Midland DHBs Board Development Internal Audit and Audit & Assurance 10 April 2017

Presentation Contents Who is Internal Audit? Who is Audit and Assurance? Links with DHB Board Sub-committees Interactive Activity ?? HOW

Who are we? – Internal Audit Midland Region Internal Audit (RIA) Service based in HSL Five auditor employees located at various DHBs Several contractors with specialist skills / capabilities and additional / flexible capacity – includes Central TAS

What do we wish to achieve for Midland? Service Vision The overall role of the RIA service is to provide independent assurance and consulting services to support and monitor the DHBs’ risk management and internal control activities that have been implemented by management to run their organisations. HOW WHAT

What do we wish to achieve for Midland? Service Vision In providing those services, the team aims to improve the DHBs’ operations and assist them to achieve their objectives. By reporting directly to the audit committee of the Board for each DHB, the RIA service assists the Board fulfill its core responsibility of governing (administering and controlling) the organisation. WHY WHO

What do we wish to achieve? Benefits to the DHBs Reduction in total regional spend on back office services in the longer term More effective regional services within the current funding More formal peer support Assist with retaining in-region skill (e.g. through broader career opportunities) DHBs are familiar with multiple auditors System, process or control requirements collated for all DHBs Audits facilitate / assist in promoting or driving regional initiatives Preferred practice easily shared amongst DHBs Sundry regional initiatives assist audit committees directly

Efficient allocation of public health system resources Internal Audit assists DHB management and governance by developing recommendations for improvement in numerous areas: The efficiency and effectiveness of a department’s business operations and administrative activities, including service delivery procedures - e.g. by streamlining and/or automating systems, processes and controls Protection and overall management of medical equipment and other assets – e.g. through sound maintenance, repair, replacement planning and security against theft or misuse Supplier contract management and monitoring – e.g. by following due procurement processes to ensure best value-for-money

Efficient allocation of public health system resources The provision, accuracy and usefulness of financial, revenue, contract and other information – e.g. to help with key clinical decisions, targets achievement, income and expenditure control Health and safety management systems – e.g. high quality systems to avoid / minimise health and safety issues, with any subsequent diversion of effort, financial penalties and reputation damage Maximising / optimising the use made of computer systems available within the organisation – e.g. through optimum use of expensive systems for automation, consistency, standardisation and accuracy Security and access to the organisation’s information systems – e.g. by minimising system downtime and service disruption then recovery time

Efficient allocation of public health system resources The Midland Regional Services Plan also refers to the need to focus on the following, which the RIA service contributes to: Innovation – by providing new ideas to resolve old problems, from our RIA service or from other DHBs Service integration – by encouraging disparate services to work together through our DHB-wide and regional work activities Reduced waste – in relation to areas such as staff and managers’ time; clinical consumables or assets; misuse or misappropriation of other DHB property (e.g. vehicles, medicines, stationery)

Links with DHB Board Sub-committees DHB Audit Committees links: Internal Audit updates against the internal audit plan Internal audit reports Perform ad-hoc assignments requested by the Committee One-on-one discussions with External Auditors and Board Members Audit and Assurance updates on delivery and performance against the annual audit plan DHB Strategy / Planning and Funding reports on any issues or high risks

Audit and Assurance Estb. 2001 de nova 2013 5 DHBs Performance - NGO contracts Auditing - Compliance - Service provision - Risk assurance -Provider support $1.2m -> $0.8m pa Crown DAA JASANZ 4Yr!

Performance auditing – Future? Findings (composite): Purchase of shot guns/nike gym shoes Incorrect/different service provided FTE misallocated Governance failures Low level Quality systems management Initiatives - current He Ritenga Health & Safety Multi-agency auditing From To delivering contracts improving communities Focus on activity output outcomes Focus on DHB multi-agency focus Low trust contract high trust suppliers

Interactive Activity