Annual Governance Statement

Report: 9
Date: 7 July 2011
By: Treasurer

Summary

In accordance with the Accounts and Audit (England) Regulations 2011 the MPA is required to undertake a review at least once a year of the effectiveness of its system of internal control and approve the annual governance statement (AGS). The AGS 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 members:

1. approve the Authority’s Annual Governance for 2010/11
2. note the Metropolitan Police Service’s Annual Assurance Statement
3. approve the revised code of corporate governance

B. Supporting information

1. In accordance with the Accounts and Audit (England) Regulations 2011 the MPA is required to undertake a review at least once a year of the effectiveness of its system of internal control and approve the annual governance statement (AGS).

2. In previous years the AGS has formed part of the statement of accounts, however the new Accounts and Audit regulations provides that the annual governance statement now accompanies the statement of accounts, rather than being included with the accounting statements.

3. The content however, and purpose of the AGS remains the same, detailing the governance arrangements the MPA has put in place to ensure that its business is conducted in accordance with the law and proper standards, including arrangements for the management of risk.
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 Appendices 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.
• 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 which is attached at appendix 3.

Significant Governance Issues

11. During 2010/11 the MPS have continued to strengthen their corporate governance arrangements through implementation of the corporate governance framework. However there are areas where further improvements are needed as evidenced by the review of effectiveness. This review, has identified four significant governance issues within the MPS which are as follows:

12. Whilst the MPS has developed an effective risk management framework supported by a plan for improvement it is not yet embedded and operating consistently across the organisation.

13. The internal control environment has continued to improve and this has been achieved during a period of significant change but it is not yet fully effective.

14. Significant savings totalling £600M need to be delivered by 2014/15 to meet the reduction in grant announced as part of the 2010 comprehensive spending review.

15. The procurement control framework has improved considerably. However, key controls need to be fully embedded and consistently applied before the framework can be assessed as fully effective especially with regard compliance and contract management.

16. In addition the review has identified the need for the MPA to start to develop new governance arrangements in response to the Police and Social Responsibility Bill, will abolish the MPA and replace it with the Mayors Office for Policing and Crime.

17. As with previous years, progress in addressing these issues will be closely monitored by Corporate Governance Committee on a quarterly basis.

C. Other organisational and community implications

Equalities impact

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

Met Forward

2. Effective governance is essential in delivering Met Forward

Financial implications

3. Effective governance arrangements are essential in ensuring effective financial management.

Legal implications

4. The action plan addresses progress in addressing the governance issues included in the Authority’s Annual Governance Statement published in accordance with the Accounts and Audit (England) Regulations 2011 whereby, there is a statutory responsibility for the Authority to publish a statement of internal control.

Environmental implications

5. There are no direct environmental implications arising from this report which is submitted as part of the Governance process.

Risk implications

6. Implementation of the action plan will ensure that risks associated with the various governance issues included in the Authority’s Annual Governance Statement for 2010/11 are mitigated.

D. Background papers

None

E. Contact details

Report author: Annabel Adams

For information contact:

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

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