1. Introduction

Purpose of the Auditor’s Annual Report

Our Auditor’s Annual Report (AAR) summarises the work we have undertaken as the auditor for North West Ambulance Service NHS Trust (‘the Trust) for the year ended 31 March 2023. Although this report is addressed to the Trust, it is designed to be read by a wider audience including members of the public and other external stakeholders.

Our responsibilities are defined by the Local Audit and Accountability Act 2014 and the Code of Audit Practice (‘the Code’) issued by the National Audit Office (‘the NAO’). The remaining sections of the AAR outline how we have discharged these responsibilities and the findings from our work. These are summarised below.

Opinion on the financial statements
We issued our audit report on 22nd June 2023. Our opinion on the financial statements was
unqualified

Value for Money arrangements
In our audit report issued we reported that we had completed our work on the Trust’s
arrangements to secure economy, efficiency and effectiveness in its use of resources and
had not issued recommendations in relation to identified significant weaknesses in those
arrangements. Section 3 provides our commentary on the Trust’s arrangements.

Wider reporting responsibilities
In line with group audit instructions issued by the NAO, on 22nd June 2023 we reported that
the Trust’s consolidation schedules were consistent with the audited financial statements.

2. Audit of the financial statements

Our audit of the financial statements

Our audit was conducted in accordance with the requirements of the Code, and International Standards on Auditing (ISAs). The purpose of our audit is to provide reasonable assurance to users that the financial statements are free from material error. We do this by expressing an opinion on whether the statements are prepared, in all material respects, in line with the financial reporting framework applicable to the Trust and whether they give a true and fair view of the Trust’s financial position as at 31 March 2023 and of its financial performance for the year then ended. Our audit report, issued on 22nd June 2023 gave an unqualified opinion on the financial statements for the year ended 31 March 2023.

A summary of the significant risks we identified when undertaking our audit of the financial statements and the conclusions we reached on each of these is outlined in Appendix A. In this appendix we also outline the uncorrected misstatements we identified and any internal control recommendations we made.

Qualitative aspects of the Trust’s accounting practices

We reviewed the Trust’s accounting policies and disclosures and concluded they comply with Department of Health and Social Care Group Accounting Manual 2022/23, appropriately tailored to the Trust’s circumstances. Draft accounts were received from the Trust on 27 April 2023 and were of a good quality. The accounts were supported by good quality working papers. In addition, the finance team provided prompt responses to our audit queries.

Significant difficulties during the audit

During the course of the audit we did not encounter any significant difficulties and we have had the full cooperation of management.

Internal Control Recommendations

As part of the audit we considered the internal controls in place that are relevant to the preparation of the financial statements. We did this to design audit procedures that allow us to express an opinion on the financial statements, but this did not extend to us expressing an opinion on the effectiveness of the internal controls. We identified one medium level control recommendation in relation to the Trust’s process for measuring leases.

3. Our work on Value for Money arrangements

Approach to Value for Money (VFM) Arrangements Work

We are required to consider whether the Trust has made proper arrangements for securing economy, efficiency, and effectiveness in its use of resources. The NAO issues guidance to auditors that underpins the work we are required to carry out and sets out the reporting criteria that we are required to consider. The reporting criteria are:

• Financial sustainability – How the Trust plans and manages its resources to ensure it can continue to deliver its services.
• Governance – How the Trust ensures that it makes informed decisions and properly manages its risks.
• Improving economy, efficiency, and effectiveness – How the Trust uses information about its costs and performance to improve the way it manages and delivers its services.

Our work is carried out in three main phases:

Phase 1 – Planning and Risk Assessment

At the planning stage of the audit, we undertake work so we can understand the arrangements that the Trust has in place under each of the reporting criteria; as part of this work, we may identify risks of significant weaknesses in those arrangements.

We obtain our understanding of arrangements for each of the specified reporting criteria using a variety of information sources, which may include:

• NAO guidance and supporting information.
• Information from internal and external sources, including regulators.
• Knowledge from previous audits and other audit work undertaken in the year.
• Interviews and discussions with staff and directors.

Although we describe this work as planning work, we keep our understanding of arrangements under review and update our risk assessment throughout the audit to reflect emerging issues that may suggest there are further risks of significant weaknesses.

Phase 2 – Additional Risk-Based Procedures and Evaluation

Where we identify risks of significant weaknesses in arrangements, we design a programme of work to enable us to decide whether there are actual significant weaknesses in arrangements.

We use our professional judgment and have regard to guidance issued by the NAO in determining the extent to which an identified weakness is significant.

We outline the risks that we have identified and the work we have done to address those risks on page [x].

Phase 3 – Reporting the Outcomes of Our Work and Our Recommendations

We are required to provide a summary of the work we have undertaken and the judgments we have reached against each of the specified reporting criteria in this Auditor’s Annual Report. We do this as part of our Commentary on VFM Arrangements, which we set out for each criterion later in this section.

We also make recommendations where we identify weaknesses in arrangements or other matters that require attention from the Trust. We refer to two distinct types of recommendations through the remainder of this report:

1. Recommendations Arising from Significant Weaknesses in Arrangements

• We make these recommendations for improvement where we have identified a significant weakness in the Trust’s arrangements for securing economy, efficiency, and effectiveness in its use of resources.
• Where such significant weaknesses in arrangements are identified, we report these (and our associated recommendations) at any point during the course of the audit.

2. Other Recommendations

• We make other recommendations when we identify areas for potential improvement or weaknesses in arrangements that we do not consider significant but that still require action to be taken.

The table on the following page summarizes the outcomes of our work against each reporting criterion, including whether we have identified any significant weaknesses in arrangements or made other recommendations.

Financial Stability

How the body plans and manages its resources to ensure it can continue to deliver its services

Overall Commentary on the Financial Sustainability Reporting Criteria

Background to the NHS Financing Regime in 2022/23

During the course of the year, and into 2023/24, the focus of the funding regime shifted from responding to the immediate challenges caused by COVID-19 to supporting recovery across the healthcare system. This necessitated collaborative working between commissioners and service providers, as local systems were expected to work together to deliver a balanced position in 2022/23. Additional funding was available for systems exceeding target activity levels through the Elective Recovery Fund.

The planning guidance for 2022/23 supported the transition back to locally agreed contracts and required systems to achieve a break-even position annually. This emphasized collaboration during the planning process, as individual organisations worked together to achieve system-level outcomes.

In 2022/23, all Integrated Care Systems (ICS) across the North West obtained NHSE approval to continue block contract and local payment arrangements for NWAS Paramedic Emergency Services (PES), Patient Transport Service (PTS), and 111 contracts. Contract income was based on nationally calculated block payments, adjusted for inflation and the national efficiency target. Additional top-ups were provided, including system top-up funding, COVID-19 funding, specific allocations, and System Development Funding for NHS 111.

Following the 2022 Autumn Statement, NHSE issued two-year revenue allocations for 2023/24 and 2024/25. The priority was to recover core services and productivity, with ambulance response times and reduced ambulance handovers identified as imperatives to improve patient safety outcomes and experiences. A balanced financial plan has been submitted, including a £12.2m efficiency target.

2022/23 Financial Performance

A high-level analysis of the financial statements, including the Statement of Comprehensive Income, the Statement of Financial Position, and the Statement of Changes in Equity, reveals the following:

• The deficit for the year from continuing operations was reported at £4.29m, compared to a £0.06m surplus in 2021/22.
• This deterioration was primarily driven by increased staff costs, which rose by £25m from £327.7m in 2021/22 to £357.7m in 2022/23, due to:
• A government pay award of £14.9m.
• Increased recruitment to meet demand.

The adjusted financial performance position on a control total basis showed a £4.86m surplus (£0.08m surplus in 2021/22). This exceeded the plan agreed with NHSE in late November 2022.

The adjusted financial performance excludes £8.85m in impairments charged to expenditure. Despite challenges, the Trust met its statutory financial targets, including the duty to break-even, and operated within the assigned External Financing and Capital Resource limits.

The Statement of Financial Position reflects an improved position, with total net assets of £102.6m as of 31 March 2023 (£102.9m as of 31 March 2022). This includes:

• An increase of £21m related to the introduction of IFRS 16 leases, with corresponding liabilities of £20m.

The Trust’s Arrangements and Approach to 2023/24 Financial Planning

The financial planning arrangements for 2023/24 are consistent with those of 2022/23. The Trust is required to submit a financial plan to the Lancashire and South Cumbria Integrated Care System (ICS) that contributes to a break-even position for the ICS. As a provider across the North West, NWAS collaborates closely with other ICSs to develop its financial plans.

The Trust’s Finance team coordinates the annual budget process, drawing input from colleagues across the Trust. Executive oversight is provided through reporting to the Resources Committee and Trust Board. The Trust has actively engaged with ICS partners on key aspects of local and system-level financial and operational planning.

Key steps in the planning and budget-setting process include:

• Identifying and quantifying financial and operational risks.
• Submitting financial plans to the Resources Committee for consideration prior to Board approval.
• Keeping the Board and sub-committees informed of long-term financial modeling assumptions via regular reports from the Executive Director of Finance.

The latest financial submission to the ICS in April 2023 reflects a balanced plan for the year, after incorporating:

• A productivity and efficiency target of £12.2m.
• Adjustments, including the removal of a £1m contingency and £1.2m in cost pressures aligned with UEC recovery plans (pending UEC fund confirmation).

The efficiency target has been increased to 2.6% of gross expenditure, still below the average across the system. Significant resources continue to be devoted to collaboration with ICS partners to deliver a balanced financial position. The Trust remains committed to understanding its role within the ICS and addressing shared pressures across all partners.

Overall Commentary on the Financial Sustainability Reporting Criteria – Continued

The Trust’s Arrangements for the Identification, Management, and Monitoring of Funding Gaps and Savings

In recent years, the Trust has consistently delivered surpluses and operated within its financial performance measures, including achieving the breakeven duty.

• 2022/23 Financial Plan:
• Included a productivity and efficiency target of £15.5m, a £4m increase from the previous year, of which 2.2% is recurrent.
• Progress against the target was reported to the Resources Committee through regular Finance Reports.
• By Month 12, the Trust had fully achieved its target, which included £8.2m of recurrent savings.
• 2023/24 Financial Plan:
• Includes a productivity and efficiency target of £12.2m.
• Initial assessments by the Finance Department have identified savings totalling £7.8m based on previous business cases and historical areas of non-recurrent savings.
• This leaves an unidentified gap of £4.3m as of March 2023. Efforts to identify additional savings schemes are ongoing, with input and agreement from representatives across the Trust.

Efficiency schemes requiring Quality Impact Assessments (QIAs) are formally signed off by the Director of Quality, Innovation & Improvement and the Medical Director.

Although there are currently unidentified efficiencies within the financial plan, this gap is not considered a risk to the Trust’s financial sustainability.

Governance

How the body ensures that it makes informed ldecisions and properly manages its risks

Overall Commentary on the Governance Reporting Criteria

The Trust’s Decision-Making Arrangements and Control Framework

The Trust has an established governance structure in place, as set out within its Annual Governance Statement. This is underpinned by the Trust’s Core Governance Documents. Executive Directors have clear responsibilities linked to their roles, and the Board Sub-Committee structure in place at the Trust allows for effective oversight of the Trust’s operations and activity.

The Trust’s Core Governance Documents are reviewed annually and updated in line with the latest best practices. During 2022/23, the Trust’s Standing Orders, Standing Financial Instructions, and Scheme of Delegation were reviewed by the Executive Leadership Committee (ELC) and Audit Committee before being approved by the Board of Directors. This has been confirmed through our review of Board and committee minutes and papers, as well as our attendance at Audit Committee meetings.

Financial investment decisions are supported by full business cases, which are reviewed by the Executive Leadership Committee (ELC). These business cases:

• Outline the strategic objectives of the project.
• Include a full option appraisal analysis considering both financial and non-financial factors, including a ‘Do nothing’ option.

Once approved by ELC, projects are scrutinized by the Resources Committee before final Board approval, in line with the Trust’s Scheme of Delegation.

The Trust has adopted a Standards of Business Conduct Policy aligned to the national model policy. Registers of gifts, hospitality, and interests are maintained, and compliance with the policy is reported to the Audit Committee regularly.

Key regulatory returns are reviewed as part of the Trust’s governance structure. For example, despite not being a Foundation Trust, the Trust complies with the NHS Foundation Trust Code of Governance, and all legally required annual self-certifications have been submitted.

The Trust maintains a full suite of governance arrangements, which are outlined in the Trust’s Annual Report and Annual Governance Statement. Our audit review of these documents confirmed consistency with our understanding of the Trust’s arrangements.

Based on these considerations, we are satisfied that there is no significant weakness in the Trust’s governance arrangements.

The Trust’s Risk Management and Monitoring Arrangements

Risk management at the Trust is guided by the Risk Appetite Statement, which is reviewed annually by the Board.

The Policy on Risk Management:

• Defines several levels of risk registers.
• Sets clear responsibilities for the timing of review of registers at each level.

The corporate risk register is reviewed quarterly by the Board and integrated into the Board Assurance Framework (BAF). The BAF outlines 11 strategic risks linked to the Trust’s strategic priorities, which are tied to the Risk Appetite Statement where appropriate. Any risk on the corporate risk register with a score of 15 or more is included in the BAF and reported regularly to the Board.

Our review of the BAF confirmed that:

• Each risk is assigned a lead director.
• The three leading risks relate to service delivery and resources.

The risk profile has improved compared to 2021/22, as hospital handover times have recovered and the impact of COVID-19 has reduced. Reporting to Committees is clear and transparent, with a demonstration of controls, assurance, and supporting evidence.

The Trust has established structures to address findings from the Manchester Arena Inquiry:

• An Emergency Preparedness, Response, and Resilience (EPRR) working group has been created, with additional resources recruited.
• The working group reports to the EPRR Sub-Committee, the Executive Leadership Committee (ELC), and finally to the Board.
• Action plans for all 14 recommendations attributed solely to NWAS have been established, with regular monitoring and reporting to committees and the Board. Additionally, NWAS is required to report updates to the Inquiry Chair at specific intervals.
• Currently, six of the 14 recommendations have been fully implemented, with seven more in progress.

Internal Controls and Assurance

The Trust obtains assurance over the effective operation of internal controls through its internal audit function, provided by Mersey Internal Audit Agency (MIAA). Each year:

• The Internal Audit Plan is developed in collaboration with Trust management and reviewed by the Audit Committee to ensure appropriate coverage of the Trust’s strategic risks.
• Progress against the plan is reported at each Audit Committee meeting, along with a report on progress made against critical and high-risk recommendations.

The internal audit culminates in the annual Head of Internal Audit Opinion, which, for 2022/23, provided substantial assurance over the system of internal controls at the Trust.

Additionally, the Trust employs MIAA to provide anti-fraud services. The Annual Anti-Fraud Report, presented to the Audit Committee in April 2023:

• Details the anti-fraud work conducted during the year.
• Includes the results of the Trust’s self-assessment against the NHS CFA standards for 2022/23.

Conclusion

Based on the above considerations, we are satisfied that there is no significant weakness in the Trust’s arrangements concerning financial sustainability.

Overall Commentary on the Governance Reporting Criteria – Continued

The Trust’s Arrangements for Budget Setting and Budgetary Control

The Trust’s budget-setting process is based on national guidelines, which set out the assumptions and processes in place. The outcome of the Trust’s baseline budget-setting process is detailed in the previous section.

Budgetary control guidelines are shared annually with all budget managers, and formal sign-off of the budget is obtained from the budget manager. We reviewed a sample of budgets and confirmed that the budget holders had signed off their budgets as approved as part of the budget-setting process.

Following the consolidation of individual operational budgets, the Trust-wide plan is taken through the Trust governance process, including the Resources Committee and Board of Directors. Our review of minutes confirms this, with papers covering the Trust’s income and expenditure position, statement of financial position, forecast cash and capital expenditure, and links to the Trust’s planned efficiencies.

Budgetary control is a continuous process at the Trust. The Trust is required to formally report its financial position and forecast outturn at each month-end to NHSE. As part of these monthly returns and annual planning rounds, the Trust submits a triangulation file that reconciles activity, workforce, and finance returns to ensure consistency. We reviewed an example monthly return alongside the year-end return submitted to NHSE. In each case, the return reconciles to the financial position reported to the Resources Committee.

As outlined in the previous section, the financial position is reported to the Resources Committee each month, with sufficient detail provided to allow for effective review and challenge at the senior leadership level.

Regulators – Care Quality Commission (CQC)

The latest full CQC inspection report of the Trust was published in June 2020. The overall CQC rating for the Trust was ‘Good’, with some outstanding practices identified and areas of improvement noted.

During 2021/22, the Trust was notified of two “urgent and emergency care” focused pressure resilience inspections in the North West, covering the North Mersey and South Cumbria & Lancashire areas, together with an NWAS organisation review. As part of these reviews, inspectors visited several of the Trust’s locations in April 2022.

The inspection report was published in July 2022 and maintained the ‘Good’ rating. The feedback identified areas of good practice and compassionate care, as well as several issues around communication between senior leaders and pressures on ensuring that the correct resources were in the right place. The Trust considered this feedback at its Board meeting in September 2022 and developed a response.

The Trust is continuing its work on the three CQC recommendations. Action plans have been drawn up to address these recommendations, and their progress will be monitored through the governance structures in place.

Based on the above considerations, we are satisfied that there is no significant weakness in the Trust’s arrangements in relation to governance.

Improving Economy, Efficiency and Effectiveness

How the body uses information about its costs and performance to improve the way it manages and delivers its services

Overall Commentary on the Improving Economy, Efficiency, and Effectiveness Reporting Criteria

The Trust’s Arrangements for Assessing Performance and Evaluating Service Delivery

The Board of Directors received monthly integrated performance reports detailing the Trust’s performance against key metrics. The data has been reported on a consistent basis and explanations provided for performance.

• Month 11 has seen a 14% decrease in call volume compared to the prior year, and a 6% reduction in incidents. This is attributed to a reduction in calls relating to flu-like or COVID symptoms. Hear & Treat continues at 14.8%, ranking 2nd nationally.

• Call pick-up performance has improved throughout the year, with 95% of calls being answered in 1 second in February 2023 compared to 285 seconds in December 2022. The improvement is driven by the reduction in calls, an increase in recruitment of Emergency Medical Advisers, and reduced sickness contributing to the improving picture.

• Calls which resulted in non-conveyance were 42.9% compared to 39.8% for the prior year. Patients were able to be dealt with via Hear and Treat and See and Treat, thereby freeing up resources to deal with more patients. The implementation of the NHS Pathways in the year contributed to the improving statistics.

• The Trust was unable to meet any ARP (Ambulance Response Performance) category targets during the year due to issues including hospital turnaround times and industrial action throughout January and February 2023.

Work on hospital handover issues has continued during 2022/23, with all ICBs being requested to appoint a senior lead to lead on hospital handover. A North West Handover Improvement Board has been established with agreed terms of reference. The board is currently working through a series of plans to ensure handover is discussed at each ICB as a key objective.

Whilst there are performance issues noted, these are not issues isolated to NWAS as a Trust and are inherent across the Ambulance Trust sector. The issues are being reported to the Board on a regular basis, and action is being taken to try and address them. This is indicative of transparent reporting, and the Trust demonstrates that it aims to identify the root causes and is able to work both internally and with others in the healthcare system to improve performance.

The Trust’s Arrangements for Effective Partnership Working

NWAS has continued to expand its extensive engagement strategy with multiple stakeholder groups. The Trust now has an established patient and public panel comprising 250 groups covering a cross-section geographically, both urban and rural, and across the age range. This panel meets regularly and has continued to do so throughout the pandemic. The Trust continues to aim to ensure representation from a cross-section of society. Panel members are invited to get involved in the Trust’s activities, including opportunities to attend Board meetings, development sessions, and Q&A sessions with the Executive.

The Trust has in place a structured format for how they engage with various stakeholders and obtain feedback on PES and 111 services. For example, providing regular updates and briefings to the two elected mayors in the region on monthly performance statistics and action plans being implemented to improve service; briefing all hospitals regarding hospital handover delays and implementing new standard procedures; and continuing engagement with the 72 MPs in the North West. All MPs were written to, and there has been engagement with MPs who have responded to the Trust with concerns about service performance.

Monthly Board stories have been an effective way for service users and staff to tell their stories and illustrate the real impact NWAS has on end users. These have provided opportunities to demonstrate that there has been learning and improvement in response to incidents.

The Trust’s Arrangements for Commissioning Services

The procurement of all goods and services is governed by the NWAS Board-approved Standing Financial Instructions. These set the procurement involvement required based on law and best practice. Procurements cannot commence unless there is an appropriate budget available or an approved business case.

Depending on value, pre-tendering approval is required. Goods and services over £100k must be compliant with the Public Contract Regulations. The approval process for contract awards over £25k and below £500k requires the Head of Procurement to review and endorse the recommendation before it is forwarded to the Director of Finance for final approval and sign-off. Awards over £500k must be taken through the Resources Committee and approved at Board level.

Overall Commentary on the Improving Economy, Efficiency, and Effectiveness Reporting Criteria – Continued

The Trust’s Arrangements for Commissioning Services (Continued)

The Trust continues to maintain a contracts database, which is used to develop the work plan for the procurement team alongside capital regulations. A process of obtaining quotes, tenders, or OJEU tenders is put into action depending on value and based on a comprehensive specification of requirements. Evaluations are undertaken by a panel of subject experts.

Frameworks are used wherever possible and often involve collaboration with other ambulance trusts to deliver economies of scale. For example, in the purchase of bulk liquid fuel, the Trust used the Crown Commercial Service Framework. For routine purchases of consumables, the NHS supply chain is used.

Procurement activity is reported to the Resources Committee on a regular basis to allow for scrutiny and governance review. A full waiver process is in place, whereby waivers are reviewed and signed off by the Head of Procurement, Director of Corporate Affairs, Director of Finance, and Chief Executive. Waivers are reported to the Audit Committee for scrutiny on a regular basis. The Trust has set a maximum of five waivers per month; in 2022/23, this target has been met throughout the year.

Based on the above considerations, we are satisfied there is not a significant weakness in the Trust’s arrangements in relation to improving economy, efficiency, and effectiveness.

4. Other reporting responsibilities and our fees

Other Reporting Responsibilities

Statutory Recommendations and Public Interest Reports

Under section 7 of the Local Audit and Accountability Act 2014, auditors of an NHS body can make written recommendations to the audited bodies. Auditors also have the power to make a report if they consider a matter is sufficiently important to be brought to the audited body or the public as a matter of urgency, including matters which may already be known to the public, but where it is in the public interest for the auditor to publish their independent view.

We did not issue any statutory recommendations or exercise our power to make a report in the public interest during 2022/23.

Section 30 Referrals

Auditors of an NHS body have a duty to consider whether there are any issues arising during their work that indicate possible or actual unlawful expenditure or action leading to a possible or actual loss or deficiency that should be referred to the Secretary of State and/or relevant NHS regulatory body as appropriate.

We have not issued a Section 30 referral to the Secretary of State.

Reporting to the National Audit Office (NAO)

The NAO, as group auditor, requires us to report to them whether consolidation data that the Trust has submitted is consistent with the audited financial statements. We reported to the NAO that consolidation data was consistent with the audited financial statements. We also reported to the NAO in line with its group audit instructions.

Fees for our work as the Trust’s auditor

We reported our proposed fees for the delivery of our work under the Code of Audit Practice in our Audit Strategy Memorandum presented to the Audit Committee on 12th April 2023. Having completed our work for the 2022/23 financial year, we can confirm that our fees are as follows:

Fees for other work

We confirm that we have not undertaken any non-audit services for the Trust in the year.

Significant risks and audit findings

As part of our audit, we identified significant risks to our audit opinion during our risk assessment. The table below summarises these risks, how we responded and our findings.

Risk

Significant Risk – Risk of fraud in expenditure recognition.

The risk of fraud in expenditure recognition is presumed to be a significant risk on all audits due to the potential to inappropriately shift the timing and basis of expenditure recognition as well as the potential to record fictitious revenues or fail to record actual revenues.

 For the Trust we deem the risk to relate specifically to the accuracy and existence of non-pay accruals, provisions, deferred income and the existence and accuracy of capital expenditure in quarter 4 of 2022/23.

Our audit response

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We addressed this risk through performing the following audit work:

• Evaluating the design and implementation of controls the Trust has in place over the recognition of expenditure.
• Testing of material year-end payables to verify their accuracy and appropriateness.
• Testing payments in the pre- and post-year-end period to ensure they have been recognised in the correct financial year.
• Reviewing intra-NHS reconciliations and data matches provided by the Department of Health and Social Care. Where necessary, we sought direct confirmation from third parties or their external auditors.

Our conclusion

We have completed our planned work and procedures in relation to the risk and have no issues to report or bring to your attention.

Key areas of management judgement and enhanced risks

Risk

As part of our audit, we identified enhanced risks to our audit opinion during our risk assessment. The table below summarises these risks, how we responded and our findings.

Enhanced Risk – IFRS 16 Implementation

IFRS 16 has been applicable from 1 April 2022 and is designed to report information that better shows lease transactions and provides a better basis for users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.
The Trust is required to re-classify a number of lease arrangements in line with this new standard for the first time in the 2022/23 accounts.

We have reviewed the work that the Trust has carried out for the implementation of IFRS 16 on 1 April 2022.
We have substantively tested lease balances and obtained evidence to support that they have been correctly classified and accurately measured under the new standard.

Our Conclusion

We have completed our planned work and procedures in relation to the area of focus. We identified a control recommendation in relation to the valuation of right of use assets.

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