Minutes of the meeting ofa joint meeting of the Governance and Audit Committee

and Board of the Patient and Client Council (PCC),

held on Wednesday 30th June 2010 in

Lesley House, Wellington Place, Belfast at 11.30am

Present:

Board members:

Mr Brian Compston (Chair of Governance and Audit Committee)

Cllr Mrs Elizabeth Adger (member of Governance and Audit Committee)

Mr Errol Hutchinson (member of Governance and Audit Committee)

Dr Paul Coulter

Miss Elaine Kelly

Apologies:

Mrs Rena Shepherd

In attendance:

Mrs Maeve Hully, Chief Executive, PCC

Mr Sean Brown, Head of Development and Corporate Services, PCC

Mrs Helen Mallen, Board Secretary

Mr Simon McGrattan, BSO Finance

Mr John Poole, KPMG

Ms Eimer McGurk, KPMG

  1. Welcome

This meeting was convened to receive thePCC’s Annual Accounts and report from KPMG and to approve the audited accounts for year ended 31 March 2010. As the meeting involved Governance and Audit Committee Members and other PCC Board Members, it was proposed that Dr Coulter Chair the meeting. This was agreed.

Dr Coulter welcomed everyone and introductions were carried out.

  1. Annual Report and Accounts

Mr Poole and Ms McGurk represented KPMG who were engaged by the Northern Ireland Audit Office (NIAO) to audit the accounts of the PCC. Their report was presented to assure the Governance and Audit Committee and Board to on the true and accurate accounts of the Patient and Client Council as prepared by the Business Services Organisation.

Mr Brown outlined the Annual Accounts and Report for 2009/10. The report included:

  • Foreword by the Chair of the PCC, reflecting on the first year of the PCC
  • Chief Executive’s Statement which reflects on some of the key achievements of the PCC in its first year.
  • Management commentary, which is based on the operational plan provided at the Board Meeting in May 2010 by Mrs Louise Skelly, Head of Operations.
  • Directors Report, outlining statutory background, committees’ structure, registers of interest, functions of Board and appointment of auditors.
  • PCC Accountability Structures
  • Statement of Accounts year ended 31 March 2010.

This Annual Accounts Report will be submitted to the DHSSPSNI, then to the NI Assembly. Dr Andrew McCormick, Permanent Secretary will go before the Public Accounts Committee with the accounts.

Dr Coulter confirmed that a lot of the material in this report has been submitted to the Board over the last year.

Mr Brown outlined the section of the Report specific to the Accounts. This included:-

  • Statement of PCC and Chief Executive’s responsibilities
  • Certificates of Chairman and Chief Executive
  • Statement of Internal Control. This document, signed by the Chief Executive as the Accountable Officer, provides assurance to the DHSSPS on how the PCC runs its business. This was presented to the Board in June 2010.
  • Audit Certificate. This will be inserted by the NIAO once they approve the accounts.
  • Net Expenditure Account for year ended 31 March 2010.

Mr McGrattan said that the laying of the accounts for the PCC will be on the 6th August 2010. There is a standard format of layout of accounts for Non-Departmental Public Bodies. He went through the accounts and outlined the following:

  • Net Expenditure is what you have spent from the money funded by the DHSSPS
  • Operating Expenses detailed the previous year’s expenditure for comparison. This was based on the legacy Health and Social Services Councils (HSSCs). As the HSSC accounts were managed by the Health and Social Care Boards there is a total operating expense figure but no detailed breakdown. Next year the PCC will be able to show line by line comparison with this year’s accounts.
  • Revenue Resource Limit (RRL) is the figure that the DHSSPS has given the PCCpermission to spend. The PCC RRL for 2009/2010 was£1.549 million
  • The PCC spent £1.3 million of its RRL, an underspend of £203,000.
  • Mr Brown had provided a paper at the Board Meeting held on the 22 June 2010, showing where the underspend occurred.
  • In addition to the RRL there was a Capital Resource Limit (CRL) of £10,000. This money was used to renew fixed assets, specifically requirements for information and communication technology (ICT).
  • Page 74 of the report details the Financial Performance Targets. The PCC is required to break even on an annual basis by containing its net expenditure to within 0.25% of RRL limits. With the underspend, the PCC break even position for 2009-2010 was 13.1% of the RRL.

If significant under spend occurs an organisation can ask the DHSSPS to amend its RRL during the financial year.

Dr Coulter highlighted that theunderspend occurred mainly because of issues with finding premises for the local and regional offices.

Remuneration details for non-executive and senior executive members are detailed in the report.

Although the report contained pen portraits for all Board Members, it was agreed that these should be removed from the document before submission to the NIAO.

3. External Audit Report, KPMG

Mr Poole explained that KPMG would usually meet with the Governance and Audit Committee when the external audit report is in early draft. With delays in obtaining some information from the BSO, the draft report was being presented in full for the first time.

The statutory auditor is the NIAO. They outsourced the external audit function to KPMG. KPMG will issue a certificate for the PCC to the NIAO and the NIAO will issue the final audit certificate to the PCC.

Mr Poole confirmed that KPMG are happy to give an unqualified assurance of the PCC accounts. He explained that the NIAO link with KPMG throughout the year regarding the audit work, but the NIAO will take some time to review the KPMG report before issuing the final certificate on accounts.

In accounting terms, Mr Poole said that the first year of the PCC has been difficult because the PCC came from four legacy organisations merging. The Health and Social Care Boards managed the HSSCs’ accounts using accounting standards superceded by new international accounting standards.

Mr Poole outlined the sections of the KPMG report as follows:

  1. Executive Summary

This states that KPMG have substantially completed the audit of the PCC. Their financial opinion is right to within 1% of the PCC expenditure and its KPMG’s regularity opinion that the PCC has spent its money in accordance as to what the NI Assembly gave it the money for.

Under critical matters for consideration by the Audit Committee, it was noted:

-the Patient and Client Council did not fully comply with the 2009-2010 Annual Accounts timetable

-the Patient and Client Council relied on the BSO and legacy HSC Boards for financial information

Cllr Mrs Adger said that she felt it important that the reasons for non-compliance with the timetable be recorded under the critical matters.

Mr Brown confirmed that the Customer Service Director and Chief Executive of the BSO had met with Maeve Hully in relation to delays in compliance.

Mr Hutchinson stressed that legally the PCC must meet the deadlines and does not need to state why it hasn’t in this report.

Miss Kelly highlighted that the reasons for delay have been well discussed and documented at Governance and Audit and Board meetings and the minutes are there for reference.

Members agreed that the PCC management response to the KPMG report will document the reasons for delays.

Action: Management Response to KPMG report to be prepared.

  1. Introduction
  1. Audit conclusion
  1. Key risks

The key risks identified by KPMG are detailed on pages 4-12 of the report as follows:

  • Key risk 1. First year implementation of adequate risk management, governance and accountability arrangements.

Internal audit did not identify any priority 1 risks. The key risks were discussed. KPMG recommended the inclusion of a financial update and conflicts of interest to be included on the agenda of Board Meetings. Dr Coulter confirmed that the conflicts of interest item had already been addressed.

  • Key risk 2. Reliance on BSO and HSC Boards

It was recommended that the four ledgers used for recording finance in 2009-2010 will be streamlined into one ledger for 2010-2011.

  • Key risk 3. The regularity of transaction within the newly established PCC
  • Key risk 4. Pressures on breakdown

The PCC needs to ensure adequate mechanisms in place for meeting the break even target of 0.25% of the RRL. It was noted that the budget for 2010-2011 was not finalised.

  • Key risk 5. Statement on Internal Control (SIC)

The SIC by Internal Audit is consistent with KPMG findings.

One priority 1 issue was identified by KPMG regarding compliance with one of the controls assurance standards on records management.

e.Faster closing deadline

KPMG will include the management response in their report together for the NIAO and the NIAO will re-issue the final report to the Governance and Audit Committee.

f.Capital Resource Limit (CRL)

Mr MrGrattan confirmed that the BSO has sought retrospective approval from the DHSSPS for the PCC to spend its CRL. The DHSSPS has given approval but KPMG are awaiting this approval in writing before accounts can be finalised.

Mr Poole accepted that the PCC are reliant on other organisations for financial management and procurement but stressed that the PCC are responsible for spending public money and must ensure correct procedures in place.

g. Adjusted and Unadjusted Audit Differences

Mr Poole confirmed that there were no differences in net expenditure from the drafts previously presented.

h. Conclusion

i. Annex A Minor points for attention of Management

There were no points noted.

j. Annex B Draft Certificate and Report of KPMG to the NIAO

The KPMG certificate and report to the NIAO will appear in the PCC financial statement.

Cllr Mrs Adger asked that the thanks of the Governance and Audit Committee and Board for the work of the staff be noted. Mrs Hully asked that thanks be noted for Mr Brown in particular, for the work he has done in managing this function.

4. Letter of Representation

In addition to the Annual Report and Accounts, Mr Brown presented a letter of representation from the Chief Executive to the NIAO for approval.

5.Approval of Accounts

On behalf of the Governance and Audit Committee, Mr Compston proposed that the Annual Report and Accounts and the Letter of Representation be adopted. Cllr Mrs Adger seconded this.

The Governance and Audit Committee approved the adoption of the Annual Report and Accounts and the Letter of Representation.

On behalf of the Board, Mr Compston proposed that the Annual Report and Accounts and Letter of Representation be adopted. Miss Kelly seconded this.

The Board quorate approved the adoption of the Annual Report and Accounts and the Letter of Representation.

Mr Brown thanked everyone for their attendance and input. He thanked BSO and KPMG and said that the deadlinewill be now be met for having the accounts signed off by the Chair and Chief Executive for submission to the DHSSPS by Friday 2 July 2010.

The original report and letter of representation will be submitted to the NIAO and copies will be made available to KPMG and the PCC Board.

Dr Coulter thanked everyone and closed the meeting.

Signed: ______Date: ______

Dr Paul Coulter, Chair

Signed: ______Date: ______

Mr Brian Compston, Chair of Governance and Audit Committee

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