Role of the Principal Accounting Officer (PAO) – Department of Health and Social Care
The Permanent Secretary, as the Principal Accounting Officer (PAO) of the Department of Health and Social Care (DHSC), is accountable to Parliament for the proper stewardship of the resources allocated to the Department. The PAO is also required to provide assurance that the individual organisations within the system are performing their functions and duties effectively and have the necessary governance and controls to ensure regularity, propriety and value for money. The PAO does this through the appointment by the PAO of the Chief Executive as the Accounting Officer of NHS Resolution. The PAO has also appointed a Senior Departmental Sponsor (SDS) to act as NHS Resolution’s designated, consistent point of contact within the Department, The SDS acts as the link at executive level between NHS Resolution and the senior officials of the Department, and also with ministers. The SDS is currently the Director General for Acute Care and Workforce. The SDS is supported by a Departmental sponsor team, who are the principal day-to-day liaison between the Department and NHS Resolution. The SDS is responsible for ensuring that each organisation is sponsored effectively and in line with the Department’s sponsor standards. The mechanisms in place to provide this assurance include:
- Annual objective setting and review process for the Chair
- Accountability from the Accounting Officer through the annual governance statement
- Setting and agreeing framework agreements between NHS Resolution and DHSC
- Agreeing the annual business plan and corporate plan
- Quarterly and annual accountability reviews
- Triennial reviews
Chief Executive and Accounting Officer (AO)
The AO may be called to Parliament to account for the performance of NHS Resolution in administering the schemes and the other functions of NHS Resolution and for the stewardship for the funds entrusted to it. The AO is required to sign the Governance Statement annually. The AO is supported in that role by the Board and NHS Resolution’s internal audit team which together provide oversight of the effective working of internal controls and provide assurance to the AO. The responsibilities of the AO are to ensure that the day-to-day operations and management of NHS Resolution is run on the basis of the standards (in terms of governance, decision-making and financial management) set out in Managing Public Money1 including seeking and assuring all relevant financial approvals. The principles set out in Managing Public Money1 are reflected in NHS Resolution’s Standing Financial Instructions which govern the day-to day operation of NHS Resolution. The responsibility for ensuring that the Standing Financial Instructions are met is delegated by the AO to the Director of Finance and Corporate Planning, and to the Finance and Corporate Governance teams. The Director of Finance and Corporate Planning also acts as the Senior Information Risk Owner (SIRO) and Data Protection Officer.
Role of the Board
The composition and conduct of the Board is guided by Standing Orders (most recently issued in January 2018) 2 and as set out in the NHS Resolution Framework Agreement. NHS Resolution has a Board consisting of a Non-Executive Chair, five other Non-Executive members and four Executive members, holding the offices of the Chief Executive Officer and Accounting Officer (AO), Chief Finance Officer, and such other Executive appointments (pursuant to the NHS Resolution (Establishment and Constitution) Order 1995 [as variously amended]). The Chair and other Non-Executive Directors are appointed by the Secretary of State. The Chair, Chief Executive and other Non-Executive Directors are responsible for appointing the Executive Directors. NHS Resolution Board members and their responsibilities are set out as follows:
Chair of the Board and of the Remuneration and Terms of Service Committee
Chief Executive and Accounting Officer. Chair of the Senior Management Team, Recruitment Oversight Committee, Reserving and Pricing Committee, Staff Engagement Group
Non-Executive Director, Chair of the Audit and Risk Committee
Sir Sam Everington
Dr Mike Durkin
Associate Non-Executive Director (ex-officio)
Non-Executive Director, Freedom to Speak Up Officer
Executive Director of Finance and Corporate Planning, Senior Information Risk Owner and Chair of the Information Governance Group
Executive Director of Safety and Learning, Caldicott Guardian
Executive Director of Practitioner Performance Advice
NHS Resolution is governed by its Board and the Chair of the Board is responsible to the Secretary of State. The role of the Board is to establish and take forward the strategic aims and objectives of NHS Resolution, consistent with its overall strategic direction and within the policy and resources framework determined by the Secretary of State. Its role is described in the corporate governance code for central government.3 This includes holding the executive management team to account ensuring the organisation is able to account to Parliament and the public for how it has discharged its functions, and that decision-making is informed by information covering the full range of corporate, financial, clinical, information and research governance. The Board ensures that effective arrangements are in place to provide assurance on risk management, governance and internal control. The Chair is responsible for ensuring that NHS Resolution’s affairs are conducted with probity, and that NHS Resolution’s policies and actions support it in the discharge of its functions and duties efficiently and effectively and meet NHS Resolution’s objectives, including those set out in its business plan.
The Board has determined that it will:
- Operate as a unitary Board, except in any areas specifically reserved for certain directors, and in a way that achieves the right balance between the role of the Board as a whole and the role of the Executive team.
- Own the process for developing strategy in conjunction with and in response to the needs of key stakeholders, with a particular focus on the medium to longer term.
- Approve (annual or longer term) plans for the implementation of strategy.
- Monitor the performance of the organisation against agreed plans.
- Be responsible for the overall system of control, ensure key risks are identified and appropriate mitigating actions are taken.
- Ensure compliance with relevant NHS and wider Government regulations and requirements, including the provision of excellent services and good value for money.
- Set the tone and culture for the organisation and lead by example.
- Review, endorse and adopt, in support of the AO, the annual report, financial statements and statement to be given by the AO.
- Collectively and individually represent the interests of NHS Resolution in other communities as appropriate.
- Conduct its affair in an open and transparent manner as possible within the constraints of preserving confidentiality where appropriate
- Periodically review its own performance
The following Committees and management structures are established to enable the Board and the AO to discharge their responsibilities and to ensure that internal controls are in place to safeguard and steward financial and resource controls.
Sub Committees of the Board
Audit and Risk Committee (ARC)
The Audit & Risk Committee is chaired by a Non-Executive director. It meets at least four times a year and is a sub-Committee of the Board. It ensures that an effective system of internal control for all risks is maintained. The Audit and Risk Committee reviews NHS Resolution’s strategic risk register, ARC reviews the results of internal and external audit work and reviews the annual audit plan with reference to the Strategic Risk Register for approval by the Accounting Officer. It also receives and reviews reports from the Operations Risk Review Group and the Information Governance Group.
Remuneration and Terms of Service Committee (RemCo)
The RemCo is chaired by NHS Resolution’s Chair. It is a Non-Executive Committee of the NHS Resolution Board, which determines its membership and terms of reference. The RemCo role includes the determination of the remuneration, benefits and terms of services of all posts covered by the Very Senior Managers’ Pay (VSMP) Framework.
Reserving and Pricing Committee (RPC)
The RPC is chaired by the AO who reports to the ARC on reserving matters and direct to the Board on pricing matters. A Non-executive is a member of the RPC. The purpose of the RPC is to provide assurance to the Board that the case reserving methodology and practice, as well as modelling methodologies, assumptions and outputs are appropriate. The responsibilities include setting and reviewing the reserving methodology for each scheme and to agree and sign off on key assumptions used in each reserving and cash flow projection exercise. The RPC also recommends to the Board reserves for accounting purposes and total collect amounts for each scheme.
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