Magazine article Public Finance

Trust's £20M Deficit a Legacy of Mismanagement, Says Auditor

Magazine article Public Finance

Trust's £20M Deficit a Legacy of Mismanagement, Says Auditor

Article excerpt

Royal Cornwall Hospitals NHS Trust will not recover a projected £20m deficit this financial year because of the 'lack of financial management and control' it suffered last year, the Audit Commission has warned.

The trust's deficit grew significantly between 2004/05 and 2005/06, from £12.8m to £27.7m. District auditor Lee Budge, while recognising 'significant external factors' such as the under-funded Agenda for Change pay initiative, found that the main reasons for the growing deficit were the trust's over-reliance on temporary financial support and its short-term approach to financial management.

Besides inaccurate financial forecasts, the auditor also discovered that the trust's budget for 2005/06 was not even presented to its board until four months into the financial year. This led to an 'inevitable lack of clarity on the trust's financial position for a substantial part of the year. …

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