AUDIT COMMITTEE. Minutes of the Meeting Held on In the Boardroom, Ysbyty Gwynedd, Bangor

Transcription

1 AUDIT COMMITTEE Minutes of the Meeting Held on In the Boardroom, Ysbyty Gwynedd, Bangor Present: Dr C Tillson Ms J Dean Rev H M Davies Mr K McDonogh (Chair) In Attendance: Mr P Carter Mr M Edwards Mr B Evans Mr D Harries Mr G Lang Mrs G Lewis-Parry Ms K Parry Ms M Popplewell Mrs M Townsend Mr M Usher Mrs W Walsh Acting Assistant Director of Finance Audit Manager, Wales Audit Office (WAO) Acting Director of Finance Head of Internal Audit, Shared Services Partnership Acting Chief Executive Director of Governance & Communications Acting Head of Corporate Affairs Assistant Director, Risk & Assurance Audit Manager, WAO Director, WAO Internal Audit Manager Agenda Item Action AC14/34 APOLOGIES FOR ABSENCE Received on behalf of Prof M Makin, Mrs G Finn, Mrs N Phillips and Mr Karl Woodward AC14/35 DECLARATIONS OF INTERESTS None AC14/36 MINUTES OF THE MEETING HELD ON AC14/36.1 Accuracy Approved. AC14/36.2 Review of Actions The summary action plan was reviewed and updates provided. 1

2 AC14/37 Annual Governance Statement AC14/37.1 Ms M Popplewell reported that further refinements had been made to the draft document since circulation with the papers, taking into account comments from internal and external auditors. AC14/37.2 Some typographical and grammatical issues were pointed out on pages 6, 23, 25 and 27. Ms J Dean requested that the development of an action plan from the staff survey be reflected on page 8 under the section on Local Partnership Forum (LPF), and that Appendix 1 should reflect her Chairing the Quality & Safety Committee as from September She also queried whether Executives were in attendance or members of the LPF. MP AC14/37.3 The Committee agreed the Annual Governance Statement (pending the amendments noted) which would be presented to the Chief Executive for a final check prior to being presented formally as part of the Financial Accounts for AC14/38 Review of Annual Accounts and Financial Statements AC14/38.1 Mr P Carter confirmed that the draft annual accounts and financial statements had now been audited and a range of amendments made with the auditors agreement. These were detailed in a summary document which was tabled for members information. AC14/38.2 Mr B Evans wished to reaffirm that the revenue position of the Health Board showed a small end of year surplus, however, the Committee needed to be clear that the organisation did not meet its statutory target to break even without the provision of additional brokerage of 2.25 million. The end of year position was however close enough to balance to avoid the need to have the accounts qualified. AC14/38.3 Mr Evans drew members attention to Table 1 within the paper which detailed the end of year position against key financial targets. He wished to confirm that the accounts had been produced through efficient and appropriate processes. AC14/38.4 Members sought clarification around pooled budgets, year on year expenditure for hospital and community health services, a correction required in relation to a declaration of interest for Ms J Dean, the exit of the former Chief Executive and a declaration of interest for Mrs M Burrows. It was noted that many of the issues raised had been addressed in revisions to the accounts since the draft had been circulated. Mrs G Lewis-Parry would forward a copy of Mrs Burrows declaration of interest form for GLP AC14/38.5 The Committee accepted the report and approved the Annual Accounts for on behalf of the Board. AC14/39 Letter of Representation The Committee approved the Health Board s Letter of Representation as part of its approval of the financial accounts. 2

3 AC14/40 Receipt of Auditor General s Report to Those Charged with Governance / Audit of Financial Statements Report AC14/40.1 Mr M Usher confirmed that the audit of the accounts had has gone very well and he acknowledged the excellent preparation by the finance team and others within the submission date. He stated however that a narrative report would be required on the financial position and planning arrangements for the Three Year Plan, but this was consistent across many of the Health Boards in Wales. AC14/40.2 Mr M Edwards drew members attention to paragraph 10 of the report which stated that there were no uncorrected misstatements within the financial statements which was positive to note. He highlighted the narrative that referred to the figures relating to Welsh Health Specialised Services Committee. He updated the audit Committee confirming that no amendments had been identified by the auditor of the Welsh Health Specialised Services Committee. AC14/40.3 Mr M Edwards referred to the statement within paragraph 12 that there were corrected misstatements which the Committee should be aware of. It was noted that whilst none of these impacted on the overall financial position, some of the sums involved merited further explanation as detailed in Appendix 4. Mr Edwards highlighted in particular a correction required to disclose Contingent Liabilities arising from retrospective continuing health care claims, and an identified misstatement of salary for the former Chief Executive. Mr Edwards outlined further work undertaken by WAO to assess whether the payments were disclosed appropriately, and which had provided clear evidence of the advice received on the legal settlement. AC14/40.4 Mr M Edwards indicated that a legacy issue from regarding the asset ownership of the Fron Heulog School of Nursing in Bangor remained unresolved, and WAO would strongly encourage the Health Board to secure a resolution to the issue. PC AC14/40.5 Mr M Edwards referred members to paragraphs regarding the accounting treatment of indexation, noting that the software used within the Health Board did not currently allow for an accurate quantification of any mis-statements, although it was unlikely that this would impact upon the bottom line. In response to a question from Ms J Dean, Mr M Usher confirmed that this requirement had recently been picked up through additional clarification within the manual for accounts and WAO were not requiring Health Boards to retrospectively account for the treatment of indexation, however, this should be undertaken to ensure a full and appropriate disclosure in AC14/40.6 Mr M Edwards highlighted that no material weaknesses were identified in internal controls, however, WAO would advise that a dialogue be maintained around the emerging issues relating to the Ysbyty Glan Clwyd capital programme. Mr Edwards also drew the Committee s attention to three specific recommendations on page 11 of the report. AC14/40.7 Mr M Usher summarised that additional resource at year end meant the Health Board had been able to live within its resource limit, and this was not an 3

4 unprecedented position across NHS Wales. The financial planning and implications for the coming year were a matter of concern and would be the subject of early discussions in It was also noted that the Delivery Unit intended to arrange a detailed review with the new Chief Executive and Chairman, and there would be further scrutiny through the Public Accounts Committee in July. Mr Usher felt the Board faced significant issues around governance and financial risk which would need to be addressed over the next few weeks. AC14/40.8 Mr G Lang suggested that the wording of paragraph 18 regarding the Annual Governance Statement be softened to reflect that further editing was required as opposed to extensive re-editing. He also noted that paragraph 21 should read has developed not is developing. Mr M Edwards accepted the comments and undertook to make the amendments. ME AC14/40.9 The Committee received and noted the report as part of its approval of the financial accounts. AC14/41 Head of Internal Audit Opinion and Annual Report AC14/41.1 Mr D Harries introduced Mrs W Walsh to the Committee, and presented his Annual Report and Audit Opinion. He summarised that the Board could take limited assurance that arrangements to secure governance, risk management and internal control, within those areas under review, are suitably designed and applied effectively. He indicated this opinion was based upon the outcome of audit work, including both draft and final reports. Mr Harries reported that internal audit s quality assurance and improvement programme had been scrutinised by Shared Services and it was confirmed that the mandatory requirements of the Public Sector Internal Audit Standards had been met. AC14/41.2 Mr Harries drew the Committee s attention to: How the audit opinion was formed across assurance domains; Figure 1 which provided an audit summary by assurance domain; A summary of the audit review of Standards for Healthcare Services; Positive view of the star chamber approach for five core standards which highlighted a need for greater scrutiny and challenge across Standards 6, 7 and 23; The delivery of the audit plan in accordance with the scheduled agreed with the Committee; A graphical portrayal of summaries of audit ratings, and noting that the 1 receiving no assurance was now featuring on Health Board agendas; Appendix F which outlined performance against key indicators, and highlighted some challenges in obtaining managers agreement to draft reports, however, there was a level of confidence this would increase going forward. AC14/41.3 Mr Harries wished to thank the Committee, BCU staff, and Wales Audit Office for the positive working relationship with internal audit. AC14/41.4 Dr C Tillson thanked Mr Harries for his report, and expressed concern on behalf of the Committee regarding the number of review areas receiving limited assurance. Mr G Lang referred to the Serious Incident Reporting review which had been given no assurance, and assured the Committee that this would receive urgent GL 4

5 action and review. AC14/41.5 Ms J Dean supported internal audit involvement in the Star Chamber approach, and enquired how significant the information gained through that process was. Mr D Harries felt this approach enabled Internal Audit to provide more robust assurance to the Board that core standards were being met. AC14/41.6 The Committee noted the report. AC14/42 ISSUES OF SIGNIFICANCE The Committee made some final amendments to the draft Annual Governance Statement, and agreed it be submitted as part of the Financial Accounts for The Committee received the Head of Internal Audit Opinion and Annual Report for The Committee received the Auditor General s report and approved the Annual Accounts for on behalf of the Board. AC14/43 ANY OTHER BUSINESS None raised. AC14/44 DATE OF NEXT MEETING Thursday 10 th July 10am, Bangor Betsi Cadwaladr University Health Board is the operational name of Betsi Cadwaladr University Local Health Board. 5