Recommendations & Conclusions
29 items
2
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The Department does not yet have a clear plan in place for a national emergency stockpile for any future pandemic. The stockpile held by the Department was invaluable for the first few months of the COVID-19 pandemic but it does not currently have a plan for the level or composition …
Government response. The government states it has a clinical countermeasure program, is setting up a UK-Moderna partnership for vaccine manufacturing, and has signed a service level agreement with SCCL for stock rotation. It is also working with SCCL on PPE volumes and …
HM Treasury
3
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
There was a fundamental absence of formal governance arrangements at UKHSA and the Department failed to respond to the heightened risks of setting up a new and complex organisation at pace. UKHSA was created on 1 April 2021 with unsatisfactory governance arrangements. Although the Non-executive Chair and Chief Executive were …
Government response. The government states UKHSA completed non-executive recruitment by April 2022, established corporate governance and committees by September 2022, and appointed an Audit and Risk Committee Chair in April 2023. A GIAA review was completed, and identified actions to improve governance …
HM Treasury
4
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
UKHSA had a fundamental weakness in financial controls and processes which resulted in it being unable to prepare auditable accounts. On 1 October 2021, the day that it became operational, UKHSA implemented a new IT accounting system and transferred the operations of its three predecessors onto this new system. At …
Government response. The government states UKHSA immediately established a Finance and Control Improvement Programme aimed at achieving unqualified accounts by 2024-25, acknowledging 2022-23 is not possible. A multi-year project plan for this programme will be in place by Autumn 2023, overseen by …
HM Treasury
5
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The Department has not yet developed a clear plan to remove the audit qualifications and deliver its accounts to a pre-summer recess timetable. The Department has prepared its accounts in exceptional circumstances for the past two years. It laid its 2021–22 Annual Report and Accounts on 26 January 2022, five …
Government response. The government has a multi-year plan to bring forward the accounts timetable by two months annually, aiming to lay 2022-23 accounts in November 2023 and achieve a pre-summer recess timetable for 2025-26. It acknowledges challenges with local audit capacity, which …
HM Treasury
6
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
There have been repeated and unacceptable governance and accounting failures within the Departmental Group which has led to poor financial control, undermined Parliamentary accountability, and money being spent without Parliamentary approval. The Department has failed to implement adequate financial control across the Group which has resulted in numerous qualifications of …
Government response. The government states it has already established a 'financial reset programme' which implemented robust financial controls and governance across its group. While acknowledging challenges in ensuring full compliance, it maintains that these processes and controls are proportionate risk mitigation and …
HM Treasury
1
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
On the basis of a report by the Comptroller and Auditor General (C&AG), we took evidence from the Department of Health and Social Care (the Department) and the UK Health Security Agency (UKHSA) on the Department’s Annual Report and Accounts for 2021–22.1
Government response. The government states it regularly updates the Committee on PPE inventory controls, disposal, and commercial resolution through quarterly updates and a March 2023 strategy document. It details how SCCL manages the PPE supply chain, inventory controls, and disposal, and how …
HM Treasury
7
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The Department continues to review the PPE contracts it entered into to identify suppliers that did not deliver against their contractual terms. By February 2022, the Department had negotiated the cancellation or variation of contracts to reduce the original supply of PPE by 1.21 billion items with an associated reduction …
Government response. The government states it is already providing regular quarterly updates on PPE inventory, disposals, and contract resolution activities, with SCCL managing the PPE supply chain and excess stock disposal, and the Contract Dissolution Team continuing to recover value from defaulting …
HM Treasury
9
Recommendation
Sixty-Second Report - Department of Hea…
Accepted
In our June 2022 report on the Department’s 2020–21 Annual Report and Accounts we noted the lack of planning for how big a PPE stockpile needed to be, and also the need to build greater resilience into the supply chain.20 We asked the Department again about the need and its …
Government response. The government agrees and details a range of specific actions for building resilience, including a clinical countermeasure programme, a UK-Moderna partnership for vaccine manufacturing, and ongoing work with SCCL on PPE volumes, long-term resilience, and stock rotation.
HM Treasury
13
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
On 1 October 2021, UKHSA had a Chief Executive and a non-executive Chair, both of whom had been appointed on 1 April 2021. UKHSA told us that the Chief Executive, despite her expertise in the science of public health, did not have experience in the other elements of running a …
Government response. The government states the implicit recommendation is implemented, detailing how UKHSA established full corporate governance by September 2022, completed non-executive recruitment, and engaged GIAA for a governance review, with identified actions completed by March 2023 to ensure traditional roles and …
HM Treasury
14
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
No additional non-executive directors were appointed until after the 2021–22 financial year. As a result, UKHSA did not comply with the principles of HM Treasury and the Cabinet Office’s Corporate governance in central government departments: code of good practice and UKHSA’s Head of Internal Audit concluded that, in their opinion, …
Government response. The government agrees and states UKHSA has established a full suite of corporate governance arrangements, including completing non-executive recruitment by April 2022 and establishing committees by September 2022, with a GIAA review identifying improvements completed by March 2023.
HM Treasury
15
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
We asked the Department whether, given the risks associated with the establishment of UKHSA, it had considered an alternative timing for establishing the new organisation to ensure that an appropriate governance framework could have been put in place. The Department said that its priority was ensuring that it had the …
Government response. The government agrees and states UKHSA has established a full suite of corporate governance arrangements, including completing non-executive recruitment and establishing committees by September 2022, with a GIAA review identifying improvements completed by March 2023.
HM Treasury
16
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The absence of governance arrangements at UKHSA, during a time of significant change and operational challenge, meant that there was inadequate scrutiny and oversight over UKHSA. We asked the Department what it had done to support UKHSA to help mitigate the risks associated with the absence of governance arrangements. The …
Government response. The government agrees and states that UKHSA has already implemented a full suite of corporate governance arrangements, including completing non-executive recruitment, establishing committees by September 2022, and completing a GIAA review with actions by March 2023.
HM Treasury
17
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The C&AG’s audit of UKHSA’s first set of accounts resulted in him disclaiming his opinions.34 This means that he was unable to give an opinion on whether the accounts were ‘true and fair’ or on whether the transactions recorded in the accounts were applied to the purposes intended by Parliament …
Government response. The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
HM Treasury
18
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The UKHSA accounts were ‘disclaimed’ as: the inventory transferred from Public Health England (£254 million) and the Department (£794 million) to UKHSA on 1 October 2021 was not subject to stock counts, £3.3 billion of consumption of Test and Trace inventory was not supported by records and the inventory held …
Government response. The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
HM Treasury
19
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
It is very unusual for an auditor to disclaim their opinion. No C&AG has disclaimed an audit opinion since January 2006, concerning the Home Office resource accounts 2004–05.36 UKHSA confirmed that they do not anticipate being able to produce accounts which will be unqualified until 2023–24 at the earliest.37
Government response. The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
HM Treasury
20
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
There were multiple root causes of UKHSA’s inability to produce auditable accounts. One of the key causes was the accounting system that UKHSA implemented on 1 October
Government response. The government agrees with the observation and states that UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, with the aim of achieving a clean audit opinion for the 2024-25 accounts and a multi-year …
HM Treasury
21
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
We asked UKHSA whether it would have been better to use one of the systems used by its predecessor entities rather than implementing the new system on the day it became operational. UKHSA said that it had inherited the decision to implement the new system from Public Health England and …
Government response. The government agrees and UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a clean audit opinion by 2024-25, with a multi-year project plan in place by Autumn 2023.
HM Treasury
22
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
UKHSA also experienced significant difficulties with staffing which compromised its ability to provide evidence and explanations to support the figures reflected in the accounts. The C&AG reported that one barrier to his ability to obtain evidence to allow him to give an audit opinion was the transitory nature of UKHSA’s …
Government response. The government agrees and UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a clean audit opinion by 2024-25, with a multi-year project plan in place by Autumn 2023.
HM Treasury
23
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
There were also operational decisions which UKHSA and the Department took which meant that some form of accounts qualification was always likely. The Department decided not to count the stockpile of emergency goods transferred from Public Health England to the UK Health Security Agency on 1 October 2022. The Department’s …
Government response. The government agrees and UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a clean audit opinion by 2024-25, with a multi-year project plan in place by Autumn 2023.
HM Treasury
24
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
To ensure timely accountability for the spending of public funds, Treasury set an administrative deadline of 30 June after the end of the financial year for Departments to publish their Annual Report and Accounts, and no later than parliamentary summer recess in July. The Department has a statutory deadline of …
Government response. The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023.
HM Treasury
25
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
We asked the Department about the timing of the 2022–23 annual report and accounts, the Department confirmed that it was aiming to lay its Accounts before the 2023 Christmas recess and then to gradually improve the timeliness in future years.49 The Department is currently working on a multi-year plan to …
Government response. The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023.
HM Treasury
26
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The Department faces two main challenges to bring the audit timetable forward, issues within the Department’s control and issues within the local audit market. The Department acknowledges that it is always looking to build its finance capability and identified three areas where more expertise is needed: financial, commercial and digital. …
Government response. The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023, while acknowledging external factors like local audit …
HM Treasury
27
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
We questioned the Department on the capacity of other bodies in its Group to prepare their Accounts to the required timescales, as we were aware that a number of bodies did not yet have auditors appointed for 2022–23, and this could have a significant impact on the Department being able …
Government response. The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023, and states it is working to address …
HM Treasury
28
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The Department and bodies within its Group have had a number of financial governance and accounting failures in recent years. The Department Core and Group accounts have been qualified by the C&AG for the past two years. In both 2020–21 and 2021–22 there was a ‘true and fair’ qualification arising …
Government response. The government states it has already undertaken a financial reset programme to establish robust financial controls and governance, putting in place proportionate controls to reduce future financial and governance failings, with a target implementation date of December 2023 for the …
HM Treasury
29
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The C&AG also qualified the Groups ‘other accruals’ in 2020–21 as there was insufficient assurance in respect of existence and valuation of £17.3 billion, the Department accrues expenditure it has incurred but has not yet been invoiced for and therefore a liability which will need to be paid in future. …
Government response. The government states it has already undertaken a financial reset programme to establish robust financial controls and governance across the department and its arm’s length bodies, which has put in place proportionate controls to reduce future financial and governance failings.
HM Treasury
30
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
Furthermore, the C&AG has qualified his ‘regularity’ opinion on the DHSC Group accounts for the past two years: the Department exceeded its budgetary limit for Resource Non-Budget Expenditure as authorised by Parliament in 2021–22 as a budget of £nil was authorised and the Department incurred an outturn of £2.457 billion; …
Government response. The government agrees with the implied concern, stating it has already implemented a financial reset programme with robust controls to reduce future financial and governance failings, which are kept under continual review.
HM Treasury
31
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
The C&AG being unable to provide an opinion on the UKHSA 2021–22 Annual Report and Accounts59 (see above) resulted in further ‘true and fair’ and ‘regularity’ qualifications on the Departmental Group accounts.60 . We questioned the Department on when it realised that the difficulties inherited by UKHSA would impact on …
Government response. The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
HM Treasury
32
Conclusion
Sixty-Second Report - Department of Hea…
Accepted
There have been other qualifications across the Departmental Group. The NHS Property Services (NHSPS) accounts were qualified in 2021–22 as NHSPS were unable to demonstrate compliance with the Financial Reporting Framework and account for the expenditure, assets and liabilities arising from certain contracts in accordance with IFRS16 Leases. There were …
Government response. The government agrees with the implied concern, stating it has already implemented a financial reset programme with robust controls to reduce future failings, which are kept under continual review.
HM Treasury
33
Recommendation
Sixty-Second Report - Department of Hea…
Accepted
At the time of our evidence session, University Hospitals of Leicester NHS Trust (UHL) had yet to publish its 2021–22 Annual Report and Accounts. UHL’s auditor was not able to obtain sufficient, appropriate evidence upon which to form an opinion for 2019–20, and issued an adverse audit opinion for 2020–21, …
Government response. The government agrees and details its financial reset programme, which has established robust financial controls and a risk-based framework across its bodies to reduce future financial and governance failings, with a target implementation date of December 2023.
HM Treasury