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Accounting for care

Accounting for care

Insight: Accountable officers
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As the Health and Social Care Bill is debated
in parliament there are a some concrete elements to the
government reforms which can be planned for.

We do know that, subject to Parliamentary approval, GP
Commissioning Consortia (GPCC) will be at the heart of
these changes, with direct responsibility for as much as 80%
of the NHS budget in England – around £80bn.

As this is taxpayers' money it comes with strings attached –
namely that there is an absolute requirement to demonstrate As the Health and Social Care Bill is debated
in parliament there are a some concrete elements to the
government reforms which can be planned for.

We do know that, subject to Parliamentary approval, GP
Commissioning Consortia (GPCC) will be at the heart of
these changes, with direct responsibility for as much as 80%
of the NHS budget in England – around £80bn.

As this is taxpayers' money it comes with strings attached –
namely that there is an absolute requirement to demonstrate
that it is used well and for its intended purpose. GPCC will be
accountable for how they spend the funds and will need to
demonstrate probity.

From April 2012, the National Commissioning Board
(NCB) will allocate the funding previously received by
primary care trusts (PCTs) directly to GPCC.

This will be in the form of a budget that is a total of
individual practice-level budgets based on a weighted capitation model.

The aim is to provide funding based on population
need and local circumstances to equalise buying power. GPCC
will be 'bodies corporate' and have a statutory basis.

A 'body corporate' is a legal entity through which the law
allows a group of natural persons to act as if they were a single
composite individual for certain purposes, an example of this
would be a company registered at Companies House. Being
on a statutory basis in this context means being able to spend
public money and accountable to parliament for its use.

Although the powers and functions of consortia are
defined by the Health and Social Care Bill 2011, it is
proposed that they will have flexibility in making their
internal governance arrangements.

However, there will be some essential requirements,
particularly relating to financial management. One of these
essential elements is to have an 'Accountable Officer', who
will be accountable directly to the Chief Executive of the NCB
as Accounting Officer for NHS commissioning activity.

The Accountable Officer (AO) is vital to ensuring the
sound stewardship of public funds and is a role that already
exists throughout the public sector. In NHS organisations to
date, the role has been fulfilled by the chief executive of PCTs
and foundation trusts, and before that, the chief executive of health authorities.

It is important that all organisations spending public
money are able to account fully and transparently for their
use of public funds. The role of the AO is key to this in
ensuring that the organisation:
• Operates effectively, economically and with probity.
• Makes good use of its resources.
• Keeps proper accounts.
This is a key role in governance terms and will involve
having arrangements in place to ensure:
• Robust financial records are kept at consortium level.
• A sound system of internal control is established and
maintained.
• The necessary financial records are retained.
• Financial considerations are taken fully into account in
decision making.

This is quite separate from the responsibilities of a
Chief Financial Officer CFO, or Director of Finance (DF)
in the NHS, which are complex and varied, ranging from
statutory duties relating to accountability, governance and
probity, 'traditional' treasurer activities, corporate strategic
management and day-to-day operational management
of financial functions. Indeed, my own view is that the
Accountable Officer role should not be undertaken by the
CFO or DF for probity reasons.

The Bill requires that when making applications to the NCB
to establish a consortia, the applicants must include a copy
of the consortium's proposed constitution, and specify the
name of the person whom the consortium wishes the Board to
appoint as its AO. Paragraph 9 sets out that each consortium
must have an AO, who may be either a member of the
consortium or an employee. They may be the AO for more than
one consortium. If the AO is not an employee of a consortium,
the consortium may remunerate him/her as they see fit.

The AO is responsible for ensuring the consortium
complies with its financial obligations. The AO is also
responsible for ensuring that the consortium fulfils its
duties to exercise its functions effectively, efficiently and
economically under new section 14K, and its duties under
new section 14L in relation to improvement in the quality of
services. They must also ensure that the consortium exercises
its functions in a way that provides good value for money.
Other obligations may be specified in a document published
by the Board for these purposes.

The Bill leaves it quite flexible as to who can be an AO; it
does not have to be a GP. It needs to be a person who is aware
of their responsibilities, both within the consortia and also to
the NCB. Someone who is financially savvy, carries weight in the group, and is prepared to take appropriate action to ensure that the consortium fulfils its financial obligations. For example the appointment letters for AOs in PCTs state:

"You are, together with the Director of Finance and Service

Development, responsible for ensuring that the accounts... must disclose a true and fair view of the PCTs income and expenditure, and of its state of affairs.

"You have particular responsibility for ensuring that expenditure by the PCT complies with Parliamentary requirements."



It also says you must:
• Not exceed your resource limit.
• Draw the attention of Parliament to losses or special
payments by appropriate notation of the statutory
accounts.
• Obtain sanction for any expenditure that exceeds the
limit delegated to the primary care trust; this includes any
novel, contentious or repercussive expenditure, which is
by definition outside your delegation.
• Ensure that all items of expenditure, including payments
to staff, fall within the legal powers of the PCT, exercised
responsibly and with due regard to probity and value for
money.
• Ensure that all expenditure is correctly attributed.
• Comply with guidance issued by the Department of
Health on classes of payments that you should authorise
personally, such as termination payments to general and
senior managers.

And critically it says that the AO must raise an objection in
writing if the chair or executive committee is contemplating
a course of action that the AO "considers would infringe the
requirements of propriety and regularity".

While the exact terms of appointment for GPCC will differ
from primary care trusts, the principles will remain the same,
which gives the AO considerable power in the system and
personal accountability for a number of key issues. In this
sense, the AO can be dismissed by the NCB Chief Executive
and a GPCC cannot continue to function without an AO.

If a GP did step up to take on this role I envisage it taking
less than a day a week, unless the person concerned is already
intimately involved in the business of the GPCC such as the Chief Executive or another lead role on the board.

There is an implication that the Accountable Officer
should attend all Board meetings and be familiar with the
overall financial position of the organisation.
There is no set remuneration as the Bill makes it clear
that any remuneration is a matter for the GPCC.

In my own role as Health Authority Chief Executive, I was not paid any additional sum, for being an AO it was part and parcel of the job. Things are slightly different in GPCC, in the sense
that the role is not attached to a particular position or even
an employee of the GPCC, so some form of remuneration is
appropriate in my view. It would have to be negotiated locally
but a pro rata sum to a Board position would be realistic.
The role of AO will be mandatory in law. The post holder has considerable powers and responsibilities in relation to
financial matters. That is not to say that the AO is solely
responsible for financial problems and is certainly not
responsible for everything that happens, or doesn't happen
in a GPCC.

The responsibilities should not be taken lightly, but
equally are not so onerous as make the role untenable. The
key issue is understanding and awareness of the role. This
is not yet fully clear yet, given additional clauses in the Bill
which could be interpreted as making the Accounting Officer
responsible in some way for quality aspects and the clause
that allows the NCB to specify "other obligations for these
purposes" – watch this space. If you are considering being an
AO – go in with your eyes open.

Mike Sobanja
Chief Executive
NHS Alliance

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