APPROVED
NHS Grampian (NHSG)
Minute of Endowment Committee Meeting
Monday 26 March 2012, 1000-1230
Conference Room, Summerfield House
Present
Mr Raymond Bisset (Chair), Non-Executive Board Member
Mr Mike Scott, Non-Executive Board Member
Cllr Lee Bell, Non-Executive Board Member
Ms Sharon Duncan, Employee Director
Mrs Laura Gray, Director of Corporate Comms and Board Secretary
Mr Alan Gray, Director of Finance
In Attendance
Mr Garry Kidd, Assistant Director of Finance
Mr Derek Angus, Treasury Accountant
Mr Mike Connor/Mrs June Jessop, Newton Investment Management Ltd - Item 4.2
Anne-Marie Meconi, Minuting Secretary
Item / Subject / Action1 / Apologies and Welcome
Apologies:Dr Roelf Dijkhuizen, Medical Director
Cllr Bill Howatson, Chairman NHSG
The Chairman welcomed Sharon Duncan to her first meeting as the new Employee Director.
This was Cllr Bell's last meeting and the Chairman thanked him for his valuable input over the years.
2 / Minute of Meeting held on 14 December2011
The Minutes of the above meeting were approved.
3 / Matters Arising
3.1 / Review of Action Sheet
Mr Bisset went through the action sheet and it was duly updated.
28.9.11 - Item 11.5 - Membership of Global Centre for Nursing Executives: To be discussed at the June meeting.
28.9.11 - Item 11.6 - Expenditure Request: Submission for funding will be made at the June meeting.
28.9.11 - Item 12 - Fund Summary Analysis of Largest Specific Funds: Further review in six months time.
28.9.11 - Item 17 - AOCB - Donation from WRVS: Discussions still ongoing. Mrs Gray and Mr Angus waiting for a meeting with GeorgeReid to take place with WRVS for an agreement to be set up first before an interim payment can be made.
The Committee noted the Action Sheet. / DA
RB
DA
LG/DA
4 / Investments
4.1 / Investment Portfolio at 30 December 2011
Mr Angus said that the difference between book and market value of the investments was over £4mat the end of February 2012. Restriction of 80% on balances of restricted funds still in place. MrKidd said this would be considered in the review of investment policy that would take place at the AGM in September.
Realised profit on the sales of investments approximately £330k which is normally transferred to the Endowment Committee Fund. The level of profit to be discussed with Newtons.
The Committee noted the report.
4.2 / Update from NewtonInvestment Management on Investments
Mr Mike Connor and Mrs June Jessop joined the meeting
Portfolio value as at 21 March 2012 - £35,338,926
Estimated income - £1,434,291
Yield - 3.9%
Mr Connor went over the general financial climate and markets. Emerging markets down by 18%. UK down by 3.5%. Growth prospect for Asia-Pacific market still more attractive. 17% in gilts. Equities just over 65%.
The level of profit on the sale of investments was discussed. It was agreed that the shareholdings in Petrobras and Noble Group be sold at a loss.
Mr Mike Connor and Mrs June Jessopleft the meeting.
The Committee noted the report and gave approval for the sale of Noble Group and Petrobras holdings.
5 / Review of Investment Management Performance
The AGM scheduled for September 2012 should include a formal review of investment performance on the agenda. The Committee was requested to consider whether to employ expertise from Wm Investments (who have previously been used by NHS Tayside) or similar company, to come in and review Newtons performance over a 3-5 year period, review the benchmark, look at the criteria and the wider market performance and give feedback to the Committee. Newtons would be informed of this exercise.
The Committee was asked to approve the following recommendations:
- Note the key points to be included in the review of investment strategy and associated performance.
- Mr Gray to request competitive quotes and proceed to appoint a suitable expert adviser to undertake the independent review of the financial performance of the funds compared to relevant sector benchmarks.
- The costs of the advisor not to exceed £4k before VAT.
- A draft report covering the key points of the review to be available for the June 2012 Committee meeting.
The Committee approved the four recommendations. / AG
6 / National Review on Use of Endowment Funds
The outcome of a recent review by the Office of the Scottish Charity Regulator (OSCR) of Endowments within NHS Lothian and Lanarkshire carries implications for other Boards. A preliminary legal discussion document from the Crown Legal Office (CLO) has advice that is inconclusive and Mr Bisset requested that NHSG seeks special legal opinion through Queens Council. Advice is sought on:
- staff physiotherapy service;
- long service and retirement awards/leaving teas;
- staff nights out ie Christmas etc;
- staff sports and social events where employees contribute towards the costs;
- complimentary therapy services ie aromatherapy.
After discussion the Committee decided on the following action:
- QC legal advice to be sought;
- Suspension of long service and retirement awards;
- Suspension of reimbursing staff nights out;
- Leaving teas, physiotherapy and complimentary therapy services and staff sports and social events to continue.
Mrs Gray said that the staff sports activities was very important to the well being and health of all NHSG staff who participate in these activities which are made available to all staff.
Retirement leaving teas costs come out of the General Endowment Fund providing the retiring employee has over 20 years service. For less than 20 years service costs can be met out of a restricted endowment from the relevant ward/department providing it is a fund for the benefit of staff.
Mr Kidd to discuss with Mr A Jackson re engaging a QC for legal advice on providing clarity on guidance and Committee reassurance on taking appropriate action.
Mrs Gray to issue a statement through the Communications network to all staff re the suspension of long service/retirement awards and reimbursing staff night outs. HR to inform individuals due to get an award.
The Committee approved the continuation of the staff physiotherapy/complimentary therapy services, staff sports and retirement teas.
Mr Kidd to produce a paper for the June meeting on any conclusions on advice received.
Mr Gray to report to the next GAPF meeting re suspension of long service and retirement awards. / GK
LG
GK
AG
7 / GAPF Endowment Funding
7.1 / Approved Expenditure Requests from 1 December 2011 to 29 February 2012
Of 11 applications received, four were approved, one approved for 50%, fourdeclined, one withdrawn and one deferred.
7.2 / Request for Additional Annual Funding
Gordon Stephen had made a request for any funds that are not being used for long service/retirement awards tosupplement the existing allocation for GAPF Endowment Fund for use by groups of staff. The Committee requested that GAPF provide a proposal for funding required. Sharon Duncan indicated that a proposal to fund an Annual Service Awards event is anticipated later in the year. / SD
8 / Donations: Donations greater than £1,000 received from 1 December 2011- 29 February 2012
Total donations received £553,953.
The Committee noted the report.
9 / Summary Financial Report as at 31 October 2011
Mr Angus said that the fund has demonstrated an improved performance compared to the previous quarter. The valuation of investments increased by £1.44m, in the three month period to 31 January 2012. In addition, the sale of the property at 403 King Street, Aberdeen, was finalised in December 2011.
In reviewing the unspent balance of the Endowment Committee Fund, MrGray asked the Committee to consider to what extent we review endowments to help improve and enhance patient amenity areas especially at ARI. It was agreed that this be discussed at a Board seminar to be arranged later in the year. The Committee did agree to continue with an annual sum of £25k to be made available to GAPF.
The Committee noted the report.
10 / Funding Requests
10.1 / Expenditure Requests Approved from 1 December 2011 to 29 February 2012
The Committee noted the report.
10.2 / Equipment RequestsApproved from 1 December 2011 to 29February 2012
£60k requested for research consumables for a project at theNeonatal Unit.
The Committee approved the request.
10.3 / Mortuary Upgrade
Mrs Gray asked the Committee to consider providing funding towards the upgrade and extension of the mortuary area as no availability within the Boards capital plan. The extension/refurbishment would cost around £250k. Other organisations ie the police and local crime writers would be approached for donations.
The Committee agreed to give £125k towards the mortuary upgrade from the Endowment Committee Fund.
Mrs Gray to ask Grampian Police for a donation. / LG
11 / Draft General Endowment Budget 2012/13
The Committee had already granted approval of the 2012/13 endowment general budget apart from the types of expenditure that was to be considered by the National Review. As it had been agreed to suspend the long service and retirement awards it was agreed that the allocations for these items be deleted.
The Committee approved the budget after amendment. / DA
12 / Patients Rights Act
Mrs Gray said that the report provides an overview of the components of the Patients Rights Act and considers whether there are implications for the Committee.
There is no requirement for a member of the public to join the Committee and this would be consistent with some other Board committees.
The Committee noted the report.
13 / Conflict of Interest Policy
Mrs Gray reported that from the policy provided by Mr A Jackson it may be possible that a separate register for Endowment Trustees should be held to note conflicts of interest, financial or of an indirect nature. A register is already held for Board Members to declare their conflict of interest.
Mrs Gray to ask Mr Jackson to confirm the operational aspects of the register and bring back to the June meeting. / LG
14 / Review of Risk Control Plan
The Committee would like to know where the Risk Control Plan sits within the Corporate Risk Register. Before Mr Angus retires the Committee needs to discuss support arrangements and his successor.
Mr Kidd to invite someone from the Risk Team to attend the December meeting to review specific risks related to the Endowment Fund.
Support arrangements for the Committee to be discussed at the June meeting which would replace the risk seminar originally planned.
The Committee approved the report. / GK
DA
15 / AOCB
Mr Raymond and Mr Scott have expressed interest in attending the NHS Lothian Endowments National Conference on 25 October 2012 which will discuss governance, risk and challenges etc.
Mr Kidd to reserve four places for the 25 October conference. / GK
15.1 / Report to NHSG Board
To include:
- Investment portfolio
- Update on National review and the engaging of Queens Council and the suspension of long service and retirement awards
- Mortuary upgrade - £125K from endowments
Mr Bisset to update the Board. / RB
Date of Next Meeting
Monday 18 June 2012, 1000-1230, Conference Room, SFH
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