CONFIDENTIAL TO BOARD MEMBERS ONLY
NEW ZEALAND BLOOD SERVICE
Minutes – NZBS Board Teleconference
Minutes of the NZBS Board
Teleconference held at:
New Zealand Blood Service
71 Great South Road
Epsom, Auckland
In attendance by phone:
Mr David Chamberlain (Chair)
Dr Jackie Blue (Deputy Chair)
Dr Bart Baker
Dr Paula Martin
Ms Edie Moke
Mr Ray Lind
Ms Fiona Pimm
Apologies:
None for this agenda
Management:
Ms Sam Cliffe (CEO)
Mr John Harrison (Director Finance)
Board Secretariat:
Vanessa Siddins (Board Secretary)
Date:
30 July 2020
The Board video conference commenced at 9.30am.
Chief Executive’s update
S Clif e advised that the Board meeting in August wil have ful updates with this meeting planned to focus on financial and
audit process outcomes. This year has not been an easy one to complete year end financials due to the Covid-19
pandemic. She would like to put on record her admiration for J Harrison and the finance team for al the changes they had
to make in this uncertain time, including the SPE and SOI. D Chamberlain also added his thanks on behalf of the Board
to J Harrison and the finance team for al their hard work.
Covid-19 NZBS response
The organisation performed wel through the acute response noting that some of our concerns did not eventuate, for
example having enough donors. We achieved our goal for a safe and secure supply of blood products which has shifted
our relationship with the central Government and cemented our place as an essential service. S Cliffe has initiated a
conversation with Rosemary Clements, our lead DHB CEO and S Clif e is at ending a meeting with DHB CEOs in
September.
The CIMS team have writ en a comprehensive Covid-19 debrief document and we have learnt a lot from the process. We
know where the gaps are including our business continuity plans with the Ministry. However, the Ministry do have some
gaps in their pandemic planning and we want to make sure that NZBS is front and centre as an essential service.
Mobilising staff to work from home at short notice was an area we did real y wel in with over 100 staf able to work from
home almost instantly. Although we have done real y wel , we need to make sure we are safe within privacy and cyber
security areas.
We don’t have approval to announce our funding yet ($7m equity and $3.97m income), however we are working through
with the Ministry on how best to receive that funding. There is unlikely to be a formal announcement as it’s lost monies,
not an infrastructure announcement
D Chamberlain agreed that the team had done a fantastic job but warned that it was not over yet and we should be
prepared to go through it again as Australia had done. S Clif e agreed that the likelihood was that it would happen again
NZBS Board minutes – 30 July 2020
CONFIDENTIAL TO BOARD MEMBERS ONLY
and noted that part of the purpose of the detailed debrief was to be bet er prepared next time. R Lind commented that the
strength of an organisation is in its at ention to learnings and that S Clif e and D Chamberlain’s work had been exemplary.
D Chamberlain queried if there had been any feedback from CSL Behring on the impact on the international plasma
market? S Clif e noted that CSL had advised us that their supply chain was strong with no specific issues mentioned to
date. S Clif e added that supplies had always been tight, however the concern was around the mid to longer term impacts
if the Pandemic isn’t brought under control which re-enforced our strategy of maintaining self-reliance.
Organ donation activity
The transition of ODNZ staff has been delayed until 30 November al going wel . They appear to be comfortable in our
space and the of ice area that we had agreed with them. There are a few contractual issues that we are working through
with ADHB. There are issues around current practices of ODNZ staf accessing tests of potential deceased donors. We
are working through this with lawyers and the Privacy Commissioner. At some point legislation might change but until then
we might need help from the Ministry. This can be discussed further at the August Board meeting.
S Clif e expressed her thanks to the Board’s working group for signing of the strawman which is now being shared with
stakeholders. The feedback to date has been overwhelmingly positive once the document had been explained. The next
meeting with EY is on Monday to col ate feedback, then this will come back to J Blue, P Martin and B Baker before being
presented to the Board at the end of August.
Motion:
The Board received and noted the CEO Report.
Motion by:
R Lind
Seconded by: F Pimm
Carried:
Al present in favour
ITEM 1
Documents for Tabling in the House
Statement of Intent 2020-2024
S Clif e advised that the changes are fairly minor and include enhanced wording around organ donation. The growth in
tissue banking and cel ular therapies have also been highlighted. There wil need to be further discussion in August around
space and future growth.
Statement of Performance Expectations 2020/21
S Clif e advised the changes in this document are more substantial with the tables updated to reflect the effects of Covid-
19. The Auditors had also requested us to update the format for the key performance indicators. What we had said we
were going to do and how we were going to do it has not changed. The Minister was keen to table these documents prior
to the House rising and Minister Henare’s of ice are ready to shepherd them through once they receive them. These papers
have also been reviewed by the Ministry and the Auditors.
The Board received the previous versions of these documents at the February Board meeting, however management
wanted to highlight changes particularly in the SPE. J Harrison was able to update the ‘base year’ finances with the actual
2019/20 financial year figures, with the only real change being the inclusion of the Covid-19 recovery monies. The financial
forecasts now present a much stronger financial position with the potential of breaching banking covenants and our own
financial guidelines, no longer a possibility. The weighted price increase went to 5.68% from the original 5.58% and J
Harrison was comfortable with what the proposed price set ing noting these had been advised to DHBs in early July 2020.
P Martin was unclear around the $15m equity injection as it appeared to be a given and it was not yet approved. J Harrison
responded that it had been built into financial projections as an assumption which was noted as such in various parts of
the SPE document. He further noted that if we do not get any equity monies then infrastructure projects the funding was
tied to would not proceed. There was general discussion on the need for clarity and if it needed to be more explicit around
the equity injection and the issues that would arise if that equity injection was not forthcoming. It was also noted that this
would require a formal business case to be completed for a bid to the Ministry for the 2021/22 funding al ocation process.
D Chamberlain pointed out that there were references to the assumption of the equity injection on pages 58 and 66 and
felt it was quite explicit.
P Martin wil provide some updates on text for the SPE around organ donation as the text in the two documents didn’t
correspond.
D Chamberlain noted an error on page 55 and B Baker noted that on page 21 it should read auto immune diseases instead
of immune compromised.
NZBS Board minutes – 30 July 2020
CONFIDENTIAL TO BOARD MEMBERS ONLY
S Clif e advised that the above changes and any others that are emailed through wil be made along with a last edit for
typos before the document goes to the Ministry.
Motion:
The Board approved the revised Statement of Performance Expectation and Statement of Intent subject
to the above changes.
Motion by:
R Lind
Seconded by: J Blue
Carried:
Al present in favour
ITEM 2
Year-End Financial Statements – Initial Review
Setting the Year-End Scene – an overview of the process
J Harrison advised that the purpose of this paper was to give the Board an initial explanation of the financial results and
importantly to provide clarity around the process to be fol owed prior to the approval formalities and financial statement
sign of currently planned for the 27 August 2020 Board meeting. The CFIS Let er of Representation required for the Crown
accounts was required to be filed with the Ministry of Health on 10 August 2020.
The material presented does not require any decisions, rather provides an outline of the process fol owed on a journey to
enable the signing off of the financial statements and detailed accounts at the end of August, following which they will be
tabled in Parliament. The papers aim to inform on what has driven the reported results and provide information on the
notes to the accounts that are published as part of the Annual report.
J Harrison noted that the figures as reported were not as adverse to budget and pre Covid-19 forecast as original y thought.
This year it was a much process for the team to complete with the process more chal enging particularly having new
personnel in various key roles. J Harrison was proud of the finance team who had held to the timetable agreed with Audit
New Zealand. It was further noted that the interim audit was conducted by email which was also more taxing on the team.
Full year results are set out on page 113 with a reported deficit of $3.61m which was not too dissimilar to our projections
given the New Zealand dol ar had weakened over the last part of June resulting in an unrealised forward exchange gain
at 30 June 2020. Page 85 contains a comparison to the last forecast. Overall J Harrison is pleased with where we landed
and noted it could have been a lot worse and reiterating that NZBS had not breached our banking covenants ensuring
confidence was maintained with our bank. The recovery money was certainly needed to keep us steady going forward.
D Chamberlain explained that this paper was a heads up to the Board on what the financials wil look like in a months’
time. J Harrison highlighted that there had been a change in Audit Director and audit manager which brought a new set of
eyes and dif erent perspectives given NZBS would be a new set ing. A good portion of the audit was appropriately focused
on inventory and our controls and systems. There had been some debate around KPIs impacted by the Covid-19 pandemic
and how these were best reported in the Statement of Performance. The auditors take quite a literal interpretation on
matters, therefore how KPIs are worded becomes increasingly important.
At this point the only outstanding item now is DataPay rerunning the script for assessing the assessed amount of accrual
for Holidays Act remediation monies. There may be an adjustment to the $1.46m remediation accrual but that figure aside
the finalised figures are expected to be as they have been presented.
J Harrison will reconfirm to the Board if any further adjustment for the Holidays Act is made, other than that it is expected
the final reported result wil be per the draft with any typos corrected.
It was confirmed in reviewing the Statutory Disclosures that P Martin was not paid for any work in this financial year.
J Harrison advised that Audit New Zealand are issuing a non-standard audit statement to everyone this year. There has
been a heavy focus on Covid-19 pandemic including the fraud opportunities. The same is true around assumptions of a
going concern which is potential y problematic without the Covid-19 recovery monies. The Board wil be updated when a
first draft of the audit opinion is confirmed.
J Harrison will confirm the status of the CFIS letter with the auditors. D Chamberlain advised that on that basis, J Harrison
could send the circular email to the Board for approval next Thursday, 6 August.
D Chamberlain summarised that the main issue in the papers was the reporting of a loss of $3.6m. Any minor details,
typos or queries should be sent through to J Harrison via email. The Board could expect to sign off the financial statements
at the August Board meeting subject to any adjustments to Holidays Act remediation position.
NZBS Board minutes – 30 July 2020
CONFIDENTIAL TO BOARD MEMBERS ONLY
J Harrison advised that July revenue was looking solid at a forecast $13.5m which was slightly ahead of budget. Carrying
over from prior meetings, he will bring deeds of indemnity to the August Board meeting and the Adverse Events Policy to
review.
D Chamberlain declared if there was no other business the meeting would be drawn to a close and anticipated the CFIS
email on 10 August 2020 from J Harrison.
The Board thanked J Harrison, the Finance team and S Cliffe for a job well done.
Close of Meeting: The meeting closed at 11.05am.
Certified as a true and correct record:
________________________________
David Chamberlain – Board Chairman
NZBS Board minutes – 30 July 2020
