Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Accepted
C&AG disclaimed UKHSA's audit opinion two years running, causing serious concern and departmental intervention.
Conclusion
The C&AG disclaiming his audit opinion is very rare. The fact that this has happened two years in a row for UKHSA gives us great cause for concern. While UKHSA has its own Chief Finance Officer, the Department has taken steps for its Director General Finance to undertake a formal role within the UKHSA finance function. No other organisations within the Department have this degree of involvement in their day to day running. We questioned how long this arrangement would be in place. The Department did not consider 19 HM Treasury, Dear Accounting Officer letter – Accounts Directions 2022–23, 15 December 2022 20 Department of Health and Social Care, Annual Report and Accounts 2022–23, HC 33, 25 January 2024, pages 128–131 21 NHS England, Consolidated NHS Provider Accounts 2022–23, HC 469, 25 January 2024; NHS England, Annual Report and Accounts 2022–23, HC 468, 25 January 2024 22 C&AG’s Report, DHSC Annual Report and Accounts 2022–23, pages 224–225 23 Qq 79–81, 104 Department of Health and Social Care2022–23 Annual Report and Accounts 13 the arrangement as unusual for a complex organisation in its set-up phase. Whilst no specific timeframe was provided, it conceded that if this arrangement was still in place in two to three years’ time then this would indicate “something will have gone badly wrong”.24
Government Response Summary
The government states the recommendation is implemented, highlighting its robust financial management framework and ongoing close work with UKHSA and the NAO through governance meetings and an audit plan to address disclaimed opinions.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 The department has a robust framework for financial management and oversight of its group ALBs but recognises the need for continuous improvement in this area, in particular in relation to UKHSA and NHS England. 3.3 As set out in our response to recommendation 1 above, the department is working closely with UKHSA and the NAO to address the disclaimed opinions on UKHSA’s 2022-23 and 2023-24 accounts. As part of this, the department is providing strong support to and oversight of UKHSA financial management under the leadership of the DHSC Director General Finance, including quarterly senior governance meetings and monthly assurance meetings, and greater transparency in financial and other reporting. 3.4 In 2022-23, the departmental group accounts received a qualified regularity opinion as some of it’s spend did not comply with HM Treasury’s ‘ring-fence’ conditions associated with the additional elective recovery funding provided. This qualification was one-off in nature and an elective recovery oversight board has since been established to mitigate against recurrence. Oversight boards have been established for other key programmes, and the monthly finance sponsorship and accountability board with NHS England provides a regular forum for the senior finance leadership in both organisations to review financial risks, discuss financial issues, and monitor progress on the management of in-year challenges, supporting collaborative working with the NHS.