Auditor General qualifies his audit opinions on Betsi Cadwaladr University Health Board’s 2021-22 Accounts
The 2021-22 accounts of Betsi Cadwaladr University Health Board have been published today with the caveat that significant areas of expenditure may not be accurate.
The Auditor General issued a qualified ‘true and fair’ opinion today on the Health Board’s 2021-22 accounts, because he could not obtain sufficient evidence that certain figures were accurately stated and accounted for in the correct accounting period. He also qualified his ‘regularity’ opinion because the Health Board again failed to meet its financial duty to break-even over a three-year period, and (along with eight other NHS bodies in Wales) incurred irregular expenditure in year in complying with a direction by Ministers to fund clinicians’ pensions tax liabilities.
The Health Board was in financial balance for the second year in a row, aided by strategic funding assistance from the Welsh Government. The audit of the Health Board’s 2021-22 accounts, however, identified significant errors. The Health Board was unable to provide sufficient audit evidence to demonstrate the existence of £72 million of expenses incurred but not paid in the year.
There was also insufficient evidence to confirm that expenditure of £122 million occurred in the year or was properly accounted for in the correct accounting period. The Health Board stated that they did not have capacity to support the further audit work necessary to fully explore these issues, and consequently a “limitation of scope” qualification was placed on the Health Board’s accounts.
The Auditor General also qualified his regularity opinion in two respects. Firstly, because the Health Board failed its duty to break-even over a three-year period ending 2021-22 and so exceeded its authority to spend. Secondly, in line with eight other health bodies in Wales, the accounts include expenditure and funding in respect of clinicians’ pension tax liabilities. The amounts are included following a Ministerial Direction to proceed with plans to commit to making payments to clinical staff to restore the value of their pension benefits packages, where taking on additional work increased their pension tax liabilities. In the Auditor General’s opinion, these transactions are irregular and material by their nature, because they are contrary to Managing Welsh Public Money [opens in new window]. For context at the Health Board, the estimated costs of funding these tax liabilities is £2.3 million, against total expenditure in year of £406 million.
Betsi Cadwaladr University Health Board is the biggest Welsh NHS body, providing services across the whole of North Wales. Along with other NHS bodies it faces considerable cost and demand pressures including the significant backlog of planned care. However, it is also receiving considerable funding from the Welsh Government which the public would expect it to manage and account for accurately. The errors the audit has identified are concerning and I have made recommendations to the board for improvement, which my team will follow up next year.
My 2021-22 NHS Finances Data Tool, to be issued next week, will set out the NHS Wales financial position in more detail, including spending on COVID-19.