Assurance engagement of the Mental Health Investment Standard 2023/24

Statement of compliance

The 2023/24 priorities and operational planning guidance states:

“The Mental Health Investment Standard (MHIS) will continue to apply to integrated care boards (ICBs) and continues to be subject to independent review. For 2023/24, the MHIS requires ICBs to increase spend on mental health services by ICB programme allocation base growth (prior to the application of the convergence adjustment).”

ICBs must publish a statement of compliance after the end of the financial year to declare whether they consider they have met their obligations regarding the MHIS in 2023/24. They must do so in a prominent position on their website: for example, alongside the annual report.

While this statement does not have to be published until the independent review is complete, NHS England expects that ICBs will have reviewed MHIS expenditure as declared for non-Integrated Single Finance Environment (ISFE) reporting for month 12 2023/24 in detail and that the statement to the independent review will be consistent with the final statement except in exceptional circumstances.

Where ICBs declare that they have met the MHIS at month 12, but do not meet the MHIS following independent review, they will be expected to justify the change in position to the Chief Financial Officer and the National Mental Health Director.

The compliance statement should read as given below.

Mental Health Investment Standard (MHIS) compliance statement

All ICBs were required to plan to achieve the Mental Health Investment Standard in 2023/24 and to spend greater than or equal to the 2023/24 Mental Health Investment Standard target spend number provided by NHS England.

As the Accountable Officer of [name of ICB], I am responsible for the preparation of the Mental Health Investment Standard Compliance Statement (the “Statement”) for the year ending 31 March 2024 and for the financial information on which the Statement is based. This includes the design, implementation and maintenance of internal controls relevant to the preparation of the Statement to ensure that mental health expenditure is correctly classified and included in the calculations, and that the Statement is free from material misstatement, whether due to fraud or error.

To the best of my knowledge and belief I have properly discharged my responsibilities with regard to reporting against the Mental Health Investment Standard.

[Delete all but the relevant statement]

a.  I consider that NHS [Name] ICB complied with the requirements of the Mental Health Investment Standard for 2023/24. The 2023/24 target spend was £XX and the actual spend was £XX.

b.  I consider that NHS [Name] ICB has not complied with the requirements of the Mental Health Investment Standard for 2023/24. [Note: the ICB should briefly set out the reasons for non-compliance.] The 2023/24 target spend was £XX and the actual spend was £XX.

c.   NHS [Name] ICB originally stated that it had complied with the requirements of the Mental Health Investment Standard for 2023/24. However, following reconsideration of its supporting calculations, I now consider that it has not complied with the requirements. [Note: the ICB should briefly set out the reasons for non-compliance.] The 2023/24 target spend was £XX and the actual spend was £XX.

d.  NHS [Name] ICB originally stated that it had not complied with the requirements of the Mental Health Investment Standard for 2023/24. However, following reconsideration of its supporting calculations, I now consider that it has complied with the requirements. The 2023/24 target spend was £XX and the actual spend was £XX.

[Name]
Accountable Officer
[Name of ICB]

Agreement of review engagement

Each ICB’s governing body will need to agree a separate engagement with an independent, appropriately qualified reporting accountant to carry out a ‘reasonable assurance review’ that specifically covers the MHIS compliance statement. This engagement should be tripartite between the reporting accountant, the ICB and NHS England, and agreed by 31 October 2024.

The reporting accountant will need to be sure they can accept the assignment, and ICBs should be mindful of their own procurement and other governance requirements.

NHS England accepts that the agreement between the ICB, its reporting accountant and ourselves is formed when the contract is agreed and signed by the ICB and the reporting accountant to complete the engagement. NHS England does not need to sign. By publishing this document, NHS England confirms that these pre-agreed terms form its agreement with the ICB and the reporting accountant.

The standard terms of engagement can be found at Annex 3. The ICB should not ask the reporting accountant to deviate from these terms. NHS England will be solely responsible for updating and publishing the standard terms of engagement. If by exception NHS England agrees to any deviation from the standard terms, we will confirm this in writing and a deviation statement must be included in the report. This does not preclude the ICB from agreeing separate engagement terms with the accountant that supplement, but do not conflict with, these standard terms of engagement.

The review should be conducted according to a standard scope that has been agreed by NHS England and can be found at Annex 1.

ICBs should plan to fund the cost of the review. In line with other financial statements, this cost may be accrued to the ICB’s 2023/24 financial accounts.

Each ICB’s reporting accountant will be required to state whether, in their view, the statement made by the ICB has been properly prepared based on the specified criteria set out below for the statement. This will provide assurance as to whether the statement is a reasonable reflection of the ICB’s performance against the standard. The report will be addressed to the ICB governing body and NHS England and should be published on the ICB’s website alongside its compliance statement. An illustrative independent reasonable assurance report for the tripartite agreement can be found at Annex 3.

Supporting information

The ICB should provide the reporting accountant with its target spend, and NHS England will separately supply reporting accountants with a complete list to allow them to check for consistency. If ICBs require further clarity on their targets, they should contact the national mental health finance team via the relevant regional finance team.

Backing detail will be required to show how the expenditure on mental health has been arrived at. This will be checked against the criteria to be used for the preparation of the statement and the relevant NHS England guidance (as set out below). The ICB should provide the reporting accountant no later than 30 November 2024 with an ICB expenditure summary and supporting papers to evidence how it calculated its expenditure.

With this information the reporting accountant should be able to validate that the expenditure is eligible MHIS spend. Where they request further information or clarification, NHS England expects the ICB will respond as quickly as possible and normally within 2 weeks.

Criteria to be used for the statement

The figures used for the headline calculation on which the statement is based should primarily be calculated as per the non-ISFE month 12 mental health submission, including:

  • spend on mental health in 2023/24 (eligible mental health spend in the year ending 31 March 2024 as outlined in the MHIS: categories of Mental Health Expenditure, adjusted for any non-recurrent allocations – in particular, the Service Development Funding (SDF) for mental health should not be included)
  • the target spend as reported in non-ISFE month 12 2023/24, which equates to 2023/24 programme allocation growth plus any shortfall from 2022/23, adjusted for any changes agreed with NHS England. ICBs will already be familiar with the target spend (through non-ISFE returns). A schedule will be provided to the reporting accountants

If the spend on mental health is equal to or greater than the ‘target spend’, the ICB should state that it has complied with the requirements of the MHIS for 2023/24.

If the spend on mental health is less than the ‘target spend’, the ICB should state that it has not complied with the requirements of the MHIS for 2023/24.

For the purposes of the MHIS, eligible mental health expenditure (which for this purpose excludes expenditure on learning disabilities and dementia) is expenditure on mental health correctly reflected in the financial ledger for the financial year (under the normal financial reporting requirements). Spend should be adjusted for any spend against non-recurrent allocations. Treatment should be consistent between financial years.

ICBs should include all identifiable mental health programme spend across all their contracts. This should include mental health-related spend with their main mental health provider contracts. Also, where it is separately identifiable, mental health-related spend in other contracts should be included; that is, smaller mental health providers, non-mental health providers and non-NHS providers.

Where spend is linked to block contracts, commissioners and providers should agree as per 2023/24 operational finance plans what proportion of this expenditure applies to MHIS-compliant services each year, and not rely on a historical split of spend.

Relevant staff costs can also be included – for example, ICB’s mental health lead, but only when the staff member is charged to programme budgets. The treatment must also be consistent between years.

Accruals and the Mental Health Investment Standard

It is normal and acceptable for accruals to be included in the year-end report of MHIS expenditure at month 12 and included in year-end reporting, including the annual report and accounts. These reflect the knowledge available at the time that the accounts are prepared and signed off.

The compliance statement used for the independent review is required to be prepared on an accruals basis, but with the knowledge available at the time the statement is signed off for publication; that is, April 2025. Accruals should only be included in this final statement where the ICB has committed to incur expenditure that will be billed after 31 March 2024 but the goods or services are received before 31 March 2024 and have not been expended by the time of the independent review. If the ICB identifies material differences (for example, >2% of the total MHIS expenditure for the year) between accruals that were made in the preparation of year-end accounts and expenditure before the finalisation of the statement of compliance, then these should be corrected in the statement of compliance. Where such a correction has been made for the compliance statement, it is not necessary to include the corresponding credit or debit in the calculation for 2024/25 MHIS spend. Note that such changes will only affect the MHIS target for 2024/25 if they were made in time for the Data Review 2024.

For example, ICB A has overall MHIS spend of £50 million in 2023/24 and its year-end position includes an accrual for £10 million for a VCSE provider of mental health services. In September this accrual is expended with a final invoice value of £9 million. As this is a material error (2% of total MHIS spend), ICB A should state total MHIS spend as £49 million in its statement of compliance for 2023/24 and should not include the corresponding credit in its MHIS expenditure for 2024/25.

Principles of engagement

Key principles are:

  • statements of MHIS spending must be prepared on a consistent basis between financial years, so if a particular category of spend features in the statement of spending for 2023/24 that category must be included in the same way in the comparator figure for 2022/23
  • historical programme budgeting guidance should not be used to decide whether spend should be included in the MHIS
  • where patients have multiple diagnoses and one or more of these is out of scope of the MHIS, clinical judgement should be applied to determine what proportion of the spend is in scope of the standard. This is particularly relevant in looking at continuing healthcare or s117 spend

In some cases, it may be possible to distinguish on the basis of the service provided (for example, changing dressings or changing a colostomy bag are clearly outside the scope of the MHIS). More complex cases may require a relevant clinician to estimate the proportion of spend that relates to mental health need. If applying this principle would result in an inconsistency with previous approaches, please contact NHS England via your region to discuss.

Correcting historical errors

NHS England expects ICBs to understand and correctly apply the guidance on what spend is in scope of the MHIS (see MHIS: categories of mental health expenditure). We encourage ICBs to continue work to improve the data that supports their classification of spend to and within the MHIS. ICBs had an optional opportunity to correct historical errors that materially impact on MHIS targets through the Data Review 2024 in September 2024. This was an opportunity for ICBs to address any findings from their 2022/23 independent review and ensure mental health spend is reported consistently. There are no significant changes in the 2023/24 MHIS categories or definitions.

Results of the Data Review 2024 will be used to calculate revised MHIS targets for 2023/24 and 2024/25, revised outturn expenditure for 2023/24 and forecast expenditure for 2024/25. For 2023/24 independent review of the MHIS, 2023/24 MHIS targets and outturn expenditure will be those reported through the Data Review 2024, where an ICB took part.

Any amendments from the Data Review 2024 will also be processed to enable MHIS targets to be calculated for 2025/26 planning.

Categories of spend

Categories of spend are defined in MHIS: categories of mental health expenditure. The expenditure included for the purposes of assessing performance against the MHIS must comply with the technical guidance – NHS England guidance for completion of commissioner finance templates; shared with ICBs via Provider Financial Monitoring System (PFMS). If you do not have access, please request this from your regional mental health finance lead.

System evidence

In assessing their mental health investment, NHS England will expect ICBs to reference information and reports provided by third parties, for example:

  • the NHS Business Services Authority (NHSBSA)
  • NHS providers
  • local authorities

We will expect the ICB to review the data for reasonableness, but not to test the source systems.

Scope of work

Reporting accountants will be required to verify the calculations and gain assurance that the spend included in them is in line with the published and other supporting guidance; and has been properly incurred.

Reporting accountants will be required to check that assumptions made by each ICB are consistent between years (unless guidance has changed between years). This is as per guidance distributed to ICBs.

This will require substantive testing, which means that reporting accountants will need to be able to trace numbers back through to the financial accounts system, and then to the original source documentation – for example, invoices/contract and additional information – to show enough information to confirm spend meets specific category definitions within the scope of the MHIS.

For this review only 2023/24 spend will need to be tested. The 2023/24 target spend will be provided to reporting accountants so they will not be required to consider the 2022/23 spend levels any further. Expenditure will need to be adjusted to take account of non-recurrent allocations and their associated spend so that the expenditure figures are presented on a like basis and based on the same guidance.

If quantifiable errors are found in the 2023/24 reported spend, the reporting accountant should quantify the errors and share the detail with the ICB and NHS England. The quantified errors do not need to be included in the reasonable assurance report that will be published with the ICB’s statement of compliance, but may be at the discretion of the reporting accountant.

Reporting accountants will not be required to comment on whether assumptions are consistent between ICBs.

The independent review is for assurance on the 2023/24 spend only. It is not a review of clinical judgement.

For the purposes of giving their reasonable assurance opinion, reporting accountants are not required to undertake any testing on the underlying information or systems maintained by third parties, such as the NHSBSA, NHS providers and local authorities. Testing of the third-party information provided by ICBs is therefore outside the scope of the reasonable assurance engagement.

Consequences of non-compliance

If an ICB makes a positive compliance statement for itself but the reporting accountant’s assessment is that this is not accurate, the ICB will be asked to correct its statement.

If the statement is not corrected, NHS England will expect the reporting accountant to issue a report stating that in their view, the statement has not been properly prepared based on the specified criteria, with the reasons why: for example, the figures in the statement have not been calculated correctly in line with the criteria. The ICB will send a copy of this report to the regional team. The ICB should explain how the error occurred and the steps it is taking to ensure the error is not repeated.

Timescales

The review of the 2023/24 expenditure should be completed and the reports ready to be published by 18 April 2025. To ensure that reports are published together, NHS England will set a date for all reports to be published in 2025.

Frequently asked questions (FAQs)

NHS England publishes Frequently asked questions for independent review of Mental Health Investment Standard (MHIS) and these should be considered as a supplement to this guidance.

Annex 1: Mental Health Investment Standard reporting – accountant specification

Context

ICBs have a specified requirement, set by NHS England, to increase their MHIS.

The 2023/24 priorities and operational planning guidance states:

“The Mental Health Investment Standard (MHIS) will continue to apply to integrated care boards (ICBs) and continues to be subject to independent review. For 2023/24, the MHIS requires ICBs to increase spend on mental health services by ICB programme allocation base growth (prior to the application of the convergence adjustment).”

All ICBs will be required to publish a statement after the end of 2023/24 to declare whether they have met their obligations with regard to the MHIS. We refer to this statement below as the ‘MHIS statement of compliance’.

The format and content of this statement, the criteria on which it is based, and the publication requirements are set out in the main body of this document.

This document confirms that the 2023/24 spend is being measured against the 2023/24 target spend being provided to the reporting accountants. There is therefore no need to revisit the 2022/23 comparative figures except to check that eligible MHIS expenditure is being consistently reported in both financial years; that is, expenditure is being consistently reported as eligible or not for MHIS inclusion.

This guidance also outlines how the validation process should be commissioned and carried out. It states that each ICB will need to agree a separate engagement with an independent, appropriately qualitied auditor to carry out a ‘reasonable assurance review’ on the MHIS compliance statement for the ICB.

Format of the reasonable assurance review

This reasonable assurance review will be carried out under ISAE (UK) 3000: Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE (UK) 3000).

Under ISAE (UK) 3000 the reporting accountant will assess whether the subject matter information used in the preparation of the statement is free from material misstatement and expresses a conclusion on this through a written report. As we have asked for the reasonable assurance review, this will be a positive opinion that provides reasonable, but not absolute, assurance in all material respects.

The reporting accountant’s report should convey their opinion on the outcome of the measurement or evaluation of subject matter information against the criteria set out in this guidance, where the criteria are the benchmarks applied by the ICB to the underlying subject matter in the preparation of the subject matter information.

For this engagement the terms in bold should be applied as follows:

  • subject matter information: the MHIS compliance statement
  • subject matter: all the information disclosed in the MHIS compliance statement and the headline calculations from which they are derived, including mental health spend
  • criteria: the calculations and definitions NHS England specifies in its Assurance engagement of the Mental Health Investment Standard 2023/24 – briefing guidance, which specifies what figures should be used to support the ICB’s MHIS compliance statement

To make it clear to the ICB and readers of the opinion how the reporting accountant has reached their conclusion, the criteria will be clearly referenced in both the reporting accountant’s engagement letter and reports.

Proposed approach

  1. Ascertain the method of compilation of the MHIS compliance statement.
  2. Consider the internal controls applied by the ICB over the preparation of the statement and the headline calculations, and evaluate the design of those controls relevant to the engagement to determine whether they have been implemented.
  3. Identify and assess the risks of material misstatement in the MHIS compliance statement as a basis for designing and performing procedures to respond to the assessed risks.
  4. Verify if the total 2023/24 spend is equal to or above the target spend as provided by the national mental health finance team.
  5. Carry out procedures on the mental health expenditure included in the headline calculations and supporting schedules to check whether it meets the definition of mental health expenditure properly incurred as set out in the relevant Group Accounting Manual and the Assurance engagement of the Mental Health Investment Standard 2023/24 – briefing guidance issued by NHS England.
  6. Verify the factual accuracy of the compliance statement based on the procedures set out above.

Where:

  1. Documented through enquiry.
  2. Documented through enquiry and walkthrough, with reference to the reporting accountant’s prior knowledge where they are the ICB’s external auditor.
  3. Considered by the reporting accountant auditor based on 1 and 2 above.
  4. Verified as follows:
    1. agree expenditure to ICB financial records and calculations
    2. agree expenditure in the supporting schedules
    3. check the ICB’s MHIS calculation and compare to the target spend for the ICB notified by NHS England.
  5. Check calculation has been calculated in line with the criteria set out in the Assurance engagement of the mental health investment standard 2023/24 – briefing guidance and agree to audited accounts.
  6. The procedures will include sample checks of the 2023/24 expenditure included in the calculations and supporting schedules to the financial ledger and the NHS England eligibility requirements set out in Assurance engagement of the mental health investment standard 2023/24 – briefing guidance (using normal audit principles and assertions). These checks will consider, for example, if the expenditure:
    • relates to the ICB
    • relates to the correct financial year
    • meets NHS England’s definition of MHIS spend for the purposes of the statement
    • has been correctly reflected in the financial ledger for the financial year (under the normal financial reporting requirements)

When planning and performing the engagement, the reporting accountant is required to be professionally sceptical, recognising that circumstances may exist that cause the MHIS compliance statement to be materially misstated, and to consider materiality.

The reporting accountant should therefore use analytical procedures to identify any unusual variances between 2023/24 and 2022/23 spend as shown in month 12 non-ISFE or recategorised outturn that require further investigation during the testing.

The reporting accountant will request written representations from the ICB as part of the engagement, including:

  • that it has provided the reporting accountant with all the information relevant to the engagement
  • confirmation of its measurement of the underlying subject matter against the applicable criteria and preparation of the headline calculation on which the statement is based, including confirmation that all relevant matters are included in the MHIS compliance statement and supporting calculations

Assurance that would be provided under the engagement

Under ISAE (UK) 3000 the reporting accountant expresses an opinion on whether the subject matter information is prepared, in all material respects, in accordance with applicable criteria.

The wording for the opinion is therefore:

“In our opinion, the Mental Health Investment Standard Statement of Compliance is properly prepared, in all material respects, based on the criteria set out in the ‘Assurance engagement of the mental health investment standard 2023/24 – briefing guidance’ published by NHS England.”

Correction of errors

If during their testing the reporting accountant finds errors in the MHIS compliance statement (or the headline calculations from which it is derived), they should ask the ICB to amend the statement (and where necessary the calculations on which the statement is derived) for the errors identified. The reporting accountant may then need to carry out further testing to confirm the material accuracy of the revised figures.

If the statement is not amended, the reporting accountant will give a qualified opinion on the MHIS compliance statement. This qualified opinion is likely to be that the statement has not been properly prepared based on the specified criteria, setting out the reasons why this is the case.

The ICB will send a copy of this report to the regional team.

Annex 2: MHIS statement of the accountable officer’s responsibilities

The National Health Service Act 2006 (as amended) states that each ICB shall have an accountable officer; and that officer shall be appointed by NHS England.

The responsibilities of an accountable officer are set out under the National Health Service Act 2006 (as amended), Managing Public Money and in the appointment letter to the ICB’s accountable officer. They include:

  • the propriety and regularity of the public finances for which the accountable officer is answerable
  • keeping proper accounting records (which disclose with reasonable accuracy at any time the ICB’s financial position)

The accountable officer will be required to make the following declaration in the MHIS compliance statement to acknowledge their responsibilities.

As the Accountable Officer of [name of ICB], I am responsible for the preparation of the Mental Health Investment Standard Compliance Statement (the “Statement”) for the year ending 31 March 2024 and for the financial information on which the Statement is based. This includes the design, implementation and maintenance of internal control relevant to the preparation of the Statement to ensure that mental health expenditure is correctly classified and included in the calculations and that the Statement is free from material misstatement, whether due to fraud or error.

To the best of my knowledge and belief I have properly discharged my responsibilities, with regard to reporting against the Mental Health Investment Standard.

In preparing the statement, the accountable officer is required to comply with the requirements of the criteria specified by us for the preparation of the statement and the headline calculations on which it has been based.

Annex 3: MHIS compliance statement – 2023/24 standard terms of engagement

Agreed as part of the assurance engagement of the Mental Health Investment Standard 2023/24 – guidance

NHS England accepts that an agreement between the integrated care board (ICB), its reporting accountant and NHS England on these terms is formed when the accountant signs the contract with the ICB as set out in clause 3 herein. [Note: NHS England does not need to sign. By publishing this document NHS England confirms that these pre-agreed terms form its agreement with the ICB and the reporting accountant. NHS England will be solely responsible for updating and publishing these standard terms of engagement. If by exception NHS England agrees to any deviation from the standard terms, it will confirm this in writing and a deviation statement must be included in the reporting accountant’s report. This does not preclude the ICB from agreeing separate engagement terms with the accountant that supplement, but do not conflict with, these standard terms of engagement.]

In these terms of engagement:

  • ‘the ICB’ refers to [name of ICB]
  • ‘the accountant’ refers to the ICB’s reporting accountants

1. Introduction

The ICB is required to produce and publish an annual MHIS compliance statement, as set out in clause 3 below, that is published alongside a report signed by an accountant to provide independent assurance. These terms of engagement set out the basis on which the accountant will sign their report.

2. Responsibilities of the ICB

2.1 The ICB is responsible for producing the MHIS compliance statement for 2023/24, maintaining proper records that comply with the terms of any legislation or regulatory requirements and NHS England’s regulatory requirements as set out in the Assurance engagement of the Mental Health Investment Standard 2023/24 – guidance (the ‘assurance briefing’) and providing relevant information to NHS England on a basis in accordance with the requirements of the assurance briefing.

2.2 The management of the ICB will make available to the accountant all records, correspondence, information and explanations that the accountant considers necessary to enable them to perform their work.

2.3 The ICB and NHS England accept that the ability of the accountant to perform their work effectively depends on the ICB providing full and free access to the financial and other records, and the ICB shall procure that any such records held by a third party are made available to the accountant.

2.4 The accountant accepts that, whether or not the ICB meets its obligations, the accountant remains under an obligation to NHS England to perform their work with reasonable care. The failure by the ICB to meet its obligations may cause the accountant to qualify their report or be unable to provide a report.

3. Scope of the accountant’s work

3.1 The ICB will provide the accountant with such information, explanations and documentation that the accountant considers necessary to carry out their responsibilities. The accountant will seek written representations from management in relation to matters for which independent corroboration is not available. The accountant will also seek confirmation that any significant matters of which the accountant should be aware have been brought to their attention.

3.2 The accountant will perform the following work in relation to reports required by NHS England:

3.2.1 The MHIS compliance statement: a reasonable level of assurance assignment as set out in the terms and conditions of the assurance briefing and subject to any adverse findings, to produce a report in the form set out in paragraph 4.

3.2.2 The criteria are identified as per the assurance briefing.

3.3 While the accountant will perform their work with reasonable skill and care, this work should not be relied on to disclose all misstatements, fraud or errors that might exist.

4. Form of the accountant’s report

4.1 The accountant’s reports are prepared on the following bases:

4.1.1 ICBs should share draft reports received from the reporting accountant with NHS England.

4.1.2 Neither the ICB nor NHS England may rely on any oral or draft reports the accountant provides. The accountant accepts responsibility to the ICB and NHS England for the accountant’s final signed reports only.

4.1.3 The accountant’s report will be prepared solely for the confidential use of the ICB and NHS England, and solely for the purpose of facilitating the MHIS compliance statement. The report will be released to the ICB and NHS England on the basis that it shall not be copied, referred to or disclosed, in whole or in part (save as otherwise permitted by agreed written terms in the assurance briefing), without the prior written consent of the accountant, except where there is a legal or statutory right of access.

4.1.4 Without imposing on the accountant and without the accountant assuming (or being perceived as assuming) any duty or responsibility and without imposing or accepting any liability to anyone except the ICB and NHS England, the ICB and NHS England may disclose the reports to others who demonstrate statutory rights of access to the report.

4.1.5 To the fullest extent permitted by law, except for the ICB and NHS England, the firm of accountants, its partners and staff neither owe nor accept any duty to any person (including, without limitation, any person who may use or refer to any of the ICB’s publications) and shall not be liable for any loss, damage or expense of whatsoever nature which is caused by any person’s reliance on representations in the accountant’s reports.

5. Liability provisions

5.1 The accountant will perform the engagement with reasonable skill and care and accepts responsibility to the ICB and NHS England for losses, damages, costs or expenses (‘losses’) caused by their breach of contract, negligence or wilful default, subject to the following provisions:

5.1.1 The accountant will not be responsible or liable if such losses are due to the provision of false, misleading or incomplete information or documentation or due to the acts or omissions of any person other than the accountant, except where, on the basis of the enquiries normally undertaken by accountants within the scope set out in these terms of engagement, it would have been reasonable for the accountant to discover such defects.

5.1.2 The accountant accepts liability without limit for the consequences of their own fraud and for any other liability that they are not permitted by law to limit or exclude.

5.1.3 Subject to the previous paragraph (5.1.2), the total aggregate liability of the accountant whether in contract, tort (including negligence) or otherwise, to the ICB and NHS England, arising from or in connection with the work that is the subject of these terms (including any addition or variation to the work), shall not exceed the amount of £500,000.

5.2 The ICB and NHS England agree that they will not bring any claims or proceedings against any individual partners, members, directors or employees of the accountant. This clause is intended to benefit such partners, members, directors and employees who may enforce this clause pursuant to the Contracts (Rights of Third Parties) Act 1999 (‘the Act’). Notwithstanding any benefits or rights conferred by this agreement on any third party by virtue of the Act, the parties to this agreement may agree to vary or rescind this agreement without any third-party’s consent. Other than as expressly provided in these terms, the Act is excluded.

5.3 Any claims, whether in contract, negligence or otherwise, must be formally commenced within 6 years after the party bringing the claim becomes aware (or ought reasonably to have become aware) of the facts that give rise to the action and in any event no later than 6 years after the relevant report was issued (or, if no report was issued, when the accountant accepted the engagement in writing). This expressly overrides any statutory provision that would otherwise apply.

5.4 This engagement is separate from and unrelated to the accountant’s audit work on the financial statements of [name of ICB] for the purposes of any applicable statutory or regulatory or other auditing framework and nothing herein creates obligations or liabilities regarding the accountant’s audit work, which would not otherwise exist.

6. Fees

The accountant’s fees, together with VAT and out-of-pocket expenses, will be agreed with and billed to the ICB. NHS England is not liable to pay the accountant’s fees.

7. Quality of service

The accountant will investigate all complaints. NHS England or the ICB has the right to pursue any complaint.

8. Providing services to other parties

The accountant will not be prevented or restricted by virtue of their relationship with the ICB and NHS England, including anything in these terms of engagement, from providing services to other clients. The accountant’s standard internal procedures are designed to ensure that confidential information communicated to them during the course of an assignment will be maintained confidentially.

9. Applicable law and jurisdiction

9.1 This agreement shall be governed by and interpreted and construed in accordance with the laws in England and Wales and the English courts.

9.2 The ICB, NHS England and the accountant irrevocably agree that the courts of the UK shall have exclusive jurisdiction to settle any dispute (including claims for set-off and counterclaims) that may arise on any basis in connection with the validity, effect, interpretation or performance of, or the legal relationship established by, this agreement or otherwise arising in connection with this agreement.

10. Alteration to terms

All additions, amendments and variations to these terms of engagement shall be binding only if in writing and signed by the duly authorised representatives of the parties. These terms supersede any previous agreements and representations (unless based on fraud) between the parties in respect of the scope of the accountant’s work and the accountant’s report or the obligations of any of the parties relating thereto (whether oral or written) and represents the entire agreement and understanding between the parties. These terms do not affect any separate agreement in writing between the ICB and the accountant.

Illustrative independent reasonable assurance report in connection with the 2023/24 MHIS compliance statement to the governing body of [name of ICB] and NHS England for the year ending 31 March 2024

To: Governing Body of [name of ICB] and NHS England

This reasonable assurance report (the “Report”) is made in accordance with the terms of our engagement letter dated [date of engagement letter] (the “Engagement Letter”) for the purpose of reporting to the Governing Body of [name of ICB] (“the ICB”) and NHS England in connection with the ICB’s Mental Health Investment Standard compliance statement dated [date of compliance statement] for the year ending 31 March 2024 (the “Statement”), which is attached. As a result, this Report is not suitable for any other purpose.

Responsibilities of the ICB

The 2023/24 priorities and operational planning guidance issued by NHS England stated that: “The Mental Health Investment Standard (MHIS) will apply to ICBs and continue to be subject to an independent review. For 2023/24, the MHIS requires ICBs to increase spend on mental health services by at least ICB programme allocation base growth (prior to the application of the convergence adjustment).”

ICBs are required to publish a statement after the end of the financial year to state whether they consider that they have met their obligations with regard to the MHIS (the “Statement”). The format and content of the Statement should be in line with the specified wording in the Assurance engagement of the Mental Health Investment Standard 2023/24 – guidance (the “Guidance”) issued by NHS England.

The ICB’s Accountable Officer is responsible for the preparation of the Statement(s) for the ICB for the year ending 31 March 2024 and for the completeness and accuracy of the accounting records and calculations (the “Relevant information”) that forms the basis for the preparation of the Statement. This includes the design, implementation and maintenance of internal controls relevant to the preparation of the Statement to ensure that mental health expenditure is correctly classified and included in the calculations, and that the Statement is free from material misstatement, whether due to fraud or error.

Relevant information to be used in the preparation of the statement

The relevant information to be used in the preparation of the Statement is set out in the guidance. This includes:

  • total expenditure on mental health in the year ending 31 March 2024, which is consistent with the definitions used for programme budgeting, as set out in the guidance
  • the ICB’s target spend for the year, as confirmed by NHS England
  • what constitutes eligible mental health expenditure for the purpose of the MHIS and the Statement

The ICB’s accountable officer was required to provide us with:

  • access to all information of which management is aware that is relevant to the preparation of the Statement, including procuring any such records held by a third party so they were made available to us
  • additional information that we requested from management for the purpose of the engagement
  • unrestricted access to persons within the ICB from whom we determined it necessary to obtain evidence

Practitioner’s responsibilities

Our responsibilities are to express a conclusion on the accompanying Statement. We conducted our engagement in accordance with the UK Standard on Assurance Engagements (ISAE (UK) 3000), assurance engagements other than audits or reviews of historical financial information. ISAE (UK) 3000 requires us to form an opinion as to whether the Statement has been properly prepared, in all material respects, in accordance with the criteria set out in the guidance.

We apply ISQM1 (UK) and accordingly maintain a comprehensive system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

For the purpose of the engagement, we have been provided by the ICB with a copy of its draft MHIS compliance statement showing the eligible MHIS expenditure and target spend for 2023/24, together with a more detailed expenditure summary. The Accountable Officer of the ICB remains solely responsible for the Statement.

We performed a reasonable assurance engagement as defined in ISAE (UK) 3000. The objective of a reasonable assurance engagement is to perform such procedures [on a sample basis] as to obtain information and explanations that we consider necessary in order to provide us with sufficient appropriate evidence to express a positive conclusion on the Statement.

A summary of the work that we performed is as follows:

[Reporting accountant to include details here]

We have examined the records of the ICB, performing such procedures on a sample basis so as to obtain information and explanations that we considered necessary having regard to the guidance issued by NHS England and received such explanations from the management of the ICB in order to provide us with sufficient appropriate evidence to form our conclusion on the Statement.

The scope of our testing covered the total MHIS expenditure included in the Statement only and does not cover the reporting of spend against individual service lines in the expenditure summary.

Our work was directed to those matters that, in our view, materially affect the Statement and was not directed to the discovery of errors or misstatements that we consider to be immaterial. While we perform our work with reasonable skill and care, it should not be relied on to disclose all misstatements, fraud or errors that might exist.

Inherent limitations (this section is only relevant if you are the ICB’s auditor)

Our audit work on the financial statements of the [ICB] is carried out in accordance with our statutory obligations and is subject to separate terms and conditions. This engagement will not be treated as having any effect on our separate duties and responsibilities as the [ICB]’s external auditor. Our audit report on the financial statements is intended for the sole benefit of the members of the Governing Body of the ICB, as a body, in accordance with Part 5 of the Local Audit and Accountability Act 2014.

It is not expected for accountants to review clinical opinions.

Our audit work has been undertaken so that we might state to the members of the Governing Body of the ICB those matters we are required to state to them in an auditor’s report and for no other purpose. Our audits of the [ICB’s] financial statements are not planned or conducted to address or reflect matters in which anyone other than such members of the Governing Body of the ICB may be interested in such purpose. In these circumstances, to the fullest extent permitted by law, we do not accept or assume any responsibility to anyone other than the ICB and the members of the Governing Body of the ICB for our audit work, for our audit reports, or for the opinions we have formed in respect of those audits.

To the fullest extent permitted by law we do not and will not, by virtue of our reports or otherwise, assume or accept any duty of care or liability under this engagement to ICB and the members of the Governing Body of the ICB, or NHS England or to any other party, whether in contract, negligence or otherwise in relation to our statutory audits of the [ICB]’s financial statements.

[Conclusion/qualified conclusion/adverse conclusion]

Our conclusion has been formed on the basis of, and is subject to, the matters outlined in this report.

In our opinion, [name of] ICB’s Mental Health Investment Standard compliance statement has been properly prepared, in all material respects, in accordance with the criteria set out in the Assurance engagement of the Mental Health Investment Standard 2023/24 – guidance, published by NHS England.

or

Except for [detail minor exceptions noted], in our opinion [name of] ICB’s Mental Health Investment Standard compliance statement has been properly prepared, in all material aspects, in accordance with the criteria set out in the Assurance engagement of the Mental Health Investment Standard 2023/24 – guidance, published by NHS England.

or

In our opinion [name of] ICB’s Mental Health Investment Standard compliance statement has not been properly prepared in all material respects, in accordance with the criteria set out in the Assurance engagement of the Mental Health Investment Standard 2023/24 – guidance published by NHS England.

Basis for [qualified conclusion/adverse conclusion]

We have undertaken our review of the ICB’s compliance statement having regard to the criteria set out by NHS England in its Assurance engagement of the Mental Health Investment Standard 2023/24 – guidance.

We have identified the following issues that indicate that the ICB’s compliance statement has not been properly prepared in accordance with NHS England’s guidance:

[insert details of issues leading to qualification of opinion]

Restriction of Use of Our Report
[Reporting accountant to add standard wording]
[name of reporting accountant]
[Office location]
[Date]

Publication reference: PRN01203