News / Monitor: consider consolidation impact

Foundation trust finance directors have been urged to ensure their annual accounts planning process has considered the impact of the consolidation of NHS charitable funds.

Consolidation of charitable funds is required for the first time in the 2013/14 accounts. The change follows the adoption of international financial reporting standards and the end of the Treasury dispensation for the NHS to opt out of applying IAS (international accounting standard) 27.

A letter from Monitor director of finance, reporting and risk Jason Dorsett said that some foundations prepare group accounts because they have subsidiary entities or other interests but most did not.

He said this would be the first group consolidation many foundation trusts had prepared.

‘It is very important that, as finance director, you should assure yourself that, if relevant, your team has the skills and expertise required to perform this consolidation,’ he said.

The level of risk to a trust’s accounts depended on the materiality of the amounts concerned, he added. Finance directors and their teams should be aware of a number of considerations, including the release of the month nine foundation trust consolidation template (which will enable a dry run) and a forthcoming HFMA guide to the consolidation – both due to be published in December.

He urged foundations to engage early with their auditors, where consolidation was material or otherwise significant.

Consolidation represented a risk to the preparation of Monitor’s consolidated foundation trust accounts. It was undertaking a short data collection exercise to understand the materiality of the consolidation to sector accounts.