As Accounting Officer, I am responsible for reviewing the effectiveness of the system of internal control. This is undertaken in the following ways:
• The head of internal audit (a role delivered as part of
our outsourced internal audit function) that reports to me provides assurance that there is generally a sound system of internal control (designed to meet the organisation’s objectives) and that controls are generally applied consistently. During the year there were six assurance based reports produced and all received a positive rating. There were a total of 13 medium rated recommendations and 9 low rated – all of which were accepted by the NHS LA.
• Members of the Senior Management Team, who have
responsibility for the development and maintenance of the system of internal control, provide me with assurance.
• The Assurance Framework provides me with evidence
of the effectiveness of controls that manage the risks to the organisation, thereby supporting and achieving its objectives.
• I regularly meet with members of the senior management
team to discuss the performance of the NHS LA and to receive assurance and feedback on their areas of responsibility. Throughout this financial year we have discussed and agreed the changes we are making to our services, including preparing for the new NHS structure (and new NHS LA members) and also the transition of NCAS from NICE.
• The NHS LA’s Reserving Committee and the NHS LA’s
actuaries support and inform me, as Accounting Officer, of matters that I should consider when agreeing the appropriate level of reserves for the NHS LA.
• I am supported by the SIRO, the Information Governance
Group and the Data Reference Group on all aspects of information governance across the NHS LA.
• The Health, Safety and Risk Committee provide me
and the Senior Management Team with assurance about the management of operational risk and safety within the organisation.
• I am also informed by the NHS LA’s external auditors
in their management letters and other reports on aspects of the system of internal control. The final accounts process for 2013/14 incorporated actions identified during the previous audits to improve the presentation and clarity of the accounts including detailed sensitivity analysis regarding our provisions at note 9 in the attached accounts.
• The Audit and Risk Committee meets regularly and
reports to the Board and me after each meeting, and also by way of a formal annual report. During the year the Audit and Risk Committee has reviewed its own effectiveness, membership and terms of reference and remains satisfied that it has sufficient flexibility in those areas to deal with the business of the Audit and Risk Committee. In addition, the Audit and Risk Committee has commissioned additional assurance regarding actuarial forecasts by introducing a peer review carried out by an independent firm of actuaries. The Audit and Risk Committee also monitors compliance with all audit recommendations to ensure that they are effectively implemented. Both the internal and external auditors are present at the Audit and Risk Committee’s meetings and the Internal Audit Team has reported on corporate governance during 2013/14.
The attendance record for the Audit and Risk Committee’s meetings is given in Figure 35 opposite.
Operations
Strategic and Dir
ector’
s Report
Report and accounts
attended
Keith Ford * Non-executive Director 2 of 2
Andrew Hauser ** Non-Executive Director 2 of 2
Nina Wrightson *** Non-executive Director 3 of 4
Rory Shaw Non-executive Director 3 of 4
Ros Levenson **** Non-Executive Director 1 of 1
* Keith Ford’s term of offi ce ended on 30 November
2013.
** Andrew Hauser was appointed Chair of the Audit and
Risk Committee on 1 December 2013.
*** Nina Wrightson became acting Chair with eff ect on
1 January 2014 and has not, therefore, been an active member of the Audit and Risk Committee since that date.
**** Ros Levenson, a member of the Rem Co., was
appointed to the Audit and Risk Committee on 1 January 2014.
Th e governance arrangements detailed in this statement aim to support the NHS LA to maximise its understanding and use of all available information about the quality and eff ectiveness of its systems to help us improve services and satisfy assurance requirements about the eff ectiveness of our systems of internal control. Based on my review I am not aware of any signifi cant control issues.
Catherine Dixon
Chief Executive NHS LA
I certify that I have audited the financial statements of the NHS Litigation Authority for the year ended 31 March 2014 under the National Health Service Act 2006. The financial statements comprise:
Statements of Comprehensive Net Expenditure Financial Position
Cash Flows
Changes in Taxpayers’ Equity Related notes
These financial statements have been prepared under the accounting policies set out within them. I have also audited the information in the Remuneration Report that is described in that report as having been audited.
Respective responsibilities of the Accounting Officer and auditor
As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Accounting Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My responsibility is to audit, certify and report on the financial statements in accordance with the National Health Service Act 2006. I conducted my audit in accordance with International Standards on Auditing (UK and Ireland). Those standards require me and my staff to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the NHS Litigation Authority’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the NHS Litigation Authority; and the overall presentation of the financial statements. In addition, I read all the financial and non-financial information in the annual review to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by me in the course of performing the audit. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my certificate.
I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities that govern them.
Opinion on regularity
In my opinion, in all material respects the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities that govern them.
Opinion on financial statements
In my opinion:
• The financial statements give a true and fair view of the
state of the NHS Litigation Authority’s affairs as at 31 March 2014 and of the net expenditure for the year then ended.
• The financial statements have been properly prepared
in accordance with the National Health Service Act 2006 and Secretary of State directions issued thereunder.
Emphasis of matter – provision for Clinical Negligence Scheme for Trusts
Without qualifying my opinion, I draw attention to the disclosures made in note 9 to the financial statements concerning the uncertainties inherent in the incurred but not reported (IBNR) claims provision for the Clinical Negligence Scheme for Trusts. As set out in note 9, given the long-term nature of the liabilities and the number and nature of the assumptions on which the estimate of the provision is based, a considerable degree of uncertainty remains over the value of the liability recorded by the NHS Litigation Authority. Significant changes to the liability could occur as a result of subsequent information and events which are different from the current assumptions adopted by the NHS Litigation Authority
Opinion on other matters
In my opinion:
• The part of the Remuneration Report to be audited has
been properly prepared in accordance with Secretary of State directions made under the National Health Services Act 2006.
• The information given in the Strategic and Directors’
Reports for the financial year for which the financial statements are prepared is consistent with the financial statements.