NHS Wandsworth Clinical Commissioning Group

Transcription

1 NHS Wandsworth Clinical Commissioning Group June 2014 Final report to those charged with governance Report to the Audit Committee on the audit for the year ended 31 March 2014 (ISA (UK&I)) 260)

2 Contents Code of Audit Practice and Statement of Responsibilities of Auditors and of Audited Bodies In April 2010 the Audit Commission issued a revised version of the Statement of responsibilities of auditors and of audited bodies. It is available from the Chief Executive of each audited body. The purpose of the statement is to assist auditors and audited bodies by explaining where the responsibilities of auditors begin and end and what is to be expected of the audited body in certain areas. Our reports and management letters are prepared in the context of this Statement. Reports and letters prepared by appointed auditors and addressed to members or officers are prepared for the sole use of the audited body and no responsibility is taken by auditors to any Member or officer in their individual capacity or to any third party. Executive summary 2 Audit approach 3 Significant audit and accounting matters 6 Internal controls 12 Risk of fraud 14 Fees update 16 Appendices 17 Appendix 1: Letter of representation 18 NHS Wandsworth Clinical Commissioning Group PwC Contents

3 An audit of the financial statements is not designed to identify all matters that may be relevant to those charged with governance. Accordingly, the audit does not ordinarily identify all such matters. Executive summary Background This report tells you about the significant findings from our audit. We presented our plan to you in January 2014; we have reviewed the plan and concluded that it remains appropriate. Audit Summary We have completed our audit work and issued an unqualified audit opinion on the financial statements on 6 th June Key Issues We are pleased to report that we have not identified any misstatements above our reporting level. We have identified several areas where improvements in accounting and internal control are possible. The weaknesses we identified are over: Monthly accounting entries to accrue for projected expenditure on investments; An error in purchase ordering, resulting in an overpayment to a supplier of 1.0m and an unallocated cash balance at the year end of 0.6m; and Debit balances totaling 13.6m within accounts payable and accruals at year end. Additional detail on these issues has been included later in our report. Please note that this report will be sent to the Audit Commission in accordance with their requirements and to the National Audit Office as auditors of the NHS England Group Accounts. We discussed our report with you on 27 th May Janet Dawson and Jack Dedman attended the Audit Committee meeting. We thank the management and staff of NHS Wandsworth Clinical Commissioning Group ( the CCG ) for their cooperation and assistance during the course of our work. NHS Wandsworth Clinical Commissioning Group PwC 2

4 Our audit approach meets the requirements of all ISAs (UK&I). The PwC Audit consists of: Smart people A Smart approach; and Smart technology. Audit approach Our audit approach was set in our audit plan which we presented to you in January There have been no changes to the audit approach since we presented our audit plan. As detailed in our audit plan, our audit approach consists of smart people, a smart approach and smart technology. Smart People We deploy a handpicked team on your audit, supported by a substantial investment in training and in our industry programme. Smart Approach Data auditing We use technology-enabled audit techniques to drive quality, efficiency and insight. In 2014, our work included: Testing manual journals through data analysis, targeting our work on the items we consider to have the highest risk of fraud or manipulation. We have identified areas for improvement in management s control of journal postings and have provided further detail on this on page 6. We will also continue to explore ways to extend our use of smart technology and data into other areas where we see an opportunity to add value, as well as for quality and efficiency. Centre of Excellence We have a Health Centre of Excellence in the UK - a dedicated team of specialists which advises, assists and shares best practice with our audit teams in more complex areas of the audit. Our team has been working with the Centre of Excellence to ensure we are executing the best possible audit approach. Delivery centres We use a dedicated technical team to review the annual report and financial statements to ensure compliance with NHS reporting standards. This level of support assists the CCG in providing reports of a high quality whilst meeting NHS reporting deadlines. NHS Wandsworth Clinical Commissioning Group PwC 3

5 Smart Technology We have designed processes that automate and simplify audit activity wherever possible. Central to this is PwC s Aura software, which has set a high standard for audit technology. It is a powerful tool, enabling us to direct and oversee audit activities. Aura s risk-based approach and workflow technology results in a higher quality, more effective audit and the tailored testing libraries allow us to build standard work programmes for key NHS audit cycles. Our audit work has addressed the significant risks we set out in our audit plan. Smart people Smart approach Smart technology The PwC Audit NHS Wandsworth Clinical Commissioning Group PwC 4

6 We have summarised below the significant and elevated risks we identified in our audit plan and the audit approach we took to address them. Risk Categorisation Audit approach Risk of management override of controls Risk of fraud in revenue and expenditure recognition Significant Significant ISA (UK&I) 240 requires that we plan our audit work to consider the risk of fraud, which is presumed to be a significant risk in any audit. This includes consideration of the risk that management may override controls in order to manipulate the financial statements. We have performed the following procedures: Tested the appropriateness of journal entries using Computer Assisted Audit Techniques; Reviewed accounting estimates for bias and evaluated whether circumstances producing any bias, represent a risk of material misstatement due to fraud and Evaluated the business rationale underlying significant transactions; Under ISA (UK&I) 240 there is a (rebuttable) presumption that there are risks of fraud in revenue recognition. We have obtained an understanding of key revenue and expenditure controls. We have evaluated and tested the accounting policy for income and expenditure recognition to ensure that it is consistent with the requirements of the NHS Manual for Accounts. We have also performed detailed testing of revenue and expenditure transactions, focusing on the areas we considered to be of greatest risk. Risk of material misstatement in opening balances Elevated Under direction issued by NHS England, the majority of the closing balances included within the 2012/13 Statement of Financial Position of Primary Care Trusts have been transferred to NHS England. However, a small number of non-current assets have been transferred to Wandsworth CCG. We have performed our work on these opening balances in line with guidance issued by the Department of Health and Audit Commission. NHS Wandsworth Clinical Commissioning Group PwC 5

7 Significant audit and accounting matters Auditing Standards require us to tell you about relevant matters relating to the audit of the financial statements sufficiently promptly to enable you to take appropriate action. The financial year 2013/14 saw the first year effect of the NHS reforms and the first year of existence for CCG s. The majority of closing balances included within the 2012/13 Statement of Financial Position of Primary Care Trusts have been transferred to NHS England under directions issued by DH to NHS England. The only exception to this was a small number of inventories, non-current assets and their closely related liabilities, for which some CCGs received within their Transfer Orders. We have set out in this section the significant matters arising from our audit as well as the current outstanding matters. Accounts We have completed our audit of the CCG s accounts in accordance with auditing standards. NHS Wandsworth Clinical Commissioning Group PwC 6

8 Our audit work is substantially complete and we anticipate issuing an unqualified audit opinion. Accounting issues The qualitative aspects of the CCG s accounting practices are set out below. As part of our data assurance assisted work on manual journal entries, we identify the journals we consider to be at highest risk of fraud or manipulation and perform targeted testing of these. We identified that monthly journals have been posted based on expected expenditure on investments, rather than the actual incurred expenditure. These journals are then reversed in the subsequent month and do not impact the year end financial statements. As a result: Management accounts reviewed at board level, and used for decision making, may not reflect the actual financial position and surplus; and Monthly reporting to NHS England may not reflect the actual financial position. We have discussed this extensively with management and understand that the accounting entries have been made with management s best estimate of committed expenditure on investments. We also understand that, whilst this practice is also followed by a number of other CCGs, the level of difference between the actual expenditure and committed expenditure is significantly higher for Wandsworth due to the CCG s higher levels of investments planned. Limitations of the Integrated Single Financial Environment (ISFE) system, especially in the first quarter of 2013/14, have also meant that the CCG s audit trail is not as robust as it would otherwise be, as a large proportion of analysis is done outside the system. We have performed a detailed review of these journals, including those posted in the last period of 2013/14 and the first period of 2014/15 and are satisfied that the journals are for management accounting purposes and do not impact the annual statutory financial statements. We do, however, consider that this may give rise to a control weakness for the CCG and ask that the Audit Committee consider the issue and satisfy themselves that the organisation has sufficient understanding each month of both actual and committed expenditure and the overall financial position of the CCG. Misstatements and significant audit adjustments We are pleased to report that we have not identified any misstatements above our agreed reporting level during the course of our audit. Significant accounting principles and policies Significant accounting principles and policies are disclosed in the notes to the financial statements. We will ask management to represent to us that the selection of, or changes in significant accounting policies and practices that have, or could have, a material effect on the financial statements have been considered. Please refer to the management representation letter in Appendix 1. Judgements and accounting estimates The CCG is required to prepare its financial statements in accordance with the Department of Health Manual for accounts and the NHS England Annual Reporting Guidance for CCGs, which specify in many areas the accounting policies and estimation techniques that must be applied. Nevertheless, there are still many areas where management need to apply judgement to the recognition and measurement of items in the financial statements. These include: The point at which income and expenditure should be recognised within the financial statements; NHS Wandsworth Clinical Commissioning Group PwC 7

9 The need to recognise provisions and accruals at yearend; and Judgement on whether the income due will be collected post year end. We have reviewed management s critical accounting estimates on revenue, expenditure and year end accruals. We consider the treatment to be in line with accounting policies and guidance issued. Financial statement disclosures As part of our audit work we have reviewed, and tested, the material disclosures in the financial statements. We identified no significant issues as part of this work. NHS Wandsworth Clinical Commissioning Group PwC 8

10 We ask management to represent to us on specific matters regarding the financial statements. We confirm that we are independent auditors with respect to the CCG s financial statements. We are not aware of any relationships which may reasonably be thought to bear on our independence and objectivity. Management representations The representation letter that we ask management to sign is attached in Appendix 1. Financial standing We have not identified any material uncertainties related to events and conditions that may cast significant doubt on the entity's financial standing. Related parties In forming an opinion on the financial statements, we are required to evaluate: whether identified related party relationships and transactions have been appropriately accounted for and disclosed; and whether the effects of the related party relationships and transactions cause the financial statements to be misleading. We have not identified any issues with related parties. The representation letter includes the related parties of Wandsworth CCG, as confirmed by management. Audit independence We are required to follow both the International Standard on Auditing (UK and Ireland) 260 (Revised) Communication with those charged with governance, UK Ethical Standard 1 (Revised) Integrity, objectivity and independence and UK Ethical Standard 5 (Revised) Non-audit services provided to audited entities issued by the UK Auditing Practices Board ( APB ES ). Together these require that we tell you at least annually about all relationships between PricewaterhouseCoopers LLP in the UK and other PricewaterhouseCoopers firms and associated entities ( PwC ) and the CCG that, in our professional judgement, may reasonably be thought to bear on our independence and objectivity. For the purposes of this report we have made enquiries of all PricewaterhouseCoopers teams whose work we intend to use when forming our opinion on the truth and fairness of the financial statements. Relationships between PwC and the CCG We are not aware of any relationships between PwC and the CCG that in our professional judgement, may reasonably be thought to bear on our independence and objectivity. Relationships and Investments We have not identified any potential issues in respect of personal relationships with the CCG or investments in the CCG held by individuals. Employment of PricewaterhouseCoopers staff by the CCG We are not aware of any former PwC partners or staff being employed, or holding discussions in respect of employment, by the CCG as a director or in a senior management position covering financial, accounting or control related areas. NHS Wandsworth Clinical Commissioning Group PwC 9

11 We have not provided any additional services to the CCG or to its Directors and/or Senior Management. We have reviewed the CCGs Annual Governance Statement and considered whether the CCG has exercised its functions economically, efficiently and effectively. Business relationships We have not identified any business relationships between PwC and the CCG. Services provided to the CCG The audit of the financial statements is undertaken in accordance with the UK Firm s internal policies. The audit is also subject to other internal PwC quality control procedures. In addition to the audit of the financial statements, PwC has not undertaken other work for the CCG. Fees The analysis of our audit and non-audit fees for the year ended 31 st March 2014 is included on page 16. Services to Directors and Senior Management PwC does not provide any services e.g. personal tax services, directly to directors or senior management. Rotation It is the Audit Commission's policy that auditors at an audited body at which a full Code audit is required to be carried out should act for an initial period of five years. The Commission s view is that generally the range of regulatory safeguards it applies within its audit regime is sufficient to reduce any threats to independence that may otherwise arise at the end of this period to an acceptable level. Therefore, to safeguard audit quality, and in accordance with APB Ethical Standard 3, it will subsequently approve auditors for an additional period of up to no more than two years, provided that there are no considerations that compromise, or could be perceived to compromise, the auditor s independence or objectivity. Gifts and hospitality We have not identified any significant gifts or hospitality provided to, or received from, a member of the CCG s Governing Body, senior management or other staff. Conclusion We hereby confirm that in our professional judgement, as at the date of this document: We comply with UK regulatory and professional requirements, including the Ethical Standards issued by the Auditing Practices Board; and Our objectivity is not compromised. We ask the Audit Committee to consider the matters in this document and to confirm that they agree with our conclusion on our independence and objectivity. Annual Governance Statement You are required to produce an Annual Governance Statement ( AGS ) for inclusion in the Annual Report and Accounts. The aim of the AGS is to give a sense of how successfully the CCG has coped with the challenges it faced, drawing on evidence on governance, risk management and controls. We reviewed the AGS and considered whether it complied with relevant guidance and whether it was misleading or inconsistent with what we know about the CCG. We found no areas of concern to report in this context. Economy, efficiency and effectiveness Our value for money code responsibility requires us to carry out sufficient and relevant work in order to conclude on whether the CCG has put in place proper arrangements to secure economy, efficiency and effectiveness in the use of resources. The Audit Commission guidance includes two criteria: The organisation has proper arrangements in place for securing financial resilience; and The organisation has proper arrangements for challenging how it secures economy, efficiency and effectiveness. NHS Wandsworth Clinical Commissioning Group PwC 10

12 We have complied with the requirements of the NAO as group auditors. We determine a local programme of audit work based on our audit risk assessment, informed by these criteria and our statutory responsibilities. We have issued an unqualified value for money conclusion. Regularity Opinion CCGs must comply with the regularity requirements for all items of expenditure and receipts to be dealt with in accordance with the legislation authorising them, any applicable delegated authority and the rules of Managing Public Money. We are required to give an opinion on the regularity of the expenditure and income for the CCG. We have issued an unqualified opinion. Additional procedures for the National Audit Office The National Audit Office ( NAO ) issue procedures via the Audit Commission in respect of two aspects of their audit of the NHS England Group Accounts. As auditors we are required to follow the group instructions issued under ISA(UK&I) 600; and adhere to specific audit procedures to provide the NAO with additional assurance over amounts recorded in the Whole of Government Accounts schedules within the Summarisation schedules. NHS Wandsworth Clinical Commissioning Group PwC 11

13 We consider management systems of internal financial control as part of our audit of the financial statements. Internal controls Accounting systems and systems of internal control Management is responsible for developing and implementing systems of internal financial control and putting in place proper arrangements to monitor their adequacy and effectiveness. As auditors, we review these arrangements for the purposes of our audit of the financial statements and our review of the annual governance statement. The significant matters that we wish to bring to your attention are: An error in purchase ordering, resulting in an overpayment to a supplier of 1.0m and an unallocated cash balance at the year end of 0.6m; and Debit balances totaling 13.6m within accounts payable and accruals at year end. Reporting requirements We have to report to you any deficiencies in internal control that we found during the audit which we believe should be brought to your attention. Summary of significant internal control deficiencies Deficiency Recommendation Management s response The CCG currently holds an unallocated cash balance within accounts payable of 0.6m. This balance is the result of an overpayment to a supplier of 1.0m, due to an error in the initial purchase order. There was no breakdown in the CCG s three way matching of purchase order, invoice and goods received note. The CCG should reinforce the importance of accurate purchase ordering. There should be sufficient review processes in place to help identify errors such as these. An over payment was made to ESH at the beginning of 2013/14 as there was an error in this template and the payments schedule picked up the annual contract figure for ESH, including the NHSE specialised commissioning element. This then formed the basis of the purchase orders. This error was rectified in Quarter1, however there was still an unallocated cash balance at year end due to the matching of receipts to invoices. All payments and invoices have been matched and control weaknesses have been rectified. There is no risk for 2014/15 as the Specialised commissioning adjustment has been processed. NHS Wandsworth Clinical Commissioning Group PwC 12

14 The CCG currently has a debit balance of 13m in accounts payable. This is a manual adjustment to correct the impact of invoices relating to 2014/15 that had been incorrectly accrued. The original credit entries remain within accounts payable at year end. In preparing monthly and annual accounts, all significant debit balances within accounts payable should be reviewed and addressed. Where accruals have been reversed, the original credit entry should be reversed. This related to 2014/15 invoices received from STG that were posted into the ledger by accounts payable as they had not be flagged as new year invoices. The management accounts team identified this error and accrued out the incorrect spend but did not use the original credit entry. Agreed that this should be reviewed on a monthly basis and discussed with the accounts payable team to ensure that accruals are reversed to their original entry. NHS Wandsworth Clinical Commissioning Group PwC 13

15 We are responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error. Risk of fraud International Standards on Auditing (UK&I) state that we, as auditors, are responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error. The respective responsibilities of auditors, management and those charged with governance are summarised below: Auditors responsibility Our objectives are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. Management s responsibility Management s responsibilities in relation to fraud are: to design and implement programmes and controls to prevent, deter and detect fraud; to ensure that the entity s culture and environment promote ethical behaviour; and to perform a risk assessment that specifically includes the risk of fraud addressing incentives and pressures, opportunities, and attitudes and rationalisation. Responsibility of the Audit Committee Your responsibility as part of your governance role is: to evaluate management s identification of fraud risk, implementation of anti-fraud measures and creation of appropriate tone at the top ; and to investigate any alleged or suspected instances of fraud brought to your attention. Your views on fraud In our audit plan presented to the Audit Committee in January 2014 we enquired: Whether you have knowledge of fraud, either actual, suspected or alleged, including those involving management? What fraud detection or prevention measures (e.g. whistleblower lines) are in place in the entity? What role you have in relation to fraud? What protocols / procedures have been established between those charged with governance and management to keep you informed of instances of fraud, either actual, suspected or alleged? We ask that the Audit Committee considers these questions again. We ask for your confirmation that there have been no changes to your view of fraud risk and that no additional matters have arisen that should be brought to our attention. A specific confirmation from management in relation to fraud is included in the letter of representation in Appendix 1. NHS Wandsworth Clinical Commissioning Group PwC 14

16 Conditions under which fraud may occur Management or other employees have an incentive or are under pressure Incentive / pressure Why commit fraud? Opportunity Circumstances exist that provide opportunity ineffective or absent control, or management ability to override controls Rationalisation/attitude Culture or environment enables management to rationalise committing fraud attitude or values of those involved, or pressure that enables them to rationalise committing a dishonest act NHS Wandsworth Clinical Commissioning Group PwC 15

17 Fees update Fees update for 2013/14 The Audit Commission has provided indicative scale fees for CCGs for the year ended 31 March We reported our fee proposals in our plan. Our actual fees were in line with our proposals, of 99,000. We have not performed any non-audit work for Wandsworth CCG and have not received any fees other than those outlined above. NHS Wandsworth Clinical Commissioning Group PwC 16

18 Appendices NHS Wandsworth Clinical Commissioning Group PwC 17

19 Appendix 1: Letter of representation Dear Sirs This representation letter is provided in connection with your audit of the financial statements of NHS Wandsworth Clinical Commissioning Group (the CCG ) for the year ended 31 March Your audit is conducted for the purpose of expressing an opinion as to whether the financial statements of the CCG give a true and fair view of the CCG s affairs as at 31 March 2014 and of its net operating costs for the year then ended and have been properly prepared in accordance with the accounting policies directed by the NHS Commissioning Board with the approval of the Secretary of State. Your audit also requires you to express an opinion as to whether, in all material respects, the expenditure and income disclosed in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I acknowledge that I have been designated as the officer responsible for preparing the accounts by the Secretary of State and that the following requirements included in the Accountable Officer Memorandum have been complied with throughout the year: that expenditure by the CCG complies with Parliamentary requirements. The basic principle which must be observed is that funds should be applied only to the extent and for the purpose authorised by Parliament. the Accountable Officer during the year was responsible for seeing that appropriate advice was tendered to the Board on all matters of financial probity and regularity. The following representations are made on the basis of enquiries of management and staff of the CCG with relevant knowledge and experience and, where appropriate, on inspection of supporting documentation sufficient to satisfy me that I can properly make each of the following representations to you. I confirm, at the time the directors report is approved, to the best of my knowledge and belief, and having made the appropriate enquiries, the following representations: Financial Statements I acknowledge as the officer responsible for preparing the accounts my responsibility under the National Health Service Act 2006 for preparing financial statements of the CCG which give a true and fair view and have been prepared in accordance with the accounting policies directed by the NHS Commissioning Board with the approval of the Secretary of State and for making accurate representations to you. All transactions have been recorded in the accounting records and are reflected in the financial statements. Significant assumptions used by me in making accounting estimates, including those surrounding measurement at fair value, are reasonable. All events subsequent to the date of the financial statements for which the accounting policies directed by the NHS Commissioning Board with the approval of the Secretary of State require adjustment or disclosure have been adjusted or disclosed. NHS Wandsworth Clinical Commissioning Group PwC 18

20 The financial statements disclose all matters of which we are aware that are relevant to the CCG s financial standing. The CCG also has the intent and ability to take actions necessary to meet its financial targets. Information Provided I have taken all the steps that I ought to have taken in order to make myself aware of any relevant audit information and to establish that you (the CCG's auditors) are aware of that information. I have provided you with: Access to all information of which I am aware that is relevant to the preparation of the financial statements such as records, documentation and other matters; Additional information that you have requested from me for the purpose of the audit; and Unrestricted access to persons within the CCG or as necessary within the CSU from whom you determined it necessary to obtain audit evidence. So far as I am aware, there is no relevant audit information of which you are unaware. Duties of the officer responsible for preparing the accounts To the best of my knowledge and belief, sanction has been obtained from the Department of Health for any losses and special payments which are novel, contentious or repercussive. All other losses and special payments were approved by at least two delegated senior managers and have been reported to the Board during the financial year, or to myself subsequent to the year end. The Chief Executive, as Accountable Officer, authorised personally all payments which fell into the classes, notified by the Department of Health, which were required to be authorised by the Chief Executive. These payments include termination payments to senior managers. Fraud and non-compliance with laws and regulations I acknowledge the responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud. I have disclosed to you the results of my assessment of the risk that the financial statements may be materially misstated as a result of fraud. I have disclosed to you all information in relation to fraud or suspected fraud that I am aware of and that affects the CCG and involves: Management; Employees who have significant roles in internal control; or Others where the fraud could have a material effect on the financial statements. I have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the CCG s financial statements communicated by employees, former employees, analysts, regulators or others. I have disclosed to you all known instances of noncompliance or suspected non-compliance with laws and regulations whose effects should be considered when preparing financial statements. I am not aware of any instances of actual or potential breaches of or non-compliance with laws and regulations that are central to the CCG s ability to conduct its business or that could have a material effect on the financial statement. NHS Wandsworth Clinical Commissioning Group PwC 19

21 I am not aware of any irregularities, or allegations of irregularities, involving management or employees who have a significant role in the accounting and internal control systems, or that could have a material effect on the financial statements. Related party transactions I confirm that the attached appendix to this letter is a complete list of the CCG s related parties. All transfer of resources, services or obligations between the CCG and these parties have been disclosed to you, regardless of whether a price is charged. We are unaware of any other related parties, or transactions between disclosed related parties. Related party relationships and transactions have been appropriately accounted for and disclosed. Employee Benefits I have made you aware of all employee benefit schemes in which employees of the CCG participated. Contractual arrangements/agreements All contractual arrangements (including side-letters to agreements) entered into by the CCG have been properly reflected in the accounting records or, where material (or potentially material) to the financial statements, have been disclosed to you. Litigation and claims I have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements and such matters have been appropriately accounted for and disclosed. Assets and liabilities There are no plans or intentions that may materially alter the carrying value and, where relevant, the fair value measurements or classification of assets and liabilities reflected in the financial statements. In my opinion, on realisation in the ordinary course of the business the current assets in the balance sheet are expected to produce no less than the net book amounts at which they are stated. At 31 March 2014 the CCG had satisfactory title to all assets and there are no liens or encumbrances on the CCG s assets, except for those that are disclosed in the financial statements. Impairment reviews have been carried out appropriately, including an assessment of when such reviews are required, where they are not mandatory. Appropriate assumptions were used with those reviews. Retirement benefits Except for those disclosures identified as missing from the remuneration report and referred to in the auditor s opinion, we confirm that: All significant retirement benefits that there was a commitment to provide, including any arrangements that are statutory, contractual or implicit in the CCG s actions, wherever they arise, whether funded or unfunded, approved or unapproved, have been identified and properly accounted for and/or disclosed. All settlements and curtailments in respect of retirement benefit schemes have been identified and properly accounted for. The CCG participated in the NHS pension scheme. I confirm that the CCG s share of the underlying assets and liabilities of this scheme cannot be identified and as a consequence the scheme has been accounted for as a defined contribution scheme. NHS Wandsworth Clinical Commissioning Group PwC 20

22 Provisions Litigation Provisions for depreciation and diminution in value including obsolescence have been made against property, plant and equipment on the bases described in the financial statements and at rates calculated to reduce the net book amount of each asset to its estimated residual value by the end of its probable useful life in the CCG s business. In this respect I am satisfied that the probable useful lives have been realistically estimated and that the residual values are expressed in current terms. Full provision has been made for all liabilities at the balance sheet date including guarantees, commitments and contingencies where the items are expected to result in significant loss. Other such items, where in my opinion provision is unnecessary, have been appropriately disclosed in the financial statements. I am not aware of any pending or threatened litigation, proceedings, hearings or claims negotiations which may result in significant loss to the CCG. Transactions with directors/officers No transactions involving directors, officers and others requiring disclosure in the financial statements under the accounting policies have been entered into. Items specific to the NHS There are no plans to implement any redundancy or early retirement programmes for which I should have made provision in the financial statements. We are not in negotiations to merge with any other NHS body or take on any other NHS body s functions in the next financial year. All income receivable in 2013/14 has been recognised in the Statement of Comprehensive Net Expenditure. The losses and special payments forms have been compiled in accordance with the direction of the NHS Commissioning Board and there are no outstanding items that have been omitted from the losses and special payments register. Items specific to the regularity opinion All aspects of contractual agreements that could have a material effect on the financial statements in the event of non-compliance, have been complied with. I am not aware of any pending or threatened litigation, proceedings, hearing or claims negotiations which may result in significant loss to the CCG. NHS Wandsworth Clinical Commissioning Group PwC 21

23 Related parties and related party transactions appendix The following related parties are disclosed in Note 20 to the CCG s financial statements for the year ended 31 March 2014 (based on a threshold of 1.9m). St George's Healthcare NHS Trust South West London & St George's Mental Health NHS Trust Chelsea And Westminster Hospital NHS Foundation Trust Kingston Hospital NHS Trust (Foundation Trust from 1 May 13) Guy's And St Thomas' NHS Foundation Trust Epsom & St Helier University Hospitals NHS Trust London Ambulance Service NHS Trust Imperial College Healthcare NHS Trust Moorfields Eye Hospital NHS Foundation Trust King's College Hospital NHS Foundation Trust South London And Maudsley Foundation NHS Trust NHS South London CSU Wandsworth London Borough Council South West London Collaborative Commissioning. Battersea Fields Practice. In addition, all related party transactions with the following GP board member practices have disclosed. Brocklebank Group Practice Grafton Medical Partners Wandsworth Medical Centre Danebury Avenue Surgery NHS Wandsworth Clinical Commissioning Group PwC 22

24 In the event that, pursuant to a request which NHS Wandsworth CCG has received under the Freedom of Information Act 2000, it is required to disclose any information contained in this report, it will notify PwC promptly and consult with PwC prior to disclosing such report. NHS Wandsworth CCG agrees to pay due regard to any representations which PwC may make in connection with such disclosure and NHS Wandsworth CCG shall apply any relevant exemptions which may exist under the Act to such report. If, following consultation with PwC, NHS Wandsworth CCG discloses this report or any part thereof, it shall ensure that any disclaimer which PwC has included or may subsequently wish to include in the information is reproduced in full in any copies disclosed. This document has been prepared only for NHS Wandsworth CCG and solely for the purpose and on the terms agreed through our contract with the Audit Commission. We accept no liability (including for negligence) to anyone else in connection with this document, and it may not be provided to anyone else PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details JA-UK