Annual governance statement 2007-08

Report: 7
Date: 12 June 2008
By: the Treasurer

Summary

The Authority is required to include an Annual Governance Statement in it’s financial statements. The Annual Governance Statements 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.

A. Recommendation

That

1. Members agree the Authority’s Annual Governance Statement for inclusion in the statement of accounts for 2007/08; and

2. note the Metropolitan Police Service’s Annual Assurance Statement

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 pervious years the Metropolitan Police Service (MPS) has produced a separate statement, now known as the 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.

5. The Annual Governance Statement and Annual Assurance Statement are attached at Appendix 1 and 2 respectively. A summary of the contents is provided below:-

Governance framework

6. The Annual Governance Statement provides details of the 12 areas of governance that are seen as being key to the Authority’s overall governance framework. These are as follows

• Identifying and communicating the Authority’s vision of it’s purpose and intended outcomes for citizens and service users
• Reviewing the Authority’s vision and it’s implications for governance arrangements
• Measuring the quality of services for users, ensuring they are delivered in accordance with the Authority’s objectives and that they represent the best use of resources
• Defining and documenting the roles and responsibilities of the Authority and MPS
• Developing, communicating and embedding codes of conduct, defining the standards of behaviour for members, officers and staff
• Reviewing and updating standing orders and supporting documentation
• Undertaking the core functions of an Audit Committee
• Ensuring compliance with relevant laws and regulations, internal policies and procedures and that expenditure is lawful
• Whistle blowing, receiving complaints from the public and handling citizen and other redress
• Identifying the development needs of members and senior officers in relation to their strategic roles, supported by appropriate training
• Establishing clear channels of communication with all sections of the community and other stakeholders, ensuring accountability and encouraging open consultation
• Incorporating good governance arrangements in respect of partnerships

Review of effectiveness

7. This section provides details of the role played by parts of the organisation seen as being key in maintaining and reviewing the governance framework.

8. In addition to the maintenance and review of governance that takes place as a matter of course throughout the year, the Authority are obliged to conduct an annual review of the effectiveness of the governance framework. The outcomes of this inform the significant issues section of the AGS.

9. The review was undertaken by senior officers within the organisation and used various sources of information to inform it. These included:-

• Reports produced by both internal and external auditors and the HMIC
• Reports received throughout the year by the Authority’s Committees especially Corporate Governance Committee.
• The MPS Annual Assurance Statement
• The Director of Internal Audit’s review of effectiveness.
• The (draft) Police Authority Self Assessment (PASA) framework. The framework (which is still being developed by the Association of Police Authorities) is intended to assist police authorities in assessing their effectiveness, and demonstrating how they add value to policing in their area. Completion of the framework was led by the Interim Assistant Chief Executive with support from the Authority’s Business Management Team and approved by Senior Management Team. The completed document is attached at Appendix 3 for information.

Significant Governance Issues

10. At the end of last year the MPS presented a report to Corporate Governance Committee that laid out their plans to strengthen and consolidate Corporate Governance across the organisation. A work programme has been developed and progress in implementing the various strands is reported to this Committee on a quarterly basis.

11. Implementation of the various strands is leading to improvements in Corporate Governance and will continue to do so in the future. However there are still areas where improvements are needed as evidenced by the review of effectiveness. This review, has identified four significant governance issues which are as follows:-

12. Internal Control – as evidenced by the Director of Internal Audit’s annual report the adequacy and effectiveness of internal control continues to fall below acceptable standards.

13. MPA HR Policies – as identified by the recently approved Local Code of Corporate Governance there is a need for the Authority to have effective HR policies in place.

14. Partnership Working – the need to improve governance arrangements with regard to partnerships was recognised as a significant issue both by the MPS Annual Assurance Statement and through the self assessment undertaken by the Authority.

15. Risk Management - Internal Audit have undertaken a review of risk management that concluded that although a framework was in place for the assessment and management of risk, it is not effective in supporting the integration and embedding of risk management across the MPS.

16. As with the Statement of Internal Control progress in addressing these issues will be closely monitored by Corporate Governance Committee on a quarterly basis.

C. Race and equality impact

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

D. Financial implications

Effective governance arrangements are essential in ensuring effective financial management

E. Background papers

None

F. Contact details

Report author: Annabel Adams, MPS

For information contact:

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

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