Scathing audit opinion on Department for the Economy

A public spending watchdog has issued a scathing opinion on the annual accounts of Stormont's Department for the Economy.

The Auditor General said that had the department been a private sector organisation it would have withdrawn from the audit.

It has instead taken the extremely rare step of issuing what is known as a "disclaimed opinion".

That means it was unable to obtain sufficient evidence to support the information in the department's financial statements.

A Department for the Economy spokesperson said the department had implemented several improvements in the preparation of the 2023-24 accounts.

They said that these highlighted a number of prior year errors which contributed significantly to the delay and to the disclaimed opinion.

They added that further improvements have already been made in preparation for the 2024-25 accounts.

This includes increasing the capacity and capability of the finance team; increasing support and communications with component bodies and maximising the use of IT solutions.

The Auditor General's opinion follows what was described as "an audit requiring very significant time and resource" which started in July 2024.

It was due to be completed in October 2024 but was only completed this month.

Issues leading to the disclaimed opinion include:

• Insufficient accounting records and explanations being provided for 19 corrections to previously published accounts concerning spending of £137m
• A potential £10m error in the department's statement of comprehensive net expenditure.
• Insufficient information being available to assess if the financial model used by the department provides a suitable basis for the estimated value of outstanding student loans

The Auditor General said that had the accounts not been disclaimed they would have been "qualified" due to irregular expenditure.

Her report also describes the complexity of the department from an accounting perspective: it has 18 component bodies in addition to the core Department itself.

These components include the six Further Education Colleges, Invest Northern Ireland, Stranmillis College and two north/south bodies.

Ten of the 18 components and the Department do not share the same financial year end.

The report also notes particular challenges in the Department's work with the Northern Regional College.

These include the quality of information provided and the speed at which it arrived.

The Auditor General Dorinnia Carville said: "This report acknowledges that the Department continues its work to make improvements to its processes to produce group financial statements.

"The complexity of this Departmental group makes the production of group financial statements particularly challenging.

"That said, the production of timely financial statements for the assembly is a fundamental part of ensuring transparency and accountability in how public money is being spent.

"It is vital that the Department and its arms-length bodies continue to put considerable effort into resolving these matters."