Losses and Special Payments Procedure Note

Transcription

1 Losses and Special Payments Procedure Note F26 Partners in Care This is a controlled document. It should not be altered in any way without the express permission of the author or their representative. Version: 8 Page 1 of 18

2 On receipt of a new version, please destroy all previous versions. Document Information Date of Issue: April 2015 Next Review Date: April 2016 Version: 8 Last Review Author: Financial Accountant Directorate: Finance Approval Route: Approved By: Date Approved: Finance Director 07/04/2015 Integrated Governance Committee Links or overlaps with other strategies/policies: SOs and SFIs F44 Security of Assets F50 Banking Arrangements Amendment History Issue Status Date Reason for Change Authorised 5 December 2008 Update Re. Care Trust Designation 6 September 2011 Revision & Update 7 March 2013 Revision & Update 8 April 2015 Revision & Update Version: 8 Page 2 of 18

3 Contents 1. Introduction Definitions Staff Responsibility Losses and Special Payments Register Checklists Exclusions Monitoring Review Date Distribution... 6 APPENDIX A Losses & Comps (More Than 1k)... 7 APPENDIX B Losses & Comps (Write-offs) APPENDIX C Losses & Comps (Property Loss or Damage) APPENDIX D Introduction 1.1 Losses and Special Payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature, they are items that should not arise. They are therefore subject to special control procedures and notation in the accounts to draw them to the attention of Parliament. 1.2 Clinical Negligence Scheme for Trusts liabilities and Liability to Third Party and Property Expenses Scheme payments above the excess, should not be reported, as financial responsibility for these is carried by the NHS Litigation Authority (NHSLA). 1.3 The purpose of this Procedure Note is to set out the method by which Torbay and Southern Devon Health and Care NHS Trust, hereafter referred to as the Trust, meets its obligations in respect of the recording and reporting of Losses and Special Payments. 1.4 This note should be read in conjunction with Section 26 of the Trust s Standing Financial Instructions (SFI s). 1.5 The Trust must comply with current Department of Health guidance on Losses and Special Payments. 1.6 A copy of the Schedule of Losses and Special Payments should be provided to the Audit Committee for review in order that the Committee could make recommendations to the Board. 1.7 Further information on completion of the Analysis of Losses and Special Payments is included in chapter 5 of the Manual for Accounts. Version: 8 Page 3 of 18

4 2. Definitions 2.1. Losses relate to the loss of money or property belonging to the Trust. Category 1: Losses of cash. Category 2: Fruitless Payments. Category 3: Bad Debts and claims abandoned. Category 4: Damage to buildings, their fittings, furniture and equipment and loss of equipment and property in stores and in use Special Payments are those which fall outside the normal day-to-day business of the Trust or those for which exceptionally and with the approval of the Department of Health, no statutory or legal liability exists. They fall into one of four main categories: Category 1: Compensation payments made under legal obligation. Category 2: Extra contractual payments to contractors. Category 3: Ex gratia payments: a) - loss of personal effects b) - personal injury claims involving negligence, where legal advice was obtained and guidance applied c) - other negligence cases and personal injury claims d) other cases including settlements on termination of employment, except cases of maladministration e) - maladministration where there was no financial loss by claimant f) patient referrals outside United Kingdom and European Economic Area guidelines Category 4: Extra Statutory or extra regulatory payments. 3. Staff Responsibility 3.1 All Losses All staff have individual responsibility for the security of Trust property and of avoiding loss All losses discovered should be reported immediately to the Director of Finance or delegated officer, irrespective of whether insurance cover for any particular type of loss is in place, see Appendix D Immediately after reporting the loss or as soon as practically possible, while the circumstances are still fresh in the mind, a written report must be prepared by the senior person reporting the loss, see appendices. 3.2 Losses where a criminal offence is suspected Where a criminal offence is suspected, in particular if theft or arson is involved, the Director of Finance must immediately inform the Police after consultation with the Security Manager However, if the case involves suspicion of fraud, then the particular circumstances of the case may determine at what stage the Police are Version: 8 Page 4 of 18

5 notified. This decision will be taken by the Director of Finance after consultation with Local Counter Fraud Specialist (LCFS) For all losses involving theft, criminal damage, including arson, neglect of duty, gross carelessness and fraud, except those which are trivial, the Director of Finance must immediately notify the Board of Directors and the External Auditor. 3.3 Loss of or damage to fixed assets Where the loss relates to a fixed asset, the Director of Finance is responsible for ensuring that appropriate information is reflected in the Trust s Fixed Asset Register. The Financial Accountant carries out such transactions and ledger maintenance on behalf of the Trust. 4. Losses and Special Payments Register 4.1 A register of Losses and Special Payments must be maintained by the Trust and each entry in the register will be assigned to a category of Loss or Special Payment. 4.2 Write-off action shall be recorded against each entry in the register. Delegated authority limits sanctioning write off for the Chief Executive and Director of Finance, are set out in the Scheme of Delegation and as delegated to Officers by the Director of Finance within agreed limits. Losses in excess of the stated limits but below the Department of Health delegation limit must be referred to the Board for final consideration of write off approval. 4.3 Write-off approval must be obtained from the Department of Health if the case is novel, contentious or likely to have repercussions for the NHS as a whole, regardless of value. 4.4 Copies of vouchers and any supporting documents must be referenced and filed to support each entry in the register. 4.5 Details of the Loss or Special Payment should be entered in the register as they are known. Where the actual value cannot be immediately determined an estimated value should be used. 5. Checklists 5.1. The Manual for Accounts requires the completion of a checklist, see appendices, for any loss or special payment in excess of 1,000. This will ensure that any lessons learned are identified and acted upon. Additionally, the Trust requires a checklist to be produced for losses or special payments under 1,000, see appendices. The checklist questions for losses (which are invariably bad debts) are straight forward to complete The checklists required for Medical Negligence and Personal Injury will be administered by the Trust utilising the Legal Managers at South Devon Version: 8 Page 5 of 18

6 Healthcare Foundation NHS Trust. The Trust s solicitors are Michelmores LLP For all Medical Negligence and Personal Injury cases a data reporting and claim assessment report must be filed with NHSLA. This is completed by the Legal Managers and the Trust s solicitors jointly. The completion of this mandatory report permits the Trust to dispense with the checklist for these cases The reference number of a Loss or Special Payment should remain constant for a series of payments (use letters after the number). This may extend over a period of years. 6. Exclusions 6.1. NHS losses should not be included. Whilst the Trust may cancel debts owed by other NHS bodies, other than foundation trusts, this will be done by issuing credit notes, so reversing the entries in the debtors ledger. There is no loss to the NHS as a whole in such cases The Trust s own legal costs are administrative and should not, therefore, be included in the Register of Losses and Special Payments. 7. Monitoring 7.1. Reports or returns on Losses and Special Payments are made, as follows: Annual Accounts Forms. periodic report to the Audit and Assurance Committee The Trust is urged to look beyond a particular write off or payment, and assess the need for any corrective action to minimise the number and cost of future cases. There may be wider lessons for the NHS as a whole. 8. Review Date This procedure will be reviewed in April Distribution Trust Website and computer network Version: 8 Page 6 of 18

7 APPENDIX A Losses & Comps (More Than 1k) Checklists Please note that for category 5 compensation payments made under legal obligation a checklist does not require completing. The reasoning for this is if a case has a legally binding order, i.e. Court Order or Judges Settlement, no further details are necessary. The checklists have been revised; there is now only 1 checklist which can be completed for all categories as appropriate. Entries will only be expected against category specific checks where the loss/special payment is within that category. FOR HEALTH BODY USE Checklist to be used when compiling the summary of the case Category Type of case Reference Number Health Body (name and code) 1. Record the amount involved and the reasons why the loss arose. 2. Detail the background of case giving full reason why payment is necessary. Have other alternatives to the payment been investigated? If not, why not? If so, provide details. 3. Was fraud involved? If so complete a fraud report and ensure that the LCFS, the relevant CFSMS team, Internal and External Auditors, and where relevant the police, are informed of the fraud in accordance with SofS Directions and using the reporting system as specified by the CFSMS. Enter dates of completion of fraud report. Version: 8 Page 7 of 18

8 4. Was theft or criminal damage involved? If so have the police been informed? If not, give the reasons why not? All security related incidents must be reported to the Local Security Management Specialist once trained, accredited and in place in accordance with forthcoming guidance issued by NHS Security Management Service. 5. For abandoned works, were detailed specifications identified before the scheme went ahead? How did the projected work compare to these detailed specifications? At what level, by whom, and why was the scheme approved? Why was the scheme abandoned and by whom? Could the scheme have been aborted earlier? Was the scheme joint financed? If so, was any agreement signed? Was legal advice taken in the drawing up of an agreement? Is the other party prepared to pay half of the costs of the scheme? 6. For Bad Debts and Claims Abandoned. Were invoices raised on a regular basis? Was the debt monitored and chased regularly? Were services withdrawn upon continued non-payment? Enclose report showing when invoices were raised and where relevant paid. For cases involving businesses has the business gone into liquidation/receivership? If so, are you listed as a creditor and do you have confirmation of this from the liquidator/receiver? If not, why not? Are any dividends being paid out? Was the financial integrity of the business looked into before goods or services were supplied? If not, why not and have procedures been revised to ensure this is carried out in the future? Version: 8 Page 8 of 18

9 7. For rental cases only did the tenant enter into lease agreements prior to occupation? If not, why not? If the lease was faulty investigate whether action can be taken against legal advisors who drew up the agreement? Provide an analysis of rent and service charges. 8. For private patients cases was an undertaking to pay signed? If not, why not? Was a full estimate of potential costs given and full deposit taken to cover these costs? If not, why not? For overseas private patient cases have the relevant embassies been contacted for payment (if applicable)? For overseas visitors, are robust procedures in place in the NHS Body to identify and charge liable overseas visitors. If not, why not? Was the overseas visitor informed that he/she would be liable to pay for the full cost of treatment? If treatment was not urgent why was it given before obtaining a sizeable deposit? 9. Stores (only) Are any linen losses calculated at 50% of the replacement value? Is this in accordance with the guidance? Is the total loss more than 5% of the total stock value? Confirm that the loss has been valued at book value less net disposal proceeds. Version: 8 Page 9 of 18

10 10. For extra contractual payments to contractors. Have other alternatives to the payment been investigated? If not, why not? If so, provide details. Provide detailed calculations on which the payment is based. 11. For ex gratia payments. Have other options been considered? If not, why not? Explain why an ex gratia payment offers the best value for money. Confirm that the proposed payment does not place the claimant in a better position than if the error had not occurred? If it does, why? In cases of hardship record what evidence exists on this? Provide detailed calculations to support the proposed payment and demonstrate why the proposed sum is in accordance with the relevant paragraphs of this guidance. For settlements on termination of employment, has relevant central guidance on such payments been followed in all respects? If not, why not? For clinical negligence and personal injury cases has the relevant central guidance for such cases been followed in all respects? If not, why not? 12. Is the value of the loss reduced by insurance? If so, record the value of the gross loss and the value of the amount recovered by insurance. Version: 8 Page 10 of 18

11 13. Have all reasonable steps been taken to recover the loss? Provide details of the attempts that have been made to recover the loss or explain why no action has been taken. Has appropriate legal advice been sought? If not, why not? If advice has been sought, what recommendations were made and have these been followed? If not, why not? 14. Identify any failings in the actions of employees, including supervisors. Having considered this, is there a need for disciplinary action? Record what action has been taken or is proposed, or if no action is to be taken, explain why. Include dates, names of individuals and positions. 15. Was there any apparent breakdown of procedures? Detail weakness or fault in system of control or supervision. 16. What proposed improvements have been put forwards to correct defects in the existing systems or procedures? Include the timetable for implementation of the improvements. What monitoring measures have been introduced to ensure the improvements are working effectively? Version: 8 Page 11 of 18

12 17. Is it necessary to inform the board/chief executive? If not, why not? Version: 8 Page 12 of 18

13 18. Do your SFIs require a Board report for this case? If so, please enclose the report. If not, consider whether in the light of this case your SFIs should be amended to require a Board report in such cases. 19 Having completed the above steps, detail the general lessons that can be drawn from this case. If a system weakness has been identified which has possible implications across the NHS the LCFS or the LSMS using either the intranet fraud prevention referral system for fraud or the Area Security Management Specialist for security matters so that measures can be taken nationally to amend policy or systems. 20. Please give details of name and position of person forwarding this case for Department of Health Approval (if applicable). Give the date when this case was first brought to the attention of the Department of Health (if applicable). Name Position Date Department of Health notified 21. I have considered fully each point on this checklist and my findings are recorded in the attached case summary and/or in the spaces above. I confirm that the details recorded above and on the attached case summary are complete and accurate, and that all aspects of the checklist have been properly considered and actioned. Signed by - Version: 8 Page 13 of 18

14 22. I confirm that the above details are complete and accurate and all aspects of the checklist have been properly considered and actioned. I agree that write off of this loss offers the best value for money for this case. Note: Delete as appropriate. This case is not novel, contentious or repercussive. I therefore agree to write off of the loss. This case is novel, contentious or repercussive and I therefore request formal approval from the Department of Health. Signed by - Date Countersigned by - Date Please note this section must be signed by two senior officers in accordance with the delegated limits set by the Board. Please print names and position held in the organisation. Name - Position held Countersigned by - Position held - Version: 8 Page 14 of 18

15 APPENDIX B Losses & Comps (Write-offs) LOSSES AND COMPENSATIONS (to be used where the value is 1,000 or less) Losses in excess of 1,000 must be recorded on the appropriate form, which can be obtained from the Finance Department, Regent House Ref No DETAILS OF DEBT WRITE OFF 1. Record invoice numbers, dates and amounts. Social Care Residential Reference No. 2. State reasons why the write off is necessary. 3. State steps taken to effect collection. Were invoices raised in time and on a regular basis? Was the debt monitored and chased regularly? Were services withdrawn upon continued non payment? Enclose report showing when invoices were paid, if appropriate. 4. For cases involving business has the business gone into liquidation/receivership? If so, are you listed as a creditor and do you have confirmation of this from the liquidator/receiver? If not, why not? Are any dividends being paid out? Was the financial integrity of the business looked into before goods or services were supplied? If not, why not and have procedures been revised to ensure this is carried out in the future? Signed: Authorising Officer Date: Version: 8 Page 15 of 18

16 APPENDIX C Losses & Comps (Property Loss or Damage) Ref No. LOSSES AND COMPENSATIONS (to be used where the value is 1,000 or less) Losses in excess of 1,000 must be recorded on the appropriate form, which can be obtained from the Finance Department, Regent House Directorate/Zone Hospital/Clinic/Unit Department A. DETAILS OF LOSS OR DAMAGE 1. Description of item(s) lost/damaged* 2. Original Cost 3. Approximate date of purchase 4. Present Value 5. Cost of Repair/Replacement* 6. If Personal Item of Patient Name of Patient Date of Admission Ward Date of Discharge/Death* Private Address (Or other address as appropriate in case of deceased patient) 7. Has an incident form been completed? YES/NO Copy attached? YES/NO B. CIRCUMSTANCES OF LOSS OR DAMAGE 1. Date and time when loss/damage* first reported 20 am/pm* 2. Where loss/damage* occurred 3. (a) Names and other details of staff reporting the loss/damage* (b) Names and other details of any witness 4. Any other relevant information (e.g. name of Solicitors etc) Signed: Zone Manager/Head of Department Date: Note: A copy of any statements obtained at the time of loss/damage* should be appended to this form. If the matter is or has been subject to police involvement then their comments to be attached if possible. *Delete where necessary Version: 8 Page 16 of 18

17 C. FINANCE DEPARTMENT APPROVAL Signed: Date: Note: 1. The above information to be completed in respect of all losses/damages and sent to the Financial Controller as soon as the loss/damage is reported. 2. Any information which is not available at the time of the loss/damage should be forwarded as quickly as possible. Version: 8 Page 17 of 18

18 APPENDIX D FLOWCHARTS Losses Loss where a criminal offence is suspected The director of finance must immediately inform the Police, after consultation with the security manager If the case involves fraud, then DoF will consult with the local counter fraud specialist what stage to involve the police For all losses involving theft, gross carelessness, fraud and arson, the DoF must inform the Board of Directors and the External Auditor Start All losses should be reported to the director of finance. NHS losses are not included in this category A written report should then be written by the senior person as soon as possible after reporting the loss Loss of or damage to fixed assets Where the loss relates to a fixed asset, the Director of Finance is responsible for ensuring that appropriate information is reflected in the trust s Fixed Asset Register A register of Losses and special Payments must be maintained by the Trust Write off action shall be recorded against each entry in the register Losses in excess of the stated limits but below the Department of Health delegation limit must be referred to the Board of Directors for final consideration of write off approval. Losses below the stated limits can be approved by delegated officers Version: 8 Page 18 of 18 Write-off approval must be obtained from the Department of Health if the case is novel, contentious or likely to have repercussions for the NHS as a whole, regardless of value.