Losses and Special Payments Procedure

Transcription

1 Losses and Special Payments Procedure This is a controlled document. It should not be altered in any way without the express permission of the author or their representative. Date: September 2014 Page 1 of 17

2 On receipt of a new version, ensure all previous versions are destroyed. Document Information Date of issue: 9 th October 2014 Version 1 Next Review Date: October 2016 Previous Review Date: Author: Position: Michael Vaughton Chief Finance Officer Approval Route Approved by: Audit Committee Date Approved: 9 th October 2014 Amendment History Version Status Date Reason for Change Authorised Date: September 2014 Page 2 of 17

3 Contents Page 1. Introduction 3 2. Definitions 4 3. Staff Responsibility 4 4. Losses and Special Payments Register 5 5. Checklists 5 6. Limits 6 7. Exclusions 6 8. Monitoring 7 9. Review Date Distribution 7 APPENDIX A Losses & Comps (More Than 1k) 8 Checklist 9 APPENDIX B Losses & Comps (Write-offs) 15 APPENDIX C Losses & Comps (Property Loss or Damage) 16 ANNEX 1 Category of Loss or Special Payment Introduction 1.1 Losses and Special Payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature, they are items that should not arise. They are therefore subject to special control procedures and notation in the accounts to draw them to the attention of Parliament. 1.2 Clinical Negligence Scheme for Clinical Commissioning Group liabilities and Liability to Third Party and Property Expenses Scheme payments above the excess should not be reported, as financial responsibility for these is carried by the NHS Litigation Authority (NHSLA). 1.3 The purpose of this Procedure Note is to set out the method by which North Somerset Clinical Commissioning Group, hereafter referred to as the CCG, meets its obligations in respect of the recording and reporting of Losses and Special Payments. 1.4 This note should be read in conjunction with Section 20 of the Standing Financial Instructions issued by NHS England. 1.5 The CCG will comply with current NHS England guidance on Losses and Special Payments as issued through the Manual for Accounts. 1.6 A copy of the Schedule of Losses and Special Payments should be provided to the Audit Committee for review and in order to make recommendations to the Board. 1.7 Further information and guidance on Losses and Special Payments for NHS organisations, together with delegated limits, is included in FDL (98)02. Date: September 2014 Page 3 of 17

4 2. Definitions 2.1 Losses relate to the loss of money or property belonging to the CCG: Category 1: Losses of cash. Category 2: Fruitless Payments. Category 3: Bad Debts and claims abandoned. Category 4: Damage to buildings, their fittings, furniture and equipment and loss of equipment and property in stores and in use. 2.2 Special Payments are those which fall outside the normal day-to-day business of the CCG or those for which exceptionally and with the approval of the NHS England, no statutory or legal liability exists. They fall into one of four main categories: Category 1: Compensation payments made under legal obligation. Category 2: Extra contractual payments to contractors. Category 3: Ex gratia payments: a) loss of personal effects b) personal injury claims involving negligence, where legal advice was obtained and guidance applied c) other negligence cases and personal injury claims d) other cases including settlements on termination of employment, except cases of maladministration e) maladministration where there was no financial loss by claimant f) patient referrals outside United Kingdom and European Economic Area guidelines Category 4: Extra Statutory or extra regulatory payments. 3. Staff Responsibility 3.1 All Losses All staff have individual responsibility for the security of CCG property and of avoiding loss All losses discovered should be reported immediately to the Chief Finance Officer or delegated officer, irrespective of whether insurance cover for any particular type of loss is in place, see Appendix C Immediately after reporting the loss or as soon as practically possible, while the circumstances are still fresh in the mind, a written report will be prepared by the senior person reporting the loss, see appendices. 3.2 Losses where a criminal offence is suspected. Date: September 2014 Page 4 of 17

5 3.2.1 Where a criminal offence is suspected, in particular if theft or arson is involved, the Chief Finance Officer will immediately inform the Police after consultation with the Security Manager However, if the case involves suspicion of fraud, then the particular circumstances of the case may determine at what stage the Police are notified. This decision will be taken by the Chief Finance Officer after consultation with Local Counter Fraud Specialist (LCFS) For all losses involving theft, criminal damage, including arson, neglect of duty, gross carelessness and fraud, except those which are trivial, the Chief Finance Officer will immediately notify the Governing Body and the External Auditor. 3.3 Loss of or damage to fixed assets Where the loss relates to a fixed asset, the Chief Finance Officer is responsible for ensuring that appropriate information is reflected in the CCG s Fixed Asset Register. The Principal Finance Manager carries out such transactions and ledger maintenance on behalf of the CCG. 4. Losses and Special Payments Register 4.1 A register of Losses and Special Payments will be maintained by the CCG and each entry in the register will be assigned to a category of Loss or Special Payment. 4.2 Write-off action shall be recorded against each entry in the register. Delegated authority limits sanctioning write off for the Chief Clinical Officer and Chief Finance Officer, are set out in the Scheme of Delegation and as delegated to Officers by the Chief Finance Officer within his limits. Losses in excess of the stated limits but below the NHS England delegation limit will be referred to the Board for final consideration of write off approval. 4.3 Write-off approval will be obtained from the NHS England if the case is novel, contentious or likely to have repercussions for the NHS as a whole, regardless of value. 4.4 Copies of vouchers and any supporting documents will be referenced and filed to support each entry in the register. 4.5 Details of the Loss or Special Payment should be entered in the register as they are known. Where the actual value cannot be immediately determined an estimated value should be used. 5. Checklists 5.1 The Manual for Accounts requires the completion of a checklist, see appendices, for any loss or special payment in excess of 1,000. This will ensure that any lessons learned are identified and acted upon. Additionally, the CCG requires a checklist to be produced for losses or special payments under 1,000, see appendices. The Date: September 2014 Page 5 of 17

6 checklist questions for losses (which are invariably bad debts) are straight forward to complete. 5.2 The checklists required for Medical Negligence and Personal Injury will be administered by the CCG utilising the appointed solicitors as sanctioned by the CCG Governing Body. 5.3 For all Medical Negligence and Personal Injury cases a data reporting and claim assessment report will be filed with NHSLA. This is completed by the CCG and the CCG s solicitors jointly. The completion of this mandatory report permits the CCG to dispense with the checklist for these cases. 5.4 The reference number of a Loss or Special Payment should remain constant for a series of payments (use letters after the number). This may extend over a period of years. 6. Limits 6.1 The Audit and Assurance Committee will approve losses and special payments over and above 50,000 but within delegated Department of Health limits. 6.2 Authorisation limits are determined within the CCG s Scheme of Delegation, and for losses, write-offs and compensation are (excluding fruitless payments and compensation payments made under legal obligation): Up to 50,000 Over 50,000 - Chief Finance Officer or Accountable Officer - Chair of Audit Committee or Chair of CCG 6.3 Fruitless payments authorisation limits are: Up to 250,000 - Chief Finance Officer or Accountable Officer Over 250,000 - Governing Body 6.4 Compensation payments made under legal obligation up to 1m can be authorised by the Chief Finance Officer or Accountable Officer. 6.5 Refer to the Scheme of Delegation for other payments authorisation and limits where the CCG has no delegated authority. 7. Exclusions 7.1 NHS losses should not be included. Whilst the CCG may cancel debts owed by other NHS bodies, other than foundation trusts, this will be done by issuing credit notes, so reversing the entries in the debtor s ledger. There is no loss to the NHS as a whole in such cases. 7.2 The CCG s own legal costs are administrative and should not, therefore, be included in the Register of Losses and Special Payments. Date: September 2014 Page 6 of 17

7 8. Monitoring 8.1 Reports or returns on Losses and Special Payments are made, as follows: Annual Accounts Forms. At least annually report to the Audit and Assurance Committee or at the next meeting following a reported loss or special payment. 8.2 The CCG is urged to look beyond a particular write off or payment, and assess the need for any corrective action to minimise the number and cost of future cases. There may be wider lessons for the NHS as a whole. 9. Review Date This procedure will be reviewed in September 2016 (to be confirmed). 10. Distribution CCG website and computer network Date: September 2014 Page 7 of 17

8 APPENDIX A Losses & Comps (more than 1000) Checklists Please note that for category 5 compensation payments made under legal obligation a checklist does not require completing. The reasoning for this is if a case has a legally binding order, i.e. Court Order or Judges Settlement, no further details are necessary. There is only 1 checklist which can be completed for all categories as appropriate. Entries will only be expected against category specific checks where the loss/special payment is within that category. Date: September 2014 Page 8 of 17

9 FOR HEALTH BODY USE Checklist to be used when compiling the summary of the case Category Type of case Reference Number Health Body (name and code) 1. Record the amount involved and the reasons why the loss arose. 2. Detail the background of the case giving full reason why payment is necessary. Have other alternatives to the payment been investigated? If not, give reasons. If so, provide details: 3. Was fraud involved? If so, complete a fraud report and ensure that the LCFS, the relevant CFSMS team, Internal and External Auditors, and there relevant the Police, are informed in accordance with Secretary of State Directions and using the reporting system as specified by the CFSMS. Enter dates of completion of report. 4. Was theft or criminal damage involved? If so, have the Police been informed? If not, give reasons. All security related incidents will be reported to the Local Security Management Specialist once trained, accredited and in place in accordance with guidance issued by NHS Security Management Service. Date: September 2014 Page 9 of 17

10 5. For abandoned works, were detailed specifications identified before the scheme went ahead? How did the projected work compare to these detailed specifications? At what level, by whom, and why was the scheme approved? Why was the scheme abandoned and by whom? Could the scheme have been aborted earlier? Was the scheme joint financed? If so, was any agreement signed? Was legal advice taken in the drawing up of an agreement? Is the other party prepared to pay half of the costs of the scheme? 6. For Bad Debts and Claims Abandoned. Were invoices raised on a regular basis? Was the debt monitored and chased regularly? Were services withdrawn upon continued non-payment? Enclose report showing when invoices were raised and where relevant paid. For cases involving businesses has the business gone into liquidation/receivership? If so, are you listed as a creditor and do you have confirmation of this from the liquidator/receiver? If not, why not? Are any dividends being paid out? Was the financial integrity of the business looked into before goods or services were supplied? If not, why not and have procedures been revised to ensure this is carried out in the future? 7. For rental cases only did the tenant enter into lease agreements prior to occupation? If not, why not? If the lease was faulty investigate whether action can be taken against legal advisors who drew up the agreement? Provide an analysis of rent and service charges.. Date: September 2014 Page 10 of 17

11 8. For private patients cases - was an undertaking to pay signed? If not, why not? Was a full estimate of potential costs given and full deposit taken to cover these costs? If not, why not? For overseas private patient cases have the relevant embassies been contacted for payment (if applicable)? For overseas visitors - are robust procedures in place in the NHS Body to identify and charge liable overseas visitors? If not, why not? Was the overseas visitor informed that he/she would be liable to pay for the full cost of treatment? If treatment was not urgent why was it given before obtaining a sizeable deposit? 9. Stores (only) are any linen losses calculated at 50% of the replacement value? Is this in accordance with the guidance? Is the total loss more than 5% of the total stock value? Confirm that the loss has been valued at book value less net disposal proceeds. 10. For extra contractual payments to contractors - have other alternatives to the payment been investigated? If not, why not? If so, provide details including detailed calculations on which the payment is based. Date: September 2014 Page 11 of 17

12 11. For ex gratia payments - have other options been considered? If not, why not? Explain why an ex gratia payment offers the best value for money. Confirm that the proposed payment does not place the claimant in a better position than if the error had not occurred? If it does, why? In cases of hardship record what evidence exists on this? Provide detailed calculations to support the proposed payment and demonstrate why the proposed sum is in accordance with the relevant paragraphs of this guidance. For settlements on termination of employment has relevant central guidance on such payments been followed? If not, why not? For clinical negligence and personal injury cases has the relevant central guidance for such cases been followed in all respects? If not, why not? 12. Is the value of the loss reduced by insurance? If so, record the value of the gross loss and the value of the amount recovered by insurance. 13. Have all reasonable steps been taken to recover the loss? Provide details of the attempts that have been made to recover the loss or explain why no action has been taken. Has appropriate legal advice been sought? If not, why not? If advice has been sought, what recommendations were made and have these been followed? If not, why note? Date: September 2014 Page 12 of 17

13 14. Identify any failings in the actions of employees, including supervisors. Having considered this, is there a need for disciplinary action? Record what action has been taken or is proposed, or if no action is to be taken, explain why. Include dates, names of individuals and positions. 15. Was there any apparent breakdown of procedures? Detail weakness or fault in system of control or supervision. 16. What proposed improvements have been put forwards to correct defects in the existing systems or procedures? Include the timetable for implementation of the improvements. What monitoring measures have been introduced to ensure the improvements are working effectively? 17. Is it necessary to inform the Board/Chief Clinical Officer? If not, why not? 18. Do your SFIs require a Board report for the case? If so, please enclose the report. If not, consider whether in the light of this case your SFIs should be amended to require a Board report in such cases. Date: September 2014 Page 13 of 17

14 19. Having completed the above steps, detail the general lessons that can be drawn from this case. If a system weakness has been identified, which has possible implications across the NHS, the LCFS or the LSMS, using either the intranet fraud prevention referral system for fraud or the Area Security Management Soecialist for security matters, ensure that measures can be taken nationally to amend policy or systems. 20. Please give details of name and position of person forwarding this case for NHS England approval (if applicable). Give the date when this case was first brought to the attention of the NHS England (if applicable). Name Position Date of notification 21. I have considered fully each point on this checklist and my findings are recorded in the attached case summary and/or in the spaces above. I confirm that the details recorded above and on the attached case summary are complete and accurate, and that all aspects of the checklist have been properly considered and actioned. Signed by I confirm that the above details are complete and accurate and all aspects of the checklist have been properly considered and actioned. I agree that write-off of this loss offers the best value for money for this case. Delete as appropriate This case is not novel, contentious or repercussive. I therefore agree to write-off the loss This case is novel, contentious and repercussive and I therefore request formal approval from the NHS England. Signed and dated by Countersigned and dated by Please note this section will be signed by two senior officers in accordance with the delegated limits set by the Board. Please print names and positions held. Name and Position held Countersigned Name and Position held Date: September 2014 Page 14 of 17

15 APPENDIX B LOSSES AND COMPENSATIONS Write-offs [To be used where the value is 1,000 or less. Losses in excess of 1,000 will be recorded on the appropriate form, which can be obtained from the Finance Department, Castlewood House, Clevedon] DETAILS OF DEBT WRITE OFF Reference No. 1. Record invoice numbers, dates and amounts. Social Care Residential Reference No State reasons why the write off is necessary. 3. State steps taken to effect collection. Were invoices raised in time and on a regular basis? Was the debt monitored and chased regularly? Were services withdrawn upon continued non-payment? Enclose report showing when invoices were paid, if appropriate. 4. For cases involving business has the business gone into liquidation or receivership? If so, are you listed as a creditor and do you have confirmation of this from the liquidator or receiver? If not, why not? Are any dividends being paid out? Was the financial integrity of the business looked into before goods or services were supplied? If not, why not and have procedures been revised to ensure this is carried out in the future? Signed: Authorising Officer Date: Date: September 2014 Page 15 of 17

16 APPENDIX C LOSSES AND COMPENSATIONS Property loss or damage [To be used where the value is 1,000 or less. Losses in excess of 1,000 will be recorded on the appropriate form, which can be obtained from the Finance Department, Castlewood House, Clevedon] Reference No. Directorate Department A. DETAILS OF LOSS / DAMAGE [delete as appropriate] 1. Description of item(s) lost or damaged 2. Original cost 3. Approximate date of purchase 4. Present value 5. Cost of repair or replacement 6. Has an incident form been completed? YES / NO Copy attached? YES / NO B. CIRCUMSTANCES OF LOSS OR DAMAGE 1. Date and time when loss or damage first reported 2. Where loss or damage occurred 3. (i) Names and other details of staff reporting loss or damage (II) Names and other details of any witness(es) 4. Any other relevant information (e.g. solicitors etc) Signed: Manager / Head of Department Date: A copy of any statements obtained at the time of loss or damage should be appended to this form. If the matter is or has been subject to police involvement then their comments should be attached if possible. C. FINANCE DEPARTMENT Signed: Date: Notes 1. The above information is to be completed in respect of all losses or damages and sent to the Chief Finance Officer as soon as the loss or damage is reported. 2. Any information which is not available at the time of the loss or damage should be forwarded as quickly as possible. Date: September 2014 Page 16 of 17

17 ANNEX 1 Losses and Special Payments Category of Loss or Special Payment A LOSSES 1 Losses of cash due to: a Theft, fraud, etc b Overpayments of salaries, wages, fees and allowances c Other causes 2 Fruitless payments 3 Bad debts and claims abandoned: a Private patients (Sections 65 and 66 NHS Act 1977) b Overseas visitors (Section 121 NHS Act 1977) c Other 4 Damage to buildings, loss of equipment and property: a Theft, fraud, etc b Other B SPECIAL PAYMENTS 5 Compensation payments made under legal obligation 6 Extra contractual payments to contractors 7 Ex-gratia payments: a Loss of personal effects b Personal injury with advice c Other clinical negligence cases and personal injury claims d Severance payments on termination of employment e Other employment payments f Maladministration no financial loss g Patient referrals outside the UK and EEA guidelines h Other payments 8 Extra statutory and extra regulatory payments 9 Special severance payments Date: September 2014 Page 17 of 17