NHS Telford and Wrekin Clinical Commissioning Group

Transcription

1 NHS Telford and Wrekin Clinical Commissioning Group BUDGETARY CONTROL FRAMEWORK October 2018 Working with our patients, Telford and Wrekin CCG aspires to have the Healthiest population in England Section Title Page 1.0 Introduction and Background 4 1

2 2.0 Roles and Responsibilities NHS Telford and Wrekin CCG Financial Duties Delegation of Budget Responsibilities Budget Holders Budget Holding Budget Holder s Financial Duties Budget Holder Responsibilities Finance Officer Responsibility ISFE Accountability Budgetary Control Budget Reports Scheme of Reservation and Delegation QIPP Budget Setting Budget Setting Process Recurrent and Non-recurrent Funding/Expenditure Business Cases Reserves External Funding, Allocation and Pilots Budgetary Management Reporting Procedures 16 Section Title Page 5.2 Variances 16 2

3 5.3 Underspends Overspends Virement between Budgets Staff Establishment Control Agency Staff Budgets Out of Office Expenditure Capital Cash Management Raising an Invoice Raising a Credit Note Cash Receipting Raising and Approving Requisitions and Purchase Payment of an Invoice Petty Cash The Finance Department The CSU Finance Hubs Primary Care Financial Management Support NHS Funding Diagram Counter Fraud 26 Budgetary Control Framework NHS Telford and Wrekin CCG 3

4 1.0 Introduction and Background This guide has been prepared to help all budget holders effectively fulfil their financial and corporate responsibilities and is intended as a supplement to the support and advice available from the Finance Departments within both the CCG and CSU. The decision to publish this guide has been taken to ensure accurate, up-to-date and consistent advice to all budget holders within the CCG. This is a comprehensive guide aimed at all levels of the organisation and therefore may contain elements which are not directly relevant to all budget holders. The Prime Financial Policies (previously called Standing Financial Instructions) detail the financial responsibilities, policies and procedures to be adopted by the CCG and together with locally generated policies they cover all aspects of financial management and control. The Budgetary Control Framework is a key element of the CCG s internal control environment and is designed to assist budget holders and managers in the discharge of their responsibilities. It sets out the rules for the financial year within which the budgets are to be operated, clarifies roles and responsibilities and ensures that the CCG s budgetary processes form part of the overall assurance framework. The aims of the framework are: To develop managements understanding and capacity in relation to financial matters. This should enable managers to achieve the best possible value from the budgets at their disposal. To provide the CCG with the necessary controls to ensure that expenditure is incurred in accordance with the CCG s approved budget. The following underlying key themes will be maintained in the framework: Budgets will be set within NHS Telford and Wrekin CCG s expected resource. Budgets will be realistic and achievable with all assumptions and budget setting methodologies made clear. Expenditure must not exceed the budget without the approval of NHS Telford and Wrekin CCG s Chief Financial Officer. There will be no automatic right to receive a budget at the same level as previous years. Budget holders will need to demonstrate how resources within their control are being spent and identify the resultant value for money benefits derived therefrom. Budgets will also reflect NHS Telford and Wrekin CCG s policy on management and operational cost reduction schemes and targets. Actual staff posts will not be permitted to exceed funded establishments. Budget reports will be issues on a regular basis for appropriate review and action. Where practicable, expenditure and income budgets will be linked but identified separately in order that trends and performance can be monitored. 4

5 Clear ownership and accountability of budgets by budget holders/managers will be required and evidenced though formal sign-off of budgets. Any proposal requiring additional finds must have appropriate finance input and sign-off including identification of the source of funding, prior to submission to the Governing body or delegated committee for approval. 2.0 Roles and Responsibilities 2.1 NHS Telford and Wrekin CCG Financial Duties The NHS Telford and Wrekin CCG is required to achieve key statutory and administrative financial duties. The financial duties are as follows: To manage within and not exceed the Cash Limit. To manage within and not exceed the revenue and capital Resource Limits. To achieve operational Financial Balance each year. The administrative duties are as follows: To achieve the Better Payments Practice Code To adhere to the Value For Money principle See below for more details: Cash Limit - The cash limit is the maximum amount of funding the CCG s can draw down from the government within a financial year. The CCG may draw down less than the cash limit, but must not exceed it. Revenue and Capital Resource Limit - The main source of income is the Department of Health through the provision of resource limits. It is a fact of the financial situation of any CCG that there will be some areas of overspending during a financial year. Therefore, in order for the CCG to be able to meet its statutory requirement of breaking even on its Income and Expenditure Account, it is essential that other areas of expenditure under spend to counteract such overspends. In essence the CCG is reliant upon managers prudent use of resources to alleviate the financial pressures caused elsewhere within the CCG. The legal obligation of the CCG to break-even on Income and Expenditure may override any local favourable variances. Financial Balance defined as not exceeding the resource limit. Better Payment Practice Code (BBPC) - Telford and Wrekin CCG is obliged to pay all non-nhs and NHS invoices within 30 days of receipt of invoice. Failure to meet this requirement could also result in the CCG being liable to interest charges under Late Payment of Commercial 5

6 Debts (Interest) Act 1998 which gave small businesses the right to claim interest from public sector organisations on debts incurred under contracts agreed after 1 st November The CCG is expected to achieve a minimum of 95% of invoices paid within 30 days. It is important, therefore, that those who are required to authorise invoices / or provide proof of delivery of goods or services against purchase orders should do so immediately or as soon as practicable upon receipt. Notice of non-compliance to this legislation is made public through both the monthly reports to the Board and the Final Accounts process. The Finance Team will actively manage performance against this target and will contact all budget holders to ensure that appropriate actions are taken in a timely manner. Value For Money - Telford and Wrekin CCG are spending public money and must, therefore, be accountable for the use of that money. An element of that accountability is value for money, which means that budget holders are charged with ensuring economy, efficiency and effectiveness in their use of resources. 2.2 Delegation of Budget Responsibilities The Accountable Officer will delegate responsibility for the management of budgets to individuals in line with the scheme of delegation to permit such managers to perform their duties. Any delegation of budgets by the Accountable Officer will be specified in a financial scheme of delegation which will provide a clear definition of responsibility for the control of expenditure; the exercise of virements and the limits on the authorisation of expenditure. A budget is a specific sum of money allocated to carry out a specific plan for a specific period of time. 2.3 Budget Holders Budgets are managed by the budget holders who monitor actual performance during the year and take corrective action when needed. Budgets should be held by individuals who are responsible and accountable through a budget for the use of resources in discharging responsibilities. An awareness of financial control is essential within the culture of the organisation. As such budget holders are responsible for ensuring that all members of their team are knowledgeable of current finance issues and understand the financial implications of their decisions and actions. Responsibility for the budget is vested in one individual for accountability purposes. 2.4 Budget Holding Budget holding is the responsibility of the management of the resources for a particular area. The framework for managing those resources is the budget. 6

7 The preparation of budgets helps the CCG to quantify objectives and identify priorities; co-ordinate activities and communicate plans. The budget is the planned allocation of resources and a means of measuring performance. It is an effective management decision making tool for budget holders. 2.5 Budget Holder s Financial Duties Budget holders, who have the authority to spend and generate income on behalf of the CCG, are duty bound to support the organisation in achieving these financial duties. They have a responsibility to manage spend within their budgets. The non-achievement of this delegated responsibility has a direct impact on the CCG s ability to achieve its financial duties and the CCG s longer term financial viability. Budget holders have a responsibility to manage the resources within their agreed budget whilst achieving planned activity level. They should utilise the following three techniques: Interpretation Forecasting - Variance Analysis Each month, financial reports are distributed to budget holders by the CCG. The Finance Team will be available to support and advise the Budget Holder on each of these techniques. With the help of the finance team, it is important that a correct interpretation of the information contained within the financial reports is achieved. A major aspect of this interpretation involves ensuring that queries raised are of a material nature i.e. it is of greater importance to investigate a 50,000 overspend than dwell upon a 50 discrepancy between the financial report and the budget holder s own records. The key message here is to: Focus On What Is Important Forecasting based on historical spending patterns and anticipating the likely impact of action in the future should be calculated with support from finance colleagues. The forecast can be useful in identifying a need for an early action plan. 2.6 Budget Holder Responsibilities All budget holders have a set of responsibilities. These are: 7

8 To set realistic budgets in conjunction with their Finance Officer that are not in excess of the amount allocated. To complete their objective within the financial and staffing constraints laid out in the budget. To spend funds only as required and to manage funds and staff in order to ensure that the best possible value for money is achieved for the public purse. To work within the established control process to ensure that all posts are properly funded and approved. To achieve the accurate coding and timely approval of all financial documents such as invoices. To regularly monitor budgets, preferably on a monthly basis. To work closely with their Finance Officer in order to keep them informed of any forthcoming financial issues, identify risks that will affect financial position and to agree the likely year end forecast outturn position. To inform their Finance Officer of the cause of any budget variances, taking into account any virements options. To develop procedures in order to correct any areas of overspend that are identified and to keep their Finance Officer informed of the causes of the variance and the actions being taken to correct the position. To comply with the Financial Direction for NHS CCGs in England and NHS Telford and Wrekin CCG s Financial Policies and Procedures at all times. Budgets must be maintained in accordance with the CCG s overall plans and policies and must be used only for the purpose for which they are provided except where otherwise approved by The Governing Body. Budget holders are responsible for the production of business cases to the level and standard outlined in this document in response to any requests from the Executive Team. These could be required in support of bids, for additional funding or in order to justify expenditure which is already budgeted for within existing budgets. The management of a budget may be delegated to a named budget manager by the budget holder. Whilst the budget manager must comply with all the above requirements, the budget holder remains accountable for the performance of the budget(s) under their control. Budget holders will receive appropriate Finance training in budget management from Finance staff. It is essential that any training requirements are raised with your Finance Officer at the regular review meetings to ensure that there are no gaps in control. 8

9 2.7 Finance Officer Responsibility A finance officer will be available to help Budget Holders manage their budget. Officers from the CCG Finance Department will assist budget holders in aspects described which will include the following responsibilities: To provide accurate, timely and relevant information to help budget holders manage their budgets. To liaise regularly with budget holders to discuss any budgetary issues and forecasts. To work closely with budget holders to understand the nature and patterns of expenditure and agree likely forecast outturn position at year end (i.e. the extent to which expenditure is likely to deviate from budget.) To provide advice guidance and assistance to budget holders. However, the ultimate responsibility for the consequences of financial decisions lies with the budget holder. To assist budget holders in completing business case documentation for new developments or the review of existing services. To maintain a financial risk register which must be updated in conjunction with the budget holder To maintain records to ensure that budgets accurately reflect the approved establishment levels. 2.8 ISFE The Integrated Single Financial Environment (ISFE) was rolled out by the CCGs and CSUs from 1 st April The use of an ISFE has been agreed to ensure proper financial and corporate governance, financial consistency and proper risk management relating to the transfer of financial information. When a new starter commences and it has been identified that for their role they require access to the ISFE system, a user management form should be completed (see embedded document). The same form should also be used for any amendments and for leavers to ensure appropriate system access. ISFE User Form New users must complete the online training before they are provided with their user ID & password. Access to ISFE is via the NHS Shared Business services Homepage on: 9

10 2.9 Accountability The financial and other performance of the CCG is monitored on a monthly basis and reported to the CCG board and NHS England. Board meetings are held in public and as such, the financial performance is a matter of public record. 3.0 Budgetary Control 3.1 Budget Reports Final budget reports are available to view on a monthly basis. Reports are available using the ISFE Business Intelligence Module. Each budget holder has access to their specific cost centre within the overall budget. ISFE Business Intelligence User Manual ISFE_BI_Manual.doc x The reports are the basis upon which budget holders confirm their understanding of their department s income and expenditure position. All variances and unanticipated items should be investigated, with the support of the Finance staff as necessary. Each month budget holders are required to formally sign off the month end and forecast positions. 3.2 Scheme of Reservation and Delegation CCG Scheme of Delegation 3.3 QIPP In order to achieve efficiency targets whilst maintaining and improving quality, the Department of Health introduced the Quality, Innovation, Productivity and Prevention challenge. In practice, this means organisations follow the lean management principles of avoiding duplication, preventing errors and stopping ineffective practices. International evidence has shown that it is possible to improve the quality of care and patient experience whilst reducing costs. CCGs are responsible for leading the QIPP agenda but all NHS 10

11 organisations have a role to play in its delivery. Cost efficiency measures will be agreed with budget holder prior to the start of each financial year and deducted from base budgets. Each measure will be monitored and reviewed on a monthly basis against the planned savings. Where actual performance is below that planned, a revised action plan must be agreed to deliver the agreed savings. The ownership of any savings plan must be identified at the outset when plans are made. The NHS budget is now growing at a much slower rate than over recent years but demand for its services continues to rise. This means that all NHS organisations must deliver year in year real cost savings and reflect this in their annual plans. If the cost of an organisation s plans to purchase and/or deliver services exceeds its anticipated levels of income, further savings must be included within the budget to bring it back in line with available resources. 4.0 Budget Setting 4.1 Budget Setting Process The financial plans and resultant annual budgets are based on Telford and Wrekin CCG s anticipated resources, risks, efficiency targets and developments known at the time of setting the budget. Meetings between Finance colleagues and Budget Holders will take place between December and March each year to begin the budget setting process for the next financial year. Once budgets are refined, these will be sent to the CCG board for approval. The Financial Plan is presented to the CCG Board during March/April each year for approval. The Board s approval of the plan is inextricably linked with funding negotiations that take place during this time with Provider Trusts. It is with these financial constraints in mind that the Board is able to assess the budget-setting plan presented. Inflation adjustments will be applied in line with agreed financial planning assumptions. Once any amendments have been made and the budget has been approved by the Board the budget details are distributed to budget holders throughout the CCG. Budgets are subject to Quality, Innovation, Productivity and Prevention (QUIPP) targets set both nationally and locally by the CCG. All budgets must be agreed and signed-off by the appropriate budget holder as acceptance of their budgetary responsibilities. They must also be approved by The Governing Body prior to the start of the financial year and in advance of any new financial commitments being made. The business planning cycle will ensure that all identified developments and cost pressures are assessed, prioritised and approved by the CCG with reference to local and national 11

12 targets. Throughout the year it will also serve as a tool for evaluating and potentially disinvesting in services which are already in place. 4.2 Recurrent and Non-recurrent Funding/Expenditure Recurrent (on-going) and non-recurrent (current year only/time limited) budgets must be identified separately. Recurrent expenditure should not be committed against nonrecurrent funding unless prior written agreement has been obtained from the CCG Chief Finance Officer. Likewise, non-recurrent funding must only be used for non-current expenditure and it will be withdrawn at the beginning of the following financial year unless written agreement is obtained from the CCG Chief Financial Officer. If external funding streams are non-recurrent, written agreement confirming funding arrangements must be received from the external stakeholder prior to any financial commitment being made by the CCG. A debtor s invoice will be requested from Finance to be raised following confirmation of funding and the budget holder s Finance Officer must be informed. 4.3 Business Cases Business Cases will be required for all proposed developments. They may also be requested by the Executive Team in connection with any existing schemes within a budget holder s area of responsibility. All Business Cases must have appropriate input and support from the finance department. In particular, the source of funding must be identified and confirmed by the Finance Officer prior to submission to The Governing Body or delegated committee for approval. This will ensure that the associated costs are accurate and provide an additional check to ensure that all financial considerations have been taken into account. It will also ensure that, for both new and existing schemes, there is absolute clarity around the reasons for and the benefits and outcomes of the schemes under review. Any changes to commissioned activity/spend and cost pressures impacting on budgetary spend must be approved in the same way as new developments. Baseline budgets will not be automatically reset to accommodate cost pressures. Budget holders must formally apply for additional budgetary resources under the same rules as for investments and developments using the agreed business planning process. Approved development funding will be retained within Reserves until confirmation is received that the development has commenced. At such a time, the budget will be released 12

13 to a designated budget holder through the formal budget virements process. The amount released to the budget holder will reflect any slippage between the planned start date and the actual start date. Business cases for capital or revenue funding should include the following: Scheme title: the unique name which clearly identifies this proposal. Background: statement of current position and why the investment is required. Detailed description & explanation of proposals Intended Benefits: analysis of benefits highlighting:- o Compliance with Estates / Facilities Strategy o Contribution to Corporate Objectives o Compliance with NHS Telford and Wrekin CCG priorities o Contribution towards Commissioning & Service Development plans o Compliance with any statutory requirements on NHS Telford and Wrekin CCG o Contribution towards NHS Telford and Wrekin CCG s Strategic Plan delivery o Contribution towards statutory compliance o Contribution to QIPP and/or Corporate Savings targets o Income generation / cost sharing opportunities Options appraisal: outline & score each option :- o Financial analysis o Non-financial benefits clear identification and justification of benefits and weighted scoring matrices for all potential options o Value for Money analysis leading to the selection of optimal option, using key commissioning and service objectives of NHS Telford and Wrekin CCG for the identification of non-financial benefits aspects to consider and score. Preferred option: provide a detailed breakdown of:- o Revenue and capital expenditure implications 13

14 o Details of how financial consequences will be funded, both recurrently & non-recurrently o Clear timescales of costs by financial year o Details of any staffing implications and associated costs o Details of any knock on costs e.g. security, cleaning o Details of technical accounting implications and costs e.g. PFI and IFRS; o Details of how benefits will be measured, over what timescales and how and when they will be formally reported to NHS Telford and Wrekin CCG o Details of correcting or mitigating arrangements in place if benefits fail to be realised at key evaluation points o Post Project Evaluation arrangements including named leads Detailed outcome benefits analysis to include:- o Intended implementation timescale of each phase of the scheme o Risk Assessment o Implications of not proceeding including both financial and nonfinancial impact across the whole care pathway / health economy Scheme Lead Manager(s) Scheme Lead Executive Officer Produced by: name of the person who produced the proposal and date. Further advice regarding the format & content of a business case can be obtained from the designated Finance Officer. 4.4 Reserves NHS Telford and Wrekin CCG Chief Finance Officer, on behalf of the Accountable Officer, will endeavour to create such reserves as are deemed necessary to secure the ability of the CCG to meet its financial duties. Reserves may include sums to cover future pay awards, price inflation, unforeseen contingencies, non-recurrent spending or other specific items as not yet allocated to individual budgets. 14

15 The Chief Finance Officer may exercise discretion to partly or wholly allocate reserves directly to departments for subsequent allocation to specific budgets. Reserves will be reviewed on a monthly basis to determine both their adequacy and necessity. All changes to revenue resource allocations notified by the Department of Health will be reflected initially in reserves. Budget holders do not have an automatic right to receive an allocation direct into their budgets. Funds will only be released from reserves when the Chief Finance Officer is satisfied that: The appropriate approval process and procedures have been complied with There is a sound financial strategy in place for spending the resource The purpose is in line with the CCGs strategic objectives and demonstrates value for money The proposed use of resource is not or cannot be funded from within existing budgets The commitment will not jeopardise the CCGs ability to meet its statutory duties and financial targets. 4.5 External Funding, Allocation and Pilots No applications should be made for any additional external funding towards pilots or service developments without formal financial sign-off. This is to ensure that any projected costs submitted are validated and that the finance department is aware of the application in order to track receipt of the external funding. No funds should be committed until allocations have been confirmed. 5.0 Budgetary Management 5.1 Reporting Procedures Budget holders will be provided with the previous month s budget report. In order to provide an accurate financial position, accruals and prepayment adjustments are controlled by the Finance Team and reviewed on a monthly basis. This includes Goods/Services Received and not paid for (GRNI). Error suspense reconciliations will also be cleared each month by the Finance Team before the deadline for monthly closedown of the general ledger. 15

16 Executive Officer level budget holders will receive summarised versions of financial statements showing performance against each budget area within their remit. All budget holders will receive detailed budget statements by cost centre and will also be provided with additional information in relation to payroll expenditure. Budget holders are instrumental in ensuring the accuracy of forecasts. Budget holders and their financial officer will be asked to provide input on forecasts as they have a more in-depth knowledge of their budget areas and outstanding commitments such as purchase orders etc. They must also carry out regular reviews to ensure that the budget reports are an accurate record of the expenditure position to date and agree the forecast position for the year end. The Chief Finance Officer will produce a monthly position statement for the Governing body which will: Highlight performance against the CCG s key financial targets Explain the reasons behind major variances from the budget and detail actions being taken to rectify the position Identify major financial risks that could affect the CCG s financial position and include details of any action being taken to mitigate them 5.2 Variances A budget holder must manage their overall budget position within the resources available. Variances, where income or expenditure differs from the budget, must be fully investigated and understood in order for the appropriate action to be taken. The appropriate Finance Officer must be made aware of all significant variances and the causes of the discrepancy identified as soon as possible. Variance analysis can be employed in aid of this and the budget holder is responsible for proposing corrective action. As part of the year end closedown process, budget holders will be asked to highlight and explain any significant variances in advance of the audit. External auditors will determine their significance. 16

17 5.3 Underspends Budget holders are encouraged to generate savings and underspend, without reducing quality of service or administrative performance. Please note that underspends in any year are not normally carried forward for use in a subsequent year. 5.4 Overspends A budget holder does not have the authority to overspend their budget. The Governing Body must safeguard its overall spending position with regard to NHS Telford and Wrekin CCG s statutory financial duties and will expect appropriate prompt action to be taken in order to minimize the serious consequences of potential overspending. Where budget holders become aware that possible significant overspends could arise, immediate action must be taken to rectify the situation. The budget holder must inform the Chief Finance Officer or a senior member of the Finance Team as quickly as possible. Where power to transfer between budgets or budget headings has not been delegated, setting an under-spend against a corresponding overspend is not permitted. Overspends will not normally be carried forward from one year to another. Executive Officers and budget holders are expected to provide a financial strategy to ensure that a balanced budget is achieved. 5.5 Virement between Budgets As a general principle, budget holders must not incur expenditure which is normally chargeable to the budgets of other budget holders without prior written authority. Virement (transfer) of funds between budgets/reserves may be necessary during the year for a number of reasons. One of these would relate to the peaks and troughs of service demand that may of necessity require some flexing of budgets. Budget holders may wish to vire funds from within their own budgets or with budgets held by others. In cases where funds are moved to other budget holders, a virement form must be completed (in conjunction with the finance officer) and signed by both budget holders. The signature of both budget holders will be required before any budget is amended. The recipient should not assume that the virement will occur and must not take any action which commits expenditure until all signatures have been obtained. 17

18 A record of all budget changes from initial base budgets will be maintained by the Finance Team. Virements cannot be actioned for: Non-recurrent funds to meet recurrent commitments Transfers between capital and revenue (either way) without written approval of the Chief Finance Officer Transfers below 1,000 Actions that would increase running costs, unless approved by the Chief Finance Officer. The Accountable Officer and Chief Finance Officer have unlimited powers of virement. Executive Officer and budget holders are required to consult with their Finance Officer when considering the financial viability of virement proposals. The Chief Finance Officer will be informed of all authorised virements. 6.0 Staff 6.1 Establishment Control Prior to placing a job advertisement the proper establishment control procedure must be followed. In completing the establishment control documentation the originating manager must: Identify how the full cost of the post will be funded. This will include, where applicable, costs relating to salary, travel, training, furniture, equipment, computer, mobile phone, etc. Explain why the post should be filled, the impact on service delivery of not filling the vacancy and the financial impact of filling/not filling the vacancy. Establishment control forms completed in respect of all posts must be counter-signed by the Finance Officer as additional confirmation of availability of funding for the post. Copies of all changes to establishments will be sent to the Finance Team to ensure that they are matched with budgets. They will facilitate the better management of budgets by ensuring that financial information is kept up to-date and will ensure that posts are only placed against funded positions. Establishment management form 18

19 6.3 Secondment of staff The establishment control process must be followed for all staff being seconded into the CCG. A budget manager must ensure that sufficient funds are available within the overall budget before a secondment is commenced. Please see Secondment Policy for full details. 6.2 Agency Staff Budgets The establishment control process must be followed for all agency staff requirements. Where agency staff are used, the appropriate establishment budget will be charged. The cost of agency staff is normally more expensive than NHS staff and therefore a budget manager must ensure that sufficient funds are available within the overall budget to accommodate this additional cost. 6.3 Out of Office Users must ensure that they set up their vacation rule within ISFE when they are going to be on annual leave. This will ensure that any notifications are redirected and that there is not a delay in processes. Please refer to the approving requisitions guide for instructions. 7.0 Expenditure 7.1 Capital Capital expenditure is expenditure on a tangible productive asset, costing 5,000 or more, with an expected life in excess of one year. The figure of 5,000 includes VAT where this is non-recoverable. If it does not meet the following criteria it will fall into revenue budgets. A group of assets which individually may cost less than 5,000, but collectively cost more than 5,000 may be capitalised where the items fulfil all of the following criteria: Individually the items cost more than 250 They are functionally interdependent They are acquired at about the same date and are planned for disposal at about the same date They are under single managerial control. 19

20 A business case must be prepared for all capital schemes. Each proposal must have appropriate input and support from the Finance Officer prior to submission to the Governing body or delegated sub-committee/individual for approval. This will ensure that the associated costs, including revenue, are accurate and provide an additional check to ensure that all financial considerations have been taken into account. Ultimate approval of all capital schemes rests with the NHS England. Where schemes are proposed, no assumptions may otherwise be made regarding the splitting of capital costs between revenue and capital budgets. However, notwithstanding the above, any capital scheme must clearly include and have approval for any revenue commitments arising from the scheme. No virement will be permissible between revenue funding and capital funding without the written agreement of the Chief Finance Officer. Once approved each capital scheme will have a designated budget holder who will be responsible for ensuring that expenditure does not exceed approved values. The general rules stipulated within this budgetary control framework will also apply to capital expenditure. 7.2 Cash Management CCGs are required to keep minimal month end cash balance. It is not allowed to carry surplus cash above this limit nor is it allowed to run with an overdraft. To support the achievement of this very tight control, budget holders are required to confirm the payment profile for significant expenditure budgets with their Finance Officer. The Finance Team will maintain a rigorous cash forecasting regime to oversee compliance and will be required to manage any variation from the forecast on a monthly basis. 7.3 Raising an Invoice The budget holder must ensure that the appropriate procedures are followed to ensure that all income due to the CCG is raised at the correct time during the financial year with the appropriate supporting information. An invoice must be raised when monies are owing to the CCG using the template below. The form must by the CCG holder. Once Sales Invoice Template be authorised budget completed, 20

21 the form should be sent to the client based accountant who will check the form and its financial coding. Once it has been approved the form will be forwarded to the Hub team who will raise the invoice. 7.4 Raising a Credit Note A credit note is issued when goods or services have been incorrectly invoiced for. A credit note request should be completed and sent to the client based accountant who will validate it and forward it on to the Finance Hub Credit Note Request Form 7.5 Cash Receipting When a cheque is received in the post, it should be sent to the Hub Team s Finance Officer with the budget code. If you are unsure of the budget code, liaise with a member of the CCG finance team. 7.6 Raising and Approving Requisitions and Purchase Orders A requisition should be raised for all non-healthcare expenditure by a member of your section who has access to the ISFE system. The checklist below is a step-by-step guide to raising a requisition. How to raise a requisition Before raising the requisition: Identify required expenditure Refer to Prime Financial Policies to ensure that the correct processes are being followed Agree the budget cost centre that the expenditure will be charged to and the subjective analysis code. If you are unsure of the code please contact the client based accountant Once you have confirmed that a purchase order is required, the requisitioner will need to log into ISFE and use the link for the IPROC module 21

22 Please refer to the below guides for assistance and information. The attached documents include: the Requisitions User Guide; Guide to Requisitioning Catalogue and Non Catalogue Requests respectively. Requisitioners_user_ guide.pdf Quick Reference Guide 1 - Requisitionin The approver will receive an once the requisition has been submitted which contains a link to the ISFE system where the notifications can be accessed. Please see the below guide for help approving requisitions. Approving requisitions Quick Reference Guide 2 - Requisitionin If the requisition is not approved after 7 calendar days, it will be returned by the system as incomplete. If this happens, the requisitioner can resubmit but at this point it would be advisable to check with the budget manager that they will approve the requisition. Once approved, the requisition goes to procurement who will review and process a purchase order that will be sent to the supplier. Once goods and services have been received, the requisitioner then needs to receipt the goods on ISFE. It is important that this process is completed promptly once the goods have been received to ensure that the invoice is paid in line with the Better Payment Practice Code. The system will automatically perform a three way match between the invoice, the purchase order and the receipt. If there are any variances, a hold will be put on the invoice and an notification sent to the requisitioner. These notifications must be dealt with promptly by reviewing the information and completing the required actions. Please refer to the guide below for instructions on how to receipt goods/services within ISFE. Receipting Goods 22

23 7.7 Payment of an Invoice If a purchase order has not been raised in respect to the goods or services, then the authorisation and payment of the invoice will be managed using the Non-Purchase Order invoice approval route on the ISFE system. This system allows for the invoice to be inputted onto the system, checked, coded and then approved by an authorised officer. This is all undertaken electronically. If you receive a paper copy of an invoice from the supplier, please forward it to the address given below and inform the supplier to re-address any future invoices to: NHS Telford and Wrekin CCG 05X Payables K825 Phoenix House Topcliffe Lane Wakefield WF3 1WE If an invoice is in your workflow, each morning an notification will alert you of the number of invoices you have outstanding. Please refer to the guide below for instructions on how to approve an invoice. Approving Invoices The invoice should already have been checked, validated and coded by the finance team. If the invoice is still coded to the balance Sheet Code (05XN ) please return it to the finance Team. It is imperative that all stages of this process are carried out in a timely manner as any delay will adversely affect the CCG s Better Payment Practice Code performance. 7.8 Petty Cash Petty Cash is provided to cover minor items of expenditure (e.g. postage) where raising a purchase order would be impractical. It is the petty cash holder s responsibility to ensure that all receipts submitted for disbursements are authorised as per the scheme of delegation All receipts for petty cash reimbursement must be retained by the petty cash holder within the CCG 23

24 Before submitting the petty cash for reimbursement, a check must be completed that the total of the receipts plus the remaining cash equals the value of the float The form must be signed by the petty cash holder and authorised by an independent member of staff The authorised petty cash form should then be forwarded to the Finance Manager for the Hub Team A claim should be made on a regular basis and at least quarterly At the end of the financial year, a verification of the balances will be required. Further instructions will be sent out in annually in March 8.0 The Finance Department 8.1 The CSU Finance Hubs The CCG procures some Finance Services from the Commissioning Support Unit (CSU) whose mains functions are: Purchase to Pay Hub Order to Cash Hub NCA & CHC Hub The P2P Finance Hub is based in Lancashire and provides the transactional finance elements of accounts payable. Their duties include handling invoice queries, urgent payment requests and payment runs as well as recording the CCG s performance against the Better Payment Practice Code and they review and submit the CCG s VAT returns. They also generate the Outstanding Weekly Invoice List. Their address is: Jubilee House Lancashire Business Park Centurion Way Leyland Lancashire PR26 6PL The O2C Finance Hub is based in Stoke and provides transactional finance elements of accounts receivable including cash allocation, assist with ISFE User setup, amendments and closures, debtor requests and chasing and arrangement of statutory payovers. Their address is: Heron House 120 Grove Road Stoke on Trent Staffs 24

25 ST4 4LX The NCA & CHC hub is based in West Bromwich and provides transactional finance elements of the NCA & CHC processing of invoices and validating backing data as agreed. Their address is: High Street West Bromwich West Midlands B70 9LD As well as the service provided by the CSU, the CCG also has its internal CCG Finance Team who are available to support budget holders (see 8.3). Please refer to the document below for the CSU s contact details. CSU Contact Details 8.2 Primary Care In 2015/16 the CCG took delegated commissioning responsibility from NHS England for GP primary care services. These services are financed via contracts held by NHS England which are agreed nationally and refreshed each year. As NHS England has specialist contract and finance expertise in this area they continue to support the CCG with these functions. However, even where the CCG has a role, NHS England remains statutorily responsible. These contracts cover General Medical Services (GMS) and Personal Medical Services (PMS) but there are also other monies made available by NHS England for: Alternative Provider Medical Services Enhanced Services Premises Prescribing Quality and Outcomes Framework All financial transactions relating to Primary Care are dealt with by the NHS England finance team. They prepare the financial position and seek agreement from the CCG s Finance Manager prior to inputting into the ledger. Further details of roles and responsibilities can be found in the Memorandum of Understanding. 25

26 8.3 Financial Management Support The finance team within the CCG will support the budget holders in the CCG in ensuring the financial position and forecast year end position is accurately reported. They provide financial advice and support to assist your decision-making and contribution towards the CCG s objectives. On a monthly basis, the relevant finance contact will meet with the budget holder to discuss budget reports and agree a forecast position. There is a designated Finance Manager for Running Costs, Primary Care, Integrated Care and Secondary Care. Finance support within the Financial Management Team should be your first point of contact for income and expenditure queries. 8.4 NHS Funding Diagram 8.5 Counter Fraud NHS Protect, part of the NHS Business Services Authority, is responsible for tackling all fraud and corruption in the NHS. It is there to protect NHS resources so that they can be used to provide the best possible patient care. The CCG s Fraud & Corruption Policy defines the policy for dealing with suspected fraud and other fraudulent acts, dishonesty involving employees, contractors and their employees. 26

27 NHS Telford and Wrekin CCG have a designated Local Counter Fraud Specialist (LCFS) who is the main point of contact for anyone in the CCG who is concerned or suspicious. Staff who have any concerns or suspicions of any activity that may be fraudulent should contact one of the following immediately: Local Counter Fraud Specialist on Chief Finance Officer on National Fraud & Corruption Reporting Line on Alternatively you can the local fraud team on counterfraudteam@cwaudit.org or the national team online at Staff are protected by the Hearing Staff Concerns Whistle-blowing Policy. This, together with the Fraud & Corruption Policy, can be found on NHS Telford and Wrekin CCG intranet site. 27