ANNUAL REPORT AND ACCOUNTS

ANNUAL REPORT AND ACCOUNTS APRIL 2016 MARCH 2017

Mid Staffordshire NHS Foundation Trust Annual Report and Accounts April 2016 March 2017 Presented to Parliament pursuant to Schedule 7, paragraph 25(4) (a) of the National Health Service Act 2006

2017 Mid Staffordshire NHS Foundation Trust

Contents Contents... 4 Trust Special Administrator s Foreword... 8 1. Performance Report... 9 2. Accountability Report... 11 3. Auditor s Report Including Certificate... 21 4. Accounts for the Year Ended 31 March 2017... 28 5. Notes to the Accounts... 31 6. Acronyms and Definitions... 39 Annual Report and Accounts April 2016 March 2017 Page 4

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Trust Special Administrator s Foreword The Trust transferred its services on 1 November 2014 to the University Hospitals of North Midlands NHS Trust and The Royal Wolverhampton NHS Trust after a Trust Special Administration process lasting 19 months. On 1 November 2014 I was appointed by Monitor as the Trust Special Administrator for Mid Staffordshire NHS Foundation Trust ( the Trust ) shell organisation. The shell organisation has remained in place to oversee outstanding business transactions and, most importantly, the potential criminal liabilities of the Trust, even though the Trust ceased to provide healthcare services and has not retained any assets or liabilities, other than criminal liabilities. During 2015/16 I was committed to ensuring that the outstanding criminal liabilities in relation to previous clinical incidents were brought to a conclusion as efficiently and effectively as possible, in partnership with other agencies. In November 2015 the Trust was prosecuted by the Health and Safety Executive at Magistrates Court in Stafford with regards to four patients who had previously been treated by the Trust and unfortunately died whilst in the care of the Trust. The Trust pleaded guilty to all charges and in December 2015 the case was considered by Crown Court in Stafford and sentencing passed. By March 2016 the Health and Safety Executive had confirmed that there would be no further prosecutions of the Trust and provided support to the Trust being formally dissolved. During 2016/17 there has been no requirement for any specific action by me as Trust Special Administrator other than ensuring robust governance arrangements continued to exist for the Trust as a shell organisation. In accordance with the Dissolution and Transfer Order in 2014, Mid Staffordshire NHS Foundation Trust will be dissolved on 1 November 2017, three years after the transfer of its property and noncriminal liabilities to the Secretary of State. The period of three years was determined following consultation with the Health and Safety Executive, and was deemed to be an appropriate length of time to ensure that on-going review of historic cases would not be prejudiced. Monitor and the Department of Health have confirmed agreement to implementing a plan jointly with me to ensure dissolution occurs on this date. Having been involved with the Trust and the unusual circumstances relating to it during the past 30 months, my final thought remains with the families of all patients affected by the tragic events at the Trust that resulted in criminal prosecutions. On behalf of Mid Staffordshire NHS Foundation Trust I apologise again profusely to those families. Mr Tim Rideout Trust Special Administrator (Accounting Officer) Date: 22 May 2017 Annual Report and Accounts April 2016 March 2017 Page 8

1. Performance Report The Performance Report has been prepared under direction issued by Monitor, the independent health sector regulator, as required by Schedule 7 paragraph 26 of the NHS Act 2006 and in accordance with the NHS Foundation Trust Annual Reporting Manual 2016/17 (FT ARM). 1.1 Overview of Performance 1.1.1 Background of the Trust Mid Staffordshire NHS Foundation Trust ( the Trust ), was authorised to become a Foundation Trust by Monitor on 1 February 2008. Prior to this the Trust was known as Mid Staffordshire General Hospitals NHS Trust since 1993. Before 1993 it was known as Mid Staffordshire Health Authority. The Mid Staffordshire NHS Foundation Trust (Dissolution and Transfer) Order 2014 made by Monitor in exercise of the powers conferred by sections 65LA(3) and 272(7) and (8) of the National Health Service Act 2006, came into force on 1 November 2014. Monitor made the Order as the Secretary of State was satisfied as referred to in section 65KB(1) of the National Health Service Act 2006 and the action recommended in the final report of the Trust Special Administrators appointed to Mid Staffordshire NHS Foundation Trust to dissolve the Trust. The Order provided for the final dissolution of Mid Staffordshire NHS Foundation Trust on 1 November 2017. The Order also provided for the property, rights and liabilities of the Trust, save for criminal liabilities, to transfer via the Secretary of State to University Hospital of North Staffordshire NHS Trust (since renamed as University Hospitals of North Midlands NHS Trust) and The Royal Wolverhampton NHS Trust on 1 November 2014. From the transfer date of 1 November 2014 until the date of dissolution, the Trust will not provide healthcare services, but has continued to exist for the purpose of preserving the Trust s criminal liabilities and allowing them to be dealt with appropriately, in conjunction with other agencies. Monitor revoked the Trust's licence on 1 November 2014, at which point the Trust no longer provided healthcare services for the NHS or otherwise. Since the appointment of the previous TSAs on 16 April 2013 and subsequently the appointment of Mr Tim Rideout as TSA and Accounting Officer on 1 November 2014 to oversee the Trust and conclude business relating to criminal liabilities, there are no voting directors as the responsibilities of the Board became the responsibility of the TSAs. Additionally, shortly following the appointment of Mr Tim Rideout the remaining governors resigned from their positions, which was logical as there was no role for them to fulfil given the nature of the continued existence of the Trust. 1983 1991 1993 2008 2014 Stafford District General Hospital opened (Stafford Hospital) Cannock Community Hospital opened (subsequently renamed to Cannock Chase Hospital) Both Stafford Hospital and Cannock Chase Hospital managed under Mid Staffordshire General Hospitals NHS Trust Authorised as Mid Staffordshire NHS Foundation Trust on 1 February 2008 Stafford Hospital transferred to University Hospitals of North Midlands NHS Trust (UHNM) and Cannock Chase Hospital transferred to The Royal Wolverhampton NHS Trust (RWT) on 1 November 2014 Page 9 Annual Report and Accounts April 2016 March 2017

1.1.2 Criminal Prosecutions During 2015/16 the TSA worked closely with all related agencies including the Police, the Health and Safety Executive and Monitor in managing criminal liabilities. At Magistrates Court on 4 November 2015 the Trust was charged with four offences under Section 3(1) of the Health and Safety at Work Act 1974, each associated with failings which (it was contended by the prosecution) contributed to the death of a patient. The Trust pleaded guilty and the case was referred to Crown Court on 15 and 16 December 2015 for sentencing. The Judge referred to the unusual situation of the Trust having no funds and the fine would be payable by Department of Health, thus creating a financial revolving door situation. However, he added that public bodies are and should be held accountable under criminal law in the same way as private organisations. The liability was settled with the fine levied paid in full to the Health & Safety Executive. Both Staffordshire Police and the Health and Safety Executive had confirmed by March 2016 that there would be no further criminal prosecutions of Mid Staffordshire NHS Foundation Trust. During 2016/17 the Trust there has been no requirement for the TSA to engage in any activity except for that related to ensuring appropriate governance of the shell organisation continued to be applied. There have been no significant risks for the Trust during 2016/17, given the confirmation received from both the Police and the Health and Safety Executive that there would be no further criminal prosecutions. 1.1.3 Going Concern In previous years, the financial statements have been prepared on a going concern basis. However, Statutory Instrument No. 2849 states that the Mid Staffordshire NHS Foundation Trust will cease on 1 November 2017 and the TSA has taken the decision not to prepare the financial statements 2016/17 on a going concern basis. This decision is in accordance with DH GAM accounting requirements 2016/17. 1.1.4 Financial Performance During 2016/17 the Trust received income in accordance with levels agreed with Department of Health in order for the Trust to fulfil the responsibilities of remaining as a shell organisation. Funding has been required in order to pay the costs of administering the Trust including the support received from the Director of Finance (non-voting), Legacy Management Services (provided by University Hospitals of North Midlands NHS Trust) and external auditors. 1.1.5 Operational Performance The purpose of the Trust during 2016/17 has been solely to remain as a shell organisation until the point of dissolution on 1 November 2017. Activity has been limited to ensuring that the Trust has continued to operate with effective governance and financial procedures. Mr Tim Rideout Trust Special Administrator (Accounting Officer) Date: 22 May 2017 Annual Report and Accounts April 2016 March 2017 Page 10

2. Accountability Report 2.1 Directors (Trust Special Administrator s) Report The Directors (Trust Special Administrator s) Report has been prepared under direction issued by Monitor, the independent regulator for foundation trusts, in accordance with: Sections 415, 416 and 418 of the Companies Act 2006 (section 415(4) and (5) and section 418(5) and (6) do not apply to NHS foundation trusts) as inserted by SI 2013(1970) and Regulation 10 and Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008; and The NHS Foundation Trust Annual Reporting Manual 2016/17 (FT ARM). The Mid Staffordshire NHS Foundation Trust (Dissolution and Transfer) Order 2014 made by Monitor in exercise of the powers conferred by sections 65LA(3) and 272(7) and (8) of the National Health Service Act 2006, came into force on 1 November 2014. Monitor made the Order as the Secretary of State was satisfied as mentioned in section 65KB(1) of the National Health Service Act 2006 and the action recommended in the final report of the Trust Special Administrators appointed to Mid Staffordshire NHS Foundation Trust to dissolve the Trust. The Order provided for the dissolution of Mid Staffordshire NHS Foundation Trust on 1 November 2017. The Order also provided for the property, rights and liabilities of the Trust, save for criminal liabilities, to transfer via the Secretary of State to University Hospital of North Staffordshire NHS Trust (now known as University Hospitals of North Midlands NHS Trust) and The Royal Wolverhampton NHS Trust on 1 November 2014. From the transfer date the Trust ceased to provide healthcare services, but continued to exist for the purpose of preserving the Trust s criminal liabilities and allowing them to be managed appropriately in conjunction with other agencies. Monitor revoked the Trust's licence on 1 November 2014, at which point the Trust no longer provided healthcare services for the NHS or otherwise. The role of the Board, including those of the Chairperson and the Chief Executive, became the responsibility of Mr Tim Rideout, Trust Special Administrator of the Trust, appointed on 1 November 2014 by Monitor. Since 1 November 2014 there have been no Directors with voting responsibilities; however Mr John Doyle was appointed by the Trust Special Administrator on 1 November 2014 to fulfil the operational duties required of the Director of Finance (non-voting). A register of interests has been maintained and both the Trust Special Administrator and Director of Finance (non-voting) complied with the responsibilities of declaring any relevant interests, a copy of which is maintained by the Trust s Company Secretary (Head of Legacy Management Service) and is obtainable by email to msft.shell@nhs.net. The requirement to comply with the cost allocation and charging guidance issued by HM Treasury does not apply, there have been no political donations made, the statement describing the better practice code, disclosures relating to quality governance and income disclosures required by NHS Act 2006 do not apply given the circumstances of the Trust. So far as the Trust Special Administrator is aware there is no relevant audit information of which the Trust s auditor is unaware and all steps have been taken in order to be aware of any relevant audit information and to establish that the Trust s auditor is aware of that information, in connection with preparing the audit report. Page 11 Annual Report and Accounts April 2016 March 2017

2.1.1 Statement as to Disclosure to Auditors Both the Trust Special Administrator and Director of Finance (non-voting) at the time of approval of this Annual Report and Accounts: so far as they are aware, there is no relevant audit information of which the Trust s auditor is unaware; and they have taken all the steps that they ought to have taken in order to make themselves aware of any relevant audit information and to establish that the Trust s auditor is aware of that information. Both the Trust Special Administrator and Director of Finance (non-voting) are regarded as having taken all the steps that they ought to have taken in order to do the things mentioned above, and: made such enquiries of the Company s Auditors for that purpose; and taken such other steps (if any) for that purpose, as are required by their duty to exercise reasonable care, skill and diligence. Mr Rideout and Mr Doyle consider the Annual Report and Accounts for 2016/17, taken as a whole, are fair, balanced and understandable and provide the information necessary for regulators and stakeholders to assess the Trust s performance in light of the Trust s circumstances. 2.1.2 Income disclosures required by Section 43(2A) of the NHS Act 2006 The NHS Act 2006 requires that the income from the provision of goods and services for the purposes of the health service in England must be greater than its income from the provision of good and services for any other purposes. Due to the nature of the trust as a shell organisation, this requirement is not relevant for the Trust. 2.2 Remuneration Report The Trust has prepared this report in compliance with: Sections 420 to 422 of the Companies Act 2006, as applicable for NHS foundation Trusts. Regulation 11 and Parts 3 and 5 of schedule 8 of the Large and Medium-sized Companies & Groups (Accounts and Reports) Regulations 2008, and Parts 2 and 4 of Schedule 8 of the Regulations as adopted by Monitor. NHS Foundation Trusts must disclose the remuneration paid to senior managers, defined as those who have authority or responsibility for directing or controlling major activities of the Trust. There have been no employed directors or employees within the Trust during 2016/17. The Trust Special Administrator was appointed and is paid by Monitor. The Director of Finance (non-voting) has charged the Trust an agreed hourly rate on a consultancy basis during 2016/17. 2.2.1 Annual Statement and Report on Remuneration Due to their being no employed directors or employees there is no requirement for an Annual statement or report on remuneration. 2.2.2 Senior Managers Remuneration Policy Due to their being no employed directors or employees there was no policy to disclose and the only relevant details are those shown in the table below. Table 1- Components of the remuneration package Position Pay How this fits the long and short term objectives of the FT? Director of Finance (non-voting) An hourly rate was paid during 2016/17 How the component operates? Maximum which could be paid in respect of that element? Not applicable Not applicable Not applicable Annual Report and Accounts April 2016 March 2017 Page 12

2.2.3 Service Contracts Due to their being no employed directors or employees there were no service contracts in place. 2.2.4 Remuneration Committee Due to their being no employed directors or employees there was no requirement for a Remuneration Committee to meet during the year. 2.2.5 Disclosures Required by Health and Social Care Act The following information is required by section 156 (1) of the Health and Social Care Act 2012, which amended paragraph 26 of Schedule 7 to the NHS Act 2006. Table 2 Directors Remuneration for year ended 31 March 2017 Annual Long term Salary performance performance related related Name and Title bonuses bonuses (Bands of (Bands of (Bands of 5,000) 5,000) 5,000) Mr John Doyle, Director of Finance (non-voting) Band of Highest Paid Director Total Remuneration Taxable benefits Pension related benefits Total (Nearest (Bands of (Bands of 100) 2,500) 5,000) 000 000 000 00 000 000 5-10 - - - - 5-10 5-10 Median Total Remuneration 7,296 Remuneration Ratio 1 For Directors employed through a Limited Company, the above shows total amount paid to the company, not the net salary. Table 3 Directors Remuneration for year ended 31 March 2016 Annual Long term performance performance Salary related related bonuses bonuses Name and Title Mr John Doyle, Director of Finance (non-voting) Band of Highest Paid Director Total Remuneration (Bands of 5,000) (Bands of 5,000) (Bands of 5,000) Taxable benefits (Nearest 100) Pension related benefits (Bands of 2,500) Total (Bands of 5,000) 000 000 000 00 000 000 25-30 - - - - 25-30 25-30 Median Total Remuneration 25,199 Remuneration Ratio 1 For Directors employed through a Limited Company, the above shows total amount paid to the company, not the net salary. The other pension related benefits disclosed arise from membership of the NHS Pensions defined benefit scheme. They are not remuneration paid, but the increase in pension benefit net of inflation for the current year and applying the HMRC methodology multiplier of 20. Further details of the Director s pension benefits are disclosed in the Pension Benefits in Table 4. Table 4 Directors Total Pension Entitlement for year ended 31 March 2017 Name and Title Real increase in pension at Real increase in pension Total accrued pension at age 60 lump sum at age 60 at 31 (bands of 2,500) aged 60 (bands of 2,500) March 2016 (bands of 5,000) No Current Directors are in the pension scheme Lump sum at age 60 related to accrued pension at 31 March 2016 (bands of 5,000) Cash Equivalent Transfer Value at 31 March 2016 (band of 1,000) Cash Equivalent Transfer Value at 31 March 2015 (band of 1,000) Real increase in Cash Equivalent Transfer Value (band of 1,000) '000's '000's '000's '000's '000's '000's '000's Page 13 Annual Report and Accounts April 2016 March 2017

Table 5 Directors Total Pension Entitlement for year ended 31 March 2016 Name and Title Real increase in pension at Real increase in pension Total accrued pension at age 60 lump sum at age 60 at 31 (bands of 2,500) aged 60 (bands of 2,500) March 2015 (bands of 5,000) Lump sum at age 60 related to accrued pension at 31 March 2015 (bands of 5,000) Cash Equivalent Transfer Value at 31 March 2015 (band of 1,000) Cash Equivalent Transfer Value at 31 March 2014 (band of 1,000) Real increase in Cash Equivalent Transfer Value (band of 1,000) '000's '000's '000's '000's '000's '000's '000's Mr John Doyle, Director of Finance (non-voting) 0-2.5 2.5-5.0 40-45 120-125 815 747 35 2.2.6 Expenses During 2016/17 there was one Director (non-voting) in office and the table below shows details of expenses. Table 6 Directors Expenses Name Period 1April 2015-31 March 2016 ( ) Period 1April 2016-31 March 2017 ( ) Mr John Doyle, Director of Finance (non-voting) 217 52 Total ( ) 217 52 The expenses detailed in the table above only include those expenses claimed directly from the Trust. 2.2.7 Reporting High Paid Off-payroll Arrangements Where the Trust uses off-payroll arrangements, either on a self-employed basis, via the individual s personal service company or other Limited Company arrangement, these appointments are all governed through contractual terms. As a minimum these provide the contractual right for the Trust to seek assurance that where the individual is appointed for a term exceeding six months and on a daily rate in excess of 220 they are meeting their income tax and National Insurance obligations. In addition for self-employed appointments confirmation is required that the individual is registered as self-employed with the HMRC, the individual being responsible for their own tax affairs and that they indemnify the Trust against any liability for Income Tax (PAYE) and National Insurance which becomes due on payments made for services under the contract. The information relating to staff engaged by the Trust but not on the payroll is shown in the following tables below: Table 7 For all off-payroll engagements at of 31 March 2017, for more than 220 per day and that last for longer than six months Number of existing engagements as of 31 March 2017 1 Of which: Number that have existed for less than one year at time of reporting 0 Number that have existed for between one and two years at the time of reporting 1 Number that have existed for between two and three years at the time of reporting 0 Number that have existed for between three and four years at the time of reporting 0 Number that have existed for four or more years at the time of reporting 0 All existing off-payroll engagements, outlined above, have at some point been subject to a risk based assessment as to whether assurance needs to be sought that the individual is paying the right amount of tax and, where necessary, that assurance has been sought. Annual Report and Accounts April 2016 March 2017 Page 14

Table 8 - For all new off-payroll engagements, or those that reached six months in duration, between 1 April 2016 and 31 March 2017, for more than 220 per day and that last longer than six months Number of new engagements, or those that reached six months in duration, between 1 0 April 2016 and 31 March 2017 Number of the above which include contractual clauses giving the trust the right to request 0 assurance in relation to income tax and national Insurance obligations Number for whom assurance has been requested 0 Of which: Number for whom assurance has been requested and received 0 Number for whom assurance has not been received 0 Number that have been terminated as a result of assurance not being received 0 Table 9 - For any off-payroll engagement of board members, and/or senior officials with significant financial responsibility, between 1 April 2016 and 31 March 2017 Number of off-payroll engagement of board members, and/or senior officials with 1 significant financial responsibility, during the financial year. Number of individuals that have been deemed "board members and/or senior officials with significant financial responsibility" during the financial year. This should include both 1 off-payroll and on-payroll engagements. 2.2.8 Fair Pay Multiple Due to their being no employed directors or employees, this section is not applicable. Mr Tim Rideout Trust Special Administrator (Accounting Officer) Date: 22 May 2017 2.3 Staff Report All Trust employees were transferred to either UHNM or RWT on 1 November 2014. It was deemed by operation of law that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applied to all staff. Therefore during the year 2016/17 there have been no employees within the Trust and therefore nothing to report within this section. In 2015/16 there were no employees within the Trust. There has therefore been no requirement to undertake a staff survey during 2016/17. 2.4 Disclosures set out in the NHS Foundation Trust Code of Governance Mid Staffordshire NHS Foundation Trust has applied the principles of the NHS Foundation Trust Code of Governance on a comply or explain basis. The NHS Foundation Trust Code of Governance, most recently revised in July 2014, is based on the principles of the UK Corporate Governance Code issued in 2012. The Trust had been in a unique situation as the powers of the Board of Directors and the Council of Governors were suspended at the appointment of the Trust Special Administrators (TSA) on 16 April 2013. On 1 November 2014 Monitor appointed Mr Tim Rideout as Trust Special Administrator and designated Accounting Officer. During 2016/17 the Trust has had no Council of Governors, no Board of Directors or any employed staff. Therefore much of the requirements of the Code of Governance are not applicable to the Trust, given the unusual circumstances. Page 15 Annual Report and Accounts April 2016 March 2017

2.4.1 Directors in Post as at 31 March 2017 Mr John Doyle was appointed on 2 June 2014 as Director of Finance and IM&T (non-voting) and continued as Director of Finance (non-voting) from 1 November 2014, during 2015/16 and 2016/17. Mr Tim Rideout was appointed by Monitor on 1 November 2014 and remained as Trust Special Administrator during 2015/16 and 2016/17. Table 10 Declaration of interest for the TSA and Director in post as at 31 March 2017 NAME / POSITION INTEREST Mr Tim Rideout Trust Special Administrator / Accounting Officer Mr John Doyle Director of Finance (non-voting) Managing Director Tim Rideout Limited Director Hazel Court Management Company Limited Director Ellison Boulters Church of England Academy Chair of Governors Reepham Primary School Director of Commissioning Operations (Cumbria and North East) NHS England Director of Delivery and Improvement (Cumbria and North East) NHS Improvement Director Maycliffe Limited There were no Directors who served as Non-Executive Directors elsewhere. 2.4.2 Governance Arrangements during 2016/17 In accordance with the agreement with Monitor and as a consequence of the licence being revoked by Monitor that included responsibilities of foundation trusts, there was no requirement for the Trust to comply with the majority of the governance standards for foundation trusts. This is because from 1 November 2014, the Trust has no assets or staff and initially the only liabilities were those relating to potential criminal liabilities. However, it was confirmed by March 2016 by both the Police and the Health and Safety Executive that there would be no further prosecutions of Mid Staffordshire NHS Foundation Trust. The Trust remained responsible for complying with legal requirements and those of Monitor relating to the Annual Report and Accounts. However, it would have been inappropriate for a public body to have no governance arrangements in place. Mr David Haycox, Company Secretary for the Trust developed interpretation documents for the Trust s Constitution, Standing Financial Instructions (SFI) and Scheme of Delegation in order that they were relevant and appropriate for the limited functions of the Trust. Mr Tim Rideout, TSA and Mr John Doyle, Director of Finance (non-voting) approved these documents prior to 2015/16 and these documents have remained applicable and in force during 2015/16 and 2016/17. Any decisions made by the TSA during 2016/17 have been made by taking account of advice and recommendations of the Director of Finance (non-voting), Company Secretary and the external auditors. In taking such decisions, the views of Monitor and other agencies have been considered as appropriate. 2.4.3 External Audit The Trust s external audit function was carried out by KPMG LLP for the period 1 April 2016 to 31 March 2017. The continued appointment of KPMG LLP as External Auditors was considered by the Trust Special Administrator in January 2015 and it was agreed that KMPG would continue to be commissioned to undertake the external audit function for 2015/16 and 2016/17, as it would have been inappropriate for the service to be re-tendered due to the circumstances of the Trust. An agreement therefore had been put in place for KPMG LLP to continue to provide the external audit service to the Trust up to the point of dissolution. The address of KPMG LLP is: One Snowhill, Snow Hill Queensway, Birmingham, B4 6GH Annual Report and Accounts April 2016 March 2017 Page 16

2.4.4 Membership Anyone aged 16 or over who lived within the wards specified below for the public constituency could register for Membership, provided they were not eligible to become a Member of the staff constituency or otherwise disqualified for Membership as described in the Constitution. Any Member aged 18 or over was previously entitled to stand for election as a Governor. No elections have been held since the appointment of a Trust Special Administrator. As a continuing foundation trust, those members from the public constituency continue to remain as members and will do so until the point of dissolution of the Trust on 1 November 2017, unless members choose to resign prior to then. The Trust is not encouraging or receiving new applications for membership. The Trust s Public Constituency comprises the local government wards specified in each of the three areas as set out in the following table. Table 11 - Public Constituency Areas Wards Minimum Number of Members Cannock All Wards within the boundary of Cannock Chase District Council 50 Stafford All Wards within the boundary of Stafford Borough Council 50 Surrounding Area All Wards within the boundary of South Staffordshire District Council All Wards within the boundaries of: Birmingham City Council Crewe & Nantwich Borough Council (Area of Cheshire East Council) Derbyshire County Council Dudley Metropolitan Borough Council East Staffordshire Borough Council Lichfield District Council Newcastle-under-Lyme Borough Council Sandwell Metropolitan Borough Council Shropshire Council Staffordshire Moorlands Borough Council Stoke on Trent City Council Tamworth Borough Council Telford and Wrekin Council Walsall Metropolitan Borough Council Wolverhampton City Council The Trust s Constitution refers to a staff Constituency; however given that the Trust has no employees it is no longer relevant or applicable. The Trust Member constituencies reflected the communities it served. Table 12 - Membership Constituency Membership Constituency Number of Members as at 31 March 2017 Public: Cannock 967 Public: Stafford 1,542 Public: Surrounding Area 548 Staff 0 Total 3057 Since 1 November 2014 new applications for membership have been directed to either or both The Royal Wolverhampton NHS Trust or University Hospitals of North Midlands NHS Trust. Members can contact the Trust through the Company Secretary (Legacy Management Service) by emailing: msft.shell@nhs.net. Page 17 Annual Report and Accounts April 2016 March 2017 30

2.5 NHS Improvement s Single Oversight Framework NHS Improvement regulates all trusts performance against measures identified within the Single Oversight Framework published during 2016/17. Each trust is required to submit reports to NHS Improvement detailing actual performance against targets. The Single Assessment Framework is not applicable to the Trust due to the operation of it as a shell organisation. 2.6 Statement of Accounting Officer s Responsibilities The NHS Act 2006 states that the Chief Executive is the accounting officer of the NHS foundation trust. The relevant responsibilities of the accounting officer, including their responsibility for the propriety and regularity of public finances for which they are answerable, and for the keeping of proper accounts, are set out in the NHS Foundation Trust Accounting Officer Memorandum issued by Monitor. However, following the appointment of a Trust Special Administrator (TSA), the TSA is the accounting officer. Under the NHS Act 2006, Monitor has directed Mid Staffordshire NHS Foundation Trust to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction. The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of Mid Staffordshire NHS Foundation Trust and of its income and expenditure, total recognised gains and losses and cash flows for the financial year. In preparing the accounts, the Accounting Officer is required to comply with the requirements of the NHS Foundation Trust Annual Reporting Manual and in particular to: observe the Accounts Direction issued by Monitor, including the 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 as set out in the NHS Foundation Trust Annual Reporting Manual have been followed, and disclose and explain any material departures in the financial statements; ensure that the use of public funds complies with the relevant legislation, delegated authorities and guidance; and prepare the financial statements on a going concern basis unless it is inappropriate to assume the business will continue to operate (see below). The Accounting Officer is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the NHS foundation trust and to enable him to ensure that the accounts comply with requirements outlined in the above mentioned Act. The Accounting Officer is also responsible for safeguarding the assets of the NHS foundation trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. As the Trust is required under the Statutory Instrument to cease operations on 1 November 2017 I have determined that the accounts should not be prepared on a going concern basis. This decision is based on the accounting requirements as set out in the GH GAM 2016/17. To the best of my knowledge and belief, I have properly discharged the responsibilities set out in Monitor's NHS Foundation Trust Accounting Officer Memorandum. Mr Tim Rideout Trust Special Administrator (Accounting Officer) Date: 22 May 2017 Annual Report and Accounts April 2016 March 2017 Page 18

2.7 Annual Governance Statement Since 16 April 2013 the Trust has been in Trust Special Administration and in October 2014 Monitor made an order under section 65LA(3) of the 2006 Act to transfer the property and liabilities of the Trust to the Secretary of State on 1 November 2014 and to provide for the dissolution at a later date; and at the same time the Secretary of State made separate orders under the 2006 Act to transfer the assets and related liabilities of the Trust to the receiving trusts, UHNM and RWT, and to transfer the residual liabilities to UHNM. The Annual Governance Statement for the Trust for 2016/17 therefore reflects that the purpose of the Trust significantly changed prior to the start of the year as a result of the transfer of services from the Trust to UHNM and RWT, the revocation of the Trust s licence for the provision of health services by Monitor and the appointment of Mr Tim Rideout as Trust Special Administrator all effective from 1 November 2014. Additionally by March 2016 is had been confirmed by both Staffordshire Police and the Health and Safety Executive that there would be no further criminal prosecutions of the Trust. This Annual Governance Statement is therefore applicable only in the context of the Trust remaining in existence as a shell organisation until the point of dissolution on 1 November 2017. 2.7.1 Scope of responsibility As Trust Special Administrator (TSA) and Accounting Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the Trust s policies, aims and objectives, whilst safeguarding the public funds and departmental assets for which I am personally responsible, in accordance with the responsibilities assigned to me. I am also responsible for ensuring that the Trust is administered prudently and economically and that resources are applied efficiently and effectively. I also acknowledge my responsibilities as set out in the NHS Foundation Trust Accounting Officer Memorandum. 2.7.2 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 on-going process designed to identify and prioritise the risks to the achievement of the policies, aims and objectives of the Trust, to 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 Trust for the year ended 31 March 2017 and up to the date of approval of the Annual Report and Accounts for 2016/17. However, the degree of complexity of such a system required during 2016/17 has been tapered to align to the limited responsibilities of the Trust during the year. 2.7.3 Capacity to handle risk Since 1 November 2014, the Trust has had no assets, no liabilities (except for criminal) and no employees. The prime responsibility for the Trust continuing to exist from that date was regarding to the management of criminal liabilities which were handled during 2015/16 by the TSA in conjunction with the Company Secretary and legal advice, including external professional legal support. During 2016/17 the Trust has operated effectively with appropriate governance arrangements as a shell organisation with minimal risk 2.7.4 The Risk and Control Framework Since 1 November 2014 the framework in place for managing and controlling risk has been established in accordance with a steer from Monitor. Due to the limited nature of the Trust, there has been no requirement for a full governance structure with supporting committees. The TSA has been the Accounting Officer responsible to Monitor and has been supported by a Director of Finance (non-voting) and, via the Legacy Management Agreement, by a Company Secretary, legal and finance professionals. During 2016/17 Issues and risks have been considered on an as Page 19 Annual Report and Accounts April 2016 March 2017

and when required basis through discussions between the TSA, Director of Finance (non-voting) and Company Secretary and decisions made and recorded as appropriate. 2.7.5 Review of economy, efficiency and effectiveness of the use of resources Since 1 November 2014 the framework in place for review of resources, due to the limited nature of the Trust, and during 2016/17 the only resources used by the Trust have been largely through the Legacy Management Agreement which are almost in their entirety fixed sums and additionally a small requirement for separate contracts for the commissioning of Director of Finance (nonvoting) and external auditors. The use of resources has been considered on an as and when required basis through discussions between the TSA, Director of Finance (non-voting) and Company Secretary and any issues addressed and recorded as appropriate. 2.7.6 Information Governance There have been no information governance matters during 2016/17 upon which to report. Freedom of Information requests have been responded to accordingly including referring the requestor to either UHNM or RWT where appropriate. 2.7.7 Annual Quality Report Directors are required under the Health Act 2009 and the National Health Service (Quality Accounts) Regulations 2010 (as amended) to prepare Quality Accounts for each financial year. However, as a result of services being transferred to the management of the receiving trusts, UHNM and RWT with effect from 1 November 2014 and the revocation of the Trust s licence by Monitor to recognise that the Trust would not provide healthcare services with effect from 1 November 2014, Monitor confirmed to the Trust that there would be no requirement for a Quality Report or Account for 2014/15, 2015/16, 2016/17 or for any period thereafter until dissolution on 1 November 2017. 2.7.8 Review of Effectiveness As Accounting Officer, I have responsibility for reviewing the 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 Director of Finance (non-voting) and Company Secretary. I have drawn on the content of information available to me. My review is also informed by comments made by the external auditors in their management letter and other reports. 2.7.9 Conclusion In reviewing the Trust s system of internal control I am satisfied that the Trust had systems in place that supported the achievement of the Trust s policies, aims and objectives whilst safeguarding the public funds during 2016/17. Since I commenced as Trust Special Administrator on 1 November 2014 sound systems of internal control have been maintained by the Trust in the management of criminal liabilities and associated activities falling within my remit as Trust Special Administrator for the Trust. Mr Tim Rideout Trust Special Administrator (Accounting Officer) Date: 22 May 2017 Annual Report and Accounts April 2016 March 2017 Page 20

3. Auditor s Report Including Certificate Mid Staffordshire NHS Foundation Trust Page 21 Annual Report and Accounts April 2016 March 2017

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Accounts Annual Report and Accounts April 2016 March 2017 Page 26

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4. Accounts for the Year Ended 31 March 2017 4.1 Foreword to the Accounts These accounts, for the year ended 31 March 2017, have been prepared by Mid Staffordshire NHS Foundation Trust in accordance with paragraphs 24 and 25 of Schedule 7 to the National Health Service Act 2006 and are presented pursuant to Schedule 7, paragraph 25 (4) (a) of the National Service Act 2006. Mr Tim Rideout Trust Special Administrator (Accounting Officer) Date: 22 May 2017 4.2 Statement of Comprehensive Income 2016/17 2015/16 Note 000 000 Operating income from patient care activities - - Other operating income - - Total operating income from continuing operations - - Operating expenses 5.2 (108) (1,128) Operating deficit from continuing operations (108) (1,128) Finance income - - Finance expenses - - PDC dividends payable - - Net finance costs - - Losses arising from transfers by absorption - - Deficit for the year from continuing operations (108) (1,128) Surplus/(deficit) on discontinued operations and the gain/(loss) on disposal of discontinued operations - - Deficit for the year (108) (1,128) Other comprehensive income Will not be reclassified to income and expenditure: Other reserve movements - public dividend capital written off - - Total comprehensive expense for the period (108) (1,128) Annual Report and Accounts April 2016 March 2017 Page 28

4.3 Statement of Financial Position 31 March 2017 31 March 2016 Note 000 000 Non-current assets - - Current assets Trade and other receivables 5.4-1 Cash and cash equivalents 5.5 8 13 Total current assets 8 14 Current liabilities Trade and other payables 5.6 (32) (10) Provisions - - Total current liabilities (32) (10) Total assets less current liabilities (24) (1,232) Non-current liabilities - - Total assets employed (24) 4 Financed by Public dividend capital 2,444 2,364 Income and expenditure reserve (2,468) (2,360) Total taxpayers' equity (24) 4 These accounts were approved on 22 May 2017 and signed by Mr Tim Rideout, Trust Special Administrator. Mr Tim Rideout Trust Special Administrator (Accounting Officer) 4.4 Statement of Changes in Equity for the year ended 31 March 2017 Date: 22 May 2017 Public dividend capital Revaluation reserve Income and expenditure reserve Total 000 000 000 000 Taxpayers' and others' equity at 1 April 2016 - brought forward 2,364 - (2,360) 4 Deficit for the year - - (108) (108) Public dividend capital received 80 - - 80 Taxpayers' and others' equity at 31 March 2017 2,444 - (2,468) (24) Page 29 Annual Report and Accounts April 2016 March 2017

4.4.1 Statement of Changes in Equity for the year ended 31 March 2016 Public dividend capital Revaluation reserve Income and expenditure reserve Total 000 000 000 000 Taxpayers' and others' equity at 1 April 2015 - brought forward - - (1,232) (1,232) Deficit for the year - - (1,128) (1,128) Public dividend capital received 2,364 - - 2,364 Taxpayers' and others' equity at 31 March 2016 2,364 - (2,360) 4 4.5 Statement of Cash Flows Cash flows from operating activities 2016/17 2015/16 Note 000 000 Operating deficit (108) (1,128) Non-cash income and expense: Depreciation and amortisation - - Loss on disposal of non-current assets - - Income recognised in respect of capital donations - - (Increase)/decrease in receivables and other assets 1 (1) Increase in inventories - - (Decrease)/increase in payables and other liabilities 22 (922) (Decrease)/increase in provisions - (300) Net cash used in operating activities (85) (2,351) Cash flows from investing activities Interest received - - Purchase of intangible assets - - Purchase of property, plant, equipment and investment property - - Net cash used in investing activities - - Cash flows from financing activities Public dividend capital received 80 2,364 Public dividend capital repaid - - Capital element of finance lease rental payments - - Interest paid on finance lease liabilities - - PDC dividend paid - - Net cash generated from financing activities 80 2,364 Increase/(decrease) in cash and cash equivalents (5) 13 Cash and cash equivalents at 1 April 13 - Cash and cash equivalents transferred under absorption accounting - - Cash and cash equivalents at 31 March 5.5 8 13 Annual Report and Accounts April 2016 March 2017 Page 30

5. Notes to the Accounts 5.1 Accounting policies and other information 5.1.1 Introduction On 1 November 2014 the services of the Trust were transferred to University Hospitals of North Midlands NHS Trust and The Royal Wolverhampton NHS Trust. Since this date the activities of the Trust have been restricted and no longer include the provision of healthcare services. From 1 November 2014 the following accounting policies have only been applied where they are relevant. Basis of preparation NHS Improvement, in exercising the statutory functions conferred on Monitor, is responsible for issuing an accounts direction to NHS foundation trusts under the NHS Act 2006. NHS Improvement has directed that the financial statements of NHS foundation trusts shall meet the accounting requirements of the Department of Health Group Accounting Manual (DH GAM) which shall be agreed with the Secretary of State. Consequently, the following financial statements have been prepared in accordance with the DH GAM 2016/17 issued by the Department of Health. The accounting policies contained in that manual follow IFRS and HM Treasury s FReM to the extent that they are meaningful and appropriate to NHS foundation trusts. The accounting policies have been applied consistently in dealing with items considered material in relation to the accounts. Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment, intangible assets, inventories and certain financial assets and financial liabilities. Going concern In previous years, the financial statements have been prepared on a going concern basis. However, Statutory Instrument No. 2849 states that the Trust will cease operating on 1 November 2017 and as a result these accounts have not been prepared on a going concern basis in accordance the remaining net assets are included in these financial statements with the DH GAM accounting requirements. No adjustments were necessary to the amounts at which the remaining total assets employed are included in these financial statements. Trust Special Administrators (TSAs) continued to be responsible for the governance of the Trust, including the delivery of healthcare services, up to 31 October 2014. On 1 November 2014, the transfer of services referred to in the 'Mid Staffordshire NHS Foundation Trust (Dissolution and Transfer) Order 2014 became effective. Healthcare services were transferred to the University Hospitals of North Midlands NHS Trust and Royal Wolverhampton NHS Trust. The Trust ceased to provide healthcare services at this point, but will continue to exist until the dissolution date of 1 November 2017 for the purpose of preserving criminal liabilities and allowing them to be dealt with appropriately. At this date all assets and liabilities were transferred to the two receiving Trusts, other than those which related to potential criminal liabilities. The outstanding liabilities relating to the Trust at 31 October 2014 will be settled by the University Hospitals of North Midlands NHS Trust under a Legacy Management Agreement. Financial support will continue to be provided by the DoH in order to ensure that the net liabilities are fully funded and that all creditors of the Trust are protected. A new Trust Special Administrator has been appointed to oversee the on-going Trust. The expenses of the Trust will also be funded by the DoH. The previously on-going criminal negligence cases were heard at Crown Court in December 2015 and have now been settled. The Health and Safety Executive has confirmed that its investigations are now complete and no further cases will be brought against the Trust. Page 31 Annual Report and Accounts April 2016 March 2017

5.1.2 Income The activities of the Trust no longer include the provision of healthcare services and therefore there is no income to report in these accounts. 5.1.3 Expenditure on other goods and services Expenditure on goods and services is recognised when, and to the extent that they have been received, and is measured at the fair value of those goods and services. Expenditure is recognised in operating expenses except where it results in the creation of a non-current asset such as property, plant and equipment. 5.1.4 Public dividend capital Public dividend capital (PDC) is a type of public sector equity finance based on the excess of assets over liabilities at the time of establishment of the predecessor NHS trust. HM Treasury has determined that PDC is not a financial instrument within the meaning of IAS 32. A charge, reflecting the cost of capital utilised by the NHS foundation trust, is payable as public dividend capital dividend. The charge is calculated at the rate set by HM Treasury (currently 3.5%) on the average relevant net assets of the NHS foundation trust during the financial year. Relevant net assets are calculated as the value of all assets less the value of all liabilities, except for (i) donated assets (including lottery funded assets), (ii) average daily cash balances held with the Government Banking Services (GBS) and National Loans Fund (NLF) deposits, excluding cash balances held in GBS accounts that relate to a short-term working capital facility, and (iii) any PDC dividend balance receivable or payable. In accordance with the requirements laid down by the Department of Health (as the issuer of PDC), the dividend for the year is calculated on the actual average relevant net assets as set out in the pre-audit version of the annual accounts. The dividend thus calculated is not revised should any adjustment to net assets occur as a result the audit of the annual accounts. 5.1.5 Value added tax Most of the activities of the NHS foundation trust are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT. 5.1.6 Early adoption of standards, amendments and interpretations No new accounting standards or revisions to existing standards have been early adopted in 2016/17. 5.1.7 Critical accounting estimates and judgements There have been no critical accounting estimates or judgements during the reporting period. 5.1.8 Standards, amendments and interpretations in issue but not yet effective or adopted The HM Treasury FReM does not require the following Standards and Interpretations to be applied in 2016-17. These standards are still subject to HM Treasury FReM interpretation, with IFRS 9, IFRS 15 and IRIC 22 being for implementation in 2018-19, IFRS 116 in 2019-20 and IFRS 14 not being applicable to DH group bodies. IFRS 9 Financial Instruments Application required for accounting periods beginning on or after 1 January 2018, but not yet adopted by the FReM: early adoption is not therefore permitted. IFRS 14 Regulatory Deferral Accounts Not yet EU endorsed. Applies to first time adopters of IFRS after 1 January 2016. Therefore not applicable to DH Group bodies. Annual Report and Accounts April 2016 March 2017 Page 32

IFRS 15 Revenue from Contracts with Customers Application required for accounting periods beginning on or after 1 January 2018, but not yet adopted by the FReM: early adoption is not therefore permitted. IFRS 16 Leases Application required for accounting periods beginning on or after 1 January 2019, but not yet adopted by the FReM: early adoption is not therefore permitted. IRIC 22 Foreign Currency Transactions Application required for accounting periods beginning on or after 1 January 2018. None of the above accounting policies would have any impact on the 2016-17 Mid Staffordshire NHS Foundation Trust accounts. 5.1.9 Operating segments The TSA as 'Chief Operating Decision Maker' has determined that the Trust operates in one material segment, which is the provision of healthcare services. The segmental reporting format reflects the Trust's management and internal reporting structure. The provision of healthcare (including medical treatment, research and education) is within one main geographical segment, the United Kingdom, and materially from departments of HM Government in England. The on-going activities of the Trust from 1 November 2014 exclude the provision of healthcare and do not generate any income. 5.2 Operating expenses 2016/17 2015/16 000 000 Services from NHS trusts 94 854 Employee expenses - senior management team 8 26 Audit fees payable to the external auditor audit services - statutory audit 6 12 Other - 236 Total 108 129,848 Of which: Related to continuing operations 108 1,128 Related to discontinued operations - - Services from NHS Trusts in 2015/16 & 2016/17 relates to costs incurred under the Legacy Management Agreement with University Hospitals of North Midlands NHS Trust. This agreement relates to the Trust funding the costs associated with the management of the Mid Staffs Foundation Trust Shell balances and the administrative costs of winding down the working capital balances which existed at 31 October 2014 which have transferred to the University Hospital of North Midlands NHS Trust. Other costs in 2015/16 include the court fine from the Crown Court in relation to contravening Health and Safety Regulations. The fine was 500k along with prosecution costs of 35,517. A provision of 300k included in the 2014/15 accounts in relation to these costs was utilised during the period. Page 33 Annual Report and Accounts April 2016 March 2017

5.2.1 Other auditor remuneration 2016/17 2015/16 000 000 Other auditor remuneration paid to the external auditor: 1. Audit of accounts of any associate of the trust - - 2. Audit-related assurance services - - 3. Taxation compliance services - - 4. All taxation advisory services not falling within item 3 above - - 5. Internal audit services - - 6. All assurance services not falling within items 1 to 5 - - 7. Corporate finance transaction services not falling within items 1 to 6 above - - 8. Other non-audit services not falling within items 2 to 7 above - - Total - - 5.2.2 Limitation on auditor s liability The limitation on auditors' liability for external audit work is 1m (2015/16: 1m). 5.2.3 Auditor s fees The audit fee for 2016/17 is 5,000 excluding VAT (2015/16: 10,000). 5.3 Employee benefits 2016/17 2015/16 Other Total Total 000 000 000 Salaries and wages - - 20 Agency/contract staff 8 8 6 Total gross staff costs 8 26 26 Recoveries in respect of seconded staff - - - Total staff costs 8 26 26 Of which Costs capitalised as part of assets - - - The Trust has not directly employed any staff since the transfer of activities on 1 November 2014. 5.3.1 Retirements due to ill health During 2016/17 there were no early retirements from the trust agreed on the grounds of ill-health (none in the year ended 31 March 2016). The estimated additional pension liabilities of these illhealth retirements is 0k ( 0k in 2015/16). 5.4 The late payments of commercial debts (interest) at 1998 2016/17 2015/16 000 000 Amounts included within interest payable arising from claims made under this legislation - - Compensation paid to cover debt recovery costs under this legislation - - Annual Report and Accounts April 2016 March 2017 Page 34

5.5 Trade receivables and other receivables Current 31 March 2017 31 March 2016 000 000 VAT receivable 0 1 Total current trade and other receivables 0 1 5.6 Cash and cash equivalents movements Cash and cash equivalents comprise cash at bank, in hand and cash equivalents. Cash equivalents are readily convertible investments of known value which are subject to an insignificant risk of change in value. 2015/16 2015/16 000 000 At 1 April 13 - Net change in year (5) 13 At 31 March 8 13 Broken down into: Cash with the Government Banking Service 8 13 Total cash and cash equivalents as in SoFP 8 13 Total cash and cash equivalents as in SoCF 8-5.7 Trade and other payables Current 31 March 2017 31 March 2016 000 000 NHS trade payables - 8 Other payables 6 - Accruals 26 2 Total current trade and other payables 10 10 5.8 Provisions for liabilities and charges analysis At 31 March 2017 total provisions were nil. During 2015/16 a brought forward provision of 300k, which related to costs expected to arise from the Health and Safety Executive investigation, was fully utilised. The HSE has confirmed that all of its investigations are now complete and there will be no further prosecutions. The Trust has undertaken an assessment of contingent liabilities and declared this as nil at 31 March 2017. Page 35 Annual Report and Accounts April 2016 March 2017

5.9 Financial instruments 5.9.1 Financial risk management IFRS 7 (Financial Instruments: Disclosures) requires disclosure of the role that financial instruments have had during the period in creating or changing the risks an entity faces in undertaking its activities. Since the transfer of activities on 1 November 2014 the Trust has been subject to minimal financial risk. Liquidity risk The on-going residual Trust is funded through public dividend capital provided by the Department of Health. The Trust is not, therefore, exposed to significant liquidity risks. Interest-rate risk 100% of the Trust's financial assets and 100% of its financial liabilities carry nil or fixed rates of interest. The Trust is not, therefore, exposed to significant interest-rate risk. Foreign currency risk The Trust has no foreign currency income or expenditure. Credit risk The Trust is not believed to be subject to any form of credit risk where one party to a financial instrument will cause financial loss for another party by failing to discharge an obligation. 5.9.2 Financial assets Assets as per SoFP as at 31 March 2017 Loans and receivables Assets at fair value through the I&E Held to maturity Availablefor-sale Total 000 000 000 000 000 Trade and other receivables excluding nonfinancial assets - - - - - Cash and cash equivalents at bank and in hand 8 - - - 8 Total at 31 March 2017 14 - - - 14 Assets as per SoFP as at 31 March 2016 Loans and receivables Assets at fair value through the I&E Held to maturity Availablefor-sale Total 000 000 000 000 000 Trade and other receivables excluding nonfinancial assets 1 - - - 1 Cash and cash equivalents at bank and in hand 13 - - - 13 Total at 31 March 2016 14 - - - 14 Annual Report and Accounts April 2016 March 2017 Page 36

5.9.3 Financial liabilities Liabilities as per SoFP as at 31 March 2017 Other financial liabilities Liabilities at fair value through the I&E Total 000 000 000 Trade and other payables excluding non-financial liabilities 32-32 Total at 31 March 2017 32-32 Liabilities as per SoFP as at 31 March 2016 Other financial liabilities Liabilities at fair value through the I&E Total 000 000 000 Trade and other payables excluding non-financial liabilities 10-10 Total at 31 March 2016 10-10 5.9.4 Maturity of financial liabilities 31 March 2017 31 March 2016 000 000 In one year or less 32 10 In more than one year but not more than two years - - In more than two years but not more than five years - - In more than five years - - Total 32 10 5.10 Events after the reporting date There were no events after the reporting period. 5.11 Losses and special payments There were no losses or special payments during the reporting period. 5.12 Gifts There were no gifts or hospitality received during the reporting period. 5.13 Related parties Mid Staffordshire NHS Foundation Trust is a body corporate established by order of the Secretary of State for Health. During the period the following transactions have occurred between senior managers, or parties related to them and Mid Staffordshire NHS Foundation Trust. Page 37 Annual Report and Accounts April 2016 March 2017

Director Related Party Expenditure '000 Mr J Doyle (Director of Finance) Maycliffe Ltd 8 J Doyle became an independent contractor from 1 November 2015. The Department of Health is the Trust's parent department and expenditure with other public sector bodies is listed below: Expenditure '000 University Hospitals of North Midlands NHS Trust 94 Annual Report and Accounts April 2016 March 2017 Page 38

6. Acronyms and Definitions AMM CoG CQC DH / DoH EBITDA FT ARM MSFT NHS NHSI RWT TSA UHNM Annual Members Meeting Council of Governors Care Quality Commission Department of Health Earnings before interest, tax, depreciation and amortisation Foundation Trust Annual Reporting Manual Mid Staffordshire NHS Foundation Trust National Health Service NHS Improvement The Royal Wolverhampton NHS Trust Trust Special Administrator University Hospitals of North Midlands NHS Trust Accounting Officer Acute Trust Annual Governance Statement Care Quality Commission Council of Governors Foundation Trust HM Treasury KPMG LLP Monitor Senior person appointed by the Treasury or designated by a Government department to be accountable for the operations of an organisation and the preparation of its accounts An NHS body that provides secondary care or hospital based healthcare services from one or more hospitals An annual statement of how the Trust has assured itself that it has taken all reasonable steps to recognise the risk to its operational and strategic goals and put in place mechanisms to mitigate, to an acceptable level, the probability or impact of those risks. The independent regulator of health and social care Those responsible for representing the interests of the NHS Foundation Trust members, and partner organisations. They hold the Trust Board to account. An NHS organisation that is run as independent, public benefit corporations, which are both controlled and run locally United Kingdom's economics and finance ministry The Trust s External Auditors Monitor is a regulator of NHS Foundation Trusts Page 39 Annual Report and Accounts April 2016 March 2017

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Mid Staffordshire NHS Foundation Trust Weston Road, Stafford, Staffordshire, ST16 3SA msft.shell@nhs.net Page 41 Annual Report and Accounts April 2016 March 2017