Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Develop and implement plan to remove qualifications from Departmental Group accounts and restore timely NHS reporting
Conclusion
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 days ahead of the statutory deadline, and as in 2020–21, they were heavily qualified by the C&AG. For 2022–23, it plans to bring forward its laying of its Annual Report and Accounts in Parliament before the 2023 Christmas recess but there are a number of challenges in doing this. It is imperative that the Departments accounts delivery gets back on track to enable it to lay its Annual Report and Accounts ahead of the summer recess. Disappointingly, it does not yet have a credible plan to do this. The Department faces challenges from gaps in its finance function and significant problems in timely delivery in the local audit market which are required for its group accounts, which will impact on its ability to prepare more timely accounts. We have reported separately on the challenges of timeliness of local auditor reporting, which includes the audit of local NHS bodies that form part of the Departmental group. Recommendation 5: The Department must develop and implement a plan to remove the qualifications from the Departmental Group accounts and work with NHS England to restore timely financial reporting and local audit across the NHS, to support laying of the Departmental Group accounts to a pre-summer recess timetable.
Government Response Summary
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 are being addressed.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. largely addressed the root causes of ongoing qualifications, mainly through the provision of audit evidence for consumables inventories in the Core Department and Agencies’ and Group’s Statement of Financial Position. The department is committed to a return to a pre-summer recess timetable. The department is working to a multi-year plan which aims to bring the timetable forward by approximately two months each year. The department currently aims to lay its 2022-23 accounts in November 2023 and return to a pre-summer recess timetable for the 2025-26 financial year. However, the factors underpinning the delays in local audit completion, mainly capacity issues are not wholly within the control of the department. The government is working to address these, and successful resolution of these issues will be critical in enabling the department to lay its accounts ahead of the summer recess. For context, local audits would need to all be completed at least one month sooner than the deadline of 30 June 2023 set for the 2022-23 audit cycle. In addition, the increased requirements on auditors (including the National Audit Office (NAO)) lead to particular challenges on a large and complex departmental group. Whilst the department and NAO recognise these challenges, they themselves are not expected to be a barrier to achieving a pre-summer recess audit timetable.