Annual governance statement – quarterly update

Report: 13
Date: 14 September 2009
By: Treasurer and Director of Resources on behalf of the Commissioner

Summary

The Authority is required to include an Annual Governance Statement in its financial statements. The Annual Governance Statement includes details of governance arrangements, highlighting how effectively they are being deployed and identifying significant governance issues and actions being taken to address them. In producing the Annual Governance Statement reliance is placed on the Annual Assurance Statement produced by the Metropolitan Police Service.

This report provides Corporate Governance Committee with an update on progress in addressing the significant governance issues included in the statement of accounts for 2008/09.

A. Recommendation

That members note the progress in addressing the significant governance issues included in the 2008/09 Annual Governance Statement for the MPA.

B. Supporting information

1. In accordance with the Accounts and Audit Regulations 2003 as amended by the Accounts and Audit (Amendment) (England) Regulations 2006, there is a statutory responsibility for the Authority to publish a statement of internal control. In previous years this responsibility has been met through the production of a Statement of Internal Control, which, following approval at Corporate Governance Committee and Full Authority, was published in the annual accounts.

2. Following publication of the CIPFA/SOLACE guidance note “Delivering Good Governance in Local Government: the framework” and the police specific “Interim Guidance Note for Police Authorities and Forces” the requirement is now met through the publication of an Annual Governance Statement (AGS).

3. The AGS subsumes and broadens out the requirements of the Statement of Internal Control and is now more of a general certification about governance issues rather than just a certification of the propriety of internal systems of control.

4. As in previous years the Metropolitan Police Service (MPS) has produced a separate Annual Assurance Statement. This includes details of governance arrangements within the MPS as well as what was included in the past in the MPS Statement of Internal Control. In producing the Annual Governance Statement reliance has been placed on the Annual Assurance Statement.

Significant governance issues

5. For 2008/09 the following issues were included in the AGS:

Risk Management

6. Although the MPS have made improvements in ensuring risks are appropriately analysed and dealt with at command unit level there still remains concerns with regard risk management at a top management level.

Procurement

7. Whilst there have been improvements in procurement through for example the development of a contracts database and the revised procurement strategy there remain areas of significant concern, such as reliance on single tender actions and continued difficulties in recruiting procurement professionals.

Internal control

8. The control environment is not at an acceptable level as highlighted by both the Director of Internal Audit’s independent opinion on the effectiveness of the system of internal control and the external audit annual letter.

Engaging with communities

9. A standardised approach to engaging with communities needs to be developed to enhance opportunities for London’s communities to express their views.

Action Plan

10. An action plan to address these issues has been produced and is attached at Appendix 1. This includes an update on progress made in implementing each of the actions which in overall terms continues to be positive including. Clarification is needed in relation to a number of MPS actions in relation to risk management. These are to be provided following September’s Service Improvement Board.

C. Race and equality impact

The Authority will ensure that equality and diversity issues are fully considered in the Annual Governance Statement

D. Financial implications

Effective governance arrangements are essential in ensuring effective financial management.

E. Background papers

• Annual Governance Statement 2008/09

F. Contact details

Report author: Annabel Adams, MPA

For information contact:

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

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