SOUTHERN HEALTH AND SOCIAL CARE TRUST ANNUAL ACCOUNTS

Transcription

1 SOUTHERN HEALTH AND SOCIAL CARE TRUST ANNUAL ACCOUNTS FOR YEAR ENDED 31 MARCH 2010

2 Southern Health and Social Care Trust Annual Accounts For Year Ended 31 March 2010 The Accounting Officer authorised these financial statements for issue on 27 May 2010 Laid before the Northern Ireland Assembly under Article 90(5) of the Health and Personal Social Services (NI) Order 1972(as amended by the Audit and Accountability Order 2003) by the Department of Health, Social Services and Public Safety on 30 June

3 SOUTHERN HEALTH AND SOCIAL CARE TRUST ANNUAL ACCOUNTS FOR YEAR ENDED 31 MARCH 2010 Contents Pages FOREWORD 3 STATEMENT OF SOUTHERN HEALTH AND SOCIAL CARE TRUST S RESPONSIBILITIES AND CHIEF EXECUTIVE S RESPONSIBILITIES 4 CERTIFICATES OF DIRECTOR OF FINANCE, CHAIRMAN AND CHIEF EXECUTIVE 5 STATEMENT ON INTERNAL CONTROL 6 16 CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL NET EXPENDITURE ACCOUNT 19 STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH STATEMENT OF CHANGES IN RESERVES STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH NOTES TO THE ACCOUNTS ACCOUNT OF MONIES HELD ON BEHALF OF PATIENTS/RESIDENTS STATEMENT OF TRUST S RESPONSIBLITIES IN RELATION TO PATIENTS/RESIDENTS MONIES 97 CERTIFICATE AND REPORT OF THE COMPTROLLER AND AUDITOR GENERAL ACCOUNT OF MONIES HELD ON BEHALF OF PATIENTS/RESIDENTS

4 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2010 FOREWORD These accounts for the year ended 31 March 2010 have been prepared in accordance with Article 90(2)(a) of the Health and Personal Social Services (Northern Ireland) Order 1972, as amended by Article 6 of the Audit and Accountability (Northern Ireland) Order 2003, in a form directed by the Department of Health, Social Services and Public Safety. 3

5 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2010 STATEMENT OF SOUTHERN HSC TRUST S RESPONSIBILITIES AND CHIEF EXECUTIVE'S RESPONSIBILITIES. Under the Health and Personal Social Services (Northern Ireland) Order 1972 (as amended by Article 6 of the Audit and Accountability (Northern Ireland) Order 2003), the Southern HSC Trust is required to prepare financial statements for each financial year in the form and on the basis determined by the Department of Health, Social Services and Public Safety. The financial statements are prepared on an accruals basis and must provide a true and fair view of the state of affairs of the Southern HSC Trust, of its income and expenditure and cash flows for the financial year. In preparing the financial statements the Southern HSC Trust is required to: - observe the accounts direction issued by the Department of Health, Social Services and Public Safety including relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis. - make judgements and estimates on a reasonable basis. - state whether applicable accounting standards have been followed, and disclose and explain any material departures in the financial statements. - prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Southern HSC Trust will continue in operation. - keep proper accounting records which disclose with reasonable accuracy at any time the financial position of the Southern HSC Trust. - pursue and demonstrate value for money in the services the Southern HSC Trust provides and in its use of public assets and the resources it controls. The Permanent Secretary of the Department of Health, Social Services and Public Safety as Accounting Officer for health and personal social services resources in Northern Ireland has designated Mrs Mairead McAlinden of Southern HSC Trust as the Accounting Officer for the Southern HSC Trust. Her relevant responsibilities as Accounting Officer, including her responsibility for the propriety and regularity of the public finances for which she is answerable and for the keeping of proper records, are set out in the Accountable Officer Memorandum, issued by the Department of Health, Social Services and Public Safety. The Accounting Officer is also responsible for safeguarding the assets of the Southern HSC Trust and hence for taking reasonable steps to prevent and detect fraud and other irregularities. 4

6 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2010 CERTIFICATES OF DIRECTOR OF FINANCE, CHAIRMAN AND CHIEF EXECUTIVE I certify that the annual accounts set out in the financial statements and notes to the accounts pages 19 to 95 which I am required to prepare on behalf of the Southern Health and Social Care Trust have been compiled from and are in accordance with the accounts and financial records maintained by the Southern HSC Trust and with the accounting standards and policies for HSC bodies approved by the DHSSPS. 27 May 2010 Date Director of Finance (SHSC Trust) I certify that the annual accounts set out in the financial statements and notes to the accounts pages 19 to 95 as prepared in accordance with the above requirements have been submitted to and duly approved by the Board. Chairman (SHSC Trust) Date Chief Executive (SHSC Trust) Date 5

7 ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2010 STATEMENT ON INTERNAL CONTROL Scope of Responsibility The Board of Directors of the Southern HSC Trust (SHSCT) is accountable for internal control. As Accounting Officer and Chief Executive of the Trust, I have responsibility for maintaining a sound system of internal control that supports the achievement of the organisations policies, aims and objectives, whilst safeguarding the public funds and assets for which I am responsible in accordance with the responsibilities assigned to me by the Department of Health, Social Services and Public Safety (DHSSPS). In delivering these responsibilities, I am accountable for the Trust s performance to the Regional Health and Social Care Board (RHSCB) and DHSSPS and report through agreed performance management arrangements and Service & Budget Agreements. This has entailed regular performance management meetings with the RHSCB, including weekly reporting and meetings between Trust officers and the Performance Management Service Improvement directorate within RHSCB. In seeking to improve quality, safety, effectiveness and efficiency, the Trust works in partnership with the RHSCB, Public Health Authority (PHA), other public sector partners and the independent sector. The purpose of the system of internal control The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to: identify and prioritise the risks to the achievement of organisational policies, aims and objectives; evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control has been in place in the SHSCT for the year ended 31 March 2010, and up to the date of approval of the annual report and accounts, and accords with Department of Finance and Personnel guidance. The Board exercises strategic control over the operation of the organisation through a system of corporate governance which includes:- a schedule of matters reserved for Board decisions; a scheme of delegation, which delegates decision making authority within set parameters to the Chief Executive and other officers; standing orders and standing financial instructions; an Audit Committee; a Governance Committee; a Gifts and Endowments Committee; a Remuneration Committee. 6

8 System of Internal Financial Control The system of internal financial control is based on a framework of regular financial information, administrative procedures including the segregation of duties and a system of delegation and accountability. In particular it includes:- comprehensive budgeting systems with an annual budget which is reviewed and agreed by the board; regular reviews by the board of periodic annual financial reports which indicate financial performance against the forecast; setting targets to measure financial and other performances; clearly defined capital investment control guidelines; as appropriate, formal budget management disciplines. The Southern HSC Trust has an internal audit function which operates to defined standards and whose work is informed by an analysis of risk to which the body is exposed and annual audit plans are based on this analysis. In 2009/10 Internal Audit reviewed and tested the following systems and gave assurances as indicated: AUDIT ASSIGNMENT Financial Ledger Budgetary Control Asset Management (Migration Process) Pharmacy Inventory Management Salaries and Wages Staff Board & Lodgings Staff Travel Patients Private Property St. Luke s and Longstone Hospitals Cash Handling - Adult Supported Living facilities Facility Audits Income & Cash Handling Newry SEC & the Laurels Residents Property Woodlawn Adult Respite Unit Residents Property Riverside Non Pay Expenditure Central Debtors Income from Private Medical Practice Charitable Funds Cash and Bank Domiciliary Care Direct Payments Southern Area Urgent Care Service (SAUCS) Environmental Cleanliness Human Resources Sickness Reporting and Information Records Management Transport Services ICT System Review (Theatre Management System) ICT Security & Control IT Asset Registers Risk Management and Assurance Framework 7 LEVEL OF ASSURANCE PROVIDED Satisfactory Satisfactory Satisfactory Limited Satisfactory Satisfactory Limited Satisfactory Limited Satisfactory Satisfactory Limited Satisfactory Limited Limited Satisfactory Limited Satisfactory Limited Satisfactory Satisfactory Satisfactory Satisfactory Limited Satisfactory Satisfactory Satisfactory Satisfactory

9 With the time planned for Other aspects of counter fraud, Internal Audit participated in the Trust s Fraud Training Programme, during November, December and January. In accordance with 2009/10 internal audit plan, Agenda for Change Assimilations and Arrears calculations were re-performed during September and October Whilst the individual errors identified were not material, Internal Audit findings indicated a high error rate in calculations sampled. Further testing in January and February 2010 indicated a low error rate in the calculations sampled. A number of additional assignments were also performed by Internal Audit during the year, on the request of the Trust: In conjunction with the Western HSC Trust and the Business Services Organisation, Internal Audit reviewed two laboratory contracts in place since This work is ongoing and will be presented to the Audit Committee at a later date. Internal Audit carried out a full investigation into an alleged theft of patients monies at Longstone Hospital and prepared an evidence file for the PSNI. Internal Audit also provided advice and guidance in relation to issues raised by the Regulation and Quality Improvement Authority financial and care inspections at one private care home. A regional review of CSR Efficiency Savings was undertaken as a consultancy exercise in 2009/10. The aim of this review was to identify successes and share learning across the Trusts both in terms of project delivery and project management. In her annual report, the Head of Internal Audit reported that, based on the work carried out by Internal Audit staff, her overall opinion for the year ended 31 March 2010 is that there is a satisfactory system of internal control designed to meet the organisation s objectives, however limited assurance has been provided in a number of areas particularly Income and Management of Client Monies. The recommendations of the Internal Auditor to address these control weaknesses have been considered by the Audit Committee. They have been or are being taken forward by the management of the Trust and their implementation will be monitored by the Audit Committee during 2010/11. In relation to the reports with limited assurance:- Staff travel and subsistence: The team responsible for this area has been the subject of many changes during the year. A dedicated team is now in place, with a supervisor and the Payroll Manager is dedicating training time during 2010/11 to address procedures and controls in this area. Residents Private Property: This area has been discussed at Audit and Governance Committee and work is progressing on standard procedures in adult supported living facilities to address some of the issues raised. In addition, following the issue of DHSSPS circular HSS(F) 57/2009 Misappropriation of Residents Monies Implementation and Assurance of Controls in Statutory and Independent Homes, independent homes used by the Trust have been contacted concerning assurances over the financial controls they have in operation. Income/Debtors: A robust action plan was put in place by management to address issues raised in 2008/09. Improvements have been achieved, however without dedicated resource in this area, significant progress has been difficult. This will continue to be an area of significant management focus in 2010/11. 8

10 Cash and Bank: Significant progress has been made in this area in 2009/10 especially since February 2010 following the implementation of IT system improvements. Management will continue to monitor this area closely into 2010/11. Direct Payments: Following the issue of new guidance by the DHSSPS in this area, the Trust has established a working group to take the implementation of the new guidance forward in 2010/11. Transport Services/Southern Area Urgent Care Services: strengthen monitoring and control in these areas. Measures will be put in place to Internal Audit also verified the Trust s self-assessed level of compliance with a number of Controls Assurance Standards. They were able to confirm that in their view, a substantive level of compliance had been achieved, as set out below: Standard Level of compliance Achieved (Self Assessment) Verified Level of compliance Achieved (IA) DHSSPS Expectation Financial Management Substantive Substantive Substantive Risk Management Substantive Substantive Substantive Governance Substantive Substantive Substantive Medical Devices and Substantive Substantive Substantive Equipment Management Records Management Substantive Substantive Substantive ICT Substantive Substantive Substantive For those controls assurances standards not reviewed by Internal Audit, the Trust has in place a system to review all controls assurance standards to ensure that it is satisfied with the assessment of each standard and the supporting evidence. For the first time in 2008/09, the Audit Commission via the Northern Ireland Audit Office ran the National Fraud Initiative on electronic data from Trusts. This exercise matched data within and between audited bodies to prevent and detect fraud. The data was collected from payroll, trader payments and financial assessments systems. The Trust developed and implemented a plan during 2009/10 to investigate priority matches. This work uncovered a number of data and processing errors, however no evidence of fraud was uncovered as a result of the work performed. Capacity to handle risk As Chief Executive, I am responsible for the Risk Management process in the SHSCT. The Medical Director is the nominated Executive Director with lead responsibility for risk management. The Trust Senior Management Team agenda is given over to Governance once a month. The risk management strategy was reviewed internally in 2009 and systems have been revised and strengthened following the identification of some gaps, including the formalisation of a "live" corporate risk register, and the strengthening of Directorate Governance arrangements. The Trust's Clinical and Social Care structures have within each division/directorate a strong ethic of risk 9

11 management and the links between inputs [incident reporting, near misses, complaints, risk assessment] and outputs follow a "lessons learned" model. The above processes are communicated through to operational staff via the relevant operational Director and service line. Where Trust wide actions are required these are shared across directorates with one Director being given overall responsibility for coordinating an improvement plan and providing feedback to the Senior Management Team on progress with implementation. Periodic updates are also provided to the Trust's Governance Committee. Greater detail is provided below. The Trust's approach to risk assessment and management is based upon the Risk Management Australian/New Zealand Standards AS/NZS 4360:2004 model, and applies the use of a 5x5 Risk Assessment Matrix in line with recognised best practice. All risks are assessed to establish impact and consequence and subsequently graded and 'traffic light' coded as very low (green), low (yellow), moderate (amber) and high (red). The Risk and Control Framework The Trust's approach to risk management is outlined in the Trust Risk Management Strategy which is integrated with the Trust's Governance Strategy. The Risk Management Strategy outlines the risk management governance arrangements and the processes associated with risk management in the SHSCT. The Medical Director's governance team provide risk management support to all directorates across the Trust. Support is provided at all levels from raising staff awareness through training on the principles of risk management, handling complaints and incident reporting to the provision of risk reports at a corporate level. Risk registers are generated and populated to a standard format from department/directorate to corporate level. The Trust has a stratified approach to managing its risks with review processes in place at all levels within the Trust. This includes departmental risk registers, service line risk registers, directorate risk registers and the corporate risk register. The corporate risk register is populated using high level directorate specific information. The Trust continues to review and update its corporate risk register on a bimonthly basis at Senior Management Team level. It is important that the corporate risk register remains a live document in order to ensure the Trust's risk management processes provide information on risks in a timely manner and controls are embedded across the organisation. Risk registers are considered an integral part of the Board Assurance Framework and risks are considered in the context of the corporate objectives. The Senior Management Team now meets on a monthly basis to review risk and governance issues. The review of risk and governance information by the Senior Management Team and Governance committee assists the Trust in learning lessons from a wide range of internal and external information. This includes information from: complaints, adverse incidents, RQIA inspections and reviews, DHSSPS circulars and professional and other regulatory bodies' advice. This information is integrated into operational systems and ultimately improves the quality of care provided to patients and clients. Information Governance Arrangements The Trust has established an ICT Steering Group with senior representation across all Directorates which has responsibility for decisions relating to ICT investment, risk management, proposals and change management. The Group reports to the Trust s Senior Management Team (SMT) through the Executive Director with responsibility for ICT (Director of Performance & Reform). The ICT Steering Group is responsible for governance, direction and operational review of ICT across the Trust and also for joint or inter-organisational projects with other organisations. It will assist in ensuring that ICT responds to the needs of the entire organisation, manages risk and that investment is 10

12 objectively prioritised. This will ensure a robust information governance framework. The structure of information Governance in the SHSCT is as follows: Informatics Governance Framework Operational Information Governance: Directional & Representational Information Governance: Chief Executive Trust Board Director of Performance & Reform & Medical Director (Data Custodian) SMT AD Informatics Governance Committee Other Governance Boards e.g. CAS, Audit Regional Information Governance Steering Group Head of Corporate Records (Data Controller) Head of IT (IT Security Officer) Informatics Risk Register Records Management & Policy Committee & ICT Steering Group Data Protection Sub-Group Informatics Risk Register The Trust s Informatics Division (incorporating ICT, Information Systems, Information Management, Data Protection, FOI and Records Management), has a risk register which is reviewed monthly by the Assistant Director and Heads of Service and updated by staff as risks arise. Risks which cannot be managed by the Informatics Division are escalated to the Director of Performance & Reform, for the Directorate or Corporate Risk Register. Risk Management In December 2007, the Trust undertook data protection self assessment which focused on: Collection Recording Storage Retrieval Access Transmission Sharing Management 11

13 of electronic and hard copy personal data and information within and outside the Trust. In particular, the self assessment concentrated on: Is data and information collected and recorded in a secure manner; Is it securely stored to prevent unauthorised access; Can it only be accessed and retrieved by those authorised to do so; Is it managed appropriately relative to the associated risk; and Is it transmitted in a secure manner with only the minimum data and information shared with other departments and organisations. From this self-assessment, an action plan was developed which identified the following areas for improvement: 1. Improved contracts and data access agreements with third parties; 2. Identification & awareness of information held across the Trust and how it is processed, including sensitive information; 3. Transfer of information to 3 rd Parties; 4. Awareness & Training; 5. Restrictions Placed on Information Access (internal & external); 6. Transmission of information; and 7. Business Continuity Planning. On the basis of this, the SHSCT took a range of measures to reduce the risks associated with the loss of personal data including finalisation of a number of policies, use of encryption software, and raising awareness amongst staff of this issue. The SHSCT is committed to ensuring information governance and reducing the risk of loss of data and will continue to review this and make improvements where necessary. Litigation Services The Trust uses the Directorate of Legal Services in the Business Services Organisation as its main legal providers. A very small number of cases remain to be managed by independent legal services providers, for example where a conflict of interest may exist. A recent internal audit report which tested the Trust s compliance with HSS(F) 67/2006 Payments in respect of Litigation and Legal Services highlighted a priority two issue to be addressed by management of the Trust. Public Stakeholder Involvement In keeping with the Trust s Corporate commitment to extending public involvement across the organisation it has completed consultation on a Draft Strategic Action Plan Framework for Personal and Public Involvement (PPI). Directorate PPI Baseline Reports have been developed, mapping all PPI activity by division. They also provide information on groups and individuals who are interested in being further involved in the work of Directorates. Recruitment of additional service users and members of the public to work with us on this agenda is underway. The baseline reports provide information on the staff within each Directorate who have been trained in community development approaches, facilitation skills and PPI training as well as the number and roles of volunteers operating within specific work areas of the Trust. This has led to the development of Directorate specific Action plans and an Executive Corporate PPI Action Plan. An easy read version of the PPI Action Plan Framework is being developed in light of the feedback received during the consultation. 12

14 A range of training programmes and support processes have been established to facilitate and support staff to develop their skill base in relation to public involvement and as a result ensure the Trust is better positioned to fulfil its obligations. In addition a range of communication and resource materials has been produced to facilitate and support communities, staff teams and partner organisations to work together. The approach to Public Involvement is underpinned by an ethos, practice and ongoing investment in community development. The setting of priorities, actions and service developments within the Trust are shaped on the basis of the needs, priorities and issues identified within local communities. Locality teams continue to build capacity, support and partnership with a large number of local community partners to facilitate and support this work. Resource ( 40k over 3 years) has been secured from HSCB and successfully tendered to a voluntary sector organisation to support capacity building in this regard. The priority given to PPI and its position within the accountability structures of Directorates, Managers and staff, together with the investment in specific staff resource further highlights the Trust s commitment to partnership working with all partners and sectors. Directorates are fully committed to ensuring Public Involvement is an integral element of their work. Wider Control Environment With regard to the wider control environment the SHSCT has in place a range of organisational controls, commensurate with the current assessment of risk, designed to ensure the efficient and effective discharge of its business in accordance with the law and departmental direction. Every effort is made to ensure that the objectives of the SHSCT are pursued in accordance with the recognised and accepted standards of public administration. The Trust s recruitment and selection policies are based on the principle of equality of opportunity and controls are in place to ensure that all such decisions are taken in accordance with the relevant legislation. Such controls include implementation of best practice procedures, mandatory training for all staff involved in recruitment and selection processes and ready availability of HR expertise and legal advice where necessary. With the centralisation of this service from April 2007 and harmonisation of legacy policies and practice, the opportunity has been taken to preserve and build on the best of legacy Trust practice and to ensure that this encompasses all Trust recruitment and selection activity in the new Trust. The SHSCT Board Assurance Framework is an integral part of the Trust s governance arrangements and is complemented by the management of the Trust s corporate risk register. Throughout the year the risks to achieving the organisational objectives were kept under review and where there were identified gaps in controls to mitigate against the risks or where there were gaps in assurance these were brought to the attention of the Board of Directors where corrective action was discussed and action plans put in place. Reports from RQIA are presented to and reviewed by the Governance Committee. In 2009/10 RQIA has reported on a number of unannounced hygiene inspections across a number of sites in the Trust. Action plans have been presented to and reviewed by the Governance Committee where Board members have not been assured that sufficient action is being taken; directors have been asked to put in place further controls and update the Board of Directors accordingly. Where there have been challenges to the Trust in meeting the standards (maternity services and hygiene inspections) applied by the RQIA, these have been discussed with representatives from the RHSCB. 13

15 Compliance with Controls Assurance Standards 2009/10 The Southern HSC Trust assessed its compliance with the 22 Controls Assurance Standards which were defined by the Department and against which a degree of progress is expected in 2009/10. The detail of this is as follows: Standard DHSS&PS Expected Level of Compliance Buildings, land, plant and Substantive non-medical equipment (70 99%) Decontamination of Substantive medical devices (70 99%) Emergency Planning Substantive (70 99%) Environmental Cleanliness Substantive (70 99%) Environment Management Substantive (70 99%) Financial Management Substantive (core standard) (70 99%) Fire safety Substantive (70 99%) Fleet and Transport Substantive Management (70 99%) Food Hygiene Substantive (70 99%) Governance (core standard) Substantive (70 99%) Health & Safety Substantive (70 99%) Human Resources Substantive (70 99%) Infection Control Substantive (70 99%) Information Communication Technology Management of Purchasing and Supply Medical Devices and Equipment Management Medicines Management Records Management Research Governance Risk Management (core standard) Security Management Substantive (70 99%) Substantive (70 99%) Substantive (70 99%) Substantive (70 99%) Substantive (70 99%) Substantive (70 99%) Substantive (70 99%) Substantive (70 99%) Trust Level of Compliance in 2009/10 Substantive Substantive Substantive Substantive Substantive Substantive* Substantive Substantive Substantive Substantive* Substantive Substantive Substantive Substantive* Substantive Substantive* Substantive Substantive* Substantive Substantive* Substantive 14

16 Standard Waste Management DHSS&PS Expected Level of Compliance Substantive (70 99%) Trust Level of Compliance in 2009/10 Substantive * De-notes subject to verification by Internal Auditor in 2009/10 Compliance with Quality Standards 2009/10 Compliance with the standards has been assessed through RQIA reviews and where gaps in compliance have been identified, these have been addressed and taken forward in action plans. Quality standards are an integral part of the Trust Board Assurance Framework and the Board has been presented with the findings of RQIA reviews and action plans. Review of Effectiveness As Accounting Officer, I have responsibility for the review of effectiveness of the system of internal control. My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers within the SHSCT who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management letter and other reports. I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Senior Management Team, Trust Board, Audit Committee and Governance Committee as follows: The Trust Board, as the corporate decision making body, considered key strategic and managerial issues facing the Trust, monitored performance against ministerial and Trust strategic priorities and received assurances of the effectiveness of the system of internal control. The Trust held 8 public Board meetings in 2009/10. The Audit Committee met on 6 occasions in 2009/10 and in particular reviewed the establishment and maintenance of an effective system of integrated governance, risk management and internal control across the organisation s activities. The committee reviewed the schedules of losses and compensations and the annual financial statements prior to submission to the Board. The committee considered the provision of Internal Audit services, reviewed and approved the Internal Audit plan for 2009/10 and the Mid Year Assurance statement and conducted a self assessment. The chair of the committee advised the Board on Internal and External audit services and presented the minutes of all Audit Committee meetings to the Trust Board. The Governance Committee met on 4 occasions in 2009/10. Throughout the year the committee considered the review of clinical and social care governance structures, clinical and social care governance issues in reports in relation to risk management (including the corporate risk register and Review of Risk Management), incidents, serious adverse incidents, independent and case management reviews, patient safety initiatives, medicines governance, professional governance, information governance, and reports of requests under Freedom of Information. The committee monitored progress in response to action plans developed to address recommendations from external reviews by RQIA. The minutes of all Governance committee meetings were presented by the chairman of the committee to the Trust Board. The Endowments and Gifts Committee met on 3 occasions in 2009/10 to oversee the administration of the Endowments and Gifts funds, their investments and disbursement. The chair of the committee presented the minutes of the Endowments and Gifts committee to the Trust Board. The Remuneration Committee met on 2 occasions in 2009/10 progressing matters pertaining to the appropriate remuneration of senior executives, in accordance with DHSSPS policy and guidance. 15

17 Significant Internal Control Issues As referred to earlier, the reports from Internal Audit services and RQIA have identified areas for focus and action in 2009/10. Internal audit were commissioned to undertake an investigation into Patients Private Property at Longstone Hospital early in this financial year following an irregularity which was identified through the system of controls in place. This investigation identified approximately 7,500 of unexplained or suspicious expenditure. The case was referred to the PSNI for investigation and the Trust s disciplinary procedures were followed. Trust management has actioned Internal Audit recommendations arising from this investigation and a follow up audit by Internal Audit resulted in a satisfactory level of assurance being provided over the controls in operation. No high risk internal control issues have been identified from work conducted in 2009/10, however the findings and recommendations of Internal Audit, RQIA and other reports are the basis of action plans which will address weaknesses/gaps in control and ensure continuous improvement to the system of internal control in 2010/11. Accounting Officer 27 May 2010 Date 16

18 Southern Health and Social Care Trust THE CERTIFICATEAND REPORTOF THE COMPTROLLER AND AUDITOR GENERAL TO THE NORTHERN IRELAND ASSEMBLY I certify that I have audited the financial statements of Southern Health and Social Care Trust for the year ended 31 March 2010 under the Health & Personal Social Services (Northern Ireland) Order 1972, as amended. These comprise the Net Expenditure Account, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Reserves and the related notes. These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited. Respective responsibilities of the Chief Executive and auditor As explained more fully in the Statement of Chief Executive s Responsibilities, the Chief Executive is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland).Those standards require me and my staff to comply with the Auditing Practices Board s Ethical Standards for Auditors. Scope of the Audit of the Financial Statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Southern Health and Social Care Trust s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Southern Health and Social Care Trust; and the overall presentation of the financial statements. In addition, I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and income reported in the financial statements have been applied to the purposes intended by the Assembly and the financial transactions conform to the authorities which govern them. Opinion on Regularity In my opinion, in all material respects the expenditure and income have been applied to the purposes intended by the Assembly and the financial transactions conform to the authorities which govern them. Opinion on financial statements In my opinion: the financial statements give a true and fair view, of the state of Southern Health and Social Care Trust s affairs as at 31 March 2010 and of its net expenditure, changes in reserves and cash flows for the year then ended; and the financial statements have been properly prepared in accordance the Health & Personal Social Services (Northern Ireland) Order 1972, as amended and Department of Health, Social Services and Public Safety directions issued thereunder. 17

19 Opinion on other matters In my opinion: the part of the Remuneration Report to be audited has been properly prepared in accordance with the Health & Personal Social Services (Northern Ireland) Order 1972 as amended and the Department of Health, Social Services and Public Safety directions issued thereunder; the information given in the Director s Report and Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which I report by exception I have nothing to report in respect of the following matters which I report to you if, in my opinion: adequate accounting records have not been kept; or the financial statements are not in agreement with the accounting records; or I have not received all of the information and explanations I require for my audit; or the Statement on Internal Control does not reflect compliance with Department of Health, Social Services and Public Safety s guidance. Report I have no observations to make on these financial statements. KJ Donnelly Comptroller and Auditor General Northern Ireland Audit Office 106 University Street Belfast BT7 1EU 23 June

20 NET EXPENDITURE ACCOUNT FOR YEAR ENDED 31 MARCH 2010 Expenditure Restated NOTE 000s 000s Staff costs 4.1 (303,291) (285,786) Depreciation 5.0 (12,009) (10,540) Other Expenditure 5.0 (216,646) (195,517) (531,946) (491,843) Income Income from activities ,916 19,080 Other Income 6.2 8,274 7,506 Reimbursements receivable 6.3 (6,800) 7,507 22,390 34,093 Net Expenditure (509,556) (457,750) Credit reversal of notional costs Cost of capital 5.0 7,651 7,383 Notional costs (audit fees) Net expenditure for the financial year (501,845) (450,315) Revenue Resource Limit (RRL) , ,420 Surplus against RRL The notes on pages 25 to 95 form part of these accounts All Income and Expenditure is derived from continuing activities 19

21 STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2010 leave cell blank Restated Restated NOTE 000s 000s 000s 000s 000s 000s Non Current Assets Property, Plant and Equipment 7.0/7.1/7.3/ , , ,398 Intangible assets 8.0 /8.1/ Financial Assets Total non current Assets 250, , ,587 CURRENT ASSETS Assets classified as held for sale Inventories ,493 3,017 1,830 Trade and other Receivables ,692 47,300 41,271 Other current assets , Financial assets Cash and cash equivalents ,005 5,325 TOTAL CURRENT ASSETS 42,971 52,853 48,770 Total Assets 293, , ,357 Current Liabilities Trade and other Payables 15.0 (47,724) (51,910) (60,022) Other Liabilities Total current liabilities (47,724) (51,910) (60,022) Non current assets plus/less net current assets/liabilities 246, , ,335 Non Current liabilities Provisions 17.0 (20,144) (31,390) (26,545) Other Payables > 1 yr Financial Liabilities Total Non Current Liabilities (20,144) (31,390) (26,545) ASSETS LESS LIABILITIES 226, , ,790

22 RESERVES Donated asset reserve 4,284 4,180 4,400 Revaluation Reserve 19,931 12,494 7,548 General Reserve 201, , , , , ,790 The financial statements on pages 19 to 95 were approved by the Board on 27 May 2010 and were signed on its behalf by: Signed (Chairman) Signed (Chief Executive) The notes on pages 25 to 95 form part of these accounts 21

23 STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 MARCH 2010 Note General Revaluation Donation Total Reserve Reserve Reserve 000s 000s 000s 000s Balance at 31 March ,331 7,548 4, ,279 Changes in accounting policy (IFRS) (2,402) 0 0 (2,402) Change in accounting policy - GIA (8,087) 0 0 (8,087) Restated balance at 1 April ,842 7,548 4, ,790 Changes in reserves Net gain/(loss) on revaluation of property, plant & equipment 7.2, , ,063 Impairment of property, plant and equipment (11) (11) Donated asset reserve - transfer to net expend for depreciation 0 0 (326) (326) Non cash charges - cost of capital 5 7, ,383 Non cash charges - auditors remuneration Net expenditure for the year (457,750) 0 0 (457,750) Capital grant 4, ,160 Total recognised income and expense for (446,155) 4,946 (220) (441,429) Grant from Parent 471, ,239 Balance at 31 March ,926 12,494 4, ,600 Changes in reserves Net gain/(loss) on revaluation of property, plant & equipment 7.1, ,437 (292) 7,145 Donated asset reserve - transfer to net expend for depreciation 0 0 (390) (390) Donated asset receipts Donated asset disposal 0 0 (4) (4) Non cash charges - cost of capital 5 7, ,651 Non cash charges - auditors remuneration Transfers between reserves Net expenditure for the year (509,556) 0 0 (509,556) Total recognised income and expense for (501,845) 7, (494,304) Grant from Parent 500, ,773 Balance at 31 March ,854 19,931 4, ,069

24 STATEMENT OF CHANGES IN RESERVES FOR THE YEAR ENDED 31 MARCH 2010 (continued) ANALYSIS OF REVALUATION RESERVE Property, Plant & Equipment Intangibles Total '000 '000 '000 Balance at 31 March , ,548 Changes in accounting policy Restated balance at 1 April , ,548 Movements in 2008/09: Net gain/ loss on revaluation 4, ,946 Balance at 31 March , ,494 Movements in 2008/09: Net gain/ loss on revaluation 7, ,437 Transfer to General Reserve Balance at 31 March , ,931 23

25 STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH 2010 Restated s 000s Cashflows from operating activities Net expenditure after coc & interest (509,556) (457,750) Adjustments for non cash costs 43,826 28,747 (Increase)/decrease in trade & other receivables 8,979 (6,216) (Increase)/decrease in inventories (476) (1,187) Increase/(decrease) in trade payables (4,186) (8,112) less movements in payables relating to items not passing through the net expenditure account: Movements in payables relating to capital 3,864 (2,595) Use of provisions (5,600) (5,213) Net cash outflow from operating activities (463,149) (452,326) Cashflows from investing activities Purchase of property, plant & equipment (38,785) (18,076) Purchase of intangible assets (222) 0 Proceeds of disposal of property, plant & equipment 4 3 Net Cash inflow/(outflow) from investing activities (39,003) (18,073) Cash flows from financing activities Grant in aid 500, ,079 Net financing 500, ,079 Net increase (decrease) in cash & cash equivalents in the period (1,379) (3,320) Cash & cash equivalents at the beginning of the period 14 2,005 5,325 Cash & cash equivalents at the end of the period ,005 The notes on pages 25 to 95 form part of these accounts 24

26 OUTHERN HSC TRUST STATEMENT OF ACCOUNTING POLICIES 1. Authority These accounts have been prepared in a form determined by the Department of Health, Social Services and Public Safety based on guidance from the Department of Finance and Personnel s Financial Reporting Manual (FReM) and in accordance with the requirements of Article 90(2) (a) of the Health and Personal Social Services (Northern Ireland) Order 1972 No 1265 (NI 14) as amended by Article 6 of the Audit and Accountability (Northern Ireland) Order The accounting policies follow IFRS to the extent that it is meaningful and appropriate to HSC Trusts. Where a choice of accounting policy is permitted, the accounting policy which has been judged to be most appropriate to the particular circumstances of the Trust for the purpose of giving a true and fair view has been selected. The Trust s accounting policies have been applied consistently in dealing with items considered material in relation to the accounts. Changes from UK GAAP to IFRS The HSC has prepared its accounts in accordance with IFRS with the effective date of transition being 1 st April First time adoption requires full comparative information to be disclosed under IFRS. All differences between closing UK GAAP financial position and opening IFRS financial position are processed through reserves. This is shown in Note 2 to the accounts. 1.1 Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment. 1.2 Currency and Rounding These accounts are presented in UK Pounds Sterling. The figures in the accounts are shown to the nearest 1, Non Current Assets Property, Plant and Equipment Property, plant and equipment assets comprise Land, Buildings, Dwellings, Transport Equipment, Plant and Machinery, Information Technology, Furniture and Fittings, and Assets under Construction. 25

27 Recognition Property, plant and equipment must be capitalised if: it is held for use in delivering services or for administrative purposes; it is probable that future economic benefits will flow to, or service potential will be supplied to, the Trust; it is expected to be used for more than one financial year; the cost of the item can be measured reliably; and the item has a cost of at least 5,000; or collectively, a number of items have a cost of at least 5,000, where the assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control; Or items form part of the initial equipping and setting-up cost of a new building, ward or unit, irrespective of their individual or collective cost. On initial recognition property, plant and equipment are measured at cost including any expenditure such as installation, directly attributable to bringing them into working condition. Items classified as under construction are recognised in the balance sheet to the extent that money has been paid or a liability has been incurred. Valuation of Property, Plant and Equipment Property, plant and equipment assets, excluding IT assets, are revalued annually using indices provided by DHSSPS in order to maintain a current cost. These assets are stated in the statement of financial position at their depreciated replacement cost less any impairment losses; IT assets are stated in the statement of financial position at depreciated historic cost. Valuation of Land and Buildings Land and buildings are carried at the last professional valuation, in accordance with the Royal Institute of Chartered Surveyors (Statement of Asset Valuation Practice) Appraisal and Valuation Standards in so far as these are consistent with the specific needs of HSC organisations. The last valuation was carried out on 31 January 2010 by Land and Property Services (LPS) which is an independent executive within the Department of Finance and Personnel. The valuers are qualified to meet the Member of Royal Institution of Chartered Surveyors (MRICS) standard. The valuation at 31 January 2010 was considered by LPS to be not materially different to the value at 31 March 2010 and this valuation has been used for year end purposes. Professional revaluations of land and buildings are undertaken at least once in every five year period and are revalued annually, between professional valuations, using indices provided by LPS. 26

28 Land and buildings used for the Trust s services or for administrative purposes are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation less any subsequent accumulated depreciation and impairment losses. Fair values are determined as follows: Land and non-specialised buildings open market value for existing use Specialised buildings depreciated replacement cost Properties surplus to requirements open market value less any material directly attributable selling costs. Modern Equivalent Asset DFP has adopted a standard approach to depreciated replacement cost valuations based on modern equivalent assets and, where it would meet the location requirements of the service being provided, an alternative site can be valued. Land and Property Services (LPS) have included this requirement within the latest valuation. Assets under Construction (AuC) Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees as allowed by IAS 23 for assets held at fair value. Assets are revalued and depreciation commences when they are brought into use. Fixtures and Equipment Fixtures and equipment, whether they are short life i.e. have a useful life of up to and including 5 years, or have an estimated life in excess of 5 years, are carried at depreciated replacement cost, as assessed by indexation. Suitable indices are applied each year and depreciation is based on the indexed amount. Revaluation Reserve An increase arising on revaluation is taken to the revaluation reserve except when it reverses an impairment for the same asset previously recognised in expenditure, in which case it is credited to expenditure to the extent of the decrease previously charged there. A revaluation decrease is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. 1.4 Depreciation No depreciation is provided on freehold land since land has unlimited or a very long established useful life. Items under construction are not depreciated until they are commissioned. Properties that are surplus to requirements and which meet the definition of non current assets held for sale are also not depreciated. 27