Financial Management Strategic Improvement Programme

Report: 6
Date: 19 October 2006
By: Treasurer and the Director of Resources for the Commissioner

Summary

This report sets out progress against the Financial Management Strategic Improvement Programme and proposes that further improvements in Financial Management should be incorporated in the Police Use of Resources Action Plan for ease of monitoring by Finance Committee.

A. Recommendations

1. Members are asked to note the reported progress against the Financial Management Strategic Improvement Programme.
2. Members are asked to agree that further improvements in financial management should be incorporated in the Police Use of Resources Action Plan.
3. Progress against the Police Use of Resources Action Plan will be reported to and monitored by Finance Committee at future meetings.

B. Supporting information

Introduction

1. The Financial Management Strategic Improvement Programme was endorsed by Finance Committee on 23 September 2004 (Agenda item 7 refers). The programme provided 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 against the programme. This report is the second of these annual progress reports.

Progress

3. Appendix 1 sets out the agreed programme with a description of progress in the right hand column. As members will see virtually all of these actions have now been completed. The nature of some of the actions is such that they require continuing attention but many of them have now become part of ‘business as usual’ for the organisation.

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

• The 2005/06 annual accounts were produced on schedule in accordance with the earlier statutory timescale.
• A 3-year efficiency savings plan has been developed and is monitored quarterly by members.
• There has been continuous improvement in the budgeting process, particularly the move to a 3-year financial planning timetable.

5. However, there are a number of areas where further improvement is required and these have been identified in the Resource Use PPAF domain in the HMIC Baseline Assessment 2005/06. Areas for improvement include:

• Further development of activity based costing data
• Further professionalisation of local finance staff, including rationalisation of financial support to ensure that support is provided in the most efficient and effective way.

6. The HMIC Baseline Assessment for police forces has been in existence for several years. In addition to this all Police Authorities are now subject to a Police Use of Resources assessment, which is a new self-assessment process conducted by the Audit Commission. The MPA has in the past two years undertaken informal assessments but this is the first year in which gradings will be officially published.

7. The HMIC Baseline assessment has been simultaneously conducted with the Police Use of Resources process although the HMIC have placed a heavy reliance on the work performed by the Audit Commission in order to avoid duplication of the inspection process. The Use of Resources assessment is a more rigorous process and covers the areas of Financial Reporting, Financial Management, Financial Standing, Internal Control and Value for Money. Within each of these categories are sub-categories, each having four levels of performance. Each level contains various criteria and must be achieved sequentially in order to achieve the next level up.

8. An action plan was originally developed to respond to the areas for improvement identified in the 2005/06 Police Use of Resources assessment attached at Appendix 1. All actions in the Financial Management Strategic Improvement Programme form part of this assessment therefore it is proposed that further improvements in financial management should be taken forward as part of the Police Use of Resources action plan. Furthermore, areas identified for improvement by the HMIC Baseline Assessment and the Audit Commission’s annual governance report will also be incorporated in the action plan. This will be reported to future Finance Committee meetings.

Abbreviations

HMIC

Her Majesty's Inspectorate of Constabulary

MPA

Metropolitan Police Authority

MPS

Metropolitan Police Service

PPAF

Policing Performance Assessment Framework

C. Race and equality impact

There are no direct equality and diversity issues arising from this report but potential implications of all aspects of the Police Use of Resources Action Plan will be considered as they are taken forward.

D. Financial implications

There are no direct financial implications as improvements in financial management will be taken forward within the budgets of the Finance function. Improvements in the use of resources should have an effect on the financial performance of the Authority.

E. Background papers

• Finance Committee 15 September 2005 Report 10 Financial Management Strategic Improvement Programme.
• Finance Committee 23 September 2004 Report 7 Financial Management
  Strategic Improvement Programme

F. Contact details

Report author: Sharon Burd, Director of Finance Services, MPS

For more information contact:

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

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