Local Audit and Accountability Bill (HC Bill 129)

Local Audit and Accountability BillPage 110

5 (1) Section 4 is to be read as if after subsection (5) there were inserted—

(6) In relation to an NHS trust, or the trustees for an NHS trust,
“accounts” means the annual accounts prepared under paragraph 3
of Schedule 15 to the National Health Service Act 2006.

(2) 5Accordingly, in section 44(1) the definition of “accounts” is to be read as if
for “(5)” there were substituted “(6)”.

Notice of appointment of local auditor

6 Section 8(4) (publication of notice of appointment of local auditor) is to be
read as if it contained the following paragraphs—

(d) 10in the case of an NHS trust, it publishes the notice in such
manner as it thinks is likely to bring the notice to the attention
of persons to whom the trust provides services for the
purposes of the health service in England;

(e) in the case of trustees for an NHS trust, they publish the
15notice in such manner as they think is likely to bring the
notice to the attention of persons to whom that NHS trust
provides services for the purposes of the health service in
England.

Functions of auditor panel

7 20Section 10(10) (publication of advice of auditor panel) is to be read as if it
contained the following paragraphs—

(d) in the case of an NHS trust, it publishes the advice in such
manner as it thinks is likely to bring the advice to the
attention of persons to whom the trust provides services for
25the purposes of the health service in England;

(e) in the case of trustees for an NHS trust, they publish the
advice in such manner as they think is likely to bring the
advice to the attention of persons to whom that NHS trust
provides services for the purposes of the health service in
30England.

Failure to appoint local auditor

8 (1) Section 12 does not apply in relation to an NHS trust mentioned in
paragraph 3(1)(a), or the trustees for such a trust as mentioned in paragraph
3(1)(b).

(2) 35Paragraph 9 applies in relation to such a body.

9 (1) If an NHS trust fails, or the trustees for an NHS trust fail, to appoint an
auditor in accordance with Part 3, the trust or (as the case may be) the
trustees must immediately inform the National Health Service Trust
Development Authority (“the Authority”) of that fact.

(2) 40If it appears to the Authority that an NHS trust has, or the trustees for an
NHS trust have, failed to appoint an auditor in accordance with Part 3, the
Authority must inform the Secretary of State of that fact by the end of 25
March in the financial year preceding the financial year to which the
accounts to be audited relate.

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(3) If the Secretary of State has been informed by the Authority under sub-
paragraph (2), the Secretary of State may—

(a) take either of the steps in sub-paragraph (4), or

(b) direct the Authority to take whichever of the steps in sub-paragraph
5(4) the Authority considers appropriate.

(4) Those steps are—

(a) to direct the trust or trustees to appoint an auditor named in the
direction given under this paragraph, or

(b) to appoint an auditor on behalf of the trust or trustees.

(5) 10An appointment under sub-paragraph (4)(b) takes effect—

(a) as if it had been made by the trust or trustees, and

(b) on such terms as the Secretary of State or (as the case may be) the
Authority may direct.

(6) The Secretary of State or the Authority must—

(a) 15inform the trust or trustees of the intention to give a direction or
appoint an auditor under sub-paragraph (4) not less than 28 days
before the direction is given or the appointment made, and

(b) consider any representations made by the trust or trustees regarding
the proposed direction or appointment.

(7) 20But the Secretary of State or the Authority may give a direction or make an
appointment under sub-paragraph (4) without having complied with sub-
paragraph (6) if the Secretary of State or the Authority thinks it is likely that
an auditor would have to exercise a function under this Act in relation to the
trust or trustees within the period of 60 days beginning with the day on
25which the direction is given or the appointment is made.

(8) The National Health Service Trust Development Authority is the Special
Health Authority established under the National Health Service Trust
Development Authority (Establishment and Constitution) Order 2012 (SI
2012/901)).

30General duties of auditors

10 Section 21(3) (general duties of auditors of accounts of special trustees for a
hospital) is to be read as if—

(a) for “accounts of special trustees for a hospital” there were substituted
“accounts of a health service body other than a clinical
35commissioning group”, and

(b) in paragraph (c)—

(i) for “the special trustees have” there were substituted “the
body has”, and

(ii) for “their” there were substituted “its”.

40Independence requirement: directors of NHS trusts

11 In Schedule 5, paragraph 5 (independence requirement: modification of
section 1214 of the Companies Act 2006) is to be read as if the substitution
for section 1214 of the Companies Act 2006 provided (in addition to its
existing provision) that a director of an NHS trust may not act as a local
45auditor of—

(a) that NHS trust, or

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(b) the trustees for that NHS trust.

Public interest reports and written recommendations

12 (1) Schedule 7 is to be read in accordance with the following sub-paragraphs.

(2) In paragraph 2(3) (persons to whom written recommendations must be sent)
5after paragraph (c) insert—

(ca) where the relevant authority is an NHS trust or the trustees
for an NHS trust, to the National Health Service Trust
Development Authority,.

(3) In paragraph 3(2) (persons to whom public interest reports must be sent)
10after paragraph (c) omit “and” and insert—

(ca) where the relevant authority is an NHS trust or the trustees
for an NHS trust, to the National Health Service Trust
Development Authority, and

(4) In paragraph 4(8) (means of publicising public interest reports and related
15notices) after paragraph (c) insert—

(d) in the case of an NHS trust, it publishes the notice in such
manner as it thinks is likely to bring the notice to the attention
of persons to whom the trust provides services for the
purposes of the health service in England;

(e) 20in the case of trustees for an NHS trust, they publish the
notice in such manner as they think is likely to bring the
notice to the attention of persons to whom that NHS trust
provides services for the purposes of the health service in
England.

(5) 25In the modifications made by this paragraph, “National Health Service Trust
Development Authority” is to be construed in accordance with paragraph
9(8).

Unlawful expenditure or activity

13 (1) Section 30(2) (referral of health service bodies to certain persons as regards
30unlawful expenditure or activity) is to be read as if, at the end of paragraph
(b), there were inserted “, and

(c) if the health service body is an NHS trust or the trustees for
an NHS trust, notify the National Health Service Trust
Development Authority of the matter.

(2) 35In the modification made by sub-paragraph (1), “National Health Service
Trust Development Authority” is to be construed in accordance with
paragraph 9(8).