Annual Governance Statement quarterly update

Report: 11
Date: 10 March 2011
By: Treasurer

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 2009/10.

A. Recommendation

That members note the progress in addressing the significant governance issues included in the 2009/10 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 2009/10 the following issues were included in the AGS:

Risk Management

6. Whilst there continues to be improvements in the effectiveness of the framework for assessing and managing risk within the MPA and MPS with increased oversight within the MPA and MPS, continued development of the MPA and MPS corporate risk registers and the introduction of a risk maturity model in the MPS, further work is needed in embedding risk management across the organisation.

Assurance Framework

7. The MPS has a significant number of internal inspection and review functions and although a number of these functions have a clearly defined role and operate to defined standards, there is a need to develop a corporate assurance framework. A review is currently underway led by the MPS which will assist in mapping the assurance functions and increasing their effectiveness.

Control environment

8. Whilst there have been improvements in control with the internal control score increasing from 2.8 to 2.6 the control environment is not yet fully effective, including within boroughs and specialist command units where there remain issues with applying controls consistently at a local level. The local control environment will also be impacted by Finance modernisation and Transforming HR in the coming year

Procurement and contract compliance

9. Good progress continues to be made in strengthening the control environment around procurement. However a number of issues around contract management have been identified which impact on our ability to ensure good value for money is being achieved including continued examples of ineffective planning which on occasion has limited the Authority’s ability to tender for goods and services competitively.

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.

C. Other organisational and community implications

Equality and Diversity Impact

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

Consideration of MET Forward

2. Effective governance is essential in delivering Met Forward

Financial Implications

3. Effective governance arrangements are essential in ensuring effective financial management.

Legal Implications

4. The action plan addresses progress in addressing the governance issues included in the Authority’s Annual Governance Statement published in accordance with the Accounts and Audit Regulations 2003 as amended by the Accounts and Audit (Amendment) (England) Regulations 2006 whereby, there is a statutory responsibility for the Authority to publish a statement of internal control.

Environmental Implications

5. There are no direct environmental implications arising from this report which is submitted as part of the Governance process.

Risk Implications

6. Implementation of the action plan will ensure that risks associated with the various governance issues included in the Authority’s Annual Governance Statement for 2009/10 are mitigated.

D. Background papers

• Annual Governance Statement 2009/10

E. Contact details

Report author: Annabel Adams, Deputy Treasurer, MPA

For information contact:

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

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