1.20 In 1997, the Committee of Public Accounts took evidence from National Savings on weaknesses in financial accounting systems for Ordinary and Investment deposits. The Committee concluded that National Savings had failed to apply basic accounting controls and there was a risk that fraud had been a factor in the discrepancies identified. In February 1999, the Committee took further evidence on progress made in resolving the weaknesses and the implications of the planned contracting out of the operational service. The Committee concluded that National Savings had made significant progress but must continue to enhance the financial and business skills of staff at the core of its organisation and meet a revised target for the production of audited accounts across all of its activities from 1998-99 onwards.
1.21 SBS now has a qualified financial controller in place at each site, one of whom is responsible for ensuring proper controls are exercised over transaction accounting across all three sites. In addition, National Savings has strengthened its own Finance Directorate with three qualified accountants now responsible for quality assuring SBS transaction accounting processes. This team can also call upon additional resources under an internal audit contract with Deloitte & Touche.
1.22 Audited product accounts have been produced for 1998-99 for the first time ever. National Savings' management are accountable for the accuracy and timeliness of the accounts. Draft accounts are prepared by SBS from data held on their systems to a specification set by National Savings. The specification requires compliance with National Savings transaction accounting requirements and generally accepted accounting procedures, as applicable in the public sector. National Savings exercise quality control over the preparation of the drafts and produce the final accounts for audit.