Comment / Quality accounts: what’s in a name?

Just because annual quality reports have been termed ‘accounts’ doesn’t make them the responsibility of the finance director. By David Bacon

When reference is made to ‘accounts’, most people understandably think of a set of financial statements. Indeed, the Collins English dictionary defines accounts as ‘detailed records of all the money that a person or business receives or spends’. There is also a natural assumption that, at an organisation level, the responsibility for the maintenance of records and the preparation of accounts sits with the finance director and their team.

Again, this is completely understandable given it is the finance director who is responsible for presenting the organisations accounts internally to the audit committee and subsequently to the board. And it is the finance director and finance team that also act as the primary interface between the organisation and auditors as the external audit process is completed.

The NHS (quality accounts) regulations 2010

(SI 2010 No 279) introduced into legislation the requirement for NHS provider organisations to prepare annual ‘quality accounts’. Among other things, these should include a signed statement by the chief executive and a description of the quality of healthcare provided by the organisation. Quality accounts, which report on the quality of services provided, are part of the overall quality improvement infrastructure of the NHS. They aim to enhance NHS providers’ accountability to the public and engage the leaders of an organisation in the quality improvement agenda.

Let’s be clear. Requiring an organisation to report openly on the quality of its services appears a sensible development. And requiring this through legislation should inevitably help to improve the quality of care that individual users of NHS services will receive. But – and there is a but – labelling these reports as a set of ‘accounts’ creates an impression that they are something that the finance director and his or her team do.

Of course finance directors and finance staff do have something to bring to the party. We are used to the idea of presenting accurate, robust information that is subject to external scrutiny and audit. But that alone is not enough to plant the quality accounts in their in-tray. The real danger of such an approach is that we lose the opportunity for wider organisational engagement and responsibility.

So how does an organisation ensure that the right organisational engagement and responsibility is in place for the development and preparation of and response to outputs from these ‘accounts’? How do finance directors ensure they do not become solely responsible for producing a report that has very little to do with their area of professional expertise?

Clearly the role of the chief executive is key in ensuring the right level of engagement in preparing quality accounts, including the formal identification of an executive director with responsibility for the preparation of and presentation of the quality accounts to the board. This organisation-wide responsibility can be further reinforced if the audit committee (with the external auditors who have undertaken the review of the quality accounts in attendance) receives, reviews and scrutinises the draft accounts, with the whole director group present, in advance of presenting to the full board.

At the moment, an NHS provider’s main relationship with external auditors is via the director of finance. However, when reviewing quality accounts, they should be developing relationships with the lead executive director for those accounts and not try to channel everything via the finance director and finance team.

David Bacon is chairman of the HFMA’s Accounting and Standards Committee