APPROVED

NHS GRAMPIAN

Minute of NHS Grampian Audit Committee Meeting

held on Tuesday, 16 September, 2008 at 10am

in the Conference Room, Summerfield House, Eday Road, Aberdeen

PRESENT

Councillor Bill Howatson, Chair, Audit Committee

Mr Gordon Stephen, Committee Member

Mr Charles Muir, Committee Member

Mr David Anderson, Committee Member

IN ATTENDANCE

Mr David Cameron, Chairman, NHS Grampian

Mr Alan Gall, Director of Finance, NHS Grampian

Mr Clark Paterson, Senior Finance Manager, NHS Grampian (for Mr B Jenkins)

Mr Alan Gray, Director, PricewaterhouseCoopers (Chief Internal Auditor)

Ms Kirsten Tollerton, PricewaterhouseCoopers (Internal Auditor)

Mrs Linda Porter, Senior Audit Manager, Audit Scotland (External Auditor)

Ms Alison Davidson, Best Value Manager, NHS Grampian (Observer)

Mr Garry Mortimer, (title), NHS Grampian (Item 4)

Mr David Sullivan, (title), NHS Grampian (Item 5)

Mrs K Booth, Minuting Secretary

Item / Subject / Action
1. / APOLOGIES
Apologies were received from Mr Richard Carey, Mr David McConnell, Mr Cameron Revie and Mr Barry Jenkins.
2. / MINUTE OF MEETING HELD ON 24 June 2008
The Committee agreed the minute was an accurate record of the meeting.
3. / MATTERS ARISING FROM EARLIER MEETINGS
The Committee noted the items on the Action Sheet and the following actions were agreed:-
Overseas Staff in NHS – pre-employment checks
Fraud Strategy CEL 3 (2008)
Discretionary Points Action Plan Report
Follow Up of High Priority Recommendations
The Committee noted that the above items from the Action Sheet are to be brought back to a futuremeeting of the Audit Committee. / BJ
3.1 / Write Off Report
Mr Gall advised that this paper gave further clarity of the background on the termination of a lease for an ultrasound scanner which resulted in a fruitless payment being made by NHS Grampian of £34,311.
The decision to discontinue use of the equipment was made by the Head of Ultrasound following continued complaints from Obstetricians and based on the unacceptable clinical risks of incorrect diagnosis. The Joint Medical Equipment Committee (JMEC) acquired the new scanner to replace the leased scanner to minimise disruption to the service and to achieve the best value for money solution for NHS Grampian.
The Committee noted the report and requested Internal Audit to look into why the leasing company was still being paidwhilst there was recorded evidence of a catalogue of equipment failures. Internal Audit to produce detailed report with recommendation to the December Audit Committee meeting.
The Committee also asked for additional information on the basis of the fruitless payment and for assurances that all efforts had been made to minimise this payment.
Clarity of Future Papers
The Chair of the Audit Committee asked that future papers coming to the Committee for noting/decision should explain acronyms by stating them in full in the first instance, e.g. the Joint Medical Equipment Committee (JMEC). The acronym to be used thereafter. / PWC
AFG
ALL
4. / UPDATE ON BACKLOG MAINTENANCE
Mr Garry Mortimer gave an update on the report which was submitted to the Asset Investment Group in May 2008 on the backlog maintenance relating to NHS Grampian properties highlighting the backlog needs and risks. Currently three of five property related facets were assessed across Grampian namely 1) physical condition, 2) fire safety & statutory compliance and 3) energy performance.
The remaining two facets yet to be assessed are functional suitability and space utilisation. Mr Mortimer reported that reduction of backlog was best addressed through increased capital investment in new infrastructure (e.g. the proposed Emergency Care and Out-Patient centres) although this will be supported by annual revenue allocations where possible. Failure to invest at appropriate levels would simply increase backlog day on day, year on year potentially affecting patient and staff safety and disruption to clinical activity due to accelerated deterioration.
The Committee noted the report and requested that Mr Mortimer give a verbal 6 month update and provide an annual report to the Committee through the Asset Investment Group. Mr Mortimer also to provide graphical projection of expected backlog maintenance over the next few years reflecting all issues, not just the impact of new infrastructure. / GM
5. / UPDATE – DEVELOPMENT OF CHANGE PROGRAMME
Mr David Sullivan gave a slide presentation update on the Development of Change Programme across Grampian. He gave a summary background of the Key Change Programme and advised that Internal Audit aided in the set up of the process and will develop annually. Mr Sullivan spoke on each slide expanding on programme plans and scorecards. The NHS Board Remit and Responsibilities slide was highlighted and Mr Sullivan thanked Internal Audit for their collation of information from the various Committees/Groups. He suggested that the Audit Committee should receive a more comprehensive report on the Capital Programme through Asset Investment Group. Internal Auditors will continue to give assurance on Better Care Without Delay progress.
The Committee noted the report. A copy of the slide presentation to be distributed to Committee members along with the unapproved minutes for noting. / PWC
KB
6. / EXTERNAL AUDIT
Mrs Linda Porter gave Mr Dave McConnell’s apology and explained that Mr McConnell had a clash of various Health Board Audit Committee meetings on the same day as NHS Grampian Audit Committee meeting.
6.1 / Audit Scotland Best Value follow-up Review 2007/08
Mrs Porter highlighted nine actions agreed in the 2005/06 Baseline Review of Best Value which was carried out by Audit Scotland and reported that NHS Grampian was making good progress in taking forward the actions. For example:
  • Increasing Awareness of BV principles through the Appointment of a Best Value Development Manager
  • Reinforcing a culture of continuous Performance Improvement
  • Joint Approach to Performance and Planning through the Appointment of a Manager to update Health Plan
  • Strengthen Governance System through implementation of an integrated Assurance Framework
  • Change and Innovation Programme – Five directly accountable programmes
  • More focus on Sustainable Development including review of Scottish Government’s Good Practice Toolkit and action taken accordingly
  • System-wide Equality of Opportunity – NHS Grampian policies/strategies Equality and diversity Impact Assessed.
  • Regional/National policy and planning - Network developments and regional challenges.
Ms Alison Davidson, Best Value Development Manager welcomed the opportunity to build on work done by Audit Scotland. She commented that Mr Sullivan’s presentation links in well ensuring Best Value principles are consistently applied. She advised there were lots of opportunities to identify real benefits for NHS Grampian to work in this way.
Mrs Porter reported that Audit Scotland were reviewing their approach to the audit of BV at a Corporate level and developing a number of toolkits for use across all Health Boards e.g. first one is looking at resources/financial management. When toolkits are available they can be used as a self assessment toolkit.
6.2 / Final Report on the 2007/08 Audit
Mrs Porter gave a detailed report highlighting the following areas:-
  • Financial Position
  • Financial Statements
  • Performance
  • Best Value
  • Governance

She reported that NHS Grampian faces a number of challenges in 2008/09 which include:-
  • Capital Programme – Three major capital projects with a combined budgeted cost of £177 million, spread over several years.
  • 18 Week Referral to Treatment Target by December 2011.
  • Introduction of International Financial Reporting Standards (IFRS) – IFRS implementation extended by a year – IFRS compliance by 2009/10 financial year.
  • Scottish Government Health Directorate – Performance Management based on a National Performance Framework.
  • Efficiency and Future Funding – Budgets for 2008/09 and immediate future need to be managed within tighter funding regime.
  • Equal Pay – Equal Pay Directive – potential liabilities
These challenges are recognised by the NHS Grampian Board and steps are being taken through the planning process to address them. Audit Scotland to continue to monitor the Board’s progress on these key issues.
The Committee noted the report.
7. / INTERNAL AUDIT
7.1 / Update on High Priority Recommendations
Mr Gray highlighted the four main headings giving a summary of progress made in relation to the implementation of high priority Internal Audit recommendations:
  • Waiting Times
  • Clinical Governance
  • Workforce/Pay Modernisation
  • Non-Clinical Services
Report NHSG06/15 – Business Continuity Planning - Dr Cameron raised concern that General Managers have reported there is lack of staff resource to finalise plans.
The Committee noted the report and asked that Internal Audit provide a separate report to the December Audit Committee meeting. / PWC
Responsible Officer of the Emergency Planning Steering Group to be invited to attend the December Audit Committee meeting to give verbal update. / BJ
7.2 / Internal Audit Progress Report
Mr Gray reported on the key findings arising from the Internal Audit reports completed and issues since the last Audit Committee meeting.
Miss Tollerton highlighted additional work undertaken in relation to key matters:-
Better Care Without Delay: Establish a comprehensive/detailed action plan.
Area Clinical Forum : Dr Cameron acknowledged the Committee’s appreciation of the Internal Auditors’ review of the constitution and the process for appointment of the Chair of the Area Clinical Forum. This process should be accepted by each Committee and Chairs appointed to the Committees.
Best Value: Advising new Best Value and Sustainable Development Manager on current status of best value activity within NHS Grampian. Work ongoing and will continue.
Endowment Funds: The report noted the level of funds held continues to rise. Mr Gall commented this was because of the generosity of the Public giving money in donations or legacies. Mr Gall advised that monies received were invested and highlighted the current stock market instability was a cause for concern. Mr Stephen commented that a substantial amount of money from Endowment Funds was used to help staff for individual development, team development, equipment or educational fees.
The Committee noted the report and asked for an update to be provided at the December Audit Committee. A strategic audit plan is to be brought to a future meeting of the Audit Committee. / PWC
7.3 / Property Transactions Monitoring
Mr Gray introduced this report which was a review of the property transactions completed by NHS Grampian in the financial year 2007/08. This is a statutory audit which must be carried out by all Health Boards.
Mr Gall reported that the importance of ensuring full accordance with procedures on the single tenders will increase as there is considerable increase in capital investment with extremely tight deadlines over this next few months and years. The audit committee will therefore require assurance that full probity is being followed.
The Committee noted the report and agreed that the register of Single Tender transactions should be presented to the Audit Committee on a regular basis. / PWC
BJ
8. / FINANCIAL POSITION AND KEY FINANCIAL RISKS
Mr Gall gave a verbal report on the financial position and highlighted some key financial risks namely:
  • Efficiency Savings
  • Energy Costs
  • Equal Pay
Mr Gall reported that the financial position was stable for the current year.
The Committee note this verbal report and agreed that no further updates will be given at future meetings as this issue is discussed at Board and Performance Governance Group meetings. The Audit Committee to focus more on effectiveness of systems, processes and controls and how well they were functioning.
9. / Items for information on request.
Hard copy/electronic copy available from Mr Barry Jenkins. / BJ
10. / AOCB
Backlog Maintenance
Mr Gall asked if members of the Audit Committee would be interested in a physical walkround with Eric Murray and Gary Mortimer to inspect backlog maintenance issues. Alan Gall to discuss with Gary Mortimer.
Future Dates of Audit Committee Meetings
Councillor Howatson suggested review of Audit Committee meeting dates/times/venue. Mr Barry Jenkins to liaise with Councillor Howatson in first instance and seek comments from Audit Committee members. / AG
BJ
11. / DATE OF NEXT MEETING
16 December, 2008 at 10am, Conference Room, Summerfield House.

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