Press Release
Report of the comptroller and auditor general: Serious Fraud Office 2011/12 accounts
1 November 2012
Amyas Morse, Comptroller and Auditor General, has qualified his audit opinion on the 2011-12 accounts of the Serious Fraud Office in respect of the voluntary redundancy costs for the former Chief Executive Officer.
The Chief Executive Officer (CEO) of the SFO, Phillippa Williamson, left the organization on 16 April 2012. However, there is no evidence that due process was followed in instigating this voluntary redundancy (for example, determining whether alternative positions within the Civil Service were sought).
The CEO's severance agreement provided for payment of £407,000 to MyCSP (who administer the Principal Civil Service Pension Scheme for the UK Government) to cover all additional pension costs arising from the early departure. The SFO should have gained approval from the Cabinet Office for this payment, but there is no evidence that the approval was obtained and therefore the NAO has deemed the payment irregular.
In addition, a special severance payment of £15,000 was made. Departments are required to gain Treasury approval in advance of making payments which are in excess of contractual amounts. There is no evidence that approval was sought and therefore this payment is also deemed to be irregular.
The new SFO Director, David Green, assumed office on 21 April 2012, and was therefore not party to the severance arrangements. He has decided against seeking retrospective approval for the transactions because he believes they were inappropriate. On becoming aware of the issue, the Director sought legal advice which confirmed that the agreement was legally binding and the SFO was legally obliged to make the payments. He commissioned an independent review into the matter with the results being shared with the Attorney General's Office and has taken steps to ensure that all future exit packages are appropriately reviewed.
Amyas Morse, head of the National Audit Office, said today:
"By failing to seek approval from the Cabinet Office and the Treasury, the Serious Fraud Office entered into an agreement which forced it to make irregular payments. While positive steps have been taken by the incoming Director, I have qualified the organisation's accounts."
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