eHealth funding: independent review

An independent review by Grant Thornton UK LLP on eHealth funding between eHealth, NHS National Services Scotland and NHS Tayside between 2012 and 2018.

NHS National Services Scotland

NSS have recognised the transaction through movements in their RRL. As the Board does not have the authority to transfer these funds directly to other health boards, the funds were transferred through the Scottish Government by adjustments in resource allocations. The reinvestment fund balance held at the end of each of the financial years since it was established in 2012, has been transferred from NSS to NHS Tayside through RRL allocations. We have agreed these allocations to Scottish Government allocations letters for each of the boards and email confirmation authorising the transfer. It appears that after eHealth Leads Group approved the transfer, eHealth actively directed SG transfer funds to NHS Tayside.

NSS internal auditors have conducted an investigation of eHealth funds at NSS. The review identified a number of recommendations around the control and governance arrangements in place within NSS around the administration of eHealth funds. Through our own investigation including: discussions with the Head of Finance, IT ( NSS); review of email correspondence between NSS, Scottish Government and NHS Tayside, and considering the findings from internal audit’s report, the following findings have been identified:


The Scottish Government provides funding to NSS for eHealth through resource allocations. eHealth then administer these funds accordingly on behalf of eHealth Leads group. As noted in our timeline, the unspent eHealth funding was returned to Scottish Government in the form of negative allocations. While the funds were often significant (2016/17: £2.582 million), there appears to be no requirement internally within NSS for the changes to be authorised or explained.

The email correspondence from NSS with the Scottish Government and NHS Tayside in relation to the transaction, primarily involved the NSS Head of Finance. We understand from NSS internal investigations that the NSS Director of Finance was only aware of the eHealth allocations to NHS Tayside through the SGHSCD resource allocations in 2016. This is consistent with the review of email correspondence around the transactions where the NSS Director of Finance is included within the email trail relating to 2015/16 transactions. We understand from the Internal audit investigation that the Director of Finance had concluded that the eHealth monies were deemed as SGHSCD’s own budget which NSS only administered. As the reverse transfer arrangement had been agreed with and processed through the Scottish Government (eHealth Deputy Director), as this was considered to be sufficient.

NHS National Services Scotland (continued)

Transactions continued

On 23 February 2018 an email from NSS to the Scottish Government’s Finance Team requesting transfer of allocation in 2017/18 to NHS Tayside was recalled. The recalled email contained an email trail dating back to 10 March 2017. This includes emails from the NSS Head of Finance, NHS Tayside’s Director of Finance and Scottish Government (eHealth) team which includes the following extract:

“In order to clarify for everyone copied, these are “national funds” for programmes such as Chi and Child Health and GP IT rather than “ NSS funds”; NSS is helping to arrange the brokerage and thanks NHS Tayside on behalf of the national programmes for assisting with this”

In the subsequent email from NSS to Scottish Government Finance and NHS Tayside, the email trail was removed and the transfer request is broken down into four separate transactions.

NSS Internal audit’s investigation concluded that this was recalled because it did not provide sufficient detail of the breakdown of the transaction. This is consistent with our own discussions with NSS Head of Corporate Reporting. NSS internal audit confirmed that from discussions with the NSS Head of Corporate Reporting that she was aware that the recalled email trails referred to “brokerage” and in her view this was not appropriate as this was not her understanding of the arrangement. Therefore this had been excluded from the follow up email.

Authorisation and oversight

There are clearly lessons for senior budget holders around greater understanding of the implications on local boards on funding decisions, in particular where there are late allocations or in the case of eHealth funds allocations that are effectively ring-fenced for returning to Scottish Government at a future date. Health boards are required to manage and report their financial performance against annual resource allocations and therefore where funds are allocations which are unlikely to be utilised in year these should be returned to the Scottish Government.

NSS maintain monitoring spreadsheets on behalf of the eHealth leads which provides a breakdown of expenditure and funding in the current year as well as forecasted financial activity. This spreadsheet is an important tracker of the eHealth Reinvestment fund as it is where the eHealth Leads can monitor the balances due from NHS Tayside. Towards the end of 2016/17, the tracker which recorded the £1.9 million of the £2.582 million held by NHS Tayside on behalf of eHealth and which was due to be returned via Scottish Government allocations was amended to £0.35 million. This was due to the spreadsheet focusing on the current year’s forecast revenue (including funding returns) which had been reduced reflecting the agreement for NHS Tayside to continue to ‘hold’ the funds until 2018/19. Visibility and transparency of the remaining balance due from NHS Tayside was lost at this point. We note that the Scottish Government Finance team maintain a separate spreadsheet which does record the outstanding amounts, however this is at a higher level. This creates a risk that the future anticipated transfer from NHS Tayside could be missed and therefore eHealth monies not utilised for their purpose intended.

NHS National Services Scotland (continued)

Authorisation and oversight continued

In addition, we found from review of the tracker that there were inconsistencies in the recognition of the source of carry forward balances in 2016/17 between the NSS Head of Finance and SGHSCD. While this did not impact on the overall financial monitoring arrangements it highlights weaknesses in the current administration of the accounting records. The NSS internal audit investigation concluded that within NSS there is insufficient monitoring of financial activity in relation to national programmes and that there was insufficient scrutiny over the programme activity at both the senior management and Board level. The investigation has recommended that controls are established over the authorisation of budgets and financial monitoring arrangements. Our review has found further areas where the controls need to be enhanced.

Finding 1: There are significant improvements required to the controls over the administration, scrutiny and oversight of funds being administered by NSS on behalf of national programmes. While we recognise that the use of these funds (including eHealth monies) may not under the direct control of NSS, they are included within the NSS annual SGHSCD allocations and therefore the Board are responsible for ensuring these funds are appropriately held and monitored. In addition, there should be a clear alignment between NSS monitoring and Scottish Government finance monitoring arrangements with only one tracker used.


Back to top