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May 2024

The importance of assurance

Source: Asia Insurance Review | Oct 2023

Rod FarrarBoards of management need to be asking different questions if they are to gain assurance that controls are being managed effectively within their organisation. Paladin Risk Management’s Mr Rod Farrar believes that boards need to be far more proactive in seeking out information to gain assurance that the necessary controls are in place to manage their risks. But it is not just about asking the question – it is about seeking evidence.
 
 
According to Paladin Risk Management director Rod Farrar, ‘show me – prove it’ should become a phrase in the lexicon of boards of management.
 
He detailed a conversation with one of his students who was struggling with issues at their leisure and aquatic centre. Despite multiple controls in place in relation to water testing, the pool was regularly closed as the quality of the water was outside regulatory guidelines. What made this difficult to comprehend was that the register that staff had to sign to confirm they had conducted the testing showed that all the testing activities had been completed.
 
Each time the pool was closed it cost thousands of dollars per day and, because the leisure and aquatic centre was being managed under contract for the local council, every closure put any contract renewal in jeopardy.
 
He said: “When I see a situation like this, my risk Spidey sense is initiated. On the one hand we have a register that is showing that all tests are being completed, and one assumes, are being done correctly, however, the results suggest otherwise”.
 
Farrar’s advice was simple: “Stop assuming and start assuring”.
 
He suggested that management review CCTV footage to ensure that all tests were being done. He also suggested that random secondary testing be conducted by a manager after the completion of tests by staff to ensure they are being completed correctly.
 
After six months, Farrar’s student reported back.
 
After initial hesitancy by management to implement the recommendations because staff should be trusted, the assurance activities commenced. What was discovered was that duty managers were not conducting all the tests that they were required to. In addition, confirmation tests identified discrepancies in the quality if the tests that were conducted.
 
The result? Since the assurance activities commenced, the pool has not been closed once for being outside of regulation. No money has been lost because of closures and the relationship with the contracting organisation has improved significantly.
 
The irony: no additional work was required by any member of staff. All this programme did was assure that everyone was doing their job and doing it properly.
 
In this case, the results were almost immediate and potentially prevented a disastrous outcome for the company. Unfortunately, in a significant number of cases, the fact that staff are not completing their tasks as expected does not emerge until after an incident has occurred.
 
Townsville Hospital
Mr Farrar recounted an incident that resulted in the death of a psychiatric patient at a hospital.
 
The coroner’s report noted that the patient was upgraded from low to medium for his risk profile and then placed on 15-minute observations after displaying quite agitated and anxious behaviour. Tragically, the patient committed suicide within two and half hours of the administrative change.
 
“What frustrated me was that despite the visual observations chart recording 15-minute observations, it was clear from the CCTV footage outside of the patient’s room that nobody entered his room in that timeframe,” he said.
 
Clearly, the observations had not been done, despite the chart being completed.  Once again, it was assumed that all the staff were doing their jobs – but they were not.
 
It was found the nursing staff who had failed to conduct regular 15-minute observations, despite documenting them, had breached professional practice standards and Health Service policy.
 
It was found this was an individual practice failing, but it was noted these breaches could be considered failings in the context of a workplace culture where non-standard visual observation practices had become routine, rather than an instance of post incident collusion and deliberate falsification.
 
Could you imagine the difference in behaviours of the nurses tasked with conducting the 15-minute observations, if there was a policy/procedure that stated:
‘Each month, the assurance team is to review 24 hours of CCTV footage to compare it with the visual observations chart to confirm correlation.’
 
If such a policy or procedure existed, then it can be safely assumed the nurses would not have taken it upon themselves to choose which procedures and processes they follow.
 
Integrity Care SA
In his previous article for Asia Insurance Review, Mr Farrar also highlighted the tragic death of Ann Marie Smith, who had been under the care of Integrity Care SA. Ms Smith, who had cerebral palsy, died aged 54, a day after she was rushed to hospital semi-conscious. It emerged that her carer Rosemary Maione, had left Ms Smith living in squalid conditions in her own home, largely confined to a cane chair, while under the care of the national disability insurance scheme (NDIS).
 
If we assume that there was a policy that stated:
‘All supervisors of [Agency] carers or contractors are to conduct monthly visits to clients of the carers to conduct a welfare check.
 
Supervisors are to record the findings in the welfare check register and immediately alert management of any issues identified during the visits.’
 
then it is obvious that these welfare checks were not being conducted.
 
But it is not simply the fact that these welfare checks were not being conducted that constituted the failure of governance at Integrity Care SA, it was the fact that no-one was checking to make sure the checks were being done.
 
As was the case in the previous examples, there may have been a register that supervisors signed to verify they were doing the checking, but what difference would it have made to behaviours if managers conducted random welfare visits to clients that supervisors had singed to say they had visited?
 
Still not convinced that assurance is a critical component of governance? Maybe the outcomes of this incident will influence you to reconsider:
The NDIS Quality and Safeguards Commission revoked Integrity Care SA’s registration and issued a banning order against it.
 
Two directors were charged with criminal neglect causing death and failing to comply with a health and safety duty of care.
 
Integrity Care SA was charged jointly by Safework SA and South Australian Police.
 
A director of Integrity Care SA was banned for life from working in the disability services industry.
 
Ms Rosemary Maione was sentenced to six years and seven month’s jail.
 
So, if you are a director or an executive at an organisation and relying purely on the beautifully coloured reports you are receiving each month and you are not asking for evidence that what is being reported accurately reflects what is happening, then this article may be a cautionary tale as to what may lie ahead. A 
 
Mr Rod Farrar is a director with Paladin Risk Management Services.
 

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