Contents
Report 15 of the 22 September 2006 meeting of the Corporate Governance Committee and provides an update on progress in addressing the significant internal control issues included in the statement of accounts for 2005/06.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).
See the MOPC website for further information.
Statement of internal control – quarterly update
Report: 15
Date: 22 September 2006
By: Commissioner
Summary
The MPA has been required to include a Statement of Internal Control (SIC) in its financial statements since 2003/04, including details of the system of internal control and risk management, the key controls, and how effectively they are being deployed, highlighting any significant internal control issues and the relevant actions being taken to address them. In addition the MPS produce their own SIC, which provides details of controls they have in place to support internal control and risk management.
This report provides an update on progress in addressing the significant internal control issues included in the statement of accounts for 2005/06.
A. Recommendation
That members note the progress in addressing the significant internal control issues included in the 2005/06 Statement of Internal Control for the MPA.
B. Supporting information
Statement of internal control
1. In accordance with the Accounts and Audit Regulations, 2003 there is a statutory obligation on the MPA to publish a Statement of Internal Control (SIC) in the annual accounts, setting out details of the MPA/MPS system of internal control and risk management, the key controls and how effectively they are being deployed.
2. The Authority is also responsible for ensuring that there is a sound system of internal control which facilitates the effective exercise of the Authority’s functions and which includes arrangements for the management of risk. In exercising this responsibility, the Authority places reliance on the Commissioner to support the internal control and risk management process as the majority of the MPA’s controls are deployed within the MPS. Hence in exercising its statutory responsibilities under the regulations, the Authority places reliance on the commissioner to deploy, maintain and monitor internal control and risk management processes.
3. The MPS evidence these controls through the production of it’s own internal SIC. This is then consolidated with the MPA’s own SIC (which also identifies risks it faces on its own account) to produce an overarching statement for inclusion in the statement of accounts.
Significant issues
4. In line with the regulations the SIC includes details of any significant internal control issues and the actions to be taken to deal with these. In 2005/06 six issues have been included in the MPA SIC. Details of each of the issues and progress made in addressing the significant issues are provided below:
| Issue | Progress |
|---|---|
| The MPS’s system of Corporate Governance is new and not yet embedded throughout the organisation | A draft internal control framework is reaching completion within the MPS and is soon to be launched. A more all-embracing corporate governance framework is currently being worked up |
| All relevant contract regulations need to be followed at all times when letting contracts | The procurement scrutiny function is currently being strengthened within the MPA. Contract regulations are also in the process of being revised and updated. These factors should help in ensuring contract regulations are followed at all times. Internal Audit are to hold a seminar with senior members of the MPS to discuss the current issues around procurement and agree a way forward. |
| The average assurance score on internal control is 3.3, significantly lower than the score of 2, needed to indicate that there are adequate systems of control in place | At this early stage the average assurance score is worse at 3.6, although the follow-up scores have improved from 2.5 to 2.4. The worsening assurance score is mainly due to a high number of first-time audits of BOCUs and OCUs. |
| Resource and financial planning needed to be more closely aligned | A revised financial planning framework has been developed and the intention is to move towards an integrated strategic and financial planning framework over the next few years. The process is already well underway as evidenced by development of the 2007/08 budget submission. |
| There are weaknesses within the processes of accounting for fixed assets | A Fixed Asset Working Group has been set up to review the overall system for processing and managing fixed assets in the MPA. The group has identified the key issues to be addressed as well as the future regulatory changes to impact on the system. It is in the process of developing the systems and procedures needed to provide a robust framework within which to control fixed assets and it expects this to be in place before the end of the current financial year. |
| Risk management is not yet fully embedded throughout the organisation | Good progress has been made with the visits to all Operational Command Units and continual delivery of the various strands of the risk training programme. Additionally, a cadre of senior officers in all Business Groups is to be trained in risk management techniques. The risk management 'bow-tie' technique (whereby the main causes and consequences of a risk are looked at in greater detail) has been introduced and is finding favour across the Service at both the business and operational aspects of the Service. Work still remains on the quality assurance aspect of the risk register process and on the corporate risk management process. |
C. Race and equality impact
The MPA will ensure that equality and diversity issues are fully considered in completing the SIC.
D. Financial implications
There are no additional resource issues arising from this report
E. Background papers
Statement of Internal Control 2005/06, MPS.
F. Contact details
Report author: Annabel Adams, MPA
For information contact:
MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18
Send an e-mail linking to this page
Feedback