In their public accounts Supply Chain Coordination Limited (SCCL), the private limited company responsible for the NHS Supply Chain (created by the Department of Health and Social Care (DHSC) and owned by the Secretary of State for Health and Social Care until 1st October 2021) said:
“the exceptional impact of the pandemic response has not only led to significant financial reporting challenges but also the reconciliation of inventory has been impacted by significant volumes, which put strain on the company’s control environment, resulting in a qualification of accounts”
The external auditor, Peter Morland, Senior Statutory Auditor of the Comptroller & Auditor General (C&AG) assigned to SCCL was unable to gain assurance from the SCCL year end stocktake.
The C&AG, Gareth Davies, leads the National Audit Office (NAO) (the UK’s independent public spending watchdog) and is an officer of the House of Commons.
The NAO certify the accounts of all government departments and many other public sector bodies.
At the 31st March 2021, the C&AG auditor reported that SCCL and DHSC inventory items were both held in a number of locations.
Inventory held on behalf of the DHSC was not segregated in the warehouse.
There was no adequate system records or physical demarcation to distinguish between items owned by SCCL and those owned by DHSC.
Consequently the C&AG auditor was unable to obtain sufficient appropriate audit evidence over the ownership or conditions of SCCL consumable inventory, valued at £159 million.
Gareth Davies recently delivered the DHSC accounts with a qualified approval also.
The DHSC also failed to maintain adequate records of the location or condition of £3.6bn worth of stock that was unaccounted for.
While officials believe the DHSC held 7.5 billion items in 16 ,000 containers at UK ports and a further 1.6 billion in storage in China, this was not confirmed.
Naomi Clews Consultancy
Procurement, Tendering, Business Skills