Introduction to the BCH Finance &

Procurement Team

Budget Manager Training Programme

Mark Mawdsley, Commercial Finance Manager

Contents

1 What is Finance?

2

3

4

The Finance Department Financial Accounting

Financial Management

Costing

Procurement

5 What is not In Finance?

Who is responsible for Finance at BCH? The Accountable Officer

The Chief Finance Officer

The Director of Finance and Procurement

The Finance Profession

6 Self Test

What is Finance in the NHS?

The term “Finance(s)” when used in the NHS can refer to a number of things: • Finance(s) can refer to the funding available to NHS

organisations, i.e. their income and/or expenditure • Finance can relate to the finance (accountancy) profession • However Finance usually means the Finance function,

department or team(s) • This can actually mean different things to different people

and even in the NHS each organisation may include or exclude a variety of elements within “Finance”

We will be looking at how the Finance department is structured here at BCH

Who In The Trust Is Responsible For Finance?

• The NHS Act 2006 designates the Chief Executive of an NHS Foundation Trust as the Accounting Officer.

• The Trust’s Chief Finance Officer is David Melbourne. • The Finance team is managed directly by Phil Foster, Director

of Finance and Procurement, and contains the following areas:

DoF

Phil Foster

Financial Accounting

James King

Financial Controller

Financial Management

Gary Williams

Head of FM

Costing

Julia Gray

Head of Costing

Procurement

Cathy Griffiths

Head of Procurement

The Accounting Officer

• The NHS Act 2006 (the Act) designates the Chief Executive of an NHSFT as the Accounting Officer.

• The Act specifies that the Accounting Officer has the duty to prepare the accounts in accordance with the Act. An Accounting Officer has the personal duty of signing the NHSFT's accounts. By virtue of this duty, the Accounting Officer has the further duty of being a witness before the Committee of Public Accounts (PAC) to deal with questions arising from those accounts or, more commonly, from reports made to Parliament by the Comptroller and Auditor General (C&AG) under the National Audit Act 1983.

• It is an important principle that, regardless of the source of the funding, Accounting Officers are responsible to Parliament for the resources under their control.

The Accounting Officer has responsibility for the overall organisation, management and staffing of the NHSFT and for its procedures in financial and other matters. The Accounting Officer must ensure that: • there is a high standard of financial management in the NHSFT as a whole; • financial systems and procedures promote the efficient and economical conduct of

business and safeguard financial propriety and regularity throughout the NHSFT; • financial considerations are fully taken into account in decisions on NHSFT policy

proposals.

The Role Of The CFO/FD

Role of Finance Director/Chief Finance Officer (FD/CFO) was defined by Healthcare Financial Management Association (HFMA): The essential finance director – values • Professionalism - meeting the standard – Acquire and apply the knowledge, skills and best practice that enable finance staff to

meet customers’ needs to consistently high standards • Integrity - doing the right things - Act in a manner that is honest, open, impartial, objective and fair • Partnership - working together - Work with others to develop mutual respect, understanding and trust to enable the organisation

to achieve its corporate objectives • Innovation - changing for the better - Develop an environment that encourages enterprise, challenge and creativity. Use different

perspectives to challenge and improve the way things are done • Commitment - seeing things through -See things through to the end, putting the task and needs of others first. This requires

loyalty, the willingness to take responsibility and the energy and determination to succeed • Excellence - giving of one’s best -Demonstrate quality in the work carried out, and constantly improve performance, always giving

one’s best • Flexibility - willing to try new approaches - Find better ways to deliver results through research, experimentation, new ways of

working and accepting the challenge and benefits of change.

FDs in the NHS must be accountants, qualified with one of 6 recognised bodies. FDs should also have experience across a wide range of the finance function’s responsibilities (for example, financial and management accounting; capital and investment appraisal; commissioning; financial performance management; budgeting/budgetary control; financial planning; costing/financial analysis; financial systems; audit; payroll) and at least 5 years’ post-qualification experience holding senior positions in the public/private sector.

In the HFMA’s view, an FD’s core activities can be grouped under four headings: • Corporate leadership and management • Stewardship and accountability • Financial management • Professional leadership and

management

FDs also need the following practical capabilities and technical knowledge: Communicating Planning, monitoring and controlling Influencing and negotiating Analysing information and solving problems Thinking strategically Making decisions Focusing on business and customers Focusing on development Working in and leading teams Governance and risk management Customer focused business advice Using IT

The Finance Profession – what is an accountant?

The Consultative Committee of Accountancy Bodies (known as CCAB) was formed in 1974 as an umbrella group for the major British qualified accountancy bodies. The six British and Irish professional accountancy bodies with a royal charter were the founder members of the CCAB. On 2 March 2011, the Chartered Institute of Management Accountants (CIMA) announced that it would be leaving CCAB, because CCAB had become more focussed on audit since the formation of the Financial Reporting Council as the regulator for accounting matters, and therefore less relevant to CIMA members.[

The Financial Reporting Council (FRC) is the UK's independent regulator responsible for promoting high quality corporate governance and reporting to foster investment. The FRC sets the framework of codes and standards for the accounting, auditing, actuarial and investor communities and oversees the conduct of the professionals involved.

In the UK, there is no licence requirement for individuals to describe themselves or practise as an accountant (except for audit or insolvency work). However, to use certain titles and designatory letters requires membership of the appropriate professional body: • Chartered Accountants must be members of one of the following: the Institute of Chartered Accountants in England & Wales

(ICAEW) (designatory letters ACA or FCA) • The Institute of Chartered Accountants of Scotland (ICAS) (designatory letters CA) • Chartered Accountants Ireland (CAI) (designatory letters ACA or FCA) • a recognised equivalent body in another Commonwealth country (designatory letters being CA (name of country) e.g. CA(Canada)) • Chartered Certified Accountants must be members of the Association of Chartered Certified Accountants (ACCA) (designatory letters

ACCA or FCCA) • Chartered Management Accountants must be members of the Chartered Institute of Management Accountants (CIMA) (designatory

letters ACMA or FCMA) • Chartered Public Finance Accountants must be members of the Chartered Institute of Public Finance and Accountancy (CIPFA)

(designatory letters CPFA)

UK generally accepted accounting practice (UK GAAP) means generally accepted accounting practice with respect to accounts of companies formed or incorporated under the law of a part of the UK that is intended to give a true and fair view. UK GAAP has no statutory or regulatory definition in the UK. UK GAAP encompasses the accounting principles contained in the accounting standards issued or adopted by the Financial Reporting Council. It extends also to the requirements of the Companies Act and the Stock Exchange as well as other acceptable accounting and industry treatments not contained in official literature.

The BCH Finance Department

The BCH Finance Department comprises those sections accountable to the Director of Finance & Procurement. It contains four sections:

- Financial Accounting - Financial Management - Costing - Procurement

• The Financial Accounting arm of the Department is led by the Financial Controller and consists of a number of separate teams all fulfilling important roles in ensuring that the Trust’s balance sheet remains strong enough to support the Trust’s day to day operations as well as its longer term strategies. These are Treasury Accounting (including Capital and Systems), Sales Ledger (Debtors), Purchase Ledger (Creditors) and Expenses.

• Financial Management is structured to support and mirror, where necessary, the organisational structure of the Trust. Teams are led by the Commercial Financial Managers whose primary role is to provide a high quality financial management service as the lead finance link to Directorates or corporate areas. The work of the Commercial Finance Managers and their teams includes advising on all technical financial issues and educating budget managers in all financial matters.

• The Costing section produces statutory costing returns for the Department of Health, costs services for contracts and provides support to the development of the national tariff. The team also undertakes production of service line reporting and patient level costing on a monthly basis

• The Procurement team is responsible for ensuring the effective management of non-pay spend by working with, and in support of, the Trust’s clinical and corporate departments. The team oversee sourcing initiatives and look to influence spending through product standardisation, supply consolidation, competitive re-tender, demand reduction, and process re-design.

Financial Accounting

Financial Controller

James King

Deputy Financial Controller

Jingjing Dong

Invoice Query Manager

Karen Gray

Sales Ledger Coordinator

Maria Cox

Deputy Invoice Query Manager

Beverley Sawyers

Invoice Query Assistant

Maureen Lewis

Purchase Ledger Assistant

Pavinder Toor

Senior Treasury Officer

Frank Walker

Treasury Officer

Emiliya Georgieva

Cashier

Peter Hillman

Systems Support Officer

Abdul Mukid

Business Accountant

Debra Howard

The financial accounting team manages the hospital’s bank accounts and cash, and deals with the payment of creditors, collection of income, payment of staff expenses, accounting for capital expenditure, internal controls and production of statutory accounts. The accounts payable (purchase ledger) section is responsible for ensuring that the invoices that the Trust receive are entered onto the finance system. Invoice payment is processed, together with any supplier enquiries. The sales ledger section ensures that the income due to the Trust is received. The initial stage is the production of an invoice, and then credit control procedures are instigated if the debt is not paid within the agreed timescales.

Financial Accounting Roles

• Financial Controller - Responsible for all activities of the sales, purchase ledger and financial accounts/treasury team. To provide a complete range of technical financial services to the Trust ensuring the integrity of all income, expenditure and control account transactions and the completion of Trust’s reports and Annual Accounts. To ensure the Trust’s accounts are maintained and reported in a professional and correct manner. Manage the financial ledger system ensuring that there are comprehensive procedures in place to maintain the integrity of the system and provide an excellent service to the finance teams and budget managers

• Deputy Financial Controller - Supports and deputises for the Financial Controller in the proactive running of the financial accounting and services team, providing day-to-day management of an experienced team of dedicated staff. It plays a significant role in producing annual accounts and other statutory or external documents for return to Monitor and other regulatory bodies, as well as having specific responsibility for managing all financial aspects of the Trust’s agreed capital programme.

• Business Accountant - The BCH Pharmacy Limited subsidiary is an independent, private limited company that provides outpatient pharmacy services to patients of the Trust, it was established during 2012 and trading from early 2013. The Business Accountant is responsible for the production of the company’s annual accounts and other external documents, produce management accounting reports for the company’s directors, manage the company’s cash flow, manage invoice processing and complete all submissions required by HMRC and other external bodies.

• Systems Support Officer - Responsible for ensuring that finance systems are available to all appropriate staff both within finance and the wider organisation. Providing expert advice on systems issues and providing ad-hoc reports as required and taking the lead on ensuring the current systems are up-to-date and being used to maximum functionality, whilst acting as Finance Systems representative on all new systems both within and affecting the finance department. Provide relevant training to our staffs as requested.

Financial Accounting Roles

• Invoice Query Manager (IQM) - Manage the Purchase Ledger and Sales Ledger section on a day to day basis in order to provide a comprehensive Purchase Ledger and Sales Ledger service to the Trust. Ensure the trust responsibilities in the management of the NHS Shared Business Services system relating to Purchase Ledger and Sales Ledger are managed and controlled in line with Trust Policies and Procedures and statutory requirements.

• Deputy Invoice Query Manager (DIQM) - Support and deputise for the IQM in ensuring achievement of the Trust’s Better Payment Practice Code (BPPC) and ensuring invoices are paid in line with suppliers’ payment terms. Act as a point of liaison between the Trust’s internal stakeholders and suppliers whether NHS or non-NHS.

• Invoice Query assistant - support the IQM in ensuring achievement of the Trust’s BPPC and ensuring invoices are paid in line with suppliers’ payment terms. To ensure that all outstanding invoices are actively chased on a daily basis, raising any concerns to the IQM or other senior managers of any impending invoices not cleared for payment or Oracle users not responding to chase emails

• Purchase Ledger Assistant - Responsible to day to day collecting invoices and coded invoices from Pharmacy and review suppliers’ statements, liaise with SBS about the invoice queries

• Sales Ledger Coordinator - To ensure that the activities carried out in the Trust’s Debtor section are managed and controlled in line with Trust Policies and Procedures and statutory requirements. To ensure that all manually raised debtor invoice requests are processed into the Oracle Finance system at the end of each month as detailed in the month end timetable. In the event of queries with customers, support the negotiation with regards to clearing the outstanding debt. Discuss courses of action with the Invoicing Manager where disputes arise.

• Senior Treasury Officer - Responsible day to day management for all aspects of cash management, including daily reconciliation of all Trust bank accounts and supervisory responsibility for all manual payments, the Cashier’s Office and the Petty Cash system.

• Treasury Officer - support the day to day responsibility for the integrity of the all areas of the Trust’s Balance Sheet, all aspects of cash management, including daily reconciliation of all Trust bank accounts and supervisory responsibility of all manual payments, the Cashier’s Office and the Petty Cash system.

• Cashier - Responsible for running the Cashier’s office five days a week during the hours of opening. To ensure that all income received is accurately receipted and banked in a timely manner and all Petty Cash payments are paid in accordance with the Trust’s Petty Cash Policy.

Head of Financial Management & Planning

Gary Williams

CFM CSS and CAMHS

Dawn Platt

Deputy CFM

Sam Smith

Management Accountant

Claire Sim

Assistant Management Accountant

Haidar Lone

CFM Medicine

Clair Young

Deputy CFM

Matthew Dixon

Management Accountant

Joe Booker

CFM Specialised

Adam Hawker

Deputy CFM

Mish Gohil

Management Accountant

Darryl Bristow

CFM Surgery

Adele Struebig

Deputy CFM

Adam Wooldridge

Management Accountant

Mohammed Banaras

CFM Corporate

Vince Munsami

Management Accountant

Martin Richmond

Assistant Management Accountant

Vacant

CFM R&D and CQUIN

Mark Mawdsley

Deputy CFM (R&D)

Paul Hitchin

R&D Accountant

Misbah Irfan

Financial Management structure

The financial management team support managers within the hospital, providing reports and analysis on expenditure and income throughout the year, setting budgets, monitoring budget performance and providing financial information and support. Corporately, the team provide hospital wide reports on the financial performance of the hospital to the senior management team and the Trust Board. Members of the financial management teams are the main points of contact with the Finance department for most departments and managers.

Financial Management Roles

The role of the Commercial Finance Manager (CFM) The CFM is a business partner for a Directorate or other defined area of the Trust working as part of the management team working to achieve joint aims and objectives. The CFM leads a small finance team ensuring the delivery of accurate and comprehensive financial reports and forecasts enabling understanding of the financial position, and key cost drivers and pressures. The CFM provides expert financial guidance and support, analysing the financial consequences of proposed decisions and supporting the development of business planning an specific business cases.

The Deputy Commercial Finance Manager (DCFM) is a key support for the CFM overseeing the month end process and taking responsibility for the delivery of accurate financial reports and forecasts and variance analysis.

The Management Accountant works closely with individual budget managers ensuring that financial reports for individual cost centres are accurate and produced according to agreed timescales. They ensure information from regular budget meetings is used in the month end process and to inform variance analysis.

Costing

The Costing team manages four main streams of work:

• The preparation and submission of statutory costing returns for the Department of Health • Costing of services for contract negotiation • Production of service line reporting and patient level costing on a monthly basis • Costing exercises to support the development of national tariff The costing team manage the costing system called Synergy and the reporting dashboard Qlikview The costing team collect patient level information from all departments within the Trust for inclusion in the costing model. They work with care providers to develop rules that are applied within the costing system to allocate the costs from the general ledger to this activity in a way that reflects how resources are consumed through the delivery of patient care.

Head of Costing

Deputy Head of Costing

SLR Accountant

Costing Assistant

Costing Roles

Head of Costing Reference costs Clinical engagement Working with specialties to improve data quality e.g. documentation, Lorenzo configuration etc. Working with specialties to support identify efficiencies through benchmarking for CIP Complex costings Work to support the national costing programme Delivering against service plan and maintaining direction of travel

Costing Assistant Collecting the monthly SLR/PLICS feeds Preparing the feeds ready for input into the costing system Building the SLR reports for review and completion by Setting up QlikView training meetings Supporting the team with other ad hoc duties

Deputy Head of Costing Reviewing , completing and distributing the SLR reports Deliver QlikView events in conservatory and 1:1 QlikView training Continue to work with specialties to produce costing methodologies Responsible for developing the costing model Responsible for developing QlikView Attend meetings on behalf of costing to deliver SLR updates Larger costing exercises and support reference costs

SLR Accountant Loading the feeds into the costing system Running the costing system process Going Live in QlikView Reviewing costing outputs on a monthly basis to keep lookup tables, weightings and other information in the system complete and up to date Maintaining a robust audit trial of the process Basic costing exercises

Procurement

Supply Chain Assistant

R&D Porter

R&D Supervisor

Supply Chain Supervisor Information Analyst &

Catalogue Manager

Business Partner Buyer

Deputy Head of Procurement

Head of Procurement

Public procurement law regulates how public sector bodies buy services, goods and works. Generally, this is achieved through requirements to advertise and competitively tender certain contracts.

The Procurement team is responsible for ensuring the effective management of non-pay spend by working with, and in support of, the Trust’s clinical and corporate departments. The team oversee sourcing initiatives and look to influence spending through product standardisation, supply consolidation, competitive re-tender, demand reduction, and process re-design. The range of initiatives covers all the main spend categories from medical surgical goods and services, estates, facilities, ICT, corporate requirements including temporary agency and capital projects.

Procurement Roles

• Head of Procurement - Responsible for all procurement issues within the Trust. Planning, organising and executing the Trust’s Procurement Strategy to ensure value for money is obtained. Develop and maintain procurement systems to ensure accountability, probity and compliance with legislation.

• Deputy Head of Procurement - Responsible for the day to day management of staff within the Department. Provide an effective and professional service, which delivers ongoing cost efficiencies and benefits to the Trust. Running complex OJEU procurements, managing multiple senior stakeholders and reporting and presenting as required.

• Procurement Business Partner - Provide dedicated procurement support to the Directorates, working with them to identify, develop and deliver credible work plans and cost improvement programmes within agreed timescales, ensuring all procurement activity is undertaken in accordance with public procurement legislation and Trust standing financial instructions and standing orders

• Information Analyst and Catalogue Manager - Provide accurate, concise and clear information to support the Trust in the identification of cost improvement opportunities. Analyse and manipulate complex data sets to produce high quality management information. Responsible for the integrity of procurement data on the Trust’s P2P oracle system. Develop and maintain product catalogues within the procurement system.

• Supply Chain Supervisor - Provide a materials management service ensuring the efficient and effective management of the Trust’s supply chain. Management of the Trust’s receipt and distribution service ensuring all goods are received and distributed in a safe and timely manner.

• Supply Chain Assistant - Materials management replenishment service on behalf of wards/departments, ensuring that all stocks are managed and replenished appropriately to agreed levels

• Receipts and Distribution Supervisor – Supervise all operational Receipts and Distribution Point (RDP) activities, providing an efficient and effective service to the Trust.

• Receipts and Distribution Porter - Operational Receipts and Distribution duties associated with the requisitioning, receipting and temporary storage of goods and their subsequent distribution to end-users

• Buyer - Provide an effective procurement service to the Trust that delivers in a timely manner the appropriate goods and services. To purchase all goods and services, at all times endeavouring to achieve best value. Process oracle requisitions

What Isn’t In Finance

The PAYROLL department are responsible for the payment of staff salaries and wages. This service is contracted out to an external provider, McKesson, and the arrangement is managed by the Human Resources team. EXTERNAL AUDIT is an essential part of the process of accountability for public money. It makes an important contribution to the stewardship of public resources and the corporate governance of public services. External auditors in the public sector give an independent opinion on public bodies’ financial statements and may review, and report on, aspects of the arrangements put in place by public bodies to ensure the proper conduct of their financial affairs and to manage their performance and use of resources. External audit in the public sector is characterised by three distinct features: • auditors are appointed independently from the bodies being audited; • the scope of auditors’ work is extended to cover not only the financial statements, but also aspects of

corporate governance and arrangements to secure the economic, efficient and effective use of resources; and • auditors may report aspects of their work to the public and other key stakeholders. The Trust’s External Auditors are ?. INTERNAL AUDIT is a key source of independent internal assurance to Boards and Chief Executives (as Accountable Officers) of individual NHS bodies. A yearly programme of work is agreed with and monitored by the Trust’s Audit Committee. External auditors may also seek to rely upon the work carried out by Internal Audit in planning their own work. The Trust’s Internal Audit service is contracted out and provided by Deloittes. The CONTRACTING team are responsible for the negotiation and agreement of the Trust’s contracts for healthcare services, and monitoring and reporting or performance against those contracts, working closely with the Information and Finance teams.

Self Test

1. Who is the Trust’s Accounting Officer? a) Chief Executive b) Chief Finance Officer c) Director of Finance & Procurement

2. Which of the following are not sections within the Finance Department? a) Financial Accounting b) Payroll c) Costing d) Internal Audit

3. Name any one of the professional accounting bodies.

4. Which section of the Finance Department is managed by the Financial Controller? a) Financial Accounting b) Financial Management c) Costing

5. Which section of the Finance Department provides advice and support to budget managers on all financial matters? a) Financial Accounting b) Financial Management c) Costing

Self Test - Answers

1. Who is the Trust’s Accounting Officer? a) Chief Executive

2. Which of the following are not sections within the Finance Department? b) Payroll d) Internal Audit

3. Name any one of the professional accounting bodies. Institute of Chartered Accountants in England & Wales (ICAEW) Institute of Chartered Accountants of Scotland (ICAS) Chartered Accountants Ireland (CAI) Association of Chartered Certified Accountants (ACCA) Chartered Institute of Management Accountants (CIMA) Chartered Institute of Public Finance and Accountancy (CIPFA)

4. Which section of the Finance Department is managed by the Financial Controller? a) Financial Accounting

5. Which section of the Finance Department provides advice and support to budget managers on all financial matters? b) Financial Management