NHS Grampian (NHSG)

Minute of Endowment Committee Meeting

Monday 18 June 2012, 0945-1230

Conference Room, Summerfield House

Present

Mr Raymond Bisset (Chair), Non-Executive Board Member

Mr Mike Scott, Non-Executive Board Member

Mrs Laura Gray, Director of Corporate Comms and Board Secretary

Mr Alan Gray, Director of Finance

In Attendance

Mr Garry Kidd, Assistant Director of Finance

Mr Derek Angus, Treasury Accountant

Mr Mike Connor/Mrs June Jessop, Newton Investment Management Ltd - Item 4.2

Mr Andrew Jackson, Legal Adviser, Item 6

Anne-Marie Meconi, Minuting Secretary

Item / Subject / Action
1 / Apologies
Ms Sharon Duncan, Employee Director
Dr Roelf Dijkhuizen, Medical Director
Cllr Bill Howatson, Chairman
This was Mr Angus' last meeting as he will be retiring on 31 July. MrBisset, on behalf of the Committee, thanked Mr Angus for all his work and advice to the Committee over the years and wished him well in his retirement.
2 / Minute of Meeting held on 26 March 2012
The Minutes of the above meeting were approved.
3 / Matters Arising
3.1 / Review of Action Log
The Committee reviewed the action log from the previous meeting and noted the following:
28 9 11 - Item 10 - Feedback from Board Seminar on Endowments - NHSG Fund Conflict of Interest Policy to be Formulated–
MrJackson to send adeclaration form to the Committee for completion. This information will be used to create a register which will be accessed through the NHSG website.
28 9 11 - Item 12 - Fund Summary Analysis of Largest Specific Funds
A report on the utilisation of the largest specific endowments to be prepared for consideration by the Committee in September 2012.
28 9 11 - Item 17 - AOCB - Donation from WRVS–
Amendment - "£405k" should read "£504k". / AJ/All
GK
GK
3.2 / 28 9 11 - Item 11.5 - Membership of Global Centre for Nursing Executives (Advisory Board Company)
The Committee considered a report from Mrs E. Smith, Nursing Director, on the benefits of membership of the Global Nursing Executives Advisory Board Company including future plans to develop increased access and use of the global resource. The Committee noted that the Advisory Board resources are seen as a useful tool by the service and that use of these resources will continue to be encouraged. The Committee requested that Mrs Smith prepare a further update report detailing feedback from the current investment and future plans for consideration by the Committee in June 2013.
The Committee noted the report. / ES
3.3 / WRVS Proposed Donation
Mr Gray introduced his report and updated the Committee on the outcome of recent discussion regarding the proposed plan for receipt of the donation.The percentage of the donation which will be earmarked for supporting strategic programmes is agreed at 20%. The balance will be allocated to hospital locations that have a WRVS facility.
Mrs Gray highlighted the opportunity to obtain publicity for both NHSG Endowment funds and the WRVS from the donation.
The Committee considered the treatment of the share of the donation attributable to RACH and agreed that, consistent with previous agreement on how donations for the Childrens Hospital will be held, that this should be subject to an onward donation from NHSG Endowment Funds to the ARCHIE Foundation.
The Committee noted the report
4 / Support to Committee for Future Endowment Meetings
Mr Kidd introduced his paper and outlined the arrangements that will take effect following the retiral of Mr Angus (Treasury Accountant) on 31 July.
The plan is to move the Endowment service on to the common IT platform used elsewhere in the Finance department and move to an integrated finance team structure over the next 18 months. This will provide an opportunity over time to move to adifferent model for the management of Endowment Funds more consistent with how our operational units are organised.
In the interim Mr Alex Hunter, Financial Accountant, will take responsibility for the management of the Endowment and Treasury Teams from 1 August 2012 and Mr Kidd will provide senior support to the Committee. The Committee alsoagreed that it would be useful to have a member of the Endowment support team in attendance at each meeting to enhance their development.
The Committee agreed the interim arrangements and requested that Mr Kidd produce a paper on the proposals for future support arrangements for consideration at the March 2013 meeting. / GK
5 / Investments
5.1 / Investment Portfolio at 31 March 2012
Mr Angus reported that the market value of the investments was greater than the book value at 31 March by £3.7m. Newtons will provide an up to date position in attendance at the following agenda item.
The Committee noted the report.
5.2 / Update from NewtonInvestment Management on Investments
Mr Mike Connor and Mrs June Jessop joined the meeting
Mr Connor gave an over view of the current financial climate and explained that although there was continued volatility in the markets they were still happy with the results coming from the Asian markets in the longer term.Their approach remained cautious approach and income focussed.
The investment position as at 13 June 2012 was:
Market value of portfolio: £34.2m
Book cost: £31.6m
Mrs Jessop presented performance against the agreed benchmarks and explained that although results were ahead of the income target for the period it was still early in the financial year for this to be seen as a trend. She asked if the Committee wished any changeto the investment benchmarks. The Committee agreed that the benchmarks should remain as present and any decision on investment strategy should appropriately be discussed and agreed by all Trustees at the AGM in September.
Mr Bisset informed Mr Connor and Mrs Jessop that a full review of investment performance should be included on the agenda for the Annual General Meeting in September. It would be helpful if, in addition to the normal content of the presentation, a short introduction summarising the Newton approach to investment management could be available for the Trustees. Mr Conner and Mrs Jessop confirmed that they would ensure representation from Newtons at the AGM and liaise with Mr Kidd on the content of the presentation.
Mr Mike Connor and Mrs June Jessopleft the meeting.
The Committee noted the report / Newtons/GK
6 / National Review on Use of Endowment Funds
Mr Bisset welcomed Mr Jackson, Board legal advisor, to the meeting.
Mr Kidd introduced the paper outlining progress in the review of governance arrangements being led by the Scottish Government Health and Social Care Directorates (SGHD) short-life working group.
Mr Kidd explained that a definitive legal opinion is required before the Committee will be in a position to agree a clear set of rules for the utilisation of funds but it is now likely that guidance from this group may not be available until later in the year. As requested at the March 2012 meeting Mr Gray is to liaise directly with the CLO in order to obtain the opinion of a QC on the specific issues e.g. clarity on Indemnification of the individual trustee.
Mr Kidd confirmed that dormant funds are not an issue for NHSG.
Mr Kidd then highlighted the draft guidance received to date and the Committee were asked to note the following key points :-
1. Donations: clarity is sought on how the donations can be used.
2. Funds for a staff night out: Noted but the example provided did not determine whether it was acceptable as a charitable use of funds.
3. Long service awards: Legal view is required as example provided indicated that it was acceptable but only if donations were provided for this purpose.
4. Funding for sporting activities: Legal view is required as unclear response provided.
5. Funding of community engagement activities: Noted.
6. Staff travel: Noted.
7. Retirement awards/vouchers and teas: Due to initial advice NHSG has suspended awards but still fund retirement teas. However similar comments as item 3
8. Staff physiotherapy service: Noted and Committee receives an update annual from the head of the service.
9. Sports and social activities: Clarity sought as indication given as probably no longer justified but not definitive.
10. Noted
11. Gym memberships: Clarity required. Similar comments as item 9
12. Training and/or reimbursement: Noted
13. Patients' benefits: Noted
14. Staff lottery: Clarity sought as indication this is acceptable although there is no charitable benefit to this.
15. Funds not compatible with charitable purposes: Clarity sought and clear advice for staff receiving donations.
16. Lecture fees: Noted
17. Non-charitable fund: Clarity sought. Similar comments as item 15.
The Committee agreed that Mr Nigel Firth should be asked to attend a future meeting to discuss sports activities.
The Committee noted the report. / AG
GK
7 / GAPF Endowment Funding: Approved Expenditure Requests from
1 March - 31 May 2012
Mr Bisset noted that individual requests are still being approved e.g. request No. 304.
Mrs Gray asked for clarification on request 305 centenary prize fund which looked like it was classified as "suspended".
.
Mr Angus to meet with Ms Duncan to find out the criteria used for requests.
Mr Kidd to give an oral update on the utilisation of the fund at the September meeting.
The Committe noted the report. / DA/SD
GK
8 / Donations: Donations Greater than £1,000 Received from 1 March - 31 May 2012
Mr Angus gave an update. A legacy of £571k had been received in early June and was to be divided between three areas of medical research.
The Committee noted the report.
9 / Summary Financial Report as at 31 March 2012
Mr Angus gave an overview and said that overall the fund had demonstrated an improved performance compared to the previous quarter with net assets increasing by £0.13m. Unrestricted funds had increased by £1.24 since 31 March 2011 due entirely to the proceeds of the sale of 403 King Street. Appendix 1 provided an overall summary and Appendix 2 provided a detailed analysis of expenditure for the period 31 March. Mr Angus indicated the variances arising over several types of expenditure and the reasons for such variances.
The Committee noted the report.
10 / Funding Requests
10.1 / Expenditure Requests Approved from 1 March to 31 May 2012
The Committee noted the report and that the approved expenditure requests continue to be greater than donations received in the same period.
10.2 / Village Arts Project
An expenditure request has been received for a total of £12k over the next two years for artwork at the new Aberdeen Community Health and CareVillage. £10k to enable the appointment of an artist to create a public art plan and promotional brochure for artworks and also to create a suite of designs and oversee their fabrication and installation over the next two years. £2k to support the GHAT costs associated with the successful delivery of the project over the period.
Mr Bisset said he thought that there was an agreement in place whereby any new facility would have artworks included in the build cost. An arrangement had been set up that funding would come through the Exchequer with endowments contributing a small amount and then GHAT would have to raise their own funds for any additional sums.
Mr Gray said that a Grampian Arts and Environment Committee had been set up to work with GHAT on art projects. GHAT should first take requests to the GAEC before submitting to the Committee. GHAT should find other ways to fund their Admin costs.
Mr Gray to clarify the policy with regard to fundingartworks for new build projects. / AG
10.3 / Huntington's Disease Research Nurse
An expenditure request had been received to fund a research nurse for two years. Mr Angus said that this person had been employed since 2008 and was a permanent employee
The Committee asked Mr Angus to request further information on the exit strategy and on the research work undertaken. This information to be circulated to the Committee by email for consideration prior to approval / DA
11 / Review of Risk Control Plan
Mr Angus reported that there was no change to the plan. A member of the Risk Control Team would be attending the December meeting. The Committee thought it would be helpful to review one or two items with the risk plan on a quarterly basis.
Mr Kidd to invite a member of the Risk Control Team to the December meeting.
Mr Kidd to put on the agenda one or two items within the plan on a quarterly basis.
The Committee approved the plan. / GK
GK
12 / AOCB
1. NHS Endowments Scottish Conference - Thurs 25 October 2012, Scottish Health Service Centre, Edinburgh
Mr Bisset (or deputy), Mr Scott and Mr Kidd would attend the above conference.
Mr Kidd to book three places.
2. Donations to Doctors Travelling Abroad
Mr Angus said a number of requests for support had been received recently from clinicians going overseas to give their services free in developing countries.
The Committee considered this principle and agreed that such requestsshould be declined on the basis that the nature of expenditure i.e. assistance to patients in an overseas country would be inappropriate as the purpose of the NHS Grampian endowment funds were to help patients and staff of NHS Grampian. / GK
12.1 / Report to NHSG Board
To include:
WRVS contribution
National review of the use of endowment funds
Investment Portfolio
Mr Bisset to update the NHSG Board. / RB
Date of Next Meeting
AGM - Monday 17 September 2012, 1000-1230, Conference Room, SFH

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