Audit Commission informal use of resources assessment

Report: 8
Date: 16 March 2006
By: the Treasurer and Commissioner

Summary

Following on from their informal “use of resources” assessment, the Audit Commission has now issued their summary of recommendations report. This paper outlines the Audit Commission’s main conclusions and findings and also includes an action plan responding to the various findings.

The report also provides a summary of the process for 2005/06, which will be rolled out to all Police Authorities and included as part of the HMIC Base Line Assessment.

A. Recommendation

That

1. members note the report; and
2. agree the action plan

B. Supporting information

Background information

1. During 2004, the Audit Commission undertook an initial performance assessment of the MPA and judged it as being fair. Part of this assessment included a separate ‘Auditors Scored Judgement’, which judged a range of financial measures. The MPA was graded 3, where 4 was the top score and 1 the lowest. For 2004/05 the Audit Commission undertook a follow up assessment, but changed the assessment measure to one focussing on the ‘use of resources’.

Use of resources assessment 2004/05

2. The use of resources judgement assessed how the MPA managed and used its financial resources, focusing on the importance of having sound and strategic financial management to ensure that resources are available to support it’s priorities and improve services.

3. The assessment covered four main areas; financial reporting, financial management, financial standing and internal control, and within these there were a number of ‘key lines of enquiry’ to assess performance at levels 2,3 and 4. Normally the MPA would have been scored on its performance on each of the areas, where it would be expected to meet the majority of criteria on one level before being assessed on the next level. However as this year was seen as pilot year, it was agreed that the Audit Commission would not score their assessment, but would provide an informed report that summarised how well we were performing in each of the areas, and include a summary of recommendations for those areas where actions are needed. A brief summary was also provided in the Annual Audit Letter.

4. The main conclusions of the assessment were positive, but not unexpectedly recognise there is still work to be done to ensure we are managing our resources effectively. The main conclusions are as follows:

Financial reporting

The accounts were produced to the statutory timetable and given an unqualified audit opinion. However, material amendments were necessary to the draft accounts and the quality of supporting working papers requires improvement.

Financial management

The MPA is improving the links between the corporate strategy and the medium term financial plan. Financial monitoring is effective and action planning in response to budget variances is becoming more focused. Asset management is developing.

Financial standing

Current spending plans are matched to the overall resources available. Reserves and balances are managed effectively. Action is necessary to improve arrangements for managing overspending budgets.

Internal control

Risk management is making progress. There are established arrangements for reviewing internal control, although the documentation of systems and procedures requires further attention. Arrangements to prevent and detect fraud and corruption are well established.

5. An action plan (Appendix 1) has been developed in response to the report. This outlines the various actions needed to improve current arrangements, the responsible department and the time frame within which actions should be completed. Whilst certain actions will take time to implement effectively, there are a number that can be delivered relatively quickly and the intention is to complete these as soon as possible so that where possible the improved arrangements feed into the use of resources assessment for 2005/06. However as indicated in the paragraph below the deadline for completion of the 2005/06 use of resources assessment is 13 April 2006, significantly earlier than previously advised, and this will make it difficult to implement any significant improvements.

Use of resources assessment 2005/06

6. The process for 2005/06 will be different. The Audit Commission are currently proposing to undertake a formal use of resources judgement, which is likely to be included in Her Majesty’s Inspectorate of Constabulary’s baseline assessment. This process has been piloted in four police authorities and is currently being rolled out to all police authorities, with authorities expected to complete the exercise by 13 April 2006. Whilst the deadline for completion is tight, the MPA has the benefit of having gone through a similar process in 2004/05.

7. The areas of assessment are expected to be broadly similar to those included in 2004/05, but there will be an additional area included – value for money. We are currently waiting for details on exactly what this will entail. A joint MPA/MPS working group has been established to monitor progress of the action plan and to oversee the process for 2005/06. The intention is to update the Committee in the autumn once the results of the assessment are known.

C. Race and equality impact

In implementing the action plan the equality and diversity implications will be fully considered.

D. Financial implications

Whilst there are no financial implications arising directly from this report, implementation of the various actions included in the action plan will ensure that the MPA improves the way in which it currently manages it’s resources.

E. Background papers

None

F. 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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