Governance of covert policing funds

Report: 8
Date: 22 March 2007
By: Assistant Commissioner Serious Crimes Directorate on behalf of the Commissioner

Summary

This report details developments within the MPS Intelligence, Covert Policing and Tasking (ICPT) Programme chaired by AC House and the specific impact upon Covert Policing arrangements within the MPS. It details MPS investment in a Head of Profession (HoP) for Covert policing, formation of a Standards Unit (SU) and Central Authorities Bureau (CAB). It also details, in brief, the business benefits of the above.

On 23 January 2007 Commander Sawyer chaired a pan Business Group Covert Policing Governance Committee meeting, attended by Internal Audit, to address the outstanding recommendations. A further such meeting, including Internal Audit, will occur on 8 March 2007. Thereafter the meeting will be quarterly and consider all areas of Covert Policing including policy, standards, inspection & review etc as well as Internal Audit reports.

A full update of all 7 current and historic Internal Audit reports upon Covert Policing is available. This is fulsome but necessary in light of concerns raised by the Director of Internal Audit to whom a full copy of the MPS position is provided; the 7 reports cover 247 recommendations of which outstanding were 64 recommendations of which 8 high risk, 55 medium risk and 1 low risk.

This report highlights the MPS response to those areas designated as High Risk. The report provides an update upon the first MPS Covert Finance Strategy 2006/7 and preparations for the 2007/8 Covert Finance Strategy.

The report concludes that significant and tangible developments have been made to address and reconcile concerns raised by Director Internal Audit. It recognises the assistance provided by Internal Audit in achieving this position. It highlights the anticipated developments in developing a Corporate Covert Policing Strategy and standardisation within covert policing practices during 2007/8.

A. Recommendation

That

1. members note MPS developments within Covert Policing Governance with associated business benefits;
2. note the update in relation to MPS Covert Finance Strategy; and
3. note and approve MPS response to Internal Audit reports.

B. Supporting information

MPS developments within Covert Policing Governance

1. On 16 January 2007 the recommendations of the cross Business Group Covert Policing Standards Project Board, progressed within the Intelligence, Covert Policing and Tasking Programme (ICPT), were approved. The recommendations were in accord with the Management Board decision of 6 June 2006, which endorsed the formation of a Central Authorities Bureau (CAB), Standards Unit (SU) and Head of Profession (HoP).

Head of Profession (HoP)

2. The HoP for Covert Policing has a mandate to:

• Act as a corporate voice for Covert Policing, following consultation with Business Groups, on professional issues by articulating a collective view and being spokesperson for the MPS
• Develop and monitor delivery of a corporate level strategy for Covert Policing
• Set, promote and assure standards in order to ensure the quality, integrity and legality of Covert Policing
• Foster the career development of staff in Covert Policing roles by ensuring they have access to appropriate training and equipment, encouraging inter-Business Group and Intra-Business Group transfers
• Ensure that consistent standards for recruitment, promotion and training are maintained
• Represent Director of Intelligence, Covert Policing & Tasking in performing all inspections, reviews, monitoring performance and provide feedback/remedial action plans for Business Groups
• Address management, career development and professional issues relevant to Covert Policing
• Forge links with Covert Policing providers from the wider Law Enforcement and Intelligence Community and with professionals in related disciplines within Government and Industry.

3. A Memorandum of Understanding (MOU) will be compiled which will define the relationship between the HoP Covert Policing, BG leads and key individuals. The wider issue of a comprehensive Covert Policing Strategy, Policy, Standards, Inspection & Review will be developed and monitored through the Covert Policing Governance Committee. Chaired by HoP membership includes all operational Business Groups, Internal Audit, Finance, Human Resources, Central Authorities Bureau and Standards Unit. It will meet quarterly with HoP reporting to AC House as Director of Intelligence.

Covert Policing Standards Unit

4. A Covert Policing Standards Unit will be formed which will be distinct from the Intelligence Standards Unit (ISU), reporting to the Head of Profession as agreed at the ICPT Steering Group on 16.1.07.

5. Staff within the existing Covert Operational Security Unit (COSU) together with staff outlined below will be joined to form a Covert Policing Standards and Operational Security Unit.

6. The Covert Policing Standards Unit will:

• Identify existing standards and where required write/harmonise standards;
• introduce the standards, service level agreements and SOP’s relating to covert policing across all business groups in support of the Head of Profession;
• through an Inspection & Review regime inspect all Business Groups against the standards set;
• be responsible for communicating strategy, policies and up to date knowledge products through a covert policing intranet site;
• implement recommendations accepted from internal and external inspections, such as MPS audit, OSC, HMIC.

Central Authorities Bureau

7. The Detective Superintendent, Head of CAB will:

• provide change management for the amalgamation of currently existing Central Authorities Bureau to deliver cost effective authorities processes for all business groups, ensuring common standards and compliance;
• promote effective business risk management by implementing a risk process to support better decision-making through good understanding of the risks involved in covert activity and their likely impact (for example, the avoidance of deploying assets where others are already tasked (blue on blue);
• provide oversight of the tasking of MPS covert assets, ensuring the most effective and cost efficient use of resources in support of priorities;
• support the Head of Profession and the Covert Policing Standards Unit with promoting doctrine and standards;
• identify the business need for an integrated IT structure for covert policing and oversee project management for procurement and delivery;
• co-ordinate MPS representation at the various internal, national and international working groups and conferences concerning covert policing, removing duplication of effort, and ensuring communication across business groups of changes and innovations beyond the MPS;
• provide a senior point of contact for referrals concerned with covert policing policy within the MPS.

8. The Band C and Band D staff forming the Directed Surveillance Oversight Unit will:

• provide central oversight and quality assurance across all Business Groups of Directed Surveillance applications/authorisations utilising CrimInt Plus;
• report back findings of central oversight to Superintendent Authorising Officers and RIPA Gatekeepers;
• liaise with Crime Academy to feedback findings of oversight to enhance Directed Surveillance training;
• be the single point of reference for RIPA Directed Surveillance issues and provide advice and guidance to Superintendent Authorising Officers and RIPA Gatekeepers.

Business benefits

9. The Standards Unit will deliver the following changes/impacts which will enable the benefits of the ICPT Programme to be met:

The Central Authorities Bureau will deliver the following changes/impacts which will enable the benefits of the ICPT Programme to be met:

Covert Finance Strategy 2006/2007

10. The Covert Finance Strategy was introduced in 2006. It details out how covert expenditure, and related financial processes across the MPS, will be managed through centralised governance. Specifically it aims to:

Define covert expenditure

1. Identify the current method by which covert finances are managed, allocated and used throughout the Service.
2. Identify current areas of weakness or non-compliance with MPS finance policies.
3. Set out an action plan to address areas of non-compliance.
4. Set up a framework enabling continuous monitoring and review of systems and compliance of MPS standards and corporate policies governing covert expenditure.

11. Five key priorities are identified:

1. Priority 1 - To determine the full extent of covert expenditure across the organisation and to review existing budgetary arrangements in order to achieve greater efficiency around the management of funds.
2. Priority 2 – To implement tighter controls around existing systems in order to make managers more accountable for covert expenditure.
3. Priority 3 - To review the purchase and control of MPS covert assets.
4. Priority 4 - To explore opportunities for income generation within covert policing activities.
5. Priority 5 - To review the role of the Covert Finance Unit and clarify the role of the Head of the CFU.

Achievements

12. A formal definition for covert expenditure was agreed and published.

1. Budget and cost centre arrangements supporting covert activity have been reviewed. A new structure is being introduced w.e.f. 1 April 2007 enabling better management, clearer identification, and improved reporting of covert expenditure to local and senior operational managers.
2. Introduction of a Covert Policing Governance Committee to formally monitor and review the implementation of Internal Audit report recommendations into covert activity.
3. Role of Head of the Covert Finance Unit currently undergoing review.

2007/2008 priorities

13. The priorities for 2007/2008 will shortly be set. Although some achievements were made during the first year of the Covert Finance Strategy, much of this activity is ‘work in progress’ and it is envisaged that next year’s key priorities will not change significantly.

Progress of Internal Audit reports

14. In order to ensure a consistent and appropriate response to Internal Audit reports concerning covert policing issues, a Covert Policing Governance Committee (CPGC) chaired by Commander Sawyer (in his role as Head of Profession Covert Policing), has been formed. The Terms of Reference include the requirement to consider and decide upon the formal acceptance of Internal Audit recommendations including detailed scrutiny and ongoing review of recommendations and target dates.

15. The inaugural meeting of the Committee on 23 January 2007 reviewed in detail the progress of 7 Internal Audit Reports covering:

1. Acquisition and Disposal of Covert Property
2. SO15 Counter Terrorism Command (formerly SO12) Accounts
3. Technical Support Unit Accounts Control
4. Criminal Justice Protection Unit (Witness Protection)
5. Informant Reward Payments
6. Covert Vehicles Purchase and Disposal
7. SCD11 (Covert Policing) Accounts Control

Summary

16. The 7 reports contained a total of 247 recommendations of which 64 remain to be implemented in full comprising of:

• 8 High Risk recommendations
• 55 Medium Risk recommendations
• 1 Low Risk recommendations

17. The recommendations are wide ranging but include the need to make improvements to internal control processes around operational expenditure and general budget management. Some also highlight areas of non-compliance with existing Police Regulations due to the vagaries of covert deployments.

18. The CPGC agreed actions to address Internal Audit recommendations and will meet again on 8 March 2007 to further review implementation. Efforts are being concentrated on implementing those recommendations in full by June 2007. It is recognised that some issues contain ‘work in progress’ that cannot be fully implemented by this time. The progress of each recommendation will continue to be monitored at the CPGC who will, where appropriate, decide upon corrective action to minimise the chances of target dates being missed. Full consultation will be maintained with Internal Audit throughout the process.

Outstanding high risk recommendations

Audit report: Acquisition and Disposal of Covert Property

19. Recommendation: 6.1.1
Detail: The policy for the provision and disposal of properties used for covert purposes is approved by the Director of Property Services in agreement with the Senior Management of the user departments.
Action: Property Services Department policy to be reviewed and submitted to Director PSD for approval.
Target date for implementation: 1 April 2007

20. Recommendation: 6.1.2
Detail: The procedures to support the policy within PSD and the user departments are documented and approved by the Director of Property Services and the Senior Management of the user departments.
Action: Property Services Department to document procedures and submit to Director PSD and senior user management for approval.
Target date for implementation: 1 April 2007

Audit report: SO15 (formerly Special Branch) Accounts

21. Recommendation: 6.2
Detail: A strategy for allocating and managing covert funds and resources is drawn up and documented guidance and procedures is produced to support the process. This should include a review of the processes in place at the remote site for funding operational activities.
Action: The management and oversight of SO15 covert accounts and related covert expenditure procedures was transferred to the Covert Finance Unit (CFU) last year. Since this time much work has been completed by CFU personnel to identify funding arrangements and to clarify and document local processes within the former Special Branch. Of the four units concerned, three have been completed to date and work is to commence shortly on the remaining unit referred to above as the ‘remote site’. The overall aim of this work is to ensure a corporate and consistent method of managing covert funds both within the new Counter Terrorism Command and the rest of the MPS. The Covert Finance Strategy, as referred to previously in the main paper, will assist in this respect.
Target date for implementation: June 2007.

Audit report: Criminal Justice Protection Unit

22. Recommendation: 7.1
Detail: An MPS strategy for the provision of witness protection is documented and approved by MPS senior management/ACPO.
Action: SOCPA (Serious & Organised Crime Police Act) policy, incorporating Witness Protection, has been signed off by the Commissioner. A Strategy has been written but awaits conclusion of case R v Van Colle Appeal after which it will be issued.
Target date for implementation: March 2007 (assuming conclusion of Appeal case)

Audit report: Informant Reward Payments

23. Recommendation: 9.11
Detail: SCD11(9) (Covert Source Management Unit) use a security firm to collect large amounts of cash from bank accounts
Action: Senior local operational management to review, with Head of the Covert Finance Unit, the current system for cash collection and to consider appropriate alternative options. It should be noted that a similar recommendation has been made in other audit reports where large amounts of cash are operated in support of other areas of covert activity. Work ongoing.
Target date for implementation: Update to HoP March 2007

Audit report: Covert Vehicles Purchase & Disposal

24. Recommendation: 6.2.5
Detail: The written Policy Guidelines and instructions governing the purchase and disposal of covert vehicles are expanded and updated in line with the further recommendations made in the Internal Audit follow up report.
Action: The Covert Vehicle Fleet Manager to update the guidelines accordingly and submit to Det. Superintendent SCD11(10) for approval.
Target date for implementation: March 2007

Audit report: SCD11 Accounts Control

25. Recommendation: 6.1
Detail: A strategy for managing covert resources is documented and approved by senior management.
Action: A Covert Finance Strategy was introduced in 2006, which now supports the Covert Policing Strategy. Five key priorities currently identify areas where specific attention is required to local procedures and systems of control. Work is ongoing within the Covert Finance Strategy to achieve the necessary improvements. The Covert Policing Standards Project Board, chaired by Commander Covert Policing, maintains an overview of both plans to ensure appropriate linkage between the two strategies.
Target date for implementation: June 2007

26. Recommendation: 9.6.1
Detail: The review and simplification of procedures for: a) recording and reconciling transactions, b) obtaining monies from Exchequer Services and c) completing suspense accounts is carried out.
Note: The majority of this recommendation has been completed, however, specific reference has been made by Internal Audit to the non-implementation of a replacement Financial IT system within the Covert Finance Unit.
Action: In consultation with Internal Audit, a replacement IT system is being developed by the Covert Finance Unit (CFU) and Central Finance Department. The system has been piloted since January 2007 by the CFU with a view to full introduction at the start of the new financial year.
Target date for implementation: April 2007

27. It is important to note that the Director of Internal Audit and his team have shown considerable patience in managing the MPS response to their recommendations. Their support and guidance prior to and during CGPC has been much appreciated by Commander Sawyer and David Osborne (Head of Covert Finance Unit).

C. Race and equality impact

1. There are no equality or diversity implications arising directly from this report.

2. The MPA are asked to note that within the varying BG there are varied diversity action plans relating to the recruitment, retention and progression of a covert policing workforce. Those plans will be co-ordinated and subject to specific discussion/review within CPCG.

D. Financial implications

1. The financial implications of the units required to take the recommendations forward are set out below. These were subject of discussion at Management Board on 6.3.07. MB agreed that the business case had been sufficiently set out, with business benefits, to justify the allocation of resources required.

2. MB agreed that existing corporate funds, outwith the ICPT programme funds, exist for 2007/8 to establish the above units.

3. Director of Resources and Director of Human Resources will manage year on year funding of the units and movement of BWT/AWT through existing corporate processes; in essence the migration of resources will be a corporate top slice across each BG and the units will be mainstream SCD funding allocation.

Covert Policing Standards Unit

Table 1. (Pay)

Table 2. (Other additional Costs [1])

Central Authorities Bureau (CAB)

Table 1. (Pay)

Table 2. (Other additional Costs [1])

E. Background papers

None

F. Contact details

Report author: Commander Shaun Sawyer, MPS.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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