1. finance

Title of Report
Executive
Summary
Agenda Item: 22
Finance Committee Minutes – 2/8/07 & 6/9/07
The minutes from the monthly Finance Committee held
in August and September, detail summaries of the
financial performance in each operational division and
actions requested from Non-Executive Directors.
The Board is asked to note the contents of the minutes.
Actions
requested
Corporate Objectives supported by this paper:
4) We want to maintain the viability of the Trust by improved efficiency and
effectiveness (using benchmarking and economies of scale where
appropriate) and ensuring that high quality services are provided cost
effectively
Key issues / Risks:
Not relevant for this paper (see Finance Report)
Public and/or patient involvement:
Not relevant for this paper
Resource implications:
Not relevant for this paper
Communication:
Updates on the Trust’s financial performance are included in regular briefings
to staff
Name
Job Title
Month and Year
Email
Mr Barry Livesey
Acting Director of Finance
November 2007
[email protected]
FINANCE COMMITTEE
MINUTES OF THE MEETING HELD 2 AUGUST 2007
Present:
Part I – Corporate Overview
Mr J Jesky, Chairman (in the Chair)
Mr J Battye, Non Executive Director
Mr H Griffith, Non Executive Director
Mrs B Herring, Programme Director - Finance
Mr M Holly, Non Executive Director
Ms K James, Director of Operations
Mr B Livesey, Associate Director of Finance
Mr J Saxby, Chief Executive
Mrs A Unwin, Non Executive Director
Part II – Divisional Review
Medicine
Mr S Farey, Divisional Director
Mrs J Moore, Divisional Accountant
Surgery
Mrs S Lunt, Divisional Director
Women & Children Mrs S Taylor, Divisional Accountant
Diagnostic
Mrs J Wood, Divisional Director
Mr G Boothby, Divisional Accountant
Apologies: Mr R Chadwick, Director of Finance and IM&T
Mr T Wilders, Director of Strategic Planning
Mrs M Carroll, Director of Nursing
Mr R Pickering, Director of Human Resources
Mr J Wilkes, Director of Facilities
Mr J Lindars, Divisional Director
Mr G Thompson, Divisional Accountant
Part I
49/07 MINUTES OF THE LAST MEETING
The minutes of the last meeting held on 12 July 2007 were received and
approved as a correct record, with an amendment; Mr Saxby asked that
minute 41/07 show the planned surplus for the year. This amendment
was agreed.
MATTERS ARISING
39/07 Mr Jesky reported that Fin McNicol is preparing a press release
on the financial position for 20 June 2007.
43/07 Mr Livesey reported that the analysis of the Financial Recovery
Plan (FRP) to show responsibility by Executive Director is being
done and will be available in the July FRP summary.
42/07 Mr Saxby reported that he had asked Mr Wilkes, Turnaround
Director to reinvigorate the salary sacrifice scheme or look for a
substitute scheme to achieve the same level of savings.
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ACTION
ACTION
41/07 Mr Griffith referred to the analysis of income for May 2007. The
answer is Yes.
51/07
Finance Report to 30 June 2007
Mr Livesey presented this report and explained the revised format which
focuses on key targets and risks.
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•
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•
•
52/07
The Trust remains on target to achieve its planned surplus of
£4,960,000.
Neither the External Finance Limit (EFL) nor the Capital
Resource Limit (CRL) have been confirmed by the SHA.
Financial plans for the capital programme and cash flows are
therefore currently based on anticipated EFL and CRLs. The
Trust is not expecting to have to borrow funds this year, based on
these estimated figures.
Expenditure budgets are overspent by £85,000 at the end of
June. This is an encouraging trend given that the overspend in
April was £195,000 and in May was £144,000.
Income budgets are marginally underachieving although activity
is ahead of target. This variance is due to casemix variations.
The year end forecast remains an overachievement of £382,000.
At this stage in the year it is not expected that the planned profit
on sale of assets will be fully achieved. An alternative plan is
being developed to take effect this financial year.
Cash balances are £24m - ahead of plan by £8m.
There are issues to be resolved with the SHA concerning funding
for the PACS project and the capital development of the ‘Making
it Better’ review.
A discussion regarding the quantification of key risks, overall financial
exposure and mitigating factors took place and it was agreed that it was
key that the Committee received assurance that these items could be
managed within the current financial forecast.
RC
It was agreed that explanatory narrative of significant variations would
be included in future reports.
RC
Facilities and Corporate Finance Report to June 2007
Mrs Herring presented these reports and confirmed that facilities and
corporate departments expect to break even at the year end.
Mr Saxby asked whether posts (establishment) were removed from
budgets as savings schemes become live to ensure adequate control
and monitoring of the FRP. Ms James replied that workforce numbers
were monitored and Mr Livesey confirmed that ‘Actual’ staff numbers
were hours worked converted to WTE.
This included bank staff but not agency.
Mr Saxby suggested that substitute schemes for sickness reduction
savings should be sought where sickness savings are not materialising.
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General discussion took place on FRP targets and the actions being ACTION
taken across all budgets to balance in year by reducing other costs if
FRP schemes were not being achieved. Mr Holly asked that this be
included in the divisional reports as the recurrent/non recurrent effect of
these measures needed to be understood.
53/07
Financial Turnaround Project
Mr Livesey presented the report, explaining that:
targets are embedded within budgets;
the forecast year end deficit of £704,000 is mainly due to
failure of salary sacrifice (£300,000) and asset sales
(£492,000);
regular meetings are held with divisional directors to discuss
individual schemes;
a comprehensive review of Commissioning Baseline Schemes
and large expenditure saving schemes is being undertaken;
a 2.5% savings target can be expected for 2008/09.
Ms James confirmed that schemes that were underachieving were
discussed and closely reviewed.
54/07
Any Other Business
There was no any other business.
55/07
Part II
Divisional Financial Review – Medicine
Mr Farey presented the report saying that it was encouraging that the
division had delivered breakeven on its budgets in the month of June.
He outlined a number of financial risks and reported that short term
savings were planned to mitigate them.
Mr Holly discussed the division’s FRP and asked that details of
mitigating actions being taken by the division were included in the report
in future. The schemes for sickness, night management savings, inhouse stress echo testing, cardiology and TB clinics were also
discussed.
Mr Farey confirmed that the division expected to break even at the year
end.
56/07
Divisional Financial Review – Surgery
Mrs Lunt presented her report showing an overspend of £36,900 at the
end of June.
The FRP for the division is ahead of target. The main risks around
delivering divisional savings are in procurement, non recurrent staff
reductions and sickness and these are being mitigated by reviewing the
timetable for service rationalisation, potential savings from purchase of
procedure packs and potential savings from rolling out of the booking
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system at Rochdale.
ACTION
Mr Holly asked that the risks and mitigating factors be outlined in the
next report.
Mr Saxby asked about FRP schemes for one-stop clinics and sickness
and medical staffing costs.
Mrs Lunt confirmed that the division was maximising all opportunities for
short term savings.
Mrs Lunt confirmed that the division expected to break even at the year
end.
57/07
Divisional Financial Review – Women and Children
Mrs Taylor presented the report in Mr Lindars absence. The division is
overspent by £30,500 which is a slight improvement on the position at
the end of May.
Mrs Taylor reported that the non recurrent underachievement against
the target savings from the bed review had now been recovered and
that the savings against vacancies were still being pursued.
Mr Holly asked that future reports outline the risk around the year end
forecast and FRP schemes and the mitigating factors that are available.
In response to a number of questions from Mr Saxby, Mrs Taylor said
that the directorate for gynaecology was preparing a recovery plan to
achieve its
elective activity target, confirmed that reductions to
establishments were made for FRP schemes, and explained that the
sickness target had been achieved by increasing vacancy factors and
focussing on certain areas.
Overall pay budgets are underspent across the division.
58/07
Divisional Financial Review – Diagnostic Division
Mrs Wood outlined the division’s financial position at the end of June.
Discussion followed on the divisional FRP schemes and targets.
Mrs Wood confirmed that the savings from pharmacy automation would
not be achieved but that savings from the use of Tazocin would
substitute. Savings of £287,000 expected from discharge drugs were no
longer anticipated but Mrs Wood said that plans were being developed
around drug savings, stationery costs and re-use of patient drugs.
Some of these schemes will need to be trialled.
Mr Holly asked that all risks and mitigating factors, recurrent and non
recurrent be included in the next report.
Mr Saxby asked about the underperformance against activity targets at
the end of June and Mrs Wood confirmed that this was under review.
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ACTION
Mrs Wood confirmed that the division expected to break even at the end
of the year.
59/07
Date and Time of Next Meeting
The next meeting will be held on 6 September 2007 in the Executive
Directors Meeting Room, Second Floor, Trust HQ.
Please note that the meeting will begin at 12 noon.
BH/CF
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FINANCE COMMITTEE
MINUTES OF THE MEETING HELD 6 SEPTEMBER 2007
Present:
Part I – Corporate Overview
Mr J Jesky, Chairman (in the Chair)
Mr J Battye, Non Executive Director
Mr R Chadwick, Director of Finance and IM&T
Mrs B Herring, Programme Director - Finance
Mr M Holly, Non Executive Director
Ms K James, Director of Operations
Mr B Livesey, Associate Director of Finance
Mr J Saxby, Chief Executive
Mrs A Unwin, Non Executive Director
Mr J Wilkes, Director of Facilities
Part II – Divisional Review
Medicine
Mr S Farey, Divisional Director
Mrs J Moore, Divisional Accountant
Surgery
Mrs S Lunt, Divisional Director
Mr G Thompson, Divisional Accountant
Women & Children Mr J Lindars, Divisional Director
Mrs S Taylor, Divisional Accountant
Diagnostic
Mr G Boothby, Divisional Accountant
Apologies: Mr H Griffith, Non Executive Director
Mrs J Wood, Divisional Director, Diagnostics
Part I – Corporate Overview
60/07 MINUTES OF THE LAST MEETING
The minutes of the last meeting held on 2 August 2007 were
received and approved as a correct record.
MATTERS ARISING
61/07
49/07 43/07 Mr Livesey reported that this had now been done.
62/07
FINANCE REPORT TO 31 JULY 2007
Mr Chadwick presented this report. He reported that at the end of
July the Trust had a surplus of £2,676k compared to the target of
£2,682k and that the Trust was on target to achieve its statutory
financial duties at the end of the year.
EMM\FC\Mins\Sept2007
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ACTION
Two further papers were tabled showing the detailed Balance
Sheet and Cash Flow position as at the end of July.
A discussion followed based on a number of questions raised by
members of the Committee.
It was agreed that the cash flow graph previously produced be
reinstated into future reports to the Committee.
63/07
Mrs
Herring
FACILITIES AND CORPORATE FINANCE REPORT TO 31 JULY
Mr Wilkes presented the Facilities report which showed a forecast
underspend of £120,000 at year end, with the main risk factor being
the expenditure on Portering.
Mr Wilkes presented the Corporate Finance report which showed a
forecast year end break even position. Mr Saxby asked that the
Salary Sacrifice be reviewed.
64/07
REPORT OF THE TURNAROUND DIRECTOR
Mr Wilkes presented this report. The Collaborative Procurement
Hub was again discussed and Mr Wilkes reported that there should
be a small improvement by the year end.
Mr Wilkes reported that the progress report narrative reconciles
back to £187,000. Mr Chadwick agreed to provide a summary
report for next month’s meeting of the Finance Committee.
Various schemes were to be discussed with the Divisional Directors
and Divisional Accountants in Part II.
65/07
WAIVING OF TENDER PROCEDURES
Mr Chadwick presented this report which was approved.
66/07
Part II – Divisional Financial Review
Medicine
Mr Farey presented this report saying that although the divisional
overspend had worsened slightly during July, this was expected
and the division remained slightly ahead of the run rate target.
A number of budgetary pressure areas were discussed along with
the risks against the financial recovery plan associated with the
sickness/absence scheme.
Ms James asked for the inpatient and day case elective activity
figures to be separated in future reports.
EMM\FC\Mins\Sept2007
Page 2 of 4
Mr
Chadwick
Mr Farey confirmed that the division expected to break even at the
end of the year.
Surgery
Sue Lunt reported that the in month & cumulative overspends were
both ahead of the run rate & the division was still confident in
delivering break even by year end.
There remained some risk areas relating to the division's Financial
Recovery Plan schemes as at July, but Gary Thompson reported
that the division had made significant progress in reviewing these
schemes & identifying replacement schemes where necessary &
the target is now expected to be delivered in full this year. There
remains a recurrent element of c. £245,000 relating to sickness
which will need to be addressed in 2008/9.
Bob Chadwick commented on the fact that the income associated
with elective in patient underperformance would not be offset by the
daycase overperformance. Sue Lunt explained medical staff
absence in general surgery was impacting on this but that the
division had plans with particular reference to Orthopaedics,
general surgery & urology to address this. In addition, Sue referred
to the fact that the division was significantly overperforming against
both non elective inpatients and new outpatients; the latter
suggesting a healthy order book for future elective care.
Women and Children
Mr Lindars presented the division’s financial position to the end of
July. This showed an overspending of £27,000 which was a slight
improvement on the previous month and was in line with the FRP.
Mr Lindars described the risks associated with the non
achievement of the recovery plan targets in respect of vacancies,
both recurrently and non recurrently. Mr Holly requested that plans
for addressing these risks be included in the next report.
Mr Lindars additionally presented the report on gynaecology activity
and confirmed the plans that were in place to recover the under
performance against target by the end of the financial year.
Diagnostics
Mr Boothby presented this report in Mrs Wood’s absence. The
division is overspent by £8,200 which is an improvement on the
previous period and ahead of the division’s planned variance. The
division is forecasting to achieve expenditure targets and deliver its
contribution to the financial recovery plan.
EMM\FC\Mins\Sept2007
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Activity targets continue to not to be met. Haematology day case
activity is significantly below target and is the result of a coding
change. A serious data quality incident has been reported to
establish how the change has arisen.
Risks identified in earlier months relating to the financial recovery
plan have now been removed and reduced.
67/07
Date and Time of Next Meeting
The next meeting will be held on 4 October 2007 in the Executive
Directors Meeting Room, Second Floor, Trust HQ.
Please note that the meeting will begin at 1.00 pm
EMM\FC\Mins\Sept2007
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