Annual governance statement

Report: 12
Date: 8 December 2008
By: Treasurer and Director of Resources

Summary

The Authority is required to include an Annual Governance Statement in its 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.

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 previous 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, MPA.

For information contact:

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

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