Agenda item

Report of the Chief Executive (to follow)

Committee received the report of the Chief Executive, which sought Committee’s approval for the draft Annual Governance Statement for the 2010/11 financial year, in accordance with the Committee’s terms of reference (part 3, section 8 of the Constitution).

It was reported that it was necessary to prepare and publish an Annual Governance Statement in England, in accordance with proper practices to meet the statutory requirement set out in Regulation 4 (24) of the Accounts & Audit (England) Regulations 2011.  Its publication also incorporated and satisfied the requirement to produce a Statement on Internal Financial Controls (SIFC) under the Local Government Statement of Recommended Practice (SORP).

Members were advised that ‘proper practices’ were set out in the framework and guidance Delivering Good Governance in Local Government, which required the Council to develop and maintain a Local Code of Corporate Governance.  This had been approved by Audit Committee on 23^rd January 2008.  The Council was also required to prepare a Governance Statement in order to report publicly on an annual basis on the extent to which the Council complied with its own Code.  The Annual Governance Statement had been drawn up following a review of the Council’s framework.

It was reported that a review had been undertaken of the Council’s position and performance against the Local Code of Corporate Governance.  The results of the evaluation exercise were demonstrated in the Overview Charts, which were attached at Appendix A to the report, together with the Evaluation Report.  These showed that there had been gradual improvements in a number of areas and highlighted some areas where the financial climate and organisational change raised some additional challenges to maintaining effective governance.  The number of factors in which there remained a perceived shortfall in performance had reduced from 18 to 11, and none had received a shortfall of more than 1 point.  The Code of Governance consisted of 67 elements within 6 core principles, which underpinned the Council’s system of governance.  The core principles were set out in the report.

Members were advised that a document had been compiled which detailed the identified ‘sources’ of assurance for each element of the Code, ranging from a record of official policy and strategy documents, such as the Constitution, to the reviews such as internal audit and external audit reports to procedures such as one-to-one management meetings.  Individual ‘assurance statements’ had been sought from Service Heads in relation to internal control and governance arrangements within their areas, and these had been built into the overall evaluation.  Significant matters raised in those statements had been included in the Governance Statement.

It was reported that the Accounts & Audit (England) Regulations 2011 included a requirement that local authorities undertake an annual review of the effectiveness of their Internal Audit, and that this should form a part of the overall review of governance.  Details of the self-assessment that had been undertaken, in relation to ‘characteristics of effectiveness’, were shown at Appendix B to the report. 

Members were informed that they should also consider their own perceptions and experiences relating to the work and output of internal audit through the Audit Committee, and were advised that internal audit was operating effectively and could place reliance on its reports and work in considering the overall effectiveness of governance arrangements.

It was reported that the Annual Governance Statement attached at Appendix C had been drafted following the evaluation exercise.  The timescale for production of the Statement coincided with that for approval of the financial accounts of 30^th September 2011.  It was required that the Statement be approved at a meeting of the Council or delegated committee (i.e. Audit Committee) and follow a prescribed format. 

The statutory requirement was that the most senior officer (the Chief Executive or equivalent) and the most senior Member (Leader or equivalent) should sign the Statement and be satisfied that the document was supported by reliable evidence and accurately reflected the internal control environment., which emphasised that the document was about corporate controls and was not confined to financial issues.  The Statement covered the requirements to produce a statement on Corporate Governance and on Internal Financial Control and it was therefore recommended that the Section 151 Officer and Monitoring Officer also sign the Statement, as in previous years.

It was reported that actions relating to those ‘Significant Governance Issues’ identified in Section 5 of the draft Governance Statement had already been acknowledged and reflected in the Council’s Corporate Plan and individual Services’ Business Plans.

It was proposed by Councillor Knight and seconded by Councillor Sykes:

“That, subject to no comments being received by noon on Monday, 26^th September 2011 that indicate otherwise, the draft Annual Governance Statement for 2010/11 be approved for signing by the Leader of the Council, Chief Executive, Section 151 Officer and Monitoring Officer.”

Upon being put to the vote, Members voted unanimously in favour of the proposition, whereupon the Chairman declared the proposal to be clearly carried.

Resolved:

That, subject to no comments being received by noon on Monday, 26^th September 2011 that indicate otherwise, the draft Annual Governance Statement for 2010/11 be approved for signing by the Leader of the Council, Chief Executive, Section 151 Officer and Monitoring Officer.