arrears (reported in note 6 to the account). Today’s report recognises, however, that significant improvements have been made by the Commission to the information available on child maintenance arrears.

The accounts have been qualified in terms of regularity because of the errors made in the calculations of maintenance assessments. Some payments have been based on incorrect assessments and some have been paid at the wrong rate. The best estimates for irregular receipts and payments for 2010-11 are £10.2 million overpayments and £13.9 million underpayments.

The C&AG has also given adverse opinions on the truth and fairness of note 6 to the account, the outstanding child maintenance arrears, which the Commission reports to be £3.748 billion at 31 March 2011. These figures do not give a true and fair view because of the level of error in the underlying case data. The best available estimates of the cumulative errors indicate that the reported arrears at 31 March 2011 contained overstatements of £219 million and understatements of £316 million.

Since the Commission took over responsibility for the statutory child maintenance schemes in November 2008, it has made significant improvements to the information available on child maintenance arrears. Errors in the underlying case data, which were previously unknown, have therefore now been made visible. The C&AG is obliged therefore to give an adverse opinion on the reported arrears. The opinions on arrears do not reflect a deterioration in the accuracy of data; rather increased transparency of errors that have accumulated since the inception of the statutory child maintenance schemes.

The Commission estimates that £0.54 billion (14 per cent of the total) of the outstanding balance is likely to be collectable. However, given the level of error in the underlying arrears data, there is significant uncertainty surrounding the accuracy of the estimated collectable amount.

Amyas Morse, head of the National Audit Office, said today:

“Since the statutory child maintenance schemes were introduced, there have been problems with the accurate calculation of maintenance and with the two underlying IT systems, neither of which was capable of properly reporting arrears. The Commission inherited these problems from the Child Support Agency.”

“Accuracy of maintenance assessments continues to be a challenge. The Commission is continuing to improve the accounting information available, so that the historic problems affecting the accuracy of arrears data are more visible. Nevertheless, the Commission still has a significant challenge in collecting the arrears that have accumulated since the beginning of the maintenance schemes.”

Notes for Editors

1.    The Child Maintenance and Enforcement Commission was established on 24 July 2008 under the Child Maintenance and Other Payments Act 2008 and is a crown non-departmental public body, sponsored by the Department for Work and Pensions. The Commission is expected to be abolished during 2012 following royal assent of the Public Bodies Act in December 2011 and its functions will transfer to the Department for Work and Pensions.

2.    A qualified regularity opinion is an opinion that transactions have been made which are not as prescribed by Parliament.

An adverse opinion of a set of accounts, or a part of a set of accounts, is an opinion that a true and fair view has not been given.

3.    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.

4.    The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 880 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.