INTERNAL AUDIT PROGRESS REPORT

Transcription

1 FOR CONSIDERATION AGENDA ITEM January 2013 INTERNAL AUDIT PROGRESS REPORT Executive Lead: Director of Finance Author: Head of Internal Audit Contact Details for further information: James Johns ext SITUATION The Internal Audit progress report provides specific information for the Audit Committee covering the following key areas: Detail relating to summaries of key findings and conclusions from the finalised internal Audit assignments that have been given Substantial and Reasonable Assurance. Full reports for assignments given Limited Assurance are included in the papers. Specific detail relating to progress against the audit plan and any updates that have occurred within the plan. Progress against the status of implementation of agreed actions form previous assignment reports. BACKGROUND The progress report provides the Audit Committee with information regarding the progress of Internal Audit work in accordance with the agreed plan for 2012/13; including details and outcomes of reports finalised since the previous meeting of the committee, amendments to the plan and also assignment follow ups. ASSESSMENT The report provides the Committee with the level of assurance as the management of a range of risks covered within the Internal Audit Plan and the necessary actions required to address any control weakness identified. Internal Audit Progress Report Page 1 of 2 Audit Committee Meeting 29January 2013

2 FOR CONSIDERATION RECOMMENDATION The Committee is asked to: Consider the Progress Report Consider the findings and conclusion from the individual finalised reports. Financial Impact Quality, Safety and Experience Not applicable report provided solely for assurance purposes Not applicable report provided solely for assurance purposes Standards for Health Services Risks and Assurance Equality and diversity The report provides assurance across a range of areas covered by the standards and generally Standard 1 Governance and Accountability. The Internal Audit plan provides assurance across a range of areas covered by the Board Assurance Framework Not applicable report provided solely for assurance purposes Internal Audit Progress Report Page 2 of 2 Audit Committee Meeting 29January 2013

3 Cardiff and Vale University Health Board Audit Committee January 2013 Internal Audit Progress Report

4 SECTION CONTENTS 1. Introduction 2. Outcomes from Completed Audit Reviews 3. Audit Reviews in Progress 4. Delivery of Internal Audit Plan 5. Recommendation follow up 6. NWSSP - Audit & Assurance Developments 7. Report summaries Appendix 1 Assignment status schedule Appendix 2 Complete Versions of Reports with Limited Assurance: Medical Locums

5 1. INTRODUCTION 1.1. This progress report provides the Audit Committee with the current position regarding the work being undertaken by Internal Audit in accordance with the agreed plan. This report includes details of reports finalised since the previous meeting of the committee, assurance ratings and key findings from these reviews, along with details regarding the delivery of the plan and any required updates The plan for 2012/13 is delivered as part of the arrangements established for the NHS Wales Shared Service Partnership - Audit and Assurance Services. 2. OUTCOMES FROM AUDIT REVIEWS 2.1. There have been a number assignments finalised since the last meeting of the Committee and these along with the respective assurance ratings are highlighted in the table below Summaries of the finalised reports with Reasonable or Substantial Assurance, including the key findings and conclusions, are included within section seven of this report. The other assignments have the full version of the reports included. ASSIGNMENT General Ledger Income, Cash & Debtors Claims Reimbursement Out of Hours Service Medical Locums ** Medicines Management** ASSURANCE RATING Substantial Substantial Substantial Reasonable Limited Limited ** Full reports attached CARDIFF AND VALE UHB Page 1 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

6 3. AUDIT REVIEWS IN PROGRESS 3.1 In addition to the finalised Internal Audit reports above a number of assignments have also reached draft report stage and are currently working with management to develop an agreed series of actions. 3.2 In addition to the assignments that that have reached final and draft report stage there are several where the fieldwork is in progress. These reviews include Waiting List management, QOF, Translation, Rule 43s, Concerns Management and PC security 4. DELIVERY OF THE INTERNAL AUDIT PLAN 4.1. Significant progress has already been made in the delivery of the of the 2012/13 plan, with good progress mage with many assignments, although there has been a slight delay in the progress of a small number of assignments. This work schedule of assignments is included at Appendix The schedule for the delivery of the Capital and Estates Assurance by the Specialist Services Unit of the Audit & Assurance Services Division had been added to the end on the main assignment schedule. The field work for the first two assignments has been completed and discussions and ongoing with management regarding the findings and preliminary reports. 4.3 The delivery of the NWSSP systems reviews are being coordinated on an All Wales basis to ensure consistency of approach and reporting. The work covering the reviews of Payroll, Accounts Payables and Procurement are underway with the aim of reporting them in the first instance to the NWSSP Audit Committee in March. The reports are to be produced on a service centre basis. 4.4 The field work for both the Accounts Payable and Payroll Reviews have been completed and findings pulled together pending the production of the definitive reports. The outcomes to date for Cardiff and Vale UHB have not identified any significant findings with the draft conclusions being that Accounts Payable will be given Substantial Assurance and Payroll Reasonable Assurance. CARDIFF AND VALE UHB Page 2 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

7 5. RECOMMENDATION FOLLOW UP 5.1. Recommendation follow up reviews continue to be undertaken as per agreed timescales in each individual audit assignment. For the reviews followed up in this period all recommendations had been actioned appropriately. 6. NWSSP AUDIT & ASSURANCE DEVELOPMENTS 6.1 Considerable work in ongoing regarding the development of the Audit and Assurance Division. Work streams have been established looking at a number of areas including standardising working practices and developing a consistent reporting methodology and rating system. 6.2 Following the formal established of NWSSP as a hosted function a strategy had been developed for the approach to auditing SSP systems along side the wider development of a full audit plan. A standardised methodology has been developed for the reviews of a number of key systems, including Payroll, Accounts payable and Contractors Services to ensure consistency of approach. 6.3 A common methodology for assignment ratings has been developed and the reports finalised for this Audit Committee as the first reports for the health board under the new methodology. The introduction of the revised ratings, whilst presented in a slightly differently way, does not represent any major change to the audit process, with old outcomes easily converted to the new methodology. 6.4 An updated Internal Audit Charter has also been developed and will be finalised shortly following consultation with the UHB. This Charter will then be brought to the Audit Committee for approval hopefully at the next meeting. This document will include the new assurance rating methodology. CARDIFF AND VALE UHB Page 1 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

8 7. FINAL REPORT SUMMARIES 7.1 General Ledger INTRODUCTION AND SCOPE In accordance with the 2012/13 Internal Audit Plan, a review of the General Ledger System operating within Cardiff and Vale UHB has been undertaken. The objective of the audit was to evaluate and determine the adequacy of the systems and controls in place for the management of the General Ledger, in order to provide reasonable assurance to the UHB Audit Committee that risks material to the achievement of system objectives are managed appropriately. OPINION AND KEY FINDINGS The level of assurance given as to the effectiveness of the system of internal control in place to manage the risk associated with the objectives covered in this review is Substantial Assurance. Overall the controls in place to manage the risks associated with the systems and processes tested within the review are of an adequate standard; however the audit has identified a limited number of weaknesses relating to: a delay in the resolution of outstanding queries in certain payroll reconciliations and the absence of backing documentation to support monthly journal entries. There were no high priority issues identified during the review that require prompt management action. CARDIFF AND VALE UHB Page 2 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

9 7.2 Income and Cash INTRODUCTION AND SCOPE In accordance with the 2012/2013 internal audit plan a review was undertaken of the management of Income and Cash within the Accounts Receivable Department and Cashiers Offices of Cardiff and Vale University Health Board (UHB). The objective of the audit was to evaluate and determine the adequacy of the systems and controls in place for the management of Income and Cash within the UHB in order to provide reasonable assurance to the UHB s Audit Committee that risks material to the achievement of system objectives are managed appropriately. OPINION AND KEY FINDINGS The level of assurance given as to the effectiveness of the system of internal control in place to manage the risk associated with the objectives covered in this review is Substantial Assurance. Overall the controls in place to manage the risks associated with the systems and processes tested within the review are of a satisfactory standard. In particular testing undertaken on the additional controls implemented by all UHB Cashiers around monies received from other Departments have been found to be satisfactory. The review only identified two minor issues that require management attention. There are no high priority issues that require action within the Finance Department. CARDIFF AND VALE UHB Page 3 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

10 7.3 Claims Reimbursement INTRODUCTION AND SCOPE In accordance with the 2012/2013 Internal Audit plan, testing of claims processed by the UHB Claims Managers was undertaken in order to provide assurance relating to Assessment Area 10 of the Welsh Risk Pool Claims Management Standard. OPINION AND KEY FINDINGS The level of assurance given as to the effectiveness of the system of internal control in place to manage the risk associated with the objectives covered in this review is Substantial Assurance. Overall, controls are in place to manage the risk associated with the systems tested within the review, and these were found to be working effectively. The audit identified no weaknesses during the review in respect of compliance with Assessment Area 10 of the Welsh Risk Pool Claims Management Standard and the UHB Claims Handling Policy and Procedures. There are no high priority issues that require action within the department. 7.4 Out of Hours Service INTRODUCTION AND SCOPE In accordance with the 2012/2013 internal audit plan, a review of the Out of Hours System within the Primary Care Division of Cardiff and Vale University Health Board was undertaken. The objective of the audit was to evaluate and determine the adequacy of the systems and controls in place for the management of the Out of Hours System in order to provide reasonable assurance to the UHB Audit Committee that risks material to the achievement of system objectives are managed appropriately. The review covered a range of management processes including, rotas, absence management and training. CARDIFF AND VALE UHB Page 4 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

11 OPINION AND KEY FINDINGS The level of assurance given as to the effectiveness of the system of internal control in place to manage the risk associated with the objectives covered in this review is Reasonable Assurance. The audit has identified a number of areas where controls and processes in place for the Out of Hours Service require enhancement. A particular area of concern is the management of sickness and annual leave for the out of hours nursing staff where there is non compliance with the All Wales Sickness Policy and the UHB s Annual Leave Policy. Improvements also need to be made around the timely completion of sickness documentation for Call Handling Staff. A consistent approach needs to be introduced for updating any changes to the staff rotas for nursing and call handing staff in order that changes can be tracked. Finally the controls around verification need to be improved in order to provide assurance that the hours that staff are paid can be matched to the staff rotas and time sheets. Two high priority issues were identified during the review that require prompt management action. There is a lack of sickness management for nursing staff. There is a lack of control over the authorisation and verification of hours to be paid for nursing staff. CARDIFF AND VALE UHB Page 5 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

12 CARDIFF AND VALE UHB - ASSIGNMENT STATUS SCHEDULE Appendix 1 ASSIGNMENT STATUS FIELDWORK DRAFT FINAL ASSURANCE AC DATE Mobile Computing Final April may May June Full July ALAS IT System (BEST) Final April may June July Limited Oct Poisons Unit IT System Final May - June July August Full Oct Charitable Funds Final May - July August Sept Limited Oct P.A.D.R.s Final May Sept Sept Sept Adequate Oct Risk Management Final May August Sept Sept Limited Oct Absence Management Final May - August Sep Sept Adequate Oct Job Planning Final June - August Aug Sept Adequate Oct Patients Money and Property Final May - June June Oct Limited Nov Establishment Controls Final May - Sept Oct Nov Adequate Nov Financial Planning Final June - August Sept Nov Limited Nov CARDIFF AND VALE UHB Page 6 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

13 General Ledger Final Oct Nov nov Nov Substantial Jan Income, Cash, Debtors Final Oct - Nov nov Dec Substantial Jan Claims Reimbursement Final Dec - Jan Dec/Jan Jan Substantial Jan Out of hours Service Final August - Oct Dec Jan Reasonable Jan Medical Locums Final June - July August Jan Limited Jan Medicines Management Final Sept - Oct nov Limited Jan Linen follow up draft November Jan Dec -- March Dignity and respect draft Nov Dec March Accounts Payable (NWSSP) Draft Oct - Dec March Payroll (NWSSP) Initial draft Oct Dec March Non Emergency Transport Wip Nov - Dec March Quality Outcomes Framework WIP Nov Dec March Procurement (NWSSP) WIP Nov - Dec March Translation WIP Nov - Dec March Medicine Top up Payments Procedure Scoping Nov - Dec March CARDIFF AND VALE UHB Page 7 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

14 ASSIGNMENT STATUS FIELDWORK DRAFT FINAL ASSURANCE AC DATE Waiting List Management WIP Dec - Feb March Asset Register WIP Dec - Feb March Concerns WIP Jan - March March Asylum Seekers Service WIP Jan - March March Coroner Rule 43s WIP Jan - March March Private Patients WIP Jan - March March Information Governance / PC Security WIP Jan - March March Non NHS Placements follow up Scoping Jan - March March Research & Development Scoping Jan - March May Stock Control Scoping Jan - March May Consultation and Engagement Scoping Jan - March May Managing Service Change Scoping Jan - March May Standards for Health Services Scoping Jan - March May Governance & Accountability Module Jan - March May Annual Report & Assurance Opinion -- May CARDIFF AND VALE UHB Page 8 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

15 ASSIGNMENT STATUS FIELDWORK DRAFT FINAL ASSURANCE AC DATE Capital CRI Scheme ** Initial draft Nov Dec Dec Dec/Jan Mar Capital - Stroke Unit Llandough ** Initial draft Nov Dec Dec Dec/Jan Mar Capital EU Remodelling ** WIP Nov - Dec Jan Jan Mar Sustainability Reporting ** Scoping Mar/May Health & Safety ** Scoping Mar/May ** - To be delivered by the Specialist Services Unit (Capital Audit) CARDIFF AND VALE UHB Page 9 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

16 CARDIFF AND VALE UHB Page 10 AUDIT COMMITTEE January 2013 INTERNAL AUDIT PROGRESS REPORT

17 CARDIFF AND VALE UNIVERSITY HEALTH BOARD INTERNAL AUDIT REVIEW VARIABLE PAY MEDICAL LOCUMS

18 INDEX 1. EXECUTIVE SUMMARY 2. MAIN REPORT 2.1 Introduction and Background 2.2 Objectives and Scope 2.3 Opinion and Conclusion 2.4 Summary of Findings 2.5 Detailed Findings 2.6 Acknowledgements 3. DETAILED AUDIT FINDINGS, RECOMMENDATIONS AND ACTIONS Appendix 1 Assurance and Priority Ratings Description REVIEW REFERENCE: UHB13.05 REPORT STATUS: FINAL DATE OF FIELDWORK: APR TO JUNE 2012 AGREED DRAFT REPORT DATE: AUGUST 2012 MANAGEMENT RESPONSES RECEIVED: JANUARY 2013 FINAL REPORT DATE: JANUARY 2013 AUDITOR /S : C.A. STEPHENS, M Lewis. Page 2

19 1. EXECUTIVE SUMMARY 1.1 INTRODUCTION AND SCOPE In accordance with the 2012/2013 Internal Audit Plan, a review of the management of medical locum pay within Cardiff and Vale University Local Health Board (UHB) was undertaken. The objective of the audit was to evaluate and determine the adequacy of the systems and controls in place for the management of variable pay, specifically Medical Locums, in order to provide reasonable assurance to the UHB s Audit Committee that risks material to the achievement of system objectives are managed appropriately. All National Health Service organisations rely on a level of temporary staffing, in order to maintain service continuity. The inherent nature of providing health services, with the variations in demand, capacity and workforce availability dictate that such expenditure is unavoidable. However, an organisation can influence demand for temporary staffing, the cost of provision and quality of service provided. Cardiff and Vale UHB expenditure on medical locum pay for , totalled 4,155, OPINION AND KEY FINDINGS The level of assurance given as to the effectiveness of the system of internal control in place to manage the risk associated with the objectives covered in this review is Limited Assurance. Whilst initial indications are that the financial performance is good, the audit identified a large number of control weaknesses. These key control weaknesses need to be addressed in order to provide an appropriate level of governance. A comparison of expenditure across NHS Wales suggests than Cardiff and Vale UHB agency expenditure is not excessive against benchmarks it is considered that the UHB should aim to further reduce it expenditure in this areas. However, the comparison is complicated due to inconsistencies in recording and reporting costs, in addition note all relevant factors are considered in these figures, e.g. regional vacancy issues or quality of service. Whilst the organisation has a number of parties involved in the management of medical locums, the responsibilities and interactions between these functions have not been clearly defined. This has contributed to the breakdown of control mechanisms and may hinder the UHB from providing effective temporary staffing arrangements. There were a number of high priority issue identified. Page 3

20 The management system in place for monitoring and controlling medical locum expenditure has not been developed. Responsibilities and relationships between different functions have not been clearly defined. There are inappropriate arrangements in place for collating, analysing and reporting data. Consequently, the organisation does not have access to appropriate information available for effective decision making or workforce planning. The UHB does not have appropriate systems in place for recording information for effective workforce planning e.g. annual leave or study leave. The UHB has not developed an overall strategy for minimising medical locum expenditure. The quality of service provided by medical locums is not appropriately monitored. o Locums are not provided with appropriate information prior to placement and induction practices vary division to division. o Performance assessments are largely not completed by Clinical Supervisors, during or following, medical locums placements. o The organisation does not request feedback from Medical Locums on potential service improvements. Page 4

21 2. MAIN REPORT 2.1 INTRODUCTION In accordance with the 2011/2012 Internal Audit Plan, a review of the management of medical locums within Cardiff and Vale University Local Health Board (UHB) was undertaken. This audit follows on from the 2010/2011 Variable Pay Audit, which focused on the use of temporary nursing staff. Locum medical staff are qualified medical professionals of any grade or speciality, who provide temporary cover in health organisations. The arrangements for their employment can vary widely: Planned v Unplanned: Planned locum appointments are usually longterm placements to cover vacancies, maternity leave or career breaks. Organisations may also plan short-term cover for annual leave requirements. Unplanned locum appointments are usually short-term placements to cover gaps arising from sickness absence, sudden unexpected increases in demand or vacancies in substantive posts. Long term sickness absence may result in long-term placements to cover the associated gap in resource. Locum Appointment for Training (LAT) v Locum Appointment for Service (LAS): A LAT is assigned an Educational Supervisor to plan for training opportunities within the post, and will also be given appropriate clinical supervision. A LAS post has no recognised training components; consequently there will usually be no assessment of competences required in a foundation or speciality programme. The doctor will be appointed a Clinical Supervisor. Internal v Agency: An internal locum will be already be employed by the NHS organisation, and will be set up on the organisations payroll. Agency locums are employed via a third party medical recruitment company (or individual). The cost and risk associated with using internal locums is generally considered lower than using agency locums. Cardiff and Vale UHB expenditure on medical locum pay for , totalled 4,155,184, representing 4.3% of total medical staff expenditure. The audit did not identify any specific targets in relation to the use of medical locum staff. However, the following information was identified: Northern Ireland Audit Office: The Use of Locum Doctors by Northern Ireland Hospital report states the national average for as 8%. Audit Scotland: The Using Locum Doctors in Hospitals report states the national average for as 4.3%. Audit Commission: The Making the Most of NHS Frontline Staff article states the average ranges from 3% to 20%. Page 5

22 2.2 AUDIT APPROACH AND OBJECTIVES The approach to audit assignments is risk based, where the risks are identified with the lead manager. Controls would then be identified to manage those risks and the assignment scope designed to provide assurances on those issues. The audit assignment has been allocated an assurance rating, dependant on the level of assurance Internal Audit are able to provide. The assurance rating is described against the inherent risk and control effectiveness of the system reviewed. There are four (4) potential levels of assurance available, along with three (3) recommendation priorities and these are described In Appendix 1. The objective of the audit is to evaluate and determine the adequacy of the systems and controls in place for the management of the Quality and Outcomes Framework, in order to provide reasonable assurance to the UHB s Audit Committee that risks material to the achievement of system objectives are managed appropriately. The objectives of this review were to establish if adequate controls are in place for the management of variable pay, and to ensure expenditure is appropriate, authorised and minimised. The main areas reviewed were: There are adequate systems in place to identify the need for, organise and approve medical locum usage. Medical locum usage is minimised by only covering required shifts. Medical locum usage is appropriately monitored. The risks considered in the review are as follows: The UHB incurs unnecessary expenditure on medical locums. Medical locum performance may be inadequate. 2.3 CONCLUSION AND OPINION As auditors, we are required to provide an opinion as to the adequacy and effectiveness of the system of internal control under review. The opinion is based on the work performed as set out in the scope and objectives within this report. An overall assurance rating is provided describing the effectiveness of the system of internal control in place to manage the identified risks associated with the objectives covered in this review. The level of assurance given to the management of Medical Locums is Limited Assurance. Page 6

23 RATING INDICATOR DEFINITION Limited assurance - + Amber The Board can take limited assurance that arrangements to secure governance, risk management and internal control, within those areas under review, are suitably designed and applied effectively. More significant matters require management attention with moderate impact on residual risk exposure until resolved. An audit previously undertaken by the National Audit Office identified that the mean average for cost of temporary staffing as a percentage of total staffing expenditure was 10%, as of The UHB cost of temporary staffing as a percentage of total staffing is 4.3%. Whilst there may have been reduction in this benchmark over the time lapsed, it is still anticipated that overall Cardiff & Vale UHB is performing adequately. Design of system / controls The findings from the review have highlighted twelve (12) issues that are classified as weakness in the system/control design, in relation to the Quality and Outcomes Framework. These are identified in the main body report as Design Risks. Operation of system / controls The findings from the review have highlighted five (5) issues that are classified as weakness in the operation of the designed system/control in relation to the Quality and Outcomes Framework. These are identified in the main body of the report as Operational Risks. Total Number of H M L Total Recommendations SUMMARY OF SIGNIFICANT FINDINGS Good Practice was noted in respect of; Cardiff and Vale UHB expenditure on temporary staffing as a percentage of total staffing cost is 4.3%. This is significantly lower than the mean average identified by the NAO, of 10%, although it is considered that an organisation such as the UHB, which includes a large teaching hospital should aim to achieve significant reduction in expenditure in this area. The negotiation of All Wales agency contracts at reduced rates and approved standards. Page 7

24 The Medical Personnel department record data on reason for absence for both internal locum and agency locum placements. There are standard documents utilised for recruiting for fixed term placement. The VAC1 form provides opportunity to assess the need and approve appropriate medical cover, whilst payments are paid via payroll. Establishment of an appropriate forum for reviewing medical staffing provisions, in the form of the Medical Workforce Advisory Group. The findings of the audit are contained in detail on an exception basis in Section 3, the most significant findings which requires management action are: The structure for the management of medical locum expenditures is fragmented, with no single department or individual having responsibility for the daily management of medical locums. This has led to inconsistencies in a number of key processes. The fragmentation of management systems has contributed to difficulties in collating, analysing or reporting data on medical locum demand, usage and expenditure The UHB does not have an overall strategy for managing medical locum expenditure. The UHB does not utilise performance measurement tools, to assist in the management of medical locum expenditure. The UHB does not have an up to date policy in place for the management of medical locums, with the previous being dated Nov The UHB does not retain appropriate evidence of medical locum authorisation. The standard rates paid for internally employed Medical Locums varies across divisions. In addition, departments have differing attitudes to negotiating rates above the standard. The UHB is using non-contract medical locums and agencies. A test of invoices highlighted a number of issues with the authorisation of non wages related expenses. The UHB Locums Policy includes a section on the assessment of Locum doctors, with assessment forms provided in the appendices. However, the policy does not detail sufficient controls to constitute a robust performance monitoring system. Page 8

25 Departments are not undertaking formal assessments of medical locum performance DETAILED FINDINGS Detailed findings and recommendations have been made in Section 3 of the report. Where enhancements are deemed necessary a rating has been allocated to assist management in the determination of prioritisation. 2.6 ACKNOWLEDGEMENT We would like to acknowledge the time and co-operation given by management and staff during the course of this review. Page 9

26 SECTION 3 FINDINGS EVALUATION RECOMMENDATION 1.RISK: The UHB incurs unnecessary expenditure on variable pay. MANAGEMENT PROPOSAL 1.1 The structure for the management of medical locum expenditures is fragmented, with no single department or individual having responsibility for the daily management of medical locums. This has led to inconsistencies in a number of key processes. Eg Booking processes. Authorisation processes. Locum rates. Data collation. Performance evaluation. Classification: Design Priority: High There are ineffective systems in place for the ongoing management of locum medical staff. The lack of an appropriate management system has prevented appropriate interaction between recording, analysis, management and supervisory functions. An appropriate management structure must be developed for the management of medical locums whereby the following groupings work together and understand each others responsibilities Medical Workforce Group Medical Personnel Department Department Medical Staff coordinators Finance Department This issue will be resolved with the impending introduction of a new system for engaging Locum staff. This process is called STAFFflow and the Health Board is currently being supported by PWC to introduce this new model. Subject to further risk assessment and Board approval, it is expected that this will be introduced in February This system will force a standard process and procedure, with some centralisation initially and devolved accountability in the longer term. The Health Board Locum Policy is being reviewed in line to support this. Responsible Officer for Page 10

27 FINDINGS EVALUATION RECOMMENDATION MANAGEMENT PROPOSAL delivery of Staff Flow project : Assistant Director of HR 1.2 The fragmentation of management systems has contributed to difficulties in collating, analysing or reporting data on medical locum demand, usage and expenditure. With each are undertaking their own review. Divisions: Departments do not record, analyse or report data on demand drivers, internal and external usage, or locum rates. Data analysis is limited to review of monthly expenditure reports produced by Accountants. Medical Personnel Department: Record information on internal and agency locum usage. This includes information on demand, but this is not always recorded and categories have not been rationalised. However, this excludes data on locums booked directly by departments. Finance Department: Finance The organisation does not have access to appropriate management information. Consequently, the UHB may be incurring excessive expenditure on medical locum staffing. The UHB must develop systems for collating and analysing data for the management of locums ensuring the information provided is of a high quality. Eg Demand drivers Grades, Specialities, Shift Average costs Internal v external locum usage and cost Appropriate reporting mechanisms must be established, to ensure appropriate review of performance. Current variable pay information is available from finance, oracle and workforce ESR systems. This information is regularly reported through the workforce scorecard which is monitored through the Financial Services Committee at a UHB Level. The Divisions are supplied with the Workforce Scorecards and this information is also supplied for the Performance Review Meetings. There is now a standard format for these Reviews as set by the Coo. The data is scrutinised at Performance Review meetings, at Divisional level, as part of overall operational performance. UHB wide, variable pay is also being monitored closely Page 11

28 FINDINGS have access to numerous sources of information (Oracle, ESR, Rostering and Medical Personnel), however staff have expressed concerns regarding data quality. Information on expenditure and demand was previously analysed and reported to the Workforce Planning Group. However, this data has not been reported in the previous or current financial year. Medical Workforce Advisory Group: Does not currently have a full list of financial or non-financial indicators to assist with decisionmaking or performance management. Consequently, management information is reported on an ad-hoc basis. Classification: Design Priority: High EVALUATION RECOMMENDATION MANAGEMENT PROPOSAL by the Medical Director and Nurse Director. The Medical Director is scrutinising this through the Medical Workforce Productivity Group and the Nurse Director is scrutinising through Nursing Financial Sustainability Group. Finance are providing the overall information to these groups. As part of STAFFflow there will be standard procedures to follow and information will be recorded on the system. It is anticipated that reports highlighting costs, grades etc of locums booked through the Staff Flow process will be readily accessible to the Medical Workforce Team and Divisional Teams. Consideration will be given to including variable pay expenditure levels within the metrics which are routinely considered by the Medical Page 12

29 FINDINGS EVALUATION RECOMMENDATION MANAGEMENT PROPOSAL Workforce Advisory Group. Action: Medical Workforce Manager by April The UHB does not utilise performance measurement tools, to assist in the management of medical locum expenditure. Targets: Audit did not identify any targets e.g. Optimum Temporary Staffing Ratio. The UHB has not identified KPI s for assessing organisational performance. Benchmarking: There are no processes in place for benchmarking performance: o Across divisions. o Against other NHS organisations. Audit notes that pay costs and travel expenses are not coded separately. This will undermine the value of comparisons with other NHS organisations. Classification: Design The organisation may not understand how it is performing. There may be excessive reliance on medical locum doctors, resulting in excessive expenditure on variable pay. The opportunity to identify and share good practice may be missed. The UHB must identify targets and Key Performance Indicators for assessing organisational performance, including optimal temporary staffing ratios. Locum expenditure as % of total medical staff costs. External v Internal Trained doctors v doctors in training. Benchmarking must be undertaken across divisions and NHS organisations. This should also enable organisations to identify local v s national issues e.g. recruitment within specific specialities. Mechanisms for reporting performance results must be established. Developing KPI s and benchmarking will be considered during the work being undertaken via the Medical Workforce Productivity Group. It is noted from the information gathered during this Audit that the UHB expenditure was 4.3%. The Assistant Director of Finance is also undertaking Benchmarking with other NHS organisations, as part of the financial planning for 2013/14. Each division has an agreed staffing establishment level and is expected to work within those parameters. They will manage their vacancies accordingly and flexibility and will as a rule not expect to fill all Page 13

30 Priority: High FINDINGS EVALUATION RECOMMENDATION Invoices must be coded to separate pay costs and travel expenses. MANAGEMENT PROPOSAL establishment to 100%. It is therefore important to understand the total paybill in relation to fixed and variable expenditure. The introduction of the STAFFflow model under which shifts are booked and authorised electronically will lead to more accurate and more timely financial and management information, with discrete information being produced in respect of shifts worked and authorised and those worked; but awaiting authorisation. The data produced by the STAFFflow database is in a flexible format which can easily be sorted to produce information by location worked, cost centre or employee name. This will clearly aid the production of trend analysis data and so facilitate greater financial Page 14

31 FINDINGS EVALUATION RECOMMENDATION MANAGEMENT PROPOSAL control Medical Workforce Manager and AMD Workforce (with Divisions) April The UHB does not have an up to date policy in place for the management of medical locums, with the previous being dated Nov This policy doesn t fully cover key aspects such as: -Management structures, systems and information flows. -Decision making processes e.g. consideration of cost and service disruption. -Authorisation of invoices. -Workforce planning (trend analysis, early planning e.g. annual leave and study leave) In addition Departmental knowledge of the Medical Locum policy (Operational Procedure for Recruitment of Locum Doctors and Dentist), is poor. There is not an appropriate policy in place for the management of medical locums. The UHB policy for the management of medical locums must be reviewed and updated to incorporate: A clearly defined management system, detailing responsibilities for recording analysis, management and supervisory functions. A corporate strategy clearly defining the decision-making process for validating the requirement for medical locum cover. Out of date and / or inadequate policies / guidance must be removed It has been agreed that the policy will be updated in line with the introduction of STAFFflow. (The policy will be updated by the group working on the STAFFflow implementation). Decision making for staff expenditure remains at Divisional level. Clinical Directors need to demonstrate that variable locum expenditure is essential to meet patient requirements and service demand. There is also an All Wales Policy in development. Local policy update is being led by Page 15

32 FINDINGS Classification: Design Priority: High EVALUATION MANAGEMENT RECOMMENDATION PROPOSAL from the intranet. the Medical Workforce Manager. February The Operational Procedure for Recruitment of Locum Doctors and Dentist refers to the following authority requirements for medical locum recruitment. Junior Medical Staff Clinical Director (or nominee) Career Grade Clinical Director Consultant Clinical Director and General Manager Tracking of invoices and discussions with Medical Staffing Coordinators identified that Clinical Directors and General Managers are rarely involved in appointing short term medical locum cover. This duty has been devolved to Medical Staffing Coordinators; however, there is no Non-compliance with UHB Policy. Expenditure is not be authorised at an appropriate level. Consideration should be given to implementing a purchase order authorisation system. Ensure appropriate sign off. Record future expenditure o Contract rates. o Hours due to be worked. There will be a streamlined process and authority levels set through the new STAFFflow. process/procedure. Detailed procedural mapping is currently being undertaken a part of the project group. Medical Workforce Manager by February The Workforce Manager, Strategy and Planning has worked in collaboration with Finance colleagues and Medical Workforce to develop an Electronic Medical Staffing Locum Sheet to facilitate payment and effective monitoring of expenditure. This system will automate pay information and ensure standardisation Page 16

33 FINDINGS formally delegating this authority. Classification: Operational Priority: High EVALUATION RECOMMENDATION MANAGEMENT PROPOSAL of reporting. Completion due in February. Action: Workforce Manager, Strategy and Planning 1.7 The UHB does not retain appropriate evidence of medical locum authorisation. Short Term Cover Locum covers are made by and stored on individuals folders. Requests are sent informally via medical personnel. There is no process for verifying all other options have been explored before going to agency. Long Term Temporary Posts The VAC1 document is a document recording authorisation to go to advert for a post. However, The VAC1 document is placed on a temporary file which is destroyed after six month. In some cases a VAC1 is not received before advert. There are inadequate processes in place for authorising medical locums, which may result in: Insufficient authorisation. Loss of audit trail. Appropriate systems must be agreed for Short Term and Long Term posts, including: Standardised documents for requesting cover. Maintenance of centralised records. Appropriate and timely communication between functions e.g. advising Medical Personnel of forth-coming post prior to approval. Standard process is in place for long term locum appointments via the VAC 1 authorisation. This is standard within the entire recruitment process and is not required to be maintained longer than 6 months as evidence of the initial authorisation process. This is still considered as an adequate system to validated long term locum. Long term locums are engaged directly and on standard NHS rates of pay, therefore not a variable pay issue but a recruitment strategy or skills based decision. The short term paper evidence issues will be addressed as part of the STAFFflow Page 17

34 FINDINGS Classification: Design Priority: Medium EVALUATION RECOMMENDATION MANAGEMENT PROPOSAL process/procedure. Medical Workforce Manager by February The standard rates paid for internally employed Medical Locums varies across divisions. In addition, departments have differing attitudes to negotiating rates above the standard. Standard rates ranged between 24 and 40. With some using rates used by Gwent. Whilst higher rates were noted as being negotiated up to 80. Whilst 80 is lower than an agency rate, there is a knock on effect on future costs, with all departments reported issues with higher expectations following negotiation of higher rates. As records of rates agreed are not appropriately recorded, it is difficult to quantify this effect. The audit identified a number of rate guidance documents There is a lack of control over rates paid to medical locums. Inconsistent application of rates could result in higher long term costs. Standard rates must be agreed for internal locum rates. The standard rate must be set at a point that optimises internal medical locum take up, but minimises overall medical locum expenditure. Where rates are agreed these should be recorded and approved. Standard rates are set but there are requirements to go outside of these limits based on supply of suitably skilled and qualified medical locums. An instruction to remain within the agreed rates as much as possible has been issued by the Medical Director to all Divisional Directors. It is also worth noting that the supply of medical locums is currently being re-tendered as part of the UK GPS contract, due to be awarded in February / March The issue of rates should be addressed by the award and implementation of the new contract, and introduction of the Staff Flow model which sets out agreed rates for Page 18

35 FINDINGS available, but departments are not following these limits. EVALUATION RECOMMENDATION MANAGEMENT PROPOSAL medical locums as part of the contractual agreement. Classification: Operational Priority: High An All Wales Locums Protocol has recently been put in place and will be adopted by the UHB. This issue will also be reviewed through the Medical Workforce Productivity Group. Medical Director March Medical locum agencies rates have been agreed on a national contract, due for renegotiation in June Despite this there is a large variation in rates claimed by contractors, including the UHB first choice supplier Medacs. The UHB may not be gaining value from the contract, and incurring unnecessary expenditure. The rates paid must be as per the contract. An analysis must be undertaken regarding the value of the contract to the UHB. Response as above. Classification: Design Priority: Medium 1.10 The UHB is using non-contract The use of non-contract A strategy must be This will be monitored by Page 19

36 FINDINGS medical locums and agencies. Non-contract agencies were paid 48,749 in , for the provision of medical locums. This account accounts for approximately 2% of total medical locum expenditure. Whilst audit acknowledges that this figure is relatively low, there are additional risks associated with using non-contract medical locums / agencies. EVALUATION agency staffing is not providing organisational value for money. Not cost effective. Least productive. Higher clinical risk. RECOMMENDATION developed to monitor and ultimately eliminate noncontract agency usage. Where non-contract agencies are used, an authorisation must be recorded on the request form. MANAGEMENT PROPOSAL MWAG. Recent work has been undertaken to review agencies used and highlighted some incorrect coding which finance colleagues are correcting. Action: Development Accountant. It is anticipated that all locum agency doctors will be appointed via the STAFFflow process. Quality cannot be assured. Rates have not been formally negotiated. The undermining of contracts may result in claims for loss of income. There is no process in place to monitor non-contract agency usage. Classification: Operational Priority: Medium 1.11,,A sample of locums paid via The UHB is now liable for Locums on temporary This situation will be based Page 20

37 FINDINGS the UHB payroll were reviewed. The test identified one example whereby a consultant s temporary contract had been renewed on several occasions, beyond the recommended period of one year. Subsequently, the locum has inherited employee rights, despite being unqualified for the substantive post. EVALUATION employing this consultant without a formal approval to appoint. RECOMMENDATION contracts must not be renewed unless a formal decision to appoint has been made. MANAGEMENT PROPOSAL on a management decision to extend a contract. Medical Workforce Team maintain records for all locums directly engaged by the UHB and review these regularly with divisions. Medical Workforce Manager and Divisional Team. Ongoing. Classification: Operational Priority: Medium 1.12 A test of a sample of 60 invoices highlighted a number of issues with the authorisation of non wages related expenses. Contributions of 550 and 380 were paid towards a locum doctors private accommodation (as the locums family were staying in the area for a period) Travel expenses not supported by receipts. The UHB may not be achieving Value for Money. There is an increased risk to patient safety. Invoices must be checked and only appropriate charged paid, provided all documentation is provided and authorised. The implementation of STAFFflow will be accompanied by a campaign to remind staff of their responsibilities in respect of authorising appropriate & validated expenditure only. The better management information referred to above includes fields for sundries such as travel expenses; so will be easily able to highlight any unusual expenditure patterns. In addition the UHB Page 21

38 FINDINGS Travel expense forms not appropriately signed off. There is no process in place to check the hours worked, with one invoice reviewed identifying a consultant working a minimum of 78 hours in a one week period. Classification: Operational Priority: Medium EVALUATION 2..RISK: Medical Professional Locum performance may be inadequate. RECOMMENDATION MANAGEMENT PROPOSAL has also contracted with Liaison to forensically examine past payments, in order to identify and recover any overpayments with regards to agency staff.this work is currently in its infancy ; but is another example of the UHB trying to be innovative in order to minimise costs in this area. Medical Workforce Manager, Finance Manager and Divisional Teams. February The UHB Locums Policy includes a section on the assessment of Locum doctors, with assessment forms provided in the appendices. However, the policy does not detail sufficient controls to constitute a robust performance monitoring system. Objectives: This has been limited to pin-pointing failures in standards. Consideration has not been given to other The UHB policy to assess Locum performance is inadequate. Consequently, There is an increased risk to patient safety. The UHB may not be achieving Value for Money. Good performance may not be recognised. Training issues may not The Policy must be amended to incorporate the following: Completion of assessment forms. Review of assessment forms. Document retention. Escalation of assessment forms, to relevant parties: o Medical Personnel o NHS organisations All the recognised Agencies that we use via the PASA agreement are required to assess suitability and undertake relevant checks when introducing a candidate for locum hire. They will also have to undertake GMC Revalidation with the new legislation coming into force. Locally, the responsible consultant is required to Page 22