MPS corporate governance framework update

Report: 10
Date: 14 September 2009
By: Director of Resources on behalf of the Commissioner

Summary

This report provides a progress update on the Metropolitan Police Service (MPS) corporate governance framework. It includes updates on the areas identified by the MPS Annual Assurance Statement (AAS).

A. Recommendation

That members note the report.

B. Supporting information

Current corporate governance arrangements

1. The MPS continues its drive to achieve excellence in corporate governance. It uses an established ‘temple’ model of corporate governance, approved by Management Board (see Appendix 1) that reflects current good practice.

2. The results of a gap analysis of the MPS corporate governance framework against the elements of the CIPFA / SOLACE framework: “Delivering Good Governance in Local Government” informed the development of the corporate governance work programme. This work programme is managed and monitored through the MPS Service Improvement Board (SIB) with regular progress updates to this Committee.

Summary of progress

3. The corporate governance work programme consists of a number of workstreams. The status of each workstream is provided below with more detail set out in the Progress Update section later in the report.

Progress update

Pillar One: Organisational structures & processes

Embedding risk management

4. A number of actions are being progressed; updates have been provided as part of a separate paper to the Committee and the MPA’s Annual Governance Statement quarterly update.

Implementation of Developing Resource Management programme

5. The Developing Resource Management (DRM) programme, launched in July 2008, specifically focused on delivering efficiency and control projects primarily in the areas of Finance, Procurement and Strategy and Improvement. The purpose of the programme is to embed a rigorous set of control processes that will provide the foundation for the delivery of projects on time and the monitoring of benefits from those projects. Details of progress on the workstreams are set out below in paragraphs 6-12.

6. As we move into a deployment stage with further system changes in August and October we will be combining Contract Compliance Management (CCM) and Purchase-to-Pay (P2P) workstreams into one Procurement workstream to energise the integration and acceleration required. However, for ease of reference to previous reporting, the updates for the individual CCM and P2P workstreams are shown below.

7. Contract Compliance Management - The second phase of this project is now underway and consists of two waves of system changes designed to improve controls and embed contract compliance. The first of these waves will enable contract compliance in areas which were previously non-compliant for example Met Property Information Centre (MPIC), Fuel Cards and Limit Orders. The second will introduce a robust on-system process for approval of contracts.

8. The Purchase-to-Pay workstream has established a corporate-wide compliance rate of 78%. This is a 19% increase since April, when a series of road shows across the MPS to support compliance and the use of appropriate routes to purchase for all goods and services were held. Furthermore, all non SAP systems are now compliant which will improve performance figures further. Future deliverables will include the onboarding of new categories of spend and enhancements to MPS reporting capability.

9. Strategic Procurement Planning (SPP) - Procurement Services are in dialogue with relevant business areas to take forward the relevant potential savings opportunities that have been identified.

10. The data collection activities for the Scheme of Delegation (SoD) Full Solution have been completed during June and July. These activities have been supported by the scheme owners and lead accountants from each business area. A detailed training needs analysis will be conducted with training planned for October for all new and (if appropriate) existing approvers. The go-live date for implementing all eight financial approval levels across the systems Enterprise Buyer Professional (EBP), Enterprise Resource Professional (ERP) and Accounts Payable Express (APEX) is on schedule for 19 October.

11. Finance and Resources (F&R) Review/Modernisation - Progress towards full implementation of revised Business Group structures continues with minor delays to the implementation as well as some increased costs. Nevertheless, Territorial Policing (TP) remains set to 'go live' on 19 October. The effect of any delays to the F&R modernisation has not yet been quantified. Directorate of Resources (DoR) structural changes were implemented in June, with recruitment and selection brought about by these changes now complete. Practical 'Guidance for Finance Staff' and 'Guidance for Resources Staff' publications have been launched, with very positive feedback. Service Level Agreements and subsequent key performance indicators are in the latter stages of development, following extensive consultation with F&R users and providers. A number of training needs have been identified which will be delivered in a timely way to ensure service delivery is both maintained and improved.

12. Partnerships - A Partnership Central Steering Group has been set up and a Head of Partnership role has been created within the Strategy and Improvement Department (S&ID) to oversee the full and sustainable implementation of the Partnership Strategy's deliverables, and to provide support and management in order to improve partnership practices within the Service. The Partnership Toolkit is being embedded within the organisation and a Best Practice Network is being established.

Provision of detailed information on emerging market hotspots, especially around specialisms and specialist professionals

13. A wide range of stakeholders from across business groups have now been interviewed. Part of the dialogue focused on pressure points and hotspots and the need to ensure reliable data is captured during recruitment processes to provide evidence that applicants are attracted by the MPS reward and benefits offering.

14. Market data has also been gathered from external sources and information collated from stakeholders about current market issues. There is some evidence from recent recruitment activity undertaken in the Directorate of Information (DoI) of cooling in the market and improved response rates of higher quality candidates than in previous campaigns. The full report will be completed in September with specific reference to hotspots identified.

Review of Expenses Policy

15. The standard operating procedures for overseas and UK travel and expense claims have been revised with effect from 1 August 2009. Those in the MPS that are responsible for authorising overseas or UK travel have been advised to ensure that those undertaking travel are aware of the new guidance.

16. Wide consultation on a rationalised draft over-arching expenses policy has been ongoing. A revised target implementation date of autumn 2009 reflects the need to complete and assess consultation responses.

Management Board operating framework

17. Work continues on shaping the corporate decision making model with Management Board. Discussions are also planned with MPA officers to ensure, as far as possible, complementary processes/report formats are developed. We will shortly launch the new business case format and carry out an evaluation after three months - providing live feedback as appropriate.

Performance against Business Group Business Plans

18. In May, business groups provided a draft Monthly Management Report (MMR) that highlighted performance against their key deliverables, contained in the 2009-12 Business Group Business Plan. S&ID and Strategic Finance have been working together, using the draft, to prototype a combined financial and non-financial MMR. Work has also taken place to develop an approval to enable a quarterly report to be produced for the MPA with monthly reports by exception. A mock-up using the June data was discussed with the MPA in August.

Organisational learning

19. A paper on organisational learning was presented at the MPA’s Strategic and Operational Policing Committee in June. The paper received a good reception and members noted that the Deputy Commissioner, as Chair of Performance Board, is the MPS corporate lead on organisational learning.

20. DoR are working closely with HR Directorate to ensure organisational learning is a key part of the MPS performance management framework and information is captured as part of the corporate monthly management report (MMR) process.

Non-compliance framework

21. Work is continuing on implementing the non-compliance framework in respect of the management of MPS resources to address mis-spend on goods and services, expenses, travel and loss of goods. The MPS are in the process of increasing awareness of the required standards for personal responsibility for the safekeeping of Service assets.

Review of MPS Environment Strategy and development of Corporate Social Responsibility / Sustainable Development Strategy for 2010-13

22. Following the management review of the MPS Environmental Management Programme for 2008/09 completed in April, a full impact assessment will be completed as part of the collation of the Environment Report 2008/09, where analysis of data (including corporate health indicators) will inform future strategy and targets for 2009/10. The report will be published in September and will inform the development of the MPS Business Plan, submitted to the Mayor in November.

23. In addition, a Corporate Social Responsibility (CSR) Manager joined the MPS in July. The CSR Manager will provide additional resource to aid the development of the CSR strategy for 2010-13 and move reporting from ‘environmental’ to wider sustainability elements, as well as integrating these through the business plan process.

Service Improvement Plan

24. S&ID and Finance Services are working together on a joint summer challenge of the SIP as part of 2010-13 budget and business planning process with business groups. Each project is being quality assured for project management rigour, clear delivery plans and sound financials.

Business charge card

25. Barclaycards were introduced as the new business charge card in May 2008, with tighter criteria for the cardholder to account for their expenditure (within 30 days). Table 1 below shows the number and value of those items of Barclaycard expenditure unreconciled as at 30 July.

Table 1 - Unreconciled Barclaycard expenditure at 30 July

26. The average age of the 829 returns processed in July 2009 was 39 days. Against this average, 87% of July processed returns were completed within 60 days of the statement date, i.e. before the end of the one to 30 day overdue period. The reasons for the delay in processing some reconciliations to completion include:

• officers outside the Metropolitan Police District (MPD) and unable to submit claims in a timely manner and
• the time taken to approve and process claims, for example time in transit, return of forms to cardholders to remedy errors, omissions and/or, provide fuller explanations to supervisors.

27. The total spend on the Barclaycard scheme in August 2009 is £293k, 25% lower than the same month last year and 33% lower than July 2009.

28. Under the current scheme, the risk of fraud has been reduced by applying an annual spend limit on each cardholder. Of the 2,160 active cards, 79% (1,702) cardholders are on the lowest annual spend limit of £5,000.

29. Each business group has documented follow-up processes to ensure that effective supervision is implemented with details of current spend being passed to supervisors who receive a second copy of the statement. The local action plans incorporate a process of escalation of outstanding returns through the cardholder’s line management to the relevant Management Board member.

30. A regular monthly meeting of business group representatives monitor these processes and procedures and address the long-standing overdue cases and any ‘off policy’ expenditure.

31. The additional controls put in place on MPS business charge cards include:

• reduced time to account for expenditure
• greater local control over cards and
• better local visibility through improved management information

32. These controls continue to work well with fewer items not accounted for in time by cardholders and quicker, more effective, management intervention/escalation when cardholders do not account for expenditure in accordance with the timetable or the applicable rules and procedures.

33. A further lessons learned review will take place by the DPS and MPA Internal Audit to ensure the operation of the revised procedures continues to address all the issues identified in ongoing investigations.

Pillar Two: Reporting and involving the MPA & stakeholders

Review of all forms of public engagement and consultation

34. A preliminary meeting has been held with the MPA to discuss the way forward. Enhancing community engagement has been included as a key theme within the MPS Diversity and Equality Strategy, which is due for formal launch in October. DAC Capability and Reform in TP is establishing a Board including key representatives from across the organisation {Safer Neighbourhoods, Communities Together Strategic Engagement Team (CTSET), Diversity and Citizen Focus Directorate (DCFD), etc} to drive the work to refresh the strategy and monitor the associated improvement plan.

Safer Neighbourhoods panel training and business / youth engagement

35. The MPS has successfully completed the second stage of the Community Engagement Project (CEP). This round provided 32 seminars including two extra sessions (add-ons) in two boroughs that focused on the seven stage Safer Neighbourhood (SN) model. A total of 459 people attended with an average of 15 people per session, which is slightly up from last year.

36. Several youth engagement master classes have been organised to address the issue of how panels can engage with young people. The project’s priority over the next few weeks will be the Community Engagement Programme Conference, to be held in October. There are currently almost 80 people registered to attend. The MPA/MPS and Safer London Foundation (SLF) continues to work on the next syllabus.

37. Under the Presence strand of the five Ps, 32 town centre teams are providing an additional four officer patrols per day. For June, this equated to almost 50,000 additional patrol hours in busy town centres.

38. The Joint development of a MPS/City of London Police Business Policing Model is still in progress. The initial research stage is complete and we are into the implementation phase with the Victoria Corridor (Westminster) and London Bridge (Southwark) trying out a range of engagement and enforcement activities targeted towards the issues identified during the research stage. The evaluation and final report stage is due in December.

Pillar Three: Standards of behaviour

Enhanced MPA / MPS Fraud and Corruption Awareness Strategy

39. The Audit Commission has submitted an initial report on the findings of the fraud awareness workshops to MPA Internal Audit. We have received a copy of this draft report, which will be considered by Management Board in September.

40. On a separate but related matter, the Director of Internal Audit has written to Director of Resources with a view to revising the MPS Special Notice dealing with the prevention and detection of internal fraud. A draft Notice is planned to go to Management Board for approval in September.

Introducing the Equality Standard

41. The Equality Standard for the Police Service (ESPS) trial initially identified for four sites (including Enfield, Richmond, Specialist Firearms Command (CO19) and HR) was subsequently expanded to encompass DCFD. The trial ended in June and the MPS has now fed back its conclusions to the National Policing Improvement Agency (NPIA) at an action learning seminar. The MPS has been developing a scoring system to assess its own performance and this issue will be the subject of ongoing discussion with the national project team.

42. The national project team has now collated the feedback from the forces trials and revised the ESPS. The MPS expects that between July and November, the NPIA will be engaged in a formal endorsement process that will involve taking the final product to ACPO council, Home Office Equality and Diversity Strategy Board (EDSB), the Association of Police Authorities (APA) and the National Policing Board for sign off. It is the intention of the Tripartite (ACPO, APA, Home Office) Equality and Diversity and Human Rights strategy that forces should plan for implementation in December.

43. DCFD is already developing an implementation plan that will reflect the learning of the trial experience and look to integrate this into the existing MPS planning and financial processes. Work in this respect is already underway with agreement for the ESPS to be included into the Deputy Commissioner’s work under the ‘Performance’ strand of the five Ps.

C. Race and equality impact

The model of corporate governance set out in this report is based on the principles of openness; integrity; accountability and equality. The development of the framework therefore should have a positive race and diversity impact by ensuring that these principles inform the way in which the MPS operates. Furthermore, improved communication of the corporate governance framework aims to help staff understand how to apply these principles in their day-to-day work.

D. Financial implications

The work streams identified will be delivered within approved budgets.

E. Legal implications

1. The MPA are under a statutory duty to prepare and publish an Annual Governance Statement (AGS), under regulation 4 (2) of the Accounts & Audit Regulations 2003, as amended by the Accounts & Audit (Amendment) (England) Regulations 2006. The AGS is a general certification about governance issues, which is the primary responsibility of the MPA as police authority.

2. In order that the MPA can discharge its statutory duty referred to in paragraph 1 above, the MPS provides its certification to the MPA by submitting an Annual Assurance Statement (AAS), as recommended by CIPFA/SOLACE guidance “Delivering Good Governance in Local Government-Interim Guidance Note for Police Authorities and Forces in England and Wales (2007”) (“The Guidance”), which demonstrates how aspects of governance have been implemented within the police force.

3. The Corporate Governance Framework provides the supporting information which evidences that the MPS will ensure it has robust systems in place that demonstrate it is adhering to the strategic direction set by the MPA, and is delivering good governance through the delivery of many operational and financial aspects within a delegated framework, in accordance with Guidance and best practice.

4. Compliance with the Corporate Framework will also assist in raising standards, reduce risk of legal challenge and build public confidence by ensuring the MPS operates in a transparent manner.

F. Environmental impact

The work streams identified have varying levels of environmental impact / benefits.

G. Background papers

None

H. Contact details

Report author: Tanya Panchal and Sian Hartley, Strategy and Improvement

For information contact:

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

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