Sharp reported on the uncollectible debts on the ledger

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					                                                                      Agenda Item: 9.6
                                                                    Paper No: TB(10)32




                            TRUST BOARD – 30 March 2010

Document Title       Report from the Audit Committee

Report Author(s)     Mike Rappolt

Lead Director        Mike Rappolt, Chair, Audit Committee

Contact Details      020 8725 2765 denise.richings@stgeorges.nhs.uk

Aim                  To update the Trust Board on the recent Audit Committee meeting

Key Issues for the Board

To receive for information the Audit Committee minutes from their meeting held on 13
January 2010.

To receive a verbal update from the Audit Committee meeting held on Wednesday 24
March 2010.

The Trust Board is asked to endorse the updated Standing Orders, Standing Financial
Instructions and Scheme of Delegation as approved by the Audit Committee at their last
meeting.

Mitigating Actions (Controls)

Internal / External Audit reports and recommendations

Recommendations to the Board
To receive the approved minutes for information; verbal update and recommendations
from the Audit Committee
Equality Impact Assessment
Has an EIA been carried out         No
(If not, state reasons)

Report from Audit Committee meetings.

Key Issues from Assessment

Risk Implications for St George’s (including clinical and financial consequences)

Failure to implement recommendations from Audit reports.
Other Implications (including patient and public involvement/ Legal/ Governance/
Diversity/ Staffing)

Need to ensure the recommendations are implemented appropriately.
Corporate Objectives that the report links to
To achieve effective integrated organisational governance.
                                                                                               Agenda Item: 9.6
                                                                                             Paper No: TB(10)32



                           MINUTES OF THE AUDIT COMMITTEE
                                            13 January 2010
                                  Room 5, Post Graduate Medical Centre

Present:                Mr Mike Rappolt                   Chair, Audit Committee
                        Ms Emma Gilthorpe                 Non Executive Director
                        Mr Graham Hibbert                 Non Executive Director
In Attendance:          Mr Roger Brealey                  Director of Operations, London Audit Consortium
                        Mr Richard Eley                   Director of Finance
                        Mr Suresh Patel                   Audit Manager, Audit Commission
                        Mr Dominic Sharp                  Deputy Director of Finance
                        Mr Peter Jenkinson                Company Secretary
                        Mr Patrick Mitchell               Chief Operating Officer
In attendance for       Mr Neal Deans                     Director of Estates
Specific items          Ms Pauline Lewis                  Counter Fraud Officer
                        Ms Zoe Packman                    Interim Director of Nursing
                        Mr Alan Thorne                    Director of Transformation
Apologies:              Ms Lindsey Mallors                Engagement Lead, Audit Commission
                        Mr Paul Murphy                    Non Executive Director
                                                                                                                         Action
10.01      MINUTES OF LAST MEETING – AC(M)(09)5
           The minutes of the meeting held on 18 November 2009 were accepted as an
           accurate record.

10.02      MATTERS ARISING
10.02.1    Schedule of matters arising / outstanding from previous minutes
           It was noted that a progress report on tightening up the controls within the Mar 2010
           Bank Office was awaited from S Storey. An update to be circulated to Audit S Storey
           Committee members prior to the next meeting.

10.02.1.1 Transformation Programme: Standardisation of project management
          across the Trust
           A Thorne outlined the current position around the progress to ensure there is consistent project management
           on all the projects trust wide and that they are carried out with a single approach.

                    Major IT and Estates projects go through a very rigorous PRINCE
                     principle methodology at its highest level including full forms of
                     specification.
                    Transformation programme, all these projects come within a single
                     methodology that has now been enhanced to include documentation
                     around project selection, start and implementation, closure planning
                     and change control. As the documentation and the flow charts are
                     developed, all the projects which go through transformation will see a
                     clear improvement on the results.
                    Other project areas are more action plan orientated; there is an
                     acceptance within the organisation that this lacks rigour and a lack of
                     risk control and benefits analysis. This is one of the key areas to
                     address with a piece of work planned over the next 2-3 months. A
                     decision tree has been developed to see whether a project would go
                     into full PRINCE or into the transformation standard of project
                     management.
                    A protocol is also being developed around small local projects that are
                     of small value to ensure there is consistency of governance
                     arrangements.
                                                                           Agenda Item: 9.6
                                                                         Paper No: TB(10)32

                  A working group has been formed to agree the process, design the
                   process of implementation and the delivery of training across the Trust.
                   The anticipated closure date for this piece of work is 31.03.2010.
               Graham Hibbert felt this was an important piece of work, however what is
               meant by the word methodology needs to be agreed. Alan Thorne reported
               that a mini handbook has been produced for those that lead projects and
               operational leaders to ensure they know how they need to act as a lead
               and their reporting responsibilities.
               Mike Rappolt sought assurance that there would be a standard Trust Policy
               for Project Management by the end of March 2010 that should be seen by
               the Audit Committee, this policy must show consistent project management
               with the aim of managing risk. Alan Thorne reported the working group Mar 2010
               would do this.                                                               A Thorne

10.02.1.2 Quality Accounts
          Zoe Packman reported that the Quality Accounts could now be published in
          June 2010 and that the stakeholders have been asked to comment on the
          content and composition of the account, two responses had been received.
          The Quality Accounts will pull together quality information that is already
          collected, verified, assessed and audited in other areas. When the Quality
          Accounts are collated they will consist of information that has already been
          seen in individual areas. It was also noted that Monitor have a consultation
          document about the Quality Accounts and have made some important
          suggestions about inclusions, one additional area to consider for the future is
          around external assurance and verification of the data, this would involve an
          audit opinion from External Audit. This is not mandatory for the first shadow
          year and discussions are taking place between Monitor, the Commissioners
          and the DoH around the role of External Audit. It was agreed that it would be
          desirable to have external assurance of the accounts and treat them in a
          similar way to the financial accounts. Emma Gilthorpe suggested obtaining a
          brief level of external assurance that would directionally help us in the future     A
          and give a high level opinion.                                                       Robertson
          Mike Rappolt reported that there was a strong view that the Quality Accounts
          should link to a Quality Strategy and referencing benchmarking with other
          Trusts in terms of quality. Zoe Packman reported there is no prescription on
          what should be in the Quality Account, this therefore makes it difficult to
          benchmark against other Trusts.
          It was agreed that the Quality Accounts would be submitted in their finalised        A
          form to the Audit Committee meeting in May 2010 with the Financial Accounts          Robertson
          so that they can be recommended to the Trust Board for approval at their May         May 2010
          meeting.
          The purpose of the Quality Accounts is to make quality transparent and visible
          to the outside world and to push a quality improvement process into the Trusts.
          The Quality Accounts must be written in lay terms and understandable to
          patients/public.

10.02.1.3 Taking it on Trust / (SWLEOC)
           Richard Eley confirmed that SWLEOC is audited as part of Epsom & St Helier
           both internal and external audit. Suresh Patel advised that Lindsey Mallors is
           the appointed audit manager and has confirmed it is part of the external audit.
           Graham Hibbert felt it was useful to see the report, however sought clarification
           on why the arrangement for sharing profits were different to losses and as it is
           an efficient service why isn’t St Georges getting more of a profit.

           Patrick Mitchell reported that the marginal SLM for most orthopaedic services
           would normally show orthopaedics as a speciality that loses money. SWLEOC
                                                                          Agenda Item: 9.6
                                                                        Paper No: TB(10)32

           is making a margin of around 3-3.8%, last year they made an error in their
           finances and Epsom & St Helier absorbed the loss, as it was their accounting
           error. The percentage of referral the Trust puts in is the percentage of income
           that comes out. St Georges started at 23%, and this year they are around
           27%, however the operating profit from this £54m turnover organisation is quite
           small.
           Mike Rappolt sought clarification on future contractual arrangements when St
           Georges becomes an F/T. Richard Eley confirmed that the agreement would
           need to be formalised as a contract. Patrick Mitchell confirmed that he is the
           Executive Director representative for St Georges on the SWLEOC Board.
           Mike Rappolt sought clarification if SWLEOC appears in the list of SLR’s or
           whether it was incorporated into some other unit. Richard Eley reported that
           any surplus or loss would be incorporated into the SLR for Orthopaedics.
           Roger Brealey declared an interest, as they are also the internal auditors for
           Epsom & St Helier Hospital.
           Mike Rappolt requested that the St Georges Audit Committee also reviews the P Mitchell
           significant and fundamental recommendations of the Audit Committee that are
           reported to the EOC Partnership Board.

10.02.2    Audit Tracking System
           Peter Jenkinson presented the report that is now monitored by the Corporate
           Office. It was noted that 53 actions had been completed versus 37 in the
           previous period and it was noted that by splitting the actions into
           high/medium/low categories of risk there were no overdue high risks. Updates
           have been received on all of the actions on the spreadsheet and this will now
           be monitored on a monthly basis at the Directors Team meetings.                P Jenkinson
           The actions were categorised in terms of overdue/in progress/completed. It
           was noted that a number of ‘in progress’ dates were past their due dates. P
           Jenkinson proposed just two categories, overdue and not yet due which was
           agreed.
           The Audit Committee recognised the improved state of the actions and
           discussion took pace as to how the list will be handled at future meetings. It
           was agreed that the Audit Committee would look at the overdue high-risk items
           and also look for themes.

           Item: 3.5.1 – Staff Bank – Patrick Mitchell reported that Sally Storey is looking
           at additional resources to resolve issues within the staff bank office. Concern
           was raised around the length of time it is taking to resolve the issues and
           Patrick Mitchell was asked to follow up progress with Sally Storey.               P Mitchell

10.03      GOVERNANCE, RISK MANAGEMENT AND INTERNAL CONTROL

10.03.1    Safety
           None for this meeting

10.03.2   Clinical and Cost Effectiveness
10.03.2.1 Capital Project Management
          Roger Brealey reported that three specific projects had been reviewed which
          had provided reasonable assurance overall. A number of recommendations
          had been made and there is an action plan to implement the actions.

10.03.2.2 Capital Programme Management
          Roger Brealey reported that internal audit could provide reasonable assurance
          overall. Roger Brealey reported that one high priority recommendation had
          been made around timely and complete development of business cases for
          major projects. The Trust has now implemented a new mechanism to manage
          this by a Business Case Advisory Group chaired by Richard Eley.
                                                                        Agenda Item: 9.6
                                                                      Paper No: TB(10)32

          Internal Audit was satisfied that this recommendation has been addressed.
          The Audit Committee were happy to accept the internal audit assurances.
10.03.3   Governance
10.03.3.1 Clinical Audit
          This item was deferred to March 2010, as Roger Brealey had been unable to
          have the exit meetings with Trudi Kemp and the team due to the Christmas
          holidays.

10.03.3.2 Agency & Medical Locums
          This item was deferred to March 2010 as Sally Storey had requested internal
          audit to defer for operational reasons. The audit is now underway.

10.03.3.3 Annual Review of Standing Orders and SFIs
          This item was deferred to March 2010 as agreed at the last meeting as this
          item is linked to the scheme of delegation. An overall Governance Framework Mar 2010
          and manual is being developed for the organisation and this item will form part P Jenkinson
          of this work.

10.03.3.4 Assurance Framework and Strategic Risk Register
          This item was deferred, as this is a substantial piece of work in progress and
          development for the Trust. This has been discussed at the Risk, Assurance
          and Compliance Committee and it was agreed to defer this item until the R Brealey
          September meeting so that the new system can be tested for 6 months.           Sept 2010

10.03.3.5 Financial management directorate review
          This item was deferred to March 2010, as an unrealistic timescale had S Patel
          originally been set. The work is almost complete and will be presented at the Mar 2010
          March meeting.

10.03.3.6 European Working Time Directive
          Roger Brealey presented the report that had been discussed and agreed with
          Patrick Mitchell and Sally Storey. It was felt that the Trust has run a good
          project with most areas on track. There were reservations and only limited
          assurance could be provided on monitoring of junior doctor rotas on a regular
          basis against the new rules and also other staff categories. Patrick Mitchell
          reported on the difficulties around compliance of the junior doctors in
          completing their diary cards. Mike Rappolt suggested a computerised system,
          Patrick Mitchell to look into the possibilities and options for an electronic Mar 2010
          system and see if it can be piloted in a single area.                         P Mitchell
          Discussion took place around whether there should be sanctions if the diary
          cards are not completed. It was noted that the Deanery had also raised the
          issue of the completion of diary cards at their recent visit to the Trust.

10.03.3.7 Efficient purchasing and control
          Roger Brealey presented the report. Mike Rappolt raised concern around the
          gap between the fieldwork and the time lapse for review at the Audit
          Committee. It was noted that delays had occurred due to difficulties in setting
          up closure meetings between internal audit and the interested parties. It was
          agreed that if delays or difficulties occur in the future the issue would be R Brealey
          escalated to the appropriate Director.

           Richard Eley acknowledged there is a lot of work to be done around
           procurement and part of that is making sure everyone is clear about the
           standards that are required from procurement. He is content that savings have
           been made; this however needs to be justified to budget holders. Moira
           Crabtree is now leading on the project and changes are being made.
                                                                        Agenda Item: 9.6
                                                                      Paper No: TB(10)32

           The key message from the report was around lack of communication; however
           there are new staff and initiatives now in place to improve the situation.

           Graham Hibbert raised concerns over the recommendations that appeared to
           be very manual intensive and lots of opportunity for things to go wrong. He
           suggested that the IT systems are reviewed to mitigate areas of vulnerability.
           R Eley reported that there has been a good implementation of the Agresso
           System but this is not yet being used properly. Improvements should be seen
           over the next 6 months.
           Dominic Sharp reported that the process is being done for the Contracts
           Register and is included in the Audit Tracking System.

           It was agreed that a further audit should be carried out within the next 12      R Brealey
           months to review progress of the new Procurement system.                         Jan 2011

10.03.4   Patient Focus
          None for this meeting

10.03.5   Care, Environment and Amenities
          None for this meeting

10.03.6   Public Health
          None for this meeting

10.03.7   Briefings
10.03.7.1 Report from Risk, Assurance & Compliance Committee
          Emma Gilthorpe presented the report from the RAC meeting held in December.
          The Trust had declared compliance with all the core standards for Standards
          for Better Health. It was noted that the Corporate Governance department is
          undergoing a restructure that RAC supported and encouraged. It was noted
          that the newly formed Performance Management Group (PMG) would now sign
          off the Quarterly Governance submission to NHS London. The role of the PMG
          will be to review the whole performance and governance framework within the
          organisation to ensure there are effective systems in place through the
          Divisions up to Board level. The PMG has also worked on redeveloping the
          performance scorecard, looking at the format, and developing indicators and
          trends. Peter Jenkinson reported that a Corporate Manual is being produced
          which will include details of the committee structure and their remits.
          SUI’s - it was noted there is an improving trend and assurance was given that
          SUI’s over the 60-day target would be cleared by the end of March, processes
          have been updated and SUI panels meet on a regular basis.
          Complaints – remain a concern however divisions have now become more
          engaged and these should be back on target by the end of February. It is
          hoped to go into the new financial year with complaints and SUI’s compliant
          with the target dates. It was noted that there are more complaints being
          received however the analysis does not show any specific trends. It was
          agreed to benchmark the numbers of complaints against other trusts.           P Jenkinson
          Graham felt that the content of the report was very good and gave a good
          sense of assurance.

10.04     FINANCE
10.04.1   Tender Waivers and Write Offs
          Dominic Sharp presented the SFI waivers information and write off
          recommendations.
          Tender waivers – there were 16 SFI waivers for November and December 2009
          that amounted to £605,841. It was noted that there is no need for waivers for
          maintenance cover that is provided by the supplier of the equipment as this is
                                                                           Agenda Item: 9.6
                                                                         Paper No: TB(10)32

          procured at the time of purchase. Mike Rappolt noted that £500k related to
          ITC. Graham Hibbert questioned why there were separate departmental
          databases and whether the central data warehouse would eliminate these. It
          was noted that the annual maintenance contract for renal database software
          amounted to £223k. Dominic Sharp to clarify the figures and report back to the Mar 2010
          next Audit Committee.                                                          D Sharp

          It was noted that the waivers had already been approved and are submitted to
          the Audit Committee for information only.

          Write-Offs – Dominic Sharp reported on the uncollectible debts on the ledger
          that are fully provided for and amounted, at month 6 to £10.4m; at month 8 this
          has been reduced to £8.5m. All the debts have been individually reviewed and
          those that are deemed collectible have been removed. The Audit Committee
          accepted the write off report.
          It was agreed that the full details of the write off’s below £10k were not required
          by the Audit Committee and it was agreed that a summary report of the amount
          would be acceptable to the Audit Committee.
          It was noted that good progress is being made with clearing the backlog of
          write-offs. Assurance was given that processes are being put into place and
          that the debt collection department has been restructured, to ensure backlogs
          do not occur in the future. It was noted that the write-off report would need to
          come back to two more Audit Committee meetings before the task is complete.
          It was noted that, in future, there will be a target for debtor weeks and it is
          hoped that the the size of the bad debt provision can be reduced.

10.04.2   Salary Overpayments
          The following correction to the paper was noted: ‘The Audit Committee had not
          set the target to reduce net salary overpayments; it was a target that was
          agreed by the Trust to be a reasonable target’.
          Dominic Sharp presented the report that showed an improvement from the
          previous report. It was noted that in addition to the reports which are sent to
          the Divisional Directors a full consolidated report on salary overpayments had
          also been sent to Patrick Mitchell who has enforced to divisional management
          the importance for ensuring all termination forms and pay changes are done on
          a timely basis, disciplinary action will be taken if this is not taking place. The
          measures put into place are constantly being reassessed to ensure they are
          being implemented; this will take place until there is a fully automated system.
          The Audit Committee accepted all the schedules.

10.04.3   IFRS - Changes to IFRS and Restated Accounts
          Dominic Sharp presented the briefing paper that explained the accounting
          adjustments for the restatement of the 2008/09 accounts under IFRS.

          The accounts had previously been submitted and reported under UK GAAP and
          as part of the transition to IFRS those accounts have to be restated under IFRS
          so that 2009/10 has proper comparative figures under the new basis. The
          accounts were submitted in November 2009 and had been audited by the Audit
          Commission.

          The key impact of the IFRS adoption on the Trust were the relates to PFI
          assets (principally the Atkinson Morley Wing) coming onto the balance sheet
          and associated depreciation and financing charges that relate to that.
          The accounting impacts were similar for the PACS and Pathology call-out
          scheme and the leases.
                                                                          Agenda Item: 9.6
                                                                        Paper No: TB(10)32

          It was agreed that the paper provided a good summary of the impact and the
          changes and were consistent with the recent Audit Commission audit. From
          2009/10 the accounts will now be presented in IFRS format.

10.05     INTERNAL AUDIT
10.05.1   Approval of Internal Audit 3 year plan
          Mike Rappolt asked for the key Audit Committee themes for the next three
          years, and how they relate to the Trust strategy, to be included in the 3-year
          plan.

10.05.2   Approval of one year Internal Audit plan
          Roger Brealey reported that internal audit aim to achieve a balance of broad
          based coverage across all the key areas of the Trust.
          Key themes:
             1.     Income collection feeder systems, clinical coding of activity
             2.     Governance. The amount of time and resources has been
                    increased to look at various aspects related to governance as
                    agreed at the Executive Risk Committee. Some of the key areas to
                    be reviewed will be the new committee structure and how this is
                    working, ( an amount of10 days is included for internal audit
                    attending Trust meetings), infection control, safeguarding children
                    and quality accounts.
          The one-year plan was reviewed and agreed with the following changes noted:
             1.     Income & debtor systems and their management
             2.     Overseas visitor’s income – moved to 2011/2012.
             3.     Partnership arrangements at SWLEOC – to be removed as it was
                    noted that SWLEOC is under reasonable control following
                    reassurances in the report under 10.02.1.3.
             4.     It was agreed to audit partnership arrangements with SGUL to
                    provide reassurance to the Audit Committee. Graham Hibbert
                    raised concerns around assurances related to teaching income.
                    Richard Eley reported that from the next financial year there will be
                    formal contracts in place with SGUL and these will be linked to
                    performance indicators. An Education strategy is also being
                    developed for completion by March 2010.
             5.     Externalisation/Community Services, Roger and Suresh to discuss
                    further to ensure there is no overlap between internal and external
                    audit.
             6.     Patient Transport, external audit will be carrying out a review of non-
                    urgent patient transport.
             7.     Action Tracking support, Roger to review the time allocated to this
                    item.
             8.     It was noted that the number of days had been maintained at 500,
                    however the Trust will potentially be growing by 20% due to
                    externalisation, Mike Rappolt asked if internal audit would be able to
                    provide the assurances needed on the same number of days with
                    the increased size of Trust. Roger Brealey felt that assurances
                    could still be provided on the 500 days based on the agreed plan. It
                    was noted that there was a 25-day contingency.
             9.     It was agreed that Supply chain management and purchasing would
                    be included at the end of 2010/2011 on the plan, for the Audit
                    Committee to be assured that the project is providing value for
                    money and whether its delivering the benefits. It was noted that
                    progress and cost savings would be reported to the Finance
                    Committee on a regular basis.
             10.    It was noted that the one-year plan has been agreed at Executive
                    level.
                                                                                                Agenda Item: 9.6
                                                                                              Paper No: TB(10)32

          Graham Hibbert raised concerns around relationships with other Trusts and
          whether they will be sustainable once St Georges becomes an F/T. Richard
          Eley reported that all arrangements would require a formal contract.


          Graham Hibbert raised concerns around the site strategy and whether timely
          planning is being carried out to reduce the number of old buildings. It was
          noted that Neal Deans would be taking a paper to the next Trust Board.

          It was agreed that the final plans would be reviewed at the meeting in March for
          approval following discussion with the Executive team and integration into the
          Audit Committee plan.

          Peter Jenkinson will review the plans with Roger and Suresh prior to the March P Jenkinson
          meeting. It was agreed that, for each item in the plan, a briefing document S Patel
                                                                                         R Brealey
          would be produced linking that item to one of the key Audit Committee themes.
          Mike Rappolt to review the plan prior to the agenda setting meeting.

          It was noted that the fees for 2010/2011 had not been finalised.

10.05.3   Progress Report
          Roger Brealey presented the report that set out the work that has been
          completed since the last meeting. Six reports had been produced and it was
          noted that one report had been included in the progress report. The revised
          audit plan was noted and the remaining items are on track for completion by
          the end of March.
          It was noted that the London Audit Consortium had achieved re-accreditation
          for their internal audit process ISO9001.

          It was noted that the Standards for Better Health audit had reported as
          fundamentally sound. the process for the declaration at 31 October 2009. It
          was noted that there had been a reduced number of PDP (appraisals) 65% to
          61% achieved and this has been discussed with Sally Storey. The RAC
          Committee were content that the Trust could declare compliance with the
          standard despite the worsening position as there is no set date in the year
          when PDP’s need to be completed, however from 2010/2011 a target date will
          be set and also the throughput of PDP’s was high enough to justify compliance.
          It was agreed that the appraisal process within the Trust needs upgrading. It
          was noted that External Audit would be carrying out an HR audit next year.

          It was agreed that both internal and external audits must be planned well in
          advance so that they can be finalised and signed off in a timely manner.                                         R Brealey

          It was agreed that in the future individual audits would not be embedded in the
          progress reports. All individual audits to be included on the agenda as
          separate items.

10.06     EXTERNAL AUDIT
10.06.1   Progress Report
          The report was self-explanatory and there were no further questions.

10.06.2   Outline External Audit Plan 2010/11
          Mike Rappolt asked for the key themes to be highlighted for the next year and following three years, to give a
          sense of where the priorities lie for both audit and the Trust.

          Suresh Patel reported that the following three areas were key priorities:
             1.     Integration of NHS Wandsworth Community Services, which will
                    have a major impact on the Trust’s accounts, systems controls,
                                                                          Agenda Item: 9.6
                                                                        Paper No: TB(10)32

                     governance and accountability structures.
             2.      People Management. In view of changes in personnel at Director
                     level, to review people management processes to determine
                     whether staff are being managed appropriately and consistently.
             3.      Foundation Trust application and progress, looking at areas around
                     governance, and Board development. It was agreed that the F/T
                     application will be undergoing a considerable amount of external
                     scrutiny and it was agreed that Suresh would discuss this further
                     with Peter Jenkinson and David Astley to agree the main theme for
                     external audit to consider. It could be around cost reduction and the
                     annual planning process, including looking at methodologies being
                     used to identify and deliver CRP’s to see whether they are
                     appropriate.

          The outlined audit plan for 2010/11 was reviewed, Mike Rappolt reported that
          proposals are being made to revamp IT Governance within the Trust, but that
          these still have to be agreed, Suresh to discuss further with Patrick Mitchell. It
          was agreed that the review of departmental financial management would
          continue and over time cover all the major units of the Trust. Suresh to bring
          back the finalised plan to the March 2010 meeting. It was noted that the level
          of the external audit fee rate had been held unchanged.

10.07     COUNTER FRAUD
10.07.1   Counter Fraud Progress Report
          Pauline Lewis attended the meeting and presented the progress report for Oct-
          Dec 2009 that was very informative and well received. It was noted that:
             1.     New allegations of fraud continue to be reported, currently there are
                    40 ongoing cases. This level of cases reported would be classed as
                    high, however this is a positive sign of awareness of the counter
                    fraud culture. The importance of education and awareness of zero
                    tolerance needs to be continually enforced.
             2.     The intranet site is running and feedback was encouraged.
             3.     It was agreed that the report would link work done to the Trust’s risk
                    register so that themes can be reviewed and any gaps in coverage
                    identified..
             4.     The main area of fraud is around timesheets and there needs to be
                    a system in place to ensure this is fraud proof.

10.07.2   KPIs for Counter Fraud
          It was noted that the KPI’s were embedded in the main report. It was noted
          that KPI targets would be included in the reports for next year.

          It was noted that the Audit Committee would review the counter fraud annual
          report that will be published at year-end. The next meeting will review the Mar 2010
          counter fraud plan for 2010/2011.

10.08     COMMITTEE BUSINESS
10.08.1   Self Assessment of Committee’s effectiveness
          Denise Richings to email the form to committee members for completion and
          return so that one consolidated report can be reviewed at the next meeting.

10.08.2   Review Audit Committee Plan
          The plan was reviewed and the following points were noted:
             1.     It was noted that on the Audit Committee plan there were a number
                    of blank areas under the Assurance Framework, particularly around
                    Patient Focus and also under Public Health. It was agreed that
                    Peter Jenkinson and Roger Brealey would review the plan to ensure
                                                                         Agenda Item: 9.6
                                                                       Paper No: TB(10)32

                     topics are placed under the correct category.
               2.    It was noted that under Briefings, this should read Risk, Assurance
                     and Compliance Committee, as the Governance Committee no
                     longer exists.
               3.    It was agreed to include Clinical Audit into the regular reporting.
                     Peter and Roger to discuss further.
               4.    Quality Accounts to be reviewed at the same time as the Financial
                     Accounts in May.
               5.    It was agreed that the July 2010 meeting would be taken out of the
                     schedule, as the Audit Committee meets quarterly with an additional
                     extraordinary meeting in May to review the Financial and Quality
                     Accounts.

10.08.3   Development Plan
          Discussion took place around whether members felt they would like any further
          development in terms of their roles on the Audit Committee. There are some
          useful sessions in the Kings Fund, the Audit Commission carry out sessions on
          an annual basis. It was agreed that the Audit Committee should be
          familiarising itself with new developments in the NHS.

          Peter Jenkinson suggested that the Audit Committee reviews its relationship
          with the Risk, Assurance and Compliance Committee in 6 months time.                Sept 2010

10.08.4   Items scheduled for the next agenda
          The agenda for the 17 March was reviewed. The following points were noted:
              1.    4.2.1 – Space Issues – remove as on the corporate risk register
              2.    4.3.1 – S4BH – remove as covered in January 2010
              3.    4.3.4 – Transformation Programme-Medium Term project – remove
                    as no longer on the plan.
              4.    4.3.6 – rename – Roger Brealey to amend description                R Brealey
              5.    4.3.7 – MAST – remove-no longer on plan – already reported
              6.    4.3.8 – Implementation of SLM – remove as moved to next year. It
                    was agreed to discuss the terms of reference at the next meeting.  R Brealey
              7.    Committee Business – add results of the Self Assessment
              8.    9.2 –Annual report for the Trust Board (draft to consider in March
                    and then final version to the Trust Board in May 2010.             R Brealey

10.08.5   Messages for Trust Board arising from this meeting
          1.  The Audit Committee requested the Executive to introduce a standard
              project management methodology across the Trust to ensure consistently
              good project outcomes are achieved. The Committee was pleased to
              learn that this recommendation had been accepted and that a new Trust-
              wide project management policy would be introduced by the end of
              March.
          2.    As part of a series of examinations of Trust “partnership” arrangements
                where financial or reputational risk is involved the Committee was briefed
                on the South West London Elective Orthopaedic Centre. The
                management processes were found to be satisfactory.
          3.    The Audit Committee received Internal Audit reports on Capital Project
                and Capital Programme Management which both provided reasonable
                assurance that the management procedures were operating well
          4.    An Internal Audit of the implementation of the European Working Time
                Directive (EWTD) gave reasonable assurance that the Junior Doctors
                Rotas have been well implemented but made some recommendations as
                to the continued monitoring of compliance with the EWTD
                                                                          Agenda Item: 9.6
                                                                        Paper No: TB(10)32


          5.   An Internal Audit could give only limited assurance on the realisation of
               procurement savings claimed by the Trust so far. This is a key area of
               savings for the Trust going forward and the Committee was pleased to
               hear of the very positive steps being taken by the Executive to achieve
               the procurement efficiencies needed
          6.   Satisfactory progress on reducing salary overpayments was noted.
          7.   As of this year all NHS Trusts must use the new International Financial
               Reporting Standards (IFRS) to prepare their accounts. The Audit
               Committee was briefed on IFRS and on the adjustments in the income
               and expenditure accounts and balance sheets in the restated 2008/09
               accounts prepared to IFRS.
          8.   An initial and useful discussion was held on the Audit Committee plan for
               2010/11. The plan will be finalised at the Audit Committee’s next meeting
               in March. The key themes for 2010/11 are likely to be:
          a.   Integration of Wandsworth Community Services
          b.   People management with the Trust
          c.   Cost Reduction Programmes
          d.   Supply Chain Management and Procurement
          e.   Income collection systems
          Further input from The Board on what should be in the 2010/11 Audit
          Committee plan would be welcome.

10.08.6   Meeting Evaluation
          The NEDS found the content and organisation of the meeting to be very good

10.09     ANY OTHER URGENT BUSINESS
          No other urgent business to discuss.

10.10     DATE OF NEXT MEETING: 24 March 2010 - Muriel Powell Seminar Room
          13.30-17.00

          A private discussion with Internal Audit took place following the main meeting.

				
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