Health and social care integration - financial assurance: guidance

4. Role of the Audit Committees (or committee(s) carrying out equivalent function)

The introduction of integration arrangements and the establishment of the IJB Audit Committee (or committee(s) carrying out equivalent function) will have implications for the ongoing work of the Health Board and Local Authority audit committees. Advice on this is provided at section B2.6 of the IRAG guidance.

In addition, the Audit Committees will have an important role to play in the assurance process through assessment of the objectives, risks, and post integration performance results of the IJB.

4.1 Pre Integration-shadow Period

The Health Board and Local Authority Audit Committees can help increase the likelihood for success of the new arrangements by verifying that officers have effective assurance processes in place. Preparations for integration may be too far advanced for full involvement of the audit committees in the preparatory stage, but where this is practical, it is recommended that they obtain assurance:

• On the finance provisions to be included in the Integration Scheme;
• On the plans for financial governance and financial assurance and risk;
• That lessons have been learnt from other integration projects (e.g. Highland partnership); and
• That the predetermined financial metrics that officers will use in future to assess whether integration has met its objectives have been identified and that a process for obtaining baseline data is in place.

It is recommended that the Audit Committees are provided with a report, produced jointly by the Health Board and Local Authority Chief Internal Auditors (and copied to the shadow IJB), on the assurance work that has been carried out by the Health Board and Local Authority. This report should be produced sufficiently in advance of the date of delegation of functions and resources (published in the Strategic Plan) to allow for consideration by the Audit Committees.

The arrangements for obtaining financial assurance should be set out in the Annual Governance Statements of the Health Board, Local Authority and Integration Joint Board for both the year prior to and the year of, delegation of functions and resources.

4.2 Implementation

The Audit Committee of the Integration Joint Board once established (or the committee(s) carrying out an equivalent function) should be provided with the assurance report and should:

• Review the finance provisions to be included in the Integration Scheme to ensure that they enable the IJB to carry out its functions;
• Formally assess whether the resources to be made available to the IJB are adequate for it to deliver its objectives and that the associated risks and assumptions are reasonable and clearly understood;
• That the respective risk management arrangements have been updated to incorporate the risks introduced by integration. See IRAG guidance section B2.2.

Advice for cases where the IJB cannot obtain assurance that its level of resources are adequate will be provided by the policy team in due course.

4.3 Post Integration

The post-integration period is a critical stage of the change process and the audit committees (or the committee(s) carrying out an equivalent function) have a key role in assessing whether the objectives of integration are on line to be achieved. It is recommended that the three audit committees (or the committee carrying out equivalent function in the IJB) are provided with a post integration report within the first year of the establishment of the IJB to evaluate the actual risk and financial performance against the pre-integration assumptions, performance on relevant integration milestones, identify lessons learned and assess whether the IJB is on course to deliver the long-term benefits.

The results of the review should be shared with the Scottish Government to enable wider learning.