NHS audited accounts true and fair but disclose significant financial stress
The timeliness and quality of NHS trusts’ financial reporting improved for 2013/14 according to the Commission’s report Auditing the Accounts 2013/14: NHS Bodies. In their first year, Clinical Commissioning Groups submitted their accounts on time but experienced some issues with quality. There is rising concern from the Commission’s appointed auditors for the financial resilience of NHS trusts, with a significant increase in the numbers of both qualified conclusions on value for money arrangements and statutory reports to the Secretary of State for Health.
The Audit Commission’s Controller of Audit, Marcine Waterman said: “Again NHS bodies closed their accounts and reported their final position to a tight deadline with no qualified true and fair opinions issued. Despite auditors reporting some issues with the quality of financial reporting at Clinical Commissioning Groups, these new bodies generally performed well for their first year.”
Findings from the work of appointed auditors at NHS trusts (excluding foundation trusts), and Clinical Commissioning Groups are presented in Auditing the Accounts 2013/14: NHS Bodies. The report covers: the timeliness and quality of accounts; arrangements to secure value for money; and auditors’ use of their statutory reporting powers.
The majority of NHS bodies put in place proper arrangements for securing value for money. However, auditors at 34 NHS trusts (34 per cent) issued a non-standard value for money conclusion relating to concerns about financial resilience. Last year, this figure was 26 per cent.
This financial year also saw a three-fold increase in the number of NHS trusts being referred to the Secretary of State for Health when compared with the previous year. Twenty NHS trusts (20 per cent) were referred to the Secretary of State for Health, due to financial issues compared with only five NHS trusts for 2012/13. 24 Clinical Commissioning Groups (11 per cent) were also referred.
Marcine Waterman, Controller of Audit concludes: “This year auditors are reporting concerns about the financial resilience of a third of NHS trusts compared with a quarter last year. This level of reporting is worrying and reflects the increasing risks to the financial sustainability of individual NHS trusts, as they continue to face sizeable financial pressures due to a rising demand for services and the necessary focus on quality of care, whilst balancing the need for continued cost savings.”
Notes for editors
1) Audited accounts are the principal means by which NHS bodies discharge their accountability for the stewardship of public money. Submitting timely audited accounts, with an unqualified audit opinion, reflects well on bodies’ financial management arrangements and is a fundamental feature of good governance. The audit process also provides essential assurance to the accounting officers for NHS England and the Department of Health (DH) about whether the funds distributed to NHS bodies have been safeguarded and accounted for properly.
2) This year’s report summarises the results of auditors’ work for 2013/14 at 101 NHS trusts (62 acute trusts, 5 ambulance trusts, 19 community trusts and 15 mental health trusts) and 211 Clinical Commissioning Groups.
3) At 31 March 2014, 98 NHS trusts remained in the Commission’s audit regime and were therefore subject to a value for money arrangements conclusion. Auditors issued a non-standard value for money arrangements conclusion at 37 of these NHS trusts (38 per cent). There ten were adverse conclusions for 2013/14 (six for 2012/13) issued to:
- Barking, Havering and Redbridge University Hospitals NHS Trust
- Croydon Health Services NHS Trust
- East Sussex Healthcare NHS Trust
- George Eliot Hospital NHS Trust
- North Cumbria University Hospitals NHS Trust
- United Lincolnshire Hospitals NHS Trust
- University Hospital of North Staffordshire NHS Trust
- University Hospitals of Leicester NHS Trus
- West Hertfordshire Hospitals NHS Trust
- Wye Valley NHS Trust
Adverse conclusion: The auditor is not satisfied that the body made proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2013, as significant weaknesses were identified
4) There were 27 qualified ‘except for’ conclusions (20 for 2012/13) issued to
- Barnet and Chase Farm Hospitals NHS Trust
- Barnet, Enfield and Haringey Mental Health NHS Trust
- Barts Health NHS Trust
- Bedford Hospital NHS Trust
- Buckinghamshire Healthcare NHS Trust
- Ealing Hospital NHS Trust
- East Cheshire NHS Trust
- East Lancashire Hospitals NHS Trust
- East Midlands Ambulance Service NHS Trust
- East Of England Ambulance Service NHS Trust
- Epsom and St Helier University Hospitals NHS Trust
- Ipswich Hospital NHS Trust
- Leeds Teaching Hospitals NHS Trust
- Liverpool Community Health NHS Trust
- Maidstone and Tunbridge Wells NHS Trust
- Mid Essex Hospital Services NHS Trust
- Mid Yorkshire Hospitals NHS Trust
- North Bristol NHS Trust
- North West London Hospitals NHS Trust
- Northampton General Hospital NHS Trust
- Plymouth Hospitals NHS Trust
- Shrewsbury and Telford Hospital NHS Trust
- Surrey and Sussex Healthcare NHS Trust
- The Princess Alexandra Hospital NHS Trust
- West Middlesex University Hospital NHS Trust
- Weston Area Health NHS Trust
- Worcestershire Acute Hospitals NHS Trust
Qualified ‘except for’: The auditor is satisfied that the body made proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2014, in all significant respects, except for one or more specific weaknesses
5) The main reasons for the financial resilience qualifications include:
■ NHS trusts failing to meet their statutory breakeven duty in 2013/14;
■ NHS trusts setting deficit budgets for 2014/15;
■ NHS trusts failing to achieve Cost Improvement Programme targets; and
■ reliance on cash support to support NHS trusts’ operational activity.
6) There were 19 referrals of NHS trusts to the SoS for 2013/14 relating to the failure of the following NHS trusts to meet their statutory break-even duty:
■ Barking, Havering and Redbridge University Hospitals NHS Trust.
■ Barnet and Chase Farm Hospitals NHS Trust.
■ Epsom and St Helier University Hospitals NHS Trust.
■ George Eliot Hospital NHS Trust.
■ Hinchingbrooke Health Care NHS Trust.
■ Ipswich Hospital NHS Trust.
■ Leeds Teaching Hospitals NHS Trust.
■ Mid Essex Hospital Services NHS Trust.
■ Mid Yorkshire Hospitals NHS Trust.
■ North Bristol NHS Trust.
■ North Cumbria University Hospitals NHS Trust.
■ North West London Hospitals NHS Trust.
■ Shrewsbury and Telford Hospital NHS Trust.
■ Surrey and Sussex Healthcare NHS Trust.
■ The Princess Alexandra Hospital NHS Trust.
■ United Lincolnshire Hospitals NHS Trust.
■ University Hospital of North Staffordshire NHS Trust.
■ Weston Area Health NHS Trust.
■ Worcestershire Acute Hospitals NHS Trust.
7). The equivalent report for local government bodies will be published in December 2014.
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