Source · Select Committees · Public Accounts Committee
Recommendation 33
33
Accepted in Part
NHS England attributes audit delays primarily to local market pressures, not systemic NHS problems.
Recommendation
We asked the Department and NHS England why so many NHS commissioners and NHS providers missed the deadline for completing their financial audits, and what it was doing to ensure that this improved. NHS England recognised that the number of organisations who were meeting the June deadline was lower than before the COVID–19 pandemic, but told us that this was improving. It told us that one of the reasons for the delays was “definitely the overall pressure on the local audit market” and the trade–off audit firms were making between undertaking local authority accounts and NHS accounts. It told us that “there are no systemic problems” with NHS bodies that were contributing to delays, and that it expected to see continual improvement.56
Government Response Summary
The government agrees with the recommendation to improve audit timeliness and outlines a multi-year plan to return to pre-recess laying of annual reports. It is working with stakeholders to build capacity and resilience in the local audit market but acknowledges a dependency on private sector audit firms, with further details to be provided by September 2025.
Government Response
Accepted in Part
HM Government
Accepted in Part
5.1 The government agrees with the Committee’s recommendations. Target implementation date: September 2025 5.2 As explained to the Committee at the hearing of 13 March 2024, the department has previously detailed a multi-year plan with the aim of returning laying its ARA before the summer parliamentary recess, by bringing forward publication by at least one month each year. This plan balances the department’s commitment to accelerating the timetable with the key dependency on private sector audit firms to undertake the audits of NHS providers and integrated care systems. Private sector audit firms have indicated very clearly to the department and the regulator (the Financial Reporting Council, FRC) that they do not currently have the capacity to complete robust, quality audits of NHS organisations quickly enough to support a return to pre-recess laying in the shorter-term. 5.3 The department is continuing to work closely with key stakeholders across the local audit system, including the Ministry of Housing, Communities and Local Government, HM Treasury, the National Audit Office, FRC and firms themselves, to build capacity and resilience in the system and ensure deadlines are met. 5.4 The department will write to the Committee in September 2025 with further detail on its multi-year plan, the risks to it, and the action the department is taking to address those risks to the greatest extent possible.