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         Sharon Cannaby summarises ACCA and the NHS Confederation’s
         joint response to the Audit Commission’s discussion document
         World Class Financial Management.

         world class financial management
            ACCA and the NHS Confederation were             whole board development, to promote              budget reporting and monitoring
         pleased to have an opportunity to provide          corporate board responsibility and to help          how consistent are the financial forecasts
         comments to the Audit Commission on its            ensure top management fully understand the          made during the year with the actual
         discussion document World Class Financial          financial environment in which they operate.        year-end position? How are lessons
         Management.                                        We are working together to develop a whole          learnt from the variations?
             Like the Audit Commission, we consider         board training package to help facilitate this      how are budget holders held accountable
         financial management to be an essential            and would welcome the opportunity to discuss        for managing their budgets?
         component for good corporate governance            this further with the Audit Commission.             how are budget holders made aware of
         and we welcome the opportunity to join in                                                              the effect of their decisions on the
         the debate on what constitutes world class         comments on individual questions                    financial position of the organisation?
         financial management.                              You can read ACCA and the NHS
                                                            Confederation’s response to individual           board reporting
         key themes                                         questions online at             does the board receive regular and
         We believe that the paper correctly identifies     pdfs/international/uk/World_Class.pdf.              accurate accruals-based financial
         and focuses on the five key themes of                                                                  information, including the risks to the
         financial management:                              questions NEDs should be asking                     financial position?
             financial governance and leadership            Going forward we believe there are a number
             financial planning                             of valuable questions NEDs should be             new contracts of employment
             finance for decision making                    asking. The key questions are summarised            what are the financial consequences of
             financial monitoring and forecasting           below. You can read a full list – as well as        implementing the new GPs/consultant
             financial reporting.                           an examination of the types of financial            contract and Agenda for Change?
                                                            information that the board should receive –         what arrangements have been put in place
         We were also pleased to note that the discussion   in the above online document.                       to ensure effective finance involvement in
         document clearly identifies financial                                                                  the implementation of the new contracts?
         management as a corporate board responsibility,    governance
         not ‘the finance director’s problem’. In many          does the board accept unqualified            additional questions for foundation trust NEDs
         organisations anything to do with finance              responsibility for the financial                 what steps have been taken to identify the
         and corporate governance is wrongly perceived          management of the organisation?                  additional financial management skills
         to be the sole responsibility of the FD.               does the board possess the necessary             that will be required?
              We believe that many of the financial             mix of skills in both executive and non-         have staff been informed of the changes
         management issues of the NHS at this time              executive members?                               (including the Audit Code, Prudential
         stem from a ‘command and control’ mentality            what arrangements are in place to ensure         Borrowing Code and the Insolvency
         which leaves local organisations not only ill          the continual development and training           Regime) required under the new FT
         equipped to deal with financial issues but             of board members?                                financial regime? What training has
         has encouraged Boards to dislocate themselves                                                           been provided?
         from financial issues in the pursuit of other      financial planning                                   what steps has the FT taken in relation to
         targets. We also very much welcome the                 how does the organisation integrate              appointing its external auditor?
         policy direction from the Secretary of State           service and financial planning and how           has the trust achieved Risk Pooling
         that each NHS organisation is responsible              well does it do it?                              Scheme for Trusts Level One and are
         for its own affairs and should not be                  how do financial data and management             there any further recommendations
         supported at the detriment of others.                  information support good strategic               arising from the assessment?
              ACCA and the NHS Confederation consider           decision-making and performance
         that more work needs to be done to support             management?                                  Sharon Cannaby – Head of Health
                                                                                                             Sector Policy, ACCA

         health service review April 2007                                                                                                                 19


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