Comment / Final accounts: a year-round event

The recurring theme at this year’s pre-accounts planning conference was how important it is that the Department of Health’s resource accounts are laid before Parliament before the summer recess. 

This affects everyone in the NHS who has an input into the preparation of any annual report and accounts. At the most basic level, it means there are 14 working days for individual NHS organisations  to prepare the draft annual report and accounts for submission to regulators (NHS England, NHS Trust Development Authority  and Monitor) and auditors, and then between 26 and 32 working days to finalise those documents.

For the regulators and their auditors, there are then only 10 to 15 working  days to prepare and audit consolidated accounts. Given those tight deadlines it is vital everyone is clear exactly what is required of them when we get to 31 March.

Another recurring theme of this year’s pre-accounts planning was that there were still issues to be resolved and final guidance to be issued.  This has been a recurring theme of pre-accounts planning conferences – and probably the reason they are so well attended.

It is easy to blame the people responsible for consolidation and guidance, but it is no easy task to bring everyone together and get an agreed  line. As all NHS organisations are responsible for preparation of their own annual reports and accounts, is there something more that can be done at grassroots level?

All the submissions for the HFMA Accounts Team of the Year Award this year said that preparation of the annual report and accounts is not a year-end event but ‘part of the normal financial reporting process plus a bit’. They all held de-briefs to learn lessons and make the following year’s process slicker. Can these de-briefs be used more proactively to prepare for the year ahead? Can they be used to identify issues that would help the whole sector? And are the final accounts really ‘part of the normal process’?

Perhaps we leave too many issues to the end of the year. It is inevitable that issues will arise at the last minute. As public sector bodies, there will always be new information required by Parliament – the Hutton pay multiple disclosures or off-payroll disclosures are good examples. But financial accounting should be considered throughout the financial year when transactions are entered into. 

Commissioners and providers will have treated antenatal payments under the maternity pathway tariff in a specific way through the year. For many, the Department’s March notification of the correct treatment will have confirmed the ‘local’ approaches, while others will be unpicking their treatment.

Although this issue was flagged by practitioners through the year, could local health bodies have done more to ensure this issue was dealt with earlier?

A debrief following each year-end is good practice. But it needs to look ahead as well as learn from the process just completed. What has changed in the contract? Have we entered into a pooled budget? What has changed in the 2014/15 Treasury Financial reporting manual?  What accounting standards are going to change? 

That way, issues can be identified and solutions suggested and raised with auditors and regulators early to assist their decision-making. There will need to be central guidance to ensure that the consistency required for consolidation is maintained. But if everyone de-briefs and considers financial reporting throughout the financial year, then perhaps next year’s pre-accounts planning will just be a round-up of what we already know.

The HFMA Accounting and Standards Committee would be glad to get your feedback to assist with this process. We have a watching brief that includes the issues we think are important, but would welcome any input at any time. Send accounting issues to [email protected]

David Bacon is chairman of the HFMA’s Accounting and Standards Committee