Central London, West London, Hammersmith & Fulham, Hounslow and Ealing CCGs
Audit Committee
This is a meeting of the Audit Committees of five CCGs. Items apply to all five CCGs, unless indicated otherwise
Monday 2nd June 2014
Room 5.4, 15 Marylebone Road
Members in attendance
All five CCGs
Philip Young (PY)
Lay member for Audit & Governance CWHHE, Chair
Central London, West London, Hammersmith &
Fulham and Hounslow CCGs
Alan Hakim (AH)
Secondary Care Consultant, CWHH CCGs
Michael Morton (MM)
Central London CCG
Lay Member, Central London CCG
West London CCG
Simon Tucker (ST)
Lay Member, West London CCG, by phone
Tony Willis (TW)
Hammersmith & Fulham CCG
Governing Body Member, Hammersmith & Fulham CCG
Hounslow CCG
Trevor Woolley (TW)
Lay member, Hounslow CCG
Raj Chandok (RC)
Ealing CCG
Vice Chair, Ealing CCG, by phone
John Riordan (JR)
Secondary Care Consultant, Ealing CCG
Non Members in attendance
Nick Atkinson (NA)
Matthew Bazeley (MB)
Heather Bygrave (HB)
Sally-Anne Eldridge (SAE)
Daniel Elkeles (DE)
Angus Fish (AF)
Philip Johnstone (PJ)
Gary McLeod (GMc)
Pooja Maniar (PM)
Mary Neckles (MN)
Clare Parker (CP)
Louise Proctor (LP)
Kieran Seale (KS)
Tim Spicer (TS)
Rebecca Whitworth (RW)
Ben Westmancott (BW)
Baker Tilly, Internal Audit
Managing Director, Central London CCG
Deloitte, External Audit (Ealing)
KPMG – External Auditors (CWHH)
Chief Officer CWHHE CCGs
Deloitte, External Audit (Ealing)
KPMG – External Auditors (CWHH)
KPMG – External Auditors (CWHH)
Senior Finance Manager, CSU
Senior Finance Manager, CSU
Chief Financial Officer CWHHE CCGs
Managing Director, West London CCG
Governance Manager, CWHHE
Chair, Hammersmith & Fulham CCG
Senior Finance Manager, CSU
Director of Compliance CWHHE CCGs
Page 1 of 7
Minutes
Business Items
Action
1.
Welcome/Apologies
1.1.
Apologies were received from Nicola Burbidge, Fiona Butler, Rohan Hewavisenti,
Mohini Parmar and Mark Trevallion.
2.
Declaration of Interests
2.1.
No other interests in addition to those previously identified were declared.
3.
Minutes of meeting – 8th May 14
3.1.
The minutes were approved as an accurate record of the meeting.
4.
Matters Arising
4.1.
The issues that had been identified at the last meeting relating to the audit were set
out in a note which was used to inform the discussion in the meeting. The other
actions (unrelated to the accounts) were deferred to the next meeting Committee.
5.
Update on common issues
5.1.
Clare Parker introduced a note which summarised the changes which had been
made consistently across the Annual Accounts and Annual Reports of the five
CCGs since the meetings of the Audit Committees on 8th May. She also introduced
a similar note relating to changes to the Governance Statements.
5.2.
It was noted that the median pay calculation has been re-done and was currently
being reviewed by the auditors.
5.3.
The papers were noted by the Committee.
6.
Central London CCG
6.1.
Clare Parker presented the Annual Report and Accounts for Central London CCG to
the Committee. She identified two specific changes that had been made since the
last meeting.
The first arose as the draft accounts included a finance lease obligation of
£1,529,000 relating to the South West Clinic, whilst the related asset sat with NHS
Property Services. The asset and liability should have been co-located with NHS
Property Services. She said that a correction for this legacy issue has been agreed
and processed and is reflected within the final accounts presented for approval. The
adjustment made has reduced liabilities, offset to legacy reserves.
The other change arose as in the Draft Accounts a £500,000 CQUIN rebate from
Imperial College Health Trust had originally been included within a net
creditor/payable balance. This has now been corrected leading to an increase in
both Receivables and Payables of £500,000 with no net impact to the Statement of
Financial Position (Balance Sheet).
She explained that, with these exceptions, all other changes made have been either
presentational or disclosure in nature and that the reported surplus remains at
£16.9m.
Page 2 of 7
6.2.
Philip Johnstone (KPMG) presented the ISA 260 report. He complimented the CCG
on the quality of the accounts and the work done to support the audit. Following the
review of the financial statements, the Annual Report (including the remuneration
report) and the Governance Statement he said that their key findings were:
 There are no material amendments to the draft financial statements
submitted for audit.
 There are no unadjusted audit differences.
 A number of minor presentational and typographical changes to the accounts
had been agreed with management.
 In addition to the routine request, KPMG have requested specific
management representations regarding the classification of revenue and
capital expenditure, and the CCG’s £nil provisions for continuing healthcare
claims.
He said that KPMG intended to issue an unqualified audit opinion on the accounts
following the Audit Committee adopting the accounts and receipt of the
management representation letter.
6.3.
Turning to the use of resources, Philip Johnstone said that, based on the findings of
their work, KPMG concluded on whether there are any matters arising from the
value for money work that need to report on. They had concluded that there are no
matters to report for the CCG.
6.4.
The Committee discussed the documents that had been presented. Philip Young
asked about the accuracy of the table of salaries and allowances, particularly with
regards to pension related benefits. It was noted that this is a common issue across
the five CCGs. It was agreed that Clare Parker will review the information and
agree any changes with Philip Young. The Committee discussed other minor
changes to the wording of the documents.
6.5.
Philip Johnstone said that there were two specific items that would be asked for in
the letter of representation in addition to the standard wording. These related to GP
IT equipment and Continuing Care provision. The Committee agreed the signing of
the letter of representation on behalf of the CCG by the Chief Officer and the Chair
of the Audit Committee.
6.6.
Having considered the items outlined above, the Committee approved the Annual
Report and Accounts and the Governance Statement for Central London CCG.
6.7.
The Committee noted that the accounts were for submission to NHSE on Friday 6th
June and that it was possible that further changes may be required pursuant to
emerging NHS England guidance. It was agreed that in that eventuality the revised
papers will be circulated, but will be subject to Chairs Action to ensure the filing
deadline can be met.
7.
West London CCG
7.1.
Clare Parker presented the Annual Report and Accounts for West London CCG to
the Committee. She said that the only changes that had been made since the
previous meeting of the Committee were either presentational or disclosure in nature.
The Statement of Comprehensive Net Income (Income and Expenditure) is
unaltered, and the reported surplus is unchanged at £29.6m.
Page 3 of 7
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7.2.
Philip Johnstone (KPMG) presented the ISA 260 report. He complimented the CCG
on the quality of the accounts and the work done to support the audit. Following the
review of the financial statements, the Annual Report (including the remuneration
report) and the Governance Statement he said that their key findings were:
 There are no material amendments to the draft financial statements submitted
for audit.
 There are no unadjusted audit differences.
 A number of minor presentational and typographical changes to the accounts
had been agreed with management.
 In addition to the routine request KPMG have requested specific management
representations regarding the classification of revenue and capital
expenditure, and the CCG’s £nil provisions for continuing healthcare claims.
He said that KPMG intended to issue an unqualified audit opinion on the accounts
following the Audit Committee adopting the accounts and receipt of the management
representation letter.
7.3.
Turning to the use of resources, Philip Johnstone said that, based on the findings of
their work, KPMG concluded on whether there are any matters arising from the value
for money work that need to report on. They had concluded that there are no matters
to report for the CCG.
7.4.
The Committee agreed the signing of the letter of representation on behalf of the
CCG by the Chief Officer and the Chair of the Audit Committee.
7.5.
Having considered the items outlined above, the Committee approved the Annual
Report and Accounts and the Governance Statement for West London CCG.
7.6.
The Committee noted that the accounts were for submission to NHSE on Friday 6th
June and that it was possible that further changes may be required pursuant to
emerging NHS England guidance. It was agreed that in that eventuality the revised
papers will be circulated, but will be subject to Chairs Action to ensure the filing
deadline can be met.
8.
Hammersmith & Fulham CCG
8.1.
Clare Parker presented the Annual Report and Accounts for Hammersmith & Fulham
CCG to the Committee. She said that with one exception the only changes that had
been made since the previous meeting of the Committee were either presentational
or disclosure in nature.
The exception related to an issue that under the Hammersmith & Fulham PCT
Transfer order, the contract between Care UK and the PCT (Farm Lane and St
Vincent) was transferred to Hammersmith & Fulham CCG. The balances from this
contract, asset and finance lease, were incorrectly assigned and transferred to NHS
Property Services. The asset and liability should have been with the CCG. A
correction for this legacy issue has now been agreed and processed, but only after
publication of the draft accounts. It is now included in the final accounts presented
for approval. The adjustment made has created an asset of £1,191,000; a liability of
£1,362,000; and a net £11,000 impact on the Statement of Comprehensive Net
Expenditure, marginally reducing the reported surplus.
The Statement of
Comprehensive Net Income (Income and Expenditure) has not materially altered,
and whilst the reported surplus remains £12.3m, it has reduced by £11,000.
Page 4 of 7
8.2.
Philip Johnstone (KPMG) presented the ISA 260 report. He complimented the CCG
on the quality of the accounts and the work done to support the audit. Following the
review of the financial statements, the Annual Report (including the remuneration
report) and the Governance Statement he said that their key findings were:
 There are no material amendments to the draft financial statements submitted
for audit.
 There are no unadjusted audit differences.
 A number of minor presentational and typographical changes to the accounts
had been agreed with management.
 In addition to the routine request KPMG have requested specific management
representations regarding the classification of revenue and capital
expenditure, and the CCG’s £nil provisions for continuing healthcare claims.
He said that KPMG intended to issue an unqualified audit opinion on the accounts
following the Audit Committee adopting the accounts and receipt of the management
representation letter.
8.3.
Turning to the use of resources, Philip Johnstone said that based on the findings of
their work, KPMG concluded on whether there are any matters arising from the value
for money work that need to report on. They had concluded that there are no matters
to report for the CCG.
8.4.
The Committee agreed the signing of the letter of representation on behalf of the
CCG by the Chief Officer and the Chair of the Audit Committee.
8.5.
Having considered the items outlined above, the Committee approved the Annual
Report and Accounts and the Governance Statement for Hammersmith & Fulham
CCG.
8.6.
The Committee noted that the accounts were for submission to NHSE on Friday 6th
June and that it was possible that further changes may be required pursuant to
emerging NHS England guidance. It was agreed that in that eventuality the revised
papers will be circulated, but will be subject to Chairs Action to ensure the filing
deadline can be met.
9.
Hounslow CCG
9.1.
Clare Parker presented the Annual Report and Accounts for Hounslow CCG to the
Committee. She said that the only changes that had been made since the previous
meeting of the Committee were either presentational or disclosure in nature. The
Statement of Comprehensive Net Income (Income and Expenditure) is unaltered,
and the reported surplus is unchanged at £1.9m.
Page 5 of 7
9.2.
Philip Johnstone (KPMG) presented the ISA 260 report. He complimented the CCG
on the quality of the accounts and the work done to support the audit. Following the
review of the financial statements, the Annual Report (including the remuneration
report) and the Governance Statement he said that their key findings were:
 There are no material amendments to the draft financial statements submitted
for audit.
 There are no unadjusted audit differences.
 A number of minor presentational and typographical changes to the accounts
had been agreed with management.
 In addition to the routine request KPMG have requested specific management
representations regarding the classification of revenue and capital
expenditure, and the CCG’s £nil provisions for continuing healthcare claims.
He said that KPMG intended to issue an unqualified audit opinion on the accounts
following the Audit Committee adopting the accounts and receipt of the management
representation letter.
9.3.
Philip Johnstone noted that the CCG had decided to upgrade and replace GP
practices' clinical IT systems with a single, integrated system and that the
expenditure required to fund this project is capital in nature. He said that the CCG
incurred £228,000 of capital expenditure on GP IT equipment during 2013/14. This
was in line with an approved capital allocation from NHS England. The replacement
of GP practices' IT systems is a two year programme and the CCG will therefore
require a further approved capital allocation from NHS England in 2014/15 in order to
complete the programme. He said that KPMG recommended that an appropriate
capital allocation is obtained from NHS England for the planned expenditure in
2014/15.
It was noted that this recommendation had been accepted by
management.
9.4.
Turning to the use of resources, Philip Johnstone said that, based on the findings of
their work, KPMG concluded on whether there are any matters arising from the value
for money work that need to report on. They had concluded that there are no matters
to report for the CCG.
9.5.
The Committee agreed the signing of the letter of representation on behalf of the
CCG by the Chief Officer and the Chair of the Audit Committee.
9.6.
Having considered the items outlined above, the Committee approved the Annual
Report and Accounts and the Governance Statement for Hounslow CCG.
9.7.
The Committee noted that the accounts were for submission to NHSE on Friday 6th
June and that it was possible that further changes may be required pursuant to
emerging NHS England guidance. It was agreed that in that eventuality the revised
papers will be circulated, but will be subject to Chairs Action to ensure the filing
deadline can be met.
10.
Ealing CCG
10.1.
Clare Parker presented the Annual Report and Accounts for Ealing CCG to the
Committee. She said that the only changes that had been made since the previous
meeting of the Committee were either presentational or disclosure in nature. The
Statement of Comprehensive Net Income (Income and Expenditure) is unaltered,
and the reported surplus is unchanged at £6.9m.
Page 6 of 7
10.2.
10.3.
10.4.
Heather Bygrave (Deloitte) presented the report on the audit. She said that there
was one uncorrected misstatement above the reporting threshold in relation to the
Statement of Comprehensive Expenditure and Statement of Financial Position.
Correction of this would have the effect of reducing net operating costs for the year
by £0.3m. If the error in the sample were projected to the remainder of the
population, the adjustment would be increased by a further £0.1m. However she
said that Deloitte expect to issue an unqualified opinion on the financial statements
and regularity and an unqualified conclusion on value for money. She said that they
had made a number of comments on the “front half” of the annual report, including
the Annual Governance Statement and management had updated the report in
response to the comments. They have now received the updated version and are
satisfied that their comments have been adequately addressed. The draft letter of
representation had been prepared and included only standard wording.
The question of the documentation of the change of Accountable Officer from Rob
Larkman to Daniel Elkeles was raised. It was noted that although NHS England had
formally written to approve the changes, they had not specifically written to Daniel
Elkeles to confirm his role. It was agreed that NHS England should be asked to
provide the necessary paperwork.
Philip Young asked about the tax position of interim staff. He noted that all interims
had been written to asking them to self-certify that they had made appropriate tax
arrangements. He asked if this provided sufficient assurance to the CCGs. Clare
Parker will check this. Philip Young also asked about the position of those who had
not given the required assurance and noted that guidance suggested that in these
circumstances contracts should be terminated. It was agreed that more needs to be
done in this area and that a policy should be agreed for those in this position and an
action plan developed for its implementation. [Post meeting note: The Chair and
Chief Officer agreed that the policy should state: “For those individuals who have not
responded to our request for assurance regarding their tax status, that if that
assurance is not forthcoming will lead to termination of their contract”].
10.5.
The Committee agreed the signing of the letter of representation on behalf of the
CCG by the Chief Officer and the Chief Finance Officer.
10.6.
Having considered the items outlined above, the Committee approved the Annual
Report and Accounts and the Governance Statement for Ealing CCG.
10.7.
The Committee noted that the accounts were for submission to NHSE on Friday 6th
June and that it was possible that further changes may be required pursuant to
emerging NHS England guidance. It was agreed that in that eventuality the revised
papers will be circulated, but will be subject to Chairs Action to ensure the filing
deadline can be met.
11.
Any Other Business
11.1.
Philip Young thanked those present for their contribution to the meeting.
12.
Dates of next meetings
Date and time of future meetings:




Thursday 10th July, 11.30am
Thursday 9th October, 11.30am
Thursday 11th December, 11.30am
Thursday 12th February 2015, 11.30am
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