Original URL: http://www.theregister.co.uk/2009/07/21/mod_audit_fail/

Auditors slam MoD over failure to keep track of radios

NAO subject stock and payroll systems to unfriendly fire

By John Leyden

Posted in Government, 21st July 2009 12:00 GMT

Government auditors have accused military planners of running wasteful and inefficient systems that have cost taxpayers millions.

A report from the National Audit Office said the Ministry of Defence was unable to account for £155m earmarked for a radio communications system for British troop in Afghanistan.

MoD officials told the BBC that although records might be deficient, it didn't mean that secure Bowman radios were missing and hadn't reached troops in Afghanistan. One explanation is that many radios were not counted because they are being repaired.

The NAO said electronic tallies maintained by the Defence Storage and Distribution Agency, which controls the majority of supplies, failed to match up with physical stocks.

"This is an asset tracking issue and does not mean equipment is missing," an MoD spokesman told the BBC. "Since December 2008, auditing has shown visibility of 90 per cent of Bowman equipment but we continue to work to improve this."

The NAO criticism of MoD administrators is damaging at a time when the deaths of British servicemen in Afghanistan are rising.

The MoD's inefficient payroll system, which auditors warned was potentially open to fraud, also came under fire. The Joint Personnel Administration system was littered with inaccuracies, with nearly 15 per cent of salary and allowance payments either containing errors or remaining unverified. This has resulted in a net error of £140 million in the MoD's accounts.

The NAO described the payroll systems as "unfit for its purpose" of paying wages and allowances to 191,000 service personnel. In addition, the NAO criticised inadequate checks in procedures used to pay out expenses claims to military personnel, a potential source of fraud.

Amyas Morse, head of the National Audit Office, said the MoD had to improve its physical records and payroll system to properly fulfil its mission.

"At this time of high operational demand, it is more important than ever for the Ministry of Defence to have accurate records of where its assets are, and how much stock it has," Morse said. "It must also have a military pay process which is fit for purpose. Although the Ministry of Defence has made some improvements to its Payroll and HR systems over the past year, I consider that there are important issues which have not been fully addressed and further significant changes are required," he added.

Links to the National Audit Office reports on the MoD, published on Monday, can be found here. ®