Sir John, the Comptroller and Auditor General and head of the National Audit Office, criticised it for accepting incorrect local authority returns of business-rate collections. The department's failure to follow up 36 returns that had been qualified by local authority auditors led directly to a shortfall of receipts to the 1991-92 non-domestic rate account. Sir John qualified the account in a report yesterday because of uncertainty over the completeness of receipts and because it contained a 'material amount of possible misstatement'.
He said a National Audit Office investigation had found the department had been slow to recognise the significance of the auditors' qualifications or the scale of the problem. As a result, the first 36 of 123 qualified returns were settled without question. Sir John said this failure was a 'serious shortcoming in financial control'.
The mistakes led to potential underpayments by councils totalling pounds 22.5m and overpayments by the department of pounds 13.2m in distribution of pooled contributions to local authorities.Reuse content