HFMA financial governance guidance revisited

28 February 2023

Senior consultant Joanna Watson reassesses her 2017 briefing on financial governance.

Back in 2017 I co-wrote a briefing for the Healthcare Financial Management Association (HFMA) on financial governance. It’s been interesting to reflect on what’s changed in the intervening six years – and what hasn’t.

There are some very obvious changes. Following the Health and Care Act 2022, CCGs have gone, and we now talk about systems rather than ‘providers and commissioners’.

Back in 2017, sustainability and transformation plans were fairly new, with 44 geographical footprints identified; now we have 42 fully functioning integrated care systems.

We’ve also seen financial governance arrangements suspended as COVID-19 impacted the NHS in ways never seen before, with temporary arrangements put in place.

So, many crucial things have changed since 2017 – but many have not. There are still huge expectations on organisations to meet their financial targets, whether that’s at an individual ICB or provider level or as part of a system. And strong financial governance and leadership are as important as ever.

Enduring questions

In 2017, we suggested questions to ask about financial governance and, while some of the language could do with an update, the principles behind those questions remain the same. Here are a few that stood out for me:

  • Is the in-year reporting effective?
    • Understand the quality of your information – is it reliable and useful, and has it been produced promptly?
    • Are the numbers easy to understand? Is it clear what is recurring/ non-recurring and is the underlying position set out?
  • Are all the strategies consistent with your overall plans, including the system plan?
  • Are the organisation’s risk management systems embedded and well-focused?
    • Critically appraise your assurance framework – does it show what really matters?

With so many urgent operational pressures on the NHS, it’s easy to concentrate time and effort on those areas and give insufficient focus to financial governance. But this is a false economy – just as it was in 2017.

I’ll end with the final sentence from the briefing, a fundamental principle of financial governance which is as valid now as it was in 2017: Good financial governance should be there to support the organisation as it strives to meet its challenges here and now, and look ahead to the future.

Meet the author: Joanna Watson

Senior Consultant

Find out more

Prepared by GGI Development and Research LLP for the Good Governance Institute.

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