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Trust probed over unreported losses

Severe failings in an NHS foundation trust’s financial management have led to calls for it to take action.

The Royal National Hospital for Rheumatic Diseases in Bath had GBP 650,000 of losses in 2006/07 but only reported the figure as GBP 40,000. It also had “further significant operating losses” in 2007/08.

Monitor, the independent regulator of NHS foundation trusts, issued an intervention notice after the error came to light following an external audit.

It is now investigating whether the error was made deliberately or if it was simply an honest mistake.

The notice of exercise of intervention powers issued by Monitor and an accompanying letter stated that the trust was in “significant breach” of its terms of authorisation.

In particular it is in significant breach of a condition which “imposes upon the trust the general duty to exercise its functions effectively, efficiently and economically”.

It ordered the trust to agree to Monitor reviewing its financial position going forward and appoint accountancy firm PricewaterhouseCoopers to “review and report upon” financial control and commercial management at the trust.

It also called on the trust to “make appropriate arrangements to satisfactorily resolve the chief executive’s position”.

The letter stated that without any action, the trust’s liquidity position and cashflow over the next 12 months were “uncertain and subject to significant risk”.

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