Technical review – April 2020

In response to the extra pressure on the NHS due to Covid-19, the Treasury and the Financial Reporting Advisory Board have decided that implementation of IFRS 16 in the public sector will be deferred for a further year to 2021/22. NHS England and NHS Improvement said that work already completed by organisations on the new international financial reporting standard on leasing will be of value in bringing leased assets on to the statement of financial position a year later than expected. However, the note to the 2019/20 accounts in relation to standards issued but not adopted will still have to be completed based on the work done to date.

A new briefing from the HFMA examines the financial governance considerations arising from the Covid-19 pandemic. For example, in terms of schemes of delegation and standing financial instructions, it considers the actions needed on authorised signatories, access to procedure notes and business continuity plans. It suggests the delegated limits that need to be considered most urgently. It also discusses the importance of setting up unique Covid-19 cost centres and budget codes and the level of detail that will be required.

The extension of the off-payroll working rules for intermediaries to the private sector that was due to happen from 6 April 2020 has been deferred to 2021. The off-payroll changes to processes for public sector bodies that resulted from this extension have also been deferred.

The Government Equalities Office and the Equality and Human Rights Commission have suspended enforcement of this year’s gender pay gap reporting deadline. In 2018, it became mandatory for all public sector employers with more than 250 employees to measure and publish their gender pay gap information on the government website and their own. Last year there was 100% compliance from all organisations including the NHS. NHS bodies would also normally be required to include a link in their annual report staff report to where the trust’s gender pay gap information can be found on the internet.

Auditors will conduct their annual accounts work remotely this year. With this presenting challenges for auditor verification of inventory, providers with material inventory balances have been asked to work with their auditors to provide alternative sources of assurance wherever possible. However guidance says that these steps should be proportionate. A ‘limitation of scope’ in the audit report may be necessary in some circumstances though it is hoped this could be avoided for most. This would be a qualified auditor opinion, modified only to reflect the auditor has been unable, at the time of the audit, to obtain sufficient and appropriate evidence on inventory.  The remainder of the opinion would be unchanged and confirm the appropriate completion of the audit.

GP practices in 2020/21 will continue to be paid at rates that assume they would have continued to perform at the same levels from the beginning of the outbreak as they have done previously, including for the purposes of the quality and outcomes framework, directed enhanced services and local enhanced services. QOF calculations for 2019/20 were due to be made as usual, as QOF activity was largely complete by early March. However, the impact of Covid-19 work would be investigated and a one-off adjustment made for practices earning less in 2019/20 than 2018/19 as a result of the virus-related activities.