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16 July 2012
Amyas Morse, the Comptroller and Auditor General has qualified his audit opinion on the 2011-12 financial statements of the Young People's Learning Agency. The Agency is an executive non-departmental public body whose accounts are consolidated within the accounts of its sponsor department, the Department for Education. As a result, the Department has also had its accounts qualified.
The Agency is responsible for the funding and support of academies, which includes making grant payments and exercising oversight of the sector on behalf of the Department for Education. The Agency's Accounting Officer is responsible for ensuring grant funding is spent properly and can be held accountable to Parliament.
HM Treasury has determined that academies fall within its spending regulations which require certain types of payments to be approved in advance. The Agency identified 14 cases, mainly from inspection visits, at nine academies, where the academies had made extra-contractual severance payments, which should have been approved in advance by the Treasury. The payments had an aggregate value of £227,000. Although the Treasury provided retrospective approval for these cases, it is unclear how many other special payments were made by academies this year. The assurance framework the Agency had in place for the 2011-12 financial year was not capable of identifying and managing all cases, and so the Agency was unable to fulfill its responsibilities to gain appropriate HM Treasury approval.
The audit opinion on the 2011-12 accounts of the Department for Education has also been qualified because the Department breached an annual spending limit set by Parliament by £63 million.
Amyas Morse, head of the National Audit Office, said today:
“I have qualified my audit opinion on the accounts of the Young People's Learning Agency because the assurance framework was not designed to detect and manage all cases of spending which required approval under Treasury rules.
“For this reason, and for breaching spending limits set down by Parliament, I have also qualified my audit opinion on the accounts of the Department for Education.”