The Department of Finance and Personnel (DFP) is addressing this issue, including the establishment of a new, cross-departmental accruals-based finance system. However, as implementation of the new system is unlikely to begin until 2006, there is a significant risk that Northern Ireland departments will fail to meet the deadline for the government's important 'faster closing' and Whole of Government Accounts programmes which are aimed at increasing the usefulness of accounts.[1] The DFP needs to do more to adhere to the government's timetable for these programmes. It also needs to exercise rigorous quality control over departments' resource accounts.

Of particular concern is the Department for Social Development (DSD) where little effective progress was made between 2001-02 and 2002-03 in addressing the causes of its severe audit qualification with levels of fraud and error rising to £120.9 million. Despite a small reduction in fraud and error levels in the 2003-04 accounts, similar problems have persisted in 2003-04. The Department needs to take effective action to stem further unacceptable losses.

Our inquiry has highlighted serious problems with the Child Support Agency's CS2 computer system which are impeding fully effective benefit administration. The government admits that these problems are "unacceptable",[2] but we detected little evidence of a strong remedial plan. Our report seeks reassurance from the government that firm action will be taken to address these problems.

Overall, we are disappointed at the apparent lack of leadership historically exercised by Department of Finance and Personnel; and that a pattern of serious failings persists each year at the Department for Social Development. These problems represent a systemic failure of sound administration. Strong action needs to be taken by the government to improve operational efficiency of the Northern Ireland departments' resource accounting. We shall return to this subject in due course, and shall expect to see significant improvements.