Agenda Document Pack - Audit, Performance and Risk Committee - 26/01/2023
Moray Council · 26 January 2023
Back to Audit, Performance and Risk Committee — 26 January 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
Audit, Performance and Risk Committee Thursday, 26 January 2023 Council Chambers NOTICE IS HEREBY GIVEN that a Meeting of the Audit, Performance and Risk Committee, Council Chambers, Council Office, High Street, Elgin, IV30 1BX on Thursday, 26 January 2023 at 09:00 to consider the business noted below. AGENDA 1. Sederunt 2. Declaration of Member's Interests 3. External Auditors Report to Those Charged with Governance Report Report by the Interim Chief Financial Officer 3 - 36 4. Audited Annual Accounts 2021-22 37 - 102 Page 1
Page 2
MORAY INTEGRATION JOINT BOARD SEDERUNT Councillor Scott Lawrence (Chair) Mr Derick Murray (Voting Member) Mr Sandy Riddell (Voting Member) Councillor John Divers (Voting Member) Mr Sean Coady (Member) Mr Graham Hilditch (Member) Mr Simon Bokor-Ingram (Member) Ms Sonya Duncan (Member) Ms Deborah O'Shea (Member) Mr Stuart Falconer (Non-Voting Member) Clerk Name: Tracey Sutherland Clerk Telephone: 07971 879268 Clerk Email: committee.services@moray.gov.uk Page 2
Page 3
REPORT TO: MORAY INTEGRATION JOINT BOARD AUDIT, PERFORMANCE AND RISK COMMITTEE ON 26 JANUARY 2023 SUBJECT: EXTERNAL AUDITORS’ REPORT TO THOSE CHARGED WITH GOVERNANCE BY: INTERIM CHIEF FINANCIAL OFFICER 1. REASON FOR REPORT 1.1 To request the Audit, Performance and Risk Committee consider the reports to those charged with governance from the Board’s External Auditor for the year ended 31 March 2022. 2. RECOMMENDATION 2.1 It is recommended that the Committee considers and notes the reports from the External Auditor within APPENDICES 1 and 2. 3. BACKGROUND 3.1 The responsibilities of Audit Scotland as the independent auditor are established by the Local Government (Scotland) Act 1973, the code of Audit Practice (2016), which can be found at https://www.audit- scotland.gov.uk/uploads/docs/report/2016/code_audit_practice_16.pdf and supplementary guidance, and are supported by the auditing profession’s ethical guidance. 4. KEY MATTERS RELEVANT TO RECOMMENDATION 4.1 The work carried out by Audit Scotland during 2021/22 has produced two reports that are subject to the consideration of those charged with governance. The reports are attached as follows: • Independent Auditors Report to those charged with governance (APPENDIX 1) • The Annual Audit Report 2021/22 (APPENDIX 2) 4.2 The audit opinions expressed were all unqualified and are reported within the ‘independent auditors report’ included within APPENDIX 1. Item 3. Page 3
Page 4
4.3 The Annual Audit Report included at APPENDIX 2 provides an Action Plan where recommendations for improvement are made, based on the findings of the review. These recommendations have been discussed with management and corresponding actions have been agreed, together with timescales for completion. 4.4 The Annual Audit Report provides a summary of the significant audit risks identified during planning. The results and conclusions of this work are noted within the report. 5. SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) and Moray Integration Joint Board Strategic Plan “Partners in Care 2022 – 2032” The work of the external auditor and the production of these reports for those charged with governance have been completed within the specified timescales agreed. (b) Policy and Legal The Public Bodies (Joint Working ) (Scotland) Act 2014 requires that the Moray Integration Joint Board (MIJB) is subject to the audit and accounts provisions of a body under Section 106 of the Local Government (Scotland) Act 1973. (c) Financial implications There are no direct financial implications arising from this report. (d) Risk Implications and Mitigation The external auditor, Audit Scotland, through the audit process, provides assurance to the Board that the Annual Accounts for 2020/21 give a true and fair view of the financial position. The Annual Audit Report highlights risks identified during the audit process and recommendations for action that have been agreed by management. (e) Staffing Implications None arising directly from this report. (f) Property None arising directly from this report (g) Equalities/Socio Economic Impact None arising directly from this report as there has been no resultant policy change. (h) Climate Change and Biodiversity Impacts There are no direct climate change and biodiversity implications as there has been no change to policy. (i) Directions None arising directly from this report Page 4
Page 5
(j) Consultations Consultation has taken place between Audit Scotland and the Chief Financial Officer of the MIJB in preparation of the Annual Audit Report. Any comments received have been considered in writing this report. 6. CONCLUSION 6.1 The External Auditor has issued an unqualified opinion for the 2021/22 Annual Accounts. The Annual Audit Report, Independent Auditors’ Report and the Letter of Representation present the full findings. Author of Report: Deborah O’Shea, Interim Chief Financial Officer Background Papers: with author Ref: Page 5
Page 6
Page 6
Page 7
102 West Port Edinburgh EH3 9DN 8 Nelson Mandela Place Glasgow G2 1BT The Green House Beechwood Business Park North Inverness IV2 3BL T: 0131 625 1500 E: info@audit-scotland.gov.uk www.audit-scotland.gov.uk Moray Integration Joint Board C/o Moray Council High street Elgin IV30 1BX 26 January 2023 Moray Integration Joint Board Audit of 2021/22 annual accounts Independent auditor's report 1. Our audit work on the 2021/22 annual accounts is now substantially complete. Subject to [the satisfactory conclusion of the outstanding matters referred to later in this letter and - delete if no outstanding matter] receipt of a revised set of annual accounts for final review, we anticipate being able to issue unqualified audit opinions in the independent auditor's report on 26 January 2023. The proposed report is attached at Appendix A. Annual audit report 2. Under International Standards on Auditing in the UK, we report specific matters arising from the audit of the financial statements to those charged with governance of a body in sufficient time to enable appropriate action. We present for the Integration Joint Board’s consideration our draft annual report on the 2021/22 audit. There are no significant findings from our audit of the financial statements to bring to your attention. 3. The report also sets out conclusions from our consideration of the four audit dimensions that frame the wider scope of public audit as set out in the Code of Audit Practice. 4. This report will be issued in final form after the annual accounts have been certified. Unadjusted misstatements 5. We also report to those charged with governance all unadjusted misstatements which we have identified during the course of our audit, other than those of a trivial nature and request that these misstatements be corrected. 6. We have no unadjusted misstatements to be corrected Fraud, subsequent events and compliance with laws and regulations 7. In presenting this report to the Audit Committee we seek confirmation from those charged with governance of any instances of any actual, suspected or alleged fraud; any subsequent events that have occurred since the date of the financial statements; or material non- compliance with laws and regulations affecting the entity that should be brought to our attention. APPENDIX 1 Item 3. Page 7
Page 8
Representations from Section 95 Officer 8. As part of the completion of our audit, we are seeking written representations from the Interim Chief Financial Officer on aspects of the annual accounts, including the judgements and estimates made. 9. A draft letter of representation is attached at Appendix B. This should be signed and returned to us by the Section 95 Officer with the signed annual accounts prior to the independent auditor’s report being certified. Page 8
Page 9
Appendix A: Proposed Independent Auditor’s Report Independent auditor’s report to the members of Moray Integration Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of Moray Integration Joint Board for the year ended 31 March 2022 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (the 2021/22 Code). In my opinion the accompanying financial statements: • give a true and fair view in accordance with applicable law and the 2021/22 Code of the state of affairs of the body as at 31 March 2022 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2021/22 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed under arrangements approved by the Accounts Commission on 10 April 2017. The period of total uninterrupted appointment is six years. I am independent of the body in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the body. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Page 9
Page 10
Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the body’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the body’s current or future financial sustainability. However, I report on the body’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Interim Chief Financial Officer and Moray Integration Joint Board for the financial statements As explained more fully in the Statement of Responsibilities, the Interim Chief Financial Officer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Interim Chief Financial Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Interim Chief Financial Officer is responsible for assessing the body’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the body’s operations. The Moray Integration Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • obtaining an understanding of the applicable legal and regulatory framework and how the body is complying with that framework; Page 10
Page 11
• identifying which laws and regulations are significant in the context of the body; • assessing the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the body’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report. Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited part of the Remuneration Report I have audited the part of the Remuneration Report described as audited. In my opinion, the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Interim Chief Financial Officer is responsible for other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Page 11
Page 12
My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Brian Howarth ACMA CGMA Audit Director Audit Scotland Page 12
Page 13
4th Floor 8 Nelson Mandela Place Glasgow G2 1BT 26 January 2023 Page 13
Page 14
Appendix B: Letter of Representation (ISA 580) Brian Howarth, Audit Director Audit Scotland 4th Floor 8 Nelson Mandela Place Glasgow G2 1BT 26 January 2023 Dear Brian Moray Integration Joint Board Annual Accounts 2021/22 1. This representation letter is provided in connection with your audit of the annual accounts of Moray Integration Joint Board for the year ended 31 March 2022 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view in accordance with the financial reporting framework, and for expressing other opinions on the remuneration report, management commentary and annual governance statement. 2. I confirm to the best of my knowledge and belief and having made appropriate enquiries of the Chief Officer and Senior Management Team, the following representations given to you in connection with your audit of Moray Integration Joint Board's annual accounts for the year ended 31 March 2022. General 3. Moray Integration Joint Board and I have fulfilled our statutory responsibilities for the preparation of the 2021/22 annual accounts. All the accounting records, documentation and other matters which I am aware are relevant to the preparation of the annual accounts have been made available to you for the purposes of your audit. All transactions undertaken by Moray Integration Joint Board have been recorded in the accounting records and are properly reflected in the financial statements. 4. I confirm that I am not aware of any uncorrected misstatements. Financial Reporting Framework 5. The annual accounts have been prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (2021/22 Code), mandatory guidance from LASAAC, and the requirements of the Local Government (Scotland) Act 1973, the Local Government in Scotland Act 2003 and The Local Authority Accounts (Scotland) Regulations 2014. 6. In accordance with the 2014 regulations, I have ensured that the financial statements give a true and fair view of the financial position of the Moray Integration Joint Board at 31 March 2022 and the transactions for 2021/22. Page 14
Page 15
Accounting Policies & Estimates 7. All significant accounting policies applied are as shown in the notes to the financial statements. The accounting policies are determined by the 2021/22 Code, where applicable. Where the Code does not specifically apply, I have used judgement in developing and applying an accounting policy that results in information that is relevant and reliable. All accounting policies applied are appropriate to Moray Integration Joint Board’s circumstances and have been consistently applied. 8. The significant assumptions used in making accounting estimates are reasonable and properly reflected in the financial statements. Judgements used in making estimates have been based on the latest available, reliable information. Estimates have been revised where there are changes in the circumstances on which the original estimate was based or as a result of new information or experience. Going Concern Basis of Accounting 9. I have assessed Moray Integration Joint Board's ability to continue to use the going concern basis of accounting and have concluded that it is appropriate. I am not aware of any material uncertainties that may cast significant doubt on Moray Integration Joint Board's ability to continue as a going concern. Fraud 10. I have provided you with all information in relation to • my assessment of the risk that the financial statements may be materially misstated as a result of fraud • any allegations of fraud or suspected fraud affecting the financial statements • fraud or suspected fraud that I am aware of involving management, employees who have a significant role in internal control, or others that could have a material effect on the financial statements. Laws and Regulations 11. I have disclosed to you all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing financial statements. Related Party Transactions 12. All material transactions with related parties have been appropriately accounted for and disclosed in the financial statements in accordance with the 2021/22 Code. I have made available to you the identity of all the Moray Integration Joint Board's related parties and all the related party relationships and transactions of which I am aware. Remuneration Report 13. The Remuneration Report has been prepared in accordance with the Local Authority Accounts (Scotland) Regulations 2014, and all required information of which I am aware has been provided to you. Page 15
Page 16
Management commentary 14. I confirm that the Management Commentary has been prepared in accordance with the statutory guidance and the information is consistent with the financial statements. Corporate Governance 15. I confirm that the Moray Integration Joint Board has undertaken a review of the system of internal control during 2021/22 to establish the extent to which it complies with proper practices set out in the Delivering Good Governance in Local Government: Framework 2016. I have disclosed to you all deficiencies in internal control identified from this review or of which I am otherwise aware. 16. I confirm that the Annual Governance Statement has been prepared in accordance with the Delivering Good Governance in Local Government: Framework 2016 and the information is consistent with the financial statements. There have been no changes in the corporate governance arrangements or issues identified, since 31 March 2022, which require to be reflected. Balance Sheet 17. All events subsequent to 31 March 2022 for which the 2021/22 Code requires adjustment or disclosure have been adjusted or disclosed. Yours sincerely Interim Chief Financial Officer Page 16
Page 17
Prepared for Moray Integration Joint Board and the Controller of Audit January 2023 Moray Integration Joint Board DRAFT 2021/22 Annual Audit Report APPENDIX 2 Item 3. Page 17
Page 18
Moray Integration Joint Board DRAFT 2021/22 Annual Audit Report | 2 Contents Key messages 3 Introduction 4 1. Audit of 2021/22 annual accounts 7 2. Financial management and sustainability 10 3. Governance, transparency, and Best Value 14 Appendix 1. Action plan 2021/22 17 Appendix 2. National reports and briefing papers 19 Page 18
Page 19
Key messages | 3 Key messages 2021/22 annual accounts 1 Our audit opinions on the annual accounts of the Moray Integration Joint Board are unmodified and there were no significant issues. Financial management and sustainability 2 The IJB reported an overall underspend of £10.7 million against a revised budget of £170.8 million. 3 Covid-19 funding of £11.7 million was received in 2021/22; £6.7 million was unspent at 31 March 2022 and is included in reserves 4 Medium term financial plans were updated during 2021/22. The IJB is projecting a budget deficit of £12.1 million over the period from 2023-27. Governance, Transparency and Best Value 5 The IJB has yet to develop processes to evaluate and measure Best Value 6 The IJB effectively monitors performance and indicators show mixed performance Page 19
Page 20
Key messages | 4 Introduction 1. This report summarises the findings arising from the 2021/22 audit of Moray Integration Joint Board (the IJB). 2. The scope of the audit was set out in our 2021/22 Annual Audit Plan which was presented to the Board on 26 May 2022. 3. This report comprises the findings from: • the audit of the Moray IJB’s annual accounts • consideration of the four audit dimensions that frame the wider scope of public audit set out in the Code of Audit Practice 2016 • a review of the arrangements put in place by the IJB to secure Best Value. 4. The global coronavirus pandemic has had a considerable impact on the IJB during 2021/22. We did not identify any significant audit risks related to the pandemic for 2021/22. Adding value through the audit 5. We add value to the IJB, through the audit by: • identifying and providing insight on significant risks, and making clear and relevant recommendations • sharing intelligence and good practice through our national reports (Appendix 2) and good practice guides • providing clear and focused conclusions on the appropriateness, effectiveness and impact of corporate governance, performance management arrangements and financial sustainability. Responsibilities and reporting 6. The IJB has primary responsibility for ensuring the proper financial stewardship of public funds. This includes preparing annual accounts that are in accordance with proper accounting practices. The IJB is also responsible for compliance with legislation and putting arrangements in place for governance and propriety that enable it to successfully deliver its objectives. 7. Our responsibilities as independent auditor appointed by the Accounts Commission are established by the Local Government in Scotland Act 1973, the Page 20
Page 21
Key messages | 5 Code of Audit Practice 2016 and supplementary guidance, and International Standards on Auditing in the UK. 8. As public sector auditors we give independent opinions on the annual accounts. Additionally, we conclude on: • the effectiveness of the IJB’s performance management arrangements, • the suitability and effectiveness of corporate governance arrangements, • the financial position and arrangements for securing financial sustainability, and • Best Value arrangements. 9. Further details of the respective responsibilities of management and the auditor can be found in the Code of Audit Practice 2016. and supplementary guidance. 10. This report raises matters from our audit. Weaknesses or risks identified are only those which have come to our attention during our normal audit work and may not be all that exist. Communicating these does not absolve management from its responsibility to address the issues we raise and to maintain adequate systems of control. 11. Our annual audit report contains an agreed action plan at Appendix 1 setting out specific recommendations, responsible officers, and dates for implementation. It also includes outstanding actions from last year and the steps being taken to implement them. Auditor Independence 12. Auditors appointed by the Accounts Commission or Auditor General must comply with the Code of Audit Practice and relevant supporting guidance. When auditing the financial statements auditors must comply with professional standards issued by the Financial Reporting Council and those of the professional accountancy bodies. 13. We can confirm that we comply with the Financial Reporting Council’s Ethical Standard. We can also confirm that we have not undertaken any non- audit related services and the 2021/22 audit fee of £27,960 as set out in our 2021/22 Annual Audit Plan remains unchanged. We are not aware of any relationships that could compromise our objectivity and independence. 14. This report is addressed to both the IJB and the Controller of Audit and will be published on Audit Scotland's website www.audit-scotland.gov.uk. Audit appointment from 2022/23 15. The Accounts Commission is responsible for the appointment of external auditors to local government bodies. External auditors are usually appointed for a five-year term either from Audit Scotland’s Audit Services Group or a private firm of accountants. The current appointment round was due to end in 2020/21 Page 21
Page 22
Key messages | 6 but this was extended for a year so that 2021/22 is the last year of the current appointment round. 16. The procurement process for the new round of audit appointments was completed in May 2022. From financial year 2022/23 Grant Thornton will be the appointed auditor for Moray Integration Joint Board. We are working closely with the new auditors to ensure a well-managed transition. 17. We would like to thank Board members, Audit, Performance and Risk Committee members, the Chief Officer and the Interim Chief Finance Officer for their co-operation and assistance over the last six years. Page 22
Page 23
1. Audit of 2021/22 annual accounts | 7 1. Audit of 2021/22 annual accounts The principal means of accounting for the stewardship of resources and performance Main judgements Our audit opinions on the annual accounts of the Moray Integration Joint Board are unmodified and there were no significant issues. Our audit opinions on the annual accounts are unmodified 18. The IJB’s annual accounts for the year ended 31 March 2022 were approved by the Integration Joint Board on 26 January 2023. As reported in the independent auditor’s report: • the financial statements give a true and fair view and were properly prepared in accordance with the financial reporting framework • the audited part of the Remuneration Report, Management Commentary and the Annual Governance Statement were all consistent with the financial statements and properly prepared in accordance with the relevant regulations and guidance. The annual accounts were submitted for audit by the statutory dates 19. The unaudited annual accounts were received in line with our agreed audit timetable on 30 June 2022. 20. The working papers provided with the unaudited accounts were of a good standard and finance staff provided support to the audit team during the audit. There were no objections raised to the annual accounts 21. The Local Authority Accounts (Scotland) Regulations 2014 require local government bodies to publish a public notice on its website that includes details of the period for inspecting and objecting to the accounts. This must remain on the website throughout the inspection period. There were no objections to the 2021/22 annual accounts. Page 23
Page 24
1. Audit of 2021/22 annual accounts | 8 Overall materiality is £1.4 million 22. We apply the concept of materiality in both planning and performing the audit and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report. We identify a benchmark on which to base overall materiality, such as gross expenditure, and apply what we judge to be the most appropriate percentage level for calculating materiality values. 23. The determination of materiality is based on professional judgement and is informed by our understanding of the entity and what users are likely to be most concerned about in the annual accounts. In assessing performance materiality, we have considered factors such as our findings from previous audits, any changes in business processes and the entity’s control environment including fraud risks. 24. Our initial assessment of materiality for the annual accounts was carried out during the planning phase of the audit. This was reviewed on receipt of the unaudited annual accounts and is summarised in Exhibit 1. Exhibit 1 Materiality values Materiality level Amount Overall materiality £1.4 million Performance materiality £1.1 million Reporting threshold £75,000 Source: Audit Scotland We have no significant findings to report on the audited annual accounts 25. International Standard on Auditing (UK) 260 requires us to communicate significant findings from the audit to those charged with governance, including our view about the qualitative aspects of the body’s accounting practices. We have no issues to report from the audit. We have obtained assurance over the significant risks identified in our Annual Audit Plan 26. Exhibit 2 sets out the significant risks of material misstatement to the financial statements we identified in our 2021/22 Annual Audit Plan. It summarises the further audit procedures we performed during the year to obtain assurances over these risks and the conclusions from the work completed. Page 24
Page 25
1. Audit of 2021/22 annual accounts | 9 Exhibit 2 Significant risks of material misstatement in the financial statements Audit risk Assurance procedure Results and conclusions 1. Management override of controls As stated in International Standard on Auditing 240, management is in a unique position to perpetrate fraud because of management’s ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise are operating effectively. Agreement of balances and transactions to Moray Council and NHS Grampian financial reports / ledger / correspondence Service auditor assurances obtained from the external auditors of Moray Council and NHS Grampian over the completeness, accuracy and allocation of income and expenditure. Review of adjustments at year end. Review of financial monitoring reports during the year. Results & Significant Judgements: We agreed the figures in the CIES, Balance Sheet and Movement in Reserves Statement to ledger information. We obtained the relevant assurances from the auditors of Moray Council and NHS Grampian. We undertook detailed testing of year-end adjustments. We reviewed financial monitoring reports that were prepared throughout the year. Conclusion: We did not identify any incidents of management override of controls. There were no identified misstatements in the audited annual accounts 27. It is our responsibility to request that all misstatements, other than those below the reporting threshold, are corrected. However, the final decision on making the correction lies with those charged with governance considering advice from senior officers and materiality. There were no misstatements identified that exceeded our reporting threshold. The IJB has made limited progress in implementing our prior year audit recommendations. 28. Limited progress has been made in implementing our prior year audit recommendations with two out of three still outstanding. For actions not yet implemented, revised responses and timescales have been agreed with management, and are set out in Appendix 1. Page 25
Page 26
2. Financial management and sustainability | 10 2. Financial management and sustainability Financial management is about financial capacity, sound budgetary processes and whether the control environment and internal controls are operating effectively. Financial sustainability looks forward to the medium and long term to consider whether the council is planning effectively to continue to deliver its services or the way in which they should be delivered. Main judgements The IJB underspent by £10.7 million in 2021/22. Covid-19 funding of £11.7 million was received in 2021/22; £6.7 million was unspent at 31 March 2022 and is included in reserves. Medium -term financial plans have been developed and these have been updated to reflect the impact of Covid-19. The IJB has identified a cumulative budget deficit of £12.1 million over the period from 2023-27. The 2021/22 budget included planned savings and contributions from reserves 29. The IJB approved its 2021/22 budget on 25 March 2021. The budget was set at net expenditure of £140.7 million with a funding gap of £1.5 million. Plans to address the gap included efficiency savings of £0.4 million and use of reserves of £1.1 million. The IJB underspent by £10.7 million in 2021/22 and received £11.7 million Covid-19 funding 30. The final 2021/22 budget was £170.8 million. The increase was due to additional non-recurring funding received from NHS Grampian during the year, with the most significant increase relating to £11.7 million of Covid-19 grants. 31. The IJB returned an underspend of £10.7 million against a budgeted breakeven position (Exhibit 3). The underspend was made up of an overspend of £2.5 million on core services and an underspend of £13.2 million on Strategic Fund schemes funded by the Scottish Government. Page 26
Page 27
2. Financial management and sustainability | 11 Exhibit 3 Performance against budget IJB budget summary Budget £m Actual £m Variance £m Gross Core Expenditure 170.8 153.8 (17.0) Total Income (169.7) (164.5) 5.2 In-year expenditure met from reserves 1.1 0.0 1.1 (Surplus)/Deficit in annual accounts 0.0 (10.7) (10.7) Source: MIJB 2021/22 budget monitoring reports and annual accounts Budget processes were appropriate 32. Detailed budget monitoring reports were submitted to the IJB Board throughout the year. The outturn to date and projected year-end outturn position, alongside revisions to the budget were clearly stated in these reports while the actual year-end outturn position was in line with expectations. 33. The content of the budget monitoring reports was updated to reflect the financial impact of Covid-19 and an additional section was included in the outturn report that highlighted spend on the Local Mobilisation Plan developed in response to Covid-19. This ensured the IJB were aware of how Covid-19 impacted on the overall financial position and outturn. 34. We observed that senior management and members receive regular and accurate financial information on the IJB’s financial position and have concluded the IJB has appropriate budget monitoring arrangements. 75% of savings were achieved but it is becoming increasingly challenging to identify further savings 35. The IJB is required to make efficiency savings to maintain financial balance. The total savings target for 2021/22 was £0.4 million. The IJB achieved £0.3 million (75%) of planned savings. The Scottish Government provided additional Covid funding that covered the £0.1 million of savings not achieved. 36. The 2022/23 Revenue Budget Report was presented to the IJB on 31 March 2022. The budget was set at £155.2 million and includes £12.6 million Set Aside and £4.9 million to support commitments in relation to the Carers Act and ring-fenced investment to support increasing demand. There is excess Page 27
Page 28
2. Financial management and sustainability | 12 funding over planned expenditure of £0.2 million. The budget includes planned efficiencies of £0.1 million. The IJB considers this to be achievable but has acknowledged the challenges it faces in identifying further savings. Total reserves are £17 million at the year end with most of this earmarked for specific purposes 37. With the £10.7 million surplus achieved in 2021/22, the balance on the General Fund was £17 million at 31 March 2022. The majority of the year end reserves balance (£15.8 million) is held as earmarked reserves for specific purposes. These include £9 million to be spent on Covid-19 and £2.3 million for the Primary Care Improvement Plan. The remaining £1.3 million has been included in uncommitted reserves and will be used as part of the 2022/23 budget. The IJB has a medium-term financial plan but has yet to develop a longer-term plan 38. Financial sustainability looks forward to the medium and longer term to consider whether the body is planning effectively to continue to deliver its services or the way in which they should be delivered. 39. During 2021/22, the IJB updated its Reserves Policy. While the Policy does not set a minimum level of reserves the IJB should hold, it does require that a prudent amount should be held and should be reviewed annually considering the prevailing financial environment. 40. As part of the 2022/23 budget setting process, the Medium-Term Financial Framework was updated and presented the Board in March 2022. This covers the period from 2022/23 to 2026/27. The updated framework identified Covid-19 as a significant risk around its budgeting in coming years, as well as the challenges of the current economic climate and labour market challenges. The plan forecasts an increasing deficit over the five years, with a cumulative deficit of £12.1 million forecast over the five years to 2026/27. 41. The IJB’s Strategic Plan 2022-2032 was presented to the Board in November 2022. The Medium-Term Financial Framework is currently being reviewed to ensure financial planning is aligned with the Strategic Plan. Financial systems of internal control operated effectively 42. The IJB does not have its own financial systems and instead relies on partner bodies’ financial systems. All financial transactions are therefore processed under the partner bodies’ internal controls. 43. As part of our audit approach, we sought assurances from the external auditor of NHS Grampian and Moray Council. Some control weaknesses were identified within Moray Council and the auditors undertook additional audit procedures to obtain the assurances required for their audit opinions. No issues were identified from completion of these additional procedures that affect our overall opinion on the IJB accounts. Page 28
Page 29
2. Financial management and sustainability | 13 Standards of conduct and arrangements for the prevention and detection of fraud and error were appropriate 44. The IJB does not maintain its own policies relating to the prevention and detection of fraud and error but instead depends on those in place at its partner bodies. We reviewed the arrangements in place at Moray Council and NHS Grampian and found them to be adequate. The IJB has a Code of Conduct in place to which members subscribe and the Members’ Registers of Interest are publicly available on the IJB’s website. 45. Appropriate arrangements are in place for the prevention and detection of fraud and error. We are not aware of any specific issues we require to bring to your attention. Page 29
Page 30
3. Governance, transparency, and Best Value | 14 3. Governance, transparency, and Best Value The effectiveness of scrutiny and oversight and transparent reporting of information. Using resources effectively and continually improving services. Main Judgements The governance arrangements are appropriate and operate effectively The IJB has yet to develop processes to evaluate and measure Best Value The IJB effectively monitors performance and indicators show mixed performance Governance arrangements are appropriate and operate effectively 46. Board and Audit, Performance and Risk Committee meetings were held remotely while restrictions were in place as a result of the Covid 19 pandemic. This continued through 2021/22 but in person meeting resumed in September 2022. Full details of the meetings held by the IJB are available on the IJB’s website. Committee papers and minutes of meetings are publicly available. Public notice of each meeting is available via the IJB’s website. 47. CIPFA has produced a good practice guide on audit committees which recommends these committees should report annually on their performance to those charged with governance. The good practice guide includes a self- assessment checklist for audit committees to help them do this. We reported previously that the IJB’s Audit, Performance and Risk Committee had not completed this assessment. The assessment has still not been completed and this is reflected in Appendix 1 and our follow up of prior year actions. 48. We consider that governance arrangements are appropriate and support effective scrutiny, challenge and decision making. The IJB has yet to develop processes to evaluate and measure Best Value 49. Integration Joint Boards have a statutory duty to have arrangements to secure Best Value. To achieve this, IJBs should have effective processes for Page 30
Page 31
3. Governance, transparency, and Best Value | 15 scrutinising performance, monitoring progress towards their strategic objectives, and holding partners to account. 50. The IJB clearly recognises the importance of securing best value, with this being highlighted in its ten-year Strategic Plan. A self-evaluation exercise on the importance of securing best value, reported in June 2019, highlighted the need to ‘develop better processes to evaluate and measure outcomes in line with Best Value’. This self-evaluation and the resulting action plan were revisited in April 2021 and an updated improvement action plan was approved in June 2021. Progress against this plan was reported to the IJB meeting in January 2022 and a development session was held for members in February 2022. 51. In prior years we have recommended that the IJB should develop its own assessment of Best Value. We have been advised that this work progressed during 2021/22 but was not completed due to changes in key staff. A revised action and timescale for completion have been agreed with management, and are set out in Appendix 1 in our follow-up of prior year recommendations. The IJB effectively monitors performance and indicators show mixed performance 52. The Public Bodies (Joint Working) (Scotland) Act 2014 requires the IJB to produce an annual performance report covering areas such as assessing performance in relation to national health and wellbeing outcomes, financial performance and best value, reporting on localities, and the inspection of services. The 2021/22 Annual Performance Report was presented to the Audit, Performance and Risk Committee on 24 November 2022 and, following approval, has been published on the IJB’s website. 53. The Board has continued to monitor key performance targets throughout the year with quarterly performance reports presented to the Audit, Performance and Risk Committee during 2021/22. Performance is measured using a RAG (red / amber / green) system against each of the IJB’s ten local indicators which are aligned to its Strategic Plan. 54. The most recent quarterly performance report (presented to the committee in August 2022) showed three of the indicators as being green, two amber and five red. 55. The five red indicators relate to: • A&E attendance rate per 1,000 of the population • number of delayed discharges at the end of the quarter • number of beds days occupied by delayed discharges • rate of emergency occupied bed days for over 65s per 1,000 of the population • percentage of patients commencing Psychological Therapy Treatment within 18 weeks of referral. Page 31
Page 32
3. Governance, transparency, and Best Value | 16 56. Delayed discharge indicators are showing an increasing trend. Work is ongoing to reduce these numbers and action taken in 2021/22 includes the introduction of twice weekly meetings to scrutinise the delayed discharge workflow and a new contract for Care at Home service provision being put in place. The IJB recognises the significant challenges in addressing issues around delayed discharges. National performance audit reports 57. Audit Scotland carries out a national performance audit programme on behalf of the Accounts Commission and the Auditor General for Scotland. During 2021/22 we published some reports which may be of interest to the IJB as outlined in Appendix 2. Page 32
Page 33
Appendix 1. Action plan 2021/22 | 17 Appendix 1. Action plan 2021/22 Follow-up of prior year recommendations Issue/risk Recommendation Agreed management action/timing B/F 1. Audit, Performance and Risk committee 2020/21 AAR CIPFA recommends that audit committees report annually on their performance to those charged with governance. CIPFA’s good practice guide includes a checklist for audit committees to use as part of their assessment of performance. The IJB’s Audit, Performance and Risk Committee has yet to assess its performance. Risk: the Audit, Performance and Risk Committee is not complying with good practice and cannot evidence its effectiveness. The Audit, Performance and Risk Committee should assess its performance using the CIPFA self-assessment checklist and report annually to the IJB on its performance. Outstanding The assessment has still not been completed Revised action: Complete self-assessment at year end and then embed this as part of business cycle. Responsible officer: Corporate Manager Revised date: 30 April 2023 B/F 2. Medium-term financial plan The IJB now has a medium- term financial plan that spans the period 2019/20 to 2023/24 but this will need to be updated to reflect the impact of Covid-19 and EU withdrawal. Risk: the financial planning assumptions in the medium- term plan may now be inaccurate. The IJB’s medium-term financial plan should be reviewed due to the impact of Covid-19 and EU withdrawal. 2020/21 Update: the IJB’s Strategic Plan and suite of other supporting documents should also be reviewed. Complete An updated medium-term financial framework has been completed and identified Covid-19 as a significant risk with assumptions made to include recurring SG funding in the figures. EU withdrawal isn’t specifically mentioned but labour challenges and wider economic challenges are. Page 33
Page 34
Appendix 1. Action plan 2021/22 | 18 Issue/risk Recommendation Agreed management action/timing A new Strategic Plan covering the period 2022 to 2032 was approved at the November 2022 meeting of the Board. B/F 3. Self-evaluation exercise A self-evaluation exercise was undertaken and presented to the Board in June 2019. It included 11 areas for improvement, including the need to ‘develop better processes to evaluate and measure outcomes in line with Best Value’. There has been no update provided to the Board on the progress against implementing these areas for improvement. Risk: the IJB is unable to demonstrate how it delivers Best Value. The IJB should develop its own assessment of Best Value. Outstanding Work to develop the IJB’s assessment of Best Value progressed during 2021/22 but was not completed due to changes in key staff. Revised action: Seek out examples of good practice from other IJBs and shape for use for Moray, presenting the model to the IJB. Responsible officer: Interim Chief Finance Officer Revised date: 31 March 2023 Page 34
Page 35
Appendix 2. National reports and briefing papers | 19 Appendix 2. National reports and briefing papers May Local government in Scotland Overview 2021 June Covid 19: Personal protective equipment July Community justice: Sustainable alternatives to custody September Covid 19: Vaccination programme January Planning for skills Social care briefing February NHS in Scotland 2021 March Local government in Scotland: Financial Overview 20/21 Drug and alcohol: An update Scotland’s economy: Supporting businesses through the Covid 19 pandemic Page 35
Page 36
Appendix 2. National reports and briefing papers | 20 Moray Integration Joint Board Draft 2021/22 Annual Audit Report Audit Scotland’s published material is available for download on the website in a number of formats. For information on our accessibility principles, please visit: www.audit-scotland.gov.uk/accessibility For the latest news follow us on social media or subscribe to our email alerts. Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 Email: info@audit-scotland.gov.uk www.audit-scotland.gov.uk AS.4.0 Page 36
Page 37
REPORT TO: MORAY INTEGRATION JOINT BOARD AUDIT, PERFORMANCE AND RISK COMMITTEE ON 26 JANUARY 2023 SUBJECT: 2021/22 AUDITED ANNUAL ACCOUNTS BY: INTERIM CHIEF FINANCIAL OFFICER 1. REASON FOR REPORT 1.1 To submit to the Audit, Performance and Risk Committee the Audited Annual Accounts for the year then ended 31 March 2022. 2. RECOMMENDATION 2.1 It is recommended that the Committee consider and recommend to the Moray Integration Joint Board the Audited Annual Accounts for the financial year 2021/22. 3. BACKGROUND 3.1 The Unaudited Annual Accounts for 2021/22 were submitted to the meeting of the Moray Integration Joint Board (MIJB) on 30 June 2022 prior to submission to external audit (paragraph 8 of the Minute refers). 3.2 The Annual Accounts have been prepared in accordance with International Financial Reporting Standards and the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014 and the Local Government in Scotland Act 2003. 4 KEY MATTERS RELEVANT TO RECOMMENDATION 4.1 The audit undertaken by the Board’s External Auditors, Audit Scotland is now complete. The External Auditors have expressed unqualified opinions in respect of the financial statements, the remuneration report, the management commentary and the annual governance statement. The Independent Auditor’s Report to the Members of the MIJB and the Accounts Commission is included within the audited Annual Accounts and can be found on page 41. The audited Annual Accounts are attached at APPENDIX 1. 4.2 The audit process highlighted changes to be made to the accounts which in the main were presentational and in parallel with expectation following external audit inspection. Item 4. Page 37
Page 38
4.3 The Auditor’s Annual Audit Report to the MIJB and the Accounts Commission is the subject of a separate report to this meeting. The report sets out the responsibilities of Audit Scotland as the independent auditor and presents a summary of the findings arising from the 2021/22 audit. The report confirms there are no unadjusted misstatements in the annual accounts to report to those charged with governance. 4.4 The Audited Annual Accounts are presented to this meeting for consideration and approval. Thereafter, the Chief Officer, Interim Chief Financial Officer and the Chair of the Board will sign the accounts prior to submission to Audit Scotland prior to publication. 5 SUMMARY OF IMPLICATIONS (a) Corporate Plan and 10 Year Plan (Local Outcomes Improvement Plan (LOIP)) and Moray Integration Joint Board Strategic Plan “Partners in Care 2022 – 2032” The Audited Annual Accounts have been completed within the statutory timescales permitted under the Coronavirus (Scotland) Act 2021 and are being presented for consideration and sign off. (b) Policy and Legal The Public Bodies (Joint Working) (Scotland) Act 2014 requires that the MIJB is subject to the audit and accounts provisions of a body under Section 106 of the Local Government (Scotland) Act 1973. In addition, the Coronavirus (Scotland) Act 2021 has been adhered allowing statutory reporting deadlines to be flexed. (c) Financial implications The adjustments and revisions made to the Annual Accounts following the external audit had no financial impact on the MIJB. (d) Risk Implications and Mitigation There are no risk issues arising directly from this report. The work undertaken by Audit Scotland provides assurance to the Board that the Annual Accounts for 2021/22 give a true and fair view in accordance with applicable law and the 2021/22 Code of the state of affairs of the MIJB as at 31 March. (e) Staffing Implications None arising directly from this report. (f) Property None arising directly from this report. (g) Equalities/Socio Economic Impact None arising directly from this report as there is no resultant change in policy. (h) Climate Change and Biodiversity Impacts There are no direct climate change and biodiversity implications as there has been no change to policy. Page 38
Page 39
(i) Directions None arising directly from this report (j) Consultations In preparation of the Annual Accounts, consultations have taken place between finance staff of both Moray Council and NHS Grampian who are in agreement within their areas of responsibility. The Chief Officer has been consulted and comments have been considered. 6 CONCLUSION 6.1 Following a completed external audit process and an unqualified opinion being received. The Audited Annual Accounts are presented here for approval and formal sign off. Author of Report: Deborah O’Shea, Interim Chief Financial Officer Background Papers: With author Ref: Page 39
Page 40
Page 40
Page 41
Moray Integration Joint Board Annual Accounts 2021/22 AUDITED ANNUAL ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2022 Moray Integration Joint Board Item 4. Page 41
Page 42
Moray Integration Joint Board Annual Accounts 2021/22 If you need information from the Moray Council in a different language or format, such as Braille, audio tape or large print, please contact: ياروم سلجم لبق نم تامولعم لىإ ةجاح ي ف متنك اذإ نوكتو ةغلب وأ ويدوأ ةناوطسأ ،يا ربلا لثم فلتخم لكش لىعوأ ةفلتخم نوكت نأ مط ب لاصّتلإا ءاجّرلاف ةظيلغ فورح لامعتساب ةعوب Jei pageidaujate tarnybos Moray tarybos teikiamą informaciją gauti kitokiu formatu, pvz., Brailio raštu, garso įrašu ar stambiu šriftu, kreipkitės: Jeśli potrzebują Państwo informacji od Rady Okręgu Moray w innym formacie, takim jak alfabet Braille'a, kasety audio lub druk dużą czcionką, prosimy o kontakt: Se necessitar de receber informações por parte do Concelho de Moray num formato diferente, como Braille, cassete áudio ou letras grandes, contacte: Ja Jums vajadzīga informācija no Marejas domes (Moray Council) citā valodā vai formātā, piemēram, Braila rakstā, audio lentā vai lielā drukā, sazinieties ar: ای نابز رگید یسک ےس لسنوک ےروم وک پآرگاتروص راکرد تامولعم ںیم لاثم ںوہ ˝ ،فورح ےڑب ای پیٹ ویڈآ ،ےلیربںیئامرف ہطبار رک امرف ینابرہم وت: Interim Chief Financial Officer to the Moray Integration Joint Board, High Street, Elgin, IV30 1BX 01343 563125 accountancy.support@moray.gov.uk Page 42
Page 43
Moray Integration Joint Board Annual Accounts 2021/22 Table of Contents MORAY INTEGRATION JOINT BOARD MEMBERS ............................................................ 1 MANAGEMENT COMMENTARY .......................................................................................... 2 STATEMENT OF RESPONSIBILITIES ............................................................................... 24 REMUNERATION REPORT ............................................................................................... 26 ANNUAL GOVERNANCE STATEMENT ............................................................................. 30 INDEPENDENT AUDITOR’S REPORT............................................................................... 41 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT ..................................... 46 MOVEMENT IN RESERVES STATEMENT ........................................................................ 47 BALANCE SHEET .............................................................................................................. 48 NOTES TO THE FINANCIAL STATEMENTS ..................................................................... 49 Note 1 Significant Accounting Policies ............................................................................. 49 Note 2 Critical Judgements and Estimation Uncertainty .................................................. 50 Note 3 Events after the Reporting Period ........................................................................ 51 Note 4 Expenditure and Income Analysis by Nature ........................................................ 51 Note 5 Taxation and Non-Specific Grant Income ............................................................. 52 Note 6 Debtors ................................................................................................................ 52 Note 7 Usable Reserve: General Fund ............................................................................ 53 Note 8 Agency Income and Expenditure .......................................................................... 53 Note 9 Related Party Transactions .................................................................................. 55 Note 10 VAT .................................................................................................................... 57 Note 11 Accounting Standards That Have Been Issued but Have Yet To Be Adopted .... 57 Page 43
Page 44
Moray Integration Joint Board Annual Accounts 2021/22 1 MORAY INTEGRATION JOINT BOARD MEMBERS 2021/22 Voting Members Cllr. Shona Morrison (Chair) * Moray Council Dennis Robertson (Vice-Chair) The Grampian Health Board Sandy Riddell The Grampian Health Board Derick Murray The Grampian Health Board Professor Siladitya Bhattacharya The Grampian Health Board Cllr. Theresa Coull Moray Council Cllr. Frank Brown Moray Council Cllr. John Divers Moray Council Non-Voting Members Simon Bokor-Ingram Interim Chief Officer Tracey Abdy * Chief Financial Officer Jane Mackie Chief Social Work Officer Jane Ewen Lead Nurse Dr Malcolm Metcalfe Deputy Medical Director Dr Lewis Walker Registered Medical Practitioner Heidi Tweedie tsiMoray Val Thatcher Public Partnership Forum Representative Ivan Augustus Carer Representative Steven Lindsay Grampian Health Board Staff Partnership Karen Donaldson UNISON, Moray Council Co-opted Members Sean Coady Head of Service and IJB Hosted Services Dr Paul Southworth Consultant in Public Health Professor Caroline Hiscox The Grampian Health Board Roddy Burns Moray Council Note * were in position until 31 March 2022 Page 44
Page 45
Moray Integration Joint Board Annual Accounts 2021/22 2 MANAGEMENT COMMENTARY The Role and Remit of the Moray Integration Joint Board The Public Bodies (Joint Working) (Scotland) Act 2014 required that Moray Council and the Grampian Health Board prepared an Integration Scheme for the area of the local authority detailing the governance arrangements for the integration of health and social care services. This legislation resulted in the establishment of the Moray Integration Joint Board (MIJB) that became operational from 1 April 2016. Moray Council and Grampian Health Board, as the parties to the Integration Scheme, each nominate voting members to the MIJB. Currently, three elected members from Moray Council and three Grampian Health Board members (one executive and two non- executives). Under the Public Bodies (Joint Working) (Scotland) Act 2014, a range of health and social care functions have been delegated from Moray Council and Grampian Health Board to the MIJB who has assumed responsibility for the planning and operational oversight of delivery of integrated services. MIJB also has a role to play in the strategic planning of unscheduled acute hospital based services provided by Grampian Health Board as part of the ‘set aside’ arrangements. Hosted services also form part of the MIJB budget. There are a number of services which are hosted by one of the 3 IJB’s within the Grampian Health Board area on behalf of all the IJBs. Responsibilities include the planning and operational oversight of delivery of services managed by one IJB on a day to day basis. MIJB has responsibility for hosting services relating to Primary Care Contracts and the Grampian Medical Emergency Department (GMED) Out of Hours service. Key Purpose and Strategy Following review and consultation, our second Strategic Planning (2019-29) – Partners in Care was launched in December 2019. The current plan emphasises the strength of integration and in addition to our two main Partners – Moray Council and the Grampian Health Board, the MIJB recognises the importance of the Third and Independent Sectors in facilitating the successful operation of the partnership of Health & Social Care Moray. As with all health and social care systems Moray is facing increasing demand for services at the same time as resources – both funding and workforce availability are under pressure. These challenges will intensify in the coming years as our population ages and more people with increasing complex needs require support to meet their health and care needs. The MIJB sets the direction and strategic intent through the development and implementation of the Strategic Plan and seeks assurance on the management and delivery of services through Board level performance reporting which ensures an appropriate level of scrutiny and challenge. The Strategic Plan identifies priority areas to support strategic direction and vision. Page 45
Page 46
Moray Integration Joint Board Annual Accounts 2021/22 3 MANAGEMENT COMMENTARY (continued) STRATEGIC PLAN KEY THEMES The Plan purposefully places an emphasis on prevention activities and seeks to prioritise these activities as a long term goal, actively pursuing good health and wellbeing for the population, this will mean increased investment in this area of work. It highlights the HOMEFIRST approach and the rationale for this is to assist people in understanding that “hospital is not always the best place for people”, a statement frequently used and in particular if you are frail and elderly can be counter intuitive to a successful recovery. The response to Covid-19 has escalated elements of the HOMEFIRST approach. Through 21/22 the pandemic has driven a level of transformational change. This pace will need to continue in the next year and beyond as we face significant levels of demand. Our Strategic Plan will be refreshed in 22/23 and will be accompanied by a delivery plan to reflect the recovery phase that will be needed to deal with day to day demand and a backlog that has accumulated. BUILDING RESILIENCE – Taking greater responsibility for our health and wellbeing HOME FIRST – Being supported at home or in a homely setting as far as possible PARTNERS IN CARE – Making choices and taking control over decisions WE ARE PARTNERS IN CARE OUR VISION: “We come together as equal and valued partners in care to achieve the best health and wellbeing possible for everyone in Moray throughout their lives.” OUR VALUES: Dignity and respect; person-centred; care and compassion; safe, effective and responsive OUTCOMES: Lives are healthier – People live more independently – Experiences of services are positive – Quality of life is improved – Health inequalities are reduced – Carers are supported – People are safe – The workforce continually improves – Resources are used effectively and efficiently Page 46
Page 47
Moray Integration Joint Board Annual Accounts 2021/22 4 MANAGEMENT COMMENTARY (continued) Population Moray is a largely rural area covering a land mass of 2,238 sq. km. It has a long coastline on the Moray Firth with harbours, fishing villages and world-class beaches. The area’s projected population for 2022 is 95,780. The main centre of population is Elgin, which is home to more than one quarter of the people living in Moray. Other towns of population between 5,000 and 10,000 are Forres, Buckie, Lossiemouth and Keith. Moray’s population has grown significantly in recent years from 87,160 in 1997. The population growth in Moray is slowing and it is projected that against the 2018 baseline1 Moray will be one of the 14 councils in Scotland who will have had a population decline by 2030. This trend is forecast to continue. The table below sets out projected population growth based on the 2018 baseline. Across Scotland there is a projected reduction in children, limited change in the working age population, but significant growth in adults of pensionable age. By comparison it is projected that Moray will have a greater decrease in children, a marked decrease in those of a working age, but a significantly higher change in those of a pensionable age. 1 https://www.nrscotland.gov.uk/files//statistics/nrs-visual/sub-nat-pop-proj-18/pop-proj-principal-2018- infographic.pdf Page 47
Page 48
Moray Integration Joint Board Annual Accounts 2021/22 5 MANAGEMENT COMMENTARY (continued) Performance Reporting Performance is reported quarterly to the Audit, Performance and Risk Committee of the MIJB. In addition to the quarterly reporting, there is a requirement under the Public Sector (Joint Working) (Scotland) Act 2014 for the MIJB to produce and publish an Annual Performance Report setting out an assessment of performance in planning and carrying out the delegated functions for which they are responsible. The Annual Performance Report is due to be published by 30 November this year and will be published on the Health & Social Care Moray website. The Coronavirus Act (Scotland) has made provision to delay the publication of this document as prior to Covid it was published by 31 July. One of the major aims of integration and a key measurable target for MIJB is to reduce the number of Moray residents that are ready to be sent home from hospital but have been delayed in this process. This is referred to as a ‘delayed discharge’. Delayed discharge can occur due to several reasons but quite often involves the onward provision of social care which can be complex in nature. The table below notes performance over a four year period showing the number of delayed discharge bed days occupied varying significantly and with minimal seasonal pattern up to March 2022. There was a significant reduction in delayed discharges in April to June 2020 onwards as the focus of the COVID-19 response in Moray was assessing and finding suitable support for those in hospital (specifically those ready for discharge) to allow for the anticipated influx of COVID-19 patients. After a sharp increase in quarter 2 of 2020-21 an immense amount of work was undertaken across the Moray system to improve the position, however the challenges in identifying capacity in the community to provide care for those who need it has proved extremely challenging. The impact of covid on existing staffing levels combined with the increasing needs identified in the community and the increase in elderly and frail people attending hospital and then requiring some form of assistance has resulted in increased delayed discharges and increased unmet need in the community. Despite these efforts the number per 1000 population of bed days occupied by Delayed Discharges was at its highest level for five years in March 2022. Improvements throughout the year include twice weekly (moving to daily when required) operational meetings to scrutinise the Delayed Discharge workflow, looking specifically at issues and implementing solutions. A new contract commenced in November 2021 for Care at Home service provision. A new model has been established where there is a primary provider who will work in close partnership with HSCM provider services. It is intended that this will increase stability in the market for care at home, enhance partnership working and facilitate our continued development of the outcome approach to commissioning. Page 48
Page 49
Moray Integration Joint Board Annual Accounts 2021/22 6 MANAGEMENT COMMENTARY (continued) Th The Number of Bed Days Occupied by Delayed Discharges 18+ per 1,000 population Jun 21 Sept 21 Dec 21 Mar 22 592 784 1,142 1,294 Jun 20 Sept 20 Dec 20 Mar 21 242 803 672 496 Jun 19 Sept 19 Dec 19 Mar 20 768 751 971 1,208 Jun 18 Sept 18 Dec 18 Mar 19 1,008 1,276 1,070 926 Jun 17 Sept 17 Dec 17 Mar 18 1,161 749 823 1,089 e Nu of Bed Days Occupied by Delayed Discharges (inc code 9) 18+ per 1,000 po In relation to Emergency occupied bed days, there continues to be a focus on ensuring people are getting home quickly and can maintain their independence. This had resulted in a long-term downward trend in the rate of emergency occupied bed days for over 65’s per 1,000 population from June 2017 to March 2021. However, the reduction of 18% in this rate from Mar 20 to Mar 21 was not maintained and levels are back up to that of March 2021. Rate of Emergency Occupied Bed Days for over 65’s per 1000 Population Jun 21 Sept 21 Dec 21 Mar 22 1,859 1,934 2,045 2,140 Jun 20 Sept 20 Dec 20 Mar 21 2,087 2,040 1,840 1,780 Jun 19 Sept 19 Dec 19 Mar 20 2,117 2,097 2,112 2,173 Jun 18 Sept 18 Dec 18 Mar 19 2,380 2,375 2,344 2,274 Jun 17 Sept 17 Dec 17 Mar 18 2,558 2,531 2,495 2,444 Covid 19 challenges and successes Throughout 2021/22, the IJB continued to deliver services in line with the Integration Scheme and Strategic Plan, however the planning and delivery of services remained impacted by the COVID pandemic. Some services remained temporarily paused whilst others rapidly adapted their delivery method and the majority of the non- frontline workforce continued to work from home. Page 49
Page 50
Moray Integration Joint Board Annual Accounts 2021/22 7 MANAGEMENT COMMENTARY (continued) For much of the year Moray remained in a pandemic response phase, flexing and stepping up quickly to respond to spikes in COVID infection rates. It was clear it would not be possible in all cases to restore services to pre-pandemic levels as long as enhanced public health measures remained in place. It was further evident that what could be delivered from within existing resources (workforce, infrastructure, and finance) was diminished. Even at this level, the requirement to operate core services alongside the additional measures in place to support the pandemic response meant there was an immediate and ongoing resource impact The health and social care system was challenged by some significant periods of demand. A pan-Grampian approach was taken in how surge and flow through the system was managed to ensure people in the community and in hospital received the care they required. Those working in health and social care in Moray across all sectors, including independent providers and the third sector stepped up to the challenge on a daily basis but have felt the negative effects of the pandemic on our communities more keenly than others. They have continued to respond with compassion, empathy and dedication in protecting and promoting people’s opportunities to have the best possible lives. By November, Grampian had experienced three waves of raised levels of COVID-19 infection and was currently in a fourth cycle of elevated disease which left the entire health and care system struggling to meet the normal level of performance despite the incredible efforts of a reduced and exhausted workforce. The social care sector in Moray faced continued periods of extreme pressure that had an impact on the wider community and the effectiveness and efficiency of health services. Service managers implemented business continuity arrangements to ensure available staff resources were focussed on maintaining business critical functions, particularly in care at home, to try to ensure that all essential care was covered. Page 50
Page 51
Moray Integration Joint Board Annual Accounts 2021/22 8 MANAGEMENT COMMENTARY (continued) One of our key challenges was effective communication and engagement with all of our stakeholders (public, staff and partner organisations). Weekly updates were produced and widely circulated. The reach of our social media platforms has expanded and the website continued to be utilised to promote information about the work of the IJB. Much of the focus of the last 12 months has been to consolidate learning and positive developments arising out of the pandemic. This included collaboration across the sector to mitigate negative impacts on the lives of individuals, families, communities and colleagues who worked tirelessly to support people, their unpaid carers and each other. Vaccination Programme Take-up of the COVID-19 vaccine was high among all cohorts in Moray. In April 2021, Phase 2 of the COVID-19 vaccination programme for the over 18s progressed. The offer of vaccinations progressed by age, starting with those aged 40-49. In August, 16 and 17 year olds were invited to come forward for vaccination and in September the offer was extended to children and young people aged 12-15. In February 2022 it was confirmed children aged five to 11 would be offered a COVID vaccine on the recommendation of the Joint Committee on Vaccination and Immunisation (JCVI). Thanks to the efforts of vaccinators and frontline staff, the Scottish Government met its target of offering every eligible adult over 18 an appointment by 30 December. Nearly 77% of eligible adults in Scotland had received a booster or third dose by that date. The Covid vaccination programme was primarily delivered at the Fiona Alcock Vaccination Centre in Elgin through appointments and walk-in opportunities, with pop-up outreach clinics held in workplaces and community venues as well as the Mobile Information Bus, to increase vaccine uptake among the vaccine hesitant in all cohorts. Page 51
Page 52
Moray Integration Joint Board Annual Accounts 2021/22 9 MANAGEMENT COMMENTARY (continued) Longer Term Impact of Covid-19 and Wellbeing There was real concern that after such a sustained period of intense physically and emotionally draining work, staff’s own resilience had been badly hit, with the recognition that they would need support and opportunities to decompress, reflect and recharge in order to find the reserves required to continue to respond to ongoing and future challenges. The We Care staff health and wellbeing programme was established to deliver, co- ordinate and enhance staff wellbeing across NHS Grampian and the Health and Social Care Partnerships. The website acted as a hub where people could access information, help and advice related to their own and or their team’s physical and mental wellbeing. Recovery and Re-mobilisation Resource was directed into supporting people to look after themselves by encouraging good infection control, testing and vaccination, and to protecting the most vulnerable, including vulnerable care home residents. Waiting times for care and support grew longer due to sustained service pressures. Additional work was directed towards increasing capacity and planning ahead for winter. Operation Iris was enacted at a Grampian wide level for an initial six month period to manage the health and care system through winter, with the NHS continuing to operate on an emergency footing. The interdependencies between services formed part of the assessment on how we remobilised, as no part of the system operates in isolation. While demand on the health and care system continued to be immense, we remained focused on planning for the longer term to ensure that services remained responsive to the community. Work on developing some areas of strategic and locality planning slowed as operational issues continued to be prioritised, but we also saw the acceleration of transformational redesign around the Home First programme alongside the opportunities presented by an expanded portfolio of health and care that now encompasses Dr Gray’s Hospital. Changes to Business as Usual Activities/ Transformation Care home and care at home assurance groups continued to meet to provide oversight and support to internal and external social care providers within the context of Covid in Moray. The group monitored information with an overview of cases staffing, safety, PPE, testing and any other pertinent issues. This is a multi-agency group that has supported and guided care homes and care at home in a positive way through the ongoing challenges. Page 52
Page 53
Moray Integration Joint Board Annual Accounts 2021/22 10 MANAGEMENT COMMENTARY (continued) A new model of care at home has been implemented since October 2021. Health & Social Care Moray commissioned a single care at home external partner to jointly deliver an outcome based care at home service across Moray. Since its establishment, Health & Social Care Moray has liaised and worked closely with both NHS Grampian and Moray Council, along with other resilience partners, to ensure that the duties of Category 1 responders are adhered to. Following an amendment to legislation, IJBs are now included within the within the Civil Contingencies Act 2004 as Category 1 responders. Longer Term Changes to Strategies and Plans Strategic planning has been delayed due to operation matters in response to the pandemic taking priority. The Strategic Planning and Commissioning Group (SPCG) was re-established in September 2021 and began to oversee the development of key programmes of work across the interfaces between primary, secondary and social care, developing the locality planning approach and coordination of the many enabling elements upon which planning and delivery of services is reliant. Locality planning resumed with intelligence gathering to inform locality profiles. Locality managers agreed terms of reference for the locality steering groups which will involve stakeholders developing approaches to community engagement to identify local health and wellbeing priorities for improvement. Locality engagement work commenced in the Lossiemouth area to consider future health and wellbeing provision and the impact on patients of the continued closure of the GP branch surgery buildings in Hopeman and Burghead. The strategic plan Moray Partners in Care was published in 2019 and it is recognised that the health and social care landscape has changed considerably since then. A refresh of the plan is essential to set the approach for the next 10 years. The revised plan – to be published in 2022 - will set out clearly our aims and objectives to the public and our workforce, building on what has already been achieved. Page 53
Page 54
Moray Integration Joint Board Annual Accounts 2021/22 11 MANAGEMENT COMMENTARY (continued) Other Impacts on services In November 2021, Moray was hit by Storm Arwen at one of the coldest periods of the year. All partners deployed an emergency response to power outages, road closures, water supply issues and the risk of flooding. Health & Social Care Moray and the local authority took action to ensure vulnerable residents were safe in their homes and access to hot food or had alternative accommodation. Throughout the stormy weather and despite access issues, staff worked diligently to ensure critical services were maintained. The Future Moray continued to progress the Home First approach to supporting people to avoid unnecessary hospital admission and to return home, wherever possible, without delay. This work has developed into Hospital without Walls, an ambitious model involving all aspects of Home First alongside unscheduled care, primary/secondary care and acute services. Hospital without Walls will offer hospital-level care to patients who are acutely unwell in their own home. It will establish a suite of responsive, co-ordinated, multi- disciplinary care supporting older people with frailty and multi-morbidity. Initial effort has been concentrated on developing a Home First Frailty Team who will be primarily focused at the ‘front door’ of Dr Gray’s Hospital but will also offer support within the community. The multi-disciplinary team will provide rapid geriatric assessments and allow a quick turnaround of those presenting at the front door. This will combine elements of the Discharge to Assess service which is now embedded into the system and provides an intermediate support approach for hospital in-patients who are medically stable and do not require acute hospital care but may still require rehabilitation. They are discharged home with short-term support to be fully assessed for longer-term needs in their own home. The IJB responded to the Scottish Government’s consultation on a National Care Service for Scotland following the recommendation of the Independent Review of adult social care. The National Care Service would operate as a new body to oversee social care, similar to how the National Health Service oversees health, enabling social care to have a more equal footing with health care. Page 54
Page 55
Moray Integration Joint Board Annual Accounts 2021/22 12 MANAGEMENT COMMENTARY (continued) It proposes that Local Integration Authorities would have more powers and would be directly funded by national government, rather than receiving their funding from local authorities and Health Boards as they do at the moment. Officers continued to work on developing the business case for the delegation of Moray Children’s Social Work and Criminal Justice to the IJB. Moray Council and NHS Grampian have now agreed the delegation, the next step to update the Integration Scheme and get approval from the Scottish Government. Financial Review and Performance Financial performance forms part of the regular reporting cycle to the MIJB. Throughout the year the Board, through the reports it receives is asked to consider the financial position at a given point and any management action deemed as necessary to ensure delivery of services within the designated financial framework. From the mid-point in the financial year, the Board was presented with financial information that included a forecast position to the end of the year. In November 2021 the Board received a financial report which forecast an expected overspend to the end of the financial year of £2.3m. This forecast reduced throughout the remainder of the year and in December 2021, MIJB were forecasting a small underspend to the end of the year of £0.2m. In March 2021, the MIJB agreed a savings plan of £0.407m. At the end of the financial year, only £0.11m had not been achieved. Scottish Government additional funding was made available that covered the underachievement on the savings target and £0.11m was received as part of Covid funding. Given the uncertainties associated with Covid-19, it was necessary to update the Board regularly on the emerging financial position. This was done formally through MIJB meetings and informally through development sessions. To support the response to Covid-19, the Scottish Government developed a process to assess the impact of Covid on Integration Authorities’ budgets. They did this through the development of local mobilisation plans for each health board area, which in turn captured each Integration Authority. The objective was to demonstrate the impact on IJB budgets and provide appropriate financial support. The local mobilisation plans were updated regularly throughout the year and funding allocations were made by the Scottish Government on the basis of these updates. At the end of the financial year, the cost of the mobilisation plan for Moray was £5.2m, this included £0.11m for the underachievement of the approved savings plan. The largest element of spend was £3.18m which was used to support sustainability payments to external providers of care. Any unspent funds are held in an earmarked reserve and drawn down as appropriate for the continued support to the pandemic response and recovery. Page 55
Page 56
Moray Integration Joint Board Annual Accounts 2021/22 13 MANAGEMENT COMMENTARY (continued) Additional detail on the areas of spend supported through Covid-19 funding is highlighted in the table below: Description Spend to 31 March 2022 £000’s Additional Staffing Costs 160 Provider Sustainability Payments 3,176 Remobilisation 1,178 Cleaning, materials & PPE 90 Elgin Community Hub 556 Prescribing 154 Other (244) Additional Capacity in Community 17 Underachievement of Savings 110 Total 5,197 Page 56
Page 57
Moray Integration Joint Board Annual Accounts 2021/22 14 MANAGEMENT COMMENTARY (continued) Service Area Budget £000’s Actual £000’s Variance (Over)/ under spend Note Community Hospitals 5,494 5,477 17 Community Health104,360 5,490 4,932 558 4 Learning Disabilities 8,264 9,691 (1,427) 2 Mental Health 9,267 9,542 (275) Addictions 1,282 1,259 23 Adult Protection & Health Improvement 151 158 (7) Care Services Provided In-House 17,215 16,238 977 3 Older People Services & Physical & Sensory Disability 19,014 20,536 (1,522) 1 Intermediate Care & OT 1,524 1,828 (304) 5 Care Services Provided by External Contractors 8,540 8,271 269 Other Community Services 8,576 8,460 116 Administration & Management 2,400 2,404 (4) Other Operational Services 1,176 1,192 (16) Primary Care Prescribing 17,416 18,310 (894) 6 Primary Care Services 18,278 18,307 (29) Hosted Services 4,619 4,632 (13) Out of Area Placements 669 832 (163) Improvement Grants 940 758 182 Total Core Services 130,315 132,827 (2,512) Strategic Funds & Other Resources 27,470 7,937 19,533 TOTALS (before set aside) 157,785 140,764 17,021 Page 57
Page 58
Moray Integration Joint Board Annual Accounts 2021/22 15 MANAGEMENT COMMENTARY (continued) The table above summarises the financial performance of the MIJB by comparing budget against actual performance for the year. MIJB’s financial performance is presented in the comprehensive income and expenditure statement (CIES), which can be seen on page 46. At 31 March 2022 there were usable reserves of £17.02m available to the MIJB, compared to £6.34m at 31 March 2021. These remaining reserves of £17.02m are for various purposes as described below: Earmarked Reserves Amount £000’s Action 15 72 Primary Care Improvement Plan 2,259 Covid-19 9,016 GP Premises 232 Moray care home infection control 223 Community Living Change Fund 319 National Drugs MAT 103 National Drugs Mission Moray 207 OOH Winter Pressure funding 202 Moray Cervical screening 110 Moray hospital at home 199 Moray interface discharge 205 Moray School nurse 46 Moray Psychological 492 MHO Funding 51 Care at Home Investment funding 656 Interim Care Funding 695 Moray Workforce well being 54 Moray Winter Fund HCSW 256 Moray Winter Fund MDT 367 Total Earmarked 15,764 General Reserves 1,257 TOTAL Earmarked & General 17,021 Page 58
Page 59
Moray Integration Joint Board Annual Accounts 2021/22 16 MANAGEMENT COMMENTARY (continued) Action 15 – as part of the Mental Health Strategy 2017-2027, Scottish Government Ministers made a commitment to provide funding to support employment of 800 additional mental health workers to improve access. Primary Care Improvement Plan – Scottish Government investment to support the GP contract that was agreed in 2018. Covers 6 priority areas identified by Government. Covid 19 - additional funding provided by Scottish Government to address the impacts of the pandemic. GP Premises – balance of funding for improvement grants including the making of premises improvement grants to GP contractors. The continued digitalisation of paper GP records. Modifications for the purposes of improving ventilation and increase to the space available in NHS owned or leased premises for primary care multi- disciplinary teams. Community Living Change Fund – funding to be used over a three year period (2021- 2024) to support reducing delayed discharge of those with complex needs, repatriate people inappropriately placed outside Scotland and to redesign the way service are provided for people with complex needs. Care Home Infection Control – to support Care Homes through the pandemic. National Drugs Medication Assisted Treatment (MAT) for embedding and implementation of the standards will he be overseen by the MAT implementation support team (MIST). National Drugs Mission Moray – balance of funding for range of activities including: drug deaths, taskforce funding, priorities of national mission, residential rehabilitation, whole family approach, outreach, bear fatal overdose pathways and lived and living experience. Out of Hours Winter Pressure funding – balance of funding to sustain GO out of hours and to support resilience to explore operational solutions. Moray Cervical Screening – balance of funding for smear test catch up campaign. Moray Hospital at home – development of Hospital at Home provides Acute hospital level care delivered by healthcare professionals, in a home context for a condition that would otherwise require acute hospital inpatient care. Moray Interface Care & Discharge without Delay (DWD)- interface care programme is part of the urgent and unschedules care programme. DWD programme is to prevent delay and reduce length of stay. Moray School Nurse – balance of school nursing programme for additional school nurses. Page 59
Page 60
Moray Integration Joint Board Annual Accounts 2021/22 17 MANAGEMENT COMMENTARY (continued) Moray Psychological – funding streams for mental health, psychological wellbeing, facilities, post diagnostic support and psychological therapies. Mental Health Officer (MHO) funding – funding to support additional mental health officer capacity. Care at Home investment funding – balance of funding to build capacity in care at home community based services. Interim Care funding – balance of non-recurring funding basis to enable patients currently in hospital to move into care homes and other community settings. Moray Workforce Wellbeing – funding to the health and wellbeing of those working in health and social care. Moray Winter Fund Health Care Social Workers (HCSW) – additional funding for further HCSW in both the IJB and Emergency department. Moray Winter fund Multi Disciplinary Team – additional funding for service pressures includes Discharge to Assess, Home First Frailty team and volunteer development. All reserves are expected to be utilised for their intended purpose during 2022/23. Significant variances against the budget were notably: Note 1 Older People Services and Physical & Sensory Disability - This budget was overspent by £1.5m at the end of the year. The final position includes an overspend for domiciliary care in the area teams, which incorporates the Hanover complexes for very sheltered housing in Forres and Elgin and for permanent care due to more clients receiving nursing care than residential care. The ageing population requiring more complex care and local demographics also contributes to this overspend. Note 2 Learning Disabilities – The Learning Disability (LD) service was overspent by £1.4m at the end of 2021-22. This consists of a £1.5m overspend, primarily relating to day services and the purchase of care for people with complex needs. Adults with learning disabilities are some of the most vulnerable people in our community and need a high level of support to live full and active lives. The overspend was offset in part by an underspend of £0.1m, relating primarily to staffing in speech and language and psychology services. The transformational change programme in learning disabilities helps to ensure that every opportunity for progressing people’s potential for independence is taken, and every support plan involves intense scrutiny which in turn ensures expenditure is appropriate to meeting individual outcomes. Page 60
Page 61
Moray Integration Joint Board Annual Accounts 2021/22 18 MANAGEMENT COMMENTARY (continued) Note 3 Care Services Provided In-House – This budget was underspent by £1.0M at the end of the year. The most significant variances relate to the Care at Home services for all client groups and the Supported Living services which are underspent predominantly due to vacancies and issues with recruitment and retention. Overspends in internal day services £0.1m mainly due to transport costs and less income received than expected. Note 4 Community Health – This budget was underspent overall by £0.6m at the end of 2021-22 and is primarily due to vacancies, unplanned leave and retirements. Recruitment and retention is an issue, which is not just apparent in Moray and a plan is currently in place to deal with this going forward. Note 5 Intermediate Care & Occupational Therapy (OT) – This budget was overspent by £0.3m. This relates primarily to OT equipment where costs have increased due to manufacturing and supply to Moray and more complex equipment requests. Note 6 Primary Care Prescribing - This budget was overspent by £894,000. The budget to March includes includes an uplift of £706,000 (non-recurring) for efficiencies not achieved and £115,000 recurring from within Moray IJB. Medicines management practices continue to be applied on an ongoing basis to mitigate the impact of external factors as far as possible and to improve efficiency of prescribing both from clinical and financial perspectives Set Aside – Excluded from the financial performance table above on page 14 but included within the Comprehensive Income & Expenditure Account is £13.04m for Set Aside services. Set Aside is an amount representing resource consumption for large hospital services that are managed on a day to day basis by the NHS Grampian. MIJB has a responsibility for the strategic planning of these services in partnership with the Acute Sector. Set Aside services include: • Accident and emergency services at Aberdeen Royal Infirmary and Dr Gray’s inpatient and outpatient departments; • Inpatient hospital services relating to general medicine, geriatric medicine, rehabilitation medicine, respiratory medicine, learning disabilities, old age psychiatry and general psychiatry; and • Palliative care services provided at Roxburgh House Aberdeen and The Oaks Elgin. The budget allocated to Moray is designed to represent the consumption of these services by the Moray population. As a result of prioritising resources to support the Covid pandemic Public Health Scotland have not produced activity data for Set Aside services for the 2019/20 or 2020/21 financial years. Page 61
Page 62
Moray Integration Joint Board Annual Accounts 2021/22 19 MANAGEMENT COMMENTARY (continued) The figures for 2021/22 have been derived by uplifting 2019/20 figures by baseline funding uplift in 2020/21 (3.00%) and 2021/22 (3.36%): 2021/22 2020/21 2019/20 2018/19 Budget 13.04m 12.62m 12.252m 11.765m Number of Bed Days and A&E Attendances -------- ------- ------- 47,047 Risks, Uncertainties and Future Developments The MIJB Chief Officer has a responsibility to maintain a risk strategy and risk reporting framework. Risks inherent within the MIJB are monitored, managed and reported at each meeting of the Audit, Performance and Risk Committee. In addition, a risk action log is monitored and managed by the Senior Management Team. The key strategic risks of the MIJB classed as ‘High’ and ‘Very High’ are presented below: VERY HIGH Risk 2 - There is a risk of MIJB financial failure in that the demand for services outstrips available financial resources. Financial pressures being experienced both by the funding Partners and Community Planning Partners will directly impact on decision making and prioritisation of MIJB. Mitigating Actions - Risk remains of the challenge that the MIJB can deliver transformation and efficiencies at the pace required. Financial information is reported regularly to both the MIJB, Senior Management Team and System Leadership Group. The Chief Officer and Interim Chief Financial Officer (CFO) continue to engage in finance discussions with key personnel of both NHS Grampian and Moray Council. These conversations have continued throughout the Covid-19 pandemic. The Chief Officer and CFO will continue to engage with the partner organisations in respect of the financial position throughout the year. Cross partnership performance meetings are in place with partner CEOs, Finance Directors and the Chair/Vice Chair of the MIJB. The CFO and Senior Management Team have worked together to address further savings which will be presented to the Board for approval as part of the budget setting procedures for 2022/23. This should be a focus of continuous review to ensure any investment is made taking cognisance of existing budget pressures. Page 62
Page 63
Moray Integration Joint Board Annual Accounts 2021/22 20 MANAGEMENT COMMENTARY (continued) HIGH Risk 1 - The Integration Joint Board (IJB) does not function as set out within the Integration Scheme, Strategic Plan and Scheme of Administration and fails to deliver its objectives or expected outcomes. Inability to recruit and retain qualified and experience staff to provide and maintain sustainable, safe care. Mitigating Actions - Induction sessions are held for new IJB members and IJB members briefings are held regularly. Conduct and Standards training was held for IJB members in December 2020 with update provided by Legal Services as appropriate. Senior Management Team (SMT) regular meetings and directing managers and teams to focus on priorities. Regular development sessions are held with IJB and System Leadership Group (SLG) Strategic Plan and locality management structure is in place The work that has been progressed through the Covid19 response has escalated developments in some areas as a matter of priority. This has been achieved through collaborative working with partner organisations and the third sector Risk 3 - Inability to recruit and retain qualified and experience staff to provide and maintain sustainable, safe care. Mitigating Actions - System re-design and transformation. Organisational Development Plan and Workforce plan were updated and approved by MIJB in November 2019 and they are being progressed by the Workforce Forum. Workforce planning has recommenced alongside plans for NShG and Moray Council and an initial draft will be submitted to Senior Management Team 8 June 2022. Staff Wellbeing is a key focus and there are many initiatives being made available to all staff including training, support, information and access to activities. Locality Managers are developing the Multi-disciplinary teams in their areas and some project officer support has been provided to develop the locality planning model across Moray. Lead Managers are involved in regional and national initiatives to ensure all learning is adopted to improve this position. They are also linked to University Planning for intakes and programmes for future workforce development Page 63
Page 64
Moray Integration Joint Board Annual Accounts 2021/22 21 MANAGEMENT COMMENTARY (continued) HIGH (continued) Risk 5 - Inability to cope with unforeseen external emergencies or incidents as a result of inadequate emergency and resilience planning. Mitigating Actions – Information from the updated Business Impact Assessments /Business Continuity Plans has informed elements of the Winter Preparedness Plan (Surge plan). A Friday huddle is in place which gathers the status of services across the whole system to provide information and contact details to the Senior Manager on Call (SMOC) over the weekend. NHS Grampian have introduced system wide daily huddles to manage the flow and allocation of resources which require attendance from Dr Grays and HSCM. NHS Grampian have amended their approach to Pandemic preparation so HSCM Pandemic plan requires redrafting and testing. Practitioner group established for Moray with representation from HSCM, Dr Grays, Moray Council and NHS Grampian to discuss matters arising from the Local Resilience Forum and within our respective organisations. In addition it will provide a forum for discussion of the linkages between organisational response plans to ensure there are no gaps or over reliance on particular local resources. HSCM represented at Grampian Local Resilience Partnership meetings and working groups and at NHSG Civil Contingencies group to ensure that plans are aligned and networks are established and maintained for use to support a response. Risk 7 - Inability to achieve progress in relation to national Health and Wellbeing Outcomes. Performance of services falls below acceptable level. Mitigating Actions – Service managers monitor performance regularly within their teams and escalate any issues to the System Leadership Group (SLG) for further discussion to provide wider support, developing shared ownership and a greater understanding across the whole system. Key operational performance data is being circulated daily to all managers in the Daily dashboard to ensure any potential issues are identified quickly so action can be taken. This dashboard is being reviewed and will be further developed with the intention of further dashboards to provide a whole system overview. This has been discussed at SLG and agreed. Performance information is presented to the Performance sub group of Practice Governance Group to inform Social Care managers of the trends in service demands so that resources can be allocated appropriately. Page 64
Page 65
Moray Integration Joint Board Annual Accounts 2021/22 22 MANAGEMENT COMMENTARY (continued) HIGH (continued) Risk 8 - Inability to progress with delivery of Strategic Objectives and Transformation projects. Mitigating Actions - Integrated Infrastructure Group previously established, with ICT representation from NHS Grampian and Moray Council, to consider and provide solutions to data sharing issues and ICT infrastructure matters. Linkages to Infrastructure Board and information sharing groups had been established albeit these meetings are not taking place regularly at the moment. Data sharing groups for Grampian and Health and Social Care Moray were established and meetings were held regularly but have not taken place regularly during Covid. These meetings have oversight of any issues arising from Data protection and GDPR matters from either Council or NHS systems. During covid the issues have been dealt with as they arose Risk 9 - Requirements for support services are not prioritised by NHS Grampian and Moray Council. Mitigating Actions – Membership of the Board was reviewed and revised to ensure representation of all existing infrastructure processes and funding opportunities. Process for ensuring infrastructure change/investment requests developed. Infrastructure Manager in post and linking into other Infrastructure groups within NHS Grampian and Moray Council to ensure level of ‘gatekeeping’. Dr Gray’s site development plan is being produced collaboratively with input from NHS Grampian and HSCM management. Work is progressing on identification of needs for some services with regard to accommodation which will be communicated with partners to find the most effective solution Development Aims for 2022/23 HOME FIRST The planning and delivery to meet the threat of Covid-19 has led to some rapid change and has created a new starting point. Home First continues to be the key strategic theme/over-arching project to embed change going forwards, to ensure that in a new environment we can continue to meet health and care needs safely, and can react to further waves of Covid-19; winter pressures; and future unknown events. Developing from last year’s Operation Home First, Moray has continued to mature it’s Home First work streams whilst also ensuring they are targeted and coordinated. In an effort to explore the entire patient pathway Hospital without Walls was devised. This programme will ensure there is a suite of responsive, seamless, coordinated, multi- disciplinary care supporting older people with frailty and multi-morbidity. Hospital without Walls pulls together the individual work streams under. Page 65
Page 66
Moray Integration Joint Board Annual Accounts 2021/22 23 MANAGEMENT COMMENTARY (continued) Home First whilst also considering unscheduled care, primary and secondary care services As a result of the Covid 19 activity and diversion, the Strategic Plan 2019-29, the Medium Term Financial Strategy and other supporting plans are due to revisited in 22/23. As the organisation continues to remobilise following the impacts of response, new, transformational ways of working are being adopted and are informing our approach to delivery of the strategic objectives outlined in the plan. In addition we will seek to: • Continue to develop systems leadership with a Portfolio approach; • Further embed Home First and develop Hospital without walls; • Ensure successful embedding of Discharge to Assess and how it interfaces with other services in support of reducing Delayed Discharges; • Continually develop by progressing the MIJB Improvement Action Plan measured against the Ministerial Strategic Objectives; • Ensure compliance with the Governance Framework as approved by the MIJB in January 2021; • Progress the Primary Care Improvement Plan; and • Embed recommendations from the Independent Review of Adult Social Care, and continue to embed Self Directed Support into mainstream activities. • Progress Housing development for people with a Learning Disability. ………………………… ……………………… ……………………… Dennis Robertson Simon Bokor-Ingram Deborah O’Shea Chair of Moray IJB Chief Officer Interim Chief Financial Officer Page 66
Page 67
Moray Integration Joint Board Annual Accounts 2021/22 24 STATEMENT OF RESPONSIBILITIES Responsibilities of the MIJB • To make arrangements for the proper administration of its financial affairs and to secure that it has an officer responsible for the administration of those affairs. In Moray Integration Joint Board, that officer is the Interim Chief Financial Officer; • To manage its affairs to achieve best value in the use of its resources and safeguard its assets; • Ensure the Annual Accounts are prepared in accordance with legislation (The Local Authority Accounts (Scotland) Regulations 2014) and the Local Authority (Capital Financing and Accounting) (Scotland) (Coronavirus) Amendment Regulations 2022, and so far as is compatible with that legislation, in accordance with proper accounting practices (section 12 of the Local Government in Scotland Act 2003); and • To approve the Annual Accounts. I confirm that the Annual Accounts were approved by the MIJB at its meeting on 26 January 2023. Signed on behalf of the Moray Integration Joint Board Dennis Robertson Chair of Moray IJB Page 67
Page 68
Moray Integration Joint Board Annual Accounts 2021/22 25 STATEMENT OF RESPONSIBILITIES (continued) Responsibilities of the Interim Chief Financial Officer The Interim Chief Financial Officer is responsible for the preparation of the Moray Integration Joint Board’s Annual Accounts in accordance with proper practices as required by legislation and as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code). In preparing the Annual Accounts the Interim Chief Financial Officer has: • Selected suitable accounting policies and applied them consistently; • Made judgements and estimates that were reasonable and prudent; • Complied with legislation; and • Complied with the local authority code (in so far as it is compatible with legislation). The Interim Chief Financial Officer has also: • Kept proper accounting records which were up to date; and • Taken reasonable steps for the prevention and detection of fraud and other irregularities. I certify that the financial statements give a true and fair view of the financial position of the Moray Integration Joint Board as at 31 March 2022 and the transactions for the year then ended Deborah O’Shea FCCA Interim Chief Financial Officer Page 68
Page 69
Moray Integration Joint Board Annual Accounts 2021/22 26 REMUNERATION REPORT Introduction This Remuneration Report is provided in accordance with the Local Authority Accounts (Scotland) Regulations 2014 (SSI2014/200) as part of the MIJB annual accounts. This report discloses information relating to the remuneration and pension benefits of specified MIJB members. All information disclosed in the tables is subject to external audit. Other sections within the Remuneration Report will be reviewed for consistency with the financial statements. Moray Integration Joint Board The voting members of MIJB are appointed through nomination by Moray Council and the Grampian Health Board. There is provision within the Order to identify a suitably experienced proxy or deputy member for both the voting and non-voting membership to ensure that business is not disrupted by lack of attendance by any individual. MIJB Chair and Vice-Chair Nomination of the MIJB Chair and Vice-Chair post holders alternates every 18 months between a Councillor and a Health Board non-executive member. The MIJB does not provide any additional remuneration to the Chair, Vice-Chair or any other board members relating to their role on the MIJB. The MIJB does not reimburse the relevant partner organisations for any voting member costs borne by the partner. The MIJB does not have responsibilities in either the current or in future years for funding any pension entitlements of voting MIJB members. Therefore no pension rights disclosures are provided for the Chair or Vice-Chair. Taxable Expenses 2020/21 Name Position Held Nomination By Taxable Expenses 2021/22 £ £ - Dennis Robertson Vice-Chair 29/04/21 to date Chair 24/09/20 to 29/04/21 Grampian Health Board - - Cllr Shona Morrison Chair 29/04/21 to 31/03/2022 Vice-Chair 01/10/19 to 29/04/2021 Moray Council - Page 69
Page 70
Moray Integration Joint Board Annual Accounts 2021/22 27 REMUNERATION REPORT (continued) Officers of the MIJB The MIJB does not directly employ any staff in its own right; however specific post- holding officers are non-voting members of the Board. Chief Officer Under section 10 of the Public Bodies (Joint Working) (Scotland) Act 2014 a Chief Officer for the integration joint board has to be appointed and the employing partner has to formally second the officer to the Board. The employment contract for the Chief Officer will adhere to the legislative and regulatory framework of the employing partner organisation. The remuneration terms of the Chief Officer‘s employment are approved by the Board. Other Officers No other staff are appointed by the MIJB under a similar legal regime. Other non- voting board members who meet the criteria for disclosure are included in the disclosures below. Total 2020/21 Senior Employees Salary, Fees & Allowances Total 2021/22 £ £ £ 96,115 Simon Bokor-Ingram Chief Officer 109,826 109,826 87,271 Tracey Abdy Chief Financial Officer 93,904 93,904 In respect of officers’ pension benefits, the statutory liability for any future contributions to be made rests with the relevant employing partner organisation. On this basis there is no pensions liability reflected on the MIJB balance sheet for the Chief Officer or any other officers. The MIJB however has a responsibility for funding the employer contributions for the current year in respect of the officer time spent on fulfilling the responsibilities of their role on the MIJB. The following table shows the MIJB’s funding during the year to support the officers’ pension benefits. The table also shows the total value of accrued pension benefits which may include benefits earned in other employment positions and from each officer’s own contributions. NOTE: no bonuses, expenses allowances, compensation for loss of office or any taxable benefits were made in 2021/22 Page 70
Page 71
Moray Integration Joint Board Annual Accounts 2021/22 28 REMUNERATION REPORT (continued) In Year Pension Contributions Accrued Pension Benefits Year to 31/03/21 Year to 31/03/22 As at 31/03/2022 Difference from 31/03/2021 £ £ £ 000’s £ 000’s Simon Bokor- Ingram, Chief Officer 13,142 (from 20/4/20) 22,954 Pension 43 5 Lump Sum 87 7 Tracey Abdy Chief Financial Officer 18,075 18,562 Pension 20 2 Lump Sum 18 - Disclosure by Pay bands As required by the regulations, the following table shows the number of persons whose remuneration for the year was £50,000 or above, in bands of £5,000. Number of Employees in Band 2020/21 Remuneration Band Number of Employees in Band 2021/22 1 £85,000 - £89,999 - - £90,000 - £94,999 1 1 £95,000 - £99,999 - - £105,000 - £109,999 1 Page 71
Page 72
Moray Integration Joint Board Annual Accounts 2021/22 29 REMUNERATION REPORT (continued) Exit Packages There were no exit packages agreed by the MIJB during 2021/22 financial year, or in the preceding year. ……………………….. ……………………… Dennis Robertson Simon Bokor-Ingram Chair of Moray IJB Chief Officer Page 72
Page 73
Moray Integration Joint Board Annual Accounts 2021/22 30 ANNUAL GOVERNANCE STATEMENT The Annual Governance Statement describes the Moray Integration Joint Board’s (MIJB) governance arrangements and reports on the effectiveness of the MIJB’s system of internal control. Scope of Responsibility The MIJB is responsible for ensuring that its business is conducted in accordance with the law and appropriate standards, and that public money is safeguarded and used efficiently and effectively in pursuit of best value. In discharging its responsibilities, the MIJB has established arrangements for its governance which includes the system of internal control. This system is intended to manage risk and support the achievement of the MIJB’s policies, aims and objectives. The system provides reasonable but not absolute assurance of effectiveness. The MIJB places reliance of the systems of internal control of NHS Grampian systems and Moray Council, which supports organisational compliance of policies and procedures in addition to those of the MIJB. Assurances are required on the effectiveness of the governance arrangements of all three organisations, meaning a significant failure in one of the three Partners may require to be disclosed in the annual accounts of all three Partners. The Governance Framework The CIPFA/SOLACE framework for ‘Delivering Good Governance in Local Government’ last updated in 2016 remains current and provides a structured approach in defining seven principles that underpin effective governance arrangements. Whilst the framework is written specifically for Local Government, the principles apply equally to integration authorities, and while the MIJB continues to evolve as an entity in its own right. It continues to draw on the governance assurances of NHS Grampian and Moray Council as its principal funding partners. Given the scope of responsibility within the MIJB and the complexities surrounding the assurance arrangements, a Local Code of Corporate Governance was developed and the MIJB assesses the effectiveness of its governance arrangements against the principles set out in the document. The Code outlines the seven governance principles from the CIPFA/SOLACE guidance (as referenced below) and provides the sources of assurance for assessing compliance relative to the MIJB, Moray Council and NHS Grampian. These assurances include referencing the governance arrangements of NHS Grampian and Moray Council which are summarised annually and published in their respective Annual Governance Statements which form part of the annual accounts of each organisation. The respective governance statements can be found on the individual organisations websites: Moray Council: Annual Accounts - Moray Council and NHS Grampian: https://www.nhsgrampian.org/about-us/annual- accounts/ . Page 73
Page 74
Moray Integration Joint Board Annual Accounts 2021/22 31 ANNUAL GOVERNANCE STATEMENT (continued) Key Governance Arrangements Covid-19 has had a significant impact on the MIJB and its approach to dealing with the pandemic has involved the use of amended governance arrangements granted under delegated powers All of the scheduled Audit Performance and Risk Committee meetings were held as timetabled during 2021/22. An interim arrangement was agreed for the operation of the Clinical and Care Governance Committee whereby the Chair of the Committee received monthly updates on the key issues arising during the pandemic response. This related principally to the provision of care, care home oversight and child and adult protection matters. In addition the Chief Officer committed to providing weekly updates on the emerging situation to IJB Members, elected Members and staff. Health and Social Care Moray (HSCM) established an emergency response group that has been operational since the end of March 2020, with the frequency of meetings being adapted throughout the year dependent on the stage of response. Representation on the emergency response groups of the Partner organisations is provided by HSCM staff, ensuring the necessary links and flow of information to ensure a co-ordinated response on a pan Grampian basis and locally within Moray. The collaborative working across the whole system increased with the Omicron wave of Covid as the impact on staffing levels and demand for services put extreme pressure on all aspects of service delivery. Up to three times daily meetings were held 7 days a week to ensure a co-ordinated response. In addition a Grampian Operation Performance Escalation System (GOPES) was established to enable senior leaders to have oversight of where pressures were located in the system and to direct responses accordingly. This development has also strengthened the identification of key metric thresholds to inform the levels for escalation Page 74
Page 75
Moray Integration Joint Board Annual Accounts 2021/22 32 ANNUAL GOVERNANCE STATEMENT (continued) Evaluation of the Effectiveness of Governance Governance Principle 1 – Behaving with integrity, demonstrating strong commitment to ethical values and respecting the rule of law Assessment of Effectiveness • The activities of the MIJB are directed by a Board comprising voting and non- voting members. The Board meets every two months and draws its membership from a broad range of sources. Formal Board meetings are augmented by regular development sessions that focus in detail on specific areas. The Board is also supported by an Audit, Performance and Risk Committee, and a Clinical and Care Governance Committee, each with a specific remit to support effective governance arrangements. The Scheme of Integration was reviewed during 2021 to increase by one voting member from each partner organisation to facilitate increased membership at the Committees • The MIJB operates in line with Standing Orders that govern proceedings of the Board and its Committees, and which incorporates the Board’s Scheme of Administration that deals with the Board’s committee structure and working groups. • The MIJB has appointed a Standards Officer to support compliance with an ethical standards framework in line with the Ethical Standards in Public Life etc. (Scotland) Act 2000 whereby members of devolved public bodies such as the MIJB are required to comply with Codes of Conduct, approved by Scottish Ministers, together with guidance issued by the Standards Commission. Page 75
Page 76
Moray Integration Joint Board Annual Accounts 2021/22 33 ANNUAL GOVERNANCE STATEMENT (continued) Governance Principle 2 – Ensuring openness and comprehensive stakeholder engagement Assessment of Effectiveness • Provision is made within MIJB’s Standing Orders for public and press access to meetings and reports. During the 2021/22 year there was a continued need to broadcast live Board meetings with attendance being virtual for all. A specific web-site has been developed for Health and Social Care Moray and is continuously monitored for improvement. Agendas, reports and minutes for all committees can be accessed via the website in addition to all the linked strategies of the MIJB. • Both the voting and non-voting membership arrangements of the MIJB are in line with the Public Bodies (Joint Working) (Integration Joint Boards) (Scotland) Order 2014. The non-voting membership comprises six professional members and five stakeholder members representing: staff, third sector bodies carrying out activities in relation to health and social care, service users and unpaid carers, and four additional non-voting members which include the Chief Executives of Moray Council and NHS Grampian in an Ex-officio capacity. The broad membership of the MIJB ensures valued input and engagement from a wide range of stakeholders. • The Community Empowerment (Scotland) Act 2015 places a statutory duty on MIJB and its Community Planning Partners to engage with communities on the planning and delivery of services and securing local outcomes. The MIJB has an approved Communications and Engagement Strategy which recognises and promotes the active and meaningful engagement with all stakeholders. Governance Principle 3 – Defining outcomes in terms of sustainable economic, social and environmental benefits Assessment of Effectiveness • The MIJB has in place a Strategic Plan 2019-29 which is supported by various documents including a medium term financial framework. Following the impact of the pandemic a review is planned for both documents. • The plan is underpinned by a performance framework, workforce plan, organisational development strategy, and a communications, engagement and participation plan. Initial work has commenced for an updated workforce plan due for completion by July 2022 • The suite of documents are designed to identify outcomes and forward-thinking on direction over the medium term. Outcomes are closely linked to the delivery of health and social care and the planned improvements for the population of Moray. • A climate change duties report is collated and submitted annually on behalf of the MIJB. Page 76
Page 77
Moray Integration Joint Board Annual Accounts 2021/22 34 ANNUAL GOVERNANCE STATEMENT (continued) Governance Principle 4 – Determining the interventions necessary to optimise the achievement of intended outcomes Assessment of Effectiveness • The MIJB’s decision making process ensures that the members of the Board receive objective and robust analysis of a variety of options indicating how the intended outcomes will be achieved, providing information on the associated risks and opportunities. • Board papers reflect the broad range of matters under consideration including regular update reports by the Chief Officer on topical matters and agenda items covering opportunities and challenges arising from reconfiguration of services. • The Financial Management Code promoted by CIPFA is recognised as a means of assisting in ensuring good financial administration. A medium term financial strategy was approved by the MIJB in March 2022 and will be reviewed in the new financial year, once the strategic plan has been reviewed. Governance Principle 5 – Developing the entity’s capacity, including the capability of its leadership and the individuals within it Assessment of Effectiveness • The Senior and Operational Management teams were due to continue to take part in a Systems Leadership Programme led by The Kings Fund to support the leadership teams however this has been further paused for the Covid 19 response. During the Covid 19 response there has been increased opportunity to work collaboratively across organisations through use of new technology. • The MIJB has met with Officers regularly for development sessions to increase the opportunity for shared learning and constructive challenge. Page 77
Page 78
Moray Integration Joint Board Annual Accounts 2021/22 35 ANNUAL GOVERNANCE STATEMENT (continued) Governance Principle 6 – Managing risk and performance through robust internal control and strong public financial management Assessment of Effectiveness • As part of a robust risk monitoring framework, the Strategic Risk Register is reviewed and updated regularly and presented to every Audit, Performance and Risk Committee. A related action log was created for monitoring purposes and is owned and monitored by the Senior Management Team. • A Performance Management Framework has been developed. Performance reporting falls within the scope of the Audit, Performance and Risk Committee and reporting is quarterly. • The internal control system links closely with those of the Partners, given their operational remit for delivery of services under direction of the MIJB. The Audit, Performance and Risk committee through its consideration of reports monitors the effectiveness of internal control procedures. The MIJB Chief Internal Auditor undertakes an annual review of the adequacy of internal controls and the opinion is included within this statement. • The MIJB has an independent S95 Officer who is a member of the MIJB, providing advice on all financial matters and ensure timely production and reporting of budget estimates, budget monitoring reports and annual accounts. • Governance arrangements have been developed and maintained to comply with the core functions of various good framework guidelines including Code of Practice on Managing the Risk of Fraud and Corruption, Public Sector Internal Audit Standards (incorporating the principles of the Role of the Head of Internal Audit), Audit Committees: Practical Guidance for Local Authorities and Police, etc. Governance Principle 7 – Implementing good practices in transparency, reporting and audit to deliver effective accountability Assessment of Effectiveness • MIJB business is conducted through an approved cycle of Board meetings. During the year, recordings of Board meetings were made available to the public. Agendas, reports and minutes are available for the public to inspect. There is a standard reporting format in place to ensure consistency of approach and consideration by Members to provide transparency in decision making. • The MIJB publishes both Annual Accounts and an Annual Performance Report following Board approval. • The Chief Internal Auditor reports directly to the Audit, Performance and Risk committee with the right of access to the Chief Officer, Interim Chief Financial Officer and Chair of the Audit, Performance and Risk committee on any matter. The Chief Internal Auditor has continued to report to Committee during 2021/22. Page 78
Page 79
Moray Integration Joint Board Annual Accounts 2021/22 36 ANNUAL GOVERNANCE STATEMENT (continued) Review of Adequacy and Effectiveness The MIJB has a responsibility for conducting, at least annually, a review of the effectiveness of the governance arrangements, including the system of internal control. The review is informed by the work of the Senior Management Team (which has responsibility for the development and maintenance of the internal control framework environment); the work of the Internal Auditors and the Chief Internal Auditor’s annual report and the reports from the External Auditor and other review agencies and inspectorates. Internal Audit Opinion The Internal Audit Service for the MIJB is delivered by Moray Council’s Internal Audit Section, and the Council’s Audit and Risk Manager holds the Chief Internal Auditor appointment to the MIJB until the 31st of March 2024. The Council’s Internal Audit Section has adopted the Public Sector Internal Audit Standards (PSIAS) that requires the Chief Internal Auditor to deliver an annual internal audit opinion and report, which has also been used to inform this governance statement. The Chief Internal Auditor’s evaluation of the adequacy and effectiveness of the MIJB framework of governance, risk management and internal control includes consideration of the findings from the audit work undertaken by the Chief Internal Auditor in his role as the Audit and Risk Manager for the Moray Council. Assurance is also sought from the Internal Audit Service Provider for NHS Grampian of the governance processes adopted by that organisation. In addition, reports issued by other external review agencies are considered in the opinion provided by the Chief Internal Auditor. In accordance with PSIAS, the Chief Internal Auditor prepares a risk based Audit Plan for the MIJB, which has regard to the internal audit arrangements of both the Moray Council and NHS Grampian functions. The impact of the pandemic continued to affect the Internal Audit Section in that officers have been working from home with a need to change established working practices and make greater use of audio, video, and screen sharing software applications. In addition, the Section has also had several staff vacancies during the year. Despite these constraints, the Audit Plan for 2021/22 was completed. The audits reported to the MIJB Audit, Performance and Risk Committee included a review of the financial monitoring arrangements within the Self Directed Support Team for direct payments made to service users. The audit found several areas where improvements were required to current operating systems and procedures, including a need to review all the care packages of the service user to recover any excess funds. An audit report was also received into the management arrangements of income held for individuals under Corporate Appointeeship Arrangements. The review found that the service was administered well, but findings were noted, including a need to review cash handling procedures and further management overview of the corporate bank account reconciliation process. Page 79
Page 80
Moray Integration Joint Board Annual Accounts 2021/22 37 ANNUAL GOVERNANCE STATEMENT (continued) However, the Chief Internal Auditor has raised concerns regarding a report to the Audit, Performance and Risk Committee on the 31st of March that detailed the outcome of a review of the Health and Social Care Moray Commissioning Service into how social care contracts are currently being managed. This was a “peer” review led by the Strategic Procurement Manager (Social Care) of Aberdeen City and Aberdeenshire Councils. The report has highlighted a number of significant concerns about how social care contracts are managed. The Audit, Performance and Risk Committee have agreed for an external organisation to undertake a review of the Commissioning Service. The Chief Internal Auditor, after consideration to the results of the work carried out by Internal Audit, taken together with other sources of assurance, with specific reference to the peer review into how the Commissioning Service manages social care contracts; only limited assurance can be provided that the Moray Integration Joint Board has adequate systems of governance and internal control, for the year ended 31 March 2022. Page 80
Page 81
Moray Integration Joint Board Annual Accounts 2021/22 38 ANNUAL GOVERNANCE STATEMENT (continued) Prior Year Governance Issues The Annual Governance Statement for 2020/21 highlighted a number of areas for development in looking to secure continuous improvement. An assessment of progress is provided below: Area for Improvement Identified in 2020/21 Action Undertaken / Progress Made in 2021/22 It is recognised that the impact the pandemic has had on services drives the need to review the Strategic Plan 2019- 29 during 2021/22. The review will require engagement of key stakeholders and MIJB approval following the governance framework. The Medium Term Financial Framework will be reviewed to reflect the emerging and anticipated financial challenge arising from Covid 19 and Scottish Government policy changes Focus will be placed on the Governance Framework approved by the Board in January 2021 to ensure this key document is embedded into operational and strategic delivery As part of the financial challenge it is necessary to ensure continuous dialogue and identification of further savings opportunities. This was a commitment made as part of the revenue budget setting for 2021/22, recognising current and future impact and the drive for transformation through Home First. Increase focus on the development of commissioning capabilities to deliver best value with a tender exercise for outcome based care at home services. The Strategic plan is being refreshed and will be presented to the IJB in November 2022. The Moray Portfolio is also working with NHS Grampian on their plan for the future, and will be undertaking a joint planning process in 2022 to define the future for Dr Grays Hospital. The Medium Term Financial Framework 22/23 to 26/27 was presented to the IJB in March 2022. It will be reviewed once the Strategic plan has been refreshed. The Governance Framework continues to be embedded. Portfolio arrangements will mean a refresh is required. Transformational redesign has continued at pace. Levels of demand, including backlogs post Covid, has resulted in it being more challenging to identify cash savings. Outcome based commissioning model in place, with evaluation in 2022/23. Further development of Self Directed Support and progressive changes to practice using the Three Conversation Model Page 81
Page 82
Moray Integration Joint Board Annual Accounts 2021/22 39 ANNUAL GOVERNANCE STATEMENT (continued) Further Developments Following consideration of the review of adequacy and effectiveness, the following action plan has been established to ensure continual improvement of the MIJB’s governance arrangements and progress against the implementation of these issues will be assessed as part of the next annual review. Areas of focus for 2022/23 1. Extending the Hospital Without Walls model to move care closer to home, with a shift to earlier intervention that reduces the demands on acute hospital care. 2. Developing the Portfolio approach for the Moray Portfolio, and the interlink with the other Portfolios in Grampian, along with developing the governance framework for this whole system approach 3. Refresh the Strategic Plan during 2022, building on the learning of the last 2 years of the pandemic, and the transformational change that has begun 4. Using the 22/23 to 26/27 Medium Term Financial Framework to match the ambitions of the Strategic Plan so that services are sustainable 5. Work with the Digital Health and Care Innovation Centre as part of the Moray Growth Deal to test new ways of working that benefit the Moray population and bring improvements to the delivery of health and social care 6. Continue to extend the reach of Self Directed Support with an ambition for Moray to be an exemplar in this arena of supporting our residents in innovative ways that promote independence and choice 7. With the potential delegation of Children’s Social Work and Criminal Justice to the Moray IJB, better align service delivery in the Portfolio to the benefit of our residents, where care is seamless and access is clear Key Governance challenges going forward will involve: • Providing capacity to meet statutory obligations whilst managing expectation and rising demand for services, with a backlog of demand from the pandemic, and wider societal economic challenges which will also drive demand; • As a Board, difficult decisions will require to be made in ensuring we operate within available funding whilst meeting the needs of our residents; • Continue to address our work force challenges in respect of recruitment and retention; Page 82
Page 83
Moray Integration Joint Board Annual Accounts 2021/22 40 ANNUAL GOVERNANCE STATEMENT (continued) • Continuing to work closely with NHS Grampian and Moray Council to build on existing relationships and establishing collaborative leadership, and to maximise the opportunities from an expanded health and social care remit with the Portfolio approach, including Dr Grays hospital, and the potential delegation to the IJB of Children’s Social Work and Criminal Justice Services; • The challenges being faced from the pandemic are expected to be a continued focus for additional scrutiny for an extended period of time, and how well we manage the recovery of service delivery. • Continue to implement the recommendations of internal audit to further improve key controls and engage with KPMG on the audit of Commissioned services. Statement In our respective roles as Chair and Chief Officer of the MIJB, we are committed to ensuring good governance and recognise the contribution it makes to securing delivery of service outcomes in an effective and efficient manner. This annual governance statement summarises the MIJB’s current governance arrangements, and affirms our commitment to ensuring they are regularly reviewed, developed and fit for purpose. Whilst recognising that improvements are required, as detailed earlier in the statement, it is our opinion that a reasonable level of assurance can be placed upon the adequacy and effectiveness of the MIJB’s governance arrangements. The immediate challenge will be to continue to meet all operational demands as we continue to recover from the Covid-19 Pandemic and through re-mobilisation whilst not compromising the safety of employees and people that use our services; beyond that, pressure on financial settlements is set to continue during the incoming period, and we will continue to engage with our Partners and the wider community to agree plans and outcome targets that are both sustainable and achievable. Taking those forward will be challenging as we aim to fulfil the nine Health and Wellbeing national outcomes and the strategic priorities identified and detailed in our Strategic Plan. Good governance remains an essential focus in delivering services in a way that both meets the needs of communities and discharges statutory best value responsibilities. ………………………… ……………………… Dennis Robertson Simon Bokor-Ingram Chair of Moray IJB Chief Officer Page 83
Page 84
Moray Integration Joint Board Annual Accounts 2021/22 41 INDEPENDENT AUDITOR’S REPORT Independent auditor’s report to the members of Moray Integration Joint Board and the Accounts Commission Reporting on the audit of the financial statements Opinion on financial statements I certify that I have audited the financial statements in the annual accounts of Moray Integration Joint Board for the year ended 31 March 2022 under Part VII of the Local Government (Scotland) Act 1973. The financial statements comprise the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, Balance Sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards, as interpreted and adapted by the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22 (the 2021/22 Code). In my opinion the accompanying financial statements: • give a true and fair view in accordance with applicable law and the 2021/22 Code of the state of affairs of the body as at 31 March 2022 and of its income and expenditure for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards, as interpreted and adapted by the 2021/22 Code; and • have been prepared in accordance with the requirements of the Local Government (Scotland) Act 1973, The Local Authority Accounts (Scotland) Regulations 2014, and the Local Government in Scotland Act 2003. Basis for opinion I conducted my audit in accordance with applicable law and International Standards on Auditing (UK) (ISAs (UK)), as required by the Code of Audit Practice approved by the Accounts Commission for Scotland. My responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of my report. I was appointed under arrangements approved by the Accounts Commission on 10 April 2017. The period of total uninterrupted appointment is six years. I am independent of the body in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK including the Financial Reporting Council’s Ethical Standard, and I have fulfilled my other ethical responsibilities in accordance with these requirements. Non-audit services prohibited by the Ethical Standard were not provided to the body. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Page 84
Page 85
Moray Integration Joint Board Annual Accounts 2021/22 42 INDEPENDENT AUDITOR’S REPORT (Continued) Conclusions relating to going concern basis of accounting I have concluded that the use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the body’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from when the financial statements are authorised for issue. These conclusions are not intended to, nor do they, provide assurance on the body’s current or future financial sustainability. However, I report on the body’s arrangements for financial sustainability in a separate Annual Audit Report available from the Audit Scotland website. Risks of material misstatement I report in my Annual Audit Report the most significant assessed risks of material misstatement that I identified and my judgements thereon. Responsibilities of the Interim Chief Financial Officer and Moray Integration Joint Board for the financial statements As explained more fully in the Statement of Responsibilities, the Interim Chief Financial Officer is responsible for the preparation of financial statements that give a true and fair view in accordance with the financial reporting framework, and for such internal control as the Interim Chief Financial Officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Interim Chief Financial Officer is responsible for assessing the body’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless there is an intention to discontinue the body’s operations. The Moray Integration Joint Board is responsible for overseeing the financial reporting process. Auditor’s responsibilities for the audit of the financial statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Page 85
Page 86
Moray Integration Joint Board Annual Accounts 2021/22 43 INDEPENDENT AUDITOR’S REPORT (Continued) Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. I design procedures in line with my responsibilities outlined above to detect material misstatements in respect of irregularities, including fraud. Procedures include: • obtaining an understanding of the applicable legal and regulatory framework and how the body is complying with that framework; • identifying which laws and regulations are significant in the context of the body; • assessing the susceptibility of the financial statements to material misstatement, including how fraud might occur; and • considering whether the audit team collectively has the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The extent to which my procedures are capable of detecting irregularities, including fraud, is affected by the inherent difficulty in detecting irregularities, the effectiveness of the body’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud are inherently more difficult to detect than irregularities that result from error as fraud may involve collusion, intentional omissions, misrepresentations, or the override of internal control. The capability of the audit to detect fraud and other irregularities depends on factors such as the skilfulness of the perpetrator, the frequency and extent of manipulation, the degree of collusion involved, the relative size of individual amounts manipulated, and the seniority of those individuals involved. A further description of the auditor’s responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website www.frc.org.uk/auditorsresponsibilities. This description forms part of my auditor’s report. Page 86
Page 87
Moray Integration Joint Board Annual Accounts 2021/22 44 INDEPENDENT AUDITOR’S REPORT (Continued) Reporting on other requirements Opinion prescribed by the Accounts Commission on the audited part of the Remuneration Report I have audited the part of the Remuneration Report described as audited. In my opinion, the audited part of the Remuneration Report has been properly prepared in accordance with The Local Authority Accounts (Scotland) Regulations 2014. Other information The Interim Chief Financial Officer is responsible for other information in the annual accounts. The other information comprises the Management Commentary, Annual Governance Statement, Statement of Responsibilities and the unaudited part of the Remuneration Report. My responsibility is to read all the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon except on the Management Commentary and Annual Governance Statement to the extent explicitly stated in the following opinions prescribed by the Accounts Commission. Opinions prescribed by the Accounts Commission on the Management Commentary and Annual Governance Statement In my opinion, based on the work undertaken in the course of the audit: • the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with statutory guidance issued under the Local Government in Scotland Act 2003; and • the information given in the Annual Governance Statement for the financial year for which the financial statements are prepared is consistent with the financial statements and that report has been prepared in accordance with the Delivering Good Governance in Local Government: Framework (2016). Page 87
Page 88
Moray Integration Joint Board Annual Accounts 2021/22 45 INDEPENDENT AUDITOR’S REPORT (Continued) Matters on which I am required to report by exception I am required by the Accounts Commission to report to you if, in my opinion: • adequate accounting records have not been kept; or • the financial statements and the audited part of the Remuneration Report are not in agreement with the accounting records; or • I have not received all the information and explanations I require for my audit. I have nothing to report in respect of these matters. Conclusions on wider scope responsibilities In addition to my responsibilities for the annual accounts, my conclusions on the wider scope responsibilities specified in the Code of Audit Practice, including those in respect of Best Value, are set out in my Annual Audit Report. Use of my report This report is made solely to the parties to whom it is addressed in accordance with Part VII of the Local Government (Scotland) Act 1973 and for no other purpose. In accordance with paragraph 120 of the Code of Audit Practice, I do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties. Brian Howarth ACMA CGMA Audit Director Audit Scotland 4th Floor 8 Nelson Mandela Place Glasgow G2 1BT Page 88
Page 89
Moray Integration Joint Board Annual Accounts 2021/22 46 COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT This statement shows the cost of providing services for the year ended 31 March 2022 according to generally accepted accounting practices. 2020/21 2021/22 Net Expenditure Net Expenditure Restated £ 000 £ 000 5,587 Community Hospitals 5,477 4,853 Community Nursing 4,932 8,546 Learning Disabilities 9,691 8,649 Mental Health 9,542 1,143 Addictions 1,259 152 Adult Protection & Health Improvement 158 15,183 Care Services Provided In-House 16,238 19,835 Older People & Physical & Sensory Disability Services 20,536 1,497 Intermediate Care and Occupational Therapy 1,828 8,067 Care Services Provided by External Providers 8,271 7,725 Other Community Services 8,460 3,033 Administration & Management 2,404 871 Other Operational services 1,192 17,451 Primary Care Prescribing 18,310 17,541 Primary Care Services 18,307 4,526 Hosted Services 4,632 808 Out of Area Placements 832 613 Improvement Grants 758 6,702 Strategic Funds & Other Resources 7,937 12,620 Set Aside 13,044 145,402 Cost of Services 153,808 151,557 Taxation and Non-Specific Grant Income (note 5) 164,487 (6,155) (Surplus) or Deficit on provision of Services (10,679) (6,155) Total Comprehensive Income and Expenditure (10,679) The 2020/21 figures have been restated to take into account the administration and Management area being split into administration and management and other operational services. There are no statutory or presentational adjustments which reflect the MIJB’s application of the funding received from partners. The movement in the General Fund balance is therefore solely due to the transactions shown in the Comprehensive Income and Expenditure Statement. Consequently, an Expenditure and Funding Analysis is not provided in these annual accounts. Page 89
Page 90
Moray Integration Joint Board Annual Accounts 2021/22 47 MOVEMENT IN RESERVES STATEMENT This statement shows the movement in the year on the Moray Integration Joint Boards (MIJB) reserves. The movements which arise due to statutory adjustments which affect the General Fund balance are separately identified from the movements due to accounting practices. Additional detail included within note 7 on page 46. Movement of Reserves During 2021/22 General Fund Balance £000 Opening Balance at 1 April 2021 (6,342) Total Comprehensive Income and Expenditure (10,679) (Increase) or Decrease in 2021/22 (10,679) Closing Balance at 31 March 2022 (17,021) Movement of Reserves During 2020/21 General Fund Balance £000 Opening Balance at 1 April 2020 (187) Total Comprehensive Income and Expenditure (6,155) (Increase) or Decrease in 2020/21 (6,155) Closing Balance at 31 March 2021 (6,342) Page 90
Page 91
Moray Integration Joint Board Annual Accounts 2021/22 48 BALANCE SHEET The Balance Sheet shows the value of the Moray Integration Joint Board’s (MIJB) assets and liabilities as at the balance sheet date. The net assets of the MIJB (assets less liabilities) are matched by the reserves held by the MIJB. 31 March 2021 £000 Notes 31 March 2022 £000 6,342 Short Term Debtors 6 17,021 Current Assets - Short Term Creditors - Current Liabilities - Provisions - Long Term Liabilities 6,342 Net Assets 17,021 6,342 Usable Reserve General Fund 7 17,021 6,342 Total Reserves 17,021 The unaudited annual accounts were issued on 30 June 2022 and the audited annual accounts were authorised for issue on 26 January 2023. . The Annual Accounts present a true and fair view of the financial position of the MIJB as at 31 March 2022 and its income and expenditure for the year then ended. Deborah O’Shea FCCA Interim Chief Financial Officer Page 91
Page 92
Moray Integration Joint Board Annual Accounts 2021/22 49 NOTES TO THE FINANCIAL STATEMENTS Note 1 Significant Accounting Policies General Principles The Financial Statements summarise the Moray Integration Joint Board’s (MIJB) transactions for the 2021/22 financial year and its position at the year-end of 31 March 2022. The MIJB was established under the requirements of the Public Bodies (Joint Working) (Integration Joint Boards) (Scotland) Act 2014 and is a Section 106 body as defined in the Local Government (Scotland) Act 1973. The Financial Statements are therefore prepared in compliance with the Code of Practice on Local Authority Accounting in the United Kingdom 2021/22, supported by International Financial Reporting Standards (IFRS), unless legislation or statutory guidance requires different treatment. The accounts are prepared on a going concern basis, which assumes that the MIJB will continue in operational existence for the foreseeable future. The historical cost convention has been adopted. Accruals of Income and Expenditure Activity is accounted for in the year that it takes place, not simply when settlement in cash occurs. In particular: • Expenditure is recognised when goods or services are received and their benefits are used by the MIJB. • Income is recognised when the MIJB has a right to the income, for instance by meeting any terms and conditions required to earn the income, and receipt of the income is probable. • Where income and expenditure have been recognised but settlement in cash has not taken place, a debtor or creditor is recorded in the Balance Sheet. • Where debts may not be received, the balance of debtors is written down. Funding The MIJB is primarily funded through funding contributions from the statutory funding partners, Moray Council and the Grampian Health Board. Expenditure is incurred as the MIJB commissions’ specified health and social care services from the funding partners for the benefit of service recipients in Moray area. Cash and Cash Equivalents The MIJB does not operate a bank account or hold cash. Transactions are settled on behalf of the MIJB by the funding partners. Consequently the MIJB does not present a ‘Cash and Cash Equivalent’ figure on the balance sheet. The funding balance due to or from each funding partner as at 31 March is represented as a debtor or creditor on the MIJB’s Balance Sheet. Page 92
Page 93
Moray Integration Joint Board Annual Accounts 2021/22 50 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 1 Significant Accounting Policies (continued) Employee Benefits The MIJB does not directly employ staff. Staff are formally employed by the funding partners who retain the liability for pension benefits payable in the future. The MIJB therefore does not present a Pensions Liability on its Balance Sheet. The MIJB has a legal responsibility to appoint a Chief Officer. More details on the arrangements are provided in the Remuneration Report. The charges from the employing partner are treated as employee costs. Where material the Chief Officer’s absence entitlement as at 31 March is accrued, for example in relation to annual leave earned but not yet taken. Charges from funding partners for other staff are treated as administration costs. Reserves The MIJB’s reserves are classified as either Usable or Unusable Reserves. The MIJB’s only Usable Reserve is the General Fund. The balance of the General Fund as at 31 March shows the extent of resources which the MIJB can use in later years to support service provision. Indemnity Insurance The MIJB has indemnity insurance for costs relating primarily to potential claim liabilities regarding Board members. The Grampian Health Board and Moray Council have responsibility for claims in respect of the services that they are statutorily responsible for and that they provide. Unlike NHS Boards, the MIJB does not have any ‘shared risk’ exposure from participation in the Clinical Negligence and Other Risks Indemnity Scheme (CNORIS). The MIJB participation in the CNORIS scheme is therefore analogous to normal insurance arrangements. Note 2 Critical Judgements and Estimation Uncertainty In applying the accounting policies, the MIJB has had to make certain judgements about complex transactions or those involving uncertainty about future events. There are no material critical judgements. During the overall Covid-19 response, a number of additional costs have been incurred beyond business as usual. The MIJB has followed national guidance regarding these and a range of additional costs are included in the MIJB’s accounts reflecting the MIJB acting as principal in the transactions including:- • social care sustainability costs; • all increase direct care Covid-19 costs; Page 93
Page 94
Moray Integration Joint Board Annual Accounts 2021/22 51 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 2 Critical Judgements and Estimation Uncertainty (continued) A further range of Covid-19 related costs and associated funding have not been recognised in the MIJB’s accounts in accordance with national accounting guidance. In these cases Moray Council is acting as principal and MIJB as the agent. This includes:- • £0.527m related to PPE and testing kits provided by NHS National Services Scotland to Moray for social care services. Note 3 Events after the Reporting Period The unaudited accounts were issued by Deborah O’Shea, Interim Chief Financial Officer on 30 June 2022 and the audited accounts were authorised for issue on 26 January 2023. Events taking place after this date are not reflected in the financial statements or notes. Where events taking place before this date provided information about conditions existing at 31 March 2022, the figures in the financial statements and notes have been adjusted in all material respects to reflect the impact of this information. Note 4 Expenditure and Income Analysis by Nature 2020/21 2021/22 £000 £000 60,984 Services commissioned from Moray Council 65,020 84,391 Services commissioned from The Grampian Health Board 88,760 27 Auditor Fee: External Audit Work 28 145,402 Total Expenditure 153,808 (151,557) Partners Funding Contributions and Non- Specific Grant Income (164,487) (6,155) (Surplus) or Deficit on the Provision of Services (10,679) Page 94
Page 95
Moray Integration Joint Board Annual Accounts 2021/22 52 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 5 Taxation and Non-Specific Grant Income 2020/21 2021/22 £000 £000 45,060 Funding Contribution from Moray Council 50,549 106,497 Funding Contribution from The Grampian Health Board 113,938 151,557 Taxation and Non-specific Grant Income 164,487 The funding contribution from The Grampian Health Board shown above includes £13.044m in respect of ‘set aside’ resources relating to acute hospital and other resources. These are provided by The Grampian Health Board who retains responsibility for managing the costs of providing the services. The MIJB however has responsibility for the consumption of, and level of demand placed on, these resources. Note 6 Debtors 31 March 2021 31 March 2022 £000 £000 6,160 The Grampian Health Board 15,739 182 Moray Council 1,282 6,342 Debtors 17,021 Amounts owed by the funding partners are stated on a net basis. Creditor balances relating to expenditure obligations incurred by the funding partners but not yet settled in cash terms are offset against the funds they are holding on behalf of the MIJB. Page 95
Page 96
Moray Integration Joint Board Annual Accounts 2021/22 53 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 7 Usable Reserve: General Fund The MIJB holds a balance on the General Fund for two main purposes: • To earmark, or build up, funds which are to be used for specific purposes in the future, such as known or predicted future expenditure needs. This supports strategic financial management. • To provide a contingency fund to cushion the impact of unexpected events or emergencies. This is regarded as a key part of the MIJB’s risk management framework. The table below shows the movements on the General Fund balance: Earmarked Reserves General Reserves PCIP & Action 15 Covid-19 Other Earmarked Total £000 £000 £000 £000 £000 Balance at 1 April 2020 - 187 - - 187 Transfers (out)/in 2020/21 1,598 1,480 2,725 352 6,155 Balance at 31 March 2021 1,598 1,667 2,725 352 6,342 Transfer out 2021/22 (341) - - - (341) Transfers in 2021/22 - 664 6,291 4,065 11,020 Balance at 31 March 2022 1,257 2,331 9,016 4,417 17,021 Primary Care Improvement Fund (PCIP) - The purpose of this fund is to ring fence funding received from the Scottish Government as part of its Primary Care Transformation Plan, this includes Action 15 funding as part of this plan. Covid – 19 – are funds received by Scottish Government during 2021/22 being held in an earmarked reserve to support the MIJB through the pandemic and remobilisation. NOTES TO THE FINANCIAL STATEMENTS (continued) Note 8 Agency Income and Expenditure Page 96
Page 97
Moray Integration Joint Board Annual Accounts 2021/22 54 On behalf of all IJB’s within The Grampian Health Board, the MIJB acts as the lead manager for Grampian Medical Emergency Department (GMED) and Primary Care Contracts. It commissions services on behalf of the other IJBs and reclaims the costs involved. The payments that are made on behalf of the other IJBs, and the consequential reimbursement, are not included in the Comprehensive Income and Expenditure Statement (CIES) since the MIJB is not acting as principal in these transactions. The amount of expenditure and income relating to the agency arrangement is shown below: 2020/21 2021/22 £000 £000 10,032 Expenditure on Agency Services 9,136 (10,032) Reimbursement for Agency Services (9,136) - Net Agency Expenditure excluded from the CIES - Page 97
Page 98
Moray Integration Joint Board Annual Accounts 2021/22 55 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 9 Related Party Transactions The MIJB has related party relationships with The Grampian Health Board and Moray Council. In particular the nature of the partnership means that the MIJB may influence, and be influenced by, its partners. The following transactions and balances included in the MIJB’s accounts are presented to provide additional information on the relationships. Transactions with the Grampian Health Board 2020/21 2021/22 £000 £000 (106,497) Funding Contributions received from the NHS Board (113,938) 84,208 Expenditure on Services Provided by the NHS Board 88,558 183 Key Management Personnel: Non-Voting Board Members 202 (22,106) Net Transactions with The Grampian Health Board (25,178) Key Management Personnel: The Chief Officer and Chief Financial Officer, are non- voting Board members and are both employed by The Grampian Health Board and recharged to the MIJB. Details of the remuneration of both officers are provided in the Remuneration Report. The Chief Officer is a joint appointment made by Moray Council and The Grampian Health Board and is jointly accountable to the Chief Executives of both organisations, as such this post is jointly funded. The Chief Financial Officer, whilst a Board appointment, does not share this arrangement of funding. Balances with the Grampian Health Board 31 March 2021 31 March 2022 £000 £000 6,160 Debtor balances: Amounts due from The Grampian Health Board 15,739 6,160 Net Balance due from The Grampian Health Board 15,739 Page 98
Page 99
Moray Integration Joint Board Annual Accounts 2021/22 56 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 9 Related Party Transactions (continued) Transactions with Moray Council 2020/21 2021/22 £000 £000 (45,060) Funding Contributions received from the Council (50,549) 60,945 Expenditure on Services Provided by the Council 64,970 66 Key Management Personnel: Non-Voting Board Members 78 15,951 Net Transactions with Moray Council 14,499 Balances with Moray Council 31 March 2021 31 March 2022 £000 £000 182 Debtor balances: Amounts due from Moray Council 1,282 - Creditor balances: Amounts due to Moray Council - 182 Net Balance due from Moray Council 1,282 Page 99
Page 100
Moray Integration Joint Board Annual Accounts 2021/22 57 NOTES TO THE FINANCIAL STATEMENTS (continued) Note 10 VAT The MIJB is not registered for VAT and as such the VAT is settled or recovered by the partners. The VAT treatment of expenditure in the MIJB accounts depends on which of the partners is providing the services as each of these partners are treated differently for VAT purposes. VAT payable is included as an expense only to the extent that it is not recoverable from Her Majesty’s Revenue and Customs. VAT receivable is excluded from income. Note 11 Accounting Standards That Have Been Issued but Have Yet To Be Adopted The Code requires the MIJB to identify any accounting standards that have been issued but have yet to be adopted and could have material impact on the accounts. There are no accounting standards issued but not yet adopted that impact on the 2021/22 financial statements. Page 100
Page 101
Moray Integration Joint Board Annual Accounts 2021/22 58 Page 101
Page 102
Page 102