Subject to Ratification at the Next Meeting
Minutes of a Meeting of the CCG Audit Committee
Held on Thursday, 19 March 2015 in the Pitch View Meeting Room, Blackpool CCG
Present:
Mr D G Edmundson, Lay Member (Chairman)
Mr C Brown, Lay Member
Mrs C McKenzie-Townsend, Lay Member
In Attendance:
Mr G Raphael, Chief Finance Officer
Mr T Cutler, Partner, KPMG LLP (UK)
Mrs E A Squires, Senior Internal Audit Manager, Mersey Internal Audit Agency
Mr D Davies, Anti-Fraud Specialist, Mersey Internal Audit Agency
Miss L Hayton, Finance Manager
Miss L J Talbot, Secretary to the Governing Body
01/15 Apologies for Absence
Apologies for absence had been received from Mr Connor and Mrs Burrows.
02/15 Declarations of Interest Relating to the Items on the Agenda
None relating to the items on the agenda.
03/15 Minutes of Meetings Held on 11 December 2014
RESOLVED:
That the minutes of the meeting held on 11 December 2014 be approved as a correct
record.
04/15 Matters Arising
(a)
MIAA Insight Report and Briefing Notes – Review of 17 CCG Assurance Frameworks – Mr Connor had
informed Mr Edmundson outside of the meeting as to where Blackpool CCG featured on the CCG Risk
Profile.
(b)
101/14 (a) Anti-Fraud – Reference was made to the investigation of a potential fraud as detailed by Mr
Raphael at the previous meeting. It had been referred to NHS Protect and had since been fully
transferred to Fylde and Wyre CCG which is the lead commissioner for the provider. NHS Protect is
working with the CSU to quantify the potential problem. NHS Protect had met with the Chief Executive of
the relevant organisation to inform them that they were investigating the issue. Mr Davies reported that
there could have been a potential overcharge however, through the contractual mechanisms, some of the
funding would be returned. NHS Protect would then determine if any further action was required once
the funds had been returned. Mr Edumundson commented that they would need to give us good reason
as to why they would not follow up a potential fraud.
(c)
102/14 Quality Monitoring Process – As discussed at the previous meeting, it was agreed that Ms Skerritt
would write an Escalation Policy in respect of quality issues. Members were informed that there were no
examples of an Escalation Policy available and this was also confirmed by internal audit colleagues. Ms
Skerritt would be required to write a new policy which would be submitted to members for comment in
due course.
ACTION: HS
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Subject to Ratification at the Next Meeting
(d)
109/14 Losses and Special Payments – It was clarified that upon taking legal advice, special payments
should be considered on an individual basis. Mr Raphael explained that the query related to a specific
payment to a specific individual and he agreed to advise on this outside of the meeting once he had the
relevant information.
ACTION: GR
05/15 Terms of Reference and Membership of the Audit Committee
The Secretary had reminded Governing Body members that the Audit Committee Terms of Reference and
Membership had been reviewed and approved by the Governing Body in September 2014. In light of the
recent Conflicts of Interest Policy which had been approved by the Governing Body, it was felt that
reference should be made to the policy within the Terms of Reference and in line with the Audit
Committee workplan. A bullet point would be added to section 6.4 regarding the committee reviewing
the adequacy and effectiveness of:
•
All procedures and their operation in relation to conflicts of interest.
RESOLVED:
That members approve the amendment to the Terms of Reference and Membership of
the Audit Committee which would be submitted to the Governing Body meeting on 5
May 2015 for approval.
ACTION: LJT
06/15 Internal Audit
(a)
Progress Report - Mrs Squires spoke to a circulated report which provided an update in respect of the
assurances, key issues and progress against the Internal Audit Plan for 2014/15. Discussion ensued as
follows:
•
•
•
Key Financial Systems – A significant assurance level had been received with one medium
recommendation and one low recommendation. It was noted that the Scheme of Delegation and the
list of Oracle approvers was not consistent. Mr Brown asked if there could be management control to
ensure it is monitored. Mr Raphael explained that the process for set up of Oracle is different to the
Scheme of Delegation because managers have to be able to sign off invoices. Invoices can be paid
once budgets are approved. Invoices tend to be for very large amounts. Mr Brown commented
however, that as a principle there could be a management process that periodically we check that the
two match up. It was suggested that this could be undertaken at the beginning of the year starting
with the budget setting process. This was agreed and internal audit colleagues would also pick it up
as part of their work.
Follow Up on Recommendations - Mrs Squires reported that there were no issues on timelines in
respect of the recommendations and she was comfortable with the progress made on the
recommendations.
Work in Progress – The following pieces of work were in progress and would be reported to the
Committee following completion:
- Assurance Framework
- Information Governance Toolkit
- Programme Management Arrangement
- QIPP
- Serious Untoward Incidents – The draft report had received limited assurance and was awaiting
management response. This related to timeliness of information from the CSU to the CCG and
there were also similar issues in respect of the complaints audit.
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Subject to Ratification at the Next Meeting
•
•
Request for Audit Plan Changes:
- Personal Health Budgets – It had been agreed with Mr Raphael that the review would be
undertaken with the auditors of Blackpool Borough Council, commencing in April 2015.
MIAA Events Calendar – Mrs Squires tabled a copy of the forthcoming events for 2015/16.
RESOLVED:
(b)
That members receive the Internal Audit Progress Report.
Draft Annual Internal Audit Plan 2015/16 – Mrs Squires spoke to a circulated report which was the draft
Internal Audit Plan 2015/16 and also included the Strategic Plan 2014/17. In particular, Mrs Squires drew
members’ attention to the proposed internal audit plan coverage. There would be key pieces of work
undertaken jointly with Fylde and Wyre CCG in respect of clinical coding (mortality).
Mr Edmundson sought clarification as to what extent primary care co-commissioning and conflicts of
interest should be included within the plan. Mr Raphael had had discussions with Mr Davies and had also
raised this with Mr Cutler. There was lack of clarity as to who would be responsible for the audit of
primary care. Once the CCG has delegated authority in respect of primary care co-commissioning it was
intended that NHS England would be maintaining a Lancashire Team in respect of contracting work
however, the operational details had not yet been clearly defined. Mr Cutler’s advice was that they
would undertake audit on the financial statements. For internal audit, discussions would need to be held
with the Director of Mersey Internal Audit Agency and organisations across the North West. It was
recognised however, that two CCGs across the North West would not be taking full delegated authority
which pointed to the need for a Lancashire-wide process. This issue would need to be revisited during the
year. It may become a responsibility with problems. A message would be taken back to MIAA via Mrs
Squires that we would want to have a quick resolution around this. It was also recognised that there
would be implications in the CCG’s Annual Governance Statement. Mr Raphael had already had
discussions with Mr Davies in respect of fraud investigations. Mr Raphael would raise this formally with
NHS England and the Director of Mersey Internal Audit Agency. It was recognised that governance
arrangements around this needed to be validated.
ACTION: EAS/GR
Reference was made to the risk areas to be kept under review which were contained within the plan and
it was acknowledged that there needed to be a degree of flexibility during the year. Mrs Squires also
informed members there was no change in the fee and it remained the same as the previous year at
£31,680 and she also commented on the additional MIAA-wide pieces of work that were provided free of
charge as part of the overall package provided by the Agency.
It was recognised that clinical coding was an important issue and that there may be some other pieces of
work which may arise out of this. Members were reminded that the joint piece of work would be
undertaken with Fylde and Wyre CCG. CSU colleagues had carried out a piece of work analysing nonelective activity which showed that there was no evidence of significant changes in the way coding is
undertaken. It was acknowledged however, that there were real changes in how sick people are. Mr
Raphael would share the information with Mr Brown if required. The accuracy of coding for financial
reasons could be considered when internal audit undertake their work and this was noted.
RESOLVED:
(c)
That members approve the draft Internal Audit Plan 2015/16.
Internal Audit Charter (Terms of Reference)
RESOLVED:
That members note that the Internal Audit Charter Terms of Reference remain
unchanged.
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Subject to Ratification at the Next Meeting
(d)
MIAA Insight/Briefings – Mrs Squires made reference to four documents presented to members:
•
•
•
•
Nothing to Declare – A Review of Gifts, Hospitality and Sponsorship Registers – Members’ attention
was drawn to the overall profile of the registers across CCGs which varied in terms of accepted or
declined gifts, hospitality and sponsorship offers. The graph showed a number of CCGs where staff
accepted gifts, hospitality or sponsorship. It was noted that there were two CCGs that reported
declined gifts. A question was asked, do any of the Blackpool CCG staff decline gifts, hospitality or
sponsorship? If so, do they report it? The Secretary would check the Constitution, Prime Financial
Policies and Scheme of Delegation to ascertain whether declining gifts, hospitality or sponsorship is
also reported.
ACTION: LJT
How are QIPP arrangements taking shape in CCGs? – Noted.
Safe Nurse Staffing – Noted.
Fit and Proper Persons Requirement in the NHS – Noted.
RESOLVED:
That members receive the MIAA Insights/Briefings.
07/15 External Audit
(a)
(b)
Progress Report
and
External Audit Plan 2014/15
Mr Cutler took both items together. He drew members’ attention to the financial statements section
within the External Audit Plan 2014/15 and in particular, the summary of response to financial statements
opinion risks. He advised that there were no significant findings and colleagues had also reviewed the
month nine position. Discussion ensued regarding the high significant audit opinion risks which related to
management override of controls and revenue recognition however, Mr Cutler explained that it was
common across a number of CCGs. He explained that there was a better system in place this year in
obtaining remuneration information.
Mr Cutler informed members that they would not be required to rely on the CSU Service Audit Reports as
he was confident that colleagues will be able to undertake the work at the CCG which would remove the
need for the Service Audit Reports.
Mr Cutler then drew members’ attention to their approach in identifying any risks of value for money and
the financial resilience and economy, efficiency and effectiveness. Mrs McKenzie-Townsend commented
on the layout of the report and found it easily understandable.
Mr Cutler informed members that from 31 March 2015, the Audit Commission would cease to be in
existence and from 1 April 2015, Public Sector Audit Appointment Limited (PSAAL) would be established
by the Local Government Association as an independent company which will oversee the Audit
Commission’s audit contracts until they end in 2017.
Members had no further comments on the External Audit Plan 2014/15 as discussion had been held at
the previous meeting on the draft document.
RESOLVED:
That the Audit Committee approve the External Audit Plan 2014/15.
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Subject to Ratification at the Next Meeting
(c)
Technical Update – Provided for information.
RESOLVED:
(d)
That members receive the External Audit Technical Update.
Confirmation of Auditor Appointment 2015/16 and 2016/17 – KPMG had been confirmed as the CCG’s
Auditors to audit the accounts for the two years from 2015/16 which would cover the 2016/17 year end.
A decision would be made in the summer 2015 as to whether the contract would be extended from 2017
to 2020.
RESOLVED:
That members note the confirmation of the auditor appointment.
08/15 Anti-Fraud
(a)
Progress Report - Mr Davies spoke to a circulated report. He had agreed the programme with Mr
Raphael and confirmed that all of the tasks were either completed or in progress. He made reference to
staff awareness informing members that a counter fraud session had been held the previous day. The
Secretary commented that positive feedback had been received and that staff found the awareness
session enjoyable. Other broad awareness material had been sent out to staff along with a counter fraud
survey. Mr Davies would await the results of the survey and would report back accordingly.
Mr Davies reminded members of the four generic areas within the progress report which related to:
•
•
•
•
Strategic Governance
Inform and Involve.
Prevent and Deter
Hold to Account.
In particular Mr Davies made reference to three MIAA information alerts that had been issued to the CCG
during the reporting period relating to bank mandate fraud, bogus phone calls and scam emails.
Mr Davies drew members’ attention to a pro-active exercise undertaken in respect of continuing
healthcare. He commented that the CCG has an established Continuing Healthcare Team that is
supported by national guidelines and local policies and procedures. Whilst no issues were identified
during this pro-active exercise, recommendations had been made in the report to improve existing
system controls that would, if accepted, reduce the potential risk of fraud occurring. Mr Davies informed
members that the team was very responsive to the recommendations and he was confident that the
delivery of the plan was on track.
Mr Raphael commented that Mr Davies had made a big difference to the fraud agenda ensuring staff are
made aware of potential frauds and a good level of information had been sent out to staff.
RESOLVED:
(b)
That members receive the Anti-Fraud Progress Report.
Annual Workplan 2015/16 – Mr Davies spoke to a circulated document which was the Annual Workplan
2015/16. He explained that it linked in with the primary care co-commissioning and that the standards
are based around the organisation. He commented that CCGs would need to put their own standards in
place for counter fraud arrangements. NHS Protect would not be issuing guidance around this but would
then undertake an inspection to review the CCG’s arrangements. It was also noted that another set of
standards for security arrangements in provider organisations would be issued.
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Subject to Ratification at the Next Meeting
Mr Davies also reported that a piece of work would be undertaken relating to conflicts of interest,
reviewing the CCG’s register and cross referencing with Companies House.
Mr Edmundson commented that it appeared that the first few pages of the document could have been
written for any CCG in the country. Mr Davies stated that whilst there was some generic information
within the report, there were other sections regarding specific areas and he made reference to the key
priorities for Blackpool contained within the report. The fee for the counter fraud work would be £8,000
and Mr Raphael had discussed it with Mr Davies previously and he was comfortable with the proposal.
Mr Brown commented that timescales did not appear to be included within the plan and Mr Davies
informed him that they would be translated in April into his workplan and timescales would be included
in reports to the Audit Committee stating when the programmes would need to be delivered.
RESOLVED:
That members approve the Anti-Fraud Annual Workplan 2015/16
09/15 Annual Reports and Accounts
(a)
Accounts Timetable – Miss Hayton spoke to a circulated report which was a timetable for the completion
of the accounts and had been produced in conjunction with the CSU. All parties were clear on their
responsibilities. She informed members that as the process is being project managed by the CSU, the
timetable is common across all local CCGs with local tailoring for each CCG for individual responsibilities
and committee dates. Miss Hayton explained that we have also ensured there is sufficient time for the
review of the accounts by the Chief Finance Officer.
Miss Hayton took members through the timetable. It was noted that the submission date for the draft
accounts was 23 April 2015 which was in line with the 2013/14 accounts. The deadline for the submission
of the audited accounts had been brought forward by one week to 29 May 2015 however, she did not
expect the shorter deadline to cause any issues. Members were reminded that the Audit Committee
meeting to approve the accounts would be held on Tuesday, 26 May 2015.
RESOLVED:
(b)
That members receive the accounts timetable.
Accounting Principles and Issues for 2014/15 – Miss Hayton spoke to a circulated report which
highlighted some of the main accounting issues facing the CCG in the preparation of its 2014/15 accounts.
She commented that as it is the second year of operation, the CCG will have comparative data from
2013/14 included within the accounts.
Members were informed that the CCG is required to disclose key accounting judgements and estimates
which it has made in the preparation of its accounts. For 2014/15 they will include acute contract
expenditure and prescribing. Miss Hayton also took members through other issues in relation to:
•
•
•
•
Property Leases Managed by NHS Property Services
Continuing Healthcare Restitution Claims
CCGs Running Cost Allowance
Pension Values – Information within the remuneration report would be consistent with the
previous year
Miss Hayton also made reference to accounting policies contained within the report.
RESOLVED:
That members note the accounting principles and issues for 2014/15.
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Subject to Ratification at the Next Meeting
(c)
Review Draft Annual Governance Statement – The Secretary tabled the draft Annual Governance
Statement which had been extracted from the draft CCG Annual Report. She asked members to provide
her with comments by Friday, 27 March 2015.
ACTION: ALL
RESOLVED:
That members receive the draft Annual Governance Statement for subsequent
comment.
10/15 Audit Committee Workplan 2015/16
The Secretary sought further clarification in respect of the Audit Committee Workplan for 2015/16 and
noted the amendments to be made.
ACTION: LJT
RESOLVED:
That members agree to the changes within the Audit Committee Workplan 2015/16
noting that changes would be made throughout the year with agreement.
11/15 Midlands and Lancashire CSU Service Audit Briefing
Mr Raphael spoke to a circulated report which was provided for information. Members were informed
that internal audit colleagues obtain their assurance from the service audit reports.
RESOLVED:
That members receive the Midlands and Lancashire CSU Service Audit Briefing.
12/15 Governing Body Assurance Framework
Mr Raphael spoke to a circulated document which was the Governing Body Assurance Framework. He
conveyed his apologies in the lateness in sending the document out.
Mr Raphael drew members’ attention to page 3 of the framework where he had included a new section
regarding the level of achievement for the CCG on the Constitution standards. It had been flagged up as a
high risk. Further work was taking place on the performance, finance and quality dashboards currently
available.
Mr Raphael had informed members that there had been an audit on the Governing Body Assurance
Framework and he had covered some of the findings within the document. He had demonstrated and
included within the document the links between gaps in control and action. Mr Raphael welcomed any
comments particularly any areas which members felt were not covered within the framework.
Mr Raphael made reference to the GP/Consultant Forum establishment which remained outstanding. It
had not yet been set up and whilst some meetings had taken place, it was recognised that the Forum had
not been established fully. He commented that we may want to discuss it as a CCG before it is sent out to
the Governing Body and consider how they would wish to take this particular issue forward.
The scoring for risk had reduced in respect of Communication and Engagement as a lot of work had been
undertaken. The Public and Patient Engagement Strategy had been approved and reflected some of the
work.
Mr Cutler asked whether the CCG was sighted on what the risks are. Mr Raphael commented that the
Governing Body Assurance Framework is submitted into the public domain and there needed to be
careful and accurate wording in the document in respect of risks to services and quality provision
especially our biggest risk in respect of mortality. Mr Cutler recognised the need to get the balance right
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Subject to Ratification at the Next Meeting
on describing risks whilst ensuring the CCG can be shown to be resolving them. Mr Brown asked whether
there was something about residual risk. Mr Cutler made reference to the principal risk. Mr Raphael
commented that he would accept any suggestions on how we phrase the risks before the next Governing
Body Assurance Framework is issued.
RESOLVED:
That members receive the Governing Body Assurance Framework.
13/15 Standing Orders, Standing Financial Instructions and Prime Financial Policies Update
Mr Raphael explained that the review of Standing Orders, Standing Financial Instructions and Prime
Financial Policies was a standing item on the Audit Committee’s workplan. Both Mr Raphael and Miss
Cosgrove were undertaking a piece of work on the CGG’s main financial policies and procedures. He
explained that whilst the Constitution contains much of the CCG’s rules to follow, upon reviewing there
are areas where we require further detail. Ms Cosgrove was currently reviewing the procurement
procedures. It was recognised that information of this nature would need to be submitted more regularly
through the Audit Committee and Mr Raphael asked whether it should also be submitted through the
Finance and Performance Committee if relevant. Members noted that pieces of work were taking place
starting with procurement and they were comfortable for Mr Raphael to determine what he feels would
be appropriate that could be submitted to the Finance and Performance Committee. He also reminded
members that with primary care co-commissioning coming into place, we would need more detail and
clearer procedures.
RESOLVED:
That members note the pieces of work to be undertaken in respect of Standing Orders,
Standing Financial Instructions and Prime Financial Policies.
14/15 Hospitality/Sponsorship Approvals
The Secretary informed members that since the previous meeting of the Audit Committee, 23 members
of staff from the CCG and GP Member Practices (along with a guest) had received hospitality through the
Altogether Now Programme.
There had been no applications for sponsorship approval.
RESOLVED:
That members note the information as outlined above.
15/15 Losses and Special Payments
RESOLVED:
That there was a nil return in respect of losses and special payments.
16/15 Schedule of Waivers
The Secretary spoke to a circulated schedule which had identified one wavier received since the previous
meeting in respect of the GP detailed care record cover and extended support for 12 months cover.
There were no alternative quotes available due to the bespoke nature of the system to facilitate multiple
user systems. The accumulated cost to the payee at the end of the waiver period was £37,722.
Further clarification was required on the detail of the waiver. Mr Raphael commented that it was the
integration of systems to undertake the MIG between secondary and primary care systems however, he
would clarify this further outside of the meeting and would inform members accordingly.
ACTION: GR
RESOLVED:
That members receive the Schedule of Waivers.
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17/15
Claims Update
RESOLVED:
That there was nil return in respect of claims.
18/15
CCG Risk Register
(a)
High Risks (Scores 15 and Above) – Members noted the high risks scoring 16 as contained within the
CCG’s Risk Register relating to:
•
•
Financial Issues
A&E Waiting Times and Referral to Treatment Waiting Times
The Secretary reported that the same high risks had been reported to the CCG Governing Body meeting
held in public on 3 March 2015.
Mr Brown made reference to risk scoring on mortality, which had recently been discussed at the Quality
and Engagement Committee. It was commented that a lot of descriptions of the risk levels do not
appear to be geared to commissioning risks. It was noted that they are mainly geared to providers. The
outcome at the Quality and Engagement Committee was to retain the scoring as it was for the time
being. Whilst it was recognised that the issues were not being addressed at pace, we would need to
ensure that all of the actions are addressed. As the CCG is a commissioning organisation, it was felt that
it was reasonable to change some of the definitions and further work would need to take place in
looking at the five levels of consequence from a commissioning point of view.
Mr Raphael informed members that a review of the risk register process and detail would be held the
following week. The Secretary would ensure that colleagues from the CSU provide examples of risk
registers more geared to commissioning.
ACTION: LJT
RESOLVED:
That members note the risks scoring 16 as outlined above.
(b)
Items for Inclusion on the CCG Risk Register – No items for inclusion.
19/15
Items for the CCG Governing Body Meetings
The Secretary noted the following items for inclusion on agendas:
ACTION: LJT
(a)
31 March 2015 – To approve the CCG Budgets for 2015/16.
(b)
5 May 2015 – Terms of Reference and Membership of the Audit Committee and Risk Register
discussion.
20/15
Any Other Business
There were no issues.
21/15
Declaration of Confidentiality
RESOLVED:
22/15
That with the exception of any agreed items to be submitted to the CCG Governing
Body meeting held in public, all of the items should be regarding as confidential.
Dates, Times and Venues of the Next Two Meetings
•
•
Tuesday, 26 May 2015 at 11.30 am in the CCG Boardroom, to approve the accounts (colleagues from
Internal Audit and Counter Fraud were not required to attend the meeting).
Thursday, 17 September 2015 at 9.30 am in the CCG Boardroom.
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