Agenda item

To consider a report by the Head of Internal Audit Services (copy enclosed) which presents the Draft Annual Governance Statement for 2012 / 13.

11.15 a.m. – 11.40 a.m.

Welsh Audit Office (WAO) National Review of Governance

 

Anthony Veale of the Welsh Audit Office presented a report regarding the National Review of Governance.

 

The review had been undertaken in February/March 2013.  Primarily it had been looking at the 2011/12 Governance Statement.  The Governance Statement had been a new requirement since 2010/11.

 

The background to the review was as follows:

·         Local Authorities required to prepare Annual Governance Statement (AGS) since 2010/11

·         Review of Governance was aligned with assessment requirements under Local Government Measure (LGM)

·         The Auditor General must audit arrangements within the Local Authority to meet LGM duties

·         Willingness to place reliance on LA’s own assessment

·         Study to provide assurance over assessment and help enhance this

·         Focus on identifying learning points for 2012/13 review of governance although the Council was already nearing the end of that process and may have more impact on future AGS.

 

Overall, improvements could be made to the way the Council produced the AGS.  The Council was already taking action to improve its processes going forward:

·         The Council’s review of its governance arrangements needed to be more wide-ranging, thorough and robust.

·         The Council had identified areas in need of improvement in its governance arrangements and was making plans to address them.

 

The Council’s review included some consideration of partnership controls but limited assurance included in the AGS in respect of the effectiveness of these partnership controls:

·         Limited assurance work undertaken to assess the effectiveness of these controls – “gap in the assurance framework”

·         Current AGS makes very limited reference to governance controls in relation to commissioning

·         New scrutiny arrangements give a higher profile to partnership issues

·         Council was taking action to improve partnership controls.

 

The Council had taken reasonable steps to evaluate arrangements for assuring effective control of governance arrangements but greater engagement and consultation was required in developing future AGS:

·         Documents to support the AGS drive officers to consider whether arrangements are effective

·         Mechanism for monitoring progress against recommendations were in place through regular meetings of Governance Group and monitoring of Action Plan

·         Internal Audit Service was risk based and ensured its work aligned with Corporate Risk Register and governance framework

·         Much wider engagement and consultation was required in the development of the AGS going forward with Members, CET and Heads of Service in particular.

 

The Council had identified and responded to lessons learnt from producing the 2011/12 AGS:

·         Both officers and members recognised the need for greater engagement in the preparation of future AGS

·         The Governance Group should support the development of the AGS going forward

·         The development of a controls assurance framework should:

o   Clearly identify key governance controls, the assurance on those controls and any potential gaps in assurance

o   Help the Corporate Governance Committee in providing greater challenge in respect of the AGS

·         There was a real opportunity for the Council to align its self-assessment programme with the development and productions of the AGS.

 

Anthony Veale of the WAO commended the Internal Audit Manager as controls assurance framework was not an easy document to produce and it had provided the WAO with all the information required.

 

The National Report would be brought back to Corporate Governance before Christmas 2013.

 

 

Draft Annual Governance Statement 2012/ 13

 

The Head of Internal Audit (HIA) presented the Draft Annual Governance Statement 2012/13 (previously circulated) to enable Members to challenge and recommend more work or improvements if deemed necessary.

 

The Draft Annual Governance Statement had been discussed at the previous Corporate Governance meeting and since then had also been presented at SLT.  Feedback had been received from Anthony Veale, Welsh Audit Office and also from SLT. 

 

The document was in draft form and would require the signature of the Chief Executive and the Leader before the end of June 2013.  The document would come back to the Corporate Governance Committee in September 2013.  There were various improvement areas and an action plan would be drawn up which would be kept up to date by the Governance Group comprising of the Scrutiny Chairs and Vice-Chairs, the Head of Legal and Democratic Services, the Head of Finance and Assets and the Internal Audit Manager. 

 

Following discussion the following issues were raised:-

·         Regarding the system of internal control, within the Draft Annual Governance Statement, it was stated that the system of internal control could not eliminate all risk and could only provide reasonable and not absolute assurance of effectiveness.  The HIA confirmed this would be raised within the Risk Management Report and would be set at CET level.

·         The need to improve engagement with the scrutiny function amongst stakeholders and how would this be achieved?  The Head of Legal and Democratic Services clarified that in respect of the guidance issued by the Welsh Government, there were improvements to be made.  Arrangements were in place for people to raise items to be submitted to scrutiny.  Issues to be considered further were whether greater use be made of Task and Finish Groups, whether members of the public be co-opted on to Scrutiny or given rights to speak at Scrutiny etc.

 

RESOLVED that subject to the above, the Draft Annual Governance Statement 2012/13 be accepted.