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Government announces extension of International Accounting Standard 27 to all NHS organisations

Government announces extension of International Accounting Standard 27 to all NHS organisations

News Release issued by the COI News Distribution Service on 30 June 2011

The Government, with Monitor has agreed to extend the consolidation accounting standard to all NHS organisations from 1 April 2013. This application has been deferred since the adoption of International Financial Reporting Standards across central government on 1 April 2009.

This decision will ensure that the highest standards apply to the reporting of public expenditure. The deferral will allow time to achieve consistent and correct application across the NHS.
The advice of the Financial Reporting Advisory Board (FRAB) and the findings of the Review of NHS-linked Charities were considered in making this decision. Whilst FRAB has expressed concerns about a further delay to the application of the accounting standard, the Government and Monitor consider that more time is necessary to apply this standard consistently and correctly in a resource efficient manner.
The legal and regulatory independence of NHS-linked charities is unaffected by this decision. Charitable funds are protected by charity legislation so that they are only used for the purposes for which they were raised. Decisions on the use of an NHS charity’s funds continue to be the responsibility of the charity’s trustees, acting in the best interests of the charity and its beneficiaries. The NHS can only apply these charitable funds to the extent, and in the ways, that the charities’ trustees want.

Notes for Editors

1. An NHS charity is defined as a statutory trust, the objects of which, and trustee arrangements for which, are determined by the provision of the NHS Act 2006 for England.
2. The Treasury, with the Department of Health, the Devolved Administrations and Monitor agreed this decision as the Relevant Authorities with central government and health sector interests.
3. The Financial Reporting Advisory Board (FRAB) is responsible for providing independent advice to the relevant authorities on financial reporting principles and standards. The role of the Board was given statutory footing by the Government Resources and Accounts Act 2000, which requires the Treasury to consult on financial reporting principles and standards. Its membership is made up of an independent Chairman and members, preparers and users of financial statements, auditors and members nominated by the Relevant Authorities. More detail is set out at:
http://www.hm-treasury.g ov.uk/psr_frab_index.htm
4. The regulation of charities remains a separate matter and the responsibility of the Charity Commission.
5. Today’s announcement follows detailed consultation and review by the FRAB and the Treasury established Review of NHS linked Charities in the context of the government accounting framework.
a. Further detail on FRAB can be found here:
http://www.hm-treasury.g ov.uk/psr_frab_index.htm
b. The Review of NHS linked Charities Review Report and dissenting report can be found here:
http://www.hm- treasury.gov.uk/prs_frab_meetings_070411.htm.

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HM Treasury Press Office (Media)
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