Health board says it has ‘learned’ from £9.4M accounting blunder

Dale Spridgeon, local democracy reporter

Wales’s biggest health board says it has “learned” from the events of an historical £9.4M blunder.

A damning report by Audit Wales had confirmed that accounting errors by the then Betsi Cadwaladr University Hospital Board happened as a result of identified expenditure of £9.4m being accounted for in 2021/22, when it appeared to relate to 2022/2.

But following probes by NHS Counter Fraud and North Wales Police, no evidence of fraud was found.

Some finance department staff had raised confidential concerns regarding the recording of transactions through whistle blowing procedures.

The health board was also made aware of an unauthorised disclosure of an accounting report by EY (Ernst & Young) in mid-May, 2023.

The firm had written a scathing report after “significant errors” were identified.

Restricted

Although the report had been restricted in terms of circulation, received by a small group of people within the health board, Audit Wales and NHS Wales Counter Fraud Service, the disclosure had constituted a breach of data legislation.

The board was also subject to a Board Effectiveness Assessment by Audit Wales which had reported in February 2023. Shortly afterwards, the Welsh Government escalated the organisation to a Level 5/Special Measures intervention.

A “deeply worrying degree of dysfunctionality,” within the then board and senior leadership,” had been identified in the report.

Sue Hill, the then executive director of finance, had been on leave of absence since December 2022, but this had included 12 months due to major surgery and treatment. She resigned and left the organisation in December 2024.

Since November, 2023 the board has been led by CEO Carol Shillabeer, who was also the interim chief from May, 2023 until her appointment.

A final summary report on the accounting issues was discussed at the BCUHB meeting yesterday (Thursday, July 31).

Statement

A statement by the board, released, 15 minutes ahead of the start of the meeting, said: “Betsi Cadwaladr University Health Board today discussed a final summary report on the accounting issues which occurred in 2021/22.

“This is to provide transparency and accountability and to ensure learning, with measures in place to safeguard that such matters do not happen in future.

“This was clearly a serious and complex matter and a wide range of reviews, investigations and other processes have been undertaken as a result.

“No evidence of fraud was found through investigations by Counter Fraud Wales and North Wales Police.

“The report demonstrates the learning and actions implemented and there are now strengthened systems, culture, and leadership in place. Audit Wales has issued an unqualified audit opinion (a true and fair view) on the Annual Accounts for the last two financial years.

“External bodies, through various reports and assurances, have recognised the progress made by the Health Board. We have, and will continue to learn from this experience as we build a culture of integrity, respect, and transparency across all areas of our organisation.”

It also outlined the board’s summary of “learning and action” as:

Strengthened Financial Governance and Financial Improvement Plan in place – last two years clean bill of health on the Annual Accounts

Strong financial performance, reducing financial overspend, exceeding Welsh Government target for 2024-25

Improvements in Contract Procurement and Management

Significant improvement in the quality of the draft financial statement presented for audit

Further improvements in Information Governance processes

Frameworks now in place setting out ambition and expectations for effective leadership and governance – including risk management framework, Integrated Performance Framework and an Integrated

Planning Framework. These have underpinned improvement actions and organisational capability.

Strengthened Corporate Governance.

Leadership – at the Board level, successful recruitment has taken place of a new Chair, Vice-Chair and

Independent Board Members; a substantive Chief Executive and a significant number of Executive Team member roles.

Culture of openness and transparency which Audit Wales and Welsh Government recognise.

Issues

Speaking at the meeting CEO Carol Shillabeer said her report had focused on issues that led to the qualification of the accounts in 2021/22.

The “core issues” had related to accounting practice, related, wider issues including contract procurement and management, HR management, information governance, culture and behaviours and the summary of key learning and action, taken and ongoing.

“This matter has been very difficult for the people involved and for wider departments in the organisation and the health board in general,” she said.

“I hope that bringing this final report means that having brought out the issues, the learning and action we can now start to move forward.”