Yr Adran Iechyd, Gwasanaethau Cymdeithasol a Phlant
Department for Health, Social Services and Children
Directors of Finance, Health Boards and NHS Trusts
Wales Audit Office
PricewaterhouseCoopers
KPMG
Deloitte & Touche
Head of NHS Financial Management
Our Ref/Your Ref: JE/JS
Date 25 September 2012
Dear Colleagues,
UPDATE NOTE – 03 (2012-13)
1. Transfer of NWSSP to Velindre NHS Trust
– Completion of S1 and S2 schedules
In response to queries received in relation to the completion of the S1 and S2 schedules the
following advice has been issued.



The S2 agreement should identify the balances to transfer to the new organisation.
Debtors and creditors identified at the end of month 2 and subsequently funded by the
Welsh Government are due to be settled by the predecessor body and should be
excluded from the S2 balances to be certified.
Expenditure items relating to month 1 and 2 that have been identified since month 2, will
be paid by NWSSP, thus these transactions should be included on the S2 of the
transferring body. Any additional charges should be invoiced to NWSSP.
S1 - The closing NBV at 31.5.12 transfers into NWSSP on 1.6.12 and the contra entry in
the accounts will be to
o
o
LHB - to the General Fund and Revaluation Reserve,
NHS Trust – to the PDC and Revaluation Reserves.
as appropriate. There is no requirement to show reserve transfers or to split between
gross and accumulated depreciation on the S1 S2 schedules.

Depreciation calculations should be based on 2/12 by the transferor body.
The following instruction (Annex 1) was issued in the Shared Services Communication
Briefing Issue 2 May 2012.
Parc Cathays ● Cathays Park
Caerdydd ● Cardiff
CF10 3NQ
Ffôn ● Tel 029 2082 3518
[email protected]
Gwefan ● website: www.wales.gov.uk
- Advance notification of potential further information requirement outside of the S1
and S2 exercise.
In relation to the WRP Accounts, if merger accounting is applied the WRP claim values
and WG debtor will transfer at their 1 April 2012 values. However, if absorption
accounting is applied Betsi Cadwaladr HB will be required to prepare a consolidated
account to include the WRP for the first 2 months and Velindre NHS Trust will prepare a
consolidated account to include the WRP accounts for the last 10 months. If absorption
accounting is the agreed accounting methodology the Finance Manager at the Welsh
Risk Pool will be contacting NHS organisations for information relating to the value of the
claims as at 31 May 2012.
2. Consolidation of NHS Funds Held on Trust Accounts into NHS Exchequer Accounts
At the TAG meeting on the 24th September 2012 it was agreed that we would consider the
following issues in preparation for the proposed consolidation of NHS FHoT Accounts into
the NHS Exchequer Accounts



If full consolidation is not a requirement the key FHoT balances for inclusion into the
consolidated account.
A review of the FHoT accounts to identify the differences in presentation with the view to
preparing the FHoT accounts on a consistent basis across Wales.
Segmental quantitative threshold summary to inform the preparation of the consolidated
accounts presentation and discussions with the WAO.
The first two items are currently being reviewed by the Welsh Government however,
organisations should provide any comments when submitting the information for item 3.
IFRS 8 Para 13 states that:
Whilst operating segments that do not meet any of the quantitative thresholds may be
considered reportable and separately disclosed if management believes that information
about the segment would be useful to the users of the financial statements.
Information on an operating segment should be separately reported if:
 If its reported revenue including both sales to external customers and intersegment sales
or transfer is 10% or more of the combined revenue internal and external of all operating
segments.

The absolute amount of the segment’s reported profit or loss is 10% or more of the
greater of:
o the combined reported profit of all operating segments that did not report a loss, and
o the combined loss of all operating segments that reported a loss.

The segment’s assets are 10% or more of the combined assets of all operating
segments.
To provide information for future discussions with Wales Audit Office please will you forward
the percentage against the 3 quantitative measures for 2010-11 and 2011-12, together with
the data used to calculate the percentage for your organisation to the Welsh Government by
close of play 5 October 2012.
For ease of summarisation please provide the information required as outlined in Annex 2.
3. Month 6 Agreement – Welsh Local Authority Data Collection
In response to mismatches between NHS bodies and Welsh Local Authorities identified
during the 2011-12 WGA process, please will you submit a list of Income and Expenditure
transactions and debtor and creditor balances with Welsh Local Authorities up to the end of
month 6. The list should include all Welsh Local Authorities that have total transactions
above £200k at year end. Schedules should:




separately Identify the Local Authorities,
include date of transaction/balances
provide a brief description of the receipt/payment
disclose any amounts relating to rates separately.
4. Public Sector Payment Policy (PSPP) and Hutton Disclosures - Meeting 25 October
2012
In preparation for the meeting on the 25 October please will you provide the following
information by 9 October 2012 for summarisation.
PSPP
 Principles for the preparation of PSPP performance
 List of adjustments currently being made to the system report, to prepare a list of agreed
adjustments.
Hutton
 What inclusions and exclusions were made in the calculation of the highest-paid director
in the organisation and the median remuneration of the organisation’s workforce.
 The top 3 issues when preparing the information.
For ease of summarisation please provide the information required as outlined in Annex 3.
If you have any queries please contact either myself or John Evans.
Yours faithfully
Financial Accountant
Finance Directorate / Cyfarwyddiaeth Cyllid
Department for Health, Social Services and Children / Yr Adran Iechyd, Gwasanaethau
Cymdeithasol a Phlant
Welsh Government / Llywodraeth Cymru