The auditor general has qualified the final accounts of Firebuy, a now defunct organisation set up to improve procurement at the fire and rescue service, saying there was considerable uncertainty surrounding their accuracy.

Firebuy, a limited company and non-departmental public body of the Department for Communities and Local Government, was formed in September 2005 to negotiate national contracts with suppliers. It ceased trading in July 2011 and its functions were transferred to other bodies.

The National Audit Office (NAO) says Firebuy went into liquidation without having prepared financial statements for 2010/11 or the relevant period of 2011/12. This contravenes requirements laid out in the Treasury's Managing Public Money which states that there should be procedures in place to gain independent assurance on key transactions, financial commitments, cashflows and other information needed to handle the wind-up effectively.

The NAO report says: 'In this instance, Firebuy Ltd did not transfer all of its financial documentation to the department. As a result, there were transactions and account balances for which the Comptroller and Auditor General was unable to obtain sufficient documentary evidence. Furthermore, there were no longer any directors or staff of Firebuy Ltd to provide explanations for transactions, adjustments and events which the department could not explain.'

However, auditor general Amyas Morse noted that the balance sheet gave a true and fair view of the state of Firebuy's affairs as of March 2012.

Morse said: 'As Firebuy Ltd no longer exists, I have not made any recommendations. The department has already taken steps to ensure that lessons are learned from this company closure by communicating the problems encountered with Firebuy Ltd to key stakeholders in the departmental group who are also preparing to face closure issues in relation to other bodies.'

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