Toronto Central Local Health Integration Network (LHIN) Finance and Audit (F&A) Committee Thursday, January 24, 2013 4:00 5:30 p.m. Boardroom, Toronto Central LHIN, 425 Bloor St. East, Suite 201, Toronto Minutes Present: John Fraser (Committee Chair) Lloyd Komori (by phone) Angela Ferrante Regrets: Carol Perry Richard Blickstead Staff Resources: Camille Orridge, Chief Executive Officer Bill Manson, Senior Director, Performance Management Raj Krishnapillai, Senior Finance Director, and Corporate and Shared Services (CFO) Sue Robertson Corporate Coordinator, Recorder 1. Welcome and Call to Order The Chair called the meeting to order at 4:00 p.m. 2. Guide to Open Meetings of the Toronto Central Local Health Integration Network The Chair noted that no members of the public were in attendance. 3. Approval of Agenda The Chair invited comments from the Committee regarding the meeting agenda. UPON MOTION duly made, and unanimously carried, the Finance and Audit Committee approves the agenda of the meeting as circulated. 4. Declaration(s) of Conflict(s) No declaration(s) of conflict(s) were made. 5. Approval of Minutes Comments from the Committee were invited regarding the pre-circulated minutes of the meeting held on October 29, 2012. 1
The following resolution was passed. UPON MOTION duly made and unanimously carried, the minutes of the Board Finance & Audit Committee meeting held on October 29, 2012 were approved, as amended. 6. LSSO/LHINC Audit Subcommittee Appointment of Members The Chair noted that he and the TC LHIN Chair undertook a process to identify two individuals for membership on the LSSO/LHINC Audit Subcommittee. Based on the membership criteria, selection guidelines and principles, Linda Keen and Bob Lawler are being recommended for appointment to the Subcommittee. The Finance and Audit Committee received the selection criteria, process and the bios for the recommended candidates. No issues or concerns were raised regarding the appointments. The following resolution was passed: Committee hereby approves the appointment of Linda Keen and Bob Lawler to the LSSO/LHINC Audit Subcommittee. NEW BUSINESS 7. Annual Audit Plan The Chair welcomed Steve Stewart and Lilian Cheung to the meeting. Members received the Audit Service Plans for the TC LHIN, the LHIN Shared Services Office (LSSO) and the LHIN Collaborative (LHINC). The audit of the financial statements of the TC LHIN will include procedures related to both LSSO and LHINC. The Chair noted that the LSSO/LHINC Audit Subcommittee met earlier in the day and recommends the approval of the tabled audit plans for LSSO and LHINC. Mr. Stewart reviewed the key elements of the audit service plans. He noted that while there are two separate audit plans, Deloitte will include the TC LHIN, LSSO and LHINC in the consolidated financial statement. The audit approach adheres to applicable professional auditing standards and accordingly, is risk based and tailored to address the significant risks to financial reporting the audit risks. Mr. Stewart advised the committee that there will be two separate materiality levels. 2
8. Annual Audit Plan Closed Session Discussion with Auditors The Committee agreed that a closed session discussion with the Auditors was not required. 9. Annual Audit Plan Recommendation to Approve Annual Audit Plan There being no questions or concerns related to the audit plans, the following resolution was passed: Committee hereby recommends that the Board approve the 2012/13 Audit Plans for TC LHIN, LSSO and LHINC. 10. TC LHIN Reports A. TC LHIN Q3 Consolidated Financial Results Report The Committee received the Q3 consolidated financial results report for the period ending December 31, 2012. No issues or anomalies were reported for this quarter. It was confirmed that a balanced budget is forecasted for the year end. There being no questions or issues raised, the following resolution was passed: Committee hereby recommends that the Board of Directors approve TC LHIN s Q3 Consolidated Financial Results Report (unaudited). B. TC LHIN Health Service Providers Operation Transfer Payment Funding The report on Q3 Health Service Providers Operation Transfer Payment Funding was provided in the meeting materials. The CEO noted that the Health Based Allocation Model is a funding reform being implemented at hospitals. It stipulates that hospitals will be funded based on the care provided rather than providing across-the-board lump sum payments. This is a significant change for hospitals and does have some funding implications for providers. The second type of funding model under the Ministry s patient-based funding is the Quality Based Procedures (QBP). While the overall direction of QBP s will provide better quality care for patients, providers are adjusting to this new funding model. The LHIN has set up a steering committee comprised of a team of experts to look at the unintended consequences of the new funding model. The steering committee discusses issues with the Ministry of Health. 3
C. Community Investment Health Service Providers Discretionary Funding C1. Discretionary Community Investment The Committee received an update on the community investment health service providers discretionary funding for Q3. A summary level of allocations for the specific priorities was also included. The CEO noted that all LHINs had criteria for the allocations however, outcomes can vary by LHIN. A Provincial Report is being developed on this and will be circulated to the Committee when it is ready. In response to a question raised, the CEO clarified that the Ministry of Health has committed to 4% increase over the next three years. Because the 2012 funds were received mid-year, the base amount is allocated first and then any funding remaining from the original $14.9M becomes one time funding for this year. C2. Discretionary Urgent Priority Fund The CEO noted that the TC LHIN has total control on the allocations from within the Urgent Priority Fund. The allocations have been made within the approved approach for the 2012/13 investment plan. No questions or concerns were raised. C3. Discretionary Surpluses Reallocation The Committee received an update on the Health Service Providers Surplus Funds reallocation. The TC LHIN met with agencies last fall to discuss the overall allocation plan and opportunities for investing one-time funding that would support health service providers. The LHIN received 165 proposals from community agencies. In response to a question raised, the CEO clarified that the TC LHIN utilized a set of criteria in order to make decisions on the proposals. The criteria were as follows: - Eliminate applications that the provider already had funding for - Eliminate applications that the provider can obtain the funds through another source - Focus on applications that advance TC LHIN s Strategic Plan - Opportunities for bulk buying were utilized which resulted in cost benefits. Raj Krishnapillai, Senior Director noted that the health service providers received the funds in ample time to be used prior to year-end. D. Toronto Central LHIN s Q3 Operations Financial Results Report The Committee was provided with TC LHIN s Q3 Operations Financial Results Report in the meeting materials. No issues or concerns were raised. The Toronto Central LHIN reported a surplus of $222K for the nine months ended December 31, 2012. TC LHIN is forecasting a balanced budget at year-end. 4
E. LHIN Collaborative Q3 Operations Financial Results Report The Committee received the LHIN Collaborative s Q3 Operations Financial Results Report in the meeting materials. The Committee was reminded that the results are distributed to all of the LHINs as a reporting mechanism. In response to a question raised, the CEO noted that the $66K surplus belongs to the collective and the LHINs have agreed that the surplus will be used to cover leasehold improvements. There being no further questions raised, the following motion was passed: Motion Committee approves the LHINC s Q3 Operations Financial Results for distribution to the LHINs. F. LHIN Shared Services Office Q3 Operations Financial Results Report The Committee received the LHIN Shared Services office Q3 Operations Financial Results Report in the meeting materials. No issues or questions were raised on the results. Motion Committee approves the LHIN Shared Services Office Q3 Operations Financial Results for distribution to the LHINs. G. Report on LSSO s RFPS Status of IT and IS Services RFP The CEO reviewed the process that will be undertaken to review the RFP submissions for the provision of IT services for the LHINs. An evaluation team has been assembled with individuals that have specific experience and knowledge of information technology and information management. The contract will require signature of the Board Chair and the signing needs to be completed by March 31, 2013. The Committee agreed that due to the timing of the contract signing being before the next scheduled Committee meeting, the motion to authorize the Chair to sign the contract will go directly to the Board in February. A Committee member requested that the evaluation process be provided to the Board in detail. 5
Procurement RFP The CEO noted that LSSO was planning to issue an RFP for procurement services for the LHINs. Legal has advised that this may not be possible as it may constitute consulting services. Work will continue on this and the Committee will be advised of any future developments or decision. 11. TC LHIN s Budget Assumptions 2013/14 Members received the draft budget assumptions for 2013/14 in the meeting materials. No questions or concerns were raised. The final budget will come forward at the April meeting. The Committee will be asked to recommend the final budget to the Board for approval. 12. Risk Report The Committee received the risk and strategic issue management report in the meeting materials. The unintended consequences associated with rehab hip and knee QBPs (quality based procedures) has been identified as a priority risk. In response to a question raised, Bill Manson, Senior Director noted that while there is no argument that the new funding model, quality based procedures, is an appropriate change in the health care system, discussions are underway to minimize the temporary negative impacts to the system and patients related to service reductions. The Committee suggested that the risk report be re-casted to tie to the organization s strategic directions, implications on the strategic plan and include information on our ability to manage the risks as it relates to the achievement of the strategic plan. 13. Q3 Report on Work Plan The Committee received the Q3 report on the work plan for 2012/13. The CEO noted that given the new Provincial health care directions with Health Links and the Seniors Strategy, the report shows that some of our initiatives have been purposefully delayed or re-scoped to provide some capacity for these new directions. The Committee requested that future reports include notes on any implications that result from some of our initiatives being re-scoped or delayed. The CEO noted that work plan targets will be set in Q1 of 2013 when the work plan is reviewed and brought in line with the new government directions. No further questions or concerns were raised. 14. TC LHIN Board Scorecard 6
The Q2 TC LHIN Board Scorecard was provided in the meeting materials. In response to a question raised regarding preferred surgeon wait times for knee replacement surgery, Bill Manson, Senior Director, noted that the TC LHIN continues to work with providers on performance improvement. 15. 2012 Procurement Directive The TC LHIN received new procurement directives from the Ministry of Health and Long Term Care in the fall of 2012. Management reviewed the new directives to ensure that all LHIN policies and procedures are in compliance. The Committee was informed of amendments to the LHIN s procurement policies as a result of the review. No questions or concerns were raised. 16. 2013/14 Annual Business Plan The TC LHIN submitted its draft Annual Business Plan to the Ministry of Health and Long-Term Care on January 31, 2013. It was provided to the Committee for information. No questions were raised. The meeting moved to a closed session. The Committee passed a motion to move the meeting to a closed session. UPON MOTION duly made and unanimously carried, that the Toronto Central LHIN Finance and Audit Committee meeting be moved into a closed session pursuant to s.9(5) of the Local Health Systems Integration Act, 2006 to: - consider financial and other matters concerning personal or public interest and personnel matters and that Board Members, Camille Orridge, and Sue Robertson join the Board in the closed session. The meeting moved out of the closed session. 17. Other Business No other business was tabled. 18. Next Meeting 7
The next meeting of the Finance and Audit Committee is scheduled for April 23, 2013. 19. Termination The meeting was adjourned at 5:30 p.m. 8