The government has announced proposals for new rules for audit committees in the health service, designed to strengthen their independence following the abolition of the Audit Commission’s oversight role.
The Department of Health has published the results of a consultation which took place last autumn on the constitutional requirements for audit committees within NHS Trusts and Clinical Commissioning Groups (CCGs).
From April 2015, the audit committees of these health service bodies will be responsible for advising the governing board on the selection, appointment and maintenance of independent relationships with external auditors. The new rules are intended to set out who is eligible and how to assess whether they are independent from the governing body.
Responses to the consultation, from CCGs, NHS Trusts and auditors including the Audit Commission were supportive of the proposals. These include the requirement for audit committees to have a chair who is an independent non-executive member of the governing board and a majority of independent non-executive members, either from the governing board or elsewhere.
However, following feedback from the consultation, the government has decided not to go ahead with the requirement for audit committees to be ‘wholly or mainly’, made up of independent non-executive members of the governing board, which the CCGs said would be difficult to implement in practice.
Under the new rules, audit committees can also include non-executive members of the governing board who are not considered to be independent, which a number of CCGS supported as a way of including GPs and so allowing for appropriate clinical input. They can also include independent members, who are not members of the governing board.
The regulations also set out how the governing board should determine the independence of a prospective audit committee member by listing the criteria to be considered,
As a result of the rule changes, some organisations may need to appoint additional members in order to achieve impartial and independent audit committees which respondents said would add to the costs of the new regime.
The Department of Health said there would a final consultation on the draft regulations in the summer, with new legislation scheduled for the autumn.
The consultation findings are here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/310019/DH_Consultation_on_NHS_Trust.pdf
