Source · Select Committees · Public Accounts Committee
Recommendation 17
17
Accepted
Department acknowledges limited control over local NHS audit issues, relying on NHS England for frontline work.
Conclusion
A large proportion of the Departmental Group expenditure flows through from NHS commissioning bodies into NHS England and NHS providers into the Consolidated Provider Accounts, both of which are prepared by NHS England. Given their impact on the timeliness of the Department’s accounts, we asked the Department and NHS England what they were doing to ensure a more timely audit of NHS commissioners and NHS providers. The Department explained that the issues faced last year were in part because more audits needed to be completed owing to the in-year establishment of Integrated Care Boards (ICBs), combined with particular issues with a small number of firms within the local audit market. It explained that it was working with NHS England to address these issues, including engaging the market to try to build capacity within local audit.25 We therefore asked what steps the Department was taking to ensure that there were sufficient numbers of local auditors and sufficient people in the firms to be able to undertake local audits. The Department told us that it “does not have all the levers under its control on the local audit” but that it was working to ensure that local audit issues “as they refer to the Department and the NHS” were managed and mitigated.26 The Department recognised that the audit of local NHS bodies was a serious issue, but explained that most of the frontline work would be done by NHS England. It told us that this would require “considerable effort” by NHS England and that the Department’s role would be to “do the supporting, national stuff we can do over the top of this”.27
Government Response Summary
The government has accepted the implicit recommendation to improve the timeliness of audits for NHS bodies, outlining its multi-year plan to accelerate the publication of its Annual Report and Accounts and its engagement with stakeholders to address local audit capacity issues.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2027 2.2 The Department of Health and Social Care (the department) is implementing a multi-year plan which aims to bring forward the publication of its Annual Report and Accounts (ARA) by at least one month per year and targets a return to pre-summer recess laying for the 2026-27 financial year. For 2023-24 audit, the Department has jointly agreed with the NAO that C&AG certification should be planned for the end of November 2024 and laying before Parliament in early December 2024, which would be nearly two months earlier than the 2022-23 accounts were laid. 2.3 The department is actively engaging with key stakeholders across government and externally to address the ongoing capacity issues in the local audit system. Addressing these issues is critical to bringing forward the laying date of the ARA. In addition to audit firm capacity, the regulatory environment in which audit firms operate is creating further pressure on timetables as requirements on audit firms continue to increase. Noting that these challenges are not wholly within the control of the department to resolve, the achievement of pre-summer recess laying of the ARA will be challenging and there is no realistic prospect of this in the short term. In summary, the department will continue doing all it can to work towards a pre-recess laying of the ARA, recognising that this will be challenging and also depends on factors outside of the department’s direct control.