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Auditors criticise NHS fraud guidelines

ACCOUNTANTS in the National Health Service warned Virginia Bottomley yesterday that they cannot properly police mismanagement, waste and fraud.

New government guidelines for auditing the health service, issued in the wake of recent financial scandals, have been fiercely criticised for failing to provide adequate protection.

The Institute of Internal Auditors, the professional body for auditors in the NHS, wrote to the Secretary of State for Health yesterday stating that government policy 'will be damaging to the NHS'.

The institute has demanded that the present system of internal audit be reformed after a damning parliamentary report on the loss of at least pounds 43m by Wessex Regional Health Authority. This followed criticism of West Midlands Health Authority for wastage on a flawed computer scheme.

The letter has also been sent to Sir Duncan Nichol, chief executive of the NHS Management Executive, Sir John Bourn, Auditor and Comptroller General, and David Cooksey, head of the Audit Commission, among others.

Professor Andrew Chambers, chairman of the professional standards and guidelines committee of the institute, who wrote the letter, said: 'We are concerned because a lot of malpractice and waste is going undetected. Audits currently don't indicate whether expenses are illegitimate or wasteful.'

The internal auditor is employed by a hospital trust or health authority to review internal systems of financial control. It is these accountants who are best placed to detect fraud and malpractice.

The NHS Management Executive published draft guidelines last month on internal audit. These restrict the scope of the audit to purely financial matters. Professor Chambers wants auditors to have a more comprehensive brief to cover the operational management of the health service where, he says, most fraud occurs.