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Decision details
Annual Governance Statement
Decision Maker: Cabinet.
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
Purpose:
To agree the Annual Governance Statement 2010/11.
Decision:
1. That the Annual Governance Statement, as attached at Appendix A to the report of the Chief Executive, be endorsed.
2. That the Statement be referred to the Audit Committee.
Reasons for the decision:
The
Accounts and Audit (England) Regulations 2011 recognise the Annual
Governance Statement as a key statement in its own
right. To this end it is no longer
required to be “included in” the Statement of
Accounts. From 31st March
2011 the regulations require that the Annual Governance Statement
“accompanies” the Statement of Accounts
instead.
The Annual Governance Statement will be signed by both the Chief Executive and the Leader of the Council. The statement must identify the key controls in operation in the Council to facilitate the effective exercise of its functions.
It should be noted that the June 2007 CIPFA/SOLACE publication entitled Delivering Good Governance in Local Government (Framework) is considered ‘proper practice’. Therefore, the production of the Annual Governance Statement is based on this publication.
The
Accounts and Audit (England) Regulations 2011 make only minor
changes to the internal control requirements of the 2006
regulations. These are that:-
a)
The regulations now use the term “Annual
Governance Statement” as the statement produced as a result
of the necessary annual review of internal control.
b) The Annual Governance Statement should remain a statement in its own right and accompany the Statement of Accounts rather than be included within it.
The
review of the system of internal control covered by the Annual
Governance Statement required by Regulation 4 is dealt with by this
report. Members are reminded that the
Audit Committee will be considering the Annual Governance Statement
and, in particular, the response to the Statement itself and the
view taken by the Executive. If the
Audit Committee feels that there are any errors or omissions then
they will have a responsibility to refer this back to the Cabinet
for consideration, and if they feel strongly that any issues have
not been sufficiently addressed then the matter may be referred to
Council.
With
reference to Regulation 6, the Audit Committee, at its meeting in
June 2011, considered the report of the Head of Internal Audit and
Risk Management which included a review of audit work during
2010/11 with a recommendation that the Audit Committee consider the
effectiveness of internal audit. This
annual review is backed up by a three yearly review of Internal
Audit by the external auditors which took place in 2008/09 and
confirmed that Internal Audit meet all 11 standards of the CIPFA
code of Internal Audit.
Best
practice has identified that the Annual Governance Statement should
be considered separately from and before consideration of the
Statement of Accounts. The Statement of
Accounts will be submitted for final approval in September
2011.
The
Annual Governance Statement covers arrangements to:-
1 |
Establish principal statutory obligations and organisational objectives |
2. |
Identify principal risks to achievement of objectives |
3. |
Identify key controls to manage principal risks |
4. |
Obtain assurance on the effectiveness of key controls |
5. |
Evaluate assurances and identify gaps in control/assurances |
6. |
Prepare an
action plan to address weaknesses and to ensure continuous
improvement of the system of internal control |
Attached at Appendix A to the report of the Chief Executive is
the draft Statement for 2010-11 which has been compiled and updated
based upon the Statement approved in June 2010 for the financial
year 2009-10.
Officers’ views have been obtained on the revised
Statement along with external validation, particularly through
external audit assessment, but it would be helpful to have
Cabinet’s views prior to signing the Statement for submission
to Audit Committee with the Statement of Accounts.
Best
practice has identified that the auditors should be presented with
a Statement of Evidence to back up the Annual Governance Statement
and this has been produced and is available as part of the Local
Code of Corporate Governance.
An
action plan has been prepared including proposals to address those
areas where the Statement identifies that further work would be
beneficial to the overall governance arrangements. The actions will be subsumed into the overarching
Corporate Improvement Plan.
The Statement will be referred for consideration by the Audit Committee, which will be asked to approve it, after appropriate updates if necessary, along with the Statement of Accounts in September 2011.
Alternative options considered:
The Annual Governance Statement is a necessary part of the Statement of Accounts and must, therefore, be ultimately agreed by Audit Committee. However, it is possible for members to disagree with the detail of the Statement, to ask for further details to be included or evidence to be produced. However, it must be acknowledged that the Accounts and Audit Regulations require the full Statement of Accounts to be agreed by Audit Committee before the end of September 2011.
Reason Key: Policy Framework Document;
Wards Affected: (All Wards);
Details of the Committee: Minutes of the Corporate Governance Officer Working Group Local Code of Corporate Governance Accounts and Audit Regulations 2003 (as amended in 2006) Evidence to support the Annual Governance Statement
Representations should be made by: 29 April 2011
Other reasons / organisations consulted
Internal Communication/report to Management
Team
Consultees
Management Team
Heads of Service
Members
Contact: Email: paulriley@maidstone.gov.uk.
Report author: Paul Riley
Publication date: 13/07/2011
Date of decision: 13/07/2011
Decided: 13/07/2011 - Cabinet.
Effective from: 21/07/2011
Accompanying Documents: