Decision details

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.

The Accounts and Audit Regulations, as amended, require that the Statement of Accounts includes an Annual Governance Statement signed by both the Chief Executive and the Leader of the Council.  This statement identifies the key controls in operation within the Council to give assurance to the production of the Statement of Accounts.

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 and the revised Local Code of Corporate Governance, detailed elsewhere on this agenda, is based on this publication.

Cabinet were reminded that in 2006 the Regulations were amended to add the following:

Regulation 4 – this requires the findings of the review of the system of Internal Control (now the Annual Governance Statement) to be considered by a committee of the relevant body, or by members of the body meeting as a whole.

Regulation 6 – this requires bodies to review the effectiveness of their system of internal audit once a year and for the findings of the review to be considered by a committee of the body, or by the body as a whole, as part of the consideration of the system of Internal Control referred to in Regulation 4.

The review of the system of internal control covered by the Annual Governance Statement required by Regulation 4 is dealt with by this report.  Cabinet were 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 on 7^th June 2010, will consider the report of the Head of Internal Audit and Risk Management which includes a review of audit work during 2009/10 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 in June 2010.

The Annual Governance Statement covers arrangements to:-

Attached at Appendix A to the report of the Chief Executive is the draft Statement for 2009-10 which has been compiled and updated based upon the Statement approved in June 2009 for the financial year 2008-09.

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 June 2010.

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 June 2010.