Taking Stock: A Way Forward

Article Abstract:

Internal audits of the operations of the stores functions of the Severn Trent Water Authority in the United Kingdom expose many areas that need improvement. To solve the problems, a group of five members was chosen to study the stores function in one of the divisions. The members were chosen from all different sections of the authority. The study determined that improvements are needed in stock control and management. Simple rules recommended to do this were 1. turnover ratios, 2. commodities which stay in place for a given period, 3. the reordering of commodities which do not follow rules and 4. disposal of commodities deemed surplus. Formal requests for new items, separately controlled emergency stocks and changes in frequency and approach to stock checking are also recommendations. Building maintenance and vehicle and plant maintenance repair departments, when studied, appear to have a history of low turnover of and a surplus of parts. The auditors determined stocking of these items to be inappropriate. To improve the system of issuing cleaning supplies, a central supply appears worthwhile. Improvements to the management information system for both stores and personnel need to be further developed. Reducing store locations and changing staff as necessary would prove efficient. Twelve months was targeted for review and they have passed. The changes have proven to be beneficial with a reduction in commodities held and increase in turnover.

Accounting and auditing

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Audit in the NHS: The Salmon Report

Article Abstract:

In August 1982, a United Kingdom working group was formed to examine auditing in the National Health Service (NHS) and make recommendations for improvements. The group accepted the audit plan according to guidance from the Association of Health Service. Treasurers consist of ten key areas to be considered to achieve a minimum acceptable level of audit. The NHS has been reorganized into smaller area health authorities. The increase of staff and gradings of staff appear to be sufficient to handle appropriate internal audit (except for twenty-seven authorities which proposed an audit staff of three). The greatest cause for concern in the working group is the computer audit and how it had developed in nationalized industries. A framework for training and developing sufficient computer auditors within the NHS was laid out. Development of a training department is a recommendation they have put forth. Improvements in collaboration between internal and external audit programs are essential. Value for money is deemed beyond the audit scope as it is not solely a financial matter. The group recommended setting up a group of permanent staff to handle reporting of value for many studies. The Salmon Report in the document that the working group is having published fall of 1983. It also briefly discusses audit committees and publication of accounts.

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Privatising Laundry Services

Article Abstract:

In attempts to achieve cost effectiveness in the United Kingdom's National Health Service, one method to be considered is to contract services with the private sector. This is analyzed in the laundry services for the Kidderminster and District Laundry as they were faced with some major capital purchases. Before considering purchase they sent out tender documents for four options of private contracts. They also computed their in-house costs. An efficiency agreement was produced between the District General Administrator and the National Union of Public Employees Area Officer to provide savings for a more competitive comparison base with the private sector. The costs of the lowest commercial tender and the in-house, based on the efficiency agreement with cash-flow projections for both, were compared. The District Health Authority, on the basis of this comparison, determined that contracting to the private sector was not justified at this time, due to financial and other value judgments.

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