YorkshireWolds&CoastPrimaryCareTrust - Annual Audit Letter
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Annual Audit Letter November 2005 Annual Audit Letter Yorkshire Wolds and Coast Primary Care Trust Audit 2004-2005 The Audit Commission is an independent body responsible for ensuring that public money is spent economically, efficiently and effectively, to achieve high-quality local and national services for the public. Our remit covers around 11,000 bodies in England, which between them spend more than £180 billion of public money each year. Our work covers local government, health, housing, community safety and fire and rescue services. As an independent watchdog, we provide important information on the quality of public services. As a driving force for improvement in those services, we provide practical recommendations and spread best practice. As an independent auditor, we ensure that public services are good value for money and that public money is properly spent. Status of our reports to the Trust Our reports are prepared in the context of the Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission. Reports are prepared by appointed auditors and addressed to non-executive directors or officers. They are prepared for the sole use of the audited body, and no responsibility is taken by auditors to any director or officer in their individual capacity, or to any third party. Copies of this report If you require further copies of this report, or a copy in large ...
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| Publié par | Chiev |
| Nombre de lectures | 20 |
| Langue | English |
Extrait
Annual Audit Letter
November 2005
Annual Audit Letter
Yorkshire Wolds and Coast Primary Care Trust
Audit 2004-2005
The Audit Commission is an independent body responsible for ensuring that public money is spent economically, efficiently and effectively, to achieve high-quality local and national services for the public. Our remit covers around 11,000 bodies in England, which between them spend more than £180 billion of public money each year. Our work covers local government, health, housing, community safety and fire and rescue services. As an independent watchdog, we provide important information on the quality of public services. As a driving force for improvement in those services, we provide practical recommendations and spread best practice. As an independent auditor, we ensure that public services are good value for money and that public money is properly spent.
Status of our reports to the Trust Our reports are prepared in the context of the Statement of Responsibilities of Auditors and Audited Bodies issued by the Audit Commission. Reports are prepared by appointed auditors and addressed to non-executive directors or officers. They are prepared for the sole use of the audited body, and no responsibility is taken by auditors to any director or officer in their individual capacity, or to any third party. Copies of this report If you require further copies of this report, or a copy in large print, in Braille, on tape, or in a language other than English, please call 0845 056 0566. © Audit Commission 2005 For further information on the work of the Commission please contact: Audit Commission, 1st Floor, Millbank Tower, Millbank, London SW1P 4HQ Tel: 020 7828 1212 Fax: 020 7976 6187 Textphone (minicom): 020 7630 0421 www.audit-commission.gov.uk
Annual Audit Letter│Contents 3
Contents Key messages Accounts Financial standing and organisational performance Financial aspects of corporate governance Performance management Action for the Board Background to our audit Accounts Matters arising from the final accounts audit Report to those with responsibility for governance in the Trust Financial aspects of corporate governance Financial standing Systems of internal financial controls Legality of transactions Standards of conduct and the prevention of fraud and corruption Performance management Overall arrangements Payment by Results Community hospitals Information management Workforce contracts Managing Resources for Improvement Work mandated by the Healthcare Commission: Data Quality Follow-up of previous work Future audit work National risk-based work Cross-cutting work Work on behalf of the Healthcare Commission Closing remarks Availability of this letter
5 5 5 6 6 8 9 10 10 10 11 11 15 16 17 18 18 19 21 23 26 27 29 30 32 33 33 33 34 34
Yorkshire Wolds and Coast Primary Care Trust
4Annual Audit Letter│Contents
Appendix 1 Background to this letter The purpose of this letter Audit objectives Appendix 2 Reports issued during the year Appendix 3 Audit fee
Yorkshire Wolds and Coast Primary Care Trust
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Key messages
Annual Audit Letter│Key messages 5
Accounts 1We gave an unqualified opinion on the PCT's accounts on 21 July 2005, but we qualified the regularity opinion on the grounds that the PCT had exceeded its revenue resource limit, and hence had not met one of its statutory duties.
Financial standing and organisational performance 2In my Annual Audit Letter for 2003/04, I said that the PCTs financial position as at November 2005 was, 'extremely perilous'. I have seen considerable activity from the Trust aimed at dealing with the problems that we identified and reported upon over the past 18 months. It is clear that there is a willingness and a commitment to address the financial problems of the PCT at all levels. However, the extent and depth of the PCTs financial problems have not decreased. In addition to the PCT's underlying problems, new national challenges have emerged for all NHS organisations such as the new contract with GPs for general medical services that have increased the difficulty of the task of achieving the PCT's financial plans. In my judgement, the PCTs financial position remains extremely perilous. Evidence from our most recent work and the PCT's own reporting of its own progress prompts me to question whether the PCTs recovery plan for 2005/06 can be delivered. In these circumstances I am under an obligation to consider what, if any, further audit action may be appropriate. 3I identified a number of areas of particular concern last year, including: • delivery of the internal recovery plan; the • implementation of the new performance management regime; the • community hospitals; and • better outcomes from the Health Information Service. achieving 4are still of concern and our current assessment of the PCT'sMany of these areas position in each of them is described in some detail in the main body of this letter. However, it is possible to summarise our findings in relation to financial standing.
Yorkshire Wolds and Coast Primary Care Trust
6Annual Audit Letter│Key messages
5The PCT did not achieve its internal recovery plan in 2004/05 and consequently lost previously agreed support. The PCT breached its revenue resource limit (the amount allocated to it by Parliament to purchase healthcare) by £6.1 million. The PCT's formal recovery plan, agreed by the Board in July 2005, required the PCT to identify and deliver some £4.8 million of savings in 2005/06. Current projections by the Director of Finance show that the PCT is likely to overspend by £1.8 million this financial year. He has calculated the worse case scenario, taking into account the recovery plan actions that still needed to be achieved, to be £13.2 million (including the potential risk of non-recurrent support being withdrawn).
Financial aspects of corporate governance 6The PCT has adequate arrangements in place to manage financial aspects of corporate governance. In particular, it has well-developed arrangements for managing risk and legal issues that we would expect to be taken forward into the new joint arrangements with East Yorkshire. Furthermore, it has revised and updated its key documents such as Standing Orders, strengthened the role of the Local Counter Fraud Specialist, and has put arrangements in place to reduce the potential governance risks related to partnership working. It needs to ensure that documentation relating to new starters is complete, and that the gaps it has identified relating to its procedure notes are filled.
Performance management 7progress in strengthening its performance managementThe PCT has made arrangements, primarily as a result of developing an integrated framework with East Yorkshire PCT. Some of the areas where arrangements have been developed are as follows. • The commissioning framework has been strengthened. For instance, the joint service programmes have been launched, and new clinical leadership roles, linked to these programmes, have been approved. • Good progress in preparing for the new funding flows as a result of the introduction of Payment by Results. • PCT and the GP practices have worked hard to ensure that changes to The the new GMS contract, the Quality and Outcomes Framework (QOF) and enhanced services were implemented and this has been a good achievement. • progress has been made on a challenging IM&T agenda. The East Some Riding Information Strategy Programme (ERISP) Board has recently been set up to manage the NPfIT programme of work within the East Riding PCTs, discussions are in progress on the long term strategic direction for IM&T, and arrangements around the Health Informatics Service have been strengthened. • systems are in place for ensuring performance data for community Good equipment and coronary heart disease (CHD) registers is reliable.
Yorkshire Wolds and Coast Primary Care Trust
Annual Audit Letter│Key messages 7
8However, the PCT still has much to do to ensure that its performance management arrangements secure continuous improvement. The main challenges it faces include the following. •performance management system (PBViews) is timetabled to The electronic be fully operational by October 2005. The PCT faces a significant challenge in ensuring that the framework becomes embedded in the culture of the organisation and that the expected benefits are realised. •the PCT has taken significant steps to address the issues around Although community hospitals, the pace of change has been slow. We recognise the sensitivity of these challenges but now the Board has determined a way forward to redesign the community hospitals over three years the PCT should ensure that it now acts to secure the service improvements and cost efficiencies identified. •for the introduction of Payment by Results (PbR) Although the preparation has gone well, there have been some concerns around the provision and validation of the Quarter 1 activity information for 2005/06 in the acute sector. •the PCT has focused on getting the new GMS contract in the first year, In place, but now needs to place increasing attention to systematically tackling modernisation, identifying and measuring benefits and scrutinising arrangements to ensure it is delivering value for money. In particular, there has been a lack of strategic direction with clear objectives to use the new GMS contracts to contribute to the redesign of services, and the PCT needs to consider how it will balance the need to develop primary care against the requirement to achieve financial targets. • PCT needs to ensure that its NPfIT projects continues to be The adequately funded and resourced and integrated in the wider programme of work, in order to facilitate the intended modernisation of services and improvements to the patient experience. It also needs to assess the impact of the PCT's long-term IM&T Strategy on the Health Informatics Service. • Audit's review of systems operated by the Health Informatics Services Internal identified a number of weaknesses that needed to be addressed around IT Security and Business Continuity. • there are examples of good practice in the commissioning of medium Whilst and high-secure placements, the health community has not adopted a strategic approach to delivering other out of area treatments (OATs) for patients with mental health needs. The health community recognises this and now needs to take firm collective action to secure better care for users and demonstrate value for money. • The PCT needs to ensure that Choice at Referral is implemented. It needs to develop a mechanism which allows patients to be aware of their options and make an informed choice.
Yorkshire Wolds and Coast Primary Care Trust
8Annual Audit Letter│Key messages
Action for the Board 9Closely monitor the recovery plan, and take alternative action promptly if recovery plan targets are being missed. 10Ensure that all outstanding issues around staff contracts and the documentation related to new starters are being dealt with promptly. 11Ensure that the new performance management system is fully implemented as quickly as possible, and it becomes embedded throughout the culture of the PCT. 12Ensure that the proposals around community hospitals presented to the Board in September are implemented to secure the service improvements and cost efficiencies identified. 13Monitor progress on implementing the agreed action plan for community ward staffing and the minor injuries unit. 14Seek assurances that the data necessary to effectively operate Payment by Results is reliable. 15delivery plans that support both the redesignDevelop clear service strategies and of primary care and the achievement of financial targets. 16that NPfIT projects continue to be adequately funded and resourced andEnsure integrated in the wider programme of work, to facilitate the intended modernisation of services and improvements to the patient experience. 17PCT's long-term IM&T Strategy on the HealthAssess the impact of the Informatics Service, and whether it will be able to provide the required service in the future. 18Ensure the system weaknesses raised by Internal Audit in its reviews of systems operated by the Health Informatics Service have been adequately addressed. 19Ensure that out of area treatments deliver optimum care for users or demonstrable value for money. 20implementation of Choice at Referral, and ensure that there is aMonitor the mechanism which allows patients to be aware of their options and make an informed choice.
Yorkshire Wolds and Coast Primary Care Trust
Annual Audit Letter│Background to our audit 9
Background to our audit 21There has been a rapid pace of change within the health service, and the demands placed on the managers. Particular challenges in 2004/05 included the implementation of the new GP contract. It has also seen the development of Payments by Results (PbR), Agenda for Change and the National Programme for IT (NPfIT), all of which will develop further during 2005/06 and beyond. 22Since its inception the PCT has had financial problems, and its underlying deficit has been rising year-on-year. In our previous Audit Letter we concluded that the financial standing of the PCT remains extremely perilous, and the return to financial stability must remain the overriding objective of the Board. Unless financial stability is achieved, long-term improvements in the quality of the care it can provide to residents will be at risk’.We also said‘We have concerns about the realism for achieving financial balance. Furthermore, even if financial balance is achieved, we have concerns as to whether this will be sustainable in 2005/06 and beyond’.The key theme of our 2004/05 audit was to assess the extent to which the PCT was putting in the necessary actions to secure long-term financial stability and meet its statutory duties. 23a zero-star rating in the 2004/05 NHSIn July 2005, the PCT obtained performance ratings and indicators. This compared to a two-star rating for 2003/04. According to the Healthcare Commission it under-achieved in the following areas: • financial management; • drug users access to treatment; and • accident and emergency waiting times. 24has become responsible for commissioning and providingFrom April 2005, it healthcare at Long Sutton Prison. It is also involved in the development of a Children's Trust led by East Riding of Yorkshire Council. 25In April 2005, the PCT entered into management integration with East Yorkshire PCT. Although the two organisations remain separated statutory bodies with their own Board and PEC, they share the same management team.
Yorkshire Wolds and Coast Primary Care Trust
10Annual Audit Letter│Accounts
Accounts We gave an unqualified opinion on the PCT's accounts on 21 July 2005, but we qualified the regularity opinion on the grounds that the PCT had exceeded its revenue resource limit, and hence had not met one of its statutory duties.
Matters arising from the final accounts audit 26We concluded that we could place reliance on the three main processes that form the basis for the preparation of the financial statements, namely: budgetary control; • • accounting system; and main • year-end closedown procedures 27We did, however, identify weaknesses within the budgetary control system., particularly around the virements and the documentation of budget variances. Consequently we needed to do additional substantive testing on budgetary control. 28These assurances, combined with the outcomes from our substantive testing of the accounts, enabled us to issue an unqualified audit opinion on whether the financial accounts give a true and fair view of the state of affairs and the net operating costs for the year then ended by the NHS deadline of 22 July 2005. 29We are also obliged to provide an opinion as to whether, in all material respects, the expenditure and income have been applied to the purposes intended by Parliament and that the financial transactions conform to the authorities which govern them, known as the regularity opinion. We qualified this opinion on the grounds the PCT had exceeded its revenue resource limit, and hence had not met one of its statutory duties.
Report to those with responsibility for governance in the Trust 30professional standards to report to those charged withWe are required by Governance (as distinct from management) certain matters before we give an opinion on the financial statements. We reported to the Audit Committee on 4 July 2005 that we would be qualifying the regularity opinion. 31detailed final accounts memorandum was subsequently produced for theA more finance team. This made recommendations for areas where further improvements can be made to the compilation of the financial statements. This was presented to the October Audit Committee.
Yorkshire Wolds and Coast Primary Care Trust
Annual Audit Letter│Financial aspects of corporate governance 11
Financial aspects of corporate governanceParticularly since the Executive team merger, the PCT has made great efforts to improve its financial management systems. It now has the mechanisms to properly review the realism of cost improvement plans and to take action promptly if the desired savings appear unlikely to be achieved. The PCT is also striving to ensure that resolution of the financial problems is not just seen throughout the organisation as an issue for the finance department alone. Despite this, however, the financial risks that the PCT faces are considerable and there must be serious risk that, as in 2004/05, it will struggle to achieve its financial targets in 2005/06. The PCT has adequate arrangements in place to manage financial aspects of corporate governance. In particular, it has well-developed arrangements for managing risk and legal issues that we would expect to be taken forward into the new joint arrangements with East Yorkshire. Furthermore, it has revised and updated its key documents such as Standing Orders, has strengthened the role of the Local Counter Fraud Specialist, and has put arrangements in place to reduce the potential governance risks related to partnership working.It needs to ensure that documentation relating to new starters is complete, and that the gaps it has identified relating to its procedure notes are filled.
Financial standing Financial standing 322004/05 has been another extremely difficult year for the PCT. NHS primary care trusts have a number of key statutory financial duties (summarised in the table overleaf), but the PCT exceeded its revenue resource limit by £6,116,000. Furthermore, the deficit would have been higher if the PCT had not been able to defer funds of £0.9 million it holds on behalf of the health economy for the cancer network into 2005/06 and if it had not received £0.3 million in non-recurrent revenue support from the Strategic Health Authority.
Yorkshire Wolds and Coast Primary Care Trust
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