fy 2014-15 draft accounts summary … operating revenue (3,570) (2,388) net programme expenditure...

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Page 1: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

FY 2014-15 DRAFT ACCOUNTS

SUMMARY

HOUNSLOW CCG

GOVERNING BODY 19.05.2015

Paper 09

David Tomlinson

Interim Chief Financial Officer

Page 2: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

2

CONTENTS

• Introduction/Executive Summary

• Achievement of Statutory Financial Duties

• Accounting Policies and Principles

• Summary Financial Performance

Page 3: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

3

INTRODUCTION / EXECUTIVE SUMMARY

The purpose of this report is to provide a high level summary of the draft Annual Accounts.

• Draft Accounts completed and submitted on time (23 April 2015)

• The CCG year end position is a surplus of £6,929k

• All statutory duties achieved

• No change in bottom-line surplus position from M10 forecast (this included the

increased surplus as agreed by NHS England).

Other targets : Better Payment Practice Code - NHS organisations are required to pay

trade creditors in accordance with the Better Payment Practice Code.

• The target is to pay trade creditors within 30 days of receipt of goods or a valid invoice,

whichever is the latter, unless other payment terms have been agreed with the

supplier.

• The targets are that as a minimum 95% of invoices by volume and by value are paid to

the terms noted above (slide 11)

Page 4: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

4

ACHIEVEMENT OF STATUTORY FINANCIAL DUTIES

The Clinical Commissioning Group is required to report in its accounts on the following statutory

duties.

Duty Plan/Allowance Actual Variance

Expenditure must not exceed income Compliant Compliant N/a

Significance - Is the CCG living within its means in its healthcare commissioning activities?

Capital resource use does not exceed the amount

specified in Directions £0k £0k £0k

Capital resource use on specified matter(s) does not

exceed the amount specified in Directions £0k £0k £0k

Significance – Does the CCG plan and control capital projects effectively? (Limited value given the

restrictions placed on CCGs with regards asset ownership)

Revenue resource limit £308,173k £308,173k

Revenue resource use on specified matter(s) does

not exceed the amount specified in Directions £301,571k £295,248k £6,323k

Revenue administration resource use does not

exceed the amount specified in Directions £6,602k £5,996k £606k

- CCG Surplus £4,176k £6,929k £2,753k

Significance – Is the CCG spending more or less than it is authorised to do in Total and in respect of

Programme (healthcare) and Administration (running cost allowance) activities?

Page 5: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

5

ACCOUNTING POLICIES and PRINCIPLES

• Accounting Policies are the specific policies and procedures used to prepare financial statements.

These include any methods and procedures for presenting disclosures.

• Accounting Policies differ from accounting principles in that the principles are overarching rules

(generally affecting all organisations) whilst policies are the manner or basis upon which an

organisation translates or values an item into its Accounts – they are an organisations way of adhering

to the rules.

• The Policies chosen can vary from organisation to organisation depending on a number of factors, and

can lead to different values being given to any particular item contained (or excluded from) the

Accounts.

• As an example, one Principle is that costs should be recognised in the accounting period to which they

relate; organisations may however value that expenditure in various ways, subject to the Policies

which they adopt.

Page 6: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

6

ACCOUNTING POLICIES and PRINCIPLES

• The Accounts have been prepared in accordance with the CCG Annual Reporting Guidance and NHS

England guidance.

• The Accounts have been prepared using International Financial Reporting Standards (IFRS) adopted by

the European Union to the extent they are judged relevant and appropriate to the CCG given the

requirement to protect a true and fair view.

• Policies over which the CCG has discretion in selection as allowed by the Manual For Accounts (many

are mandated and no discretion is allowed) include :-

Corporate Recharges within CWHHE Collaboration - recharges are made based on

local structure, usage and occupancy levels.

NHS 111 Shared Commissioning - recharges are made based on population size.

Bad Debts provisions - Provisions are made for non NHS invoices over 90 following

review for reasons for non payment.

Risk Share - The five CCGs of the CWHHE Collaboration have an agreed risk share policy in

place which is reviewed and amended on an annual basis. Redistributions are made between

CCGs where risks that are outside of the control of a one or more CCG have arisen and can be

offset with fortuitous gains in other CCGs.

Page 7: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

7

SUMMARY FINANCIAL PERFORMANCE : Surplus • The CCG’s year end position is a surplus of £6.929k

• The CCG exceeded its planned surplus of £4,176k by £2,753k (consistent with the M10 FOT).

• The £6,929k favourable variance to plan consists of £6,323k Programme costs and £606k for

Admin/Running costs.

• The main contributors that make up the exceeded planned surplus are - Programme costs : Favourable movements £4.1m : Investment slippage £2.2m : Release of contingency £0.8m : Property charges £0.6m : CHC risk share return

Programme costs : Unfavourable movements £1.7m : Over performance on Acute contracts £1.1m : NCA activity £1.6m : Continuing Healthcare £0.5m : MH specialist services • Running costs below plan £606k : mainly due to vacant posts during the beginning of the

financial year and CWHHE RCA reserve. • This position has been reflected in the CCG’s draft accounts submitted to NHS England on 23rd

April. The reported position is still subject to external audit. • The full 2014-15 outturn report will be provided to the Finance Committee and the Governing

Body in June, once the accounts are audited.

Page 8: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

8

SUMMARY FINANCIAL PERFORMANCE : RISKS

• During 2014/15 two local agreements were in place that contributed to the CCG delivering the

revised financial target of £6.929m, these were;

• Locally agreed Acute fixed price contracts

• NW London CCG risk share

• The fixed price contracts at the West Middlesex University Hospital [WMUH] and Imperial College Hospital [ICH] during 2014/15 mitigated costs of £3.1m at WMUH and £1m at ICH for activity above plan. This increased volume of patient activity is fully contracted within the 2015/16 Service level Agreements.

• Hounslow contributed £2.7m to the NW London CCG risk share. This was made up of £1.3m towards sector wide risks such as London Ambulance pressures and C&W merger costs. The remaining £1.4m was a contribution to Ealing CCG acute over performance of £0.9m and estates costs of £0.5m.

Page 9: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

SUMMARY FINANCIAL PERFORMANCE : STATEMENT OF

COMPREHENSIVE NET EXPENDITURE (SOCNE)

9

2014-15 2013-14

£'000 £'000

Administration Costs and Programme Expenditure

Gross employee benefits 4,217 1,887

Other costs 300,597 288,654

Other operating revenue (3,570) (2,393)

Net operating costs before interest 301,244 288,148

Other operating revenue _ _

Other (gains)/losses _ _

Finance costs _ _

Net operating costs for the financial year 301,244 288,148

Net (gain)/loss on transfers by absorption

Net operating costs for the financial year including absorption transfers301,244 288,148

Of which:

Administration Costs

Gross employee benefits 1,876 1,388

Other costs 4,120 5,035

Other operating revenue _ (5)

Net administration costs before interest 5,996 6,418

Programme Expenditure

Gross employee benefits 2,341 499

Other costs 296,477 283,618

Other operating revenue (3,570) (2,388)

Net programme expenditure before interest 295,248 281,729

Page 10: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

SUMMARY FINANCIAL PERFORMANCE : Summary of Net

Expenditure by Commissioning Area

10

Commissioning Area £'000

Acute 180,886

Community Health 31,547

Continuing Care 10,417

Mental Health 30,207

Other (includes Prog

administration & estates) 4,051

Prescribing 30,857

Primary Care 10,854

Total Programme Costs 298,818

Running Costs 5,996

Total Expenditure 304,814

Other Operating Revenue (3,570)

Total operating Expenditure 301,244

Page 11: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

SUMMARY FINANCIAL PERFORMANCE : GROSS OPERATING COST

11

2014-15 2013-14 Change ehange %

Total Total Comments

£'000 £'000

Gross employee benefits

Employee benefits excluding governing body members 3,992 1,609 2,383 148%

Considerable increase in wages - this is due to the CSU ceasing

and services coming back in-house. Also includes agency costs

for non recurrent project costs i.e. AEC setup & OOH services

support.

Executive governing body members 225 278 (53) (19%)

Reduction represents HCCG collaborative share reduced from

31% (13/14) to 16% (14/15), this includes full year impact of Ealing

CCG joining the collaborative.

Total gross employee benefits 4,217 1,887 2,330

Other costs

Services from other CCGs and NHS England 7,904 6,204 1,699 27% Includes £1.453m support to Ealing CCG via CWHHE risk share.

Services from foundation trusts 36,473 31,959 4,514 14%Includes non recurrent £2.5m merger support for Chelsea &

Westminster and West Middlesex.

Services from other NHS trusts 190,521 186,079 4,442 2%

Services from other NHS bodies 12 18 (6) (34%) Non contracted activity via Welsh & Scottish bodies

Purchase of healthcare from non-NHS bodies 23,889 24,266 (378) (2%)

Chair and lay membership body and governing body

members496 563 (67) (12%) Last year included £63k payment relating to 12/13.

Supplies and services – clinical 0 1 (1)

Supplies and services – general 769 954 (185) (19%)

Reduction in spend includes expenditure which is classed as

recharges by providers - this includes the CHC children service

provided by HRCH.

Consultancy services 352 402 (51) (13%)

Consultancy this year is fee for MCAP via Finemore (to support

activity monitoring at Westmid UCC) & Mcpin for mental health

project.

Establishment 918 930 (12) (1%)

Transport 2 0 1

Premises 2,910 4,151 (1,241) (30%)

Charges via NHS Property and Community Health Partnership

were based on actual spend this year as opposed to PCT

baseline - reduction mainly relates to Heart of Hounslow site.

Depreciation 35 42 (8) (18%) Reduction in charges reflects write off that occurred last year.

Amortisation 87 130 (42) (33%) Reduction in charges reflects write off that occurred last year.

Impairments and reversals of property, plant and

equipment0 5 (5) (100%) No w/o this year.

Impairments and reversals of intangible assets 0 117 (117) (100%) No w/o this year.

Audit fees 89 91 (2) (2%)

Prescribing costs 30,303 29,502 801 3% Increase in line with growth 3%

GPMS/APMS and PCTMS 4,699 3,206 1,492 47% Includes new funding for over 75 £1m and extend hours £500k

Other professional fees excl. audit 273 1 272 22089%

Includes legal fees in relation to setting up localities & fees for ICP

chairs (ICP service transferred from Central London Community

Health in July 14)

Clinical negligence 0 1 (1) (100%)

Education and training 447 31 416 1353%Includes non recurrent training monies via HENWL & non recurrent

training for OOHs services.

CHC Risk Pool contributions 421 0 421 NHSE CHC Risk Pool contributions

Total other costs 300,597 288,654 11,943

Page 12: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

SUMMARY FINANCIAL PERFORMANCE : BETTER PAYMENT

PRACTICE CODE

12

The target is to achieve 95% in all categories.

• Note Hounslow CCG has considerably improved it’s BPPC compared to last year and has achieved target in terms of financial values in both NHS & NON NHS payables.

• Main reasons for this improvement has been the finance team moving back in house and more direct focus on clearing invoices.

• Clearing the backlog of non-contract activities relating to 13/14.

• Works continues to improve and meet the 95% target in invoice numbers.

Measure of compliance 2014-15 2014-15 2013-14 2013-14

Number £'000 Number £'000

Non-NHS Payables

Total Non-NHS Trade invoices paid in the

Year 8,077 29,602 7,878 27,477

Total Non-NHS Trade Invoices paid within

Target 7,608 28,701 6,467 22,176

Percentage of Non-NHS Trade invoices

paid within Target 94.19% 96.96% 82.09% 80.71%

NHS Payables

Total NHS Trade Invoices Paid in the Year 3,666 237,665 1,250 214,474

Total NHS Trade Invoices Paid within

Target 3,391 229,098 900 176,684

Percentage of NHS Trade Invoices paid

within Target 92.50% 96.40% 72.00% 82.38%

Page 13: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

13

SUMMARY FINANCIAL PERFORMANCE : PROPERTY, PLANT &

EQUIPMENT

Tangible Assets Intangible Assets Total Assets Comments

31/03/2015 31/03/2015 31/03/2015

Assets £'000 £'000 £'000

Opening balances 286 172 458

Impairment 0

Depreciation (175) (69) -244

Closing Balance 111 103 214

Plant & Machinery and Software

Licences , transferred from

Hounslow PCT

Page 14: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

14

SUMMARY FINANCIAL PERFORMANCE : TRADE & OTHER

RECEIVABLES

Receivables Category 2014-15 2013-14 Comments

£'000 £'000

NHS receivables: Revenue 3,812 2,715

Includes Central London CCG risk share income, UCC income, NHS

111 recharges, NHS England IT recharge and NHS Trust's &

Foundation Trust Acute under performance.

NHS prepayments and accrued income 1,558 2,986 Acute Maternity pathway £1,558k.

Non-NHS receivables: Revenue 145 106

Non-NHS prepayments and accrued income 0 20

VAT 183 71

Other receivables 13

Total 5,711 5,899

Aged debtors analysis £'000 £'000

0-30 days 933 297

31-60 days 0 703

61-90 days 182 0

Over 90 days 0 0

Sub Total 1,115 1,000

Less Bad debts Provision 0 0

Other Debtors items/prepayments 4,596 4,899

Total (Note 1) 5,711 5,899

Note 1 - £753k of these debts have been settled since year end.

Page 15: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

15

SUMMARY FINANCIAL PERFORMANCE : TRADE & OTHER

PAYABLES

2014-15 2013-14

 Payables Category £'000 £'000 Comments

NHS payables: revenue 13,445 15,549 Reduction in creditors is due to the CCG having block acute

SLA's with it's main providers - WMUH & Imperial.

NHS accruals and deferred income 2,123 2,100 This represents WIP for acute SLA's at year end.

Non-NHS payables: revenue 4,656 2,007 Increase in creditors include NHS property and CHP which were

fully paid in 13-14, but remained unpaid this year end, this is due

to late billing from the both providers.

Non-NHS accruals and deferred income 15,614 9,450 The main increase in Non NHS accruals includes : Community

equipment LB Hounslow, Continuing Care Providers as per

caretrack, PPA Drugs and LES accrual for over 75's & PM

challenge fund.

Social security costs 26 17 In line with staff transferred to CCG.

Tax 30 17 In line with staff transferred to CCG.

Other payables 130 38 Increased in Pensions Creditors in line with staff costs

transferred to CCG.

Total 36,024 29,178

Page 16: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

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SUMMARY FINANCIAL PERFORMANCE :

NHS RECEIVABLES - AGREEMENT OF BALANCES

The Agreement of Balances process is a comparison of what the receiver records as

outstanding compared to what the payable organisation recognises as a balance

outstanding.

Notified: this is the amount notified by the Provider as the amount due to them on the

receivables statement i.e. invoices raised up to the 20th March.

Accrued: these are balances on the accruals statements issued and represents activities

for the financial period not yet billed as at 31st March.

Adjusted: this includes accruals if no statements are issued and all other adjustments.

Organisation Type Notified Accrued Adjusted Disputed Total

£'000 £'000 £'000 £'000 £'000

NHS England 0 0 326 0 326

Clinical Commissioning Groups 1,580 1,224 0 0 2,804

Commissioning Support Units 0 0 0 0 0

Total NHS Trusts 290 1,636 0 0 1,926

Total Foundation Trusts (34) 216 2 0 184

Local Authorities 0 0 0 0 0

Total 1,836 3,076 328 0 5,240

Page 17: FY 2014-15 DRAFT ACCOUNTS SUMMARY … operating revenue (3,570) (2,388) Net programme expenditure before interest 295,248 281,729 SUMMARY FINANCIAL PERFORMANCE : Summary of Net Expenditure

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SUMMARY FINANCIAL PEFORMANCE :

NHS PAYABLES - AGREEMENT OF BALANCES

There are no formally disputed invoices as at 31st March 2015.

The Agreement of Balances process is a comparison of what the receiver records as

outstanding compared to what the payable organisation recognises as a balance

outstanding.

Notified: this is the amount notified by the Provider as the amount due to them on the

payables statement i.e. invoices raised up to the 20th March.

Accrued: these are balances on the accruals statements issued and represents activities

for the financial period not yet billed as at 31st March.

Adjusted: this include accruals if no statements are issued and all other adjustments.

Disputed: are invoices that are formally disputed, where the other party is notified of such

dispute.

Organisation Type Notified Accrued Adjusted Disputed Total

£'000 £'000 £'000 £'000 £'000

NHS England 0 0 14 0 14

Clinical Commissioning Groups 525 2,894 1 0 3,420

Commissioning Support Units 9 0 0 0 9

Total NHS Trusts 5,751 3,205 (1) 0 8,955

Total Foundation Trusts 1,962 1,181 13 0 3,156

Local Authorities 0 0 2,916 0 2,916

Other government departments and ALBs 1,273 172 21 0 1,466

9,520 7,452 2,964 0 19,936