Technical / Planning for a year-end with no surprises

There has been a focus on the estimates and judgements used in getting to that position, with the Department looking to review the consistency in how guidance is being implemented as part of additional ‘due diligence work’.

This is a novel move and has prompted some discussion and a statement from the HFMA. However, putting this issue to one side, the main message coming out of the HFMA’s pre-accounts planning conferences in January was that there should be no surprises. 

In recent years, the outturn reported pre-audit has not changed materially as a result of audit and the expectation is that this year will be no different. The way to achieve this is to discuss
all potentially difficult issues with external auditors as soon as possible. Ideally, this will already have happened.

While the various accounting manuals have been available for some time, more recent guidance was issued in the last weeks of March. Monitor, for example, issued an update to its Annual reporting manual. This makes amendments to the disclosures in relation to ‘on-balance sheet’ service concessions, internal audit expenditure, merger support monies and income as a result of capital-to-revenue transfers. The update also confirms there are no changes to the fair pay multiple or off-payroll disclosures.

The Department was also planning to issue another FAQ on the pensions disclosures made in the accounts. The narrative disclosure relating to the NHS pension scheme has been amended and has been issued to trusts and clinical commissioning groups. Foundation trusts should have received this or will do shortly.

Foundation trusts and trusts will be required to include the single total remuneration table in their consolidation schedules this year. However, this should not cause any additional work as the information is reported in the remuneration report; it is simply to avoid another central collection.

The Department also issued the month 12 agreement of balances guidance, and it is worth checking for changes. This year, for the first time, income and expenditure with a year-to-date balance of more than £2m will have to be agreed at year-end. The contact lists have been updated and section 7 and the appendices provide guidance on how to make sure you are agreeing balances with the right part of NHS England.  A large proportion of mismatches result from failing to identify the appropriate part of NHS England to agree balances with.

The only new accounting standard to come into force this year is IFRS 13 – Fair value measurement. It is expected to have a limited impact on NHS bodies. As a result, the valuation of surplus assets, which are not in use and have no restrictions on their sale, has changed.

The better care fund is expected to be a critical issue for CCGs. The HFMA understands that auditors are looking closely at these arrangements and will expect that the accounting treatment for the fund has been determined based on an assessment of the signed agreements. It is particularly important to identify whether host bodies are acting as principals or agents in the agreement as this may be the determining factor in whether accounting is on a gross or net basis.

Finally, this is a big year of change for charities with the adoption of a new statement of recommended practice and resulting restatement of the 2014/15 accounts. There is a briefing on year-end reminders available on the HFMA website.

In brief

• Monitor and the NHS Trust Development Authority have updated their NHS provider inflation assumptions for the period 2016/17 to 2020/21. They recommended providers use these when planning and forecasting activities, while also taking account of local circumstances, opportunities and pressures.

• Monitor issued updates to its financial accounting guidance – the month 12 foundation trust consolidation template and updates to the two optional accounts templates.

• The Department of Health has updated the templates for recovering costs of care from visitors and migrants. The templates, applicable from 6 April, take in updates to Overseas chargeable patients, NHS debt and immigration rules: guidance on administration and data sharing.

• The HFMA has issued briefings on charitable funds’ year-end and changes in financial reporting standards and guidance. The former reminds NHS charities to follow the new statement of recommended practice for 2015/16 annual accounts; the latter highlights the changes that could affect NHS organisations’ annual reports and accounts.

NICE update

Sickle cell treatment patient and cost benefits

About 13,500 people have sickle cell disease in England – they have a mutated variant of haemoglobin that causes red blood cells to form a distinctive sickle shape, writes Nicola Bodey. These red blood cells do not flow easily and can cause blockages – vaso-occlusive crises. These are most serious when they restrict the blood flow to major organ systems.

NICE guidance (MTG28) states that the case for adopting Spectra Optia Apheresis System (Spectra Optia) for automated red blood cell exchange in people with sickle cell disease is supported by the evidence.

Spectra Optia is an apheresis and cell collection platform that can be used for automated red blood cell depletion and exchange in adults or children with sickle cell disease, who are on a long-term or temporary/medium-term transfusion regime. It is faster to use and needs to be done less often than manual exchange and should be considered for people who need regular transfusion.

Some 700 people in England with sickle cell disease will be eligible for Spectra Optia and an estimated 570 people will have it from year five, when a steady state is reached.

The annual saving associated with implementing the guidance for the population of England is £12.9m from 2020/21 (about £18,100 per 100,000 population).

A Spectra Optia machine costs about £62,400 and maintenance costs are estimated to be £4,600 per year. It is anticipated there will be savings if commissioners and providers work together to reduce the need for chelation therapy by using Spectra Optia.

There will be a reduction of five hospital appointments per year compared with manual or top-up transfusion. Each attendance will be shorter by about four hours as a result of the more efficient transfer.

This will reduce the impact of transfusion therapy on education and work for people with sickle cell disease.

Nicola Bodey is senior business analyst at NICE