Annual Governance Statement - quarterly update

Report: 12
Date: 12 December 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.

This report provides the Corporate Governance Committee with an update on progress in addressing the significant governance issues included in the statement of accounts for 2010/11.

A. Recommendation

That That members note the progress in addressing the significant governance issues included in the 2010/11 Annual Governance Statement for the MPA.

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 line with the new Regulations the annual governance statement now accompanies the statement of accounts, rather than being included with the accounting statements. However, the content 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.

3. 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

4. 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, identified four significant governance issues within the MPS which are as follows:-

5. 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.

6. 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.

7. 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.

8. 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.

9. In addition the review identified the need for the MPA to develop new governance arrangements in response to the Police and Social Responsibility Act, which will abolish the MPA and replace it with the Mayors Office for Policing and Crime. A separate report on the MOPC governance arrangements is submitted to this meeting of the Committee.

10. 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.

C. Other organisational and community implications

Equality and Diversity Impact

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

Consideration of 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, Deputy Treasurer MPA

For information contact:

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

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