Brennan Report - Department of Health and Children

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Report of the Commission on Financial Management and Control Systems in the Health Service7.7 PERFORMANCE MANAGEMENTWe believe that an effective performance management system is essential if an organisation ascomplex as the health service is to be managed efficiently. In this report, we have identifiedareas in which the management of the health services needs to be improved andaccountability strengthened. To achieve this, effective performance appraisal systems areessential. It is important that good performance is rewarded and poor or underperformance isconfronted – a recent Finnish study concluded that acceptance of financial reporting in thehealthcare field may be accelerated by aligning the incentives of medical practitioners to theeconomic performance of the entity under their control 10 . An important and basic element ofperformance management is that an effective management information system is put in placeand that reporting deadlines are met.We strongly support the early implementation of the performance management scheme agreedin the recent national partnership negotiations as a means of achieving this goal. The text states:"A model of performance management, integrated with service planning and human resource planning,is currently being developed for the health service. This process will be expedited and the rollout of aperformance management scheme accelerated to successfully align effective utilisation of humanresources with strategic and operational performance priorities. The parties will work energetically todevelop and agree an appropriate national uniform system of performance management for the healthservice" 11We also believe that there is a need to develop the management skills of those charged withrunning the health service.Recommendation on Management Development in the Health ServiceR7.13 An accelerated management development programme should be put in place for senior managers in the healthservice.7.8 SUMMARYIn this Chapter, we have noted the difficulties which exist in relation to management andcosting of the pay budget, aspects of which were also referred to in Chapter 2. We have maderecommendations to improve the information flows consistent with the wider reportingframework recommended in Chapter 9. This is necessary to provide a more accurate basis formanpower policy considerations going forward – as the pay bill accounts for almost 70% ofcurrent expenditure in the health service, manpower management is an essential component ofthe overall management framework discussed throughout the report.We have made recommendations to improve the skills mix and management performanceacross the health service. This will help to maximise value for money and can also play a rolein changing the culture so that good financial management is not seen solely as a financefunction, in line with our core principles from Chapter 2.10Kurunmaki, L., Making an Accounting Entity:The Case of the Hospital in Finnish Health Care Reforms,The European AccountingReview (1999) 8:2 pp219-237.11Sustaining Progress; Social Partnership Agreement 2003-2005, page 102.98
Chapter 8 Audit ReformCHAPTER 8AUDIT REFORMIn this Chapter, we look in detail at a range of issues related to audit functions and responsibilities in the healthservice.8.1 OVERVIEWA wide range of internal and external auditing reforms are necessary so that expenditure iscontrolled and assessed in a manner consistent with modern commercial practice. Given thescale of on-going investment in the health service, reforms will be required in the accountingstandards throughout the health service. The improved systems of checks and balances will haveto include changes in risk assessment and management. We also recommend that the newsystems of control for the health service should include measures to protect against fraud.Consistent with modern commercial best practice, it is imperative that the health service, aspart of its general governance arrangements, ensure that strong audit committees exist,appropriate external and internal audit arrangements are in place and, in terms of enforcement,that there is a clear and unambiguous policy on fraud.8.2 AUDIT COMMITTEESLegislation governing health boards provides for reserved functions of the boards, with all otherfunctions being executive functions of the CEO. Health boards may not issue a direction to theCEO in relation to executive functions but the CEO must give the board of the health boardinformation sought by them in relation to these functions.Best practice requires organisations to establish audit committees chaired by an independentnon-executive Chairman. External auditors and internal auditors should report to the auditcommittee. If necessary, legislation should be amended to ensure that the reserved functionsof health boards and health board CEO executive functions support implementation of bestpractice in relation to audit committees of health boards. However, we believe that healthboards could voluntarily adopt many aspects of best practice in relation to audit committeeswithout a change in legislation.All health boards should establish an audit committee. These audit committees should:●●●Comprise at least three non-executive directors.Have written terms of reference dealing clearly with authority and duties.Duties should include reviewing:◆ Scope and results of audit;◆ Cost effectiveness of audit; and◆ Independence and objectivity of auditors.Members of management are not normally members of audit committees but frequently arerequired to attend meetings to provide the committee with any information required. Thepowers and functions of the audit committee, as set out in its charter or written terms ofreference, should be adopted by the board.The main function of an audit committee is to reassure the board on the system of internal99
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Commission onFinancial Managementan
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TABLE OF CONTENTSEXECUTIVE SUMMARY
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6.4 COMMUNITY DRUG SCHEMES 80Medica
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Executive SummaryEXECUTIVE SUMMARYT
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Executive SummaryWe do not underest
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Executive Summary"demand-led" schem
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Terms of ReferenceTERMS OF REFERENC
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GlossaryEstimates for Public Servic
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Chapter 1 Introduction and Backgrou
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Chapter 1 Introduction and Backgrou
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Chapter 2 Overview and Issues2.2 OR
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Chapter 2 Overview and IssuesTable
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Chapter 2 Overview and IssuesIn 200
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Chapter 2 Overview and IssuesProble
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Chapter 3 Managing the Health Servi
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Page 137 and 138: Appendix 3Name of AgencyWomen’s H
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Appendix 4Approvals Required in lin
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Appendix 5Appendix 5DIAGNOSIS RELAT
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Appendix 5Figure: Ax.1 Casemix Adju
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Appendix 6Appendix 6AUDIT OF STRUCT
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Appendix 8Appendix 8 - Integrated M
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ADDENDUMNumber Recommendation IT Ti
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Brennan Report - Department of Health and Children

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