Finance Manual version 1 1 - July 2008

FINANCE MANUAL

Version 1.1 (July 2008)

FINANCE MANUAL 2008/2009

Document Version Number: 2.0

Date written: July 2008

Owner: Michael Mulligan

Job Title: Financial Controller

Email address: [email protected]

Contact number: 020-8407-3688

Author: Julia Todd/ Michael Mulligan

Next review date: November 2008

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CONTENTS (Click on Page Number to Access)

SECTION 1 - FINANCE STRUCTURE 3

SECTION 2 - INTRODUCTION 4

SECTION 3 - PURCHASING GOODS AND SERVICES 18

SECTION 4 - SALARIES AND WAGES 22

SECTION 5 - PAYMENTS 27

SECTION 6 - COLLECTION OF INCOME 35

SECTION 7 - CASH AND BANKING 37

SECTION 8 - CASH HANDLING 38

SECTION 9 - FIXED ASSETS AND CAPITAL EXPENDITURE 40

SECTION 10 - COMPENSATION PAYMENTS 44

SECTION 11 - LOSSES 47

SECTION 12 - PETTY CASH 51

SECTION 13 - TRAVEL AND SUBSISTENCE 55

SECTION 14 - CHARITABLE FUNDS 63

SECTION 15 - PRACTICE BASED COMMISSIONING 70

SECTION 16 - REFERENCE COSTS AND PAYMENT BY RESULTS 71

SECTION 17 - PROGRAMME BUDGETING 73

SECTION 18 - YEAR END & ANNUAL ACCOUNTS 74

SECTION 19 - DELEGATION OF POWERS 80

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SECTION 1 - FINANCE & STRATEGY STRUCTURE 2008

Director of Finance and

Strategy Alex Johnstone

Deputy Director of Finance (Financial Planning Support)

Mike Sexton

PA to Director of Finance & Strategy Linda Harmston

Performance Jeffrey

Boateng

PlanningJane Carey-

Harris

Deputy Director of Finance (Business and Decisions Support)

Karen McKinley

Financial Accountant

Capital/ Charitable

Funds Mohamed

Zamir/ Temp: Elliot

Abadoo)

SystemsSupport AP

Lead Mahesh Shah

Chief Management Accountant Mark Dowell

Financial Accountant Control A/cs

and Cash (Temp: Jalil Minakaran)

Senior Finance Manager

(Commiss) Neil

McDowell

Financial Analyst - Primary

Care Faiza

Waheed

Senior Finance Manager Provider

Di Pearson

Orchard Hill / PLD Cashier Janet Ford

Finance AdministrPrimary

Care Ioannis Tsolkas

Financial Analyst

Community Vacant

Financial Analyst PLD/HQ Martin

Financial Analyst

Acute -BFC Temp: Ryan

Raghubir

Finance Assistant

Continuing Care / FNC

Jenni Gurner

Financial Analyst:

PBC/ Prescribing

Tonye Segbedzi

TemporaryAdmin

Support Hughes Hubert

Temporary Cashier Support Cynthia Nartey

Financial Controller

Michael Mulligan

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SECTION 2 - INTRODUCTION

2.1. The purpose of this manual is to provide all Sutton and Merton PCT non-finance staff with assistance in dealing with financial issues. It covers the PCT’s main financial functions. However, detailed procedures that will affect only one or two non-finance staff are not included. These procedures will be agreed with the staff concerned.

2.2. Sutton and Merton PCT operates within a statutory framework in which it is required to adopt Standing Orders. Its detailed financial regulations are laid down in its Standing Financial Instructions, which form part of the Standing Orders. The format for these is laid down by the Department of Health, and they have to be approved by the PCT’s Board. As well as these, the PCT has a Delegation of Authority document, also approved by the Board. Together with locally generated rules and instructions, these collectively set the business rules for financial and other transactions which all directors and employees of the PCT must follow in order to achieve probity, accuracy, economy, efficiency and effectiveness. It is a requirement that all employees of the PCT are aware of the content of these documents and follow them at all times. Non-compliance can lead to disciplinary action.

2.3. These documents can be obtained from the PCT’s Intranet. Look under Document Library, Finance, Finance Procedures.

2.4. Day to day administration of the PCT’s financial services is managed by the NHS Shared Business Services. This is a Joint Venture between the Department of Health and Xansa, designed to enable NHS organisations to improve the efficiency of their finance function, and thereby free up funds for frontline care. Budgetary control is managed in-house by the Finance team based at The Nelson.

2.5. Further guidance with regard to the management and reporting of budgets is available in the PCT’s Budget Manual, which is issued annually by the Finance Department.

2.6. Finance Directorate Responsibilities

Financial Management and Planning Management Accounting Treasury Management Preparation of Annual Accounts Preparation of Programme Budgets

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Preparation of National Schedule of Reference Costs Financial support to Business and Operational Planning Financial support for the implementation of DoH Policy initiatives Financial support to Capital Programme management Financial support to Patient Choice and Payment by Results Financial support to Practice Based Commissioning Administration of financial systems & documentation Liaison with Financial Shared Services (SBS) Financial Risk and Governance Accounts payable support VAT Charitable funds financial support Patients monies Cashiering.

The PCT also have a number of Service Level Agreements with other organisations. Contacts in these other agencies are;

NHS Shared Business Services, Wakefield, West Yorkshire

NHS Shared Business Services provide the following services to the PCT via a Service Level Agreement;

Payment of invoices (send BACS/raise cheques following approval by budget holder through the Oracle system)

Banking and Treasury Management Generate debtor invoices following request from PCT Maintenance of budget reports which are viewed via Portal system

Key contacts for budget managers are as follows:

2.7 Area of Finance System Name Phone No.

Reset Passwords IT Service Desk 0870 850 3382 Can also be reset on line - //nww.finsys.fss.nhs.uk Issues with Portal Statements Local Management Accountant See Organisation Chart Purchase Order Issues John Beeson 020 8687 4519

Oracle System Issues Mahesh Shah 020 8251 0575 and Accounts Payable

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2.8 Payroll Department, Orchard Hill Provides the following services to the PCT:

Processing and payment of salaries Pensions Processing and payment of expenses claims

Key contacts at Payroll are :

Designation Name Phone No.

Payroll Manager Jenny Martin 020 8770 2898

Deputy Payroll Manager Julie Hillier 020 8770 8292

Also e-mail team members at [email protected]

2.9 Support Services Partnership (Wandsworth PCT)

The SSP provide the following services to the PCT via a service level agreement;

Supplies Support Professional procurement advice

Key contacts at SSP are:

Designation Name Phone No.

Head of Procurement Nigel Lake 020 8687 4517

Assistant Supplies Manager Jon Beeson 020 8687 4519

Purchasing Team Leader Daniel James 020 8687 4557

2.10 Corporate and Financial Governance

General

The processes of governance are to ensure that the organisation matches the:

Right people, to do… The right things, in … The right way, by … Ensuring that effective systems are in place, including … Checks and controls, and … Appropriate internal/external reporting arrangements.

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The Corporate Governance Framework

Directors and Heads of Service/lead managers hold copies of the full corporate governance documents for the PCT and summaries have been circulated to all members of staff. These documents explain how the PCT is governed and regulate the way in which the PCT and its staff carry out its business. The documents are:

Standing Orders Standing Financial Instructions Code of Conduct, Code of Accountability and Code of Practice on

Openness in the NHS Scheme of Delegation

All employees are responsible for

Security of the PCT’s property Avoiding loss of cash, equipment, supplies etc. Economy and efficiency in the use of NHS resources Conforming with

- Standing Orders - Standing Financial Instructions - Scheme of Delegation - Procedures

These documents are available on the intranet:

(Document Library/Finance/Finance Procedures)

Standing Orders

PCT Standing Orders govern its proceedings and its business.

They regulate:

The composition of the Board and Executive Committee and the arrangements for the meetings of its committees

Declarations of Interest Standards of Business Conduct for ALL STAFF including declarations of

interest and hospitality accepted. Tendering and contract procedures for the supply of any goods and

services The powers reserved to the Board and those delegated to Directors and

other staff.

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Standing Financial Instructions (SFI’s)

PCT Standing Financial Instructions detail the financial responsibilities, policies and procedures to be adopted by the Trust. They are designed to ensure that its financial transactions are carried out in accordance with the law and government policy in order to achieve probity, accuracy, economy, efficiency and effectiveness.

SFI’s identify the financial responsibilities that apply to everyone working for the PCT.

If you are an authorised signatory you should have access to a full copy of the SFI’s

SFI’s apply to any transactions carried out in the name of Waltham Forest Primary Care Trusts

All staff have responsibilities under SFI’s and should be as a minimum made aware of these

Codes of Conduct and Accountability

2.11 Principals Of Conduct

You are expected to:

ensure that the interest of patients remain paramount at all times be impartial and honest in the conduct of your official business; use public funds to the best advantage of the service, always ensuring

value for money; All staff should be familiar with the PCT’s Code of Conduct Managers need to be aware of the NHS code of Conduct for Senior

Managers.

And ensure that you do not;

abuse an official position for personal gain or to benefit your family or friends

seek to advantage or further private business or other interests in the course of official duties.

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2.12 Putting Principals Into Practice

Acceptance of Gifts and Hospitality

All employees are required to declare offers of gifts or hospitality to their Line Manager and must not accept any gifts. All hospitality accepted must be notified to the Financial Controller.

Hospitality

Modest hospitality only should be accepted, e.g. lunches in the course of working visits. Any corporate hospitality should be declared in advance to your manager and taken in staff’s own time.

Declaration of interest

Any member of staff (or close relative) who has a significant business interest in a business which may compete for an NHS contract should declare this to the Trust either on starting employment or on acquisition of the interest. It is the Trust’s responsibility to ensure that its interests, or those of patients, are adequately safeguarded. This is a contractual obligation and all staff are advised to declare their interests to the Governance and Risk Manager. Failure to declare such an interest could result in disciplinary action.

Examples of a ‘significant financial interest’ would include;

shareholding in a company supplying or manufacturing goods which are or might be purchased by the Trust;

ownership or part-ownership of a business which may compete for business with the Trust

Confidentiality

The Trust has a legally binding obligation not to disclose information of a confidential nature concerning patients’ illnesses and personal information, and likewise has a duty to draw the obligation to the attention of staff and expect them to behave equally responsibly.

In addition, appropriate confidentiality and responsibility must also be shown in respect of information regarding supplies, goods, services, or about staff employed by or on behalf of the Trust, including contracting staff.

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It is also a criminal offence under the Data Protection Act (1984) to disclose unauthorised personal data held on a computer to a third party.

Unauthorised disclosure of any such information may, therefore, lead to disciplinary action being taken.

Meetings with Company Representatives

The Trust has developed ground rules for the conduct of meetings between company representatives and employees.

Preferential Treatment in Private Transactions

Staff must not seek preferential rates or benefits in kind from private transactions with companies with which they have official dealings.

Contracts

Professional standards for the purchase and supply of goods, materials or services must be adhered to at all times. (Please refer to “Ethical Code of the Chartered Institute of Purchasing and Supply” available from the Procurement Manager).

Favouritism in Awarding Contracts

Fair and open competition between prospective contractors or suppliers is a requirement of the Trust’s Standing Orders, available from Finance.

Warnings to Potential Contractors

The Trust will ensure that a warning is given to all potential contractors against corrupt practices. Please refer to the Trust’s Standing Orders, available from the PCT’s Intranet.

Secondary Employment/Private Practice

You must ensure that your Manager is aware of any secondary employment you have or intend to take, including any private medical work, management consultancy or lecturing etc. The Trust considers that your employment with Waltham Forest PCT is your principal employment and you must ensure that any secondary employment will not impair your ability to perform your duties adequately. The Trust will not accept any legal responsibility for your contravention of statutory or legal law as a result of your secondary employment.

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Criminal/Civil Proceedings

Any proceedings brought against you for any criminal/civil offence, whether connected with your employment or not, must be reported to your manager.

Commercial Sponsorship

You may accept commercial sponsorship for attendance at relevant courses or conferences providing you seek permission, in advance, from your manager or Director who has to be satisfied that acceptance will not compromise purchasing decisions in any way.

Commercial Sponsorship of Posts – “Linked Deals”

If the Trust enters into partial sponsorship with a company, the Trust will make it abundantly clear that the arrangement will have no effect on purchasing decisions by the Trust, and will monitor arrangements.

2.13 Fraud & Corruption

What is Fraud? Fraud is the intentional distortion of records to conceal the misappropriation of assets or obtaining benefit by deception. Corruption is the offering, giving, soliciting or acceptance of inducements that may influence a person's actions. Who Commits Fraud?

Whilst the majority of people who work in and use the NHS are honest, there is a minority who will seek to defraud the NHS of its resources. Some examples include

Health Bodies – staff and patients Pharmacists Dentists Opticians Doctors

How can Fraud be stopped?

The Secretary of State issued directions to combat fraud and corruption within the NHS in December 1999. A Special Health Authority, the NHS Counter Fraud and Security Management Service was created to combat fraud in the NHS.

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Each Trust and PCT must have a designated Local Counter Fraud Specialist (LCFS). The LCFS is regarded as the first line of defence against fraud and corruption and receives specialist training in:

Investigation, law and procedures Investigative interviewing Proactive evidence gathering Principles of good practice.

How can you help? If you have knowledge of fraudulent activity or see something you believe looks suspicious, please notify your Local Counter Fraud Specialist, Rebecca Chappell who can be contacted on 0208 687 4693 or by e-mail at [email protected]. If you would prefer to speak to someone outside the PCT you can ring the NHS Fraud and Corruption Reporting Line on 0800 028 40 60. Lines are open Monday to Friday 8am to 6pm. The NHS Fraud & Security Management Service can be contacted via e-mail as follows: [email protected] Or by post:

NHS CFSMS Third Floor Lakeside Alexandra Park St. Helens WA10 3TL

2.14 Budgetary Responsibilities

Introduction

This chapter will explain what a budget is, the budget monitoring process, the structure of reports and lastly what the key responsibilities of the budget holder and the finance team are within the budget monitoring cycle.

What Is A Budget?

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A “budget” is a plan expressed in financial terms for a defined period of time usually showing expenditure and/or income employed to attain a given objective. In this capacity budgets are meant to serve several purposes. These are to:

- enable planning - enable performance monitoring - co-ordinate activity - allow the implementation of the plan - communicate - motivate - authorise action

The Budget Monitoring Process

The process of budget monitoring can be seen as a periodic cycle as outlined below.

Planning

Review and Implementation

Reporting

Corrective Monitoring

Action

Through the production of regular timely information, managers can monitor their budgets on a regular basis and take any corrective action necessary to bring expenditure back in line with the plan.

The Structure Of Budget Reports

Budgets contain details of expenditure and income in all or part of the following categories: -

2.15 Expenditure

- Pay (salaries of Trust employees and agency staff) - Non Pay (consumable items e.g. Medical &Surgical Equipment, Stationery,

Rent etc…)

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I

2.16 Income

- From within the NHS - From outside of the NHS

2.17 Responsibilities Of Budget Holders

The following are the responsibilities of Budget Holders:

- contain expenditure within budget - if this is not possible, to notify your line manager as soon as you become

aware of any likely overspending or reduction in income - ensure that all expenditure attributed to the budget has been

requisitioned and authorised by an appropriately designated officer or the Budget Holder using an official purchase order

- review budgetary information on a regular basis and undertake any corrective action that may be required to bring it in line with the plan.

- liaise with the Finance Department to assist in the setting of budgets on an annual basis.

- to ensure recurring expenditure is not committed against non-recurring income/budget.

You (the budget holder) are responsible for managing your budget and ensuring you stay within resources.

2.18 Responsibilities of the Finance Department.

The following are the responsibilities of the Finance Department with respect to budgets:

- to prepare budget reports in a timely, accurate and meaningful fashion. - to investigate, in conjunction with the Budget Holder, and report on

variances in the financial, activity and manpower information contained within the budgets.

- forecast income and expenditure outturn, in conjunction with the Budget Holder, based on the most up-to-date information available

- to support and maintain the system controlling and authorising expenditure

- to advise Budget Holders on current and future financial issues and opportunities

- to assist in the preparation of budgets - to ensure that value for money is being obtained from expenditure

incurred on individual budgets - to produce additional information that may be required by the Budget

Holder to enable the effective management of resources.

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In summary the Finance team is there to help you (the budget holder) effectively manage your budget.

2.19 Budget Setting The Finance Directorate prepares budgets annually with the assistance and agreement of budget holders.

Budgets are calculated taking into account the following factors:

- actual spend during the current year - levels of activity required - resources available - baseline budget in the current year

2.20 Recurring/Non Recurring Expenditure

The time related incidence of cost can be subdivided into the following headings:

- Recurring – these costs will be repeated in subsequent accounting periods (e.g. salaries) and represent an ongoing commitment.

- Non-Recurring – one off costs, which are unlikely to re-occur, at least in the medium term (e.g. purchase of a computer).

Recurring expenditure commitments should never be made be set against non-recurring sources of income.

2.21 Cost Improvements

Invariably the demand for services can exceed the budget available. As a result it is necessary to establish measures to generate additional resources internally through becoming more efficient. These measures are referred to as a Cost Improvement Programmes (CIP’s) or Cash Releasing Efficiency Savings (CRES).

Budget Holders have a role to identify and deliver the PCT’s annual cost improvement plans.

2.22 Budget Monitoring

Monthly budget reports are available approximately 2 weeks after the month end and can be viewed through the web based Portal system.

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On a monthly basis budget holders should review the performance of their budgets and identify with the assistance of the Finance Team the facts influencing that position. Necessary corrective action should be identified to rectify any overspending. If corrective action cannot be identified then the budget holder’s line Manager should be notified as soon as the matter becomes apparent.

2.23 Budget Virement

Virement is a process whereby budget allocation is transferred between headings within a budget or in certain cases between budgets (subject to the agreement of both affected budget managers and the PCT).

This process should give budget holders flexibility in the management of their overall budget, so they can ensure best use of scarce resources.

Virements will only be reflected on the PCT’s finance system (and therefore reports) after appropriate approval has been given through the completion of a virement form.

2.24 Frequently Asked Questions

How Much Can A Budget Holder Spend?

Managers of budgets can spend up to a maximum of their delegated budget.

The budget holder may not spend more than the amount allocated for an individual budget heading unless it is matched by a corresponding saving or increase in income, on a different budget line.

Budget holders will be informed of their delegated budget shortly after PCT Financial Plans have been agreed by the Board. Details of an individual’s responsibilities are set down in the Trust’s Scheme of Delegation which should be read in conjunction with this guidance. Copies are available from the PCT Finance Department and on the PCT Intranet.

2.25 Who Can Appoint Staff?

Again the Scheme of Delegation identifies who can appoint members of staff to an approved post within the establishment. At its lowest level this is a Head of Service but this will be dependant upon the appointment in question.

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2.26 What Goods and Services Can Be Requisitioned?

Goods and services may be requisitioned from the Supplies department from within any one heading included in the budget allocation provided that:

- The value of the goods/services ordered is within agreed authorisation limits.

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SECTION 3 - PURCHASING GOODS AND SERVICES This section covers the purchasing of goods and services, including capital works. It does not cover the purchase of healthcare.

3.1. Introduction

3.1.1. The PCT’s standing financial instructions (SFIs) and standing Orders (SOs) cover the procurement of goods and services. The following is a summary only, and in the event of query, reference must be made to the SFIs and SOs.

3.1.2. All goods and services should be ordered through the purchase ordering system provided by the Supplies Department (Support Services Partnership).

3.1.3. In cases where expenditure is above, or expected to be above, £2,000 formal quotations should be received before an order is placed. If the expenditure is above £10,000 then competitive tendering procedures will need to be used. These are managed by the Supplies Department on the PCT’s behalf and are not covered here.

3.1.4. The following financial limits for the minimum number of quotes or tenders should be noted:

Contracts No. of Quotes / Tenders

Up to £4,999 2 minimum verbal quotations

£5,000 - £19,999 3 written quotations

£20,000 - £99,999 3 written competitive tenders

£100,000 - £149,999 4 written competitive tenders

£150,000 and above 6 written competitive tenders

3.1.5. If you wish to apply for a waiver of the requirement to tender, you must complete a Single Tender Authorisation Form, available on the PCT’s Intranet. Look under Document Library, Finance, Finance Procedures. Once completed, send the form to either the Director of Finance and Commissioning or the Chief Executive.

3.1.6. Full details are included in the SFIs and SOs and are not repeated here. If required, advice can be obtained from the Supplies Department.

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3.1.7. There are strict limits on the expenditure that individuals within the PCT can authorise. See the section on Delegation of Powers.

3.2. Summary Of Procedure

3.2.1. All requisitions for goods and services must be made using the Oracle I-Procurement system. Refer to the Finance Department or the Supplies Department for further information.

3.2.2. The I-Procurement system enables you to:

Raise a requisition for a catalogue or non-catalogue item

Approve a requisition (provided you have the authorisation to do so)

Check the status of your previous requisitions, e.g. to see if the order has been raised

Confirm receipt of the goods or services

3.2.3. All purchase orders are raised by the Supplies Department, unless the department concerned has been authorised to raise its own.

3.2.4. Invoices are matched against receipted orders and, provided all is in order, this is sufficient authorisation for the invoice to be paid. Any price, quantity or other queries are referred to the person who authorised the order.

3.3. Detailed User Procedures

3.3.1. When a person identifies the need for goods or services he or she should requisition these using the Oracle I-procurement system.

3.3.2. Value for money should always be considered when acquiring goods and services, for example topping up the stationery cupboard once a month rather than raising orders for individual items as and when they run out.

3.3.3. Only the quantities of goods actually required by the PCT must be ordered, and there must be sufficient funds available in the budget to meet the cost of them.

3.3.4. The authorisation of the requisition is covered by the way in which Oracle users are set up. In no circumstances should any user disclose their user name and password to anyone else. If someone else needs to use the system to order goods, then he or she should be set up as an authorised user via the Finance Department.

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3.3.5. When choosing the item to be supplied or the services to be performed you should always seek to obtain the best value for money for the PCT. If necessary, consult the Supplies Department for advice. If this advice is not acceptable, then the Director of Finance and/or the Chief Executive should be consulted.

3.3.6. Unless the department requiring the goods is authorise to raise its own orders, the Supplies Department will raise the order and pass it to the supplier. As soon as the goods (or some of them) arrive, the order should be receipted via I-Procurement.

3.3.7. Stock items (i.e. those acquired from the NHS Supply Chain), are charged to the PCT via their RESUS system. There is an electronic link between this system and the PCT’s financial ledger, which means that the cost of the goods is charged against the appropriate budget. The Finance Department manages this link.

3.3.8. For non-stock items, the supplier is asked to send its invoice direct to Shared Business Services, who will match it against the goods or services received and, provided all is in order, pay it without any further authorisation from the budget holder.

3.3.9. In cases where it is not possible for the cost to be included on the purchase order (for example, a repair), the order will be raised for a nominal amount such as £1.00. When the invoice arrives, Shared Business Services will refer the invoice to the person who authorised the order asking for the price to be approved.

3.3.10. The following general points need to be noted:

a) You may not issue an order for any item or items to any firm which has made an offer of gifts, reward or benefit to individual PCT members or employees, other than: -

Isolated gifts of a trivial character or inexpensive seasonal gifts, such as calendars;

Conventional hospitality, such as lunches in the course of working visits.

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b) Goods may not be taken on trial or loan without first referring to the Supplies Department to ensure that the supplier complies with all relevant legislation etc. In no circumstances should any goods be taken on trial or loan that could commit the PCT to a future uncompetitive purchase.

c) Orders should not be split or otherwise placed in a manner devised so as to avoid the financial thresholds.

d) The PCT’s Standard payment terms are 30 days from the date of an invoice. You may not accept credit periods less than this.

e) Prepayments (other than for maintenance contracts) are not normally permitted. If a prepayment is being contemplated, then the Director of Finance or Head of Supplies must be consulted before the PCT is committed to it.

f) Please try to spread requisitions evenly over the year and avoid an ‘end-of-year spend’.

g) Please allow adequate time for procurement, especially if a quotation or tendering process needs to take place. Failure to plan properly is not a sufficient reason to by pass the PCT’s financial regulations.

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SECTION 4 - SALARIES AND WAGES

4.1. Introduction

The Pay Services department, which is based at Orchard Hill, is responsible for paying the PCT's staff, including bank staff. This department works closely with the PCT’s Finance and Human Resources departments. Both weekly and monthly payrolls are prepared, depending on employees’ terms and conditions of service.

4.2. Objectives

The objectives of the Payroll system are:

Accurate and timely payment of staff in accordance with their terms and conditions of employment.

Compliance with HM Revenue and Customs requirements with respect to statutory deductions from pay.

Payments to employees accounted for accurately and in full.

Payments only made in respect of people that are employed by the PCT and that employees are removed from the payroll when they leave the PCT.

All payments made to the correct employee with no duplicate payments

Costs of employees seconded to other organisations are recovered

Management information in respect of salaries and wages is accurate, timely and adequate.

Adequate segregation of duties to minimise the possibility of fraud or error. In particular, segregation of duties between the appointment of employees, payment of staff and accounting functions.

4.3. Scope Of This Section

4.3.1. This section provides an overview of the paper flows and the key internal controls required to meet the objectives set out above as they relate to PCT managers. It does not extend to specific operational procedures within the Payroll Department. It does not cover the appointment of a new employee, or any other staffing issues that are the responsibility of the PCT’s Human Resources department and delegated managers.

SECTION 4 - 6BSALARIES AND WAGES

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4.3.2. This section covers the general procedure to be applied to all payments to employees, including bank staff. It also covers the financial aspects of the secondment of employees to other organisations. However, the special arrangements whereby NHS staff are seconded to Sodexho under the Retention of Employment Model (REM) are outside the scope of this document.

4.3.3. There is a separate section of this manual for travel and subsistence costs.

4.4. Detailed Procedures

4.4.1. Permanent Information

a) The Human Resources Department manages the engagement of new staff. Human Resources send a Staff Joining Form to the employee with the appointment letter. These are four part, pre-numbered forms that are kept by the Human Resources department. The form must be fully completed within 24 hours of the employee starting work, and passed to the Pay Services department within a further 24 hours. Failure to do this could mean that the new employee is not paid at the appropriate time. If any of the documentation (e.g. the P45 tax form) is not available, the form should still be completed and sent to the Pay Services department, with the missing documentation following as soon as possible.

b) If a new employee fails to turn up or only works for a short period of time before failing to turn up without explanation, then the Pay Services Department must be notified by telephone call or email as a matter of urgency. Otherwise, it is likely that the employee will be paid for time that they have not worked. This should be followed by the completion of a Staff Leaving Form.

c) If an employee is absent without authorisation (AWOL) the issue should be discussed with a Human Resources adviser urgently. This could avoid overpayment of salary.

d) When an employee resigns from the PCT, the Manager must immediately complete a Staff Leaving Form and send this to the Pay Services department.

e) If an employee is due to retire, then three months’ notice must be given to the Pay Services department. This is to allow time for the NHS Pensions agency to calculate the employee’s pension entitlement and ensure that payment is made following his or her last day of service with the NHS.


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f) Permanent variations to an employee’s pay details must be notified to the Pay Services department within 48 hours of the change, using a Change of Staff Details form. These are four part, pre-numbered forms that can be obtained form the Human Resources department. If the change relates to the employee’s home address, next of kin or bank details, then the pink copy (Management Accounts) should be destroyed.

g) If there are any changes to an employee’s grade or salary (other than a pay award or normal progression up the spine points) then an ‘Establishment Variation’ form must be completed. Further details are obtainable from the PCT’s Human Resources Department. This does not apply if the employee is appointed to a different post that already exists in the PCT’s establishment.

4.4.2. Monthly and Weekly Procedures

a) The PCT operates a positive reporting system. No employee is paid unless there is a positive confirmation that they continue to be employed by the PCT.

b) The positive reporting system is managed by means of the weekly and monthly pay books that circulate between the Pay Services Department and the department where the employee works. As well as confirming an employee’s attendance at work, they are used to notify the Pay Services department of any temporary changes to the employee’s pay such as overtime and unsocial hours. They are also used to notify the Pay Services department of any absences that affect, or could affect, the employee’s pay such as sick leave or unauthorised absences and for the payment of business expenses. Note that accurate recording of sickness is essential as inaccurate records have serious implications for sick pay entitlements and could lead to overpayments.

c) Instructions as to how to complete the pay books, and the deadlines by which they must be returned to the Pay Services Department are contained in the books themselves.

d) The person who authorises the pay books must be an authorised signatory, approved by the budget holder. He or she is required to sign off the sheet for every employee. This signature acts as authorisation to pay the employee for the current week or month. Before signing off a sheet, the authorising officer should ensure that the employee is still working for the PCT and has not taken any unauthorised leave. This is particularly important for employees who undertake shift work or work at remote locations.

4.4.3. Verification of the Payroll

a) Detailed reports are available to budget holders via the ‘Portal reports’ each month. These list the employees whose pay costs have been charged to the budget for the month.


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b) Budget holders should scrutinise this carefully and inform the Management Accounts team of any errors. If it is known that an employee left the PCT before the beginning of the month, then the Pay Services department should also be informed, as it could indicate that the leaver has not been removed from the payroll.

4.4.4. Overpayments to Employees

a) There may be occasions when it becomes evident that an employee has been overpaid. Should this occur, then the Pay Services Department will make adjustments to correct the payroll, and inform the PCT of the overpayment.

b) If the overpaid employee is still employed by the PCT, then discussions are held with him or her about how the overpayment can be recovered. The employee’s line manager is often part of these discussions. This often leads to an agreement to deduct the overpayment from his or her future pay, either as a lump sum or spread over a number of months.

c) If the overpaid employee has left the PCT, then all appropriate steps will be taken to recover the money, including reference to the PCT’s debt collectors as a last resort.

d) If, despite all possible action being taken, the debt cannot be recovered, then it will have to be written off. This means that it will have to be charged to the budget for the department where the employee worked.

4.4.5. Bank Staff

a) Bank staff are appointed and set up on the payroll in the same way as for substantive staff.

b) When a member of the bank carries out some work for the PCT he or she must complete a timesheet, which is then authorised by their manager and sent to payroll for processing. For staff that also have a substantive post with the PCT any bank pay arising will be consolidated and paid as one payment. For staff that only have a bank post, payment will be made on a weekly basis.

c) The Finance Department ensures that the bank employee’s salary is charged to the correct budget(s).


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4.4.6. Secondment of Employees to Other Organisations

a) When negotiating the secondment of an employee to another organisation, the financial aspects must be agreed at the outset. Areas to consider are:

Will the employee receive a different salary during the secondment?

Are there any additional amounts payable to the employee, e.g. increased London allowance?

How much will the host pay towards the costs? Is it a fixed percentage of these costs or a fixed amount?

Who will fund the employee’s travel costs, how will these be claimed and who will authorise them? Note that the host should not pay these costs direct to the secondee. For tax purposes, they have to be paid via the PCT’s payroll.

Are there any other costs that will be paid by the host, e.g. mobile phone costs?

b) Once all the details are agreed, the Pay Department should be advised so that they can make the necessary changes to the employee’s pay.

c) The manager responsible for organising the secondment must then advise the Finance Department of the secondment and ask them to raise invoices to the host. Information that needs to be provided is:

The name of the secondee and the host

The starting date and period of the secondment

The agreed financial recharging arrangements

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SECTION 5 - PAYMENTS

5.1. Introduction

5.1.1. The NHS Shared Business Services organisation (SBS) is responsible for paying the majority of the PCT's creditors, who include traders, agencies, healthcare providers, GPs etc. Suppliers are asked to send their invoices direct to SBS in Wakefield. On arrival, invoices are scanned by SBS and an electronic copy is made available via the NHS Net. Emails are then sent out to the person who is responsible for approving the invoice for payment. This person will log onto the Oracle system and electronically ‘sign off’ the invoice. Once the invoice has been validly signed off, it will be paid as soon as it becomes due for payment.

5.1.2. There are also facilities to request payments directly without previous receipt of an invoice.

5.1.3. It is essential that all payments be correctly allocated, i.e. coded, to a specific budget. Budgets and their associated codes are managed by the Finance Department, who advise users of the codes set up for their specific departments and/or areas of responsibility.

5.1.4. There are strict limits on the expenditure that individuals within the PCT can authorise. See the section on Delegation of Powers.

5.2. Scope

5.2.1. This section provides an overview of the key processes required to enable payments to be made. It does not cover the details of how to use the Oracle system. Anyone who requires training should contact the Finance Department.

5.2.2. Payments to GPs under the PMS and GMS arrangements are made by the Primary Care Support Service and not SBS. They are not covered in this guide.


5.3.1. All suppliers should be requested to send their invoices direct to SBS (see paragraph 5.4.3).

5.3.2. All invoices received at SBS are scanned and logged onto the Oracle financial ledger as soon as they are received.

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5.3.3. If the invoice exactly matches a receipted purchase order (see the section on Purchasing Goods and Services), it is paid without any further approval. Otherwise, SBS send out an email to the relevant person asking him or her to approve the invoice for payment.

5.3.4. The person who receives the email can either approve and code the invoice directly on the Oracle system (provided he or she has been given the authority to do this – see paragraph 5.5) or pass it on to someone else to check, code, approve etc.

5.3.5. Once the invoice has been approved and coded it is released for payment, although invoices are not normally paid until the payment run before their due date.

5.3.6. Payments to NHS organisations are made via the PCT’s Paymaster Account. There are two payment runs a month for this – on the 1st and the 15th. Most other payments are made via the BACS system, the remainder being made by manual cheques or payable orders. There is one BACS payment run per week and two payable order runs per week.


5.4.1. All goods and services should be ordered using the PCT’s official ordering procedures (see the section on Purchasing Goods and Services). Once the goods or services have been received, the department concerned should formally ‘receipt’ the order. The SBS will match the supplier’s invoice against the receipted order, and, if all is in order, pay it without further input from the PCT. Any discrepancies are referred to the PCT and the invoice put on hold (i.e. not released for payment) until these are resolved.

5.4.2. There are many invoices (e.g. for the purchase of healthcare) that do not have a matching order. In these cases, the following procedure will be applied:

a) When the invoice is received at SBS it is scanned and logged onto the Oracle financial ledger.

b) SBS then allocate the invoice to a specific PCT user of the system. This could be the budget holder (if known to SBS), the person who is named on the invoice, or a named person in the Finance Department. If SBS do not know whom the invoice should be allocated to, they allocate it to a ‘super user’ in the Finance Department.

c) Users should log onto the Oracle system regularly, where they will be able to view scanned copies of the invoices that are currently awaiting action by them. For each invoice, he or she has various options, including:

Code the invoice and approve it for payment


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Code the invoice and forward it to someone else to approve for payment

Approve the invoice and forward it to someone else to code

Put the invoice on hold while a dispute is resolved (see paragraph 5.6)

Pass the invoice back to SBS with a comment, e.g. that it is a duplicate of an invoice that has already been paid, that it does not relate to Sutton and Merton PCT, it has been set up against the wrong supplier, etc.

d) Once the invoice is forwarded to someone else then that person becomes the ‘owner’ of the invoice and is responsible for progressing it.

e) SBS send out daily emails advising people of the invoices that they currently own. If, after fourteen days, that person has not actioned the invoice, it is automatically escalated (i.e. forwarded to) his or her line manager. This does not apply if the invoice has been put on hold.

f) The ‘super users’ in the Finance Department are responsible for managing the progress of invoices around the PCT. They can, for example, reallocate invoices that have been allocated to the wrong person, or return an invoice to SBS if there appears to be an error on it. They cannot approve invoices for payment. This is the responsibility of the budget holder, or other person nominated to approve invoices for payment.

g) Once the invoice has received a valid code and has been approved, it will be transferred to the Oracle financial ledger. At this stage, it is charged as an expense against the relevant budget.

h) The supplier will be paid in the next available payment run or, if it is not yet due for payment, in the payment run immediately before it becomes due for payment.

5.4.3. All suppliers should be requested to send their invoices direct to the following address:

Sutton and Merton PCT 5M7 PAYABLES 4625 PHOENIX HOUSE TOPCLIFFE LANE WAKEFIELD WEST YORKSHIRE WF3 1WE


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5.4.4. However, there will be instances where a PCT manager receives invoices direct. In these cases, the manager should immediately forward the invoice to the above address, ensuring that it is clearly labelled “5M7 PAYABLES 4625”. It will then be scanned and processed through the system in the same way as invoices sent direct to the Wakefield address. At the same time, the supplier should be informed of the correct address for invoices.

5.4.5. Alternatively, if suppliers persist in using the wrong address, invoices can be returned to them with a letter advising them of the address that they should be using. This will delay payment, and is sometimes the only way to get suppliers to use the correct address.

5.4.6. In cases where payments need to be made without a supplier’s invoice being received, an on-line payment request has to be completed. Employees who regularly need to request these payments can be authorised to request them. If this facility is required, please contact the Finance Department. Otherwise, a member of the Finance Department can complete the request. Note that the originator cannot approve the payment request, and must therefore forward it to someone else for this. The originator must ensure that he or she retains documentation to support the payment, as this is required for audit purposes.

5.4.7. Points to note when approving payments are:

a) It is your responsibility to check that:

The goods or services have been received and are satisfactory.

The supplier has not previously invoiced for the goods or services.

The amount is correct.

b) Once the invoice has been approved, SBS cannot accept any responsibility for checking these. Likewise, SBS cannot accept responsibility if a manager makes two requests for the same payment. It is managers’ responsibility to ensure that they maintain adequate records so that they know what invoices and payment requests they have approved.

c) Invoices will only be paid if they are addressed to the PCT. Invoices addressed to, for example, a GP will not be paid, even if the PCT has agreed to fund the expenditure. In this case, the GP should pay the invoice directly and then send a separate invoice to the PCT to obtain reimbursement.

d) Managers should never promise a supplier or creditor that they will be paid by a certain date. The actual date of a payment will depend on how quickly it can be processed and when the next payment run is.


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e) Where a supplier sends a lot of individual invoices for similar events, e.g. for catering supplies, managers might like to contact the supplier and arrange a different invoicing structure, for example to receive monthly invoices. This would reduce the workload significantly. However, it is essential to ensure that there is a mechanism in place to get the invoices approved promptly. For example, if an invoice covered fifteen different events that needed to be approved by fifteen different people, it would be too unwieldy. In this event, it might be possible to agree that one specific person would take responsibility for approving the invoice and split coding it to the different budgets.

f) All NHS bodies are required to pay their creditors in accordance with the Better Payment Practice Code. The target under this code is to all creditors within 30 days of receipt of goods or a valid invoice (whichever is the later) unless other payment terms have been agreed with the supplier. If this code is not adhered to, the creditor is entitled to charge interest on the unpaid amount at base rate + 8%, plus up to £100 for the time spent chasing the unpaid bill. In order to meet the 30 days target, you should aim to have all invoices coded and approved no more than 21 days after receipt. If this deadline is not met, then any amounts charged to the PCT as a result of late payment would be charged to the same budget as the invoice. Compliance against the target is monitored and has to be reported to the Department of Health.

g) The rules as to whether or not VAT is recoverable are complex. Where VAT is recoverable, SBS will recover it from HM Customs & Excise and only the net cost of the goods or services will be charged to the budget. If VAT is not recoverable, then the full cost, including the irrecoverable VAT, will be charged to the budget.

5.5. Who Can Code And Approve Invoices For Payment?

5.5.1. The only people who can code and approve invoices for payment are those who have specifically been authorised as “Non-PO invoice approvers”.

5.5.2. Each Non-PO invoice approver has an approval limit and can only approve invoices up to this limit.

5.5.3. A person who is authorised to review and code, but not approve, invoices has an approval limit of zero.


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5.5.4. It is not essential for the person who ultimately approves an invoice to do the detailed checking on it. For example, the PCT might receive an invoice from the London Borough of Sutton for £500,000 covering many special placements per an attached schedule. The value of the invoice means that it will have to be approved by a Director or other senior person in the PCT. However, the invoice can initially be allocated to a more junior person so that he or she carries out the detailed checking and coding. Once the invoice has been checked and coded, it can be forwarded to the Director with a message that it is correct and can be paid. All the Director then needs to do is satisfy him or herself that all appropriate checks have been carried out and then formally approve it for payment.

5.5.5. Contact the Finance Department if someone needs to be set up as a Non-PO invoice approver.

5.6. Management Of Disputes

5.6.1. The PCT (not SBS) is responsible for the resolution of disputes arising on its invoices. SBS can only handle straightforward disputes, e.g. where it is clear that an invoice has already been paid.

5.6.2. Invoices that are disputed should be put on hold on Oracle (not returned to SBS – see below). A brief reason for the dispute should be entered in the pop-up box when this is done. This is helpful if the supplier queries why the invoice has not been paid.

5.6.3. Where an invoice is disputed it is essential that a named person in the PCT takes ownership of it and identifies a clear reason for the dispute, e.g. the goods were not of the required standard, the provider has not provided data to support its charge for overperformance, etc.

5.6.4. The person who ‘owns’ the dispute should take whatever action is necessary to get it resolved, including obtaining a credit note from the supplier if the invoice is not going to be paid in full.

5.6.5. All disputes must be resolved promptly.

5.7. When To Return Invoices To SBS

5.7.1. If an invoice has been raised incorrectly by a supplier there is a temptation to click the “Return to SSC” box when dealing with it. This is not the correct way to deal with invoices that the supplier has raised incorrectly.

5.7.2. Invoices should only be returned to SBS in the following circumstances:

The invoice was issued to someone other than Sutton and Merton PCT, but somehow got put into the PCT’s workflow.


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The invoice is clearly in the workflow twice, under two different, but similar, references, e.g. 000123 and A000123.

The invoice is addressed to Sutton and Merton PCT invoice, but has been scanned onto an incorrect supplier account (e.g. an invoice issued by Hereford PCT has been scanned onto the system as owing to Hereford Hospitals NHS Trust).

5.7.3. If a supplier has issued two separate invoices for the same charge, then the duplicate one should not be returned to SBS. The correct action is to:

Put the duplicate invoice on hold.

Advise the supplier that there is a duplicate invoice and ask for a credit note.

When the credit note arrives in your workflow, approve both the duplicate invoice and the credit note at the same time. One will offset the other, resulting in no charge to your budget and no payment to the supplier.

5.8. How To Deal With Credit Notes

5.8.1. When a supplier issues a credit note this must be coded and approved in the same way as invoices are approved.

5.8.2. However, when approving a credit note, you must ensure that the invoice it offsets (if there is one) is approved at the same time. There is a pop-up box on Oracle to remind you of this. Please don’t ignore it!

5.8.3. If you don’t approve the invoice at the same time, the credit note will result in an incorrect reduction in the amount paid to the supplier.

5.9. When Negotiating With A New Supplier

5.9.1. New suppliers of goods and services can only be established by the Supplies Department.

5.9.2. However, managers will sometimes need to establish new suppliers when, for example, negotiating for the provision of healthcare, where the Supplies Department are not involved.

5.9.3. When negotiating with a new supplier, managers should never agree to payment terms less than 30 days. The PCT’s payment processes are such that there is no guarantee that any shorter timescale can be met.


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5.9.4. The PCT is unable to make payments by standing order or direct debit. All payments are made via the payment facilities provided by SBS. Remember to advise new suppliers of the address where they should send their invoices (see paragraph 5.4.3 in this section).

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SECTION 6 - COLLECTION OF INCOME

6.1. Introduction

The NHS Shared Business Services organisation (SBS) raises invoices for the collection of income from the PCT's debtors, who include other NHS organisations, employees, local authorities, GPs, etc. However, it is the responsibility of PCT staff to request the invoices. This is done on-line. Staff within SBS monitor receipts against these invoices, taking appropriate steps to recover unpaid debts.

6.2. Scope

This section provides an overview of the key processes required to enable income to be collected. It does not cover the details of how to use the Oracle system. Anyone who requires training should contact the Finance Department.

6.3. Summary Of Procedures

6.3.1. The Accounts Receivable function of SBS is notified electronically via the Oracle system of all amounts that are owing to the PCT. This function is responsible for raising invoices to collect these amounts and taking whatever steps are necessary to ensure that the amount due to the PCT is recovered.

6.3.2. If there are any queries from the debtor regarding the amount due, or difficulty in recovering the debt, it will be necessary for SBS to refer back to the Manager who initiated it.


6.4.1. Collection of income is the responsibility of the department that is entitled to the income. Although the Finance Department will oversee this, they are not responsible for identifying the income in the first place, nor for requesting that invoices be raised.

6.4.2. Any manager who identifies that the PCT is entitled to receive income from another person or organisation, needs to raise an on-line invoice request via the Oracle system. Only people who have been given this responsibility within the system may request invoices. If you need to be given this authority, or need training in how to request invoices, please contact the Finance Department.

6.4.3. In no circumstances should any PCT staff raise their own invoices, or request that payment be made direct to the PCT. All requests for payment must be made via official invoices issued directly to the debtor by SBS. If correspondence needs to be attached to the invoice, an electronic version of the supporting correspondence should be processed with the request to raise the invoice. Alternatively, the documentation can be sent direct to the debtor with a note that SBS have been asked to raise the invoice.

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6.4.4. Wherever necessary, VAT will be added to the amount invoiced. This VAT will not show on the budget, but will be paid over to HM Revenue and Customs directly. The rules regarding VAT are complex, and are managed by SBS. If SBS have insufficient information regarding whether VAT should be applied or not, they may need to refer to the person who requested the invoice for further information as to the nature of the income.

6.4.5. If SBS have difficulty recovering the amount from the debtor, they may need to refer to the person who requested the invoice for assistance. If it then turns out that the invoice is incorrect, or should not have been raised in the first place, then the originator should request a credit note. This is done electronically using the Oracle system and training can be provided if necessary.

6.4.6. Credit notes or refunds to debtors will never be initiated by SBS, as its officers are not authorised signatories.

6.4.7. In exceptional circumstances it may be necessary to refer an outstanding debt to a debt-collecting agency or, in extreme cases, write it off. This option will only be used if all other means of collecting the debt have failed. Whenever a debt is written off it will be charged back to the budget to which it was originally credited. In addition, the PCT’s losses procedures will need to be invoked. These are covered in greater detail in the section on losses.

6.4.8. Note that amounts owed by other NHS organisations (but not NHS Foundation Trusts) cannot be referred to debt collectors, and cannot be formally written off. Any disputes must be resolved by negotiation between the two parties. If it is agreed that the amount will not be paid, then a credit note must be issued to cancel it. If agreement cannot be achieved by negotiation, then referral should be made to the Strategic Health Authority. They will, however, view this as a failure on the part of both organisations.

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SECTION 7 - CASH AND BANKING

7.1. Introduction

The PCT’s standing financial instructions stipulate that the PCT’s Board shall approve the banking arrangements and that the Director of Finance is responsible for managing these. For these reasons the cashiering function is centralised in the Finance Department.

7.2. Scope

7.2.1. The NHS Shared Business Services (SBS), with support from the in-house Finance Department, handle the main cash and banking for the PCT. Unless so authorised by the Finance Department, no outside departments should normally deal with any cash or banking issues.

7.2.2. This procedure therefore just sets out the key issues around cashiering that managers need to be aware of.

7.2.3. Separate procedures exist for:

Petty cash

Cash handling

Charitable Funds.

7.3. Key Issues

7.3.1. No employee of the PCT, other than the Director of Finance, can authorise the opening of any bank account in the PCT’s name.

7.3.2. See the section on Cash Handling for information on what to do with any monies received.

7.3.3. There will be times when an organisation wishes to credit money directly into a PCT’s bank account (e.g. when the PCT has been awarded a grant). In these circumstances, the payer should be asked to contact the Finance Department to get the relevant bank details. It would also be helpful for the manager to inform the Finance Department that the money is expected, and what it is for. This will assist in ensuring that the money is credited to the correct budget.

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SECTION 8 - CASH HANDLING

8.1. Introduction

The purpose of this section is to inform staff as to the correct procedure for the acceptance, receipting and storing of cash and cheques prior to transfer to the PCT’s cashier.

The Cashier at Orchard Hill carries out the PCT’s main cashiering function. However, there are other locations where it is necessary to have the facility to receive cash and cheques. Provided it is agreed by the Finance Department, arrangements can be made for these locations to document and bank their own receipts.

8.2. Scope

8.2.1. This section sets out the general procedures to be applied when cash and receipts are received at locations outside of the Finance Department. It does not cover the procedures applied by departments that have their own banking arrangements. These departments agree their procedures directly with the Finance Department.

8.2.2. Separate procedures are available for

Petty cash

Charitable funds

Therefore, these areas are not covered in detail here.


8.3.1. Certain authorised sites within the PCT have the facility to accept and bank receipts. Cash and cheques should not normally be received at PCT sites that do not have this facility. If a department has a source of money for which it requires banking arrangements, either temporarily or permanently, then the Finance Department should be consulted.

8.3.2. There will, however, be rare occasions when cash or cheques are received in other departments. These should be taken intact to the Cashier at Orchard Hill or the Finance Department at The Nelson as soon as possible. Place the cash or cheques in an envelope with a covering note explaining what they are for. If known, the budget code to which the receipt is to be credited to should be given. Cash receipts should never be used to fund expenditure or to cash cheques for anyone.

8.3.3. When accepting cash from a third party, be it a company or an individual (including cash in respect of patients’ monies), the following steps should be taken:

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Always count the cash in the presence of the individual passing it to you. If possible, ensure that you have a work colleague present.

When the cash has been counted, record, preferably on PCT headed notepaper, the amount received, the date, your signature, your name (in block letters) and the nature of the receipt. This should take the form of “Received £… from … on …. in respect of ……….”. If you have a colleague with you, ensure that he or she countersigns this.

Take a copy and give it to the cash giver as a receipt.

As soon as possible, pass the cash and the copy of the receipt to a person who has formal receipting arrangements (for example, the cashier at Orchard Hill). This person will count the cash in your presence and give you a formal receipt for it. If it is not possible to pass the cash over immediately, then it should be stored in a safe location (for example a locked drawer) in an area to which the public and patients do not have access.

8.3.4. A similar procedure should be followed for cheque receipts. Ensure that

The cheque is made payable to the PCT.

The cheque is not post-dated (or more than six months old)

The cheque is signed

The amount in words agrees with the amount in figures

8.3.5. All cash and cheques should be passed to the PCT’s cashier intact. Cash should never be used to fund expenditure, nor to cash cheques for anyone.

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SECTION 9 - FIXED ASSETS AND CAPITAL EXPENDITURE

9.1. Introduction

9.1.1. Fixed assets are defined, briefly, as assets that are held for use in connection with the PCT’s business. They generally have a life of more than a year. They can be tangible or intangible. Examples of tangible fixed assets are land, buildings, vehicles, medical equipment and IT equipment. An example of an intangible fixed asset is a piece of computer software.

9.1.2. The PCT’s fixed assets are recorded in its asset register. The minimum threshold for an asset to be recorded in the asset register is £5,000. However, a group of lower valued, inter-dependent, assets (e.g. a computer network) that collectively have a value of £5,000 or more are included in the asset register.

9.1.3. Expenditure on fixed assets that qualify for inclusion in the asset register is described as “capital expenditure” and is accounted for separately from normal expenditure. In particular, it is not charged against the department’s normal budget. For example, the purchase of a photocopier for £6,500 would be classified as capital expenditure and would therefore not be charged against the photocopying budget.

9.1.4. Every year the PCT is given a capital budget (formally known as the capital resource limit). All capital expenditure counts against this budget. The budget is divided into individual schemes, each of which has a designated manager. The overall management of the capital budget is the responsibility of the PCT’s Director of Finance.

9.1.5. The maintenance of the PCT’s asset register and monitoring of its capital expenditure is carried out by the Finance Department.

9.1.6. In addition to “bought” assets, the PCT could have fixed assets that have been donated to it, for example by the League of Friends. These assets have to be recorded in the asset register, but the cost of them (other than, possibly, running costs) is not borne by the PCT. Donated assets include assets purchased out of the PCT’s Charitable Funds.

9.2. Scope

9.2.1. The rules around fixed assets and capital expenditure in the NHS are set out in the Capital Accounting Manual, which is issued by the Department of Health.

9.2.2. This section sets out the aspects of these rules that non-finance managers need to be aware of. Further advice can be obtained from the Finance Department.

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9.2.3. The normal procedures regarding the requisitioning of goods and services apply to capital expenditure in the same way as they apply to revenue expenditure. As the amounts of expenditure tend to be higher, particular care must be taken to ensure that wherever necessary appropriate quotes and tenders are obtained. Advice from the Supplies Department should be obtained.


9.3.1. Asset Register

a) The PCT’s asset register is maintained by the Finance Department. The register shows the name of the manager who has responsibility for the asset.

b) In order to keep the register accurately, the Finance Department needs to be aware of all changes to the PCT’s fixed assets, including changes in donated assets. Examples are the donation of a vehicle by the League of Friends, or the scrapping of a piece of medical equipment.

c) The Finance Department scrutinise all payments made by the PCT to identify any expenditure that should be classified as capital. When they identify any, they will contact the relevant budget holder to obtain details and then update the asset register.

d) However, this does not pick up any new donated assets. Any manager who acquires a major piece of equipment by donation should therefore contact the Finance Department to advise them of the donation. The Finance Department will ask for the relevant details and then update the register.

e) From time to time, and at least once a year, the Finance Department send out details of the assets listed in the asset register to the responsible managers. The managers are required to check that they still have the assets and then confirm this to the Finance Department. If any assets are no longer held, then the manager will be asked to provide details of the disposal, including any sale proceeds, so that the records can be updated.

f) The Finance Department use the information in the PCT’s asset register to account for its fixed assets. Both the register and the accounts are subject to audit. It is therefore important that the register is accurately maintained.

9.3.2. Capital Expenditure

a) As stated above, the PCT has a budget for capital expenditure. All expenditure charged to this budget is reviewed by the Finance Department on behalf of the PCT. If it appears that the expenditure does not meet the definition of capital as set out in the NHS Capital Accounting Manual then the expenditure will be transferred to a revenue budget.


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b) As well as this, the Finance Department review expenditure that is charged to revenue budgets. Where an item that appears to meet the definition of capital as set out in the NHS Capital Accounting Manual is identified, the relevant budget holder will be contacted so that further details can be obtained. If, as a result of this, it is clear that the expenditure has to be treated as capital, then it will be transferred into the capital budget. It is possible that the budget will also be transferred. The PCT’s management accounting team will arrange this if necessary.

9.3.3. Definition of Capital

a) The definition of capital that is used in the NHS is quite complex and the following is just a brief summary. If further information is required, reference must be made to the Finance Department.

b) All capital expenditure must result in the acquisition of an asset, either tangible or intangible, that has an expected life of more than one year.

c) Expenditure below £5,000 does not count as capital unless it relates to the acquisition of a “grouped” asset or is an enhancement to an existing asset, such as new, improved, windows.

d) A grouped asset represents a collection of individual assets that together form a single collective asset because the items fulfil the following criteria:

The items are functionally interdependent; and

The items are acquired at about the same date and are planned for disposal at about the same date; and

The items are under single managerial control; and

Each individual grouped asset has a value of over £250

e) A specific example of a grouped asset is the PCT’s computer network. Any piece of IT equipment that is attached to the network is considered to be functionally interdependent, despite the fact that it is capable of stand-alone use. This means that effectively all IT equipment purchases that meet the criteria set out in d) above must be treated as capital.

f) Another example of a grouped asset is the purchase of assets to set up a new building or refurbish an existing building.

9.3.4. Disposals and Condemnations

a) When it is decided to dispose of an asset owned by the PCT, the head of department should ascertain the estimated market value of that asset, taking account of professional advice where appropriate.


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b) If the estimated market value is in excess of £500 then the Supplies Department should be consulted regarding the obtaining of competitive quotes or tenders and formally approving the disposal.

c) Once the asset has been sold, the Finance Department should be advised. They will be responsible for:

Ensuring the sale proceeds are received

Removing the asset from the PCT’s asset register.

d) If an asset becomes unserviceable reference should be made to the PCT’s policy on condemning and disposal of assets. If an asset has to be scrapped, the Finance Department should be advised so that they can remove it from the PCT’s asset register.

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SECTION 10 - COMPENSATION PAYMENTS

10.1. Introduction

10.1.1. There are times when a member of staff, patient or third party believes they have a claim against the PCT and will seek compensation. When this occurs, the manager involved needs to be aware of and follow the PCT’s procedure.

10.1.2. Once made, all compensation payments need to be put into the PCT’s losses and compensations register. This is administered by the Finance Department.

10.2. Scope

10.2.1. This section sets out the procedure that managers need to follow whenever they receive a request for compensation.

10.2.2. There is a separate procedure on losses covering the management of the ‘loss’ aspect of the payment.


10.3.1. Whenever a patient, member of staff or member of the public wishes to claim compensation payments for loss or damage to personal effects, the claim is carefully considered by PCT management. If appropriate payment is approved.

10.3.2. Once payment has been approved, the claimant is asked to sign an indemnity form before the payment is made.

10.3.3. Compensation payments made under legal obligation are negotiated on the PCT’s behalf by their legal advisors.

SECTION 10 - 12BCOMPENSATION PAYMENTS

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10.4.1. The relevant Service Manager should carefully consider all claims for compensation by patients, staff and members of the public. If it is considered that an ex gratia payment is appropriate, then this should be formally approved as follows:

Amount of Payment Approved by

Up to £99.99 Service Manager

Between £100 and £499.99

Executive Director

Between £500 and £999.99

Executive Director or Director of Finance

Between £1,000 and £50,000

Chief Executive or Director of Finance

Over £50,000 PCT Board

10.4.2. If fraud is suspected, the manager should immediately notify the Local Counter Fraud Specialist, who will advise on further action.

10.4.3. Upon receipt of authority to offer an ex-gratia payment, the manager should write to the claimant offering this. He/she should ask the claimant to sign and return an Indemnity Form.

SAMPLE INDEMNITY FORM:

I agree to accept the sum of £............. as full and final settlement of any claim I may have against Sutton and Merton Primary Care Trust in respect of .............

I am not receiving compensation for this from any other source.

.......................................... SIGNATURE

........................................... DATE

10.4.4. When the signed Indemnity Form is received, the manager should write to the claimant advising him/her that arrangements have been made for a cheque to be sent under separate cover.

10.4.5. The manager should send a Losses Form (see section on Losses) and all supporting documentation to the Finance Department together with a covering letter asking for a cheque to be sent to the claimant.

10.4.6. The Finance Department will acknowledge receipt of the Losses Form and arrange for a cheque to be sent to the claimant.


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10.4.7. Meanwhile, the manager should ensure that all necessary enquiries to discover the cause of the loss are carried out and that any necessary action is taken to prevent a recurrence.

10.4.8. Compensation payments made under legal obligation may only be made after receipt of a letter of authorisation from the PCT’s legal representatives.

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SECTION 11 - LOSSES

This procedure complements the PCT's Incident Reporting Procedure which should also be followed whenever necessary.

11.1. Introduction

11.1.1. Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments, and special notation in the accounts to draw them to the attention of Parliament.

11.1.2. These control procedures require that all ‘losses’ to the service (including compensation payments made) are recorded, investigated and formally written off. The write off process is designed to ensure that the circumstances surrounding the loss and any lessons that can be learned from it are considered at a senior level within the organisation.

11.1.3. Accordingly, all losses and compensations have to be recorded in the ‘Losses and Compensations Register’ and then formally written off.

11.2. Scope

11.2.1. This section sets out the information that managers need to know regarding the recording and write off of losses. It does not extend to the procedures applied within the Finance Department, which include the process for obtaining formal write off of losses.

11.2.2. There is a separate procedure available for compensation payments.


11.3.1. The PCT’s losses and compensations register is maintained by the Finance Department.

11.3.2. PCT managers notify the Finance Department when they discover a loss. The PCT then ensure it is properly recorded, investigated and formally written off.

SECTION 11 - 13BLOSSES

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11.4. Definition Of A Loss

11.4.1. Any incidents which result in losses to the PCT are considered to be "losses". A loss to the PCT can result from a patient or staff making a claim against it, from PCT property being damaged or stolen, or from accounting procedures, e.g. overpayment of salaries or bad debts. Payments made as a result of a loss are charged to the relevant budget unless insurance compensation has been received. If fraud is suspected, the manager should immediately notify the Local Counter Fraud Specialist, who will advise on further action.

11.4.2. Whenever any other matter arises which involves, or is thought to involve, irregularities concerning cash, stores or other property or any suspected irregularity in the exercise of any function of a pecuniary nature, the Director of Finance must be notified immediately.

11.4.3. Incidents resulting in a loss or damage of patient or staff personal effects, where no claim is made against the PCT are NOT losses. They do not need to be recorded. Where theft is suspected, the patient or staff member concerned should be advised to report the matter to the police. It is also advisable to contact the Security Co-ordinator.


11.5.1. Any employee suspecting or discovering damage to the PCT's property or loss of the PCT's property or cash should report this to his or her departmental head.

11.5.2. The departmental head should decide whether the incident requires further investigation and whether it should be reported as a loss.

11.5.3. A Losses Form (see attached) should then be completed and signed by the departmental head. If the extent of the loss cannot be ascertained at this stage, an estimate should be made.

11.5.4. If fraud is suspected, a copy of the Losses Form should be sent immediately to the Local Counter Fraud Specialist, who will take full responsibility for investigating and reporting the case.

11.5.5. The relevant departmental head should ensure that all necessary enquiries to discover the cause of the loss are carried out and that any appropriate action is taken to prevent recurrence.

11.5.6. If there is a likelihood of submitting an insurance claim, the Finance Department should be notified as soon as possible.


11.5.7. If an estimate has been made of the extent of the loss, the department head should endeavour to ascertain the exact loss and notify the Finance Department as soon as it is known.

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11.5.8. The department head should send the original Losses Form and, wherever possible, supporting documentation to the Finance Department.

11.5.9. The Finance Department will acknowledge receipt of the Losses Form and record the loss in the Register for Losses and Compensations.

11.5.10. If the loss exceeds £1,000, it will be necessary for the department head to complete a checklist. The purpose of this is to ascertain the likely cause of the loss, ensure that any recoveries against it have been made and consider whether there are any lessons that can be learned. The Finance Department will send out the checklist, which should be completed and returned as soon as possible.

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LOSSES FORM

Department in which loss arose…………………………………………………..

Date of loss……………………………………..

Brief details (Including the cause of the loss)

Amount (estimated if exact amount cannot be ascertained): £………………………

Has a claim been made against the PCT’s insurance policy? Yes/No

Certified correct:

……………………………………………….. (Head of department)

………………………………………………… Name

……………………………………….. Date

Please attach all supporting documentation, including any internal reports relating to the loss and send to:

Finance Department Hamilton Wing Nelson Hospital Kingston Road Raynes Park SW20 8DB

FOR FINANCE DEPARTMENT USE ONLY:

L&C ref Date received Acknowledged Submitted for write off

Written off


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SECTION 12 - PETTY CASH

12.1. Introduction

12.1.1. Authorised officers hold petty cash floats for the purposes of making small purchases, payments to staff for the reimbursement of “out of pocket” expenses incurred or for the reimbursement to patients of monies held in safe custody. They are held at various locations within the PCT. The limit on individual petty cash payments is £25. If more than this needs to be paid, it should be done using the PCT’s normal payment facilities (see the Payments section).

12.1.2. The Finance Department has overall responsibility for managing these petty cash floats and for recording the expenditure in the PCT’s accounting records.

12.2. Scope

12.2.1. This section provides an overview of the paper flows and the key internal controls required to meet the objectives set out above.


12.3.1. Any department that has a need to hold a petty cash float should formally apply to the Finance Department for one.

12.3.2. All petty cash floats are operated on the imprest system, as set out in paragraph (b) below.

12.3.3. Persons who hold petty cash for the PCT are required to keep their cash float in a secure place and send regular returns to the PCT’s Cashier listing what has been spent out of this.

12.3.4. As well as giving details of the cash spent, these returns act as a request for reimbursement of cash.

12.3.5. Most petty cash is reimbursed from the main petty cash float held by the Cashier at Orchard Hill.

12.3.6. If it is not possible for the float to be reimbursed by the Cashier, arrangements can be made to raise cash cheques that are sent to the cash holder, who cashes them at the nominated branch of the PCT’s bank.

12.3.7. The Finance Department ensure that petty cash payments are recorded in the PCT’s financial records.

SECTION 12 - 14BPETTY CASH

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12.4. Detailed Procedures

12.4.1. Petty Cash - Introduction

a) A petty cash float is a sum of money held by a unit or department to disburse small items of expenditure. The levels of expenditure determine the size of the float. No individual payments from the petty cash should exceed £25.00, except with the express authority of the Head of Financial Accounting.

b) All petty cash floats within the PCT operate on the imprest system. The principle of this system is that reimbursements exactly match expenditure which has been incurred so that, at all times, the amount of cash in hand plus vouchers not yet reimbursed add up to the amount of the petty cash float.

12.4.2. Procedure for Setting up a Petty Cash Imprest Float

a) A unit requiring their own petty cash should wherever possible arrange to have a sub-float from an existing petty cash float (see paragraph 12.4.3 below). Normally this would be a sub-float from the petty cash float held at Orchard Hill.

b) If, however, this is not possible, a "Request for Petty Cash Imprest" form (obtainable from the Finance Department) should be completed.

c) Once the float has been approved the Finance Department will issue the petty cash holder with a copy of the petty cash procedure, a supply of petty cash sheets and the petty cash float itself. The Finance Department will explain the procedure to the petty cash holder, any relief petty cash holder and the person in charge of certifying the petty cash expenditure forms, explaining in particular the reimbursement procedure. They will also assist with any further training requirements.

12.4.3. Procedure for Establishing Sub-Floats

a) When it becomes necessary at a hospital or other unit for a sub-float to be established in a particular department, the petty cash holder should complete a "Request for petty cash sub-float" form (obtainable from the Finance Department) and forward it to the Finance Department for approval.

b) Where the request is approved, the petty cash holder will be notified and they should then issue the relevant sum to the sub-float holder and complete a petty cash voucher, which is signed by the petty cash holder and the sub-float holder.

c) This petty cash voucher is then held as an IOU by the petty cash holder as part of the main petty cash float.


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d) From time to time the sub-float holder will need to be reimbursed for the cash that has been used. He or she should submit the vouchers to the main float holder who will then pass over cash to the exact amount of the vouchers. The vouchers then form part of the main petty cash float, and the sub float is back up to the amount shown on the IOU.

e) It should be noted that, at any time, the amount of cash in the sub-float’s petty cash box, plus the value of the vouchers that have not yet been reimbursed, should equal the amount of the sub-float, as per the IOU. This should be checked at least once a month, and more regularly if the usage is significant.

12.4.4. Procedure for Increasing Petty Cash Floats and Sub-Floats

a) Where a petty cash holder or sub-float holder feels that his/her float is not sufficient for the needs of the department or unit, he/she may apply for to the Finance Department for an increase. Once this approval has been given, the Finance Department or, in the case of a sub-float, the main petty cash holder will arrange for the cash to be supplied.

12.4.5. Issue of Petty Cash

a) The petty cash holder must ensure that all requests for petty cash are supported by a petty cash voucher or other approved document bearing the signature of the claimant and of the budget holder (or his / her representative). All appropriate receipts should be attached to the voucher and the appropriate expenditure code noted.

b) The float holder should ensure that individual claims do not exceed £25.00, except by prior permission of the Financial Controller. If this permission has been granted, evidence should be attached to the voucher.

c) Expenditure over £25 should not be broken down so as to circumvent the £25 limit.

d) In no circumstances should petty cash be loaned to anyone (other than approved sub-floats) and it should never be used to cash cheques for anyone.

e) Petty cash should never be used to reimburse employees for travel and subsistence expenses. These must be claimed through the correct procedure and are reimbursed via the payroll. See the separate section on travel and subsistence.

12.4.6. Reimbursement out of Cash Receipts

a) Unless expressly authorised by the Finance Department, all cash receipts should be banked intact (see separate procedure) and not used for the reimbursement of petty cash floats.


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b) Where reimbursement out of cash receipts has been agreed, the cashiers at the Finance Department will advise the petty cash holder how to do this.

12.4.7. General Procedure for Petty Cash Holders

a) It is the responsibility of the petty cash holders to ensure that their float is kept in a lockable cash box and that the box is kept in a safe, if possible, or otherwise in a lockable cupboard or drawer away from areas open to the public.

b) The keys to both the cash box and the safe (or lockable cupboard or drawer) and no more than one duplicate should be kept on the person of the float holder and his / her nominated deputy at all times, including night and weekend periods.

c) At all times, the following should add up to the petty cash float: -

Actual cash in hand

Petty cash vouchers for which reimbursement has not yet been claimed

Reimbursement claims made to the Cashiers but not yet received

IOUs in respect of sub-floats

d) This should always be checked when reimbursement is applied for. It is recommended that, where reimbursement takes place at more than weekly intervals, the check takes place each week.

e) Whenever responsibility for a petty cash float is handed over from one person to another (e.g. when the holder goes on annual leave) the cash should be balanced up. The balancing, noting the amounts of both cash and vouchers, should be documented and signed by both people.

f) If at any time the float holder becomes aware that the balance of cash is incorrect, either surplus or deficit, then this must be reported immediately to the Finance Department.

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SECTION 13 - TRAVEL AND SUBSISTENCE

13.1. Introduction

13.1.1. Employees of the PCT are entitled to reclaim the costs incurred by them on travel in connection with the PCT's business, or, in certain circumstances, for attendance at an approved training course. This includes reimbursement for using their own transport, public transport fares and incidental expenses such as parking costs.

13.1.2. If the employee is required to be away for a full day or more, then subsistence costs and the costs of overnight accommodation can be reclaimed. Refer to the Agenda for Change Terms and Conditions of Service handbook for details.

13.1.3. The Pay Services department processes travel and subsistence claims and amounts due to employees are paid with their weekly or monthly pay.

13.2. Objectives

13.2.1. The objectives of the travel and subsistence system are:

To enable PCT employees to recover the costs of travel and subsistence incurred in the course of the PCT’s business.

Management information in respect of travel and subsistence costs is accurate, timely and adequate.

HM Revenue and Customs requirements met.

Adequate segregation of duties to minimise the possibility of fraud or error.

13.2.2. This procedure sets out the processes that need to be followed to achieve these objectives.


13.3.1. This section provides an overview of the arrangements in place within the PCT and what employees and managers need to be aware of. It does not extend to the arrangements for employees who have a lease car from the PCT or for excess travel that is payable as a result of the change of an employee’s base.

SECTION 13 - 15BTRAVEL AND SUBSISTENCE

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13.3.2. The rates quoted in this section relate to the vast majority of PCT employees. There are, however, different rates for doctors. These can be obtained on request from Pay Services department.

13.3.3. For more details refer to the Agenda for Change Terms and Conditions of Service handbook.


13.4.1. Any employee who is required to use his or her own private motor vehicle for travelling on the PCT’s business should be set up as a regular or standard user in accordance with the Agenda for Change Terms and Conditions of Service handbook. This stipulates the mileage rates that are to be used. The rates that applied at the time of writing are shown at Appendix 1 to this section.

13.4.2. Employees can also obtain reimbursement for the use of a pedal cycle when travelling on the PCT’s business. There is no need to be set up as a regular or standard user to claim this.

13.4.3. In order to obtain reimbursement for travel and subsistence costs incurred, PCT employees should complete one of the PCT’s official travel claim forms. These are available direct from the Pay Services Department. They should then ask their line manager (or other agreed authorising officer) to authorise it. A copy of the authorised claim should be taken and retained by the employee for information. The original form should then be passed to the person who completes the pay book for the department. Details from the form are then entered on the positive reporting sheet. The claim form is sent to Pay Services with the pay book. Pay services check the claim and then reimburse the amount due to the employee via the payroll. The original form is returned with the pay book.


13.5.1. Set up of Authorised Car Users

a) Any employee who is required to use their motor vehicle in connection with their employment at the PCT can apply to be set up as an authorised car user.

b) If it is known that the employee will need to be an authorised car user, this is included on the Staff Joining Form. If it is decided at a later date that an employee needs to be an authorised car user a ‘Change of Staff Details’ form should be completed.


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c) The budget holder / manager will decide, in conjunction with the employee, whether he or she should be a regular user or a standard user. To be a regular user, the employee must meet one of the following criteria:

Travels an average 3,500 miles a year, or

Travels an average 1,250 miles a year and necessarily uses his or her car an average of 3 days a week or spends an average of at least 50% of his/her time on such travel, including the duties performed during such visits, or

Travels an average 1,000 miles a year and necessarily spends an average of 4 days per week on such travel, including the duties performed during such visits

d) Regular users receive a monthly lump sum and a mileage rate. Standard users just receive a mileage rate, but this is higher than the one paid to regular users.

e) The rates paid depend on the cc of the motor vehicle and are laid down in the Agenda for Change Terms and Conditions of Service handbook. It is therefore important to ensure that the cc of the motor vehicle is accurate. The rates that applied at the time of writing are shown at Appendix 1 to this section.

f) It is the responsibility of the employee to obtain and maintain full third party insurance including cover against risk of injury to or death of passengers and damage to property while the vehicle is used on the PCT’s business. THE PCT CANNOT ACCEPT ANY RESPONSIBILITY IF THE INSURANCE IS NOT OBTAINED OR KEPT UP BY THE EMPLOYEE. The PCT may ask the employee to provide evidence to this effect.

g) If an employee needs to be reclassified from a standard to a regular user or vice versa (e.g. because the duties of their post have changed, requiring more or less travel) then a ‘Change of Staff Details’ form should be completed.

h) Note that employees who are not set up as authorised users should not be allowed to use their own vehicle for any journeys in connection with the PCT’s business unless they can confirm that they have business use on their insurance policy.

13.5.2. Claiming for Business Travel

a) All claims for reimbursement of business travel must be made on the PCT’s official travel claim forms. The form is available from Pay Services and cand be copied locally.


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b) The following points need to be noted when completing the form:

The payroll number must be accurately shown. If it is not, then there could be a delay in making the payment.

If the vehicle is different from the one previously used for PCT business, then a ‘Change of Staff Details’ form must be completed and signed by the employee’s line manager. The top copy of this form should be sent to Pay Services as soon as possible.

The wording on the claimant’s certificate should be read carefully and understood, particularly as regards the condition of the vehicle, the insurance held and the status of claims for call outs.

The total miles claimed and the period covered must be completed before the form is presented for signature.

The claim must be signed by both the claimant and his or her line manager (or other agreed authorising officer). If this is not done, the claim will be returned and payment is likely to be delayed for a month.

Details of how to ascertain the mileage that can be claimed are set out in paragraph 13.5.3 below.

The date and reason (use the codes listed on the form) must be shown for each journey.

There must be supporting documentation for all non motor vehicle expenses. Where any of these are not available (e.g. for a car park that does not issue receipts) a note to this effect should be made.

13.5.3. Mileage that can be claimed

a) For journeys starting and ending at base - claim the actual miles travelled.

b) For journeys starting and finishing at home - claim the return mileage from home to the place visited, or, if lower, the return mileage from base to the place visited.

c) For journeys starting at home and ending at base or vice versa - claim the return mileage from base to the place visited, or, if lower, the actual miles driven (i.e. single journey from base to the place visited + single journey from the place visited to home).


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d) Clinical staff that make a large number of visits per day (e.g. district nurses) may use their diaries to provide a detailed breakdown for the amount of their mileage claim. The starting and ending mileometer readings should be noted in the diary. The authorising officer may check the diary before the claim is authorised. Diaries used as a back up to a travel claim must be maintained as laid down by the PCT. On the claim form the section ‘Journey Details’ can be completed ‘as per diary’.

e) Claimants are expected to travel between points by the shortest or quickest practical route and claims for mileage must be restricted to this. In the event of a detour being made to avoid a hazard or delay, resulting in additional mileage being travelled to that expected, then details must be noted in, or on an attachment to, the claim form.

f) A passenger allowance can be claimed if another member of staff or client is accompanying the employee as a passenger on a business journey.

g) The same basic rules apply to journeys using public transport - the return costs of the journey from base to the place visited and return, or, if lower, the actual fares paid can be claimed. A one-day travelcard should be used if this is the most economical method. Note that the original ticket or an appropriate receipt should be retained to support the claim.

h) For a long distance journey where there is suitable public transport available, this should be used. If an employee uses his or her own vehicle, then a lower mileage rate (‘public transport rate’) will be paid.

13.5.4. Submission and Processing of Claims

a) It is the authorising officer’s responsibility to check, within reason, the accuracy of the claim, including the mileages. Pay Services do not check this, although they will review the claim for obvious anomalies, querying these where necessary.

b) Once completed, a copy of the claim should be taken and retained by the employee for information. The original form should then be passed to the person who completes the pay book for the department. Details of the claim should be entered onto the employee’s weekly or monthly pay sheet and the claim form then passed to Pay Services together with the pay book.

c) Pay Services keep records of the claims made by each employee and any anomalies (e.g. a different motor vehicle being used) or apparent duplicate claims will be queried and may lead to a delay in payment of the claim.

d) Employees and managers should ensure that claim forms are submitted regularly (preferably monthly for regular users and at least quarterly for standard users). In particular, the claim to the end of February must be included in the March pay book. If this is not done, the employee could be disadvantaged for tax purposes.


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13.5.5. End-of-Year Summaries

a) The actual mileage paid for, as set out above, is all allowable business mileage for tax purposes. However, for regular and standard users, the mileage rate paid by the PCT is greater than the rate that HM Revenue and Customs allow. This may give rise to a profit, which is taxable. The profit will be calculated by the PCT at the end of each tax year, and notified to both the employee and the HM Revenue and Customs. It is the employee’s responsibility to include this profit on any return that they are asked to make to the HM Revenue and Customs.

b) At the end of each financial year Pay Services collate all the information for each employee and produce the returns for HM Revenue and Customs (known as P11D forms). Copies of these are passed to existing employees (but not to employees who left before the end of the tax year). If any ongoing employee does not receive a P11D by the end of the July following the tax year, and believes that he / she should have had one, this should be queried with Pay Services.

c) At the same time as the P11D forms are prepared, Pay Services will review the actual mileage claimed by regular car users. Where this appears to be below the criteria for being a regular user, the Head of Department will be advised and asked to consider whether the employee should be reclassified as a standard user.


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APPENDIX 1 to SECTION 13 -

MILEAGE RATES (From 1st July 2008)

The current rates are as follows:

Public transport rate 24p a mile

Bicycle miles (up to 9000 miles) 29.7p a mile

Bicycle miles (over 9000 miles) 17.8p a mile

Passenger miles 5p a mile

Standard User rates

For motor cars:

Engine capacity 501 to 1000cc 1001 to 1500cc over 1500cc

Up to 3500 miles 37.4p 47.3p 58.3p

Miles thereafter 17.8p 20.1p 22.6p

For other vehicles e.g. motor cycles:

Engine capacity 125cc or less over 125cc

Up to 5000 miles 16.2p 25.3p

Over 5000 miles 6.1p 9.0p

Regular User rates

For motor cars:

Engine capacity 501 to 1000cc 1001 to 1500cc over 1500cc

Lump Sum (p.a.) £508 £626 £760

Mileage rates

Up to 9000 miles 29.7 p 36.9p 44.0p

Miles thereafter 17.8p 20.1p 22.6p

HM Revenue and Customs Approved Mileage rates at the time of writing are as follows:

Motor cars or vans

Up to 10,000 business miles 40p per business mile

Over 10,000 business miles 25p per business mile

Motor cycles 24p per business mile

Bicycles 20p per business mile


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Please note that if the rate reimbursed is greater than the approved rate the excess will be charged to tax. A P11D will be sent to the tax office and yourself to show this excess after the end of the tax year.

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SECTION 14 - CHARITABLE FUNDS

14.1. Introduction

14.1.1. NHS Charitable Funds (also known as Trust Funds or non-Exchequer Funds) are governed by law relating to Charities. A lot of helpful information is available from the Charity Commission whose website is at www.charity-commission.gov.uk.

14.1.2. The Charitable Funds consist of donations, bequests and fund raising proceeds. They are a source of funding for patient and staff amenities not provided by the PCT. They are also used to pay for long service awards for retiring employees.

14.1.3. The law relating to the governance of charitable funds and what they can spend their resources on is complex. Broadly speaking, the PCT’s charitable monies are divided into individual funds. Each of these has its own purpose. Managerially, all of the funds for the PCT come under one “umbrella fund” which is controlled by the PCT as a corporate trustee. The PCT’s Board of Directors discharge their responsibility for this via a Charitable Funds Sub-committee, which meets at least three times a year. The “umbrella fund” is known as the “Sutton and Merton Primary Care Trust Umbrella and other Related Charities” and is registered with the Charity Commission (reference 1100642).

14.2. Objectives

14.2.1. The objectives of the Charitable Funds system are:

Compliance with Charity law and the Charity Commission’s requirements.

All Charitable Fund transactions are recorded correctly and adequate accounting records are maintained

Charitable Fund expenditure is properly authorised and in accordance with the objects of the Fund.

Management information in respect of Charitable Funds is accurate, timely and adequate.

Adequate segregation of duties to minimise the possibility of fraud or error.

14.2.2. This procedure sets out the processes that need to be followed to achieve these objectives.

SECTION 14 - 16BCHARITABLE FUNDS

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http://www.charity-commission.gov.uk/

http://www.charity-commission.gov.uk/

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14.3.1. This section provides an overview of the day-to-day paper flows and the key internal controls required to ensure that the financial management of the Charitable Funds meets the objectives set out above. It does not extend to the non-financial aspects of the management of the Funds.

14.3.2. This section covers the general procedure to be applied in respect of Charitable Fund transactions. For further information, including the establishment of new funds, it is necessary to refer to the Finance Department.


14.4.1. The financial aspects of the PCT’s Charitable Funds are administered by the Finance Department.

14.4.2. Each individual Charitable Fund has a designated manager who is responsible for the administration of the fund, including the authorisation of expenditure out of the fund.

14.4.3. Expenditure out of Charitable Funds must be authorised by the designated manager. Expenditure over £250 per quarter from one fund must, in addition, be approved by the Charitable Funds Committee. All expenditure is notified to the Committee at their regular meetings.

14.4.4. Surplus funds are invested and the resulting income is apportioned over the individual Funds.


14.5.1. Income

a) Income is received by various methods and in various forms throughout the PCT. Income may be received by post, donations given in to the wards or reception desk, etc.

b) Any member of staff who is given a sum of money for the PCT’s charitable funds should initially follow the guidelines set out in the procedure on cash handling. Any letters or other communications accompanying the receipt should be attached to it before it is passed to a cashier or the Finance Department. This is to ensure that the purpose of the donation is recorded and properly accounted for. If there is no documentation then the donor's name and address (unless he or she wishes to remain anonymous) and his or her wishes should be noted on a piece of paper and attached to the receipt.


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c) The Finance Department will ensure that the money is credited to the correct fund.

d) If the donor specifies a condition (i.e. gives a specific as opposed to a general fund donation) that does not fall within any existing fund, then it may be necessary to set up a new fund. Refer to the Finance Department for further guidance.

14.5.2. Expenditure

a) Goods and services to be funded by charitable monies should be ordered in the normal way, using official orders raised by the Supplies Department. The cost centre for the fund (as advised by the Finance Department) should be stated on the requisition. The requisition must be authorised by the fund’s designated manager.

b) Other payments should be made by sending a payment request to the Finance Department. This request must indicate the fund that the payment is to come out of, and be signed by that fund’s designated manager.

c) It is the responsibility of the fund’s manager to satisfy him or herself that the expenditure is appropriate for the purpose of the fund and that there is sufficient money in the fund to pay for it.

d) If expenditure from one fund is over £250 per quarter then it must be authorised by the Charitable Funds Committee before being paid. The Finance Department will check this. Any fund manager wishing to make such a bid should apply by using the appropriate form, which is posted in the public folder. Alternatively, contact the Finance Department.

e) If an official order was raised, the authorisation will have been checked by the Supplies Department. It will not be necessary for the invoice to be signed by the manager. The goods or services should be receipted in the normal way.

14.5.3. Recognition of Long Service Awards

a) The policy for recognition of service awards can be obtained from the Human Resources Department. This covers retirement gifts, leaving parties and long service awards.

b) Any manager who believes that a member of staff is entitled to a payment under the above policy should submit the appropriate form to either the Finance Department (retirement gifts / leaving parties) or to Human Resources (long service awards).


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14.5.4. VAT

a) If certain medical or scientific equipment is purchased out of charitable monies then it can be zero-rated for VAT (i.e. no VAT is payable). In order to do this, the VAT Certificate G has to be sent to the supplier with the order. The certificate should be completed by the manager requisitioning the goods and sent to the Supplies Department with the requisition. See Appendix 1 for the form. This is two pages long and should be printed out onto double-sided paper.

b) Generally speaking, VAT charged on expenditure funded by the Charitable Funds is recoverable using the same rules as applied to exchequer expenditure. The recovery is handled by the Finance Department.

14.5.5. Reporting

a) At the end of each month, the Finance Department will produce a report for each Fund itemising

The fund’s balance at the start of the financial year

A list of income in the year

A list of expenditure in the year

The fund’s closing balance

b) The reports will be reviewed to ensure that no funds are overdrawn. If so, this will be drawn to the attention of the fund’s manager and he or she will be asked how he or she intends to bring the fund back into credit. Until this happens, all payments out of the fund should cease.

c) Each fund’s report is sent out to the fund’s manager for information.

14.5.6. General Issues

a) Where a manager wishes to carry out any fundraising on behalf of the PCT, advice should be obtained from the Finance Department to ensure that all legal requirements are met and that the PCT and its Charitable Funds are not put at any risk.

b) When a donation is received it is important to ensure that any condition or direction which is attached to it is noted and complied with. If the conditions or directions attached are unduly onerous or nor capable of fulfilment without disproportionate difficulty and bearing in mind the size of the gift, then it may be necessary to point this out to the donor or even with regret to decline the gift. It may be necessary to record the conditions or directions or to establish a separate fund.


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c) The Director of Finance of the PCT is responsible for opening and maintaining bank accounts for the use of the PCT’s’ Charitable Funds. These are separate from the revenue bank accounts of the PCT. No one else may open any bank account in the name of the PCT or any of its Charitable Funds.

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Certificate G PURCHASE FOR DONATION TO AN ELIGIBLE BODY OF MEDICAL, SCIENTIFIC ETC. EQUIPMENT PART 1 - to be completed by the purchaser

[tick boxes as appropriate] I................................................................................................................................ (full name)

.............................................................................................................. (status in organisation)

of ........................................................................................................... (name and address of

..............................................................................................................................organisation)

declare that I am/the above named organisation is buying from:

............................................................................................................... (name and address of

.....................................................................................................................................supplier)

with funds provided entirely by a charity or from voluntary contributions.

the following:

................................................................................................................(description of goods)

..................................................................................................................................................

..................................................................................................................................................

..................................................................................................................................................

which I believe are medical equipment sterilising equipment

scientific equipment laboratory equipment

computer equipment refrigeration equipment

video equipment

parts or accessories of the equipment indicated above

for donation to:........................................................................................... (name and address

............................................................................................................................... of recipient)

..................................................................................................................................................

..................................................................................................................................................

which is:

a Health Authority or Special Health Authority in England or Wales

a Health Board in Scotland

a Health and Social Services Board in Northern Ireland

a hospital whose activities are not carried on for profit

a research institution whose activities are not carried on for profit


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a charitable institution providing care or medical or surgical treatment for handicapped persons

the Common Services Agency for the Scottish Health Service

the Northern Ireland Central Services Agency for Health & Social Services

the Isle of Man Health Services Board

a charitable institution providing rescue or first-aid services

a National Health Service trust established under Part I of the National Health Service and Community Care Act 1990 or the National Health Service (Scotland) Act 1978

For use in:

medical research veterinary research

medical training veterinary training

medical diagnosis veterinary diagnosis

medical treatment veterinary treatment I have read the guidance in the Customs and Excise VAT Notice 701/6 and apply for zero-rating of the supply under Group 15, items 4 or 6 of the zero-rate Schedule to the VAT Act 1994.

.................................................................................................................. (signature and date)

********************************

The production of this certificate does not authorise the zero-rating of the

supply. It is the supplier’s responsibility to ensure that the goods supplied

are eligible before zero-rating them.

********************************

PART 2 - for use by the supplier

I have read the guidance in Customs and Excise VAT Notice 701/6 and agree

that the goods supplied come within the category indicated above (or come

within the alternative eligible category of .................................................................................

................................................................................................................................ equipment)

.................................................................................................................. (signature and date)

Notes (e.g. any steps taken to verify the declared particulars)


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SECTION 15 - PRACTICE BASED COMMISSIONING

Practice based commissioning is a system for involving primary care professionals, usually General Practitioners, in the commissioning cycle. The underlying premise is that by getting those individuals who are closest to the patient, namely the General Practitioner, to be actively involved in the commissioning cycle, either on an individual patient or a group of patients basis, commissioning will become more robust as services will be commissioned that reflect the needs of the practitioners responsible population. It also enables a direct link to be made between the actual cost of the referral and the referrer.

Practice Based Commissioning is incentivising GP Practices, and other

primary healthcare professionals, to:

Understand, segment and anticipate the needs of local communities and individual patients, planning and prioritising accordingly

Secure national and local health priorities for their patients Understand the financial parameters of health including value for

money Supporting the PCT in allocating scarce resources across competing

priorities

In order for the PCT to develop over the next five years it is vital that practice based commissioning is embraced across the PCT and that the practice based commissioners play an integral role in the assessment of need, service planning and monitoring of services to meet the needs of their local populations and to meet national and local targets.


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SECTION 16 - REFERENCE COSTS AND PAYMENT BY RESULTS

Introduction to Reference Costs

The purpose of costing is to quantify, in financial terms, the value of resources consumed to undertake a certain activity or produce a certain unit of output. The White Paper 'The New NHS: Modern and Dependable' (1997) gave a commitment to produce unit costs on a consistent basis and to publish them in a National Schedule of Reference Costs (NSRC). Reference costs form part of the financial regime of all NHS providers of acute and community services. NHS providers are encouraged to share detailed costs with all stakeholders, from patients through to healthcare professionals. The costing of NHS services for reference cost purposes are undertaken using the principles and framework detailed in the NHS Costing Manual to provide cost information on a consistent basis.

Through the NSRC, unit cost information enables meaningful discussion to take place between Strategic Health Authorities, PCTs and providers on the variations in costs of providing services. With greater consistency and reliability of reference costs, uses will become more important. For instance the new national tariff fixing standard prices for healthcare procedures, introduced from 2003/04, is based on average reference costs (see Payments by Results section below).


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A key element of the government’s modernisation plans is reform of the financial framework and funding flow. The proposal for bringing about this change was set out in “Delivering the NHS Plan”, through the introduction of a system of Payment by Results. This is intended that money will flow with patients as:

PCTs will commission from a number of providers on the basis of a

standard national tariff adjusted for casemix and for regional variations. Instead of block contracts, hospitals and other providers will be paid for

the actual activity they undertake.

The main driver behind this initiative is patient choice. The introduction of national tariff takes away the need for local negotiation on price and enables the focus to be on quality and responsiveness, the things that are important to patients. This reform is undoubtedly one of the key challenges for finance in the NHS over the medium term. As the project rolls out and commissioning arrangements are changed in response to the key issues around patient choice, provider capacity and service quality, the requirement for robust financial systems to underpin the new financial flows framework will be critical. Further details can be found on the NHS website under Reference Costs

http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/NHScostingmanual/index.htm

Payment by Results http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/NHSFinancialReforms/index.htm


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http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/NHSFinancialReforms/index.htm

http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/NHSFinancialReforms/index.htm

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SECTION 17 - PROGRAMME BUDGETING

In 2002, the Department initiated the National Programme Budget Project. The aim of the project is to develop a primary source of information, which can be used by all bodies, to give a greater understanding of “where the money is going?” and “what we are getting for the money we invest in the NHS?”.

The project aims to provide an answer to these two questions by mapping All PCT and Health Authority expenditure, including that on primary care services, to programmes of care based on medical conditions.

PCT’s returned the first programme budget collection, relating to 2003/04 in August 2004. Initially this is in the form of an unaudited financial return but with an expectation of transition to an Audited Note to the Accounts in later Years (possibly by 2008/09).

Further details can be found on the NHS website under http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/Programmebudgeting/index.htm


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http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/Programmebudgeting/index.htm

http://www.dh.gov.uk/en/Policyandguidance/Organisationpolicy/Financeandplanning/Programmebudgeting/index.htm

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SECTION 18 - YEAR END & ANNUAL ACCOUNTS

Introduction

All Primary Care Trusts have a responsibility to control their finances throughout the year. Performance is monitored internally and externally, and Label1

on an annual basis audited accounts must be produced. The Annual Accounts must be published and made available publicly as part of the annual report.

Financial Duties

Achieve Financial Balance

The PCT has a statutory duty to maintain expenditure within its annual revenue resource limit.

The PCT has a statutory duty to maintain its capital spend within its annual capital resource limit.

The PCT has a statutory duty not to spend more cash than has been allocated. PCT’s manage a combined cash limit for revenue and capital.

Demonstrate Full Cost Recovery

To demonstrate full cost recovery on an accruals basis in relation to their Provider functions. In other words, provider activities must not be subsidised by commissioning funds. This is described as recovering the “full cost” of provider services.

PCT’s have flexibility to transfer any amount of resource limit from revenue to capital but transfers from capital to revenue are subject to a regional control total. Unplanned under spends may not be carried forward.

Public Sector Payment Policy

To pay 95% of their non-NHS trade creditors within 30 days of receipt or invoice date, whichever is the later, of a valid invoice


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Timetable The annual accounts are produced in line with the Fiscal year (April to March) and have to be completed by early May following the Year end. This is a busy time for the Finance department and it is essential that Budget Managers support this process by;

Ensuring that all invoices relating to the period are passed through to the finance department.

If invoices have not been received but a charge is expected than

this also needs to be communicated to the finance department for inclusion in the accounts.

It is important at this time to make sure that income and expenditure is matched to the correct period. If not the costs will have to be charged against the following years budget. Audit The NHS Act 1977 requires NHS bodies to prepare accounts and have them independently audited. The external auditors must assess and report on the systems of internal control used in preparing the annual accounts which show a “true and fair view” of the financial position of the PCT.


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Budget Codes & the Chart of Accounts

Budget codes are a simple way in which to accurately and consistently keep a record of all expenditure incurred by an organisation. By requiring expenditure to be recorded against a specific budget heading (cost centre) and expenditure type (subjective code) the PCT can record who (which budget holder) spent the money and also what the money was spent on (equipment, acute commissioning etc).

Below is an example of the financial coding structure used by Waltham Forest PCT. Our coding structure is similar to other NHS organisations using National Shared Business Services and reflects the “national chart of accounts” developed by the Department of Health.

Entity

Cost Centre

Subjective

Analysis 1

Analysis 2

Spare

5NCN

123456

1234

12345

12345

123456

This is always the same and denotes WFPCT

Cost centre is used by budget holder to allocated expenditure to the correct area.

This denotes the expenditure type;

Drugs Equipment Commissioning Nurse Band 7

Can be used to provide further detail. This may be for capital job numbers.

May be used to further analyse costs for PBC.

Spare segment is not used at WFPCT

Budget holders can only code expenditure to their own cost centres. Any questions regarding the coding structure should be directed to your management accountant.


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Terminology

Operating Plan

This document sets out how resources are to be utilised in commissioning services, which meet national priorities and local targets.

NHS ‘Service Agreement’

An agreement between an NHS Trust and a PCT to purchase & provide a range of activities in relation to Health Care.

- Commissioner: A purchaser of healthcare, for which it pays, from its own allocation of funds. e.g. Primary Care Trusts

- Provider: A supplier of Healthcare, for which it receives payment, from a Purchaser or Commissioner. E.g. An NHS Hospital Trust.

Service Agreement Income

The flow of money into an Organisation arising from Service Agreements. This income is, in turn, used by the Organisation, in the allocation of Budgets.

Non-Service Agreement Income

Flow of income into the organisation from sources other than NHS Service Agreements (car parking, recharges for staff, private patients, etc).

Budget

The funds allocated by the PCT to a particular department to fulfil the planned level of service expected during the planning period.

Budgets are allocated on an annual basis, and are most frequently divided into twelve accounting periods, beginning in April and ending in March the following year. A Budget can be either recurring (allocated on an indefinite basis), or non-recurring (allocated for a limited period only).


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Expenditure

The actual spend of money against the allocated Budget. Reporting and monitoring of expenditure against Budget takes place on a monthly and on an annual basis, both internally, to the Trust Board and individual Directorates and Managers, and externally, to the Regional Office of the NHS Executive.

Accruals

A manual ‘accounting adjustment’ which allows expected, although not yet actual expenditure, to be charged against a Budget. This allows expenditure to be charged in the accounting period to which it relates, even though a cash transaction has not taken place in that period.

Prepayments

These are also ‘manual accounting adjustments’, but account for what are otherwise known as ‘payments in advance’. If a single cash transaction takes place in one month, but relates to a period of six months, then an adjustment is made so that only one sixth of the transaction value appears against the Budget for that month. A further sixth will be allocated in the following month, and so on.

Income / Expenditure

The above are what make the difference between “cash” accounting and “income & expenditure” accounting – i.e., we try to measure income earned and resources used regardless of when £ changes hands.

Virement

Once the Total Budget for a Directorate has been established, it is important to ensure that the most effective use of these resources is obtained. In order to facilitate this, the Directorate is permitted to move resources from one department to another as the need arises. This process is known as VIREMENT.

The current budgetary control regime has emphasis on “the bottom line”


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On Cost

The cost to the Organisation of employing a member of staff is greater than their actual salary. This is because the Organisation makes additional National Insurance payments and Superannuation Contributions on your behalf. Since these contributions are based on percentages of salary, the higher the salary, the greater the On-Cost will be. You should, therefore, expect an Annual Budget for a member of staff to be greater than their actual annual or pro rata salary. On cost for superannuation is 14 percent and national insurance is approximately 8 percent.

Incremental Drift

Most staff groups are paid on pay scales that include incremental points. The additional cost of employing a member of staff who moves from a lower point of scale onto the next incremental point is called ‘incremental drift’. Since additional funding is rarely available to increase Budgets for this, it is, more often than not, left to Directorates and individual Budget Holders to ‘manage’ this ‘financial pressure’. The costs associated with Incremental Drift may be highlighted within Directorate Business Plans as a ‘recurring pressure’.

However, opportunities arise through staff turnover to have ‘negative’ incremental drift if recruitment takes place at a lower point on the scale.

Note: It is always prudent, when defining the costs of service developments to account for salaries at the maximum of the relevant pay scale. This approach eliminates the potential impact of incremental drift and, indeed, in the short term, will have financial benefits.

Reserves / Centrally Held Budgets

Some funding is held centrally in identified reserve accounts for allocation to Directorates as appropriate.

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SECTION 19 - DELEGATION OF POWERS Delegated Matter Authority delegated To

Expenditure for which the PCT has a specific budget:

Stock / non-stock requisitions up to £20,000

Service Manager / Head of Department or Executive Director

All requisitions up to £50,000 Executive Director

All requisitions from £50,000 - £100,000 Executive Director and Director of Finance and Strategy ort Deputy Director of Finance

All requisitions from £100,000 - £250,000

Chief Executive and Director of Finance and Strategy or Deputy Director of Finance

All requisitions from £250,000 - £1,000,000

Chief Executive and Chairman

All requisitions over £1,000,000 Trust Board

Works orders up to £19,999 Associate Director of Business Management and Estates

Works orders from £20,000 - £74,999 Chief Executive or Director of Finance and Strategy or Deputy Director of Finance

Works orders over £75,000 The delegated authority limit for Non Works applies

Non pay expenditure for which no specific budget has been set up and which is not subject to funding under delegated powers of virement (subject to the limits specified above)

Chief Executive and Director of Finance and Strategy

Orders exceeding 12 month period Director of Finance and Strategy or Chief Executive

All contracts for goods and services and subsequent variations to these

Executive Director or Director of Finance and Strategy

Grants to Local Authorities / Voluntary Bodies

Up to £20,000 Executive Director

£20,000 to £49,999 Chief Executive

Over £50,000 PCT Board

Commissioning Expenditure

Signing SLAs approved within annual budget

Executive Director

Regular monthly payments of approved reimbursements up to £8,000,000

Assistant Director of Commissioning or Deputy Director of Finance

SECTION 19 -21BDELEGATION OF POWERS

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SECTION 19 -21BDELEGATION OF POWERS

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Delegated Matter Authority delegated To

Further reimbursement of expenditure within approved allocation:

Up to £50,000 Commissioning Manager

Less than £100,000 Deputy Director of Finance

More than £100,000 Director of Commissioning or Director of Finance and Strategy

Other payments As for non-pay

Expenditure from Charitable Funds

Up to £500 Designated Fund Manager

Up to £3,000 per request (max of £10,000 per year)

Director of Finance and Commissioning, Executive Director’s Nominated Deputy and Director of Finance and Strategy’s Nominated Deputy – to Chairman of the Charitable Funds Committee for information

Over £3,000 Chairman of the Charitable Funds Committee

Documents

Finance Manual version 1 1 - July 2008