CRN East Midlands SOP for the monitoring of partner organisations
This document is provided by the Clinical Research Network East Midlands (CRN EM) to set out the key processes applied within the region to obtain assurance for Minimum Control MO2 within the LCRN Minimum Financial Controls to support the delivery of the Performance and Operating Framework. This standard operating procedure outlines the processes in place to ensure that LCRN funding provided to LCRN Partners is used solely to deliver NIHR portfolio research activities as per the LCRN Partner Organisation contracts. In addition, it should also provide assurance that all financial information provided by LCRN Partners is accurate and all costs are valid and appropriately authorised.
Valid for use from 17 June 2019
Review Date September 2021
The University Hospitals of Leicester NHS Trust, as the Host organisation for the NIHR CRN East Midlands, is contracted by the Department of Health and Social Care (DHSC) to undertake timely and accurate budgetary monitoring and reporting of funds paid directly to Partner Organisations. Additionally, CRN East Midlands is required to provide sufficient assurance that NIHR CRN funding is used only on eligible CRN activity and in accordance with DHSC funding agreement terms. CRN East Midlands gains this assurance through a range of mechanisms which will be described in this document.
It is the expectation that the CRN EM Host Organisation will ensure that appropriate financial controls are in place for the management of the NIHR CRN funds provided to them.
This document provides guidance and outlines the step-by-step process required to obtain assurance from CRN EM partners, as per Minimum Control MO2.
There are several processes in place to ensure the LCRN funding has been used in accordance with the contractual obligations of the Host Organisation. Each of these processes have been delegated by the Host Organisation through the CRN East Midlands Chief Operating Officer.
To support the delivery of research in the East Midlands each Partner has a Senior Team Link (STL) and a Host Finance Link (HFL). The STL is a member of the LCRN Operational Management Group and the HFL is a member of the Host accounting team. One of the purposes of the STL role is to support the budget setting process and provide ongoing support throughout the financial year to ensure that funding is appropriately managed in accordance with the contract.
Each Partner, prior to the beginning of the financial year, submits an Annual Financial Plan (AFP) based on their funding allocation for that year. This is then reviewed by the Senior Team Link (STL), DCOO and COO to ensure funding is used in accordance with Attributing the cost of health and social care Research and Development (AcoRD) guidance and meets the needs of the region. Once agreed by the leadership team, this will be used as the basis on monitoring of expenditure throughout the year.
Partner organisations are required to submit monthly returns on 15th of each month to their Host Finance Link. The returns should contain details of individual posts funded by the CRN EM in accordance with the agreed AFP submission. The return should provide a list of individual posts funded, their pay band, WTE, actual cost incurred in the month and forecast for the remainder of the financial year. The return should also show any non-pay expenditure,including the reporting of any incurred overheads upto a maximum of 8% of the pay budget.
This monthly return is initially reviewed by the Finance Link for accuracy, cost is within pay band, non-pay and overhead costs are within agreed range, to monitor vacancy factor and ensure vacant posts are recruited as per plan. Any discrepancies are identified and liaised with the finance contact at the Partner Organisation. The return is then discussed with the Senior Team Link to feed back on findings of the return on a monthly basis and is appraised with the financial position of the allocation. The Senior Team Link also provides information to the Finance Link of planned new posts, leavers and any other relevant information. All findings are documented and Senior Team Link signs off the monthly return. Monthly meetings are scheduled for the year as per attached time table – Appendix 1.
The Finance Links will also provide a financial overview of the Partner to the Deputy COO in order to monitor and manage the overall CRN EM budget. This will be done on a quarterly basis as a minimum and always prior to NIHR finance tool submission.
The Deputy COO will feed back to the COO to make strategic financial decisions throughout the year, in order to achieve a break even position at the year end.
At the end of the financial year all Partners are asked to complete and sign an Annual Statement of Expenditure (ASTOX) (Appendix 2) for the funding received in-year. The purpose of the annual return is to seek confirmation that funding has been utilised in accordance with the contractual obligations and to follow best practice recommended by Host auditors.
Finance Health Check Visits
Following a NIHR CRN Coordinating Centre finance health check at CRN East Midlands, we were advised to introduce a mechanism to provide an understanding of the systems in use, the financial support available in the Partner Organisation and the financial management arrangements in place. The recommendation was to ensure that each Partner Organisation would be reviewed at least once and to undertake at least one healthcheck per quarter.
The intention of the visit is to obtain a broader understanding of the control environment in place and to be assured that Partners have appropriate and adequate procedures/policies in place to monitor expenditure incurred within the Partner for the funding received from CRN EM. It also covers how funding is used and that it is used for eligible purposes only and in accordance with the terms of the funding agreement (PO/LCRN Host Organisation Contract)
- An initial letter was sent to Partner Organisations to complete a finance health check questionnaire (Appendix 3) in September 2016
- STL and Finance Links were also required to input as to financial perspectives in relation to the relevant PO
- All questionnaires were reviewed and risk assessed by COO and Deputy COO using a scoring matrix (Appendix 4), this analysis, along with a consideration of the size of the budget, and other pertinent information helped to define a schedule of visits
- Approximately three months prior to a visit the Partner Organisation is notified and arrangements made for the visit
- Prior to the visit, the Partner Organisation is required to provide evidence to support the information submitted in the questionnaire, along with an updated questionnaire two weeks prior to the visit to support various aspects of the financial health check
- All evidence is reviewed by Senior Team Link, Deputy COO/COO, Head of Finance and Finance Link
- The visit is an opportunity to discuss the questionnaire and have a two way communication regarding finance issues, as well as research delivery and any other business that the Partner/LCRN team find pertinent.
- Approximately 2 weeks after the visit a draft feedback letter is sent to the Partner Organisation for all parties involved to comment. A final letter is sent to the Chief Executive of the Partner Organisation within four weeks outlining findings and any recommendations.
- Should any concerns be raised during a health check then this would be followed up to ensure that any actions or recommendations have been implemented until satisfied that contractual obligations are being adhered to.