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{{org_field_name}}

Registration Number: {{org_field_registration_no}}

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Financial Reports Policy

1. Purpose

The purpose of this policy is to ensure {{org_field_name}} operates in a financially responsible, transparent, and sustainable manner through the consistent production, monitoring, and review of accurate financial reports. This supports good governance, regulatory compliance, and the delivery of safe, person-centred services. This policy supports compliance with Regulation 17 (Good governance) of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 and Regulation 13 (Financial position) of the Care Quality Commission (Registration) Regulations 2009. It also supports the provider to meet the wider requirements of section 20 of the Health and Social Care Act 2008 by maintaining effective systems for oversight, risk management, record-keeping, and financial sustainability.

2. Scope

This policy applies to the Directors, Registered Manager, finance team, administrative staff, and any external financial advisors or auditors associated with {{org_field_name}}. It includes responsibilities related to preparing, reviewing, and managing financial reports for operational activities, regulatory submissions, budget planning, and performance evaluation.

3. Related Policies

• CH04 – Good Governance Policy
• CH13 – Safeguarding Adults from Abuse and Improper Treatment Policy
• CH17 – Infection Prevention and Control Policy (for cost monitoring)
• CH18 – Risk Management and Assessment Policy
• CH26 – Recruitment, Selection, and Retention Policy (for payroll budgeting)
• CH41 – Managing Service User Finances Policy

4. Policy Statement and Responsibilities

Commitment to Financial Accountability and Transparency

{{org_field_name}} is committed to maintaining effective governance, assurance, and auditing systems in relation to financial management. Financial reporting arrangements must enable the provider to assess, monitor and improve the quality, safety, sustainability and lawful operation of the service. Financial information will be used not only to monitor income and expenditure, but also to identify risks that may affect staffing, premises, equipment, service continuity, insurance cover, supplier resilience, and the provider’s ability to continue to deliver safe, person-centred care in line with the Statement of Purpose.

Financial governance forms part of the provider’s wider governance framework and will be subject to regular assurance, scrutiny, escalation and documented oversight by the Board, Director(s), Responsible Individual (where applicable), and Registered Manager in accordance with their respective roles.

Types of Financial Reports Produced

The following financial governance reports may be produced and reviewed, depending on the size and structure of the service:

• Monthly management accounts, including income, expenditure, accruals, variances, commentary and trend analysis
• Cash flow forecasts, including short-term and medium-term liquidity monitoring
• Budget versus actual reports, with explanation of material overspends, underspends and corrective action
• Payroll establishment reports, including agency usage, overtime, vacancies and workforce cost pressures
• Creditor and debtor reports, including aged debt, overdue liabilities and key supplier exposure
• Capital and maintenance expenditure reports, where relevant to premises safety, compliance and service continuity
• Insurance, indemnity and statutory payment monitoring, including renewals and deadlines
• Financial risk exception reports, where triggers or thresholds indicate heightened operational or sustainability risk
• Annual accounts and end-of-year financial statements, prepared in accordance with applicable legal and accounting requirements
• Ad hoc reports, including scenario planning, contingency planning, commissioning changes, occupancy sensitivity analysis, and service continuity cost modelling
• Any written financial or governance report reasonably required by the Care Quality Commission or other competent authority.

Roles and Responsibilities

Company Director / Board / Provider: Has ultimate responsibility for the financial governance, solvency, lawful operation, and sustainability of {{org_field_name}}. Must ensure adequate resources, oversight, internal control, assurance, and timely escalation of financial risks that may affect the safe delivery of regulated activity.

Responsible Individual (where applicable): Provides oversight on behalf of the provider and seeks assurance that governance systems, financial controls, and risk management arrangements are effective and proportionate.

Registered Manager: Has responsibility for day-to-day operational financial awareness within the service, including monitoring budgeted expenditure relevant to care delivery, identifying pressures or anomalies, escalating concerns promptly, supporting accurate reporting, and ensuring financial issues that may affect people’s safety, staffing, equipment, accommodation or continuity of care are acted on without delay.

Finance Lead / Finance Administrator / Accountant: Maintains complete and accurate financial records, prepares regular financial reports, supports reconciliations and audit trails, monitors deadlines and statutory submissions, and reports exceptions, anomalies, or control weaknesses to senior leadership.

External Accountant or Auditor (where used): Provides independent professional support, statutory accounts preparation, audit, assurance, taxation advice, and additional scrutiny where required.

Controls and Review Process

Financial reports must be subject to a documented review and assurance process. As a minimum:

• reports will be reviewed at least monthly by the provider or delegated senior leaders;
• material variances, deteriorating trends, unusual transactions, missing information, or control weaknesses will be investigated and recorded;
• actions arising from financial review will be allocated to a named person with a timescale and completion date;
• significant financial risks will be entered onto the service or corporate risk register where they may affect safe care, legal compliance, workforce resilience, premises safety, supplier continuity, or business continuity;
• governance meetings will record financial discussions, decisions, challenges, assurances received, and follow-up actions;
• internal checks, reconciliations and sample audits will be used to test the accuracy, completeness and timeliness of financial information;
• where concerns indicate a possible risk to people using the service or to the continuation of regulated activity, the matter will be escalated immediately to the provider and managed under the risk management and business continuity arrangements; and
• the provider will be able to produce a written report for CQC, if requested, setting out how the quality and safety of the service are assessed, monitored and improved through governance systems.

Ensuring Data Accuracy

All financial records must be accurate, complete, sufficiently detailed, securely maintained, and capable of providing a clear audit trail. Financial data must be reconciled at defined intervals against bank records, payroll records, invoices, receipts, contracts and other source documents. Access to financial records will be role-based and restricted to authorised persons. Records will be retained, archived and destroyed in accordance with legal, regulatory and organisational requirements, including data protection and records management obligations.

Financial Sustainability and Compliance

In line with Regulation 13 (Financial position) of the Care Quality Commission (Registration) Regulations 2009, {{org_field_name}} must take all reasonable steps to carry on the regulated activity in a manner that ensures the financial viability of that activity for the purposes of achieving the aims and objectives set out in the Statement of Purpose and meeting registration requirements. The provider must therefore maintain sufficient financial resources, suitable insurance and indemnity arrangements, and effective oversight of financial risks. Financial reporting will be used to:

• confirm that resources remain sufficient to provide and continue to provide services to the required standards;
• identify actual or emerging risks to staffing, agency dependence, payroll, premises, equipment, utilities, food, medicines, insurance and other core service costs;
• inform decisions about occupancy, dependency levels, commissioning changes, fee levels, and service development;
• support safe service continuity planning where adverse events, market pressures or financial stressors arise; and
• provide evidence of prudent and transparent governance to CQC, commissioners, auditors, funders and other legitimate stakeholders where required.

Safeguarding Against Financial Mismanagement

Any suspected fraud, theft, financial irregularity, bribery, falsification of accounts, misuse of organisational funds, conflicts of interest, or deliberate concealment of financial information will be treated as a serious governance concern and investigated promptly under the provider’s governance, disciplinary, whistleblowing, and fraud-response procedures. Where concerns relate to the money or property of a person using the service, the matter will also be managed under safeguarding procedures and, where necessary, referred to the local authority, police, CQC, commissioners or other relevant bodies.

Training and Staff Development

Relevant staff involved in financial governance must receive training, instruction or supervision proportionate to their role. This may include:

• understanding financial reports and key financial controls
• budget monitoring and variance analysis
• fraud awareness, conflicts of interest and ethical handling of finances
• procurement, authorisation and segregation of duties
• record-keeping, confidentiality and data protection
• escalation of financial concerns and use of whistleblowing routes
• business continuity implications of financial stress or supplier failure
• use of finance systems and reporting tools.

Communication and Reporting to Stakeholders

Financial information will be shared externally only where there is a lawful, contractual, regulatory, governance, or legitimate operational reason to do so, and only to the extent necessary. Where information is shared with commissioners, Local Authorities, auditors, funders, insurers, lenders, regulators or professional advisers, confidentiality, data protection and commercial sensitivity must be respected. Information intended for residents, relatives or representatives will be limited to what is appropriate, relevant and understandable, and will not disclose confidential or commercially sensitive information unnecessarily.

Regulatory Reporting and Audit

{{org_field_name}} will comply with all applicable financial, company, tax, insurance, audit and regulatory requirements. This includes maintaining financial records and evidence sufficient to demonstrate compliance with Regulation 17 (Good governance) of the Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 and Regulation 13 (Financial position) of the Care Quality Commission (Registration) Regulations 2009. Annual accounts, tax submissions and other statutory returns will be completed within required timescales. The provider will cooperate fully with lawful requests from CQC and other competent authorities and will provide financial or governance information where reasonably required.

Financial Risk Escalation and Service Continuity

{{org_field_name}} will maintain clear escalation arrangements where financial information indicates an actual or potential risk to safe care, continuity of service, or legal compliance. Escalation triggers may include, but are not limited to: inability to meet payroll; inability to meet pension, tax or insurance liabilities; serious cash flow deterioration; persistent high agency costs; major unplanned maintenance pressures; threatened loss of utilities or essential supplies; insolvency indicators; unsustainable occupancy levels; covenant breaches; significant fraud loss; or supplier failure affecting care delivery. Where a trigger is met, the provider must undertake an immediate risk assessment, record the issue on the risk register where appropriate, implement mitigating action, and consider whether the business continuity plan, incident management process, safeguarding procedures, commissioner engagement, professional advice, or regulatory notification requirements are engaged. The overriding priority in all cases is to protect residents’ safety, wellbeing and continuity of care.

Notification of Relevant Changes and Serious Financial Events

Where a financial issue results in, contributes to, or is associated with a notifiable event, change or incident, {{org_field_name}} will make statutory notifications to the Care Quality Commission and any other relevant body in accordance with current legal requirements and CQC guidance. This includes, where applicable, changes affecting the provider or manager, insolvency-related events, and events that stop the service running safely and properly. The provider will also seek timely legal, accountancy or insolvency advice where there is any material concern about continuing financial viability.

5. Policy Review

This policy will be reviewed at least annually and sooner where required by changes to legislation, CQC guidance, registration requirements, inspection findings, enforcement action, audit findings, serious incidents, business continuity events, fraud or financial irregularity, insolvency risk, major organisational change, or changes to the Statement of Purpose or operating model. The review must consider whether financial governance arrangements remain effective, proportionate and aligned to the scale, complexity and risk profile of the service.

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Responsible Person: {{org_field_registered_manager_first_name}} {{org_field_registered_manager_last_name}}
Reviewed on: {{last_update_date}}
Next Review Date: {{next_review_date}}
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