abcdefghijklm Health Department St Andrew’s House Directorate of Finance Regent Road Edinburgh EH1 3DG

Director of Finance Telephone: 0131-244 2811 Health Boards & Fax: 0131-244 2057 Special Health Boards Janice.macphail2@.gsi.gov.uk http://www.scotland.gov.uk

Your ref: Our ref:

23rd October 2001

Dear Colleague

Whole of Government Accounts

The Scottish Executive is embarking on the process to deliver the Whole of Government Accounts (WGA) project in Scotland.

WGA will be commercial-style accounts covering the whole of the public sector. In the same way as commercial group accounts, WGA will treat Government as if it were a single (consolidated) entity by eliminating all significant transactions and amounts owed between public sector entities. They will be intended to present a “true and fair” view of Government’s activities.

The WGA project will be split into two main stages, the first of which is to produce Central Government Accounts (CGA) which will cover all “central government bodies” for the financial year, 2003/04. The second main stage will be to produce WGA for the financial year, 2005/06. In the intervening years, 2001/02 and 2002/03, dry run exercises will be used to test systems and procedures.

As Health Boards and Special Health Boards fall within the boundaries of CGA we have been asked to gather information on the debtor/creditor balances with other CGA bodies as reported in your annual accounts for 2000-01.

I would be grateful if you could complete the attached template (XLS version, PDF version) instructions attached, and return to David Eatock, no later that 15th November 2001.

Please do not hesitate to contact me if you wish to discuss.

Yours sincerely,

Janice MacPhail

abcde abc a

INTER BODY BALANCES WITHIN CENTRAL GOVERNMENT ACCOUNTS: SCOTLAND

INSTRUCTIONS TO HEALTH BOARDS FOR THE RETURN OF 2000-01 DATA TO THE SCOTTISH EXECUTIVE

1. General

This exercise is being undertaken as a first step in preparing for the introduction of Central Government Accounts (CGA) and subsequently Whole of Government Accounts (WGA) under which a full set of consolidated accounts will be produced on the basis of UK GAAP (as adapted).

In Scotland this is enshrined in Section 20 of the Public Finance and Accountability (Scotland) Act 2000. The Scottish Ministers will formally designate those bodies falling within the CGA and WGA boundaries and require such bodies to provide such information as they require to produce consolidated accounts and to have these audited.

In the wider perspective these accounts will then be used to construct a consolidation pack to be submitted to HM Treasury and feed in to the UK consolidation process.

2. The Designation Process and Testing Timetable

The formal designation of bodies will first be applied for the financial year 2003-04 and a Scottish Statutory Instrument will be laid before the Scottish Parliament in January 2003. The intention is that on a UK basis a set of CGA accounts will be published for the year 2003-04.

For the year ended 31st March 2001, the prime purpose of the exercise is to establish the volume and complexity of such inter-body relationships and to build on this experience in designing systems and processes to facilitate an effective consolidation process. The following two years will be used to conduct dry run exercises to ensure that processes are in place to deliver a consolidated set of accounts for those bodies designated.

As part of that process we need to establish, for bodies falling within the boundary for Central Government Accounts, suitable mechanisms for identifying end year balances and in year trading between the your organisation and other public bodies in order to eliminate such balances from the consolidation.

3. The Return Template

The template (attached file Scotland CGA template.xls) is based on the one currently used for the consolidation of the Scottish Administration and the intention is to keep the process as simple as possible.

All year-end balances for those bodies being listed as within Scottish CGA should be listed on the return.

For those bodies within the boundary for the Scottish Administration currently completing consolidation packs this process is current practice. The only extension will be the range of bodies not currently included in the Scottish Administration consolidation but falling within the CGA boundary (namely executive NDPBs and some other bodies)

Please refer to appendix A for a list of those bodies currently falling within the CGA boundary within Scotland.

In the consolidated accounts produced to comply with section 20 of the Public Finance and Accountability (Scotland) Act 2000, the net indebtedness between bodies has to be eliminated. To allow this process, it is essential that the net indebtedness between bodies be the same in each account. The totals for all bodies on returns made to the Scottish Executive should therefore be equal. In future years it will be necessary that balances between bodies are agreed, and the respective debtor and creditor balances between bodies are reported as the same in their accounts.

4. Deadline for the return of 2000-01 balances to Scottish Executive

The date for the return of intra-CGA balances is 15 November 2001. It is important that this date is adhered to allow the finalisation of the trial exercise and to allow the further testing of consolidation processes.

5. Gross Balances

In cases where a body has both a debtor and creditor balance with another health body, the balances must be shown separately to facilitate the process.

6. Balances reported

Inter NHS balances should be those reported on the SFR 30.0, unless a Board has received notification from the SEHD of a required alteration to the SFR 30.0 balance, in which case the amended figure should be reported. As this is the first information gathering exercise for CGA it has been decided to limit the amounts to be included by Boards for non-NHS bodies, to relate to invoices dated on or before the 31st March 2001, which were reported in the annual accounts at that date.

7. Bad Debt Provisions

In the exceptional case where a balance with another body has been included within the provision for bad debts, then the balance must be included on the return and separate disclosure made of the amount and the reason for the inclusion within the provision.

Appendix A

SE core departments Rural Affairs Department Development Department Education Department Enterprise and Lifelong Learning Department Health Department Justice Department Administration Executive Agencies Historic Scotland Scottish Agricultural Science Agency Scottish Court Service Fisheries Research Services Scottish Fisheries Protection Agency Scottish Public Pensions Agency The Student Awards Agency for Scotland HMI Schools Inspectorate Scottish Homes Health Boards Argyll and Clyde Ayrshire and Arran Borders Dumfries and Galloway Fife Forth Valley Grampian Greater Glasgow Highland Lanarkshire Lothian Orkney Shetland Tayside Western Isles

Other Health bodies Clinical Standards Board for Scotland Common Services Agency for the NHS in Scotland Health Education Board for Scotland Health Technology Board for Scotland Mental Welfare Commission for Scotland Scottish Ambulance Service Board Scottish Council for Postgraduate Medical and Dental Education State Hospitals Board for Scotland Other Bodies Crown Office and Service Associated General Register Office for Scotland Departments National Archives of Scotland Executive NDBPs Accounts Commission for Scotland Community Learning Scotland Hannah Research Institute Learning and Teaching Scotland Macauley Land Use Research Institute Moredun Research Institute National Board for Nursing, midwifery and health visiting for Scotland National Galleries of Scotland National Library of Scotland National Museum of Scotland Rowett Research Institute Royal Botanic Garden, Edinburgh Scottish Children’s Reporter Administration Scottish Conveyancing and Executry Services Board Scottish Criminal Cases Review Commission Scottish Crop Research Institute Scottish Environment Protection Agency Scottish Further Education Funding Council Scottish Higher Education Funding Council

Scottish Hospital Endowments Research Trust Scottish Hospital Trust Scottish Board Scottish Natural Heritage Scottish Qualifications Authority Scottish Screen Scottish Tourist Board Water Industry Commissioner for Scotland Highlands and Islands Enterprise Crofters’ Commission Deer Commission for Scotland Parole Board for Scotland Royal Commission on the Ancient and Historic Monuments of Scotland Scottish Agricultural Wages Board Scottish Medical Practices Committee