LIB 05 A CIPFA INTRODUCTORY GUIDE FOR CLINICAL COMMISSIONING GROUPS ESTABLISHING CLINICAL COMMISSIONING GROUPS A SET UP CHECKLIST JUNE 2011 1
Frewrd This is ne f a series f CIPFA guides t the fundamental respnsibilities f the Accuntable Officer in a Clinical Cmmissining Grup. The guides are intended as intrductins t key aspects f these respnsibilities. They are intended t help and supprt Accuntable Officers, and the wider leadership and decisin-making structures in the Cnsrtia. They will als enable key staff members t recgnise the requirements placed upn them, and enable them t act as critical friends t the Accuntable Officers. The guides will assist Accuntable Officers in develping their nn-clinical skills and abilities, enabling them t challenge effectively, and t hld t accunt their specialist staff and advisers. The subjects t be cvered in the first set f guides include: An Intrductin t the NHS Refrms and Financial Challenge An Intrductin t establishing a Clinical Cmmissining Cnsrtia An Intrductin - Preparing and Evaluating Business cases Optin Appraisal An Intrductin - Pling budgets and the benefits f integrated care prvisin CIPFA is keen t supprt the effective leadership and management f Cmmissining Cnsrtia and encurages users f these guides t raise questins and make suggestins fr future guides and mre in depth supprt Please cntact Steve Strutt Health Plicy at CIPFA stephen.strutt@cipfa.rg CIPFA is ne f the leading prfessinal accuntancy bdies in the UK and the nly ne which specialises in the public services. It is respnsible fr the educatin and training f prfessinal accuntants and fr their regulatin thrugh the setting and mnitring f prfessinal standards. Uniquely amng the prfessinal accuntancy bdies in the UK, CIPFA has respnsibility fr setting accunting standards fr a significant part f the ecnmy, namely lcal gvernment. CIPFA s members wrk (ften at the mst senir level) in public service bdies, in the natinal audit agencies and majr accuntancy firms. They are respected thrughut fr their high technical and ethical standards, and prfessinal integrity. CIPFA als prvides a range f high quality advisry, infrmatin, and training and cnsultancy services t public service rganisatins. As such, CIPFA is the leading independent cmmentatr n managing and accunting fr public mney.
Intrductin Establishing a Clinical Cmmissining Grup can be a cmplex prcess and there are a number f steps t be cmpleted t set up an rganisatin that is staffed t cmmissin high quality care fr its resident ppulatin and mnitr and reprt n utcmes achieved and expenditure incurred against its financial allcatin It can be expected that Clinical Cmmissining Grups will mve frm a psitin where it is perfrming well t a psitin where it is transfrming health care with imprved utcmes within its available resurces. Gd gvernance is imprtant t managing Clinical Cmmissining Grups This guide is set ut in three sectins 1 The principles f gd gvernance fr the prvisin f public services 2 Establishing a Clinical Cmmissining Grup a checklist f initial actins 3 Mving t a high perfrmance rganisatin a checklist The Principles f Gd Crprate Gvernance All Public Sectr rganizatins require gd gvernance as part f their risk management arrangements, the principles f gd gvernance are detailed belw Gd Gvernance Standard fr Public Services 1 Gd gvernance means fcusing n the rganisatin s purpse and n utcmes fr citizens and service users 1.1 Being clear abut the rganisatin s purpse and its intended utcmes fr citizens and service users 1.2 Making sure that users receive a high quality service 1.3 Making sure that taxpayers receive value fr mney 2 Gd gvernance means perfrming effectively in clearly defined functins and rles 2.1 Being clear abut the functins f the gverning bdy (The Bard) 2.2 Being clear abut the respnsibilities f nn-executives and the executive and making sure that thse respnsibilities are carried ut 2.3 Being clear abut relatinships between gvernrs and the public 3 Gd gvernance means prmting values fr the whle rganisatin and demnstrating the values f gd gvernance thrugh behaviur 3.1 Putting rganisatinal values int practice 3.2 Individual gvernrs behaving in ways that uphld and exemplify effective gvernance 4 Gd gvernance means taking infrmed, transparent decisins and managing risk 4.1 Being rigrus and transparent abut hw decisins are taken 4.2 Having and using gd quality infrmatin, advice and supprt 4.3 Making sure that an effective risk management system is in peratin 5 Gd gvernance means develping the capacity and capability f the gverning bdy t be effective 3
5.1 Making sure that appinted and elected gvernrs have the skills, Knwledge and experience they need t perfrm well 5.2 Develping the capability f peple with gvernance respnsibilities and evaluating their perfrmance, as individuals and as a grup 5.3 Striking a balance, in the membership f the gverning bdy, between cntinuity and renewal Gd gvernance means engaging stakehlders and making accuntability real 6 6.1 Understanding frmal and infrmal accuntability relatinships 6.2 Taking an active and planned apprach t dialgue with and accuntability T the public 6.3 Taking an active and planned apprach t respnsibility t staff management 6.4 Engaging effectively with stakehlders As part f minimising risk NHS Clinical Cnsrtia will have t embrace arrangements t manage their rganizatin and the financial allcatin fr cmmissining healthcare fr their ppulatin The fllwing is a checklist fr Cnsrtia. A number f these actins will depend n whether supprt services are t be prvided in huse r frm ther prviders and in additin, further natinal guidance that can be expected n the set up f rganizatins within the Authrisatin prcess New rganisatins in their infancy need t develp an understanding f their health spend and utcmes against budget It can take a perid f time befre newly frmed rganizatins becme fully effective. Clinical Cmmissining grups in their infancy have t discharge statutry respnsibilities. develp an rganisatinal structure with respnsibilities cmmensurate with the rganisatins purpse and bjectives. develp jb descriptins, persn specificatins, grades and recruit t affrdable establishments huse staff taking int accunt remte r hme wrking pprtunities fr staff. ensure accurate, timely, relevant and cmprehensive management infrmatin systems are in place develp escalatin prcesses fr targets & bjectives that may nt be perfrming n line develp systems f internal cntrl. develp cntrl prcesses arund health & safety, data prtectin and quality and diversity. prepare t cmplete returns required fr the NHS CB Operate within a management cst envelpe Clinical Cmmissining Grups will require an accurate and clear understanding f their Resurces available 4
current health spend current health utcmes cmmitments agreed by predecessr Primary Care Trusts Grups have the ptin f their supprt services being prvided by Primary Care Trusts pssibly re-established as Scial Enterprises A Lcal Authrity The Private r Vluntary Sectr. In deciding hw Clinical Cmmissining Grups are t be supprted it will be necessary t undertake a service and financial appraisal int the cst f that supprt assess the quality f that supprt ensure that the prvider has sufficient expertise, experience and financial standing accunt fr the cst f change and transitin review carefully and implement prcedures t ensure that the expertise and crprate memry is nt lst in mving prvisin frm current prviders Each Clinical Cmmissining Grup will need t appint an Accuntable Officer, and ther prfessinals. These appintments may cver several cnsrtia The Accuntable Officer has t ensure that the cnsrtium perates ecnmically, effectively and with prbity keeps cmprehensive accunts makes gd use f resurces. has and retains cmprehensive financial recrds develps and maintains a cmprehensive system f internal cntrl. takes decisins with reference t their financial implicatins leads the rganizatin t imprved health perfrmance within guidelines issued by the NHS Cmmissining Bard and within financial allcatins has develped bard assurance, inductin and rganizatinal develpment prcedures has a media, press ffice facility can address cmmunicatins frm the public has business cntinuity prcedures has agreed reprting lines has established a risk register that identifies risks and mitigating actins if these risks ccur. CIPFA recmmends that each grup has a Chief Financial Officer (CFO). The rle f the CFO can be varied and cmplex frm Statutry duties relating t accuntability, prbity and gvernance Day t day peratinal management Strategic planning Making payments and cllecting receipts Maintaining the integrity f Financial systems Being an expert n natinal payment systems (Pbr) 5
Treasury management Cunter Fraud Prviding cmprehensive financial reprts fr the Bard Preparing the annual reprt and accunts and statement n internal cntrls Leading n standing rders, standing financial instructins and a scheme f reservatin and delegatin referred t belw Having a cmprehensive understanding f the NHS Finance regime and mechanisms such as hw Cmmissiners make payments t Prviders under the Payment by Results Tariff. Establishing Bank Accunts Ensuring supprt services are specified and evaluated Internal & External Audit arrangements in place The Grup requires access t prfessinal legal services advice t cver cmplaints, claims, legal matters, appeals against funding decisins, estate and prperty matters The Grup requires access t prfessinal Human Resurces advice fr all aspects f persnnel management The Grup requires access t prfessinal clinical advice. Structures shuld be in place t manage clinical risk and clinical perfrmance management and that serius untward incident (SUI) reprting is in place Standing Orders shuld be develped these prvide practical rganizatinal rules n rles and respnsibilities f the Bard Cmmittees and Individuals t prtect the interests f the cnsrtium and staff and prvide adherence t statutry pwers Standing Financial Instructins shuld be develped these set ut the cnsrtia s financial prcedures Hw the rganizatin accunts fully and with transparency fr everything they d. A Scheme f reservatin that and delegatin is required that Details thse decisins reserved nly fr the Bard itself and thse decisins that can be taken n behalf f the Bard, by whm and the financial limits f that authrity The Grup shuld have an effective framewrk f financial accuntability this is understd and applied thrughut the rganisatin, frm the Bard thrugh executive and nn-executive directrs t frnt line Managers and staff. The Grup requires adequate IT systems management t supprt its day t day functins Its peratinal and strategic planning the prvisin f management infrmatin the interpretatin and implementatin f natinal IM&T plicies. IT Systems need t prvide quality data that is secure, disaster planning & recvery prcesses shuld be in place and secure data can be shared acrss agencies. 6
Financial plans shuld be develped and apprved by the Grup Bard that remain within bth resurce and cash limits are prepared within guidance issued by the NHS Cmmissining Bard. Financial plans are develped frm an accurate assessment f health need and activity, capacity requirements and expenditure required t meet the current and expected imprvement in health utcmes Finance staff analyse financial issues and cntribute interpretatin, insight, advice, ptins, expertise and slutins t supprt decisin makers During the year the Cnsrtia bard receive timely and accurate infrmatin n perfrmance against peratinal and financial targets Annual accunts are planned and prepared taking accunt f Internatinal Financial Accunting Standards (IFRS) and are supprted by wrking papers t a standard acceptable t External Auditrs The rganisatin s financial accunting and reprting meet prfessinal and regulatry standards Arrangements are put in place t pay invices in line with prmpt payment cdes and cllect incme due The Grup has integrated cmmissining and financial planning s that it aligns resurces t meet current and future bjectives and pririties. Agreed cntracts are perfrmance managed as required t deliver utcmes The Grup can analyze and reprt n current and frecast cntract and financial perfrmance, payments made and payments due and financial returns. Systems f patient engagement are established; T infrm the future shape f services. Surveys, plls and web-enabled feedback are used t cllate views frm service users, carers and the public including thse in ethnic minrity and difficult t reach grups Cmprehensive agreements are in place fr each f the rganisatin s delivery partnerships and cllabrative arrangements (including any pled budgets) that cvers aims and bjectives risk management arrangements arrangements fr reviewing, revising and agreeing the audit arrangements ending and disslving the agreement as required wnership f and respnsibility fr any assets and liabilities; gvernance arrangements; funding arrangements; accunting and financial reprting arrangements; financial and perfrmance mnitring arrangements; prcurement arrangements 7
Financial literacy is diffused thrughut the rganisatin s that decisin takers understand and manage the financial implicatins f their decisins. The rganisatin identifies and manages its significant business risks. The rganisatin is risk aware rather than risk averse Allcatins t Grups are understd thrughut the rganisatin With specific reference t internal budgets Financial and managerial respnsibilities are aligned, with revenue and capital budgets assigned t and wned by individual Managers within a frmal scheme f budget delegatin? All budgets are ntified t Managers befre the start f the financial year Managers knw the rganisatin s verall in-year financial psitin against budget Managers mnitr budgets at least mnthly and act prmptly and effectively t respnd t variances? Finance Staff prduce reprts t the Bard and the Leadership Team (at least quarterly unless circumstances require clser fcus) and Managers (mnthly) that are relevant, accurate, timely, well presented and understandable? Mnitring is predictive rather than backward lking and fcused n large, high risk r vlatile budgets Mnitring is related t peratinal activity indicatrs that are lead indicatrs f spend The rganisatin assess the prgress f its capital prjects ( as required) and their impact n cash flw, capital financing, revenue accunts and balance sheet, at least quarterly Budget variances are analysed and used as a basis fr taking crrective actin Reprts link capital and revenue financial and peratinal infrmatin t give an verall picture f perfrmance The rganisatin prvide clear dcumentatin, supprt and guidance, s that Managers wh are budget hlders understand their respnsibilities and wn their budgets Frecast r actual budget variances and trends are reflected in budget preparatin Managers are fully invlved in setting their budgets, wrking with Finance staff, s that they take wnership The rganisatin actively manages budgets, with mnitring and frecasting that is insightful, ensures n surprises and leads t respnsive actin. The rganisatin systematically pursues pprtunities t reduce csts and imprve value fr mney in its peratins via 8
its prcurement and cmmissining active management f its wn fixed assets The rganisatin have a clear plicy n carry frward f year end variances, designed t help resurces t be used t best effect in line with natinal guidelines Managers understand they are respnsible fr delivering services cst effectively and are held accuntable fr ding s Spending trends and budgets are prjected ver a rlling 12 mnth perid ahead spanning financial years t identify emerging cst pressures and infrm future planning The rganisatin maintains prcesses t ensure that infrmatin abut key assets and liabilities in its balance sheet are a sund and current platfrm fr management actin. Cllabrative arrangements t deliver services are accuntable fr their funding and service perfrmance The rganisatin reviews its financial prcesses regularly t ensure these are effective. An Audit Cmmittee meets t take reprts and actins n Cnsrtium perfrmance and risks. A Remuneratin cmmittee is established fr matters f pay and perfrmance The NHS Cmmissining Bard Licensing / assurance prcess is cmpleted leading t apprval The rganisatin perates and maintains accurate, timely and efficient transactinal financial services (e.g. creditr payments, incme cllectin, payrll, and pensins' administratin The Grup cmpletes the NHS Cmmissining Bard Licensing / assurance prcess. The Grup will mve t a psitin f maturity when it can be shwn t be influential and seen t be actively imprving health services The Grup has a cmprehensive understanding f hw its financial allcatin has been prepared f lcal demgraphics in terms f expected ppulatin and age prfile change within the lcal ppulatin ppulatin prjectins are cnsistent with thse frm statutry partners t prvide fr a cnsistent planning base variances between GP registered ppulatins and Office f Natinal statistics ppulatin estimated fr their lcal ppulatin hw this may change its allcatin thrugh mdelled scenaris ver the next 5 year perid Its health pririties Supply side strategies 9
Experienced, respected and innvative Clinical Champins and netwrks input int pathway analysis and imprvement; review referral management; admissins avidance and ptential fr care prvided clser t hme. Clear respnsibilities are allcated fr the refrm agenda. Service specificatins are develped market develpment strategies are develped transitin strategies are develped. Internal and external expertise is available t the cnsrtia t develp services that can be agreed by clinicians and service users Wrkfrce strategies aligned t service develpments are wrked thrugh Health needs assessment, predictive mdelling and service specificatin is embedded int Health service refrm The rganisatin has access t sufficient financial skills t meet its peratinal and strategic needs including the develpment f business cases fr the imprvement f health services in line with natinal guidance The rganisatin s leadership integrates financial management int its strategies t meet future business needs. Its financial management apprach supprts the change agenda and a culture f custmer fcus, innvatin, imprvement and develpment. The rganisatin uses financial management expertise and a rbust evidence base in its strategic decisin-making. The lcal ppulatin has cnfidence that changes t healthcare prvide will prvide a higher quality service The change are evidenced based Strategies such as extending elective admissin waiting times are seen as a last resrt t managing within resurce and cash limits. The rganisatin develps and sustains its financial management capacity t help shape and supprt its transfrmatinal prgramme The Grup prduces a medium-term Financial Plan and a lnger term financial strategy cvering the base year 5 future years The Medium-term Financial Plan is cnsistent with the rganisatin s aims and bjectives and takes accunt f lcal and natinal pririties, changing legal requirements, demgraphic trends, demand levels and natinal standards? The rganisatin prepares its subsequent budget that is cnsistent with crprate bjectives NHS Cmmissining Bards guidelines and directives strategies an agreed medium-term Financial and cmmissining Plan The cnsrtium develps and implements standard prcedures fr cntract negtiatin, using natinal templates and guidelines where available. 10
The Cnsrtium undertakes a cmprehensive risk assessment t infrm budget setting, and reprting t the Bard with financial implicatins, mitigating actins and cntingency prvisins The rganisatin wrks with ther bdies t deliver services that better meet the needs f users and custmers, balancing quality and cst. The rganisatin systematically pursues pprtunities t reduce csts and imprve value fr mney in its peratins via its prcurement and cmmissining active management f its wn fixed assets The rganisatin s financial management prcesses supprt rganisatinal change. The rganisatin wrks with ther bdies t deliver services that better meet the needs f service users, carers and the public balancing quality and cst. There are apprpriate linkages between predictive mdelling analysis, risk stratificatin and patient management strategies that review services, initially t manage services t say high cst patients. External stakehlders have cnfidence in the integrity f the rganisatin s financial cnduct External Stakehlders have cnfidence that the rganisatin cmmissins the best pssible health care fr its ppulatin and can demnstrate this against peer perfrmance Custmers and stakehlders can bring influence t bear n key financial management plicies, including resurce allcatin 11