MAIDSTONE BOROUGH COUNCIL
CABINET
20 MAY 2010
REPORT OF THE CHIEF EXECUTIVE
Report prepared by Paul Riley
1. ANNUAL GOVERNANCE STATEMENT
1.1 Issue for Decision
1.1.1 To consider the draft Annual Governance Statement for 2009-10 to be signed by the Chief Executive and the Leader, and included in the Statement of Accounts. The combined Statements will be submitted to Council for approval on the 23 June 2010.
1.2 Recommendation of the Chief Executive
1.2.1 It is
recommended that Cabinet:
a) Consider and endorse the Annual Governance Statement attached
at APPENDIX A.
b) Refer the Statement to the Audit Committee.
1.3 Reasons for Recommendation
1.3.1 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.
1.3.2 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.
1.3.3 Cabinet
are 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.
1.3.4 The
review of the system of internal control covered by the Annual Governance
Statement required by Regulation 4 is dealt with by this report. 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.
1.3.5 With
reference to Regulation 6, the Audit Committee, at its meeting on 7th
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.
1.3.6 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.
1.3.7 The
Annual Governance Statement covers arrangements to:-
1 |
Establish principal statutory obligations and organisational objectives |
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2. |
Identify principal risks to achievement of objectives |
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3. |
Identify key controls to manage principal risks |
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4. |
Obtain assurance on the effectiveness of key controls |
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5. |
Evaluate assurances and identify gaps in control/assurances |
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6. |
Prepare
an action plan to address weaknesses and to ensure continuous improvement of
the system of internal control |
1.3.8 Attached
at APPENDIX A 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.
1.3.9 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 Cabinets views prior to signing the Statement for submission
to Audit Committee with the Statement of Accounts.
1.3.10 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.
1.3.11 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.
1.3.12 If Cabinet are minded to endorse the Statement it will then be considered 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.
1.4 Alternative Action and why not Recommended
1.4.1 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.
1.5 Impact on Corporate Objectives
1.5.1 The Statement incorporates best practice as anticipated by the Core Values included in the Strategic Plan.
1.6
Risk
Management
1.6.1 The Statement incorporates the essential elements of a well managed Council which ensures that many elements of the Strategic Risk Register are addressed.
1.7
Other
Implications
1. Financial
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2. Staffing
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3. Legal
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4. Equality Impact Needs Assessment
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5. Environmental/Sustainable Development
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6. Community Safety
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7. Human Rights Act
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8. Procurement
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9. Asset Management
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1.7.1 None.
1.8 Relevant Documents
1.8.1 Appendices
APPENDIX A Annual Governance Statement
1.8.2 Background
Documents
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
IS THIS A KEY DECISION REPORT?
Yes No
If yes, when did it first appear in the Forward Plan?
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This is a Key Decision because: ..
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Wards/Parishes affected: ..
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