Auditor releases on Scarborough and NE Yorks NHS Trust

The District Auditor of Scarborough & NE Yorkshire NHS Trust has today issued a public interest report following the correction of serious misstatements and errors in the Trust's accounts.

The Trust's financial position deteriorated in 2004/05 and, after producing a draft set of accounts showing a breakeven position the Trust needed to make major corrections to comply with NHS accounting rules and consequently reported a £4.5m deficit

In his report the District Auditor points out that:

· The Trust relied on accounting adjustments in order to present a balanced financial position in 2004/05 but did not take effective action to correct the underlying situation in which its operating divisions were overspending.

· As external auditors we informed the Trust before the accounts were prepared that the proposed adjustments would be contrary to accounting standards.

· Following our audit work which concluded that certain accounting adjustments were a device to achieve financial balance rather than improve the accuracy of the accounts the Trust agreed to correct the accounts to show the true financial position.

Mark Kirkham, the District Auditor, said: ‘I've not been given a credible explanation for the situation in which financial balance was reported to the Board and Strategic Health Authority in the full knowledge that the accounts would not be acceptable for audit. In my opinion the desire to present a small surplus compromised the integrity of the production of accurate annual accounts.'

The Trust's three year financial recovery plan requires savings of £6.3m for 2005/06 and recovery proposals need to be supported by detailed action plans.

Copies of the report are available from the Audit Commission and from the Scarborough & NE Yorkshire NHS Trust.

ENDS

NOTES TO EDITORS

A copy of the District Auditor's public interest report is attached with this news release.

Under Section 8 of the Audit Commission Act 1998, the appointed auditor is required to consider whether to issue a report in the public interest, on any significant matter coming to his or her notice in the course of an audit, to bring it to the notice of the audited body and the public.

For health bodies, under Section 10 of the Act, the appointed auditor must send a copy of the report to the Secretary of State and the health body must consider its contents as soon as practicable in a meeting open to the public.

The Audit Commission is an independent body responsible for ensuring that public money is spent economically, efficiently and effectively, to achieve high quality local services for the public. Our remit covers around 11,000 bodies in England , which between them spend more than £180 billion of public money each year. Our work covers local government, health, housing, community safety and fire and rescue services.

As an independent watchdog, we provide important information on the quality of public services. As a driving force for improvement in those services, we provide practical recommendations and spread best practice. As an independent auditor, we ensure that public services are good value for money and that public money is properly spent.

For further information about the Audit Commission, visit our website at www.audit-commission.gov.uk

FOR MORE INFORMATION CONTACT TONY COX ON 0113 251 6654

It's Time to call for Accountability

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An Audit Commission report's shown that the Trust that runs hospitals in Scarborough, Whitby , Bridlington and Malton is £4.5 million in debt.

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