AUDIT COMMITTEE. Minutes of the Meeting held on 25 th January 2011 in the Board Room Howard Court

Transcription

1 AUDIT COMMITTEE Minutes of the Meeting held on 25 th January 2011 in the Board Room Howard Court Present: Alison White (AW) Non Executive Director (Chair) Julian Laite (JuL) Non Executive Director In Attendance: Jessica Linskill () Director of Quality and Governance Gordon Flack () Director of Finance Doug Freeman (DF) RSM Tenon Rachel Brittain (RB) Audit Commission Clive Appleby (CA) Company Secretary Karen Taylor () Acting Chief Executive Karen Seikus (KS) Minutes Secretary Francesca Pillow (FP) Local Counter-Fraud Service (LCFS) Justin Spencer (JS) AD Estates (For item 18/11) Jaci Church (JC) AD Quality (For item 13/14/11) A Formalities Action 01/11 Welcome, Introduction and Apologies Apologies were received from Heather Moulder (HM) Chief Executive, Mark Hodgson (MH) Audit Commission and Tim Merritt (TM) RSM Tenon. 02/11 Members Declaration of Interests None declared. 03/11 Minutes of the Meeting held on 25 th January 2011 Minutes of the December meeting were agreed as a correct record. 04/11 Matters arising from the Minutes of the Meeting held on 25 th January (tracker) The Committee noted the tracker report on outstanding action points. Observations were as follows: 90/10 Patient Experience Report (11.09/10) To be included in the interim Quality framework. Claire Hawkins (CH) has been appointed as Director of Quality and governance from March 1 st and will liaise with her to ensure continuity of this work. 90/10 Meeting to be arranged between AW, Anne McPherson, and CH to discuss the roles of the Audit and HealthCare Governance Committee (HCG) including 1

2 systems, processes and internal controls. A report back to the Audit Committee after this meeting will be made. 90/10 has written to Alan Pond re the findings of the General Ledger Audit. The management of shared services is to be kept under review in contract monitoring meetings. 91/10 Revised Terms of Reference for the Bank and Agency Audit have been approved 96/10 CA to prepare draft assessment on how well the Committee complies with handbook recommendations. If new handbook is not published in time; review against existing one. 89/10 Payroll report to be added to February agenda. It was noted that the workforce planning audit response is overdue and was asked to progress the response with the Director of HR and update at the next audit committee meeting. AW/AMc CA B Internal Audit 05/11 Final Audit reports received since previous meeting The following reports were received and noted: Governance (1.10/11) Community Services Registration process (7.10/11) Safeguarding Vulnerable Adults (8.10/11) 06/11 Internal Audit Progress Report (January) DF presented the IA Progress Report. It was noted that the Payroll Report has since been finalised and issued. Governance Work is ongoing in relation to the recommendations. Terms of Reference are in place for the HGC and business cycle. The Executive Team will be reviewing the Committee Structure. The role of the Audit Committee in the review of finance was discussed. DF clarified that the judgement was that at present this remained an unusual situation. DF was asked to provide clarification on the apparent change in RSM Tenon position since that provided at an earlier meeting on the requirement for a finance committee as distinct from an audit committee. Response expected at next Audit Committee. In respect of Board Committees the role of the Audit Committee is to ensure that sub committees work to a consistent, standardised process. The internal audit reports demonstrate that this has not been the case and the processes therefore need to be tightened up. A proposal is to be put forward to the chairman of the Board that DF /DF AW 2

3 minutes and formal reports from chairs of subcommittees come to the Board to encourage discussion and to increase awareness of key issues. Community Services Registration Process Concerns were expressed on the lack of a systematic approach and reporting differences. It was noted that HCT CQC registration was a new process for both HCT and CQC. HCT is in the process of refining systematic collection of data. A question was raised as to the extent to which the Board and Audit Committee can rely on information due to reporting differences across services. It was noted that the CQC have requested compliance evidence from Gossoms End by 4 th Feb. This will give a mechanism for the Executive to test how well the assurance information and mechanisms are working. It was agreed that the Audit Committee would use this experience to inform what action was needed more widely. Verbal report to come to the next meeting. Safeguarding Vulnerable Adults HCT Policy has been updated. and DF to meet to discuss Incident Reporting, Risk Identification and Management. There was an issue on staff understanding their roles and following processes, policies and procedures. to update IA progress report in relation to points 1.13 and 1.9. General Comments reported that the organisation has moved forward since these audits were undertaken. AW requested that the CEO provide an overview of any key lessons learnt/organisational wide issues arising from audits in the future, prior to the detailed discussion on each audit. 07/11 Internal Audit Tracker It was noted that editing has made the tracker easier to read. Reports discussed at the meeting will be added to the tracker for progress report in February. 08/11 Internal Audit Plan Following discussion of the plan the following actions were requested of RSM Tenon. 1) Strategy to be reviewed to show approach up to March 2012 and subsequent changes to approach after the Trust becomes an FT. Explanation to be given of critical factors over whole of the period and major changes in wider external environment. 2) Analysing the experience from this year and using that to inform what happens in the audit plan for next year. 3) Assessment of risk and planned audits. Audit programme /DF KS DF/TM 3

4 to be based on analysis of risk (clinical and non clinical). A revised proposal taking these issues into account will go to the Executive Team. 09/11 (Revised) Internal Audit Report Process Process approved. and Executive Team to ensure that robust processes are implemented. 10/11 Trust strategies At the Board Briefing in December the Trust Strategies were discussed, in the context of the Integrated Business Plan. The Integrated Business Plan (IBP) is the overarching organisational strategy, with a number of strategies informing the content of the IBP (for example stakeholder engagement strategy commercial strategy, quality strategy) A strategy hierarchy will be circulated to Board members. C External Audit 11/11 RB was asked to advise the Committee regarding the number of days allocated for external audit. Concern was expressed at the level of the fee. Noted that RB supplies publication of scale and rationale of fees. Noted that HCT are required to use the Audit Commission for external audit until such time as FT status is achieved. At this point competitive quotations may be obtained. Discussion with the PCT on valuation of wheelchair stock has resulted in an agreed way forward. The PCT are prepared to sign an undertaking to buy back the stock at the current opening valuation amended for future movements using the same valuation method. This would be effective in the event HCT ceases to provide this service. In effect the PCT has therefore agreed to underwrite the current carrying value in the HCT accounts. This approach is to be discussed further with the external auditors. D Risk and Assurances 12/11 BAF The Committee noted improvement to the format and clarity of the BAF. It was agreed to make amendments to the following points on the BAF. 05/10/12 Adjust to match Action to the appropriate Gap identified 01/11/02 Amend to read Recruit to establishment levels if funding available. RB CA The residual risk score is the view from the Executive as to the extent that the risk can be mitigated. AW expressed concern that in some cases the residual risk may be higher than shown by the report because of the volume/complexity of mitigating action required, or because risks impacted on each other. It was noted that multiple sources of assurance (e.g. IA reports) should also 4

5 inform the identification of risk. 13/11 High Level Risk Register (HLRR) This register is a consolidation of all Business Unit risks (Held on Business Unit Risk Registers - BURR) which have a current risk score of 15 and over. Risks that impact on clinical services are also reviewed by HCG. There are more risks on December register compared to November. It was noted that this is the first time the HLLR has been reviewed by the Audit Committee. It was agreed that it needs to be developed in line with the development of the BAF, and specifically the HLRR should reference the BAF and consideration to be given to the interplay between BAF/HLRR risks. It was noted that further training is being provided to staff throughout the organisation to support the identification and description/classification of risk. (JC) JC/CA 14/11 Quality Risk Profile Q3 Summary (QRP) The paper was noted. It was agreed that there needed to be further detail regarding how the Risk Profile is created by the CQC, and what this is telling the organisation. It was agreed that the QRP will be considered at the next Board Briefing in February and this will include:- An analysis of CQC measurements informing the Risk Profile, including the data source An analysis of what the information is telling HCT in terms of actions required. (E) Financial Sustainability 15/11 Finance Report (Month 9) At month 9 the Trust is showing an under spend to date of 71k. The overspend on the estates budget remains an issue. The Director of Finance is working with the PCT to resolve this position. Forecast position The forecast position is 33k surplus. was asked to include the forecast position at the beginning of the finance paper. The forecast is also to be shown in more detail, by Business Unit in future report. Bank and Agency Analysis Bank and Agency spend reduced in December. This rate is meeting CIP expectation and also the additional expectations 5

6 from the closure of Hitchin Hospital over Christmas. The Terms of Reference for the Bank and Agency audit have been agreed. It was noted that authorisation levels have been raised to DOF level. Risks and Opportunities The following were noted: (1) Withdrawal of funding related to Windmill bed reductions has been avoided following agreement with the PCT (2) Risks related to Carillion invoices have remained. (3) Reablement monies have been secured, contribution of 200k. Cash Flow Declining cash balance to March driven by recharge expected from the PCT for Estates costs in Feb. Working Capital A more formal escalation process in credit control is taking place with an additional post in this area to ensure that the Trust is reducing its debtor days. PCT disaggregation The Trust is still in negotiation with the PCT re corporate overheads. The Trust has reached agreement on balances except for the Estates overspend up to November Business Unit financial analysis It was agreed that there needs to be a more detailed financial analysis undertaken at Business Unit level. The Committee agreed to review detail for Community Nursing and Children s SLT to test this process. It was agreed that the Business Unit Performance reports will be circulated to the Board for information Any changes to the Financial position will be reported to AW and JuL by . 16/11 Cost Improvement Programme (CIP) Gordon Flack presented the CIP programme for to date. The plan is to achieve a minimum of 5 million saving. It was noted that refinement of plans were required to reflect correct phasing. Lessons learnt from underachievement last year are being applied to this year. Risk factor is built in for There is a high level understanding of projects and assurance required per project. reported that additional consultancy 6

7 support is being used to further support the development of efficiency savings. Concerns were raised by AW/JuL that the CIP programme is not sufficiently developed, and this will be raised and discussed at the Trust Board meeting in January. 17/11 (Draft) Terms of Reference for Finance and Business Planning Committee It was agreed that a paper needs to go to the Board with an options paper outlining the following 1) Status Quo remains with advantages and disadvantages 2) New committee as per paper 3) Board review finance in more depth with no specific FB committee 4) A combination of enhanced Board role plus a FB committee The paper will be presented to the February Audit Committee and March Board meeting. 18/11 Estates It was noted that 1 m worth of savings have been made over a 3 year period. The service demonstrates value for money in the most recent national benchmarking information. The main issue is that budget has not been set recognising inevitable cost pressures. The HCT Estates strategy is to be reviewed and this will be presented to the Board Briefing in February. F Counter fraud 19/11 There have been fewer HCT investigations in Counter fraud training to Business Units has gone well. There are no cases currently relating to HCT. FP to give information on previous cases to. Briefing regarding counter fraud performance and HCT antifraud work plan will come to March meeting. of the Audit Committee. G Internal Audit Memorandum of Understanding 20/11 Noted and approved H Date and Time of Next Meeting Tuesday 22 nd February 2011 between in Board Room Howard Court FP 7