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Department of Health and Social Care Accounts 2022-23

Gareth Davies, the Comptroller and Auditor General (C&AG) and head of the National Audit Office (NAO), has qualified his audit opinion on the Department of Health and Social Care (DHSC) accounts for 2022-23. This is because he has disclaimed the UK Health Security Agency (UKHSA) accounts for a second year running.

The disclaimer of the UKHSA accounts is due to a combination of the impact of last year’s disclaimer, reducing the assurance over in-year transactions and opening balances, together with a lack of assurance over closing balances relating to the Covid Vaccine Unit (CVU).

UKHSA Accounts 2022-23

In contrast to the previous year, UKHSA was able to provide transaction listings and evidence to support audit sample testing during 2022-23. However, this required extensive work and took significant time for UKHSA to achieve. During 2022-23 UKHSA has also taken the required steps to improve its high-level governance arrangements.

The CVU transferred into UKHSA from DHSC on 1 October 2022. Its main function is to procure sufficient vaccines to support national vaccination programmes.

The CVU team uses a model to predict future vaccine demand and assess the extent to which held vaccines are expected to be used before they expire.  This forward-looking estimate is needed to calculate several balances in the accounts.

Given the scale of vaccine procurement and therefore the model to the accounts, it was identified as a key audit risk at the start of the audit.

After the year-end and in response to a new Covid variant in August 2023, UKHSA changed the model it was using and key stakeholders, including the UKHSA financial accounts team and the NAO audit team, were not informed of this change on a sufficiently timely basis to allow a full audit.

UKHSA provided a revised version of the model to the NAO in mid-December 2023. This included an updated forecast of expected future demand and incorporated actual data from the autumn vaccination campaign. The decision to update the expected future demand was driven by the identification of a new Covid variant in August 2023. The revised model did not have supporting documentation setting out its methodology or quality assurance. In addition, the inputs to the revised model are based on additional modelling which would also require audit; therefore it was not possible for the C&AG to complete his audit ahead of the statutory deadline of 31 January 2024.

Delays in Local NHS Audits in 2022-23

Both the NHS England and the Consolidated Provider Accounts rely on the timely provision of audited accounts from the Commissioners, Trusts and Foundation Trusts that feed into the two group accounts.

The timetable set by NHS England and DHSC for the 2022-23 group accounts required local auditors to complete their statutory audits by 30 June 2023.  This would have enabled the completion of these accounts by November 2023.  Delays in the completion of these local audits mean that the NHS England, and Consolidated Provider Accounts are once again being completed just ahead of the Statutory Deadline (31 January 2024) and nearly 10 months after the year end.

DHSC’s accounts have been similarly delayed due to a combination of the local audit delays and the issues relating to UKHSA described above.

The continued deterioration in the timely finalisation of NHS bodies’ accounts and completion of local audits, undermines accountability and oversight across the group.

NHS England clearly recognises the risks that late auditor reporting can represent and has been proactive in using its influence to support providers, commissioners and local auditors with timely delivery.

All parties are keen to lay their annual reports and accounts in Parliament significantly earlier than has happened over the last four financial years however, the NAO remains concerned that there could be similar delays in the delivery of NHS local audits for 2023-24.

Irregularity in NHS England Accounts 2022-23

In 2022-23 NHS England and the NAO identified that 12 medical practitioners received ineligible suspension payments over the 2017-18 to 2022-23 financial years totalling £1,335,626.

NHS England failed to establish a system of control to ensure suspension payments were only paid to medical practitioners who met the qualifying criteria, and that suspension payments were stopped promptly once the qualifying period ended.

The C&AG has again qualified his regularity opinion in relation to these ineligible suspension payments (the 2021-22 NHS England accounts were also qualified on this issue). The circumstances indicate insufficient regard to the use of public funds. Suspension of a medical practitioner often involves serious misconduct, and the C&AG considers payment of ineligible suspension payments in those circumstances to be contentious. NHS England should have had checks in place to prevent or detect such payments.

DHSC Accounts 2022-23

PPE contracts

The Department is still investigating fraud in and trying to recover value from its COVID-19 PPE contracts. It estimates total fraud prevented and/or recovered for PPE procurement is £202 million, from a total spend of £13.6bn. The Department should continue to investigate potential cases of fraud in COVID-19 procurement and ensure that it recovers as much money as possible where it has identified fraud and also from contracts that have failed to deliver.

“It is clearly deeply unsatisfactory that I have been unable to provide an opinion on the UKHSA accounts for a second consecutive year. The Department must urgently exercise adequate oversight of UKHSA and the wider group to strengthen its financial governance and control.

“Elsewhere in the DHSC accounts, I remain concerned about the lack of timeliness regarding NHS audits and the wider ecosystem, particularly amid ongoing challenges in the local authority audit landscape.”

“Meanwhile, ongoing efforts to detect, prevent and recover fraud must continue, improving public confidence that this drain on the public finances is being tackled effectively and efficiently.”

Gareth Davies, head of the NAO

Read the full report : Department of Health and Social Care Annual Report and Accounts 2022-23

Channel website: https://www.nao.org.uk/

Original article link: https://www.nao.org.uk/press-releases/department-of-health-and-social-care-accounts-2022-23/

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