Contents
Report 6 of the 11 September 2008 meeting of the Corporate Governance Committee, with a quarterly update on the Annual Governance Statement.
Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).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.
Annual Governance Statement – quarterly update
Report: 6
Date: 11 September 2008
By: Treasurer and Director of Resources on behalf of the Commissioner
Summary
The Authority is required to include an Annual Governance Statement in its financial statements. The Annual Governance Statement 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.
Corporate Governance Committee has requested a report providing an update on progress in addressing the significant governance issues included in the statement of accounts for 2007/08
A. Recommendation
That Members note the progress in addressing the significant governance issues included in the 2007/08 Annual Governance Statement for the MPA.
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.
Significant governance issues
5. For 2007/08 the following issues were included in the AGS:
6. 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:-
7. 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.
8. 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.
9. 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.
10. 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.
Action plan
11. An action plan to address these issues has been produced and is attached at Appendix 1. This includes an update on progress made in implementing each of the actions which in overall terms continues to be positive.
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
- Annual Governance Statement 2007/08
F. Contact details
Report author: Annabel Adams, Deputy Treasurer
For information contact:
MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18
Appendix 1: Action Plan
| Governance Issue 2006/07 | Agreed Action | Progress to date | Deadline | |
|---|---|---|---|---|
| 1. | The adequacy and effectiveness of internal control continues to fall below acceptable standards as evidenced by the Director of Internal Audit’s opinion of the adequacy and effectiveness of the MPS control environment. The main areas of concern are detailed below. | |||
| 1.1 | Non compliance with regulations and internal policies for example in relation to American Express and contract regulations and “Post event” and late procurement activities resulting in the need for contract extensions or single tender actions | Work is underway to improve the corporate governance framework and to develop resource management within the MPS through projects such as purchase to pay. Implementation of these will ensure controls are strengthened, compliant contracts are in place and examples of non-compliance reduced to a minimum. Progress in implementation of these will be monitored by the regular corporate framework update reports presented to corporate governance committee A set of 60 corporate health indictors has also been developed to assist the MPS and Authority in measuring compliance. | The MPS Management Board have approved a proposal to bring together a number of workstreams under a single governance structure managed as a “Developing Resource Management” programme, with the purpose (amongst other things) to minimise the risk of control failures across the MPS. Included in the programme are the following workstreams which should help in achieving this objective: -. The development of a consolidated database of all contracts. Further development of the purchase to pay project Implementation of scheme of delegation for the MPS to support the Authority’s Standing Orders. | March 2008 |
| 1.2 | Continued weaknesses in financial and business controls in local commend units | Finance Services and Territorial Policing are working with Internal Audit to ensure that those business systems that have been identified for improvement are adequately supported in 2008/9. The newly configured Quality Assurance Team in Finance Services will be taking the lead on this piece of work. The protocol being developed covering the work of internal audit and the response of the service to audit and review activity will ensure that audit recommendations are dealt with more promptly. | Internal Audit continue to work with Finance Services and TPHQ in ensuring the improvements are implemented. In addition, the Delivering Resource Management Programme will pick up many of the control issues identified by internal audit. | March 2008 |
| 2. | The Authority’s Local Code of Corporate Governance recognises the need to have effective MPA HR policies in place to enable staff to be effective in their role. Whilst the improvement programme has recognised this as being a key objective, progress to date has been limited. | A consultant has been appointed to draft a set of HR policies for the Authority. The expectation is that these will be drafted and in place within a tight timescale. Once approved these will allow a consistent approach throughout the Authority to a wide number of HR policies. Drafting and approval of the policies will be monitored by SMT on a regular basis. | A consultant has been appointed to draft a set of HR policies for the Authority. Policy priorities have been agreed with the union who have now been consulted on the first drafts, which have been submitted to SMT for sign off. Future policy priorities have been agreed with SMT | November 2008 |
| 3. | Governance arrangements for partnership working need to be reviewed and strengthened to recognise their increasing importance | The MPS have recently approved a partnership strategy and implementation plan and are in the process of developing a toolkit for partnerships which will include guidance to members of staff engaged in partnership working. Implementation of these will ensure that best practice is shared across the MPS and partnerships are supported by appropriate governance arrangements and comply with the Authority’s and MPS decision making processes. | The MPS has agreed a partnership strategy and implementation plan in June 2008 which is being progressed as part of the Developing Resource Management programme within the Service Improvement Plan. | December 2008 |
| 4. | Internal Audit has undertaken a systems review of the corporate risk assessment and management process that has identified a number of areas where the existing arrangements and approach could be improved. The main areas identified are as follows: - Although a framework is 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. An up to date risk management policy is not in place and the current focus on business risk does not encourage a more integrated approach across the organisation. The structures in place supporting the risk management process in the MPS are not fully effective and need to be reviewed to ensure that risk management is fully understood, valued and supported. Controls are not in place to ensure that risk assessment is adequately and effectively integrated into the business planning and performance management process. | Review the approach to business risk management to incorporate a process based on integrating all risk activities across the organisation | The MPS approach to risk management has been reviewed and a revised strategy drafted. Proposals within the implementation plan seek to align risk activity across the organisation from specialist and operational risk areas through to strategic and corporate risk. True integration of risk activities will take significant time but it is anticipated that corporate processes will be agreed by the target date. | 30 Sept 2008 |
| Clearly define the strategy for implementing risk management based on a framework that is integrated within the planning, performance and day to day management of the MPS | Good progress is being made on the revision of the risk management strategy and an initial draft and implementation plan has been forwarded to the Corporate Risk Review Group and other key stakeholders for comment. It is expected that the revised strategy will be submitted to the Corporate Governance Committee in December 2008. | 30 Sept 2008 | ||
| Set clear accountabilities across the MPS | Officer and staff accountabilities with regard to risk management will be reviewed as part of the risk management framework update in September. | 30 Sept 2008 | ||
| Embed risk management into the business planning and performance management framework | A review of corporate decision making is currently taking place with the view of establishing one corporate management process for the MPS. This review includes risk management and will provide a framework for embedding risk management within an annual cycle with robust corporate objectives which includes business planning and performance | 30 Sept 2008 | ||
| Apply a generic risk management cycle based around policing plan objectives and targets | ||||
| Design and implement a structure that acknowledges the need to simplify reports and escalate significant risk through the command chain in quick time. | Business Groups and Borough/ Operational Command units are currently working to improve risk reporting and escalation processes. Approaches are co-ordinated through the Business Group Risk Co-ordinators’ Forum. At the corporate level there will be links to the ongoing corporate decision making project and Performance Management Framework. | March 2009 |
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