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Ernst & Young LLP

Bromley Clinical Commissioning Group

Annual Audit Letter for the year ended 31 March 2017

July 2017

ENCLOSURE 15

For information

Contents

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Contents

Executive Summary ................................................................................................................................................................................ 2

Purpose .................................................................................................................................................................................................. 6

Responsibilities ....................................................................................................................................................................................... 8

Financial Statement Audit ..................................................................................................................................................................... 10

Value for Money .................................................................................................................................................................................... 13

Other Reporting Issues .......................................................................................................................................................................... 15

Appendix A Audit Fees ..................................................................................................................................................................... 17

In April 2015 Public Sector Audit Appointments Ltd (PSAA) issued ‘‘Statement of responsibilities of auditors and audited bodies 2015-16’. It is available from the Chief Executive of each audited body and via the PSAA website (www.psaa.co.uk)

The Statement of Responsibilities serves as the formal terms of engagement between appointed auditors and audited bodies. It summarises where the different responsibilities of auditors and audited bodies begin and end, and what is expected of the audited body in certain areas.

The ‘Terms of Appointment from 1 April 2015’ issued by PSAA sets out additional requirements with which auditors must comply, over and above those set out in the National Audit Office Code of Audit Practice (the Code) and statute, and covers recurrent matters of practice and procedure.

This Annual Audit Letter is prepared in the context of the Statement of Responsibilities. It is addressed to the Directors of the audited body, and is prepared for their sole use. As appointed auditor, we take no responsibility to any third party.

Our Complaints Procedure – If at any time you would like to discuss with us how our service to you could be improved, or if you are dissatisfied with the service you are receiving, you may take up the issue with your usual partner or director contact. If you prefer an alternative route, please contact Steve Varley, our Managing Partner, 1 More London Place, London SE1 2AF. We undertake to look into any complaint carefully and promptly and to do all we can to explain the position to you. Should you remain dissatisfied with any aspect of our service, you may of course take up these matters with our professional institute. We can provide further information on how to contact them.

http://www.audit-commission.gov.uk/pages/default.aspx

Executive Summary

Annual Audit Letter for the year ended 31 March 2017 – Chiltern and Aylesbury Vale Clinical Commissioning Groups

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Executive Summary

We must issue an Annual Audit Letter to Bromley Clinical Commissioning Group (the CCG) following completion of our audit procedures for the year ended 31 March 2017.

The results and conclusions on the significant areas of the audit are shown below.

Area of Work Conclusion

Opinion on the CCG’s:

► Financial statements. Unqualified – the financial statements give a true and fair view of the financial position of the CCG as at 31 March 2017 and of its’ expenditure and income for the year then ended.

► Regularity of income and expenditure. Unqualified – financial transactions were conducted within the CCG legal framework.

► Parts of the remuneration and staff report tobe audited.

We had no matters to report.

► Consistency of the Annual Report and otherinformation published with the financialstatements.

Financial information in the Annual Report and published with the financial statements was consistent with the Annual Accounts.


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Reports by exception:

► Consistency of Governance Statement The Governance Statement was consistent with our understanding of the CCG.

► Referrals to the Secretary of State and NHSEngland


► Public interest report We had no matters to report in the public interest.

► Value for money conclusion We had no matters to report.


Reporting to the CCG on its consolidation schedules.

We concluded that the CCGs’ consolidation schedules agreed, within a £250,000 tolerance, to the audited financial statements.

Reporting to the National Audit Office (NAO) in line with group instructions.



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As a result of the above we have also:


Issued a report to those charged with governance of the CCG, giving the significant findings resulting from our audit.

Our Audit Results Report was presented to the Audit Committee on 23 May 2017 and updated on the day the financial statements were certified, 31 May 2017.

Issued a certificate that we have completed the audit in accordance with the requirements of the Local Audit and Accountability Act 2014 and the National Audit Office’s 2015 Code of Audit Practice.

Our certificate was issued on 31 May 2017.

We would like to take this opportunity to thank CCG and CSU staff for their assistance during the course of our work.

Janet Dawson

Partner For and on behalf of Ernst & Young LLP

Purpose

Annual Audit Letter for the year ended 31 March 2016 – NHS Chiltern Clinical Commissioning Group

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Purpose

The Purpose of this Letter

The purpose of this Annual Audit Letter is to communicate to Members and external stakeholders, including members of the public, the key issues arising from our work which we consider should be reported to the Clinical Commissioning Group (CCG).

We have already reported our detailed audit findings in our 2016/17 Audit Results Report to the Audit Committee, who represent those charged with governance. We do not repeat them here.

Responsibilities


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Responsibilities

Responsibilities of the Appointed Auditor

We carried out our 2016/17 audit work as proposed in the Audit Plan issued in January 2017. We acted in accordance with the National Audit Office's 2015 Code of Audit Practice, International Standards on Auditing (UK and Ireland), and other guidance issued by the National Audit Office.

As auditors we are responsible for expressing an opinion on:

► the 2016/17 financial statements;

► the regularity of expenditure and income;

► the parts of the remuneration and staff report to be audited;

► the consistency of other information published with the financial statements, including the Annual Report; and

► whether the consolidation schedules are consistent with the CCGs’ financial statements for the relevant reporting period.

Also we must report by exception:

► if the Annual Governance Statement does not comply with relevant guidance or is not consistent with our understanding of the CCG;

► to the Secretary of State for Health and NHS England if we have concerns about the legality of the CCGs’ transactions or decisions;

► any significant matters in the public interest; and

► forming a conclusion on the CCGs’ arrangements to secure economy, efficiency and effectiveness in its use of resources.

Responsibilities of the CCG

The CCG is responsible for preparing and publishing their statement of accounts, Annual Report and Annual Governance Statement. The CCG is also responsible for having proper arrangements to secure economy, efficiency and effectiveness in its’ use of resources.

Financial Statement Audit


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Financial Statement Audit

Key Issues

The Annual Report and Accounts is an important tool for the CCG to show how it has used public money and can demonstrate sound financial management and financial health.

We audited the CCGs’ Statement of Accounts in line with the National Audit Office’s 2015 Code of Audit Practice, International Standards on Auditing (UK and Ireland), and other guidance issued by the National Audit Office. We issued an unqualified audit report on 31 May 2017.

Our detailed findings were reported to the 23 May 2017 Audit Committee and updated on the day we issued our unqualified audit report.

The key issues identified in our audit were:

Significant Risk Conclusion

Management override of controls We have not identified any material weaknesses in controls or evidence of material management override.

We have not identified any instances of inappropriate judgements being applied.

Revenue and expenditure recognition Our testing has not revealed any material misstatements related to either revenue or expenditure recognition.


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Other Key Findings Conclusion

We requested some changes to disclosure in the notes to the financial statements including areas such as disclosure of additional related party transactions (MIND payments of £1,661,000); correction of some figures in the provision for impairment of receivables note; and some enhancements to fair pay disclosure and gender disclosure. The adjustments to disclosure that we requested were processed in a revised version of the draft accounts.

Satisfactory

Value for Money


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Value for Money

We must consider whether the CCG has ‘proper arrangements’ to secure economy, efficiency and effectiveness in its’ use of resources. This is known as our value for money conclusion.

Proper arrangements are defined by statutory guidance issued by the National Audit Office. They consist of the CCGs’ arrangements for:

taking informed decisions;

deploying resources in a sustainable manner; and working with partners and other third parties.

We had no matters to report in any of these three areas.

Proper arrangements forsecuring value for money

Informeddecision making

Working withpartners and third parties

Sustainableresource

deployment

Other ReportingIssues


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Other Reporting Issues

Department of Health/NHS England Group Instructions

We need only report to the NAO by exception, i.e. if there were significant issues or outstanding matters arising from our work. There were no such issues.

Annual Governance Statement

We are required to consider the completeness of disclosures in the CCGs’ Annual Governance Statement, identify any inconsistencies with the other information which we know about from our work, and consider whether they comply with relevant guidance.

We did not identify any areas of concern.

Breach of revenue resource limit and referral to Secretary of State

We must report to the Secretary of State any matter where we believe a decision has led (or would lead) to unlawful expenditure, or some action was (or would be) unlawful and likely to cause a loss or deficiency. We had no exceptions to report.

Report in the Public Interest

We have a duty under the Local Audit and Accountability Act 2014 to consider whether it is in the public interest for us to report on any matter that comes to our attention in the course of the audit, either for consideration by the CCG or brought to the attention of the public.

We did not identify any issues which required us to do this.

Control Themes and Observations

As part of our work, we obtained enough understanding of internal controls to plan our audit and determine the nature, timing and extent of our testing. Although our audit was not designed to express an opinion on the effectiveness of internal control, we must communicate any significant deficiencies we found to the CCG. We did not identify any significant deficiencies in the design or operation of an internal control that might result in a material misstatement in the CCG’s financial statements of which management are not aware.

Audit Fees

Appendix A


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Appendix A Audit Fees

Our final audit fee for 2016/17 remained in line with the fee set out in our Audit Plan in January 2017.

Description

Final Fee 2016/17

GBP

Planned Fee 2016/17

GBP

Scale Fee 2016/17

GBP

Final Fee 2015/16

GBP

NHS Bromley CCG Audit Fee 63,600 63,600 63,600 65,519

We confirm we have not undertaken any non-audit work outside the PSAA’s requirements.

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