Financial management strategic programme

Report: 10
Date: 9 June 2003
By: Treasurer

Summary

The report sets out progress against the financial management strategic programme.

A. Recommendation

That members note the reported progress against the financial management strategic programme.

B. Supporting information

Introduction

1. The financial management strategic programme was presented to the former Finance Planning and Best Value Committee on 21 February 2002. The programme was intended to be a comprehensive statement of initiatives and actions in progress or planned to improve the Authority’s financial position and financial management in the MPS.

2. I undertook to provide members with an annual report on progress with an interim report at six months. The first interim report was considered by the Finance Committee on 24 October 2002.

Progress

3. Appendix 1 sets out the agreed programme with a description of progress in the right hand column. Some actions have now been completed as indicated. There is significant progress on other actions but there remains further work to be done. The nature of some actions is such that they will require continuing attention, but at some stage this should become part of the normal business of the organisation.

4. Some of the key successes in the programme are highlighted below:

• Following on from the Authority’s financial regulations, updated financial instructions have been issued and communicated within the MPS (ref 1b and c).
• The restructuring and strengthening of the MPS Finance Department is substantially complete. The number of qualified accountants has more than doubled and the senior management team is fully recruited. (Ref 1e and 11d)
• The budget preparation process is developing with increasing links with the planning process and good cooperation with the GLA. (Ref 2a, b and c)
• Considerable effort has gone into financial awareness training with plans to cascade further to inspectors and sergeants. (Ref 3d)
• Devolved financial management is continuing to develop in a controlled process. (Ref 4)
• The MPA was proactive in the review of the national funding formula and the resulting settlement for 2003/04 was relatively very favourable for the Metropolitan Police. (Ref 7a)
• A sponsorship and income generation unit is being set up in the MPS. (Ref 7e)
• The Authority’s balance sheet has been strengthened and will be further improved in the 2002/03 accounts with the potential for securing an unqualified audit opinion. (Ref 8c, 9b and c)
• A five year capital programme has been established. (Ref 10a)
• Risk management has moved forward with the appointment of a Director of Risk Management and this, together with improvements in claims management, should lead to more favourable insurance arrangements at this year’s renewal. (Ref 15a and b)
• The transfer of civil staff pensions to the principal civil service scheme has been completed. (Ref 15c)

5. Areas where significant improvement or development is still required include:

• Although substantial progress has been made in putting in place the internal control framework audit, evidence suggests that internal control remains weak. Mechanisms need to be developed to enable management to assure itself that controls are being complied with. (Ref 1d)
• The Commissioner has given his support to internal audit but progress in implementing high risk recommendations will continue to require close monitoring. (Ref 1h)
• The process for producing budget monitoring information has been improved but there remain question marks over the reliability of forecasts. (Ref 3b)
• There has been good progress in preparing for the implementation of activity based costing but substantial work lies ahead both to achieve a successful implementation and to derive positive benefits from this initiative. (Ref 5a)

Future reports

6. It is proposed to review the programme itself over the next two months. Actions that have been completed should be removed from the ongoing programme to avoid repetition in future progress reports. In some cases the emphasis has changed since the programme was first established and actions need to be redefined. New requirements may have emerged which should be included. The revised programme will be reported with the next interim progress report.

C. Equality and diversity implications

None directly related to the programme.

D. Financial implications

There are no financial implications not reflected in approved budgets.

E. Background papers

None

F. Contact details

Report author: Peter Martin, Treasurer, MPA.

For more information contact:

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

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