Auditors refuse to sign off MoD accountes

National Audit Office says 'systemic' problems mean defence ministry is unable to account for £6bn of equipment

The National Audit Office today refused to sign off the Ministry of Defence's annual accounts, for the fourth year in a row.

The spending watchdog said the MoD was unable to account properly for more than £6bn of equipment. The head of the audit office, Amyas Morse, said that despite efforts by the MoD to tackle the issue, there remained "systemic and deep-rooted" problems with its asset management system.

He said it had emerged that the problems were more extensive than previously thought as the work done to track down the equipment brought fresh difficulties to light.

The NAO found the MoD was unable to account for the whereabouts of £5.5bn of spares and other stocks, and £752m of military equipment, including firearms and 5,961 Bowman radios worth £184m.

"Despite action by the department to improve its asset management and accounting, the issues I have identified are systemic and deep-rooted," Mr Morse said. "The level of control exercised by the department is not yet sufficient to enable me to provide an opinion on a significant proportion of assets reported in the financial statements."

The MoD said that the issues raised by the NAO had no impact on the provision of essential equipment to frontline troops. "The National Audit Office has recognised that the MoD has improved procedures for inventory management and, by the end of March this year, had completed a full reconciliation of Bowman radios," a spokesman said. "We are continuing to work hard to improve our inventory management and ensure our accounting systems become compliant with financial reporting standards, but recognise that both issues will take time to be rectified."