Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Accepted
UKHSA attributes financial control lapses to pandemic, prioritising health protection over standard processes.
Conclusion
We asked UKHSA what lessons could be learned from the setup of a complex new government body and the issues reported by the C&AG in 2021–22 and 2022–23.12 UKHSA responded that if setting up a similar new body it would go about it ”in exactly the same way” and that the control issues that led to two consecutive disclaimers were a consequence of the operational challenges arising from the pandemic.13 The Department’s view, shared by UKHSA, was that it would take decisions on health protection issues first and then “do our best about the rest”. UKSHA stated that, if another significant health protection issue were to arise, it might expect to see further lapses in financial management and accountability. UKHSA told us that there was a balance point about recognising “exactly what we must do in terms of financial governance and control” and dealing with large health protection issues.14 The Department told us that it defended the decisions it had taken about the organisation based on health protection but recognised that it had made mistakes in some areas. We noted that UKHSA had encountered challenges in setting up a new organisation and responding to the pandemic, but that this was not an excuse 9 Q 47 10 Q 49 11 Qq 59–60 12 Q 61; C&AG’s Report, UKHSA 2022–23, pages 133–140; Report by the Comptroller & Auditor General, UKHSA Annual Report and Accounts 2021–22, HC 1086, 26 January 2023, pages 91–96 13 Q 61 14 Q 62 Department of Health and Social Care2022–23 Annual Report and Accounts 11 not to have proper financial controls. We observed that these were the “bread and butter” of what government departments should be doing, including when making sure that organisations are set up with the proper arrangements.15
Government Response Summary
The government has accepted the implicit recommendation to improve UKHSA's financial controls, detailing an ongoing Finance and Control Improvement Programme. UKHSA aims for an improved 2023-24 audit opinion with certification in November and subsequent pre-summer recess laying without qualifications, supported by a comprehensive audit plan and PWC engagement.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Target implementation date: January 2025 1.2 Following its 2021-22 disclaimed accounts, the UK Health Security Agency (UKHSA) established a Finance and Control Improvement Programme to develop, implement and embed a robust programme of work to support the production of auditable accounts. While UKHSA received a further disclaimed audit opinion for its 2022-23 accounts, the Comptroller and Auditor General recognised the improvements that had already been made in UKHSA’s financial controls and emphasised that the work of the programme should be accelerated. 1.3 There is now greater confidence both within UKHSA and DHSC of an improved audit opinion for the 2023-24 accounts. While an unqualified opinion is not possible this year due to the prior year disclaimer, we are working hard to produce quality, auditable accounts and to have certification from the NAO in November. UKHSA will then target laying its annual report and accounts pre-summer recess, without any qualifications, at the earliest opportunity. 1.4 A comprehensive audit plan is in place for UKHSA, agreed with the NAO, to support the 2023-24 audit process and in particular, the resolution of the specific 2022-23 Covid Vaccines Unit issue. PWC have been engaged by UKHSA to provide external support and third-party verification to the 2023-24 audit.