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NHS fraud team probe £122m expenditure not properly accounted for at Welsh health board

A WELSH health board has been placed under investigation by an independent accounting team, Audit Wales, and the NHS Counter Fraud Service after £122m of expenditure wasn’t properly accounted for.

Betsi Cadwaladr Health Board, Wales largest, serving Anglesey, Gwynedd, Conwy, Denbighshire, Flintshire and Wrexham, has commissioned an accounting firm to review errors in its accounts that were identified.

NHS Counter Fraud Service has confirmed that is also carrying out investigation work, and Audit Wales’ auditor general is working on a separate review.

It is potentially embarrassing for Audit Wales, who looked into and signed off the beleaguered health board last year – but have now found major problems.

The apparent errors included the health board’s inability to properly demonstrate the existence of a whapping £72m of expenses that were incurred but not paid in the year 2020-21, and insufficient evidence to confirm that a £122m expenditure occurred in the year, or was properly accounted for in the correct period. Huge numbers.

Responding to the news, Plaid Cymru health and care spokesperson Rhun ap Iorwerth MS said: “The problems at Betsi Cadwaladr health board have been well publicised, extremely distressing and worryingly numerous.

“The news of further investigations is a damning indictment of Welsh Government in their utter failure to make the changes that patients in the north of Wales so desperately needed while the health board was in special measures. Even since the health board was taken out of special measures – conveniently before the Senedd election – there have been damning reports on vascular services from the Royal College of Surgeons and Healthcare Inspectorate Wales, and reports of patient deaths at the Ablett Unit and Hergest Unit.

“The Holden Report, which was one of the factors in placing Betsi Cadwaladr into special measures in the first place, was not published for eight years, during which the health board fought to keep the details hidden. We had previously sought reassurance that the culture of bullying and intimidation by senior management highlighted within the Holden Report had been fully addressed.

“Crucially, this is yet another demonstration that it was premature to bring the health board out of special measures just six months prior to the Senedd elections. In addition, it has never been clearer that Betsi Cadwaladr University Health Board cannot continue. It is broken – beyond repair, I’m afraid – and needs to be replaced. Staff and patients alike deserve better. That the Welsh Government is refusing to even consider it is an untenable situation. It really makes you question if the Health Minister has a grip on her brief.”

A spokesperson for Audit Wales said: “The Auditor General’s audit of the Health Board’s 2021-22 accounts identified a number of significant errors and made three recommendations to the board for improvement, including the need for it to undertake a review to understand why the issues occurred and to strengthen its controls accordingly.

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“The Auditor General is aware that in response to his recommendations, the Health Board commissioned Ernst Young to undertake an external review of the circumstances that led to the errors identified. In addition, the Auditor General is also currently undertaking a separate high level review of board effectiveness as part of his annual programme of performance audit work at the Health Board.”

Commenting on the news, Welsh Conservative Shadow Health Minister, Russell George MS told Herald.Wales: “I am deeply concerned at the reports that huge sums of money are unaccounted for in Betsi Cadwaladr’s accounts and that there is another investigation into the senior leadership and their ‘working relationships’.  

“There seems to be a new disheartening story every week regarding issues to do with the health board’s performance. This does seem to me like another episode of the Labour Government burying bad news over the Christmas period with these investigations. 

“What Betsi Cadwaladr Health Board needs, is good leadership, accountability and stability to prevent these problems.”

Regarding the separate investigation into ‘working relationships at a senior leadership level’, the Health board stated that “Concerns have been raised through the NHS Wales Raising Concerns Policy about governance and leadership.” 

“They will be investigated independently in line with existing procedures and policies.”

Overall, auditors are said to have raised concerns that £122m of expenditure was not properly accounted for.  

The Welsh financial watchdog, Audit Wales, said it was still investigating to work out whether and how the money was spent.  

Following a report, the NHS Counter Fraud Service Wales was asked to investigate.  

Audit Wales said of the accounting issues: “The Auditor General issued a qualified ‘true and fair’ opinion on the Health Board’s 2021-22 accounts in August 2022, because he could not obtain sufficient evidence that certain figures were accurately stated and accounted for in the correct accounting period.”

The Auditor General further qualified his ‘regularity’ opinion because the Health Board again failed to meet its financial duty to break-even over a three-year period, and (along with eight other NHS bodies in Wales) incurred irregular expenditure in year in complying with a direction by Ministers to fund clinicians’ pensions tax liabilities.

“The audit of the Health Board’s 2021-22 accounts identified significant errors. The Health Board was unable to provide sufficient audit evidence to demonstrate the existence of £72 million of expenses incurred but not paid in the year.

There was also insufficient evidence to confirm that expenditure of £122 million occurred in the year or was properly accounted for in the correct accounting period.

“The Health Board stated that they did not have capacity to support the further audit work necessary to fully explore these issues, and consequently a “limitation of scope” qualification was placed on the Health Board’s accounts. As a result of the issues arising from the audit of accounts, the NHS Counter Fraud Service is carrying out further investigation work.”

The Welsh Government had to intervene in the health board earlier in 2022 after significant gaps in record keeping, incident management, team working, reporting concerns, leadership and morale were discovered. There had also been reports of bullying, harassment, and staff feeling unable to speak out.

The health board was put into special measures in June 2015, and de-escalated from special measures in November 2020.