The National Audit Office has issued a report criticising the way an agency run by the Lord Chancellor's Department is handling a billion pounds of mentally incapacitated people's money.
The Public Trust Office (PTO) – an LCD agency since 1994 – supervises the investment of over £1.45bn of thousands of patients' cash.
In the report, NAO chief, Sir John Bourn, says the performance on patients' investment portfolios is “disappointing”.
He says only 47 per cent met the PTO's three-year capital growth target and calls for a robust system for dealing with brokers who are under-performing.
He says the use of patients' cash is not monitored properly and calls for the PTO to be “more vigorous and systematic” in pursuing those who do not submit accounts of how money is used, and that the PTO should also review the accounts it does receive more quickly.
Accountability, he says, is impaired by weaknesses in performance measurement and lack of progress in developing accurate and consistent agency accounts.
Poor accounting policies, systems and procedures blighted the PTO's aim of producing auditable commercial-style financial statements from 1996/97, he says.
Despite the litany of criticisms in the report, however, Sir John does stress that there is evidence of increased satisfaction with some of the PTO's services since his last report in 1994.
The NAO report coincides with the Lord Chancellor's announcement that the PTO's first quinquennial review – involving a detailed scrutiny of its performance over the past five years – will be carried out later this year.
A Lord Chancellor's Department spokesman says parliamentary convention prevents him commenting on the NAO report until after the PTO's chief executive, Julia Lomas, and the LCD permanent secretary and departmental accounting officer, Sir Hayden Phillips, appear before the public accounts committee later this month.