SOUTHPORT & ORMSKIRK HOSPITAL NHS TRUST MINUTES OF THE MEETING OF THE AUDIT COMMITTEE HELD ON 19 JULY 2007 Present: In Attendance: Apologies: Mrs J Citarella (Chair) Mrs M Carberry Mr K Clarkson Mr C Throp Mr D Kay, KPMG Mr A Mee, KPMG Ms S Blackwell, MIAA Mr S Davidson, MIAA Miss C Aitken Mr L Byrom Mr M Eastwood Mr K Bowman, MIAA 07/25 MINUTES OF THE MEETING HELD ON 17 MAY 2007 The Minutes of the meeting held on 17 May 2007 were agreed as a correct record. 07/26 MATTERS ARISING i. Minute No. 07/19i Compound Indicators The Committee members noted the response received from Paul Tiffen, Head of Quality at the Counter Fraud Service, the content of which was much as anticipated. It was confirmed that the Committee s concerns had been highlighted and discussed at a recent Directors of Finance meeting. The non executive directors agreed that no further action be taken at the present time. ii. Minute No. 07/23i Investigation re Spoof Letter Upon advice from the Counter Fraud Service, no further action would be taken due to lack of sufficient evidence. A different approach would be taken in the future should any further redundancies prove necessary. 07/27 MINUTES OF TRUST BOARD SUB COMMITTEES i. Risk Management Committee 24 May 2007 Medical Staff Sickness it was confirmed that the reporting procedure to be followed by medical staff had been checked and reinforced and that there had been no further evidence of problems. New Risk Management Standards the Trust Board and Clinical Board had been briefed regarding the revised standards for CNST and RPST and the consequent significant challenge in terms of workload to ensure the collation of the necessary
evidence. The Risk Management Committee would be similarly briefed at its next meeting. Risk Register Top risks the Committee members were apprised of new risks that had been identified and of the action being taken to resolve and prevent a recurrence of these issues. Continuing problems with the baby tagging system were deemed of considerable concern and were discussed at length. A status report would be requested and the views of the Audit Committee taken back to the Health & Safety Committee to ensure further action is taken. Action: K Clarkson Decline in Decontamination Incidents the Committee members were pleased to note the decline in such incidents. Clinic Typing a significant backlog of clinic/discharge related typing, due to staff shortages within the medical directorate, had been reported and subsequently dealt with. From an assurance point of view, this was highlighted as a positive indication of the culture within the Trust which encourages staff to raise such areas of risk. It was suggested that this might be a worthwhile area for review by MIAA. Action: C Throp/S Blackwell ii. Clinical Governance Committee 23 May 2007 CHKS Top 40 Hospitals despite increasing competition the Trust had again received the CHKS Top 40 Hospitals award, demonstrating extensive use of clinical benchmarking. Confidential Enquiry Report no new reports had been received, which was encouraging and a positive indicator in terms of assurance. iii. Finance & Performance Committee 25 June 2007 Ledger Introduction following a number of problems which had now largely been resolved, staff were becoming accustomed to using the new system. It was highlighted that Oracle was a national product and, unlike the previous system, not specifically tailored to the Trust s requirements. Overall Financial Plan the Trust was working to a balanced in-year I&E position, subject to the achievement of a 5M recovery plan. It was highlighted that, since the month 3 position had been reported, the forecast surplus had been increased to 2.823M in the light of revised guidance whereby Trusts would now be criticised for over-achieving against planned surpluses. Financial Risks these were in respect of: a. activity performance the income target in respect of Sefton PCT, having been set on forecast outturn, was higher by 450K than the figure reflected in the final SLA which had been set on actual outturn. The Trust was, however, over-performing substantially, therefore it was believed that the risk would be mitigated. b. 18 weeks the Trust had a one-off opportunity to secure up to 4M allocated by the PCTs. Maximising income from this source would facilitate the FT process. c. recovery plan this was a low risk area. Savings of 4.8M had already been identified, however directors were being encouraged to deliver a full year effect in excess of the 5M target given the withdrawal next year of 1.7M transition monies under PbR.
Turnaround the role of Turnaround Director would be taken up by Mr Throp in September, when Mr McGarrity s contract ends. In the interim, Mr McGarrity was conducting a comprehensive review of consultants job plans with a view to identifying efficiencies and savings. iv. Charitable Fund Committee 25 June 2007 Portfolio Performance a total return of 25,215 on the portfolio since March was noted. Income of 45,454 had been generated, exceeding the annual target of 34,000. It was highlighted that Citigroup were performing well, particularly given the ethical investment policy framework within which they were operating. v. HR Strategy Committee - 13 June 2007 Chrysalis Charity Application the documentation required to set up the charity was in the process of being signed. Sickness Absence Controls it was highlighted that the Sickness Absence Policy had been revised so that, in line with other Trusts, enforced periods of absence following an episode of D&V, measles etc were now to be recorded as authorised leave, rather than sick leave. This would assist with targets. Consultant Job Planning this exercise was undertaken every year, however this year the process was being led by the Turnaround Director. Consultants diaries for a 4 week period in May/June had been analysed and volume/throughput per PA was being assessed. The Turnaround Director would be providing a report on his findings, identifying any potential efficiencies and savings. 07/28 KPMG PROGRESS REPORT The progress report in respect of 2006/07 was reviewed and noted. 07/29 AUDITORS LOCAL EVALUATION REPORT 1 ST PHASE The Committee noted the indicative scores awarded in respect of 3 of the 5 key areas linked to the Code of Audit Practice assessed to date: Financial Management 3; Internal Control 3; Value for Money 3. It was confirmed that, since the report had been published, the remaining 2 areas had now been completed and were due to be submitted for final moderation in August. The indicative scores for these were consistent with the previous year: Financial Reporting 2; Financial Standing 1. KPMG anticipated that there would be no changes to the indicative scores. A review was then undertaken of the scores achieved against the individual key lines of enquiry. Comparing 2005/06 with the current year, the Trust had either maintained its scores or improved. The score of 4 in respect of the management of performance against budgets was highlighted and it was confirmed that it was exceptional for such a score to be achieved. Whilst still subject to final moderation, this had been successfully defended at national level by KPMG. The Committee members acknowledged the sterling work of the finance department staff involved in this process.
07/30 KPMG FOLLOW UP REPORT 2006/07 The follow up report, setting out progress made by the Trust against agreed action plans, was reviewed. The Committee was pleased to note that the Trust had made good progress in implementing the various recommendations made by KPMG during their performance management reviews, with only a small number of actions remaining outstanding in relation to 2 areas: Acute Hospitals Portfolio and Realising the Benefits of Workforce Contract Reform. It was highlighted that this work feeds into the ALE process and had had a positive effect in relation to the score for Internal Control (3). Regarding governance arrangements, KPMG believed that there was some scope for improvement in terms of implementing an internal mechanism to facilitate the timely collection of evidence to support actions plans and to monitor progress. It was, however, recognised that the introduction of the new ledger had necessarily been prioritised, and that, now in place, attention could again be focused upon this task. 07/31 MIAA PROGRESS REPORT The report, setting out significant issues arising from work undertaken and summarising performance against plan ( 58 / 307 days), was reviewed. It was confirmed that there were no specific concerns which needed to be brought to the Committee s attention for action or intervention. It was highlighted that, based on its findings, MIAA would now be providing a rating for recommendations made. At the request of the Audit Committee, following the findings from the theatre follow up review, a further review had been carried out of the software used within the Theatres to assess the integrity of the database for recording activity information. Limited assurance had been given due to a number of weaknesses being identified (procedural inconsistencies, systems administration, lack of routine reconciliation with PAS, and lack of formal and timely checks to verify the accuracy of information input etc). Some details had yet to be finalised, therefore the completed formal report would be brought to the next Audit Committee meeting. Limited assurance had been given following a payroll review within Pharmacy. The findings and recommendations, generally reflecting those elicited during reviews of other departments over the years, were noted. It was, however, highlighted that this department had adopted procedures in respect of completing SVLs which did not follow Trust policy and this was of some concern. It was recognised that these issues needed to be dealt with in the short term, however in the medium/long term they would be resolved following the implementation of ESR. At the Trust s request, the arrangements in place for making additional payments to consultant medical staff had been reviewed to establish and assess the effectiveness of controls and to provide assurance that payments were being made only to consultants. The detailed findings and required actions were in the process of being finalised, however the broad themes included inconsistencies in the claims process, lack of an independent monitoring system and the need to ensure compliance with EWTD regulations. The Committee members expressed concern at the level of additional payments received by consultant radiologists. Assurances were given that these were in no way fraudulent, but had been made in line with an agreement to enable the service to run despite a long term consultant vacancy. It was noted that 2 more radiologists had now been recruited, therefore the level of additional payments would reduce. Reviews of corporate reporting and sickness recording were on-going and would be reported to the Committee in due course.
07/32 COUNTER FRAUD UPDATE The Committee members were apprised of progress in relation to on-going National Fraud Initiative work and presentations to staff. An investigation was currently underway into an allegation that a member of staff on sick leave due to mobility issues was, during that time, working elsewhere. Evidence to support the allegation and intended prosecution was being gathered, following which the Trust would then be able to start disciplinary proceedings internally. The potential PR implications for the Trust were noted. 07/33 OUTSTANDING DEBTORS/CREDITORS TO JUNE 2007 The routine report identifying debtors and creditors over 6 months old and over 5K was reviewed, discussed briefly and noted. All debts were health service related and all but one ( 19,131 from Central Lancashire PCT) had been agreed as part of the year end agreement of balances exercise. Facilities would be providing the necessary supporting evidence to secure payment in respect of the disputed invoice. Aged creditors amounted to 659K at the end of June and none had exceeded the 60 day category. It was advised that SBS were now producing a Directors of Finance Dashboard each month, providing a benchmark against the client base, which would provide a level of assurance with regard to the Trust s performance. 07/34 DEBT MANAGEMENT POLICY The Committee members noted the debt management policy under which SBS operates. The general principles remained the same, however NHS debts would now be flagged to the SHA after 6 months. 07/35 WAIVER OF TENDER re LEASEGUARD In accordance with the Trust s Standing Orders and Standing Financial Instructions, the Audit Committee were notified of a waiver of tender in respect of the re-negotiation of the leases for the two modular buildings to reduce the level of risk placed on the Trust and re-schedule payments in order to achieve a more equitable position and assist with the recovery plan. Following an informal beauty parade, Leaseguard had been engaged on a no win, no fee basis. if successful, fees would be 93K over 2 years. The renegotiated deal would be audited to ensure it would remain off balance sheet. 07/36 ANY OTHER BUSINESS There was no other business. 07/37 DATE AND TIME OF NEXT MEETING Thursday, 13 September 2007 at 2.00pm in the Boardroom, Corporate Management Office, Southport DGH. Minutes\acjul07