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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.
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.