APPROVED
NHS Grampian (NHSG)
Minute of the Audit Committee Meeting
Tuesday 10 December 2013, 1000-1300
Conference Room, Summerfield House
Present
Mr David Anderson, Non-Executive Director, NHSG (Chair)
Cllr Barney Crockett, Non-Executive Director, NHSG
Mrs Sharon Duncan, Employee Director, NHSG
Dr Lynda Lynch, Non-Executive Director, NHSG
In Attendance
Mr Jim Boyle, Audit Partner, Deloitte LLP
Mr Alan Gray, Director of Finance, NHSG
Mr Garry Kidd, Assistant Director of Finance, NHSG
Ms Susan King, PricewaterhouseCoopers LLP (PwC)
Mr David Pfleger, Director of Pharmacy & Medicines Management (Item 10)
Mr Mark Reid, Senior Manager, PricewaterhouseCoopers LLP (PwC)
Ms Karlyn Watt, Audit Manager, Deloitte LLP
Mr Mark White, Director, PricewaterhouseCoopers LLP (PwC)
Ms Tracey Leete, Minuting Secretary
Item / Subject / Action1 / Apologies
Mr Richard Carey, Chief Executive, NHSG
Mrs Jenny Greener, Non-Executive Director, NHSG
Cllr Bill Howatson, Chairman, NHSG
2 / Declaration of Interest
None.
3 / Minute of Meeting Held on 10 September 2013
The Minute of the previous meeting was approved as an accurate record.
4 / Matters Arising
4.1 / Action Log of 10 September 2013
The Committee reviewed the action log from the previous meeting and noted the following points not covered elsewhere on the agenda:
25 6 13 – Item 8 – Risk Management Annual Report
The Committee had previously agreed that the effectiveness of current risk management arrangements should be documented and asked Mr Wood to prepare an addendum to the report with the required evidence.
The Committee noted that the agreed internal audit review of Governance arrangements would also consider the arrangements for cross reporting between Board Committee’s and the method of feedback to evidence the effectiveness of risk management arrangements. The findings and recommendations from this review will be reported to the March 2014 meeting.
Mrs Duncan asked if existing arrangements provided sufficient focus on key emerging risks for example the impact on NHS Grampian should the use of national workforce tools to determine nurse staffing levels become mandatory. Mr Reid responded that PwC would consider the process to ensure visibility of emerging risks by the key governance Committee’s as part of the review of governance arrangements.
The Committee requested that Mr Kidd draft a letter for Mr Anderson to send to the Chair of the Performance Governance Committee (PGC) highlighting the specific risk raised by Mrs Duncan and requesting that this is considered at a future meeting of the PGC. / PwC
GK/DA
4.2 / Other matters arising not on the action log
None.
5 / Internal Audit
5.1 / Progress Report
Mr Reid presented the progress report and highlighted the following :
Proposed Changes to the Operational Audit Plan
Executive Management had requested an amendment to the 13/14 plan to incorporate additional reviews of the Patient Feedback/Complaints Service and the processes for managing delayed discharges. To accommodate this change it was proposed to defer the planned reviews on Innovation and Performance Management until 2014/15.
Mr Gray explained that Health Improvement Scotland (HIS) are to undertake a national review of patient feedback and complaints arrangements during 2014 and the expectation is that NHSG will have completed a local internal audit review early in 2014 in order to inform this process.
Dr Lynch requested that the scope of the patient feedback/complaints audit should be properly balanced with equal emphasis given to both patient experience and complaints. Mr White confirmed that this would be the case.
Members expressed concern at the proposal to defer the review of performance management arrangements. Mr White explained that the scope of the planned audit was to review processes for reporting performance against national targets rather than a review of operational performance management arrangements.
The Committee agreed the planned changes to the 13/14 operational audit plan but requested that an audit of operational performance management arrangements should be carried out early in the new financial year.
Mr White, in consultation with Mr Gray, to develop a revised scope for a review of operational performance management arrangements and to make provision for this to be carried out in the first quarter of the 14/15 audit programme.
Mr White to circulate both the draft scope for the audit of operational performance management and the draft scope for the Patient Feedback/Complaints audit to members for comment.
Theatre Utilisation
No critical risks were identified in the report; however, the report did highlight two areas of high risk with key recommendations concerning the availability and consistency of information to support effective performance management of theatre capacity.
Mr Gray stated that a new operational management team are now in place with responsibility for the Theatres and the findings from the review will help them target improvements in local management processes. A key action agreed by the Acute Sector Senior Management Team is to form a Theatre Executive Committee, consisting of senior clinical and management stakeholders, and with a specific remit to co-ordinate use and ensure the effectiveness of theatre utilisation.
Dr Lynch asked for clarification of the current arrangements which allow theatres to be staffed for only 46 weeks in a year and how this influenced the demand and capacity work which supported the development of new theatres at ARI and Woodend Hospitals.
Mr Gray stated that the 46 week figure reflected historical recruitment difficulties within the service and also limitations on revenue funding in prior years. Mrs Duncan added that there are also certain times in a year when theatres are required to be out of operation to allow essential maintenance.
Mr Gray further explained that the development of the new theatres allows sufficient capacity to meet the current anticipated net demand. The planning assumes more efficient working practices will improve the efficiency of the existing theatres and also includes an element of future proofing. A significant additional investment in staff and other resources to support delivery of Treatment time Guarantees has recently been agreed by the Board and recruitment efforts are underway. The new theatre capacity at ARI and Woodend Hospitals will now become operational in April 2014.
Dr Lynch asked why the Woodend Theatre operational date had slipped from January to April. Mr Gray explained that this was due to unforeseen technical engineering issues relating to the supply of utilities to the new Theatres which are now resolved.
Mr Anderson queried whether the target dates for the identified actions were achievable.
The Committee agreed the following actions :-
- Mr Reid review the timescales for delivery of the required actions with local management and incorporate any changes in a final version of the report.
- Mr White to ensure a follow up audit is carried out in the third quarter of 2014/15.
- Mr Kidd to arrange for the report to be referred to the Performance Governance Committee for further consideration.
- Mr Anderson to raise the effectiveness of theatre utilisation across NHS Grampian with Cllr Howatson as a subject to be considered by the full Board in a future seminar.
The review concluded that management have developed a well designed process and highlighted a number of areas of good practice. No critical or high risk findings were identified. Two low risk areas for improvement were highlighted in relation to ability to use financial levers to solve recruitment difficulties and the planning for new investment in support of the long term goals as set out in the Board’s 20/20 vision.
Mr Gray stated that his intention is to engage Board members more fully in the development of long term financial plans through a scenario planning session at a future Board Seminar.
The Committee noted the report.
Board Governance Review - Update
Mr Reid explained that the report is not scheduled for completion until March 2014 but Mr Anderson had requested that the emerging findings be shared with the Committee members to allow any salient points to be fed back to Board members at a planned development session in December 2013.
The majority of planned interviews with Executive and Non Executive Directors are complete and the following issues have been highlighted:
- Inconsistency in format and quality of papers submitted to Committee’s – often not clear how the issue links to a strategic objective.
- Induction of Non Executive Directors – variable quality of briefing, absence of mentoring and ‘buddy’ arrangements.
- Requirement for Non-Executive role to be clearly defined – potential for confusion/cross over with management responsibilities
- Board seminars – ineffective use of agenda, often hijacked for core business not enough emphasis on horizon scanning.
- Links between Committees – no arrangements for knowledge transfer to ensure participants in debate at key committees are properly informed.
- Communication and cross fertilisation of skills and experience between non executive directors – no arrangements exist for networking outwith formal committee structures.
AG
PwC
PwC
PwC
GK
DA
5.2 / High Priority Recommendations
Mr Reid informed the Committee that there were no high priority recommendations to report against other than those arising from the previous health and Safety Audit which are due to be reported to the Committee in March 2014.
The Committee noted the position.
5.3 / Waiting Times Progress Report
Mr White introduced the report which focused on progress against the recommendations arising from last year’s internal audit review of waiting times arrangements and also from the related national reviews undertaken by Audit Scotland and by the Public Audit Committee.
The report’s findings concluded that direct action has been taken against each recommendation and that processes are in place to ensure monthly performance audits of the key elements of the waiting times process.
The Committee requested that Mr White include a paragraph in the executive summary regarding the availability of monthly audit information and regular management review including reporting to the Board’s Performance Governance Committee.
The Committee agreed that the report, incorporating this agreed amendment, should be submitted to the SGHSCD as evidence of progress.
Dr Lynch asked if the legal focus on waiting times target achievement had an impact on ongoing clinical care of patients, in particular regarding access to essential follow up treatment. Mr Gray confirmed that there are a range of steps in place to ensure all patients are seen within the legal timeframe. Mrs Duncan clarified that the clinicians are the key decision makers in terms of the care pathway and frequency of follow up treatment but this may not always be identified as part of the ongoing performance reporting.
Members agreed the need to clarify the existence of monitoring arrangements to measure the timing and quality of follow up treatment and agreed that this issue should be referred to the Clinical Governance Committee for Consideration. / PwC
AG
GK/DA
5.4 / Audit Committee Effectiveness Workshop
Mr Anderson confirmed his intention to arrange a further effectiveness workshop for the Committee following the March 2014 meeting.
Mr Reid outlined the proposed approach to the workshop which involved all members of the Committee completing a questionnaire covering behaviours and processes in advance of the workshop. The results will be collated by PwC and linked to the findings from the review of governance arrangements to provide the material for the workshop session.
Dr Lynch suggested it may be worth receiving previous members feedback from the session held 2 years ago. Mr Anderson responded that he was keen to receive a new perspective from current committee members and would prefer not to refer to the previous material initially, although this would be taken in to account when reviewing any actions arising from this more recent session.
Mr Reid to liaise with Mr Kidd to arrange distribution of the questionnaire to Committee members in advance of the March 2014 workshop. / PwC/
GK
6 / External Audit
6.1 / 2013/14 External Audit Plan
Mr Boyle introduced the External Audit Plan for 2013/14 and confirmed that initial planning work had gone well. In terms of the overall approach this is broadly consistent with previous years but there are two key areas of change that will require to be built in to the 2013/14 process. These are the accounting arrangements for the completion of the Boards first Hub initiative project, the Aberdeen Health and Community Care Village, which will go on balance sheet effective December 2014 and the requirement to consolidate the NHS Grampian Endowment Funds accounts with the main Board accounts for financial year 2013/14 onwards.
There is good engagement with NHSG management and finance staff and agreement has been reached on a mutually acceptable timetable for the audit of the financial statements which is in line with Committee and Board dates and the need to have the audit finalised and reported by 30 June 2014
Ms Watt summarised the key audit risk areas that have been identified as part of the initial planning work and also highlighted the agreement on best value audits for 2013/14, which will focus on a follow up of the previous years report on planning and resource alignment and a new review of arrangements forHealth and Social Care Integration.
Mrs Duncan highlighted the financial challenges that will be associated with the creation of joint partnership budgets under the Health and Social Care integration agenda. Mr Gray confirmed that the decision to allocate resource to a partnership lies with the Health Board and the Local Authority as appropriate and the budget to be made available to integrated partnerships will be subject to annual agreement and must fall within existing resource limits. Cllr Crocket clarified that neither NHS Grampian or the local authorities will be allocated additional resources for this purpose and the intention is to drive efficiencies through redesign of services enabled by closer integration.
The Committee agreed the 2013/14 Audit Plan.
6.2 / Benchmarking – Finance Function
Ms Watt introduced the report prepared by Deloitte LLP benchmarking the NHS Grampian Finance function against other respondents from companies across their client base. Overall the Board compares favourably with other organisations in terms of the size and efficiency of the Finance Function.
Dr Lynch highlighted that the report implies the Board’s finance function is under resourced compared to other similar sized organisations and asked Mr Gray and Mr Kidd to provide their perspective as managers of the finance team. Mr Gray responded that the finance team continually looks to improve how it works with the service. Although staffing levels are light compared to other similar organisations we do have a very experienced team who are willing to work flexibly and like many other areas of our service often keep hours over and above their contractual requirement. A number of experienced members of staff are however expected to retire over the next 5 years and this will present a significant challenge to the sustainability of the finance service. Mr Kidd advised that the Senior Finance team had given significant thought to succession planning in recent years and plans were in place to develop staff to take on key roles. In addition the department has recently moved to a fully integrated management structure with all staff co-located in the same building which has allowed the development of generic skills improving resilience through cross cover across a variety of job roles.
The Committee noted the report and welcomed the assurance provided by the approach to succession planning adopted by the Senior Finance Team.
7 / Audit Scotland
7.1 / National Study Reports
Mr Kidd presented, for information, a summary of reports issued by Audit Scotland during the year.
The Committee agreed that, provided the reports are distributed to the relevant people, they would not wish to have sight of every report. Mr Kidd advised that the Health Sector reports are disseminated by the Chief Executive’s office.
Cllr Crockett asked that the Housing Scotland report be added to the summary.
The Committee noted the reports and recommended Mr Kidd forward the Scotland’s public sector workforce report to the Director of Workforce. / GK
GK
7.2 / Report on NHS Financial performance 2012/13
Audit Scotland published the annual review of “NHS Financial Performance 2012/13” on 10 October 2013 which contained four key recommendations.
Mr Gray presented a paper which demonstrated that the Board have made significant progress against all of the key recommendations in the report.
Dr Lynch asked for further clarification of the process where cost reduction plans are not achieved. Mr Gray responded that performance against agreed cost reduction targets is monitored on a regular basis and any significant underperformance subject to intervention by senior Management.
The Committee noted the report.
8 / Single Tender Register
Mr Kidd presented the single tender register an explained that a number of waivers authorised by the Head of Procurement earlier in the year had not been included in previous updates to the Committee. This error in the process had now been corrected resulting in a higher than normal number of waivers for consideration.
The Committee noted the single tender actions authorised since the last meeting (No’s 46-64).
9 / Counter Fraud
9.1 / Steering Group Role and Remit
Mr Kidd explained that the Committee had previously agreed to the establishment of a Counter Fraud Steering Group (CFSG) at the September 2013 meeting and presented a draft role and remit for the consideration and approval of the Committee.
The Committee approved the role and remit for the CFSG.
9.2 / Progress Report
Mr Kidd presented a paper to update the Committee on progress against the specific requirements outlined in CEL 11 (2013) and highlighted various mechanisms in place to raise fraud awareness across the organisation.
The Committee noted the content of the report but due to a formatting error some members were unable to read the detailed description associated with the individual referrals for suspected fraud.
The Committee agreed that Mr Kidd should recirculate the report to members for further comment by 17 December 2013 then submit to NHS Counter Fraud Services. / GK
10 / Prescribing in General Practice in Scotland
Mr Pfleger presented a report detailing progress against the recommendations outlined in the Audit Scotland report on Prescribing in General Practice and highlighted the following key points :-
- all recommendations are either fully implemented in Grampian or are partially in place with plans to improve.
- The below average weighted cost per patient in Grampian achieved with a relatively low level of prescribing support .
- Key areas of focus in 13/14 and future years include developing links to SMR data to identify clinical risk and improve patient safety, development of information to support analysis of co-morbidities/patient history to assist in drug therapy reviews and development of improved practice level data to support effective prescribing.
11 / Future dates for 2014/15
Revised dates for future meetings up to and including March 2015 were tabled.
The Committee noted the revised dates.
12 / AOCB
None.
13 / Report to the NHS Grampian Board
The Committee agreed that the following items would be of interest to all Board members :
- Theatre Utilisation
- Waiting Times Progress Report
- Prescribing in General Practice
13 / Date of next meeting
The next meeting will be held on Tuesday 18 March 2014 at 1000 hours in the Conference Room, Summerfield House to be followed by Audit Committee review of effectiveness and development session 1300-1500.
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