Page 66 - H:\Annual Report\

External Audit In addition, throughout the year the Audit Committee
has reviewed and dealt with the following matters:
In April 2017 new regulations were issued by the
• Annual Governance Statement
National Audit Office in April 2017 meaning that NHS
organisations can no longer retain the services of the • Consideration of the 2017/18 Annual Accounts
same audit firm for both core financial audit services
• NHS Improvement quarterly returns
and tax advice. Given the specialist nature of the tax
advice historically received from the tax team at KPMG • External Assurance Report on the quality account
(the Trust’s external auditors at this time), this meant the
• External Audit report on the financial statements to
core financial audit function was re-tendered.
31st March 2017 and ISA 260
KMPG concluded the audit of the 2016/17 Annual • Losses and special payments
Report and Accounts in May 2017, a competitive tender • Counter Fraud reports by the MIAA specialist in
process was then undertaken during the summer of accordance with the approved 2017/18 work plan
2017, following which a recommendation was made to
the Council of Governors to award the contract to Ernst • Internal Audit work plan for 2017/18
& Young. This recommendation was approved by the • KPMG External Audit Year end report 2016/17
Council of Governors at its meeting in September 2017
for an initial three year period, with the option to extend • External Audit Strategy and Accounting Issues
relating to the Audit of the Trust’s 2017/18 Accounts
for a further two one year extension periods.
• Accounting policies for the 2017/18 Financial
The work of External Audit can be divided into two Statements
broad headings:
• Audit Committee work plan 2017/18
• To audit the financial statements and provide an
• Review and approval of the terms of reference for the
opinion thereon,
Audit Committee
• To form an assessment of our use of resources.
• Annual Reports of the Trust’s assurance committees,
including Clinical Quality Assurance Committee
The Committee has approved an External Audit Plan
and receives regular updates on the progress of work • Approval of the Treasury Management Policy
including audit work undertaken on the quality account. • Financial Statement audit risks for 2017/18.

The external audit fees for 2017/18 were: Ernst & Young Scrutiny of the management of the financial and
£48,000 p.a. (fixed price for 5 years) operational risks to the organisation is the responsibility
of the Resources and Business Development
Note: The price in the outgoing KPMG contract was Committee. However, the Audit Committee maintains a
£53,100 p.a. (fixed for 5 years). regular overview of these key risks via its consideration
of the Board Assurance Framework which details
The Audit Committee members have had regular the controls in place to mitigate them, any gaps in
opportunities to meet in private with internal audit and assurance and the action being taken to address them.
external audit during the year. The Board Assurance Framework is reviewed on a
monthly basis by the Board as a whole and is also
Five meetings were held during the financial year used by the Resources and Business Development
2017/18 of which one, in May, was devoted to Committee to inform its standing agenda items. In this
consideration of the auditors’ report on the Annual way the cycle of control is maintained between the
Accounts and ISA 260. The Committee has an annual various elements of the governance framework.
work plan with meetings timed to consider and act on
specific issues within that plan. The Audit Committee considered the financial
statements audit risks including the areas where
At each meeting the Audit Committee considered a the Trust has applied judgement in the treatment of
range of key issues and tested the underpinning control revenues and costs to ensure that the annual accounts
and assurance mechanisms, including: represented a true reflection of the Trust’s finances. The
• The monthly Board Assurance Framework report External Audit Plan 2017/18 highlighted two significant
audit risks in relation to NHS income and receivables
• Internal Audit Reports in accordance with the
and the valuation of land and buildings. The risk
approved 2017/18 work plan
around NHS income and receivables was added as
• Counter Fraud reports by the MIAA specialist in a new risk due to an increased risk of misstatement
accordance with the approved 2017/18 work plan. from the estimation of income from Sustainability and
Transformation funding (STF).

Alder Hey Children’s NHS Foundation Trust 66 Annual Report & Accounts 2017/18