Technical / Critical issues stand out in ‘quiet’ year-end
New accounting standards
The only new accounting standards are the ‘package of five’ standards relating to working with other entities (new IFRSs 10, 11 and 12 and revised IASs 27 and 28). This is the timeto review all contracts, service-level agreements or even informal arrangements with any other bodies to see whether they are subsidiary, joint operation or joint venture arrangements and decide the appropriate accounting treatment. Foundation trusts should remember that Monitor requires the disclosure of the accounting policy for any such arrangements that have not been accounted for under these standards.
Going concern
IAS 1 requires managers to make an assessment of an entity’s ability to continue as a going concern. Given the financial climate, this may be harder this year. It should include consideration of the expected outturn, reliance on financial support or non-recurrent savings, cashflow forecasts, levels of borrowing and working capital and performance against financial ratios and duties. In the NHS, the going concern assessment is complicated by service provision often being unaffected by the financial position. Service continuity may mean accounting policies are unaffected by the going concern assessment, but extra disclosures will be required where there are material uncertainties in that assessment.
Agreement of balances
Agreement of balances is always time- consuming. This time next year, agreement of income and expenditure at month 12 will be a required part of the exercise, as well as at month 9. It may be beneficial to adopt that approach a year early, especially as income and expenditure mismatches will be reported this year-end and must be corrected.The guidance for this year-end has been issued on the finman website. Everyone should read this and note areas where guidance has been provided. Key points to note are:
-
Agree accruals at the year-end.
-
Include any partially completed spell balances in accruals and do not bill for these.
-
Take care to identify the correct part of NHS England when agreeing balances with them (the same applies for part-year foundation trusts).
-
Assume that gross accounting is the default position and only use net accounting when the conditions set out in the guidance are met.
The process is a key risk for the Department of Health, especially as it expects to report a balanced position with only a small margin.
Remuneration report
The changes to the remuneration tables introduced last year continue to apply. Remember that the pension-related benefits calculation should exclude employee contributions and be reported as zero when the calculation results in a negative number. CCGs should refer to NHS England’s detailed guidance on dealing with pension disclosures in relation to GPs. This may result in changes to last year’s comparatives.
Governance statement
Finally, the governance statement should be clear as to whether any significant control issues have been identified and what they are. If there have been no significant control issues, that should be clear too.
Debbie Paterson is HFMA technical editor
|
In brief Monitor has published therevised annual planning timetablefor 2015/16. The timetable for planning, contracting and dispute resolution has been agreed with NHS England and the NHS Trust Development Authority. A letter outlining the timetable said it was challenging but achievable.
The Department of Health has published guidance on the healthcareeducation and training tarifffor 2015/16. The tariffs cover non-medical placements and medical undergraduate and postgraduate placements in secondary care. The guidance sets out the tariffs and how they can be implemented and varied.
The Department has also issuedguidance on the month 12 agreement of balances exercise– which is available from the online NHS finance manual – and it has published the month 12 payables/ receivables template on the site.
Changes havebeen made to theNHS foundation trust annual reporting manual 2014/15. According to Monitor, the changes to note were relatively minor, such as adding IFRS 9 and IFRS 15 to a list of standards not yet adopted, and disclosures such asthose on non-compulsory departure payments and valuation techniques. |
|
NICE update Hepatic encephalopathy treatment approved Hepatic encephalopathy isa reversible neuropsychiatric syndrome caused by an accumulation of toxins in the bloodstream that are normally removed by the liver. Symptoms range from personality changes, intellectual impairment through to reduced levels of consciousness and altered neuromuscular activity. Rifaximin decreases intestinal production and absorption of ammonia, which is thought to be responsible for the neurocognitive symptoms of hepatic encephalopathy, thereby delaying the recurrence of acute episodes. Hepatic encephalopathy is defined based on the severity of clinical symptoms of mental deterioration using the Conn grade. It may be classified as covert or minimal (Conn grade 0 or 1) or overt (Conn grade 2, 3 or 4). When people are in remission or have minimal hepatic encephalopathy, their condition may be managed at home under secondary care. However, if a person has an acute overt episode, they are often admitted to hospital for treatment. The current standard of care is treatment with lactulose although lactulose is not licensed for reducing the recurrence of episodes of overt hepatic encephalopathy. New guidance from NICE (TA 337) has now recommended that rifaximin is likely to be effective in reducing the recurrence of overt hepatic encephalopathy episodes and is well tolerated. Treatment with rifaximin may improve quality of life, prevent readmissions to hospital and reduce morbidity and carer burden. Overt hepatic encephalopathy occurs in around 30%-45% of people with cirrhosis. The estimated eligible population for rifaximin for preventing episodes of overt hepatic encephalopathy is expected to be approximately 12,000 people for the population of England. Rifaximin became available in January 2013. The manufacturer estimates there are around 2,300 people (21% ofthe treated population) currentlytaking rifaximin. It is estimated that by year three, the number of people taking rifaximin will rise to 40% of the treated population. The cost associated with implementing the guidance is estimated as £3m in year one, £5.6m in year two and £8.2m from year three onwards for the populationof England. People may continue to use rifaximin until death or until they have a liver transplant. NICE update was prepared by Nicola Bodey, senior costing analyst at NICE |
Related content
The value masterclass shares examples of organisations and systems that have pursued a value-driven approach and the results they have achieved.
This webinar series offers colleagues of ICS organisations the opportunity to discuss common priorities, challenges, and successes within their field.