Computer systems blamed for accounting problems at MoD

Billions of pounds worth of arms and equipment not correctly recorded on systems led to accounts being qualified

Army kit is "missing" on IT systems

Fault-ridden computerised recording systems at the Ministry of Defence (MoD) have been blamed for “losing” £6.6bn of arms and equipment, according to a National Audit Office (NAO) report.

The formal qualification to the MoD's accounts by comptroller and auditor-general Amyas Morse also criticised net errors totalling £140m in the Joint Personnel Administration (JPA) payroll system.

The failings were revealed in comments reported to Parliament explaining Morse's refusal to sign off last year's MoD accounts.

His report is particularly critical of the Managed Equipment Fixed Registers (Mefar) using data from subsidiary systems including Merlin - concerned with wheeled and tracked vehicles - and Maestro - concerned with grouped assets such as rifles - and singles out faulty records on the computer-based Bowman radio communications equipment, with £150m-worth unaccounted for.

There are huge discrepancies in the records covering the issuing of equipment to military units and census checks on military stores.

Discrepancies in some of the records have increased from £258m in 2007 to £1,077m covering the tax year ending in 2009.

And a wide range of equipment has been moved to operational units without relevant changes being recorded on Maestro, with officials blaming changes in the timings of censuses and "operational tempo".

The systems are said to accurately report on the existence and location of 80-97 per cent of radio assets, with some £2m-worth destroyed.

The report said accurate information was needed to ensure hardware and software are upgraded and maintained properly.

Criticism of "significant weaknesses" in JPA - played down by the MoD at the time with claims that teething problems were being dealt with as it was rolled out to the three services — include the disclosure that the system depends on the accurate input of information by users, with expense claims paid without further controls.

Random checks by accountants revealed net errors in specialist pay, allowances and expenses likely to total more than £140m, with a further £83m in errors in charges for accommodation and food. The reliability of the systems was so poor it was impossible to accurately verify numbers of certain categories of personnel, particularly reservists called up for service.

Morse's report said the JPA system was "extremely complex and subject to continuous changes" with some 400 "extensions" providing variations to functionality of an original "off-the-shelf" package. He spoke of "frustration" over lack of access to terminals and a failure to take proper account of the needs of reserve forces.

He said the MoD was proposing a new joint board to be responsible for data management policy and an army data management organisation to improve the quality of information, but he warned these would reduce the savings expected from introducing the system, adding: "Several step changes are still required before the end-to-end military pay process including JPA can be considered fit for purpose."

The MoD later denied £6.6bn of assets had been “lost”, insisting it was a question of being unable to satisfy the NAO's demand for paperwork from stock checking to verify their presence.

A spokesman said the total figure was "an extrapolation" based on a lack of evidence. He said systems have been improved and their reporting ability enhanced and they ensured an effective support chain.