Annual Governance Statement 2009/10

Report: 9
Date: 14 June 2010
By: Treasurer

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.

A. Recommendation

That

1. members agree the Authority’s Annual Governance Statement for inclusion in the statement of accounts for 2009/10; 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 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.

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 its purpose and intended outcomes for citizens and service users
• Reviewing the Authority’s vision and its 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, including the joint inspection of the police authority.
• Reports received throughout the year by the Authority’s Committees especially Corporate Governance Committee.
• The MPS Annual Assurance Statement
• The Director of Audit Risk and Assurance’s Annual Report including her review of effectiveness.

10. In addition as part of the process a review was undertaken of the Authority’s local code of corporate governance.

Significant Governance Issues

11. During 2009/10 the MPS have continued to strengthen their corporate governance arrangements through implementation of the corporate governance framework.

12. However there are areas where further improvements are needed as evidenced by the review of effectiveness. This review, has identified four significant governance issues which are as follows:-

13. Risk management – Whilst there continues to be improvements in the effectiveness of the framework for assessing and managing risk within the MPA and MPS with increased oversight within the MPA and MPS, continued development of the MPA and MPS corporate risk registers and the introduction of a risk maturity model in the MPS, further work is needed in embedding risk management across the organisation.

14. Assurance framework - The MPS has a significant number of internal inspection and review functions and although a number of these functions have a clearly defined role and operate to defined standards, there is a need to develop a corporate assurance framework. A review is currently underway led by the MPS which will assist in mapping the assurance functions and increasing their effectiveness.

15. Local control environment - Whilst there have been improvements in the local control environment within boroughs and specialist command units there remain issues with applying controls consistently at a local level. The local control environment will also be impacted by Finance modernisation and Transforming HR in the coming year.

16. Procurement and contract compliance - Good progress continues to be made in strengthening the control environment around procurement. However a number of issues around contract management have been identified which impact on our ability to ensure good value for money is being achieved including continued examples of ineffective planning which on occasion has limited the Authority’s ability to tender for goods and services competitively.

17. As with previous years, 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. Legal implications

None given.

F. Background papers

None

G. Contact details

Report author: Annabel Adams, MPA

For information contact:

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

Appendix 1: Annual Governance Statement

Position as at 31 March 2010 including plans for the financial year 2010-11

1. Scope of Responsibility

The Metropolitan Police Authority (MPA) is responsible for ensuring its business is conducted in accordance with the law and proper standards, and that public money is safeguarded, properly accounted for, and used economically, efficiently and effectively. The Authority also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

In discharging this overall responsibility, the Authority is also responsible for putting in place proper arrangements for the governance of its affairs and facilitating the exercise of its functions, which includes ensuring a sound system of internal control is maintained through the year and that arrangements are in place for the management of risk. In exercising this responsibility, the Authority places reliance on the Commissioner to support the governance and risk management processes.

The Authority has approved and adopted a code of corporate governance, which is consistent with the principles of the CIPFA/SOLACE Framework: Delivering Good Governance in Local Government. A copy is on our website at www.mpa.gov.uk or can be obtained from the Treasury Team, Metropolitan Police Authority, 10 Dean Farrar Street London, SW1H 0NY. This statement explains how the Authority has complied with the code and also meets the requirements of regulation 4(2) of the Accounts and Audit Regulations 2003 as amended by the Accounts and Audit (Amendments) (England) Regulations 2006 in relation to the publication of a statement on internal control.

A more detailed Statement of Assurance for the MPS signed by the Commissioner supports the Authority’s overarching Governance Statement.

2. The Purpose of the Governance Framework

The governance framework comprises the systems and processes, and culture and values by which the Authority is directed and controlled and its activities through which it accounts to and engages with the community. It enables the Authority to monitor the achievement of its strategic objectives and to consider whether these objectives have led to the delivery of appropriate, cost effective services, including achieving value for money. The system of internal control is a significant part of that framework and is designed to manage risk to a reasonable and foreseeable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the Authority’s policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them effectively, efficiently and economically.

The governance framework has been in place at the Authority for the year ended 31 March 2010 and up to the date of approval of the statement of accounts.

3. The Governance Framework

The key elements of the systems and processes that compromise the governance arrangements that have been put in place for the Authority and MPS include:

Identifying and communicating the Authority’s vision of its purpose and intended outcomes for citizens and service users

Authority members are responsible for the vision, strategic direction and priorities for the Authority, and are advised by the senior management team who also advise and support members in influencing and shaping the strategic direction and priorities for the policing of London. Environmental scanning forms an important part of the identification of local and national expectations.

MetForward is the Authority’s strategic framework providing details of the strategic priorities within which the Authority will operate over the next three years. Enabling the Authority to discharge its functions effectively and ensure delivery of the policing plan and other key priorities.

Within the MPS the annual Corporate Strategic Assessment process identifies, through environmental scanning, crime intelligence, strategic capability and stakeholder analysis, the policing priorities outlined in the Policing London Business Plan. Public consultation forms an important part of the process with a number of consultation processes being used to identify public priorities. The plan covers a three-year period and provides details of the MPS’s corporate objectives, outlining what the MPS intend to do to deliver these objectives. The plan also describes how the delivery of these objectives will be monitored through the use of Critical Performance Areas and targets. Full Authority agrees the plan on an annual basis.

In addition, both the Full Authority and the Strategic and Operational Policing Committee meet regularly to consider the strategic direction, plans and progress of the Authority and MPS. A range of member committees regularly review specific policy areas. These formal meetings are held in public and papers are available on the internet.

Reviewing the Authority’s vision and its implications for governance arrangements

The Authority’s vision was reviewed in 2008/09 at the start of the new four-year term of office, the outcome of which MetForward, was approved by Full Authority in April 2009. A new committee structure supporting this and enabling the Authority to adopt a more strategic approach to its oversight of the MPS and the setting of policy priorities was approved in 2008/09 and reviewed in 2009/10.

All committee work programmes have been reviewed to ensure actions are in place to deliver the Met Forward agenda. The annual review of the local code of corporate governance framework has not highlighted the need for any revisions.

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

The Strategic and Operational Policing Committee is responsible for monitoring performance and ensuring that MPS policy, planning and business change results in improved operational performance and productivity in respect of key priorities and targets. In addition, the Full Authority receives performance information on a monthly basis with members of the Authority using the information provided to hold the Commissioner to account.

Within the MPS the Performance Board is responsible for monitoring key performance.

The Authority regularly scrutinises budgets throughout the financial year to ensure they represent best use of resources. Budgets are scrutinised both as part of the business planning process, with all business group’s budgets being subject to members’ scrutiny of their savings and growth proposals and as part of budget monitoring with the Authority’s Finance and Resources Committee receiving regular monitoring reports. Additional scrutiny is provided by the Resources and Productivity Sub Committee.

As part of the Policing London Business Plan the MPS is required to demonstrate cashable efficiency savings of 9.3% over 3 years from 2008/09. Achievement in meeting these savings is monitored by HMIC. In addition, Finance and Resources Committee monitor progress through quarterly update reports.

Defining and documenting the roles and responsibilities of the Authority and MPS and the members and senior officers within each, setting out clear delegation arrangements and protocols for effective communication, and arrangements for challenging and scrutinising the services’ activity

The roles and responsibilities of each of the Authority’s Committees are clearly defined in their individual terms of reference. These include arrangements for challenging and scrutinising the MPS's activity.

The Authority’s Standing Orders, which are reviewed on an annual basis, provide for the delegation of Authority functions and decision making to committees, sub committees, panels and senior officers and includes a scheme of delegation that sets out those decisions that the Authority has delegated to its officers and the Commissioner.

A statement of member role, responsibilities and expectations was agreed by Full Authority in September. The statement aims to increase member awareness of their roles and responsibilities, thereby improving their effectiveness as a member of the Authority.

Developing, communicating and embedding codes of conduct, defining the standards of behaviour for members, officers and staff

Members are bound by the statutory Code of Conduct that form part of Standing Orders, and Standards Committee is responsible for ensuring that members are aware of their responsibilities under the code and receive guidance on ethical standards and behaviour. All members are offered training on standards and the code of conduct as part of the induction process. The Authority’s Standards Committee have developed key standard indicators that are used to monitor ethical and good practice standards in the Authority.

The Authority has in place a set of values and behaviours which support the corporate strategy. These are currently being reviewed to ensure they are aligned with MetForward, the Authority’s strategic framework.

The Good Conduct and Anti Fraud Policy forms part of standing orders and is applicable to both Members and employees of the Authority and the MPS and also all external persons that the Authority does business with. Following the success of the fraud awareness workshops provided during 2008/09 The MPA/MPS have agreed to jointly fund further Audit Commission workshops during 2010/11 to further raise fraud awareness within both organisations.

Within the MPS the Professional Standards Directorate are the lead for this area, with the MPS Professional Standards Strategic Committee overseeing strategy and policy. The Committee is supported by a professional standards support programme who are responsible for reducing specific risks identified with the operational command units. The strategic intelligence assessment assess risks relating to corruption and wrongdoing of MPS staff.

Reviewing and updating standing orders and supporting documentation, which clearly define how decisions are taken and the processes and controls required to manage risks

The Authority’s decision making process is clearly defined in standing orders and supporting financial instructions and these are reviewed on an annual basis to ensure they continue to be fit for purpose. A review of standing orders was last completed in 2009 with the Full Authority approving the revisions in June 2009 and this year’s annual review of standing orders is currently underway.

Within the MPS financial instructions and supporting procedure notes and manuals are reviewed and updated regularly to ensure they remain fit for purpose. A review of the scheme of delegation has taken place to ensure appropriateness of the scheme as part of the overall MPS corporate governance framework.

The Corporate Governance Committee is responsible for risk management activity within the Authority and MPS, ensuring that risk management processes and programmes operate effectively in accordance with the risk management statement and supporting strategies. There is a joint risk management statement between the Authority and MPS, which sets out the vision and objectives for risk management and the differing roles of the Authority and MPS.

Within the MPS there is also a corporate risk register, risk management policy and a business risk maturity model in place. Risk management is a standing item on the Governance Board and the risk managers together forum.

The Authority has developed a risk register that is reviewed regularly by the Senior Management Team, actions from which are embedded in corporate and teamwork plans

Undertaking the core functions of an Audit Committee

The Corporate Governance Committee provides the core functions of an Audit Committee and in line with CIPFA guidance considers issues relating to internal control, risk management and financial reporting, including the annual scrutiny of the statement of accounts. The Committee also provides a forum to discuss areas of concern raised either by internal or external audit as well as Health and Safety scrutiny.

In addition to the Authority members that sit on Corporate Governance Committee there are also two co-optees. These members bring additional expertise in their areas of competence i.e. health and safety and risk management.

In line with good practice a review of the effectiveness of the Corporate Governance Committee was undertaken during 2009/10. This concluded that the committee was dealing with its key areas of business in accordance with its terms of reference and CIPFA guidance. A number opportunities to change were recommended and these are in the process of being implemented.

Ensuring compliance with relevant laws and regulations, internal policies and procedures and that expenditure is lawful

The Authority has a duty to ensure that it acts in accordance with the law and various regulations. Standing orders and supporting policies and procedures have been produced to ensure officers, within the Authority and MPS understand their responsibilities. These, and compliance with them, are reviewed regularly both internally and by the appropriate committees, and all Committee reports must consider the legal implications of their proposals.

Professionally qualified staff occupy key roles throughout the MPS and the Authority with external advice sought as and when needed. Regular reports are made to the Authority on compliance with current initiatives and external requirements, with Internal Audit reporting on the effectiveness of the organisation’s systems of internal controls and making recommendations for improvement. During 2009/10 the role of Monitoring Officer was delegated to the Head of the Corporate Secretariat. The recently appointed Solicitor to the Authority will in future take on this role.

Within the MPS, all reports to Management Board and Investment Board must consider legal implications and the scheme of delegation requires legal advice to be sought from the Directorate of Legal Services before the MPS enters into any form of commitment. The Policy Co-Ordination Unit is responsible for overseeing all key aspects of policy, quality assuring all policies and overseeing the monitoring of corporate policies. Purchasing processes within the MPS have recently been reviewed to ensure compliance with policies and procedures.

Whistleblowing, receiving complaints from the public and handling citizen and other redress

Within the Authority the Corporate Secretariat provide the central point for receiving complaints sent to the Authority. The Professional Standards Cases sub-committee considers complaints made about police officers. The Committee will consider whether or not there is a matter to be investigated, arranging for an investigation if a need is identified.

Complaints made about the Authority or a member of staff are initially dealt with by the relevant line manager, being referred on to the corporate complaints officer and the Local Government Ombudsman if need be. Whilst complaints made against members are investigated by the Standards Committee.

Within the MPS the Confidence Satisfaction and Standards Unit are responsible for receiving, monitoring and resolving quality of service complaints. The Authority has access to the MPS’s complaints database and regular reports are provided to the MPA Professional Standards and Complaints Committee.

Arrangements are in place for members of the public to report internal fraud in the MPS or the Authority via its website.

The Authority has a whistleblowing policy for its own staff and the MPS have a “Reporting Wrongdoing Policy” which sets out the whistleblowing arrangements for the MPS, including compliance with the 1998 Public Interest Disclosure Act. Internal Audit is one of the contact points for reporting wrongdoing.

Identifying the development needs of members and senior officers in relation to their strategic roles, supported by appropriate training

The Authority’s appraisal process ensures that work related and personal development objectives of all staff within the Authority are properly identified, managed and monitored.

A new member assessment and development process has been put in place. All members now receive an annual assessment of their individual performance, including an optional training needs analysis, supplementing the training offered as part of the induction programme for all new members and the regular lunchtime briefings. In addition a member development programme is currently being developed.

Within the MPS the Personal Development Review process identifies, manages and monitors the work related and personal development opportunities for all staff. The Leadership Academy trains and develops new and existing managers through values based leadership development programmes and interventions. There are also structured induction/probation programmes and mandatory training for new supervisors and line managers. The human resources scorecard reports are discussed at monthly human resources board meetings, and training issues at training management board.

Establishing clear channels of communication with all sections of the community and other stakeholders, ensuring accountability and encouraging open consultation

The Authority and MPS work in partnership to consult on all relevant plans, policies and proposals such as the Policing London Business Plan and Budget and take the results of the consultation into account prior to making decisions. Areas include:

• Understanding Community Views on Policing - making arrangements, in consultation with the Commissioner, for obtaining the views of people in the area about matters concerning their policing.
• Consultation on Police Objectives – ensuring that in the development of annual policing objectives, the Authority has regard to issues raised in local consultative arrangements; that separate consultative arrangements are put in place by the Authority for each London Borough in consultation with its respective local authority.
• Crime and Disorder Partnerships – to ensure that local people’s views on crime and disorder reduction priorities are included in the development of local crime and disorder Strategic Assessment and in the planning and implementing the crime and disorder partnership plan.
• Local Strategic Partnerships, and Local Area Agreements – Police Authorities have a legal duty to co-operate in determining LAA targets and have regard to those targets linking LAA targets, Policing Plan targets and CDRPs
• Safer Neighbourhood Panels and the associated communication strategy are seen as key in engaging with the community.

A MPA and MPS community engagement commitment 2010-2013 (formally known as the community engagement strategy) has been drafted and action plans re its delivery are currently being drawn up.

The Community, Equalities and People Committee ensures oversight of community engagement, with the practical implementation of community engagement continuing to be supported by the work of a broad section of the Authority, through monitoring and scrutiny work and by the specialist support of its Engagement and Partnerships Unit.

A new round of Joint Engagement meetings is due to commence in May 2010 whereby key borough stakeholders will be brought together with the Authority’s Chair to facilitate joint problem solving on issues related to crime and public safety.

Incorporating good governance arrangements in respect of partnerships

The Authority has strengthened governance arrangements for Community Policing Engagement Groups (CPEGs) to ensure they are properly held to account for the funding they receive. Bids for funding for 2010/11 have been reviewed and approved by members of the Community Engagement and Citizen Focus Sub Committee.

As a responsible authority of each borough’s crime and disorder reduction partnership (CDRP), the Authority undertakes it duty through assigning a link officer to each of the 32 CPEGs. Ensuring the Authority’s views are represented in the general development of their work and in the development of borough based community safety priorities and their incorporation into the work of local strategic partnerships and their Local Area Agreement developments. The link officers also ensure there is two way communications between the CPEGs and the Authority. These officers, work with Authority members, supporting them when they are attached to Boroughs as link members. The Community Engagement and Citizen Focus Sub Committee’s terms of reference require oversight and guidance of the CDRP work and additionally the officers also report back through the internal management structure of the Authority.

Within the MPS there is a Partnerships strategy supported by a web-enabled partnerships toolkit, which provides guidance for all partnership working, MPS finance regulations and specific guidance for EU funding bids. As well as a partnerships best practice network, a partnership central steering group has been set up which has representation from across the Authority and MPS. A partnerships central database is in place which is updated quarterly and links in with the Medium Term Financial Plan (MTFP) and monthly revenue forecast. This database is also used to assess and manage risks. There are accounting arrangements in place for partnerships and these are specified in the finance manual. Budgets and fixed expenditure are separately accounted for in the finance system and monthly reviews and a year-end review of financial and operational performance of partnerships are carried out by Finance Services.

4. Review of effectiveness

The Authority has responsibility for conducting, at least annually, a review of the effectiveness of the governance framework, including

• The system of internal audit
• The system of internal control

A group of senior officers within the Authority have undertaken a review of effectiveness of the governance framework using as its basis the Authority’s self assessment framework and taking into account the work of internal auditors and also managers within the Authority who have responsibility for the development and maintenance of the governance environment. In addition, comments made by the external auditors and other review agencies and inspectorates have informed this review. The roles and processes applied in maintaining and reviewing the effectiveness of the governance framework are outlined below: -

The Authority

The Authority has overall responsibility for the discharge of all the powers and duties placed on it and has a statutory duty to ‘maintain an efficient and effective police force’. The Authority will from time to time receive reports on governance issues. However as detailed in standing orders, the Authority has delegated responsibility for the review and maintenance of the governance framework to Corporate Governance Committee and therefore that Committee discusses the majority of governance issues, with reports being referred to the Authority as and when felt appropriate. During the year and following concerns raised at Resources and Productivity Sub Committee with regard contract compliance, the Full Authority received a section 5 report from the monitoring officer. Progress in addressing this has continued to be monitored by the Sub Committee and there is clear action plan in place to ensure the Authority is in a compliant position by December 2010

The Metropolitan Police Service

The Commissioner has responsibility for conducting a review of the effectiveness of the governance framework within the MPS at least annually. This review is informed by the work of the Director of Resources, Director of Audit Risk and Assurance and managers within the MPS who have responsibility for the development and maintenance of the governance environment. In preparing the Annual Governance Statement for 2009/10 the officers of the Authority have placed reliance on this review and the MPS’s resulting Annual Assurance Statement.

Corporate Governance Committee

The Authority has delegated responsibility for reviewing and maintaining the effectiveness of the governance framework to the Corporate Governance Committee, with the Committee receiving regular reports on governance issues at its quarterly meetings. During 2009/10, and in addition to the regular update reports on governance and risk issues, the Committee also received a number of reports on specific governance issues, including reports relating to recording and reporting of gifts and hospitalities within the Authority and MPS, the Audit Commission review of Internal Audit, a separate review of the effectiveness of Corporate Governance Committee and the outcome of a review into the award of contracts to Impact Plus

The Committee reviews and approves the Annual Governance Statement for inclusion in the Annual Statement of Accounts and receives quarterly update reports on progress made in addressing significant governance issues included in it.

The Standards Committee

Standards Committee is responsible for promoting and maintaining high standards of conduct by members of the Authority and as part of the review and maintenance of an effective governance framework the Committee monitors key standard indicators on a regular basis.

The Assessment Sub-Committee of the Standards Committee convened twice during 2009/10 and considered complaints against an external member of an Authority committee and against a member of the Authority, in both cases deciding that no further action was needed. In addition a sub-committee of the Standards Committee was set up to consider a matter relating to the appointment of an external representative of the Authority’s Section Panel. The Sub-Committee decided to recommend to the Home Secretary that they be removed from the membership of the selection panel. The Committee also considered, jointly with the Greater London Authority’s Standards Committee, a report on a Code of Conduct complaint against a member of the Authority. In finding that there had been no breach of the Code the Committee asked for guidance to be produced, for members and officers, on their responsibilities in respect of confidential information to which they are a party by virtue of their role.

In addition to the regular standard indicator reports, the committee also considered reports with regard to new regulations for Standard Committees which came into force in June 2009, and a report on members expenses, gifts and hospitality

Internal Audit

In maintaining and reviewing the governance framework, the Treasurer places reliance on the work undertaken by Internal Audit and in particular Internal Audit reports to the Chief Executive and the Corporate Governance Committee and the Director of Audit and Risk and Assurance’s independent opinion on the adequacy and effectiveness of the system of internal control. For 2009/10 the Director of Audit and Risk and Assurance is of the opinion, taking into account all available evidence, that the internal control environment has improved and there is a positive direction of travel with clearly defined plans in place to address areas identified for further improvement but overall the control environment is not yet fully effective.

External Audit

External Audit are an essential element in ensuring public accountability and stewardship of public resources and the corporate governance of the Authority’s services, with their annual letter particularly providing comment on financial aspects of corporate governance, performance management and other reports. In 2009/10 the annual letter highlighted amongst other things the need for continued monitoring of the Authority's financial position and the strength of reserves; ensuring members continue to receive reports in relation to the collectability of Landsbanki deposits and the need for the Authority to ensure effective control of treasury management functions. The letter also made reference to the unqualified opinion given by the district audit in relation to both the financial statements and value for money conclusion.

Her Majesty's Inspectorate of Constabulary

Her Majesty's Inspectorate of Constabulary HMIC are charged with promoting the effectiveness and efficiency of policing, improving performance and sharing good practice nationally. HMIC delivered inspections in several areas during 2009/10, these included the police "scorecard". This assessed the approach to service delivery and value for money. There were two borough inspections - Westminster and Barking and Dagenham, both of which highlighted several concerns about the way the boroughs were being run. Action plans have been put into place to address the problems identified. Like all forces, the MPS's approach to delivering the policing pledge was assessed. The MPS were graded "fair". There were also several joint inspections of custody all of which found much good practice, but also significant areas for improvement. The Authority was also inspected by a joint team from HMIC and the Audit Commission. The joint team concluded, amongst other things, that the Authority is performing adequately and has made significant improvements in its governance of the MPS in the past three years, it is well placed to improve further. The inspection report also stated that the Authority is strengthening systems, processes and governance. The MPA was graded fair.

In addition to the above other review/assurance mechanisms such as the Health and Safety Inspectorate are also relied upon.

We have been advised on the implications of the result of the review of the effectiveness of the governance framework by Corporate Governance Committee and a plan to address weaknesses and ensure continuous improvement of the system is in place.

Significant Governance Issues

5. Significant Governance Issues

We propose over the coming year to take steps to address the above matters to further enhance our governance arrangements. We are satisfied that these steps will address the need for improvements that were identified in our review of effectiveness and will monitor their implementation and operation as part of our next annual review.

Signed:

Chair of the Metropolitan Police Authority

Catherine Crawford
Chief Executive of the Metropolitan Police Authority

Bob Atkins
Treasurer

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