13.1 |
Resources
686.
The HCDC
welcomed the MOD’s decision to provide earlier estimates of
NACMO,
but
maintained its view that the MOD should include the cost of
commenced operations
in its Main
Estimates at the beginning of the financial year.
687.
The Inquiry is
aware of two interventions by the PAC/NAO in relation
to
expenditure
in Iraq.
688.
The FCO’s
Financial Compliance Unit (FCU) visited Baghdad in April/May 2005
to
review the
Embassy’s financial controls.429
The FCU
found no evidence of fraud, but did
identify
write‑offs totalling approximately £13,000 relating to mobile phone
bills, where
either the
phone had been lost and subsequently used or the individual user
could
not now be
identified. In addition, Iraqi staff had incurred charges totalling
more than
£24,000 on
personal calls from mobile phones. The FCU concluded that was
unlikely to
be
recoverable, and should be paid for by the Embassy.
689.
The FCO’s
phone service provider alerted the FCO at the end of June 2005
that
they had
concerns over the level of activity logged against one FCO
satellite phone.430
As a
precaution, the service provider had barred the phone on 24 June.
The FCO
switched
off all its active satellite phones in Iraq on 15 July, and
terminated the
associated
line rental agreements.
690.
Sir Michael
Jay reported to the PAC on 15 February 2006 that the FCU
was
investigating
a loss of £594,000 as a result of two satellite phones being stolen
or
misappropriated.431
Sir Michael
outlined some of the weaknesses in FCO systems that
had already
been identified, highlighting the failure of officials in London to
challenge the
bills which
they received, and some of the improvements which had already been
made.
691.
At the request
of the PAC, the NAO reported to it in July 2006 on the
outcome
of the
FCU’s investigation (in the context of the NAO’s report on the
FCO’s 2005/06
Resource
Accounts).432
The FCU had
found that the IPU had ordered 10 satellite phones
in
September 2003 for use in Iraq. The phones had been made ready for
use before
being
dispatched. Weaknesses in the controls over the physical location,
storage, billing
and payment
for the phones had led to the loss of two of the phones (together
with
another
that had been rented previously) remaining undetected until June
2005. Despite
extensive
enquiries the FCU had not been able to establish who was
responsible for the
theft and
subsequent misuse of the phones. The FCU had calculated the full
extent of
the loss at
£594,370; the bill for one phone for June 2005 had been over
£212,000.
429
Minute
Major to Chaplin, 5 May 2005, ‘Financial Compliance Unit (FCU)
Visit to Baghdad: 19 April –
5 May’.
430
Comptroller
and Auditor General, Theft and
Misuse of Satellite Phones in Iraq, 18 July
2006.
431
Public
Accounts Committee, Session 2005‑2006, Foreign and
Commonwealth Office Resource
Accounts
2004‑05, 15 February
2006. Uncorrected transcript of Oral Evidence given by
Sir Michael Jay
KCMG,
Mr Dickie Stagg CMG and Mr Ric Todd.
432
Comptroller
and Auditor General, Theft and
misuse of satellite phones in Iraq, 18 July
2006.
559