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Sir John Bourn, head of the National Audit Office, told Parliament today that trustee bodies administering charitable funds associated with the NHS have made substantial progress in adopting high standards of corporate governance and have adequate controls in place to ensure that business is properly conducted. Sir John concludes that the current arrangements for supervision and accountability of these trustee bodies are operating effectively and there is no case to be made now for greater regulation.

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There are over 500 trustee bodies administering charitable funds associated with the NHS that hold net assets amounting to some £1.8 billion. Trustees are responsible for the administration of the individual charities and for ensuring that assets are properly managed, controlled and safeguarded in accordance with trust and charity law. In 1998-99 the trustee bodies spent £322 million in support of the NHS.

The National Audit Office examined corporate governance and financial arrangements by visiting 21 of the trustee bodies. They made recommendations aimed at further improving corporate governance and financial control arrangements, which trustees agreed to implement. The areas covered by these recommendations included:

  • ensuring that trustees are kept fully informed about business conducted by sub-committees and ratify any decisions that they take;
  • avoiding trustees acting as fund advisors where it could lead to a conflict of interest. Where this is not possible arrangements being made to ensure that all interests are properly declared and dealt with in an appropriate fashion;
  • introducing comprehensive induction procedures for all new trustees, including formal briefings and the provision of relevant Charity Commission and NHS Executive guidance and background information about the charity;
  • maintaining up to date registers of interest covering trustees, support staff and fund advisors, and non-financial as well as financial interests;
  • developing an integrated forward plan, budget and policy for the use of reserves
  • regularly monitoring and reviewing the performance of their investment advisors;
  • periodically testing the market for the investment managers and other service providers; and
  • developing guidelines for fund advisors and potential grant applicants on what expenditure is appropriate to the charity.

"I am glad to be able to provide a positive assurance that these funds are being well managed. In our report, wherever possible we have drawn out examples of good practice, as well as pointing to areas where we consider that further improvements to corporate governance and financial control arrangements could be made."

Sir John Bourn


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