fy 2014-15 draft accounts summary … operating revenue (3,570) (2,388) net programme expenditure...
TRANSCRIPT
FY 2014-15 DRAFT ACCOUNTS
SUMMARY
HOUNSLOW CCG
GOVERNING BODY 19.05.2015
Paper 09
David Tomlinson
Interim Chief Financial Officer
2
CONTENTS
• Introduction/Executive Summary
• Achievement of Statutory Financial Duties
• Accounting Policies and Principles
• Summary Financial Performance
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)
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?
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.
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.
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.
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.
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
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
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
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%
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
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.
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
16
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
17
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