BOARD MEETING TITLE OF REPORT: Report from the Audit Committee REPORT AUTHOR : Brian Hanford, Director of Finance / Lin Jonsberg, Board Secretary

Transcription

1 BOARD MEETING TITLE OF REPORT: Report from the Audit Committee REPORT AUTHOR : Brian Hanford, Director of Finance / Lin Jonsberg, Board Secretary PRESENTED BY: Rob Parker, Chair Audit Committee PURPOSE OF REPORT: To advise the Boards of NHS Herefordshire and NHS Worcestershire of the recent Audit Committee held on 7 March 2013 and to present the approved minutes of the 22 January 2013 meeting. KEY POINTS: DoH arrangements for audit sub-committees of the DoH Audit & Risk Committee presented Internal Audit reports reviewed. Internal audit report on safeguarding o The audit report only received moderate assurance and that the Committee were concerned by the number of high risk recommendations. An update from Sue Doheny was requested at the cluster board on 19th March. External Audit reports and VFM risk assessments reviewed. Draft CCG audit committee workplans for discussed with recommendations. Approved minutes of the meeting held on 22 January 2013 are attached as Appendix 1. The Board s agreement is sought to approve the minutes of the 7 March 2013 audit committee at the first meeting of the DoH regional Audit Sub- Committee in April RECOMMENDATION TO THE BOARD: The Board is asked to note the contents of the report and agree the approval of the minutes of the 7 March meeting by the DoH Audit Committee in April 2013.

2 CONTEXT & IMPLICATIONS Strategic Objectives To inform the Annual Governance Statements and provide assurance to the Board on financial systems and controls Financial Internal Audit Reports/External Audit Reports/Final Accounts Legal Complies with relevant legislation Risk & Assurance Risks identified during the meeting have been captured and considered for entry on the risk register and BAF. HR, Equality & Diversity None identified Handover/Legacy Compliant with DoH requirements National Policy Department of Health National Policy Carbon/Sustainability Not applicable Partnership Risks to Partnership arrangements identified in directorate risk registers and escalated to BAF as appropriate GOVERNANCE Committee/Approval Process (with dates) as appropriate Audit Committee minutes of meeting held on 22 January 13 approved at meeting on 7 March 13.

3 WEST MERCIA CLUSTER AUDIT COMMITTEE Minutes of the meeting held on 22 nd January 2013 at 2.00 pm in the Board Room, Turnpike House Medical Centre, Newtown Road, Worcester. PRESENT: Mr Robert Parker (Chair) Mr William Hutton Mrs Susan Mead Non Executive Director - Worcestershire Non Executive Director Shropshire Non Executive Director - Herefordshire IN ATTENDANCE: Dr Philip Ashurst Mr Brian Hanford Mrs Sue Johnson Ms Louise Nunn Ms Alison Smith Mrs Liz Cave Mr James Cook Mr James Elsby Ms Zoe Thomas Mrs Kristina Woodward Ms Emma Masters Ms Sarah Ann Moore Mrs Hilary Newman (Minutes) Locality Associate & ex Chair HPCT Audit Committee West Mercia Director of Finance Senior Resource Accountant Deputy Chief Finance Officer, Herefordshire CCG Executive Lead Governance & Performance, Telford & Wrekin CCG External Audit Grant Thornton External Audit Grant Thornton External Audit Grant Thornton External Audit Grant Thornton Internal Audit CW Audit Internal Audit - CW Audit Internal Audit - KPMG 61/11 Apologies Apologies were received from Andrew Mason, Julia Dillon, Terry Feltus, Donna McGrath, Andrew Nash, Jill Sinclair, John Snell, Carol Thompson and Mary Walters. 62/11 Minutes of the last meeting The minutes of the meeting held on 16 th October 2012 were agreed as a true record with the following amendment. West Mercia Cluster Audit Committee 22 nd January 2013 Page 1 of 11

4 62/ /11 63/ /11 Minutes of the last meeting continued Annual Audit Letter Herefordshire PCT Page five, eighth paragraph, to read Mrs. Mead did not feel that the issues would solely be resolved locally and there was still some uncertainty about how the leadership from the LAT would come together with the CCG leadership to implement a longer term solution. Matters arising from the minutes Internal Audit Report Progress Report 2012/13 NHS Worcestershire, Telford & Wrekin PCT & NHS Shropshire Mrs Johnson referred to the action point for Ms Masters and Mr. Darby to discuss the response from Shared Business Services regarding the staff overpayments as a result of amendments to hours. The response from SBS had been discussed. Mrs Johnson and Ms Masters would discuss a local solution when they meet on 23 rd January SJ/EM 56.1/11 Internal Audit Progress Report 2012/13 NHS Worcestershire, Telford & Wrekin PCT & NHS Shropshire Ms Smith confirmed the inaugural meeting of the Telford & Wrekin CCG Audit Committee been held on 15 th January Ms Smith advised that awareness had been raised regarding the Board Assurance Framework and the Risk Register. The workplan and approval of the Audit Committee Terms of Reference would be presented to the Telford & Wrekin CCG Audit Committee at their next meeting in March Mrs. Woodward advised that the Telford & Wrekin Internal Audit reports would be presented at that meeting. 57.1/11 Counter Fraud Workplan Update NHS Worcestershire Mr. Parker advised that Mrs. Thompson had not yet been copied on Ms Dillon s detailed reports on investigations. Mr. Hanford would arrange for Mrs. Thompson to receive the reports. BH 58.2/11 Waivers for NHS Worcestershire Mr. Hanford to share the detail of the Hallet O Neil consultancy work with Mr. Parker and Mrs. Thompson. BH West Mercia Cluster Audit Committee 22 nd January 2013 Page 2 of 11

5 63/ /11 Matters arising from the minutes continued External Audit Annual Audit Letter Worcestershire PCT Mrs. Cave had discussed with Mr. Hanford the successor Audit Committee for Arden, Herefordshire and Worcestershire, and the arrangements for the consideration of the annual audit reports following the closedown of the PCT. 57.1/11 Counter Fraud Workplan Update NHS Worcestershire Bribery Act & Conflicts of Interest Mr. Hanford presented Julia Dillon s briefing report on the Bribery Act Mr. Parker asked for the CCG Audit Committee Chairs and Chief Finance Officers to receive the briefing report. Mr. Parker asked for confirmation at the next Cluster Audit Committee that the Bribery Act 2010 and actions to minimise the risk from conflicts of interest had been signed off by the CCGs. BH/JD BH/JD 59/11 Transition CCG Audit Committee Assurance Mr. Hanford presented the CCG Audit Committee Assurance checklists for Redditch & Bromsgrove CCG & Wyre Forest CCG, South Worcestershire CCG and Shropshire CCG. The Telford & Wrekin CCG checklist was tabled at the meeting. Mr. Hanford explained that the CCG Audit Committee checklist is part of the handbook for CCGs to self assess their state of readiness. Mr. Hanford advised that all the Chief Finance Officers had previous experience of the final accounts process. Chairing the CCG Audit Committee meetings would be a major role for the Lay members. Ms Smith advised that the terms of reference for all committees had been submitted and scrutinised in detail as part of the Telford & Wrekin CCG authorisation process. Mr. Hanford advised that any conditions to be placed on the CCGs would be announced shortly. Mr. Hanford explained the governance role of the NHS Area Team. West Mercia Cluster Audit Committee 22 nd January 2013 Page 3 of 11

6 63/11 59/11 Matters arising from the minutes Transition CCG Audit Committee Assurance - continued Dr. Ashurst asked if a checklist had been received from Herefordshire CCG. Mr. Hanford confirmed that a checklist had not yet been received from Herefordshire CCG and would follow this up. Mr. Parker expressed concern that the next Herefordshire CCG Audit Committee meeting would not be held until the end of April Mr. Parker commented that there were procedural issues and a lot to be completed by early April Mr. Parker suggested that Mr. Hanford and himself meet with the Herefordshire CCG Audit Committee Chief Finance Officer and Chair. Mr. Hanford commented that he receives copies of the Herefordshire CCG Audit Committee agenda and papers, and has been assured that the committee understands the range of issues. Mr. Parker commented that South Worcestershire CCG Audit Committee and Redditch & Bromsgrove CCG & Wyre Forest CCG Audit Committee were currently well placed and if this continues would be well prepared by early April Mr. Hutton advised that Shropshire CCG had held three formal Audit Committee meetings. Mrs. Woodward advised that Shropshire CCG Audit Committee were as embedded as the Worcestershire Audit Committees. Ms Smith advised that a workplan is being developed around the Audit Framework Clinical Governance and explained the approach. The Telford & Wrekin CCG Board Assurance Framework would be taken to their CCG Board with the Risk Register. The next meeting of the Telford & Wrekin CCG Audit Committee would be held in the third week in March Mrs. Woodward advised that progress reports for the year would be taken to the Telford & Wrekin CCG Audit Committee meeting. There was discussion on the transition process from PCT to CCG, what is required of the CCG Audit Committees going forward and the timescale. Mr. Parker advised that the CCG Audit Committee Assurance checklist doesn t quite capture where the CCGs need to be by 1 st April Mr. Parker and Mr. Hanford would meet outside the meeting to discuss the appropriate way forward. Ms Nunn joined the meeting. BH/JS RP/BH RP/BH West Mercia Cluster Audit Committee 22 nd January 2013 Page 4 of 11

7 64/ /11 Accountable Officer & Director of Finance Roles For the Financial Closedown of PCTs Mr. Hanford presented the letter received from the NHS Chief Financial Controller at the Department of Health confirming the Accountable Officer and Director of Finance roles for the financial closedown of PCTs. Mr. Hanford explained that the West Mercia Cluster is the only cluster in England to have been divided into two. Mr. Hanford is the Finance Director for the Arden, Herefordshire and Worcestershire Area Team and under Department of Health guidelines is the Director of Finance for Herefordshire PCT, Coventry PCT, Warwickshire PCT and Worcestershire PCT. Ros Franke from 14 th January 2013 was appointed to the role of Finance Director for the Shropshire and Staffordshire Area Team. Mr. Hanford advised that the delivery of Finance leadership had been considered. Donna McGrath had been appointed Acting Director of Finance for Shropshire County PCT and Andrew Nash had been appointed Acting Director of Finance for Telford & Wrekin PCT. The Staffordshire PCTs would agree a handover with Ros Franke. Mr. Hanford explained the Area Team Finance Director role and the process for the sign-off of the accounts for 2012/13, which would be the responsibility of the Department of Health. Department of Health sub committees will be formed under the Department of Health Audit Committee to cover Area Team responsibilities for the sign-off of the annual accounts for 2012/13. Current Audit Committee members would be invited to be involved in the Department of Health Audit Committees. Mr. Hanford advised that it now appeared possible for PCT Audit Committee members that are going to serve future CCGs to be included in the Department of Health sub committees from 1 st April Mr. Hanford suggested that Shropshire and Staffordshire would form a joint Audit Committee and Arden, Herefordshire and Worcestershire would form a joint Audit Committee from 1 st April Separate conversations would be required with Shropshire and Telford & Wrekin links. Mr. Hanford and Ros Franke would identify members for the new Audit Committees. BH Mr. Parker asked what plans were in place for PCT AGMs and annual reports. Mr. Hanford advised that full governance statements and annual reports would be produced. Mrs. Cave confirmed that External Audit would follow the same process as previously. Mr. Hanford had not received specific guidance from the Department of Health on AGMs West Mercia Cluster Audit Committee 22 nd January 2013 Page 5 of 11

8 64/ /11 65/ /11 Accountable Officer & Director of Finance Roles - continued For the Legal Closedown of PCTs Mr. Hanford explained the transfer scheme process for the legal closedown of PCTs. The process would include the transfer of assets and liabilities, and the transfer of legal claims and staff. The transfer of assets submission to the Department of Health would be presented to the Cluster Boards in March Herefordshire PCT, Coventry PCT, Warwickshire PCT and Worcestershire PCT all have transfer schemes which would be shared with the receiving organisations. Current assets and liabilities would be transferred to the Department of Health if they are to be settled within three months. Dr. Ashurst asked if there is a requirement for the formal involvement of CCGs. Mr. Hanford advised that part of the sender organisations key individuals will have been involved, however to fulfil their role as receiver organisations they clearly have a key role. In March 2013 plans to receive assets would be issued to the CCG Boards. Arden, Herefordshire and Worcestershire Area Team have identified one person to lead the governance closedown and reporting process. In Herefordshire there was an agreement with Hoople to keep the ledger open and process the final accounts. In Worcestershire work to produce the final accounts would be carried out by the Arden Commissioning Support Service (CSS). The Area Team Finance Directors and Area Directors have been given the role of overseeing the whole process. External Audit Audit Fee Letter 2012/13 Herefordshire PCT, Shropshire County PCT, Telford & Wrekin PCT and Worcestershire PCT Mrs. Cave presented the Audit Fee Letters for 2012/13 for Herefordshire PCT, Shropshire County PCT, Telford & Wrekin PCT and Worcestershire PCT, and reported a reduction of 40% for the scale fees for 2012/13 compared to the audit fees for 2011/12. Mrs. Cave advised that Tony Corcoran would be leaving Grant Thornton. James Cook would be the Engagement Lead for Shropshire and Telford & Wrekin with immediate effect. Grant Thornton had been appointed as External Auditors to Herefordshire CCG, Shropshire CCG, Telford & Wrekin CCG and the three Worcestershire CCGs. West Mercia Cluster Audit Committee 22 nd January 2013 Page 6 of 11

9 65/ /11 External Audit Audit Fee Letter 2012/13 Herefordshire PCT, Shropshire County PCT, Telford & Wrekin PCT and Worcestershire PCT - continued Mrs. Cave went through the Worcestershire PCT letter and advised that the letters were all similar. External Audit were carrying out risk assessments with all the PCTs and there were no significant risks to report. Secondary Care and Primary Care were the areas most at risk and slightly more work was being carried out in these areas. Mrs. Cave advised that the Annual Audit Letter is still a requirement to be considered. Mr. Parker asked if the staff required for the final accounts process would be available. Mr. Hanford advised formal arrangements would be made with the employers of individuals as required. In Worcestershire key staff would still be in the system to carry out the final accounts work. Mrs. Cave advised that specific dates would be agreed for the sign-off of the final accounts. Mr. Hanford explained the process for the closedown of the existing ledgers and the new ledgers. 65.2/11 Value for Money - Audit Approach Briefing Herefordshire PCT, Shropshire PCT, Telford & Wrekin PCT & Worcestershire PCT Mr. Cook went through the Value for Money (VFM) Audit Approach Briefing for Herefordshire PCT, Shropshire PCT, Telford & Wrekin PCT and Worcestershire PCT. Mr. Parker commented that it was a very useful report and asked who would receive the conclusions regarding legacies and risk. Mr. Cook advised that the External Audit Opinion would be issued in June 2013 and VFM recommendations could be included in the Annual Governance Statement. Grant Thornton would report issues from the PCTs to the CCGs, in the organisations where they are the External Auditors. Mrs. Cave advised that if invited, Grant Thornton would be happy to attend CCG Audit Committee meetings where they were not the auditors, to discuss VFM findings. Mr. Parker suggested writing to the CCG Audit Committee Chairs and Chief Finance Officers of the CCG Audit Committees to advise that the opportunity for Grant Thornton to attend their Audit Committee meetings had been made available. BH West Mercia Cluster Audit Committee 22 nd January 2013 Page 7 of 11

10 65/ /11 66/ /11 External Audit - continued Auditing Standards Communication with the Audit Committee Mr. Elsby presented the Auditing Standard Communication with the Audit Committee reports for Shropshire County PCT, Telford & Wrekin PCT and Worcestershire PCT. The report for Herefordshire PCT was tabled at the meeting. Mr. Elsby advised that the summary produced for each PCT was consistent and had been updated from last year s understanding. Mrs. Cave explained the definition of material/significant items with regard to fraud. Mr. Hanford advised that there would be a national tender exercise for Internal Auditors to include Counter Fraud. The National Commissioning Board would commission one specialised services care pathway. Mr. Hanford advised that the Area Team would be members of the Health and Wellbeing Board. Mr. Parker asked the Committee to forward any comments regarding the Herefordshire PCT report to John Cook. Ms Thomas advised that there was emphasis around the Wye Valley Trust contract at page four of the report. Dr. Ashurst would discuss issues raised in the report with Jill Sinclair. Internal Audit Reports Progress Report 2012/13 NHS Worcestershire, Telford & Wrekin PCT & NHS Shropshire Mrs. Woodward presented the Progress Report 2012/13 for NHS Worcestershire, Telford & Wrekin PCT and NHS Shropshire. Mrs. Woodward reported that all work would be completed by 31 st March Mrs. Woodward advised that final reports had been presented to the CCG Audit Committees except Telford & Wrekin CCG, these would be presented by the end of March There were no outstanding recommendations to report. Mrs. Woodward advised that draft reports for the Information Governance legacy reviews would be issued for the three PCTs. PA/JS West Mercia Cluster Audit Committee 22 nd January 2013 Page 8 of 11

11 66/ /11 Internal Audit Reports Progress Report 2012/13 NHS Worcestershire, Telford & Wrekin PCT & NHS Shropshire - continued Mrs. Woodward advised that Internal Audit were awaiting formal responses to recommendations for the draft Safeguarding Adults and Children report. Mrs. Woodward reported significant assurance for Shropshire PCT and Telford & Wrekin PCT for Safeguarding Adults and Children. 66.2/11 Progress Report NHS Herefordshire Ms Moore presented the Progress Report for NHS Herefordshire. Ms Moore reported significant assurance for the Financial Reporting, Core Financial Systems, and Asset and Inventory Control reports presented to the Herefordshire CCG Audit Committee earlier in the day. Ms Moore referred to the recommendation tracking on page four of the report and advised that there were currently three recommendations outstanding. The Information Governance recommendations would be carried forward to the new plan. The Corporate Governance review and the Business Continuity & Disaster Management review would be part of the PCT transition to the CCG and the CCG Corporate Governance arrangements. The draft QIPP Planning & Reporting and the Adult Safeguarding & Continuing Care reports would be issued at the end of February Mr. Parker commented that the Herefordshire authorisation process seemed to have a number of red indicators and asked what the current position was regarding outstanding Governance red issues. Mr. Hanford explained that it was expected that the reds would turn into conditions. Mr. Hanford explained that the Area Team would use the conditions to work with Herefordshire CCG. Ms Moore advised that Herefordshire CCG has set up a process to deal with issues in the feedback including proposed changes to the governance structures. Mr. Parker asked if there was a Cluster milestone plan. Mr. Hanford advised that this would be included within the conditions and response conditions statement due in January Mr. Parker asked to see the conditions report for Herefordshire CCG and would share this with the Cluster Audit Committee members if necessary. BH/RP West Mercia Cluster Audit Committee 22 nd January 2013 Page 9 of 11

12 67/ /11 Local Counter Fraud Specialist Counter Fraud Report NHS Herefordshire Ms Moore presented the Counter Fraud Report for NHS Herefordshire. Dr. Ashurst advised that the report had been presented to the Herefordshire CCG Audit Committee earlier in the day. The Committee noted the Counter Fraud Report for NHS Herefordshire. 67.2/11 Counter Fraud Workplan NHS Worcestershire April 2012 to March 2013 The Cluster Audit Committee noted the Counter Fraud Workplan for NHS Worcestershire for April 2012 to March / /11 Waivers Waivers for NHS Shropshire Mr. Hutton advised that the NHS Shropshire schedule of waivers tabled at the meeting had been presented to the Shropshire CCG Audit Committee meeting the previous week. Mr. Hutton referred to the waiver listed on the schedule and advised that the supplier was the sole provider qualified to carry out the work. The Audit Committee noted the waivers. 68.2/11 Waivers for NHS Worcestershire Mr. Hanford presented the schedule of waivers for NHS Worcestershire. The Audit Committee noted the waivers. West Mercia Cluster Audit Committee 22 nd January 2013 Page 10 of 11

13 69/ / /11 Any Other Business Debtors Write-off Report NHS Herefordshire The Debtors Write-off Report for NHS Herefordshire was tabled at the meeting. Dr. Ashurst advised that the write-offs had been presented to the Herefordshire CCG Audit Committee. The write-offs were mostly very old and every effort had been made to recover the debts. Ms Nunn would confirm if any of the debts listed on the schedule had been provided for In last year s accounts outside of any general provision for bad debts The Committee agreed the write-off of the debts at Appendix A of the report. Next Meeting It was agreed that a Cluster Audit Committee meeting would be held in March The Committee would consider the detail of the transfer schemes at the next meeting. Ms Smith commented that the Department of Health deadline for any legal changes to transfer schemes is 11 th March The transfer schemes would be presented to the Cluster Board on 19 th March LN 70/11 Date and time of next meeting The next meeting will be held at 2.00 pm on Thursday, 7 th March 2012 at Turnpike House. RP/HJN January 2013 Signed: Date: West Mercia Cluster Audit Committee 22 nd January 2013 Page 11 of 11