2 Assurance and governance
2.1 Financial assurance
What will be the respective responsibilities of the Integration Joint Board financial officer, the Health Board accountable officer and the Local Authority Section 95 Officer?
2.1.1 The Health Board accountable officer and the Local Authority Section 95 Officer discharge their responsibility, as it relates to the resources that are delegated to the Integration Joint Board, by setting out in the Integration Scheme - the purpose for which resources are used - and the systems and monitoring arrangements for financial performance management. It is their responsibility to ensure that the provisions of the Integration Scheme enable them to discharge their responsibilities in this respect. (See "following the public pound" at 2.7)
2.1.2 The Integration Joint Board financial officer will discharge her/his duties in respect of the delegated resources by:
- Establishing financial governance systems for the proper use of the delegated resources;
- Ensuring that the Strategic Plan meets the requirement for best value in the use of the Integration Joint Board's resources; and
- Ensuring that the directions to the Health Board and Local Authority provide for the resources that are allocated in respect of the directions are spent according to the plan; it is the responsibility of the Integration Joint Board financial officer to ensure that the provisions of the directions enable them to discharge their responsibilities in this respect. (See "following the public pound" at 2.7);
2.1.3 The Health Board accountable officer and the Local Authority Section 95 Officer are responsible for the resources that are paid by the Integration Joint Board to the Health Board and Local Authority in support of the Directions for operational delivery. In his or her operational role within the Health Board and Local Authority, the Chief Officer is:
- Accountable to the Chief Executive of the Health Board for financial management of the operational budget, and is advised by the Health Board Director of Finance;
- Accountable to the Section 95 Officer of the Local Authority for financial management of the operational budget; and
- Accountable to the Chief Executive of the Local Authority and Chief Executive of the Health Board for the operational performance of the services managed by the Chief Officer.
Will the Integration Joint Board require its own financial regulations?
2.1.4 Yes; financial regulations should be developed by its financial officer and incorporate a minimum set of controls. It is recommended that the financial regulations are approved by the Integration Joint Board.
2.1.5 The financial regulations of the Health Board and Local Authority should be revised, if necessary, to incorporate changes resulting from the financial integration arrangements including the arrangements for virement associated with the Integrated Budget (Section 4.3.1).
2.2 Risk management
2.2.1 The Chief Officer will be responsible for establishing the Integration Joint Board's risk strategy and profile and developing the risk reporting arrangements. There should be regular reporting on risk management to the Integration Joint Board.
2.2.2 The participating authorities should identify and manage within their own risk management arrangements any risks they consider to have retained under the integration arrangements. The Health Board and Local Authority should continue to report risk management to the existing committees, including the impact of the integration arrangements.
What risks will be considered in developing the Integration Scheme?
2.2.3 Regulations require that the risk management arrangements for the Integration Joint Board are set out in the Integration Scheme. It is recommended that the risk register includes the key risks inherent in integration and include:
- Governance, management and strategy;
- Financial management;
- Asset management;
- Information management;
- Performance management; and
- Customer management.
2.3.1 Integration Joint Boards should make appropriate provision for insurance according to the risk management strategy. The Act (Section 45(2)(b)) enables, but does not require, Integration Joint Boards to become members of CNORIS, a joint risk sharing scheme.
2.3.2 The Act (Section 65(2)(b)) also enables, but does not require Local Authorities to become members of CNORIS. Health Boards will remain mandatory members of the scheme. Additional information on liability and insurance is included in the Statutory Guidance statutory guidance on the establishment and operation of Integration Joint Boards.
Will the scheme cover all insurable risks?
2.3.3 No. The scheme currently covers Health Boards for:
- Clinical negligence claims and actions which arise in connection with the acts and omissions of their employees; and
- Non-clinical claims and actions which arise following loss or bodily injury affecting Third Parties or Employees or certain other pecuniary risks.
2.3.4 The Act widens the scope of the scheme (Section 65(3)) to include social care functions but does not extend to other functions in the Local Authority, for example, housing services. Further information on the scope of functions within CNORIS can be obtained from the Scottish Government Health Directorate.
How will the payments to the scheme be calculated?
2.3.5 Members will make payments towards the accumulated cost of paying the agreed claims for each financial year based on the assessed risk of the functions which they bring to the scheme. The contribution is calculated annually, with the claims initially being funded by the Scottish Government Health and Social Care Directorate.
Will there be a threshold for paying claims by the scheme?
2.3.6 Yes. Under current arrangements, scheme members are required to meet claims of £25,000 or under from their own budgets. Further information on CNORIS may be obtained here.
2.4 Internal audit
2.4.1 It is the responsibility of the Integration Joint Board to establish adequate and proportionate internal audit arrangements for review of the adequacy of the arrangements for risk management, governance and control of the delegated resources. This will include determining who will provide the internal audit service for the Integration Joint Board and nominating a Chief Internal Auditor.
2.4.2 The operational delivery of services within the Heath Board and Local Authority on behalf of the Integration Joint Board will be covered by their respective internal audit arrangements as at present.
2.4.3 The internal audit service should undertake its work in compliance with the Public Sector Internal Audit Standards.
2.4.4 To ensure that the risk based audit plans for the Integration Joint Board, Local Authority and Health Board are co-ordinated to ensure proper coverage, avoid duplication of efforts and determine areas of reliance from the work of each team, it is recommended that the Chief Internal Auditors for each of the respective bodies share information, co-ordinate activities with each other and with other external providers of assurance and consulting services.
Will there be a separate internal audit plan for the Integration Joint Board?
2.4.5 Yes; it is recommended that there should be a risk based internal audit plan.
Until the Integration Joint Board is empowered to provide services (Section 12 (1)(c)(d)), the Chief Internal Auditor of the Integration Joint Board, in developing the audit plan, would be expected to consider the risks associated with:
- The Strategic Plan and planning process;
- Financial plan underpinning the Strategic Plan; and
- Relevant issues raised from the partner Health Board and Local
- Authority internal auditors
2.4.6 The risk based audit plan should be developed by the Chief Internal Auditor of the Integration Joint Board and approved by the Integration Joint Board or other committee (see 2.6 Audit Committees). It is recommended that it is shared with the relevant committees of the Health Board and Local Authority.
Who will provide the internal audit service?
2.4.7 It is recommended that internal audit service should be provided by one of the internal audit teams from the Health Board or Local Authority. It is recommended that the arrangements for the internal audit service provided to the Integration Joint Board should be set out in a service level agreement.
2.4.8 It is recommended that the Chief Internal Auditor from either of the Health Board or Local Authority fulfil this role in the Integration Joint Board in addition to their role as Chief Internal Auditor of their respective Authority.
How will the internal audit be reported?
2.4.9 The Integration Joint Board Chief Internal Auditor should report to the Integration Joint Board on the annual audit plan, delivery of the plan and recommendations and should provide an annual internal audit report including the audit opinion.
2.4.10 It is recommended that the Integration Joint Board annual internal audit report is shared with the partner Health Board and Local Authority through the reporting arrangements in those bodies for internal audit.
2.4.11 Reports on each internal audit engagement will be reported to the Chief Officer. The IJB should determine any other reporting arrangements it requires from the Chief Internal Officer Auditor.
2.5 External Audit
Will the Integration Joint Board require an external audit?
2.5.1 Yes; this will be specified in the legislation (Section 13).
Who will carry out the external audit?
2.5.2 The Accounts Commission will appoint the auditors to the Integration Joint Board. (Section 13).
2.6 Audit Committee
Will the Integration Joint Board be required to have an audit committee?
2.6.1 The Integration Joint Board should make appropriate and proportionate arrangements, for consideration of the audit provision and annual financial statements, which are compliant with regulations and good practice governance standards in the public sector. This should include any reports from internal audit, external audit and the annual accounts (see section 3). For example this may be an audit committee which meets before the main Integration Joint Board meeting two or three times per year.
Who may be the members of the audit committee?
2.6.2 It will be the responsibility of the Integration Joint Board to agree the membership having regard to the agreed remit, skills and good practice for a public sector audit committee. It is anticipated that members of the Integration Joint Board will serve in this capacity.
2.7 Following the public pound
2.7.1 Current guidance for Local Authorities where funding is provided by one partner to another body to deliver services which would otherwise be provided by the funder, requires arrangements to be in place to maintain control and clear public accountability over the public funds. This will apply in respect of:
- the resources delegated to the Integration Joint Board by the Local Authority and Health Board; and
- the resources paid to the Local Authority and Health Board by the Integration Joint Board for use as directed and set out in the Strategic Plan.
2.7.2 It is recommended that the best practice principles as set out in the Code of Guidance on Funding External Bodies and Following the Public Pound should be incorporated into both the Integration Scheme and the directions made by the Integration Joint Board to allow the Integration Joint Board financial officer, the Health Board accountable officer and Local Authority Section 95 Officer to discharge the duties noted at 2.1.1 and 2.1.2 above.
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