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<p>Bookkeeping adjustments arise when an asset balance or transaction in the accounts
is written off because there is no definitive evidence that confirms or denies the
existence of the asset or supports the transaction, e.g. writing off asset balances
which cannot be linked to physical assets, or balances that should have been cleared
on project completion. The accounting adjustments detailed in the Department's Annual
Report and Accounts needed to be made because the audit trails did not provide the
required standard of certainty over the value of the asset balances or transactions
involved. There was no evidence of fraud, theft or payments made in error.</p><p>Of
the £25.622 million reported as Bookkeeping Adjustments, the majority (£24.441 million)
relates to just four cases. There are ongoing initiatives to improve the quality and
accuracy of the information reported in our Annual Report and Accounts. A Statement
of Financial Position Group has been established to enforce a more rigid approach
to the management of asset balances across the Department. As a result, we are introducing
more regular review of asset balances and account reconciliations. The National Audit
Office review the accounting treatment of procurement projects and account reconciliations
as part of the financial audit of the Annual Report and Accounts and any errors are
reported in the Departmental Management Letter. A formal process exists to monitor
resolution of these errors and lessons are incorporated into Departmental Policy.</p>
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