Fresh attack on MoD finances

The MoD said Kosovo was partly to blame for the overspend

The Ministry of Defence is being strongly criticised by MPs for overspending its approved budget by £37.1m in 1998-1999.

Taxpayers have a right to expect much better stewardship of their money

MP David Davis

The main areas of waste, according to the cross-party Commons Public Accounts Committee, was money spent on defective or unnecessary computer systems, fraud by staff and poor financial management and forecasting.

MPs said the ministry had overspent its budget every year for the last four years.

The MoD defended its record, saying it was compelled to spend more money than expected because of costs incurred while preparing for the war in Kosovo.

The report comes less than two weeks after the committee condemned the MoD's purchasing record which it said was "abysmal" and had cost the taxpayer billions of pounds.

'Serious doubts'

David Davis, Conservative MP and chairman of the committee, said: "This report raises serious doubts about financial management at the MoD.

"Their ill-considered attempts to develop bespoke IT systems and their inadequate systems of control have led directly to significant losses to public funds.

MPs identify waste

£21m on Common User Data System

£8.7m on failed naval pay and pension system

£477,734 embezzled by one employee

"Taxpayers have a right to expect much better stewardship of their money."

The report found that nearly £30m had been wasted on failed computer systems alone.

In one instance of fraud a single individual working in the Army's pension office in Glasgow managed to embezzle £477,734 before being detected and jailed.

MPs warned the MoD that it must improve its record: "The Department must exercise much more rigorous financial control in future and comply fully with Parliamentary and Treasury authorities."

'Overspend an underspend'

In a statement the MoD said that difficulties with some of its budget headings had led to the £37.1m overspend but it argued that when the balance of other headings was taken into account the overall result was in fact an underspend.

"The overspend on two MoD accounts was caused by a small number of receipts coming in a few weeks late after the end of the financial year, coupled with some unforeseen expenditure on Kosovo.

"It's also important to point out that the department underspent its overall cash limit that year by £73.9m," the statement said.