Minutes

Minutes of the meeting of the Corporate Governance Committee of the Metropolitan Police Authority held on 7 December 2007 at 10 Dean Farrar Street, Westminster, London SW1H 0NY.

Present

Members

• Toby Harris (Chair)
• Jennette Arnold
• Faith Boardman (Deputy Chair)
• Joanne McCartney
• Rachel Whittaker
• Karim Murji

MPA officers

• Ken Hunt (Treasurer)
•  Alan Johnson (Policy Officer, Human Resources)
• David Riddle (Deputy Chief Executive and Deputy Clerk)
•  Peter Tickner (Director, Internal Audit)
•  Ruth Hastings Iqball (Committee Section)

MPS officers

• Peter Brown (Head of Compliance, Property Services)
•  Nick Chown, (Director, Risk Management)
•  Dani Fitzgerald (Inspection Liaison Analysis Unit)
•  David Hill (Head of Corporate Business Continuity Management)
•  Nick Kettle (Head, Safety and Health Risk Management)
•  Anne McMeel (Director of Strategic Finance)
•  Richard Riley (Director, Strategy and Modernisation)
•  Paul Stock (Director, Strategic Finance)

Co-opted member

• Linda Duncan (Head of Governance Services, Hyman Capital Services Limited)
• Richard Stephenson (Director, Group Health, Safety and Environment, Transport for London)

Also in attendance: Michael Haworth–Maden (District Auditor, Audit Commission) and Martin Searle (Audit Manager, Audit Commission)

15. Apologies for absence

(Agenda item 1)

No apologies were received.

16. Declarations of interests

(Agenda item 2)

No declarations of interest were received.

17. Minutes and notes of the Corporate Governance Committee – 14 September 2007

(Agenda item 3)

The minutes and notes of the previous meeting were considered.

Resolved – That the minutes of the Corporate Governance Committee held on 14 September 2007 be agreed.

18. External Audit annual audit letter 2006/07

(Agenda item 4)

The District Auditor had submitted the annual audit letter for 2006/07. It was submitted to the Corporate Governance Committee for comment. The letter was introduced by the Audit Manager, Audit Commission. The Treasurer added that there had been full consultation with the MPA/MPS over the contents of the letter, and that it was recognised that there were improvements that needed to be made. The Director of Strategic Finance, assured members that the Safer Neighbourhood procurement issues had been Resolved and that key reconciliation issues were in place. Members requested a briefing providing an overview of the letter before the report was received by the full Authority. The Chair thanked the Audit Commission for the letter, and stated that the Committee was pleased to note improvement and asked that the MPA and MPS remain mindful of the areas requiring further progress.

Resolved - That a briefing providing an overview of the letter be received by members before the report was received by the full Authority.

19. Internal Audit progress report

(Agenda item 5)

The Committee received a report on the work of Internal Audit for the period April to December 2007. The report also summarised the results of significant Internal Audit work to date and the adequacy and effectiveness of control in MPS systems where Internal Audit had issued final reports since April 2007.

The Chair noted that three quarters of Internal Audit’s investigators were working on investigations in relation to corporate credit cards. He asked how long this investigation would last and for an indication of the level of the problem. The Director of Internal Audit, replied that the investigation was in its early stages, and that his staff had yet to see all the evidence. He did not think the work would be completed within the timescales presented to the last full Authority. The Director of Strategic Finance, stated that all claims should have been received from officers last Friday, but some remained outstanding and an extension had been given until today for their receipt. As of 13 November £1.7m remained unreconciled of post 2006 claims. This matter had been give high importance by the MPS’s senior management team (SMT) and was an agenda item at every SMT meeting. She added that some officers had asserted that they had already submitted their claims, but they had not been recorded. These officers were being asked to provide evidence of their submission. The investigation was also using a lot of her department’s resources, including the additional resources put into the section from other parts of Finance Services that processed the corporate credit cards. She stated that the MPS were now looking at retendering the contract for the provision of corporate credit cards with a new provider. The MPS was also considering on-line reconciliation and the addition of management approval of expenditure; however she did not want to review the area of corporate credit cards until the investigation was completed. 26% of the usage for credit cards was undertaken overseas, in a variety of currencies, and a limit was needed on cash withdrawals. To date 800 cards had been cancelled as their need was being revaluated. The Chair asked if this included the cards of officers who had been seconded or had left the MPS. The Director of Strategic Finance, said it was being made clear that cards were given to a post holder and not the person fulfilling the role and should be handed in when a person changed post. Members felt that the Human Resources Directorate should undertake a comprehensive review of expenses policies and sought assurance that the subject was being looked at in the round. The Director of Strategic Finance, reported that SMT had discussed this already. She added that policies were being reviewed to ensure they were clear and easily available to all staff. The Chair cautioned that any revised guidance should be rooted into operational reality, noting that for example some cards would be used in war zones. Members asked about the unreconciled £1.7m and the missing documentation. The Director of Strategic Finance, explained that £1.7m was the sum that remained unreconciled. Most of the expenditure would be eventually accounted for, it was sometimes the case that expenditure was legitimate but the wrong procurement route had been taken. Many officers kept copies of their claims, and she was now asking her staff to issue receipts for paperwork.

Members noted that the issue of corporate credit cards had first been raised with the MPS in 2004 and they felt they should have been dealt with earlier. The Director of Strategic Finance said some action had been taken in 2004, but the MPS had a history of dealing with such matters as accounting problems and not governance issues and therefore not escalating them if necessary to SMT level. Members also asked it the SMT appreciated the damage this issue had caused to the MPS’s reputation. The Director of Strategic Finance stated that the SMT did appreciate this, and the Commissioner agreed that the matter had to be resolved. The Chair added that it would have been better if this had happened earlier, however recognising that it had not he hoped lessons had been learnt and similar issued would be dealt with sooner. The Director of Strategic Finance, said the MPS would now ensure that the right level of management picked up high-level audit recommendations and recognised local audit recommendations could have corporate implications. Internal Audit and representatives from Finance Services would be meeting regularly to pick up such issues. The Chair asked about local audits, for instance of BOCUs and how Territorial Policing would pick up issues of significance. The Director of Strategic Finance said that lead accountants had been asked to pick up any accounting issues.

Members asked about the 41 new cases under investigation since September 2007, and asked how they had come to Internal Audit’s notice. They were informed that reports came from business groups, Human Resources or Professional Standards Directorates or the ‘Right Line’ process. The Director of Internal Audit also referred to report 12 on increasing fraud awareness.

Resolved – That

1. members note the progress made in achieving the 2007/08 Internal Audit Plan; and
2. note the current Internal Audit evaluation of the adequacy and effectiveness of internal control in the MPS.

20. MPA Internal Audit plan for 1 April 2008 to 31 March 2009

(Agenda item 6)

The Director of Internal Audit, introduced a report and associated appendices setting out the proposed plan for the use of Internal Audit resources from 1 April 2008 to 31 March 2009. The annual plan was based on an updated Audit Needs Assessment and Risk Analysis for the next five years. He noted that the third audit title in appendix 3 should be ‘Police pay and conditions’ not ‘ACPO pay and conditions’. The Director of Internal Audit was asked if an audit of expenses was included the plan. He replied that there were related aspects in the follow up work and expenses would be audited again when changes to the current system had been implemented. Internal Audit would advise before hand and assist the MPS develop a sound system where necessary.

Resolved – That

1. the proposed use of Internal Audit resources be approved and the summary calculation of audit need and comparison to planned work set out in Appendices 1 and 2 be noted; and
2. the programme of Internal Audit work, set out in Appendices 3 to 6 be approved.

21. Statement of Internal Control – quarterly update

(Agenda item 7)

The MPA had been required to include a Statement of Internal Control (SIC) in its financial statements since 2003/04. This included details of the system of internal control and risk management, the key controls, and how effectively they were being deployed and highlighting any significant internal control issues and the relevant actions being taken to address them. In addition the MPS produced its own SIC providing details of controls it had in place to support internal control and risk management. Members received a report providing an update on progress in addressing the significant internal control issues included in the statement of accounts for 2006/07. The Treasurer noted that the appendix had been expanded following members’ comments at the last meeting. The Chair added that delegated authority was part of the governance discussion to come. The Director of Strategic Finance, stated that, in line with a request from the Authority, the high level scheme of delegation was being reviewed and being developed into local delegation.

Resolved – That progress in addressing the significant internal control issues included in the 2006/07 Statement of Internal Control for the MPA be noted.

22. MPS corporate governance framework including financial control

(Agenda item 8)

The Committee received a report providing an overview of the current MPS Corporate Governance Framework, which supported the Service in carrying out its functions in accordance with the powers delegated to the Commissioner by the MPA. It set out plans to strengthen and consolidate corporate governance including ensuring improved financial control and better coordination and communication of corporate governance across the organisation. It identified how work was being progressed, and the planned reporting arrangements to provide the Commissioner and the MPA with reassurance that key processes, structures and policies were embedded within a single, cohesive framework. The report also described the work required to comply with the revised audit requirements, which came into force in April 2007. This requirement included the production of an Annual Assurance Statement at the end of this financial year. The Director of Strategic Finance, said the report has been considered by the MPS Management Board, as part of the developments to ensure the MPS as a whole saw corporate governance as ‘business as usual’ and not something extra to its core business. She then described how the ‘temple’ model outlined in the report would be used as part of this process. She stated that her Directorate was the service lead on governance in the MPS and touched upon the committee structure that supported this lead.

The Chair stated that he saw the report as a sign of progress. He recognised that there had been difficulties between the MPS and MPA in this area, but once reconciled, this and the report at item 9 would provide a mechanism for achievement in the future. The Director of Strategic Finance, stated that the MPS must be able to own and manage it’s affairs internally. Reporting on corporate governance was made to the Performance Board on which the MPA was represented, the MPS also reported to this Committee, the process as described in the report was about embedding this in the organisation. The Chair agreed that it was critical that the MPS Management Board owned the process. He added that it would be helpful for members to receive a briefing note mapping the MPS governance structure, naming the various boards, who sat on them and what they did. The Director of Strategic Finance said this could not yet be provided as the MPS was reviewing its decision making processes. She did however undertake to provide information on the MPS’s Management, Investment and Performance Boards. The Chair agreed that the members should receive this initially, with a fuller briefing paper following when matters were clearer.

A co-opted member felt the report was in line with good governance, but suggested that a pillar was missing from the ‘temple’ on the framework around accountability and decision making. The Director of Strategic Finance, stated that this was included in the central pillar ‘reporting to and involving stakeholders’. Members welcomed the report but felt that accountability to the MPA was not given sufficient importance and that the MPA was more than just a stakeholder. The Director of Strategic Finance, responded that the ‘temple’ was a generic model and that it was a given that the MPA was part of the governance structure, but she was happy to elaborate this further in the next report. Members agreed that the ‘temple’ model was a good way of communicating the message to MPS staff, but had reservations about the language used in regard to the pillar ‘standards of behaviour’ which did not match that of the Together Programme. The Director of Strategic Finance, added that she had been in discussions with the lead for the Together Programme on how training on governance could be included in its training programmes.

Resolved – That

1. the report be noted;
2. the approach taken to support a robust corporate governance framework be endorsed; and
3. members receive a briefing paper mapping the MPS’s Management, investment and Performance Board, with a fuller a briefing paper mapping the MPA’s committee structure for governance when matters were clearer.

23. CIPFA/SOLACE good governance in local government framework/interim guidance note for police authorities and forces

(Agenda item 9)

This item was taken before item 8, as it made a more logical order. The report, introduced by the Treasurer, detailed the requirements of the new CIPFA/SOLACE Framework regarding the local Code of Governance and the Annual Governance Statement and in particular addressed the interim guidance for police authorities and forces. He stated that the Code of Governance was not yet completed. He suggested that the Annual Assurance Statement should be signed by the Commissioner and reflect the current SIC. He felt this would be a better option than a joint statement which would be a complex document to complete. He added that a gap analysis was needed in order to develop on a good code of local governance and would be brought to the next Corporate Governance Committee.

Members endorsed the report, but felt it concentrated on finance not people, for instance appendix 1 referred to codes of conduct but did not suggest reviewing HR policies. The Treasurer undertook to ensure this was addressed. Members also felt risk management in the MPA was omitted, and asked if this should be separated from MPS risk management. The Treasurer responded by saying that the Annual Governance Statement would be the MPA’s but it would include the preparation by the MPS of a separate Annual Assurance Statement which would outline the respective areas of responsibility and would support the authority’s Annual Governance Statement . He added that CIPFA required a named risk sponsor, and he felt this committee should fulfil that role. The Deputy Chief Executive noted that the MPA had a risk management process, its Business Management Group, chaired by the Chair of the Authority looking at risks monthly. The Chair requested that a briefing note be sent to members stating how risk management was carried out within the MPA.

Resolved – That

1. the change in requirements regarding the new Annual Governance Statement and implications for the existing Statement on Internal Control be noted;
2. the Authority’s participation in the pilot for the Police Authority Self Assessment Framework be endorsed;
3. the development of a local Code of Governance be agreed and that a fuller report be brought to the next meeting;
4. the Treasurer sign the Annual Governance Statement in addition to the Chief Executive and Chair of the Authority;
5. the Corporate Governance Committee be appointed risk sponsor; and
6. a briefing note be sent to members stating how risk management was carried out within the MPA.

24. Reference from full Authority

(Agenda item 10)

The Committee received a report inviting it to consider a response to proposals in relation to the implementation of Internal Audit and Health & Safety recommendations made at the Full Authority meeting on 22 November following discussion of issues arising from the misuse of corporate credit cards. The Chair suggested a system of personal signing off of recommendations as part of the governance process and that there was a need to look at the job descriptions of senior staff. He also requested a fuller report on a statement of annual assurance for sign off. The Deputy Chief Executive suggested that all job descriptions, in both the MPA and MPS, include reference to responsibility for audit and health and safety and that the Director, HR, should consider how this responsibility should be included in discipline codes and the Director of Strategic Finance, in reporting arrangements for dealing with internal audit recommendations.

Resolved – That a further report be received on how the MPA and MPS could be assured that the implementation of Internal Audit and Health & Safety recommendations were carried out.

25. Business risk management team update

(Agenda item 11)

A report on progress made by the MPS in the areas of corporate governance, business risk management and insurance management was received by members. It was reported that a members briefing on the MPS corporate risk register had preceded this committee meeting and that members had been advised that the register was to be the subject of a review.

The Committee was informed that an advantageous arrangement had been made in regard to insurance renewal. The Chair requested that the Committee's congratulations be conveyed to the MPS members of staff responsible.

Resolved – That

1. the progress to end October 2007 on corporate governance, business risk management, and insurance management be noted; and
2. the progress as captured by the Audit Commission / ALARM risk management Key Performance Indicator be noted.

26. Raising fraud awareness in the MPA and MPS

(Agenda item 12)

This joint report by the MPA and MPS made proposals to raise the level of fraud and corruption awareness in those responsible for conducting MPA/MPS business, with the aim of strengthening further internal control within the Authority – an issue identified by the Audit Commission in their 2006/07 Annual Governance Report to the Authority.

In the light of the financial implications contained in the report, members asked if the proposals represented value for money. The Director of Internal Audit and the Director of Strategic Finance, both agreed that the work should not be seen in isolation and that this was a route the MPA and MPS should take.

Resolved – That the proposed direction of travel to raise the level of internal fraud awareness within the MPA and MPS, including the use of the Audit Commission’s Changing Organisational Cultures Toolkit be endorsed.

27. Update on MPS health and safety performance

(Agenda item 13)

The Committee received a summary analysis of MetAir accident data comparing the periods November 2005 to October 2006 against November 2006 to October 2007. The Head, Safety and Health Risk Management, stated that he had been unable to provide data in relation to police community safety officers, however he undertook to provide a note to members (This has been done)

The Chair remarked that the major incident analysis, asked for at the last meeting, was helpful. He noted 20% of major incidents happened during training. He was informed that these mostly related to officer personal safety training, which by its nature had to be realistic. The Head, Safety and Health Risk Management, offered to provide more information in his next report.

A member referred to an incident involving a ceiling at the Training School at Hendon. The Director, Strategic Finance, undertook to provide further details to members. (This has been done)

Resolved – That the report be noted.

28. Proposed procurement exercise for an independent professional audit of health and safety management in the MPA and MPS

(Agenda item 14)

At its meeting on 22 March 2007, the Corporate Governance Committee agreed a proposal that an independent professional audit of MPA/MPS Health and Safety Management should be carried out every 3-4 years. A report was received proposing a procurement exercise to enable this process to be implemented.

Resolved – That an independent professional audit of MPA/MPS Health and Safety Management be carried out in 2008-09.

29. Preparations to maintain delivery of the MPS critical activities in the event of an influenza pandemic

(Agenda item 15)

The Committee received a report giving background information on pandemic influenza and reporting on action being taken by the MPS to put in place business continuity plans to ensure, as far as is practicable, that delivery of a police service to London be maintained during such a pandemic.

The Chair stated that he had attended a meeting on biological terrorism. The meeting had questioned the effectiveness off vaccination as it could trigger the emergence of a second more virulent phase of a disease. The meeting had also discussed the use of hydroxyl generators, a disinfection process that stimulated the body’s own defence system. The Head of Corporate Business Continuity Management added that the limitations of anti viral drugs were well known. Members were assured that influenza pandemic was contained within the risks in the risk register. The Chair recommended that the risk be extended to include that of biological terrorism.

Resolved – That actions taken to prepare for an influenza pandemic be noted and the procedures to be put in place in the event of a pandemic to maintain an acceptable level of service to the people of London be endorsed.

30. Equality objectives of MPA Committees - Corporate Governance Committee

(Agenda item 16)

This report set out an equality objective relevant to the work of the Corporate Governance Committee, namely:
Reports provided to Corporate Governance Committee which include data on staff/officers of the Service or Londoners as a whole provide a breakdown of all relevant equalities information.

This would, in conjunction with the objectives and workings of other MPA committees, demonstrate that the MPA was fulfilling its statutory and policy obligations in this area and assist the MPA to move through the levels of the Equality Standard for Local Government

Members asked if the objective was achievable given the limitations of MetAir data. The Deputy Chief Executive agreed this was an issue, but sufficient data should be available elsewhere.

Resolved – That members agree the recommended equality objectives, subject to confirmation by the full Authority.

31. Exclusion of Press and Public

(Agenda item 17)

Resolved – That the press and public be asked to leave the meeting during discussion of the remaining item of business because exempt information as defined in of Part 1 Schedule 12A of the Local Government Act 1972 (as amended) was likely to be made known.

32. High-risk audit recommendations

(Agenda item 18)

A report was received confirming the status of outstanding high-risk accepted recommendations made by MPA Internal Audit as at mid November 2007, and providing details of ongoing work to enhance the process by which the MPS respond to audit recommendations. The Chair noted the reduction in outstanding recommendations. The Director, Internal Audit, felt that two recommendations shown as completed were not, although action might be in place to complete the recommendation. The Chair felt this distinction needed to be made clear in future reports.

Resolved – That the status of all outstanding high-risk recommendations made in relation to MPS control systems by MPA Internal Audit be noted.

33. Loss of critical it and communication systems on 26 April 2007, as a result of the an electrical power failure at NSY

(Agenda item 19)

This report detailed the causes of the unexpected power failure during a pre-planned maintenance event at New Scotland Yard, as a result of which IT and communication systems were lost, and reported on the actions taken to minimise the risk of a future occurrence and to mitigate the impact should another power outage occur.

Resolved – That

1. the on-going activity arising from the lessons learnt and actions being taken by Property Services, Directorate of Information (DoI) and CO3 be endorsed; and
2. it be recognised that whilst DoI have plans in progress to migrate many systems away from New Scotland Yard, those systems would remain vulnerable to power loss until moved.

34. Health and Safety audit – sports clubs

(Agenda item 20)

A report was received updating members on the progress the sports clubs had made since the last Committee meeting on the recommendations contained within the Turner & Townsend Health and Safety Audit. It was agreed that a further inspection of the sports clubs be authorised to validate the sports clubs’ own assessments. The Deputy Chief Executive added that there was no overarching health and safety mechanism for the sports clubs, but this was something the MPA would expect to see in the future.

Resolved - That

1. the report be noted; and
2. an independent update audit on health and safety management of the sports clubs be authorised.

35. Sports clubs – oral update by Deputy Chief Executive

(Agenda item 14)

The Deputy Chief Executive stated that matters had almost proceeded as far as discussing leasing terms for the sports clubs. The clubs were being assured that at this stage the MPA only wished to achieve legal transparency about ownership and responsibilities in regard to the clubs. He added that once leases were agreed, the clubs would be free to make local arrangement in regard to maintenance. Members asked why this freedom was not extended to borough command units. The Director of Strategic Finance, stated that the clubs would still have to use the appropriate procurement mechanism and that any structural changes would have to be agreed with the MPA who would remain the freeholders.

Resolved - That oral report be received.

The meeting ended at 1.30pm

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