How Boards use financial management information is critical to delivering value for money from public funds. Reporting financial management information to the Board is a self assesment guide from the National Audit Office to help Boards receive the information they need.

Good financial information available to key decision makers at the right time has a beneficial effect on organisational performance conversly poor or inadequate financial information has  a negative impact on effective decision making. To support Boards to fulfil their responsibilities effectively, the financial management information that they receive must be clearly linked to the organisation’s performance against its objectives and fit for purpose in terms of scope, quality and presentation.

The purpose of the Code of Conduct for Payment by Results (PbR) 2007/08 is to establish core principles, with some ground rules for organisational behaviour, and expectations as to how the system should operate, and to minimise disputes, as well as guide the resolution of them. This is Version 2, issued March 2007, which is not a comprehensive update of the original Code published in January 2006. Instead, limited changes have been made to reflect the developments in the national tariff for 2007/08, i.e. unbundling and the data quality assurance framework. We anticipate a more thorough review of the Code once the consultation on the Options for the Future of PbR is complete.

PbR introduces a degree of transparency in NHS financial flows that is almost unprecedented. The new system challenges organisations to manage successfully in a dynamic environment and creates incentives for increasing productivity and making efficient use of resources.

The Secretary of State requires compliance with this Code by all NHS Bodies operating PbR, including health authorities, NHS trusts and primary care trusts (PCTs). .

Even for those with a strong background in accounting, some aspects of NHS finance can be immensely complicated.  The Healthcare Financial Management Association (HFMA) with the Audit Commission, has published three guides for non-executives to help them get a more detailed grasp of their annual accounts.  They have been written especially for non-executive directors with limited financial expertise to help them understand NHS accounts and to explain the role and responsibilities of non-executive directors and auditors in the accounting process.   The guides cover NHS Trusts, Primary Care Trusts and Foundation Trusts.

• NHS Trust Accounts: A Guide for Non-executives

• Primary Care Trust Accounts: A Guide for Non-executives

• Foundation Trust Accounts: A Guide for Non-executives and Governors

NHS reference costs 2007/08: collection guidance  outlines the mandatory requirements for the 2007/08 reference costs collection. It updates and supersedes previous costing guidance. It should be read in conjunction with the latest version of the NHS costing manual.

This is is mandatory return for all providers of services to the NHS. It is also mandatory for commissioning of services for NHS patients whose care is provided by non-NHS providers. Information is also required for services provided to NHS patients under a sub-contract from a NHS provider. Hospices and nursing homes are excluded from this requirement. The data is used to inform the national tariff under Payment by Results. It is therefore essential that the reference cost collection is of the highest quality and accuracy.

The  NHS costing manual 2007-08 manual establishes the principles and practice of costing to be applied in the NHS. It is not just designed to support the production of the National Schedule of Reference Costs and through this, the national tariff, but should also be used in developing and monitoring service and financial frameworks, as well as developments in and the monitoring and implementation of National Service Frameworks.