National Audit office chief Amyas Morse has refused to fully sign off the 2011-12 accounts of the Department for Culture, Media and Sport (DCMS).

Morse qualified his audit opinion due to the department's accounts 'not accurately reflecting the value of certain assets held within the group'.

In 2011-12, the DCMS was responsible for some £4bn of net operating costs and assets of some £14bn, mainly consisting of property plan and equipment, together with gross liabilities of some £7bn.

The NAO report said the department was originally unable to provide a complete draft of the accounts to meet the statutory deadline, and on 28 January 2013 the Accounting Officer wrote to the Chair of the Committee of Public Accounts, and the Chair of the Culture, Media and Sport Committee outlining his intention to delay the laying of the accounts.

It highlighted the fact the preparation of the 2011-12 group accounts represented 'a significant challenge for DCMS'.

The report said 'the consolidation is complex, necessitating the inclusion of 46 separate bodies, which themselves include subsidiary bodies, while the exact definition of the accounting boundary took time to conclude.

'Many of the bodies apply different accounting frameworks to the department: the museums and galleries sector apply the Charities SORP; the Lottery distributing bodies apply commitment accounting under an accounts direction issued by HM Treasury; and the public broadcasting authorities apply International Financial Reporting Standards. This required adjustments to bring the accounting policies of these bodies into line with those of the department.'

Another factor was the BBC, which despite properly preparing its accounts to the international accounting standards, rather than government accounting standards, meant it recorded its tangible non-current assets (mainly land and buildings, plant and machinery, and fixtures and fittings) at depreciated historic cost rather than under the fair value convention.

The BBC has intimated that it will supply figures on a fair value basis for future years.

The NAO said 'despite the absence of reliable valuation information under the fair value convention, given the cost of the assets involved, it is likely that there is a significant misstatement of assets in the department's accounts'.

The report said the department's focus on the delivery of the London 2012 Olympic and Paralympic Games 'meant that it had originally planned to prepare the accounts in the autumn and lay them in December'.

It went on: 'Notwithstanding the difficulties involved in preparing the accounts for a complex department with a large number of separate bodies, this still allowed a period of more than four months to prepare the accounts. However, the department underestimated the complexity of the task and lacked the necessary capacity in its finance function, meaning that an extension to the statutory deadline had to be granted, and additional help needed to be purchased.'

The department has now 'committed to undertake a review of the 2011-12 process' a move 'welcomed' by the NAO, which has called on the department to 'learn lessons from this year to ensure it can account to parliament in a timely manner in the future'.