24 May Mark Hodgson Executive Director Ernst & Young LLP One Cambridge Business Park. Cambridge CB4 0WZ. Dear Mark

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1 Agenda Item Annex C Note: To sign following Governing Body approval of the Annual Report and Accounts 2017/18 24 May 2018 Mark Hodgson Executive Director Ernst & Young LLP One Cambridge Business Park Cambridge CB4 0WZ Lockton House Clarendon Road Cambridge CB2 8FH Tel: Web: Dear Mark This representation letter is provided in connection with your audit of the financial statements of NHS Cambridgeshire and Peterborough Clinical Commissioning Group (the CCG ) for the year ended 31 March Your audit is conducted for the purpose of expressing an opinion as to whether the financial statements of the CCG give a true and fair view of the CCG s affairs as at 31 March 2018 and of its net operating costs for the year then ended and have been properly prepared in accordance with the accounting policies directed by the NHS Commissioning Board with the approval of the Secretary of State. Your audit also requires you to express an opinion as to whether, in all material respects, the expenditure and income disclosed in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I acknowledge that I have been designated as the officer responsible for preparing the accounts by the Secretary of State and that the following requirements included in the Accountable Officer Memorandum have been complied with throughout the year: that expenditure by the CCG complies with Parliamentary requirements. The basic principle which must be observed is that funds should be applied only to the extent and for the purpose authorised by Parliament; the Accountable Officer during the year was responsible for seeing that appropriate advice was tendered to the Board on all matters of financial probity and regularity. The following representations are made on the basis of enquiries of management and staff of the CCG with relevant knowledge and experience and, where appropriate, on inspection of supporting documentation sufficient to satisfy me that I can properly make each of the following representations to you. 24 May 2018 Page 1 of 7

2 I confirm, at the time the directors report is approved, to the best of my knowledge and belief, and having made the appropriate enquiries, the following representations: Financial Statements I have fulfilled my responsibilities, under the relevant statutory authorities, for the preparation of the financial statements in accordance with the NHS Commissioning Board Directions and the Department of Health Group Accounting Manual 2017/18. I acknowledge, as members of management of the CCG, our responsibility for the fair presentation of the financial statements. That I believe the financial statements referred to above give a true and fair view of the financial position, financial performance and cash flows of the CCG in accordance with the NHS Commissioning Board Directions and the Department of Health Group Accounting Manual 2017/18 and are free of material misstatements, including omissions. I confirm that I have approved the financial statements. I confirm that the significant accounting policies adopted in the preparation of the financial statements are appropriately described in the financial statements. I believe that the CCG has a system of internal controls adequate to enable the preparation of accurate financial statements in accordance with the NHS Commissioning Board Directions and the Department of Health Group Accounting Manual 2017/18 that are free from material misstatement, whether due to fraud or error. I believe that the effects of any unadjusted audit differences, as set out on page 22 of your Audit Results Report, accumulated by us during the current audit and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. I have not corrected these differences identified by and brought to my attention by the auditor because due to the immaterial nature of the differences. Fraud I acknowledge that I am responsible for the design, implementation and maintenance of internal controls to prevent and detect fraud. I have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. I have no knowledge of any fraud or suspected fraud involving management or other employees who have a significant role in the CCG s internal controls over financial reporting. In addition, I have no knowledge of any fraud or suspected fraud involving other employees in which the fraud could have a material effect on the financial statements. I have no knowledge of any allegations of financial improprieties, including fraud or suspected fraud, (regardless of the source or form and including without limitation, any allegations by whistleblowers ) which could result in a misstatement of the financial statements or otherwise affect the financial reporting of the CCG. Page 2 of 7

3 Compliance with Laws and Regulations I have disclosed to you all known actual or suspected noncompliance with laws and regulations whose effects should be considered when preparing the financial statements. Also that in all material respects, the expenditure and income recognised in the financial statements has been applied to purposes intended by Parliament and the financial transactions conform to the authorities which govern them, except for expenditure in excess of the revenue resource limit as reported to the Secretary of State and NHS England in our s30 referral dated 28 June Information Provided and Completeness of Information and Transactions I confirm that I have provided you with: Access to all information of which we are aware that is relevant to the preparation of the financial statements such as records, documentation and other matters as agreed in terms of the audit engagement; Additional information that you have requested from us for the purpose of the audit; and; Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence. Also that all material transactions have been recorded in the accounting records and are reflected in the financial statements. I have made available to you all minutes of the meetings of the Governing Body, and committees (or summaries of actions of recent meetings for which minutes have not yet been prepared) held through the year to the most recent meeting on the following date: 24 May I confirm the completeness of information provided regarding the identification of related parties. That I have disclosed to you the identity of the CCG s related parties and all related party relationships and transactions of which you are aware, including sales, purchases, loans, transfers of assets, liabilities and services, leasing arrangements, guarantees, non-monetary transactions and transactions for no consideration for the period ended, as well as related balances due to or from such parties at the year end. These transactions have been appropriately accounted for and disclosed in the financial statements. I confirm that I believe that the significant assumptions used in making accounting estimates, including those measured at fair value, are reasonable. I have disclosed to you, and the CCG has complied with, all aspects of contractual agreements that could have a material effect on the financial statements in the event of noncompliance, including all covenants, conditions or other requirements of all outstanding debt. Page 3 of 7

4 Liabilities and Contingencies All liabilities and contingencies, including those associated with guarantees, whether written or oral, have been disclosed to you and are appropriately reflected in the financial statements. I have informed you of all outstanding and possible litigation and claims, whether or not they have been discussed with legal counsel. I have recorded and/or disclosed, as appropriate, all liabilities related litigation and claims, both actual and contingent, and have disclosed in the financial statements any guarantees that you have given to third parties. Subsequent Events Other than the disclosure described in Note 38 to the financial statements, there have been no events subsequent to period end which require adjustment of or disclosure in the financial statements or notes thereto. Agreement of balances and key judgements I have disclosed to us details of all transactions and judgements that I have made on income and expenditure, payable and receivable balances with counter-parties irrespective of whether or not they have been included in the 2017/18 Agreement of Balances Exercise. I have agreed balances, disputes and claims with all NHS bodies via the Agreement of Balances process and where not agreed, you have reported the matter to us. I have disclosed to you all of the risks and judgements I have made in arriving at the CCG s reported financial outturn for financial year ended 31 March Accounting Estimates That in respect of accounting estimates recognised or disclosed in the financial statements: I believe the measurement processes, including related assumptions and models, you used to determine the accounting estimate(s) have been consistently applied and are appropriate in the context of the applicable financial framework. The disclosures relating to accounting estimates are complete and appropriate in accordance with the applicable financial reporting framework. The assumptions you used in making accounting estimates appropriately reflects our intent and ability to carry out specific courses of action on behalf of the entity, where relevant to the accounting estimates and disclosures. No subsequent events require an adjustment to the accounting estimates and disclosures included in the financial statements. Page 4 of 7

5 Specific Representations I confirm that: 1. Going Concern The CCG has prepared the financial statements on a going concern basis and that Note 1.1 to the financial statements discloses all of the matters of which I am aware that are relevant to the CCG s ability to continue as a going concern. 2. System Investment Fund The accounting treatment adopted by the CCG for the System Investment Fund (SIF), where the CCG acts as a host body, is the most appropriate. That the CCG does not have exposure to the risks and rewards associated with the system investment fund and as such Net Accounting has been adopted. Yours sincerely. Jenny Raine, Interim Chief Finance Officer NHS Date I confirm that the Audit Committee acknowledges the content of this letter as part of the accounts approval process and agreed that the Interim Chief Finance Officer signed this letter of representation on behalf of the CCG.. Dr Julian Huppert, Chair of the Audit Committee NHS Date Page 5 of 7

6 Related parties and related party transactions appendix During the year, other than that declared below, none of the Department of Health Ministers, clinical commissioning group Governing Body members or members of the key management staff, or parties related to any of them, has undertaken any material transactions with the clinical commissioning group. A number of local GPs were members of the CCG s Governing Body. Details of payments made by the CCG to their practices and related parties disclosed by the GPs and other Governing Body members were as follows: 31 March 2017 Payments to Related Party * Receipts from Related Party * Amounts owed to Related Party Amounts due from Related Party '000 '000 '000 '000 Dr Cathy Bennett, Partner, Cornford House Surgery Dr Mark Brookes, Partner, Nuffield Road Medical Centre Dr Harald Mistry, Senior Partner, Thomas Walker Surgery 79 2 Dr Gary Howsam, Partner, New Queen Street Surgery Dr David Irwin, Senior Partner, Buckden Practice Dr Alex Manning, Partner, Burwell Surgery Dr Andrew Wordsworth (left Sept 2016), Partner, Trinity Surgery Practice 112 Dr Neil Modha (left 31/07/16), Partner, Thistlemoor Med Centre 122 Dr Neil Modha (left 31/07/16), Company Secretary, Graham Young Chemists Ltd 1 Dr Neil Modha (left 31/07/16), Director, Greater Peterborough Network Ltd 403 Dr Neil Modha (left 31/07/16), spouse employed by Wansford practice (Dr Takhar & Partners) 209 Dr Gary Howsam, Director, Greater Peterborough Network Ltd to May Dr David Irwin, Partner, Dermatology Clinic Community Service (DCCSL) Dr David Irwin, spouse is a GP Partner Wellside Surgery, Sawtry Dr Alex Manning, Director, Urgent Care Cambridgeshire, to Oct ,995 Dr Alex Manning, clinical work for Herts Urgent Care 9,698 Dr Alex Manning, Trustee, Arthur Rank Hospice 3,692 Dr Harald Mistry, Director, ZR Medical Ltd 20 Dr Harald Mistry, Supervisory Board Director, Greater Peterborough Network 418 Dr Harald Mistry, Clinical Leads, Herts Urgent Care 9,698 Dr Andrew Wordsworth (left Sept 2016), ACES 1,146 Dr Andrew Wordsworth (left Sept 2016), CURA 18 Vanessa Connolly, Patient Member of Patient Participation Group, Huntingdon Road Practice, until November Tracey Dowling, spouse employee of, East Coast Community Health Care 7 Julian Huppert, employed by University of Cambridge to 21/10/ Rebecca Stephens, Patient Participation Group, Thorpe Road Surgery 80 3 Maureen Donnelly (left 05/07/16), Partner Governor, Cambridge University Hospitals NHS FT 65,917 Page 6 of 7

7 Rebecca Stephens, Member, Cambridgeshire & Peterborough NHS FT 137,182 (47) 3,598 (107) Rebecca Stephens, Member, Peterborough and Stamford Hospitals NHS FT 144,938 (52) 4,928 (1,095) Dr Harald Mistry, spouse employee of Cambridgeshire & Peterborough NHS FT 137,182 (47) 3,598 (107) Dr Christopher Scrase, employed by, Ipswich Hospitals NHST Dr Sripat Pai, spouse employee of, Cambridge University Hospitals NHS FT to 31/01/17 186,981 Dr Sripat Pai, spouse employee of, East & North Herts NHS Trust from Feb Dr Cathy Bennett, spouse employee of, Cambridge University Hospitals NHS FT 206,619 (118) 2,593 (6,162) Jonathan Dunk, spouse employee of, Cambridge University Hospitals NHS FT 206,619 (118) 2,593 (6,162) Jessica Bawden, spouse employee of, Cambridgeshire County Council, from Jan ,090 (514) 5,346 (1,575) Dr David Irwin, son employee of Cambridge University Hospitals NHS FT 206,619 (118) 2,593 (6,162) Dr Gary Howsam, sessional work with, Cambridgeshire Community Services NHST to July ,887 Dr Gary Howsam, stepson employee of Peterborough & Stamford Hospitals NHS FT. 144,938 (52) 4,928 (1,095) The Department of Health is regarded as a related party. During the year the clinical commissioning group has had a significant number of material transactions with entities for which the Department is regarded as the parent Department. These entities with material values are listed below: Page 7 of 7 Payments to Receipts from Amounts owed to Related Party Amounts due from Related Party Cambridge University Hospitals NHS Foundation Trust 206,619 (118) 2,593 (6,162) Peterborough & Stamford Hospitals NHS Foundation Trust 144,938 (52) 4,928 (1,095) Cambridgeshire & Peterborough NHS Foundation Trust 137,182 (47) 3,598 (107) Hinchingbrooke Health Care NHS Trust 88,447 (109) 395 (890) East of England Ambulance Service NHS Trust 34, Cambridgeshire Community Services NHS Trust 21,219 (99) 780 (27) The Queen Elizabeth Hospital, King's Lynn, NHS Foundation Trust 27, (383) Papworth Hospital NHS Foundation Trust 14,297 (67) 320 (18) NHS England 1,619 (609) 750 (1,451) East & North Hertfordshire NHS Trust 2, (60) Department of Health - (1,509) - - In addition, the clinical commissioning group has had a number of material transactions with other government departments and other central and local government bodies. Most of these transactions have been with local County Councils, see below for values. Payments to Receipts from Amounts owed to Related Party Amounts due from Related Party Cambridgeshire County Council 36,090 (514) 5,346 (1,575) Hertfordshire County Council 2,594 (15) 454 (47) Peterborough City Council 10,295 (90) 7,356 (287) * Related Party transactions have been calculated on a cash and not an accruals basis, as the headings provided by the Department of Health imply.