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NHS Direct 2004-2005: Qualification of Audit Opinion

Head of the National Audit Office Sir John Bourn has qualified his opinion on the accounts of NHS Direct for the year up to 31 March 2005 because of a lack of evidence to support a significant number of payroll payments. A second reason for the qualification was a lack of evidence to support comparative figures relating to previous years for all aspects of the accounts.

Established in 1998, until April 2004 NHS Direct was centrally managed by the Department of Health but the service was delivered at a local level by 22 NHS Trusts. When NHS Direct became a Special Health Authority in April 2004, it had to put in place new accounting systems and procedures. While these systems were being established the host Trusts which had previously funded and managed the service continued to be responsible for providing accounting and payroll services under service level agreements. Since NHS Direct had not implemented a centralised ledger or payroll system and the payroll providers and records were dispersed across the country, there was an absence of central management control over the processing of payroll.

Work by NHS Direct and the NAO has indicated that in the region of £1.6m of payroll expenditure in 2004-05 may be inaccurate.

According to today’s report, NHS Direct has also been unable to provide evidenced comparative income and expenditure figures for previous years. NHS Direct has estimated total income and expenditure of £121 million for the previous year based on returns provided by the host Trusts to the Department of Health together with an estimate of central departmental costs, but has been unable to provide sufficient evidence to support these figures.

“I have qualified the accounts of NHS Direct because of a lack of evidence that correct payments have been made to staff. “NHS Direct has taken steps in year to centralize its accounting and payroll systems. It is vital that it continues to strengthen internal controls and ensures that proper accounting records are maintained in the future.”

Sir John Bourn

Notes for Editors

  1. NHS Direct became a stand alone Special Health Authority on 1 April 2004. It provides a 24-hour, 7-day-a-week healthcare advice and information service by telephone, on-line and through an interactive Digital TV Service.
  2. In previous years, NHS Direct had been funded and managed by the Department of Health under service level agreements with the 22 host trusts from which the telephone service operates. The costs of NHS Direct were accounted for as part of NHS Trust expenditure and, consequently, included within the accounts of the respective host trusts.
  3. The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office which employs some 800 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.
  4. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.

PN: 10/06