Agency criticised for financial weakness

Chris Blackhurst@c_blackhurst
Wednesday 04 May 1994 23:02

ANOTHER branch of government, the National Insurance contributions agency based at Newcastle upon Tyne, has been accused of weak financial management and systems in a report published today, writes Chris Blackhurst.

The National Audit Office, the public finance watchdog, has refused to sign-off the accounts of the agency which collects over pounds 33bn annually in NI contributions. The Commons Public Accounts Committee has set aside a session in two weeks to look into the findings.

Sir John Bourn, the Comptroller and Auditor General, who heads the NAO, said he was unable to say whether the agency's accounts are 'free from material uncertainty'.

Inspectors had carried out 118,000 visits to employers last year and uncovered pounds 89m in underpayments. In their checks, Inland Revenue staff had unearthed a further pounds 48m outstanding. However, officials were unable to put a value on some nine million errors revealed by the agency's computer. Half the errors were simple but two million have been referred for investigation.

Since 1991, employers have been liable for National Insurance on company cars. Contributions are based on the cash equivalent of the car and petrol benefit.

But, points out the NAO, the only way the agency can discover if firms are complying is by visiting their premises. And of 10,000 company car audits carried out by inspectors only 30 to 40 per cent of the businesses were making the correct contributions.

Checks of employers' sick pay and maternity arrangements - covering 30,000 inquiries to the Newcastle headquarters - have also revealed errors in 25 to 30 per cent of cases, the NAO says.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

View comments