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PRIMARY CARE TRUST UNABLE TO PAY BILLS, AUDITORS WARN

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The appointed auditor to Cheshire West Primary Care Trust has today issued a report on the PCT's financial position...
The appointed auditor to Cheshire West Primary Care Trust has today issued a report on the PCT's financial position.

In the public interest report (PIR) the appointed auditor found that:

.The PCT overspent in 2004/05 despite receiving support from Cheshire & Merseyside Strategic Health Authority. The underlying deficit at the end of that year was£8.1m.

.The PCT will significantly overspend in the current financial year; without financial support the position is currently forecast to be£17.6m.

.The PCT has not taken adequate recovery action in the last two years.

.The cash position is so poor that the PCT may not be able to pay its creditors without support.

Peter Chambers, of the appointed auditor PricewaterhouseCoopers LLP said:

'The financial trend is symptomatic of an organisation that has not taken steps to manage its business. This is due to a combination of failure to identify service actions that would deliver cost savings, and failure to develop a robust and deliverable financial recovery plan once the need had been identified'.

The appointed auditor has highlighted increasing concerns in a number of reports and discussions with the PCT. In the 2003/04 annual audit letter to the PCT's board in October 2004 PwC recommended that appropriate importance should be attached to the financial recovery planning process. Increasing concerns were reported throughout 2005, culminating in the conclusion in the 2004/05 annual audit letter (reported to the Board in October 2005), that the latest version of the financial recovery plan was inadequate and would not deliver the required outcomes.

The auditor has recommended that the PCT goes back to first principles and engages with all directors and managers to produce a deliverable recovery plan which addresses the underlying deficit.

The auditor will meet with the board to discuss the issues raised in this report and what action the PCT will take in response to the recommendations made. PwC will continue to monitor the PCT's progress in delivering sustainable financial recovery.

Copies of the report are available on the Audit Commission website at www.audit-commission.gov.uk

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