DRAFT. Audit Committee Held on Monday 6 December 2010 commencing at 9.30 pm Rowan House meeting room, Pinderfields Hospital

Transcription

1 DRAFT Audit Committee Held on Monday 6 December 2010 commencing at 9.30 pm Rowan House meeting room, Pinderfields Hospital Present Mr I Wilkinson (Chair and Non Executive Director) Mr J Kershaw (Non Executive Director) Mr D Longstaff (Non Executive Director) In attendance Mr N Bell (Internal Audit) Mr M Howson (Internal Audit) Mr D Parker (Local Counter Fraud Specialist) Mrs S Howard (External Audit) Mr P Spinks (External Audit) Mrs M Miller (External Audit) for Item 6c. Mr A M Waite Ms R Unwin Mr A Pepper (Director of Finance) (Foundation Trust Project Director) (Assistant Director of Finance) 67.00/10 Apologies Action None /10 Declaration of interests None /10 Quorate Mr Wilkinson confirmed that the meeting was quorate /10 Minutes of the last meeting held on 20 September 2010 The minutes were accepted as a correct record of the meeting /10 Attendance Register Noted and to include Sarah Howard /10 Matters arising 72.01/10 Post Implementation Review PACS Initial review completed. Iain Wilkinson and Simon Nahk to follow up outside meeting /10 External Annual Plan 2010/11 finalisation of Use of Resources component To be picked up under item 6b. IW/SN 72.03/10 Annual Audit Letter 2009/10 To be picked up under item 9b. Progress on 2009/10 ISA 260 report To be picked up under 9b. 1

2 72.04/10 Update on Government Developments/Taking on Trust To be picked up under 10a /10 External Audit 73.01/10 Progress report Mrs Howard highlighted key areas and noted that the Auditor Local Evaluation (ALE) process had ceased with immediate effect and had been replaced by auditor opinion on financial resilience and arrangements for securing economy, efficiency and effectiveness. This was a welcome change which should provide scope for auditor Use of Resources (UoR) work to be prospective with a view to helping secure QIPP and improved resilience. Discussions were still ongoing to agree appropriate focus of auditor UoR work /10 Final Accounts Plan Mr Spinks presented the accounts plan for 2010/11 and asked the Committee to note that: planning was well progressed and ahead of previous years new audit standards bring increased emphasis on areas of management estimation and judgment accounting arrangements for TCS remain to be confirmed by DoH and this could impact on 2010/11 accounts (date of effective transition key vs ) the risk of adjusting post balance sheet event in respect of ET remedy hearing schedule late March 2011 SLA income reconciliation and agreement with PCTs still ongoing work 73.03/10 Review of Finance Function Grant Thornton highlighted the outputs of follow on work from the review: Specific proposals for improvement with a view to FT fitness for purpose: - Financial reporting (including financial risk rating) - Cash flow forecasting and treasury management - Financial modelling (including MONITOR Long Term Financial Model) Emphasises requirement to look at impact of significant project work on resourcing within an already lean Finance department /10 Comparative ALE scores Mr Spinks presented the paper which highlighted the Trust s overall score of 3 against the score of other Trusts. Mr Spinks recommended that this item be read in conjunction with item 13a - ALE report issued by Audit Commission /10 Annual Summary of Recommendations Mr Spinks provided a verbal update and outlined the Audit Commission recommendations which said that there was no need to do a formal statement this year as one had been done the previous year. 2

3 74.00/10 Internal Audit 74.01/10 Progress report Mr Howson presented the report and noted that since 20 September 2010 the Trust had commissioned further work and this had led to an increase in the plan of 21 days, consequently the plan is now 567 days. As at 26 November 2010, 328 days had been provided representing 58% of the plan. The Committee was also asked note that since the last meeting: 1 final report was issued for final reports were issued for 2011 Mr Howson confirmed that the final Waiting List Initiative payments report had been finalised and all recommendations, as reported to the Committee were agreed. The Committee noted limited assurance opinions in respect of WLI and individual working elsewhere while on call at the Trust. The Committee challenged and confirmed that matters being progressed appropriately. The committee discussed at length and expressed concern as to the extent to which matters which had received limited assurance may indicate a cultural problem and which requires a more broad based approach. Mr Howson to report on the follow up progress at the next meeting MH 74.02/10 Follow-Up of Recommendations Mr Howson noted that there were: 4 new reports Charitable Funds, Debtors, Overseas Visitors and IT Asset Management 3 previously followed up reports JAC, Safeguarding Children and Clinical Audit Progress towards the implementation of the recommendations could be found in Appendix B of the report. The Committee challenged ensuring quality of implementation and how would you know that the recommendations are effective in achieving the outcomes. It was agreed that Internal Audit would develop audit report to include KPI measures in the action plans. MH 74.03/10 KPIs Mr Howson reported that: 6 draft reports had been issued 4 management responses to those draft reports were agreed within the relevant timeframe 6 final reports were issued within target time The Committee was also asked to note that in order to measure quality, West Yorkshire Audit Consortium issue a quality questionnaire with each Final report which is sent to the lead Director of the area audit. 3

4 The scores of returned questionnaires can be found in a table at the end of the report /10 WYAC annual report (update) An update is to be presented at the next meeting. NB 75.00/ /10 Counter Fraud Progress report Mr Parker presented the report and highlighted the key areas of work which had been undertaken since the last meeting. The Committee reviewed and confirmed that counter fraud arrangements remain proportionate and effective to local risk of fraud /10 Final Assessment of Counter Fraud Arrangements 2010 Mr Parker presented the paper and noted that the Trust had been finally assessed as a rating 2. In respect of sanction the Committee challenged and was assured that arrangement were in place to ensure a fair and equitable approach regardless of staff grade or standing. Further, that these arrangements are underpinned by common Trust policies (in particular Disciplinary and Counter Fraud and Corruption). This was noted /10 Accounting Matters 76.01/10 Update on accounting issues Mr Pepper presented the paper and highlighted key accounting issues relevant to 2010/11 accounts; including TCS, outstanding Employment Tribunal and work on Reviewing Provision. The Committee reviewed the issues and it was agreed that updates would be presented to the next meeting as necessary. AP 76.02/10 Progress on 2009/10 ISA 260 report Mr Pepper presented the update and highlighted the progress to date. The Committee was assured of the follow up recommendations and confirmed that satisfactory progress and planning on 2010/11 accounts /10 Progress on IT report Mr Pepper presented the report and noted that most recommendations had been implemented on time and further work may be required from IT 76.04/10 Progress on Finance Department Review Mr Pepper presented the paper and asked the Committee to note the progress to date. 4

5 76.05/10 Accounts Timetable Mr Pepper presented the paper and asked the Committee to note key meeting dates: Wednesday 11 May 2011 Thursday 19 May 2011 Wednesday 25 May /10 Changes to the VAT system Mr Pepper presented the report and advised the Committee there were two issues: The change to the VAT system with regard to the amendment to standard rate from 17.5% to 20% from 4 January 2010 The change to levying penalties on NHS bodies for VAT errors from 1 April /10 Updates Debt Collection policy Mr Pepper asked the Committee to note the content of this report and to approve the policy. The Committee challenged and assured proposals to improve arrangements for receipt of money and debt collection. The Committee approved the revised policy subject to reviewing the number of reminders downwards /10 Credit Card Proposals The Committee was asked to note the current credit card machine arrangements and to support the proposals for future developments. The Committee noted and agreed to go forward with proposals /10 Governance Matters 77.01/10 Update on Governance Developments (including Training Needs Assessment) Ms Unwin updated the Committee and highlighted outstanding issues. The Committee challenged and assured progress in respect of the development of fit for purpose governance arrangements. Noted further work required in respect of risk register and its effectiveness in underpinning /10 Tender Exceptions Report No items to report /10 Losses and Special Payments No items to report /10 For information To note /10 KEY MATTERS TO REPORT TO THE BOARD 5

6 1. Use of Resources (UoR) - Auditor Local Evaluation (ALE) process ceased with immediate effect - Replaced by auditor opinion on financial resilience and arrangements for securing economy, efficiency, effectiveness - Welcome change which should provide scope for auditor UoR work to be prospective with a view to helping secure QIPP & improved resilience - Ongoing dialogue to agree appropriate focus of auditor UoR work. 2. Accounts planning 2010/11 - Noted planning well progressed and ahead of previous years - New audit standards bring increased emphasis on areas of management estimation and judgment - Accounting arrangements for TCS remain to be confirmed by DoH (merger vs. acquisition); could impact on 2010/11 accounts; date of effective transition key ( vs ) - Noted risk of adjusting post balance sheet event in respect of ET remedy hearing schedule late March SLA income reconciliation & agreement with PCTs noted as ongoing work 3. Outputs of follow on work from review of Finance team: - Specific proposals for improvement with a view to FT fitness for purpose: o Financial reporting (including financial risk rating) o Cash flow forecasting and treasury management o Financial modelling (including MONITOR Long Term Financial Model) - Emphasises requirement to look at impact of significant project work on resourcing within an already lean Finance Department. 4. Committee noted limited assurance opinions in respect of WLI and individual working elsewhere whilst on call at the Trust. Challenged and confirmed that matters being progressed appropriately. Expressed concern at extent to which these matters may indicate a cultural problem and which requires a more broad based approach. 5. Assured follow up of Internal Audit Department recommendations. Challenge re ensuring quality of implementation and how would know recommendations effective in achieving outcomes. To develop audit reports to include KPI measures in action plans. 6. Reviewed and confirmed that counter fraud arrangements remain proportionate and effective to local risk of fraud. 7. In respect of sanction the Committee challenged and was assured that arrangements were in place to ensure a fair and equitable approach regardless of staff grade or standing. Further, that these arrangements are underpinned by common Trust policies (in particular Disciplinary and Counter Fraud & Corruption). 6

7 8. Assured follow up of recommendations arising from ISA260 re 2009/10 accounts and confirmed satisfactory progress and planning of 2010/11 accounts. 9. Challenged and assured proposals to improve arrangements for receipt of money and debt collection. 10. Challenged and assured progress in respect of the development of fit for purpose governance arrangements. Noted further work required in respect of risk register and its effectiveness in underpinning those arrangements /10 Any other business None /10 Date and time of next meeting Thursday 10 March am pm HQ Meeting room 1, 3 rd floor, new HQ & Education Centre 7