Annual report of the Corporate Governance Committee

Report: 16
Date: 19 June 2006
By: Treasurer

Summary

The report summarises the work of the Corporate Governance Committee for the year 2005/06.

A. Recommendation

That members agree the report as representing the Committee’s work over the last year for submission to the Authority.

B. Supporting information

Introduction

1. The Authority requires each committee to produce an annual report on its activities. The reports are intended to give a general indication of member performance. They will also provide material for incorporation into the Authority’s published annual report.

Meetings and membership

2. The Committee has met on four occasions during the year at appropriate points in the annual audit cycle.

3. The Panel comprised four members. Jennette Arnold has been Chair of the Committee for the year. Other members have been Rachel Whittaker (Deputy Chair), Toby Harris and Elizabeth Howlett.

Responsibilities

4. The Authority at its annual meeting on 8 July 2004 established the Corporate Governance Committee as a new committee. The Committee fulfils the Authority’s duties in relation to internal and external audit and scrutinises the draft accounts on behalf of the Authority. In both cases, the Committee approves the annual audit programme. It has general oversight of the effectiveness of the control systems in operation. The Committee has a remit to keep the MPA risk management strategy under review and endorse an annual programme of risk management activity for the MPS, receiving progress reports and an assessment of achievement after the end of the year. The Committee also satisfies itself on an annual basis, that the MPA and MPS health and safety plans are sufficient to discharge the Authority’s Health and Safety responsibilities, that the plans are being implemented, that targets in relation to health and safety performance are being achieved and any topical issues are brought to notice.

Accounts

5. The Committee reviewed the draft final accounts for 2004/05 and agreed drafting amendments. The Committee recommended their approval by the full Authority.

External audit

6. The Committee received the external auditor’s annual audit letter on conclusion of the 2004/05 audit. The external auditor was again able to provide an unqualified audit opinion on the accounts. He stated that ‘The timeliness of the draft accounts improved again this year’. Whilst recognising that the quality of working papers and the application of Statement of Recommended Practice guidance were maintained from last year, he commented that further improvements were necessary to achieve the standards that the MPA and MPS aspire to.

7. Under the general heading of ‘Performance’, the auditor noted that the Authority is committed to addressing the issues identified in the initial performance assessment (IPA), and that a comprehensive organisational development programme is being established and key internal processes strengthened. The Auditor also undertook a tailored use of resources assessment to gauge progress on last years IPA. No score was provided, however the Auditor noted “the MPA and MPS have responded positively to our initial assessment and are committed to improving arrangements.”

8. The Auditor noted that the HMIC, as part of his baseline assessment of the operational effectiveness of the MPS, has concluded that its performance was good or better in most areas.

9. The Auditor noted he had issued an unqualified report on the Best Value Performance Plan (BVPP), which was recognised as being a significant achievement for the MPA and MPS. It was recognised that there were improvements in the quality of performance information contained within the BVPP, with opinion being reserved on only one performance indicator.

Internal Audit

10. The Committee has received progress reports on the Internal Audit programme for 2005/06 and has considered the Director of Internal Audit’s annual report. The annual report showed a slight improvement in the overall control assessment with good progress in areas that have previously been the subject of internal audit review. In particular, high-risk systems reviewed during the year were found to have adequate controls. While major outsourcing programmes were well managed, some concern was noted around procurement control failures in a range of business areas across the MPS. The Director of Internal Audit’s assurance score was based on a wider range of work than previously, taking into account internal audit advisory work and investigations, as well as work by other review agencies.

11. The Committee has approved the Internal Audit plan for 2006/07 based on an updated audit needs assessment and risk analysis for five years ahead. The plan includes a continuing programme of BOCU and OCU reviews, advisory work, audits of business and financial systems and follow-up reviews of areas subject to audit in 2005/6. Internal Audit will continue to provide further risk and control awareness training to the MPS.

Risk management

12. Throughout the year, the Committee has received regular corporate risk update reports from the MPS. These provide updates on the three areas where the Business Risk Management Team (BRMT) provides the MPS with a professional lead i.e. corporate governance, business risk management and insurance management.

13. At the request of Corporate Governance Committee, a review was undertaken of the joint risk management strategy. An updated and enhanced document was then presented to Committee for approval.

14. In the Annual Audit Letter the Auditor reported back on his follow up to the 2003 review of risk management, overall he felt that progress is positive and that risk management arrangements have been enhanced in 2005. However, he highlighted areas where improvements were still needed to install a culture of risk awareness across the MPS.

15. The Committee received an interim report on statement of internal control (SIC). The report provided an update on progress in addressing significant issues identified in the 2004/05 SIC and outlined the process for completing the SIC for 2005/06.

Health and safety

16. To ensure the discharge of the Authority’s statutory responsibilities, the Committee has overseen the safety, health and welfare of police officers and police staff, people in the care and custody of the MPS, and all members of the public on police premises or property, by

• agreeing the priorities for health and safety in the MPS
• approving the revised joint policy on health and safety
• approving the policy on health and safety within the Authority itself and the plans to audit performance.
• monitoring all contact the MPS has had with the Health and Safety Executive.
• scrutinising, on a quarterly basis, MPS health and safety performance data in relation to fatalities, major incidents, near misses and other specific key performance indicators.
• reviewing the response of Health and Safety Branch to the July terrorist attacks
• reviewing the response of Health and Safety Branch to the deployment of MPS staff in areas affected by the tsunami
• overseeing the management of MPS swimming pools
• approving the code of Practice for MPA employees participating in operational police duties
•  reviewing information relating to assaults on MPS staff.

17. In reviewing performance, the Committee has noted a general improvement in all areas.

18. To strengthen the oversight mechanism, the Authority is represented on the MPS Strategic Health and Safety Committee and members are all are provided with copies of the minutes. In a reciprocal arrangement, the MPA Committee provides a conduit for the expression of concerns and all staff associations are invited to meetings of the Committee so that, if necessary, any issues can be raised direct.

Next year

19. In the forthcoming year, the Committee will continue to oversee the internal and external audit programmes. The Committee will be looking for continuing improvement in the Director of Internal Audit’s rating of the adequacy of internal control in the MPS. The Statement of Internal Control will be considered as a separate report to the accounts and in future quarterly updates are to be provided on progress in addressing significant issues identified in the statement. The Committee will continue to take a lead on behalf of the Authority in overseeing risk management arrangements in the corporate governance structures of both the MPA and the MPS and in particular monitoring the progress of the MPS risk management programme and the internal control actions detailed in the Annual Statement. It is anticipated that further progress will be made in the assurance that MPS and MPA Health and Safety plans are sufficient to discharge the Authority’s responsibilities and in particular that the plans are being implemented.

C. Race and equality impact

The Committee addresses equalities aspects if and when they arise in relation to its business.

D. Financial implications

The cost of the Committee’s activities is met within the MPA’s directly managed budget.

E. Background papers

None

F. Contact details

Report author: Ken Hunt, Treasurer, MPA.

For information contact:

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

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