HSE Audit and Risk Committee meeting minutes 12 July 2024

Members Present

Brendan Whelan (Chair), Michelle O’Sullivan, Pat Kirwan, John Moody, Éimear Fisher and Sharon Keogh

HSE Executive Attendance

Stephen Mulvany (Chief Financial Officer), Mairead Dolan (Asst Chief Financial Officer), Joseph Duggan (Chief Internal Auditor), Joe Ryan (ND Public Involvement, Culture and Risk Management/Chief Risk Officer), Dara Purcell (Corporate Secretary), Patricia Perry (Office of the Board)

Apologies

Trevor O’Callaghan (CEO Dublin Midlands Hospital Group)

Joined the Meeting

Siobhan Dunphy (Acting ND Procurement)(Item 3.6), Elaine Kilroe (AND Enterprise Risk Management)(Item 4.2), John Delamere (AND National Employee Relations)(Item 5.1), Patrick Lynch (National Director Planning & Performance)(Item 6), Brian O’Connell (Interim ND Capital & Estates)(Item 6); Martin McKeith (AND Capital & Estates), Eleanor Masterson (Chief Architectural Advisor)(Item 6.3)

Minutes reflect the order in which items were considered and are numbered in accordance with the original agenda.  All performance/activity data used in this document refers to the latest information available at the time.

The Chairman held a private session to consider the agenda, papers and the approach to conducting the meeting.

2.1 Conflicts of Interest

No conflicts of interest were declared.

2.2 Minutes

The Committee approved the minutes of 07 June 2024.

2.3 Action Log and Follow Up Items

The Chair advised that he had reviewed the ARC Action Log with the Board Office and all actions were being progressed as per the Update Report.

2.4 Brief of Board Meeting – 28 June 2024

The Chair provided the Committee with an update of discussions held at the HSE Board Meeting of 28 June 2024.

3.1 YTD Expenditure and projection to Year-end

The CFO provided a briefing to the Committee on the Year to Date (YTD) Financial Position as at May 2024. The draft revenue Income and Expenditure (I&E) financial position shows a YTD deficit of €857.7m or 8.8%, which includes a net deficit of €718.0m in Acute Operations, €155.1m in Community and €110.6m in Pension and Demand Led areas which is slightly offset by a surplus of (€126.0m) in Other Operations / Support Services.

He advised that a ‘bottom up’ 2024 projection exercise based on Q1 financial results has been completed. The 2024 Q1 forecast for DoH, excluding first charge, is showing that the Revenue I&E outlook before any mitigating actions is €2,342.8m deficit. An additional first charge of €571m falls to be dealt with in 2024 increasing the projected deficit pre mitigating measures to €2,913.8m.

The Committee noted the detailed discussions in recent months with regard to the development of a comprehensive Pay and Numbers Strategy (PNS), which has now concluded, and welcomed that the overall funding arrangement includes 2024 and 2025. The CFO outlined the critical principles of the PNS, and that the Health Regions and National Services will receive a detailed notification of respective allocations for 2024.

3.2 Health Budget Oversight Group (HBOG)

The Committee noted that there has been no meeting of HBOG since April 2024, and that a meeting is scheduled for 22 July 2024.

3.3 Final Comptroller and Auditor General Audit Certificate

The Chair informed the Committee that the HSE Board re-approved the final draft Annual Financial Statements (AFS) 2023 and associated documentation at the Board meeting on 28 June 2024.

The Committee noted that the final C&AG audit certificate, with an unqualified audit opinion, was issued on 02 July 2024 and a combined Annual Report and AFS Submission was made to the Minister for Health and the Minister for Children, Equality, Disability, Integration & Youth on 03 July 2024.

The Committee reviewed and discussed the Audit Cert, noting the C&AG removed the emphasis of matter statement in relation to Department of Children, Equality, Disability, Integration & Youth (DCEDIY) and that it is being considered as a chapter as part of the C&AG’s report for 2024. The Committee discussed the management issues raised, and questioned the issue of employment settlements and high earners and it was agreed that these issues would be reviewed by the Committee on a quarterly basis.

3.4 Draft Special Legislative Accounts 2023

The Asst CFO advised the Committee that the HSE is required to prepare certain accounts under legislation, and presented the following Special Legislative Accounts 2023 to the Committee.

• Patient Private Property
• Hepatitis C
• Long Stay Repayments
• Long Stay Donations

The Committee noted the Special Legislative Accounts relating to Hepatitis C, Long Stay Repayments and Long Stay Donations and noted that the accounts had been submitted to the C&AG for audit on 31 May 2024.

The Committee reviewed and discussed the key figures in the 2023 National PPP Accounts and were advised that Crowleys DFK had completed their audit of the accounts and prepared the draft National Consolidated PPP Accounts and produced a Management Letter detailing their findings which was received by HSE on 30 May 2024. The recommendations arising from the findings are being addressed.

The Asst CFO advised that the C&AG Management Letter in respect of the 2023 PPP National Accounts was also received on 9 February 2024, and the issues raised are similar to Crowley’s DFK audits and were already notified prior to the signing of the 2023 accounts. She advised that management responses had already been notified to the C&AG before the issue of the Management Letter and were included in the Management Letter to the CEO.

The Committee noted the recommendations from the Management Letters, and noted that each Care Centre receives a more detailed Management Letter which outlines specific findings to be addressed. In relation to the high risk rating finding, the Committee noted that supports including training to local Care Centre PPP administrators and their line managers would take place.

The Committee welcomed the ongoing quality improvement initiative over the past number of years, and that the PPP service is the safest, unique invaluable service of managing, or helping to manage, a vulnerable adult’s in-care finances with greater independent oversight.

The Committee noted that the C&AG Audit will be carried out in August / September 2024 which will then permit the Committee to take a final view of the accounts before recommending them to the Board for approval.

3.5 Internal Controls Improvement Programme

The Asst CFO provided an update to the Committee on the progress of the Internal Controls Improvement Programme. She advised that work continues to grow awareness among all staff of the importance of compliant behaviour and the role each individual plays in this regard. The Committee welcomed the significant progress that has been made across the six work streams, notwithstanding the challenges faced in recent years including Covid-19 and the Cyber Attack, and noted that currently 5 of the 6 work steams are completed and are part of business as usual. In relation to the remaining work stream, which relates to the development of an internal controls self-assessment tool, the roll out of the process should be finalised by the end of 2024.

The Committee noted that from the findings of C&AG audits, Internal Audits as well as responses from the Internal Control Questionnaire (ICQ) and Controls Assurance Review Process (CARP), there is an awareness that there are still a number of key control weaknesses requiring further support, and it was agreed that further updates would be brought to the Committee on a quarterly basis.

3.6 Contract Approval Requests

The Acting ND Procurement presented to the Committee the following Contract Approval Requests (CARs).

1. Provision of Meningococcal Group B Vaccine on behalf of the HSE and all other Public Services to GlaxoSmithKline (GSK).
2. Provision of Contracted Satellite Haemodialysis Unit for UL Hospital Group (Ennis).
3. National Logistics Solution for Health Protection Products.
4. Provision of 100% Renewable Electricity Supply to the Health Service Executive & Health Sector.
5. Supply & Delivery of a Monoclonal Antibody for Respiratory Syncytial Virus (RSV) Passive immunisation of infants.

The Committee considered the detail of the proposed CARs and agreed to recommend to the Board for approval.

CFO and Acting ND Procurement left the meeting

AND Enterprise Risk Management joined the meeting

4.1 Establishment of the Central Compliance Function update

The ND Public Involvement, Culture and Risk Management (PICRM) provided the Committee with an update in relation to the establishment of the Central Compliance Function (CCF), and advised that the role of the AND CCF had been filled, and the future structure of the CCF will be determined over the coming months.

The Committee noted the update relating to Centralised and Aggregated Compliance Reporting, and that a draft pilot Compliance Metric Report has been developed and presented to the CIA, CRO and the Asst CFO in May 2024. Discussions with the SLT and Committee members will be required over the next few months to agree the principal compliance obligations for inclusion in the metric report, and the frequency of reporting to the Committee is to be determined.

He advised that discussions have taken place with the AND Enterprise Risk Management (ERM) in relation to the potential to restructure the Corporate Risk Support Team (CRST) to include compliance matters or the possibility of establishing a dedicated Risk & Compliance Committee.

The ND PICRM advised the Committee that a Compliance Obligations Register has been developed, and outlined the number of stakeholder engagements made by the AND CCF since his appointment, with further meetings being arranged with the REOs and respective Governance & Risk Leads.

The Committee welcomed that a draft multi-year implementation plan has been developed by the CCF, which includes the development of the compliance framework, compliance improvement plans, an annual compliance monitoring plan, identification of a technology solution for compliance monitoring, and developing and supporting compliance training.

The Committee noted the next steps which include engagement with Committee members in relation to the Principal Compliance Obligations applicable to the HSE and review and approve the draft Compliance Obligations Register; finalise the Compliance Metric Reporting frequency required by the Committee; and that the draft implementation plan be brought to the Committee for review and approval at the September meeting.

A copy of the Compliance report will be circulated to Committee members for information purposes.

The Committee held a discussion in relation to the culture function and the importance of developing and promoting a positive, high quality culture within the HSE.

4.2 CRO Update

The AND ERM provided the Committee with an update on the following items.

The Committee were advised that the Q2 2024 CRR remains in draft and is subject to change until presentation and approval by the SLT on 23 July 2024, and noted the update.

The Committee noted that the CRR reflects engagement and feedback from SLT risk teams and subject matter experts, and updates relating to the number of Open and Watched risks, the transitional ownership arrangement, the inclusion of metrics, and management updates.

The full Q2 Corporate Risk Register will be presented to the Committee at the September 2024 meeting.

The Committee discussed the relationship between the DoH and the HSE in relation to Risk, and were advised that there has been engagement with Risk Leads and Assistant Secretary in the DoH and a further meeting is scheduled for September.

The Committee highlighted the issue of Industrial Relations matters that are ongoing, and the risks associated with same, and were advised of the Business Continuity Management (BCM) policy managed by Tom McGuinness, AND for Emergency Management and that all HR risks which include Industrial Relations matters, are watched risks and are being monitored. The Committee highlighted that Health Regions should have a BCM Policy.

The Committee noted the interim arrangement of risk ownership proposed to be put in place for risks currently recorded against a role that would not form part of the new structure. Until an appropriate SLT owner is identified, these risks will continue to be monitored by the relevant CRST member and Risk Management Lead. The SLT will review both the risks and ownership at subsequent meetings where the CRR is presented.

As previously agreed by the Committee, a Corporate Risk Briefing for each of the Board Committees who are assigned corporate risks would be carried out as part of the annual work programme. The Committee noted the Corporate Risk Briefing template developed to assist with this, which was approved by the SLT.

The Committee noted the status of actions that arose from the Committee’s workshop held on 25 January 2024, and it was agreed that the Chair and AND ERM would speak offline.

John Delamere AND National Employee Relations joined the meeting

5.1 Monthly Report including intranet, policies and IR update

The Chief Internal Auditor (CIA) provided the monthly report update to the Committee in relation to the Internal Audit Team Site; Internal Audit Policies (2024); and Industrial Relations, with the AND National Employee Relations (AND NER) in attendance for this item.

The CIA advised that Internal Audit has recently implemented several initiatives as part of the continuous improvement of the function and its delivery of internal audit activity, with several initiatives which would enable staff to access a wider range of ICT systems, applications, and data with significant accompanying benefits.

He advised that updates and additions to the IA Manual are ongoing, reflecting the new Global IA Standards 2024, and a review and update of the Ancillary Safety Statement for the IA Division, which takes account of the Corporate Safety Statement 2023, and which will assist in ensuring a fully complete Safety Statement is in place for all Internal Audit staff, which were noted by the Committee.

The AND NER provided an update to the Committee in relation to the Internal Audit Industrial Relations matter. The Committee noted concern relating to a timely resolution and were advised that it is hoped that the matter will be progressed by September. The Committee highlighted that the ongoing non-cooperation of some auditors is impacting the timely delivery of the Internal Audit Plan, and on the Committee’s ability to provide assurance to the Board. It was noted that the CIA was asked to develop a contingency plan to address the assurance deficit arising from the audits which are not taking place.

The Committee discussed the Non-Recurring Funded Waiting List Initiatives Audit Report, which identified risks regarding procurement and pay policy compliance, and noted that Acute Services are to assess the findings and report back to CFO and SLT. The Committee requested that a further update be brought back to the Committee in relation to the procurement of service providers at a future meeting.

5.2 Internal Audit Charter Review

The CIA presented to the Committee the draft Internal Audit Charter, which defines the internal audit function's purpose and mandate, and how the Internal Audit Division will govern itself by adherence to the mandatory elements of the Institute of Internal Auditors’ (IIA) International Professional Practices Framework (IPPF).

It was agreed that the Committee would further review the draft and provide feedback to the CIA.

5.3 Internal Audit Strategic Plan

The CIA presented an update to the Committee in relation to the strategic considerations and direction of the Internal Audit Division, which the Committee reviewed and approved the Internal Audit Strategy on a Page and the revised structure that supports it.

Patrick Lynch, National Director Planning & Performance; Brian O’Connell, Interim ND Capital & Estates; Dr Philip Crowley, ND Wellbeing, Equality, Climate and Global joined the meeting

6.1 Climate Strategy - Update on progress

The ND Wellbeing, Equality, Climate and Global (ND WECG) provided to the Committee an update on progress on the HSE Climate Action Strategy Implementation (Strategy), which sets out the HSE’s commitment to deliver net-zero emissions no later than 2050, and delivering healthcare that is environmentally and socially sustainable. The Strategy outlines the HSE’s approach to addressing the Government’s National Climate Action Plan (NCAP).

The Committee also noted the HSE’s Infrastructure Decarbonisation Roadmap, which sets out an approach and actions to achieve the Energy targets set out in the NACP to deliver an estate that is Net Zero by 2050, which is managed by the HSE Capital and Estates team and has been updated for 2024 and submitted to Sustainable Energy Authority of Ireland (SEAI).

He outlined that ten strategic objectives, under six priority areas, and two additional enabling functions have been identified as the building blocks of the Strategy. A Steering Group has been appointed and working groups are in place to coordinate implementation of each of the ten objectives.

As highlighted in the paper, he outlined the key achievements to date, and advised the Committee of the plan to hold an in-person Sustainability Leadership course, which will be delivered by Change by Degrees in Q3 2024 for the HSE Leadership Team and Board members, to which ARC members were welcome to attend.

The Committee held a discussion in relation to the importance of the implementation of Green Public Procurement; that no standardised process exists for Fleet Management across the HSE; and the mapping of health services facilities in relation to flood risk.

The Committee welcomed the positive progress since the launch of the Strategy in June 2023, and noted that Climate Action is a core priority for implementation of the HSE. It was agreed that further updates would be brought to ARC on a half yearly basis.

ND WECG left the meeting

6.2 National Children’s Hospital (NCH) Project and Programme Update

The ND Planning and Performance (ND P&P) provided an update to the Committee in relation to the National Children’s Hospital (NCH) Project and Programme.

At the request of the Committee at the June meeting, the ND P&P provided the Committee with a copy of the Operational Readiness Review which was commissioned by him as the HSE Lead Director, and undertaken by an international expert, Professor Melvin Samsom, which has concluded. The final Report and Implementation Plan was approved by the CHI Board, and the CHI are responsible for implementing the plan, which will be monitored through the HSE Lead Director process.

1. The Committee noted the key actions to give effect to the Report’s recommendations, which were Transformation; Operational Leadership; Clinical Leadership; The Organisational Model; and Managing the Programme. Professor Samson in making these recommendations stated that ‘These recommendations should be seen as a package that require implementation in a timely manner to reduce the risks of failed commissioning / transformation programme’.

The Committee were advised that the CHI have undertaken detailed planning on the operational commissioning programme and submitted a paper to the HSE in June 2024, and is now under review. The CHI commissioning team has been strengthened with the recent approval by the HSE of a further 36 CHI commissioning posts. The HSE continues to monitor CHI’s implementation of its wider workforce plan, through the established ‘Quarterly Workforce Review’ process.

The Committee discussed the external assurance review and Implementation Plan, and highlighted their concern in relation to some of the serious issues and risks to the programme, and with the CHI’s ability to deliver on this next phase, which could result in further timescale delays, additional costs, safety and quality issues and reputational damage for CHI and HSE.

In relation to the programme management and programme oversight arrangements, in which the HSE has responsibility for programme funding and assurance, the Committee outlined the importance of oversight by the HSE Board.

6.3 National Maternity Hospital

The ND P&P provided an update to the Committee in relation to the National Maternity Hospital (NMH) at St. Vincent’s University Hospital (SVUH) Programme – Governance and Resource Mobilisation.

The Committee noted that the Programme Governance Structure for the NMH at SVUH Programme was previously presented to the Committee in November 2023, where Option 2, which proposed HSE as the Contracting Authority and primary delivery entity, as the preferred option to ensure that effective and clear governance arrangements are in place to deliver the programme, was endorsed, approved by the Board and had subsequently been reviewed and feedback received from the DoH, NMH and SVUH.

The ND P&P advised that the Programme is now at a critical juncture with multiple work streams ongoing in preparation for approval to award the main construction contract and to ensure readiness to commence these works on site. The mobilisation of the Programme Governance Structure, and of the associated resources required, is a key priority for the Programme. Approval by the NMH of the Programme Governance Structure remains outstanding, and is a dependency for progressing mobilisation.

The Committee noted the summary of the key milestone timelines for the governance and resource mobilisation.

The Committee discussed the Programme Reporting Lines under the Programme Governance Structure, noting the responsibilities of the HSE.

The Committee discussed the key lessons learned from the NCH in relation to the timely mobilisation of the Programme Governance Structure, and that the HSE must deliver this programme to timescale, to budget and to quality and safety standards, and outlined that the HSE Board will need to establish its own robust governance mechanisms to complement those built into the programme structure.

6.4 Capital & Estates Strategy - Update on progress

The Committee noted the update on progress in relation to the Capital & Estates Strategy, essential enabler to providing the healthcare infrastructure to support current and future service needs.

The Committee were advised that work is ongoing with the DoH towards the publication of the Strategic Healthcare Investment Framework (SHIF), which is expected for publication in the coming weeks. Work is also ongoing with the DoH to develop the Common Appraisal Framework (CAF) to implement the SHIF, a key objective of which is to develop a CAF to address the need for consistency of approach in planning and decision making in relation to capital investment proposals.

The Committee noted the update in relation to the recruitment process for the National Director for Capital & Infrastructure, which will build capability at national level for both the planning and implementation of major infrastructure projects.

It was agreed that a further discussion in relation to the Capital & Estates Strategy would be brought to the September meeting.

6.5 Quarterly Report on relevant Property transactions delegated to the Executive

The Interim ND Capital & Estates provided a summary report on transactions approved between €2m & €10m and low value/nominal CAT 3a transactions for the period of 01 April – 30 June 2024, which was noted by the Committee.

6.6 Building Contracts and Properties

The ND P&P and Interim ND Capital & Estates presented the following proposed contract to the Committee, who considered with close scrutiny the detail, and agreed to recommend to the Board for approval.

Interim ND Capital & Estates left the meeting

There was no further business.

The Chair thanked the Committee and EMT members. The meeting ended at 2pm.

Terms of Reference: Audit and Risk Committee