CWM TAF UNIVERSITY HEALTH BOARD CONFIRMED MINUTES OF THE MEETING OF THE AUDIT COMMITTEE HELD ON 5 OCTOBER 2015 AT YNYSMEURIG HOUSE, ABERCYNON

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1 CWM TAF UNIVERSITY HEALTH BOARD CONFIRMED MINUTES OF THE MEETING OF THE AUDIT COMMITTEE HELD ON 5 OCTOBER 2015 AT YNYSMEURIG HOUSE, ABERCYNON PRESENT Mr G Bell - Independent Member (Chair) Dr C Turner - Independent Member Cllr M Forey - Independent Member IN ATTENDANCE Mr S Webster - Director of Finance Mr J Palmer - Director of Primary, Community and Mental Health (in part) Mr R Williams - Board Secretary / Director of Corporate Services & Governance Mr H Evans - Head of Corporate Finance Mr J John - NHSSSP - Internal Audit & Assurance Mr M Jones - Wales Audit Office Ms J Joyce - Wales Audit Office Mr J O Sullivan - Graduate Management Trainee (WHSSC) Ms L Vincent - NHSSSP - Internal Audit & Assurance Ms C Llewellyn - Board on Board Welsh Government Pilot Programme (Observing) Miss G Roberts - Head of Corporate Services Mrs J Maggs - Secretariat AC/15/157 AC/15/158 AC/15/159 WELCOME AND INTRODUCTIONS Mr G Bell, Chair, welcomed everyone to the meeting and those present introduced themselves. APOLOGIES FOR ABSENCE Apologies for absence had been received from: Mrs M K Thomas, Mr D Jones and Mr I Virgil. DECLARATIONS OF INTERESTS There were no Declarations of Interests. 1

2 AC/15/160 UNCONFIRMED MINUTES OF THE AUDIT COMMITTEE MEETING HELD ON 6 JULY The minutes of the meeting held on 6 July 2015, were confirmed as accurate, subject to an amendment on page 6, item AC/15/137 Mr H Evans made reference to the comment in relation to overspend related to an overspend for NHS Wales within the Welsh Risk Pool, rather than solely Cwm Taf UHB. There were also agreed amendments to a number of typographical errors. The minutes of the meeting were confirmed subject to the corrections raised. AC/15/161 AUDIT COMMITTEE ACTION LOG Item 15/041 Medical Agency Managed Service Members NOTED that the Health Board had a shared interest with MEDACs and a response from the HMRC was awaited. Item 15/042 PONT Charity (THET funding) It was NOTED that not all the related funding had been claimed and that further progress would be made once the related THET closure report had been received by Trustees. Item 15/088 Standards of Behaviour Policy - Members NOTED the progress being made related to piloting the electronic process in parallel with the paper based process, the latter was considered a cumbersome process to coordinate. Item 15/133 Local Counter fraud Mr John Palmer gave assurance to Members that the matters raised in relation to Dental at the last meeting were being addressed. Members NOTED that the Audit Tracker captured the reported current arrangements from a directorate perspective. Item 15/144 Members NOTED that arrangements had been made for CCLA Charitable Funds Investment Management to present to the Annual meeting of the Trustees in November AC/15/162 AC/15/163 MATTERS ARISING There were no matters arising not contained within the action log. LOCAL COUNTER FRAUD SERVICES REPORT Mr Steve Webster presented the report in the absence of the Local Counter Fraud Officer. Members NOTED: Dental claims (point 2.4.) which had been discussed by Mr J Palmer and the revised flow chart which was distributed to the Committee for information and assurance. 2

3 Compensation had been received from ebay (point 2.9) due to a member of staff running a business from the workplace, this person no longer worked for the health board A quality assessment had been carried out by NHS Protect (point 2.10) which tested the awareness of staff on the Counter Fraud and Standards of Behaviour Policy Current cases under investigation (point 3.1) Specific case where a guilty verdict was returned (point 3.2) Mr Steve Webster would catch up on the detail of the case with Mr Dave Jones with a view to ensuring organisational communication if appropriate to learn lessons A serious allegation (point 3.5) that a GP Practice had altered patient records, this was under review by the Deputy Medical Director Members NOTED the content of the report and the ongoing actions being taken. Members also NOTED the work plan and the number of days available to the organisation. AC/15/164 AUDIT RECOMMENDATIONS TRACKER The report on the Audit Recommendations Tracker was RECEIVED and NOTED by the Committee. In presenting the report, Mr Robert Williams, Board Secretary / Director of Corporate Services, apologised for the size of the print. A summary of the reported progress in each of the areas of Audit activity was made particularly around the outstanding recommendations. Members were invited to submit any comments / amendments on the Audit Tracker for consideration to the Board Secretary. An overview of the reports was provided, 34 internal audit reports had been received with 171 recommendations. 127 recommendations were reported as completed and signed off by executive leads. Members NOTED the 44 outstanding recommendations of which 39 were outside the intended completion dates. Discussion took place around when lead Directors with responsibility would be called to account to the Committee for any outstanding actions that had lapsed beyond agreed implementation dates. Members AGREED to give the matter further consideration and send comments directly to Mr Robert Williams. In the interim Mr R Williams and Mr S Webster agreed to draft a side of A4 outlining an approach to be taken with out of date timescales for implementing audit related recommendations. Members RESOLVED to: NOTE the update report and the summary of progress 3

4 ENDORSE the progress made to date and further actions and AGREED to provide further comments on the progress of the Audit Tracker. AC/15/165 PROCUREMENTS AND PAYMENTS REPORT (01/06/15 31/08/15) Members reviewed and discussed the actions outlined within Appendix 1 and Appendix 4 and RESOLVED to: ENDORSE the actions approved by the Chief Executive. Provide clarity on the costs of Charter Housing Association (appendix 1) and AGREED that Mr S Webster would report back at the next meeting. AC/15/166 ORGANISATIONAL RISK REGISTER Mr Robert Williams presented members with the latest version of the Health Board s risk register. Members were informed that the register was reported routinely to the Integrated Governance Committee and the Corporate Risk Committee and that assigned risks were considered by Committees of the Board as appropriate. Members NOTED that an update would be presented to the next Executive Board It was confirmed that improvements had been made in that directorates and localities were now regularly completing exception reports that were routinely reported quarterly at the two key sub Committees of the Board. Members NOTED that whilst arrangements relating to risk management within directorates continued to mature, there were areas for improvement identified, not least the adoption and development of the Datix risk module. Mr Robert Williams explained that prior to the current review there were some adjustments agreed at various committees that needed to be reported into Audit Committee and that related to the Clinical Coding risk. Members NOTED that Category A response times had improved following the additional work undertaken working with the Welsh Ambulance Service, resulting in the risk rating reducing from 20 to 16 and the controls strengthened. Members NOTED that the All Wales Sickness Absence Policy had recently been agreed and arrangements had been put in place in Cwm Taf into how this policy would be applied, this included training for managers. The Members: NOTED the updates within the report 4

5 DISCUSSED the identified risks assigned to the Board Sub Committees and whether any other risks needed to be considered and NOTED that a more substantial discussion would take place at the next Integrated Governance Committee. AC/15/167 LOSSES AND SPECIAL PAYMENTS REPORT FOR THE PERIOD 01/06/15 31/08/15 The report of the Director of Finance advising the Audit Committee on the losses and special payments made by the UHB for the period to 1 st June 2015 to the 31 August 2015, as required in Standing Financial Instructions was RECEIVED and NOTED. Mr Huw Evans provided members with an update on the losses and the special payments for the period. Members were informed that the number of personal injury claims continued to reduce, however the number of medical negligence claims had increased substantially. Discussion took place on some key issues including the increase in medical negligence cases; the progress in the Ysbyty Cwm Rhondda construction dispute and the projected overspend which had been included as a provision in the UHB financial plan. Members NOTED that the plan would continue to change as related work progressed and further updates were received on each claim. Members were also aware that scrutiny of claims in particular was undertaken by the related concerns/claims panels reporting to another Board Sub Committee. Members NOTED the losses and special payments made for the year 1 st June 2015 to 31 st August AC/15/168 BOARD ASSURANCE FRAMEWORK Mr Robert Williams reminded members of the progress in developing the Board Assurance Framework and the ongoing work since the Board meeting in March Members were supportive of the work to date and felt it was important to maintain the framework as a dynamic document and to communicate its content effectively across the organisation. Members DISCUSSED and NOTED the populated Board Assurance Framework and confirmed that it met the requirements of the Committee. AC/15/169 STANDING ORDERS AND STANDING FINANCIAL INSTRUCTIONS Mr Robert Williams, Board Secretary/Director of Governance, presented the report. Members NOTED a number of proposed changes to the documents including: 5

6 Adding in the University status Correct contact details for the Board Secretary Recognising the work to decouple the Joint Governance Framework for WHSSC and EASC Including the Capital Programme Board formally as a Board Sub Committee Adding in the new Board Sub Committees; Primary Care and the Academic Partnership Board and Changing the timescale for the issuing of Board and Sub Committee papers from the current 10 days to one calendar week prior to the meeting date. Members NOTED the changes set out in the report and ENDORSED the proposed amendments to the Standing Orders and Standing Financial Instructions. Members also NOTED the ongoing work to de-couple WHSSC and EASC Joint Governance Framework. AC/15/170 REVISED SCHEME OF DELEGATION Mr S Webster presented the report. Members NOTED the work to date. Following discussion of the draft schedule it was agreed that a generic description of delegated authority needed to be developed. Members were offered the opportunity to provide additional feedback on the information provided outside of the meeting. Members NOTED an ongoing period of engagement and consultation across the UHB with a view to bringing a revised scheme of delegation to the Audit Committee for consideration at its January 2016 meeting. Members RESOLVED to: NOTE the reported progress made; and ENDORSED the draft Schedule of additional delegations for further consultation. AC/15/171 REVIEW OF THE AUDIT COMMITTEE TERMS OF REFERENCE Mr Robert Williams informed the Committee that there were no changes required to the Terms of Reference over the last year. Following discussion the following amendments were AGREED: To add in at the bottom of page 3 under External Audit discuss with the External Auditor, in line with the agreed audit plan Under Charitable Funds add a bullet point to include Annual reporting to the Trustees Under Quorum change should to must Circulation of papers ensure papers are distributed at least one calendar week in advance of the meeting. Members NOTED the Audit Committee meeting dates for 2016 including an additional date in May and as from January 2016, that 6

7 Dr Chris Turner would be taking over the Chair and the meeting on the 18 th January 2016, would be Mr Geoff Bell s last Audit Committee Meeting as a member. AC/15/172 AUDIT COMMITTEE ANNUAL SELF ASSESSMENT QUESTIONNAIRE Mr Robert Williams distributed copies of the questionnaire to the Committee. Dr Chris Turner raised concerns regarding the duplication of questions, although was supportive in the overall purpose of the exercise but felt that there may be added benefit of collectively discussing some of the questions posed. Cllr Mike Forey considered that some of the questions were complex in nature and queried whether the questionnaire was overly complicated. Overall, Members felt that the questionnaire s purpose was to test the effectiveness of the Committee although considered that some of the questions were testing the effectiveness of the individual. Members NOTED that the questionnaire was extracted from the Audit Committee Handbook and was recommended as best practice on a national NHS Wales approach. Members NOTED the results and it was AGREED that if any independent members had any other related concerns, following reflection on the discussion and feedback, to speak with Mr Robert Williams. AC/15/173 CHARITABLE FUND BALANCES Members were advised of the activity and balances on charitable funds for the period 1 st June 2015 to 31 st August The balance at the end of August was confirmed as 1.159m, which was an increase of 7k since the last report. Mr Huw Evans informed members that as agreed at the last meeting the following actions had been taken: a new General Purpose Fund had been set up for Prince Charles Hospital, following the receipt of a legacy Public Liability Insurance had been purchased for fundraising activities Giving to Pink Initiative had raised 52,626 at the end of August which was in line with their targets. Members NOTED the contents of the report. AC/15/174 INTERNAL AUDIT PROGRESS REPORT 2015/16 Mr James Johns updated the Audit Committee on the progress made since the last meeting. In addition to the finalised audits reported, Members NOTED that four assignments were currently at or near 7

8 draft report stage. Fieldwork had also commenced in a number of areas. The following reports were received: Costing Arrangements Report Mr James John updated the Committee on the key findings regarding Costing which had been commissioned by Mr S Webster linked to work ongoing across Wales. Members NOTED that the audit was examining how costs for clinical interventions were established and how this could be developed for a unit cost. Additional work would be required to engage the clinical directorates to understand the information received and identify the flaws in the data for the benefit of the organisation. Members felt that the tool was useful and could provide more accurate data to reduce costs. Members NOTED that all of the recommendations had been agreed and the report was well received. A short discussion took place around the usefulness of ongoing as a management response and how milestones might be identified to assist the understanding of related progress. Members were asked to examine the high risk recommendations in more detail and respond to the appropriate Director if any concerns were identified. Members NOTED that Mr S Webster would be taking forward related work in response to the audits findings. Directorate Governance 2014/15 In accordance with the 2014/2015 internal audit plan, a review of Directorate Governance within Cwm Taf University Health Board was undertaken. The objective of the audit was to evaluate and determine the adequacy of the systems and controls in place for Directorate Governance in order to provide reasonable assurance to the UHB Audit Committee that risks material to the achievement of system objectives were managed appropriately. Issues were identified which needed to be addressed by the Directorates involved although substantial assurance was reported. Mr S Webster whilst welcoming the outcome of the audit, considered it was important to note the limited scope of the reported audit work. Members NOTED the contents of the report. Environmental Sustainability Report Members discussed the findings of the report and NOTED that substantial assurance was received. One amendment was suggested in the report which referred to a Trust rather than the 8

9 Health Board. The report would also be shared with the Corporate Risk Committee. 2014/15 Annual Quality Statement Members discussed the findings of the report and NOTED that substantial assurance was received and that the report would be shared with the Quality and Safety Committee. Staff Overpayments Members discussed the findings of the report. For the purpose of the Audit Tracker the recommendations were agreed for: - Temporary administration / clerical/ bank staff - Emphasising the responsibility of managers around termination forms and processes - Tracking a number of payments and reporting to an appropriate authority (e.g WFIS Board which Jo Davies had set up) Members NOTED the report and the actions intended by officers to mitigate the issues raised as a consequence of the annual audit of accounts. Directorate Governance Facilities Members discussed the findings of the report. Members NOTED that reasonable assurance was received. AC/15/175 EXTERNAL AUDIT WALES AUDIT OFFICE AUDIT COMMITTEE UPDATE Members discussed the findings of the update received and NOTED that the work was largely completed. WALES AUDIT OFFICE TRAUMA AND ORTHOPAEDICS MANAGEMENT RESPONSE Members received the management response and NOTED that some elements would be addressed at the monthly Clinical Business Meeting (CBM) and also through the work of the Quality and Safety Committee. It was AGREED that a follow up report would be received at a future meeting. WALES AUDIT OFFICE FINANCIAL STATEMENTS MEMORANDUM Members received the Financial Statement Memorandum. The following areas of the report were discussed 1. A significant amount of overpayments of salary were made during the year because line managers failed to notify NHS Wales Shared Services Payroll Services of staff leaving on a timely basis. 9

10 2. The Board had an adequate internal control environment to reduce the risk of material misstatement to the Financial statements but areas of improvement were identified. 3. The Auditors had difficulty in getting working papers to support parts of the account on a timely basis. Members NOTED the report. AC/15/176 AC/15/177 AC/15/178 AC/15/179 ITEMS FOR REFERRAL TO OTHER COMMITTEES Members NOTED that a number of reports received would be shared with sub committees of the Board as recorded within the minutes. AUDIT COMMITTEE MEMBERS TO MEET WITH AUDITORS Members considered that it was not necessary to meet in private with the Auditors. ANY OTHER BUSINESS Dr Chris Turner noted that this was Mr Geoff Bell s last Audit Committee meeting as Chair and on behalf of the Committee wished to thank Mr Bell for his commitment to the work of the Committee over many years, the most recent being in the capacity of Chair. Members NOTED that Mr Bell would have one further meeting as a member of the Committee, prior to his term of office as an Independent Member of the Board ending in March DATE OF NEXT MEETING The next meeting of the Committee was scheduled to take place on 18 January Mr Geoff Bell, Chair 10