The government needs to stick with standard systems and processes if it is to improve its financial management, says the National Audit Office (NAO).

In its October 2010 Spending Review the Government asked departments to identify their priorities, based on an accurate, realistic assessment of the costs, benefits and risks.

"To carry out this exercise effectively and to build on it for future years requires mature financial management," said the NAO, in its report "Progress in improving financial management in government," published today.

The report says government departments "often have a legacy of multiple IT systems which do not adequately interface with each other. There is rarely an automatic cascade of data from management accounting systems to resource accounts".

It goes on to say that departments often use multiple data systems to piece together accounting information manually, "which introduces risks to both the control of transactions and the accurate presentation of these transactions in the accounts".

The NAO also reveals there "is no consistent approach to the configuration of Oracle-based accounting systems across government". For example, the NAO found that the Ministry of Justice’s multiple financial systems and "incomplete" financial reports affected the government's ability to monitor its overall budgetary position, and its awareness of the Ministry’s assets, liabilities and future cash requirements.

In an example of improved practice the NAO cites the Department for Education, which has moved its financial transaction processing to the shared services operation run by the Department for Work and Pensions.

"Such a move to greater consolidation of systems and processes has the potential to help rationalise financial management reporting tools and increase alignment across government, and could be adopted more widely," said the NAO.

The NAO added there was also "improved practice" at the Foreign and Commonwealth Office.