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Introduction to Finance

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  1. Introduction to Finance Mersey Care NHS Trust

  2. Format of the Session • Part 1 • Overview of Funding in the NHS • Statutory Financial Duties • Other Duties • Your Financial Responsibilities • Conclusions • Part 2 • Procurement/Supplies Function • Payroll Function • Questions

  3. Overview of Funding in the NHS • Where does the money come from? • AND • How is it spent?

  4. Where does the money come from?

  5. How is it spent? - Planned spending in the NHS

  6. Statutory Financial Duties • Break-even • Achieve a 3.5% return on our assets • Manage within external financing limit (EFL) • Manage within capital resource limit (CRL)

  7. Other Duties • To pay 95% of invoices within 30 days as per the Better Payment Practice Code (BPPC) • All public sector organisations are expected to pay Small/Medium Enterprises within 10 days of receipt. • Pay all Service User/Care claims within 7 days of receipt. • Ensure value for money • Achieve Cost Improvement Target (CIP)

  8. Break-Even Duty • The Trust must not spend more than its total income • MCT is forecasting a £4.25m surplus in 2013/14

  9. 2013/14 budget 2013/14 Income £000 budget % High Secure Commissioners 66,227 33% Medium Secure Commissioners 11,894 6% Low Secure Commissioners 5,039 3% Liverpool CCG 56,345 29% Sefton CCG’s 25,498 13% Other CCG’s 6,313 3% Education & Training 2,927 1% Local Authority 8,534 4% Other Non NHS 3,038 2% Informatics Merseyside 11,928 6% Total Income 197,743 100% Income 2013/14

  10. 2013/14 2013/14 budget budget Expenditure £000 % High Secure CBU 42,601 22% Liverpool CBU 26,462 14% Positive Care Partnership CBU 25,519 13% Safe Partnership CBU 12,803 7% Rebuild CBU 13,250 7% Addiction CBU 7,491 4% Total Clinical Business Units 128,126 67% Specialist Management Services 32,782 17% Capital Charges 9,698 5% Early Retirements & PIB's 2,172 1% Earmarked Reserves 9,037 4% Informatics Merseyside 11,678 6% Total Expenditure 193,493 100% Expenditure 2013/14

  11. Capital Resource Limit • Is the amount to spend on capital each year • For maintaining the estate and funding for specific schemes • The capital spend for 2013/14 is £10.9m • Any under spend would be lost

  12. External Financing Limit • The EFL is the cash target • Can only fund cash expenditure from internally generated resources • Limit on external borrowing • Ensures NHS Trusts do not spent more cash than agreed by Parliament

  13. Your Financial Responsibilities Corporate Governance • Governing policy documents: • - Standing Orders • - Standing Financial Instructions • - Scheme of Reservation and Delegation • - Standards of Business conduct • Accountability Arrangements • Financial Controls • Budget Holder Responsibilities

  14. Standing Orders (SO’s) • Practical set of rules • Protects the organisation and the staff • Specifies the business of the Board and the structure of committees • Breach of SOs can lead to disciplinary action

  15. Standing Financial Instructions (SFI’s) • Detailed set of high procedures and responsibilities which are supported by more detailed department procedures • Includes: Authorisation of expenditure Budgetary Control Tendering & Contracting Procedures Capital Investment Security of Assets • All Staff must read and understand both SOs and SFIs • website: www.merseycare.nhs.uk • Services • Finance • Financial Policies & Procedures

  16. Scheme of Reservation and Delegation • Outlines decisions reserved for the Board • Sets out those who are empowered to take action on behalf of the Board • Includes approval of budgets and expenditure limits

  17. Standards of Business Conduct • Anyone acting on behalf of the Trust is expected to conduct themselves in a way which is consistent with the public sector values • The policy in respect of the receipt of gifts, donations, leaving presents and rewards • The policy in respect of hospitality provided and received • The use of corporate credit cards • The procedure for registering gifts and hospitality

  18. Accountability Arrangements • Chief Executive – Accountable Officer • Director of Finance and other Directors • Senior Budget Holders • Budget Holders

  19. Financial Controls • Audit (External and Internal) • Workforce controls • Budgetary controls • Ordering Goods and Services – NHS Supplies • Expenditure Authorisation • Appropriately skilled Finance Dept • Appropriately skilled Budget Holders

  20. Responsibilities of Budget Holders • To remain within budget • Comply with Finance policies including SO’s, SFI’s and the Scheme of Delegation • Highlight potential slippage/overspends • Report on action taken to address overspends, to Finance Committee if significant

  21. Conclusions • Primary Statutory Duty to break even in 2013/14 MCT is forecasting a £4.25m surplus • Corporate Governance documents: • Standing Orders • Standing Financial Instructions • Scheme of Reservations & Delegation • Standards of Business Conduct • Financial Controls • Budget Holder Responsibilities