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Child Maintenance Client Funds Account 2017-2018

Amyas Morse, Comptroller and Auditor General (C&AG), has qualified his audit opinions on the Client Funds Accounts prepared by the Department for Work and Pensions for the 1993 and 2003 Child Maintenance Schemes on the grounds of material levels of irregular receipts and payments and misstated arrears balances. However he has again given a clean audit opinion on the 2012 Child Maintenance Scheme Account as the Department has continued to improve the accuracy of these child maintenance assessments.

The Department is closing the 1993 and 2003 Child Maintenance Schemes, supporting parents to set up family-based maintenance arrangements or apply to the 2012 Scheme. The C&AG has once again qualified his opinions on the 1993 and 2003 Scheme Account. He has estimated irregular receipts and payments of £3.7 million, or 2.11% of total receipts. The C&AG also estimates that the £3.5 billion arrears balance reported in the Account relating to unpaid maintenance is understated by at least £100.4 million (2.86% of the total arrears balance), largely due to errors in underlying assessment calculations that are compounded when the cases are managed outside of the IT systems. As cases close, the Department will try to recover unpaid maintenance but it is not taking action to ensure that arrears are accurately calculated.

From December 2018, new legislation will allow the Department to write off unpaid 1993 and 2003 Schemes maintenance that is not value for money to collect, or where it cannot trace the parent. The C&AG has noted the importance of monitoring the notification collection and write off procedures to understand and minimise the impact on parents.

The C&AG also notes that he considers it likely that he will qualify his opinions on the 1993 and 2003 Schemes account again next year, as case closure will not address the historic and current inaccurate assessments underlying the receipts, payments and arrears balances reported in the 1993 and 2003 Schemes account.

This is the second year in which the 2012 Scheme Account has received an unmodified opinion from the C&AG. The Department expects accuracy to improve further as it increases the proportion of these child maintenance assessment calculations that are automated; around 840,000 automatic calculations were made during 2017-18. However unpaid maintenance on the 2012 Scheme cases has increased by £84.1 million since last year to £197.9 million; the C&AG notes that the Department should take action to ensure that arrears on the 2012 Scheme do not suffer the same problems as those on the 1993 and 2003 Schemes.

Notes for Editors

The Department is closing its 1993 and 2003 ‘Child Support Agency’ child maintenance schemes. The 1993 and 2003 schemes struggled with IT problems leading to poor customer service, backlogs and incomplete information about amounts due. The 2012 Child Maintenance Scheme administered by the Department’s Child Maintenance Service was introduced to resolve these problems and encourage private arrangements. Since November 2013 all new applications have been to the 2012 scheme. The Department began to tell parents in 2014 that their 1993 and 2003 Scheme cases would close and that they would have to apply to the new 2012 Scheme, or make their own family-based arrangements. The Department has reported that as of October 2018, only 660 cases remained to be closed by the end of 2018. 

Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.

The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £741 million in 2017.

Contact

NAO Press Office 
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

 

Channel website: https://www.nao.org.uk/

Original article link: https://www.nao.org.uk/press-release/child-maintenance-client-funds-account-2017-2018/

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