A comprehensive system of controls assurance in the NHS - covering financial, organisational and clinical risk - moved a step closer this week as new guidance and control standards were unveiled in London. The controls assurance initiative, the latest in a long line of corporate governance schemes in the NHS, already requires trust and health authority chief executives, on behalf of their boards, to sign assurance statements in their accounts confirming that internal financial controls are in place. Earlier in the year an NHS circular announced that from 1999/2000 the requirement was being extended to risk management and organisational controls, covering non-financial, non-clinical risk areas. The eventual goal is to converge with the clinical governance initiative, which aims to ensure high standards of care are maintained, allowing chief executives to publish 'all controls' statements with the accounts each year. As well as reducing health bodies' exposure to risk, the NHS Executive believes the controls assurance initiative will increase public confidence in the quality of services. Although NHS managers frequently complain the service is blighted with 'initiative-itis', the scheme has been almost universally welcomed. According to Roger Swain, director of finance and IT at Addenbrooke's NHS Trust and a member of the Healthcare Financial Management Association's corporate governance and audit committee: 'The Executive has managed to steer a difficult path between overprescription and too generalised guidance that is of no use to anyone.' The new guidance was formally launched by health minister John Denham at a major event held at the London Arena on Monday attended by over 800 NHS managers, including 100 internal auditors. Eighteen standards on risk management and organisational controls, covering areas such as health and safety, infection control, waste management and catering, have been issued. Health bodies will have to self-assess their performance against these standards using a prescribed scoring system, identifying weaknesses and drawing up corrective plans. But Tim Crowley, head of internal audit at Mersey Internal Audit Agency, who addressed Monday's conference, told Accountancy Age that the standards should only be seen as a starting point. 'The problem with issuing standards is you can get a minimalist response,' he said. 'Health authorities and trusts should identify their own unique set of risks in terms of their own agenda and risk profile.' In particular health authorities and primary care groups, responsible for commissioning health care services, may need to develop their own set of control standards as the existing batch are seen as more applicable to NHS trusts. The controls assurance initiative is seen as a major opportunity for internal auditors, giving them a wider remit to vet areas outside the financial arena. The enhanced role is in line with recommendations in the recent Turnbull Committee report on internal control issues in the private sector. And although the Executive wants to avoid controls assurance being seen as finance led, the experience internal auditors have gained implementing the initiative for internal financial controls and with corporate governance in general makes them perfectly placed to take on wider responsibilities. 'It is a golden opportunity for the audit function to change its role and fill a vacuum,' said Swain. Colin Reeves, director of finance and performance at the NHS Executive has described controls assurance as 'the final piece of the corporate governance jigsaw'. The NHS corporate governance initiative was a direct response to the Cadbury Report in 1992 and sparked the setting up of audit committees, the publication of new codes of conduct and an overhaul of internal audit structures. The changes have been seen as instrumental in the achievement of four years' accounts remaining unqualified.
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