MINUTES of the Audit Committees This is a meeting of the Audit Committees of five CCGs. Items apply to all five CCGs, unless indicated otherwise

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1 Agenda item: 03 MINUTES of the Audit Committees This is a meeting of the Audit Committees of five CCGs. Items apply to all five CCGs, unless indicated otherwise Tuesday 24 May 2016, 11:00am 11:30pm Rooms 5.4, 15 Marylebone Road, London NW1 Members in attendance Philip Young (PY) Dominique Kleyn (DK) Dr Alan Hakim (AH) Trevor Woolley (TW) Dr Raj Chandok (RC) All five CCGs Lay member for Audit & Governance, CWHHE CCGs (Chair) Central London CCG Lay member (by phone) West London CCG Secondary Care Consultant, CWHHE (from item 7 onwards) Hounslow CCG Lay member Ealing CCG GP member Non Members in attendance Neville Purssell (NP) Clare Parker (CP) Keith Edmunds (KE) Jules Martin (JM) Eva Horgan (EH) Simon Carney (SC) Mark Jarvis (MJ) Rebecca Whitworth (RW) Suleman Allinson (SA) Mary Neckles (MN) Amit Shah (AS) Maria Claridge (MC) Chair, Central London CCG Chief Officer, CWHHE CCGs Chief Finance Officer, CWHHE CCGs Managing Director, Central London CCG Deputy Chief Finance Officer, CWHHE CCGs Head of Governance, CWHHE CCGs (Secretary) Head of Governance & Engagement, Hammersmith & Fulham CCG Head of Financial Support, Ealing CCG Financial Control Manager, CWHHE CCGs Financial Control Team Manager, Hammersmith & Fulham CCG Senior Management Accountant, Central London CCG CWHHE Governance (Minutes) Page 1 of 5

2 Nick Atkinson (NA) Paul Henson (PH) Neil Hewitson (NH) Joe Farnell (JF) Philip Johnstone (PJ) Head of Internal Audit, RSM Auditor, KPMG LLP Director, KPMG LLP Audit Manager, KPMG LLP Director, KPMG LLP Minutes Business Items Action 1. Welcome/apologies 1.1 The Chair welcomed members and attendees to the meeting. 1.2 Apologies were received from: Mohini Parmar, Chair, Ealing CCG 1.3 It was noted that Hammersmith & Fulham CCG was inquorate for the meeting and decisions taken would require ratification in correspondence (thereafter highlighted in the minutes). 2. Declaration of interests 2.1. No other interests were identified beyond those declared previously. 3. Minutes of meeting 5 May The minutes were agreed to be a true and accurate record of the meeting. 4. Matters arising and Action Log Matters arising 4.1 There were no further matters arising not already addressed on the Agenda and Action Log. Action Log 4.2 There were no further updates for the Action Log. 5. Summary of changes to CWHHE CCGs Accounts 5.1 The Committees received a summary of the changes made to each set of the annual accounts since they were last submitted to the Audit Committee on 5 May 2016, noting that the changes were presentational or disclosure-related only and each CCG s reported surpluses remained unchanged. 6. External Audit Progress Report CWHHE CCGs 6.1 Members noted a progress report from the external auditors (KPMG), detailing the work undertaken since the last meeting of the Committees on 5 May Central London CCG s Annual Report & Accounts 2015/ Members received, for approval, Central London CCG s 2015/16: Page 2 of 5

3 a) Statutory Accounts Members attention was drawn to the amendment made, in the accounts, of the figure spent on consultancy services from 6m to 15m, and were advised this was comprised of both external contracts and external consultancy. It was agreed that officers would review the explanatory note to ensure the greatest possible clarity. b) Year End Audit Report (ISA260) KPMG presented the main findings of their audit of the accounts, reporting that Management Representation Letter. Members attention was drawn to the external auditors recommendations, made as a result of the work undertaken in 2015/16, relating to: the authorisation of journals; the agreement of balances process within the CWHHE collaborative; and related parties returns. In briefing the Committees on the concern over journal authorisations, Members were assured that this was not endemic across CWHHE but rather isolated instances brought about by senior staff being unavailable to authorise journals at the appropriate levels, leading to staff breaking the transactions into several smaller amounts for authorisation at a lower level. Officers had accepted the audit findings and the staff members involved had been spoken to directly and are set to receive training on the scheme of delegation, to ensure this does not reoccur. Members were advised that KPMG had undertaken extensive testing to assure themselves that journals had not been used for hiding any fraudulent activity; however, given the risk posed, it was recommended that management continue extensive testing of journals and post-approvals continue with a review of journals and approvals for the year-to-date to be undertaken. KPMG s audit of the related parties disclosures, included in the notes to the financial statements, had identified discrepancies with the disclosures made by Governing Body members in the CCG s Register of Interests. Governance leads will be asked to reconcile the Governing Body members related parties disclosures in the financial statements, with that of the disclosures included in the Registers of Interest, and report back to the Committees. c) Management Representation Letter (ISA260) The Committee confirmed that there were no issues to be brought to the attention of the external auditors. Members attention was drawn to the specific provision contained in Central London CCG s ISA260, acknowledging the control failures identified over the appropriateness of journal entries. d) Annual Report EH SC Page 3 of 5

4 7.11 Body, the Audit Committee APPROVED Central London CCG s 2015/16 Statutory Accounts, Year End Audit Report, Management Representation Letter and Annual 8. West London CCG s Annual Report & Accounts 2015/ Members received, for approval, West London CCG s 2015/16: 8.2 KPMG presented the main findings of their audit of the accounts, reporting that It was noted that an issue with the incorrectly authorised journals had also 8.3 occurred at West London CCG, with approval made by staff at levels above their authorisation limit. Members were assured that the issue allowing this to occur, had now been rectified Body, the Audit Committee APPROVED West London CCG s 2015/16 Statutory 9. Hammersmith & Fulham CCG s Annual Report & Accounts 2015/ Members received, for approval, Hammersmith & Fulham CCG s 2015/16: 9.2 KPMG presented the main findings of their audit of the accounts, reporting that 9.3 As it was inquorate, it was agreed to seek (outside of the meeting) the Audit 9.4 Committee s approval of Hammersmith & Fulham CCG s 2015/16 Statutory Accounts, Year End Audit Report (ISA 260), Management Representation Letter and Annual APPROVED by the Hammersmith & Fulham CCG s Audit Committee, outside of the meeting. 10. Hounslow CCG s Annual Report & Accounts 2015/16 CP/JM CP/LP CP/JC Page 4 of 5

5 10.1 Members received, for approval, Hounslow CCG s 2015/16: iii) Management Representations Letter; and KPMG presented the main findings of their audit of the accounts, reporting that Body, the Audit Committee APPROVED Hounslow CCG s 2015/16 Statutory 11. Ealing CCG s Annual Report & Accounts 2015/ Members received, for approval, Ealing CCG s 2015/16: iii) Management Representations Letter; and 11.2 KPMG presented the main findings of their audit of the accounts, reporting that Body, the Audit Committee APPROVED Ealing CCG s 2015/16 Statutory 11.5 The Committees wished to record their gratitude to the finance teams across the CWHHE CCGs, and team of auditors at KPMG, for the work put into ensuring the accounts will be filed and published on 27 May Any other business CP/SJ CP/TS 12.1 No further matters were raised. Dates of next meetings: Thursday, 16 June 2016, (changed from 07 July); and Thursday, 13 October 2016, Page 5 of 5