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Governance Committee |
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19 July 2022 |
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Title of report: |
Assessment of the Corporate Governance Framework for 2021-22 |
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By: |
Assistant Chief Executive |
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Purpose of report: |
To (i) provide information on compliance with the Council’s code of corporate governance and any changes to it that may be necessary to maintain it and ensure its effectiveness in practice; and (ii) gain approval of the Council’s Annual Governance Statement in compliance with the requirements of the Accounts and Audit Regulations 2015. |
1. approve the action plan for 2022/23 as set out in Annex E of Appendix 1;
2. note that actions identified to enhance governance arrangements are reflected in Business Plans and that implementation will be monitored throughout the year;
3. confirm that Members are satisfied with the level of assurance provided to them through this report and the Council’s governance framework and processes;
4. consider any comments from the Audit Committee;
5. identify any significant governance issues that should be included in the Council’s Annual Governance Statement;
6. approve the draft Annual Governance Statement for signature by the Leader and the Chief Executive and publication within the Statement of Accounts; and
7. approve the Local Code of Corporate Governance for 2022/23.
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1. Supporting Information
1.1 The corporate governance framework reflects both legislative and regulatory change and is based on revised guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Chief Executives and Senior Managers (SOLACE).
1.2 The Accounts and Audit Regulations 2015 require the Council to ensure that it has in place a sound system of internal control which facilitates the effective exercise of its functions and which includes arrangements for risk management. The Council is required to conduct an annual review of the effectiveness of its system of internal control and to prepare an Annual Governance Statement (AGS) in accordance with proper practices in relation to internal control to accompany its Statement of Accounts.
1.3 The production of an AGS is the final stage of an ongoing process of review of our governance arrangements including risk management and internal control. In summary the process must involve an organisation reviewing the adequacy of its governance arrangements, developing an action plan for improving those arrangements and communicating the framework to users and stakeholders.
1.4 As part of the review process this year, the Council has reviewed the format and content of the AGS and changes have been made. The new format of the AGS has been adopted to better set out the governance arrangements and better relate them to the principles in the corporate governance framework.
2. Assessment of the Corporate Governance Framework for 2021-22
2.1 The main policies and strategies that make up the Council’s corporate governance framework are set out in the Local Code of Corporate Governance attached as Annex C to Appendix 1. The Local Code of Corporate Governance was updated to reflect the revised CIPFA/SOLACE Framework that was published during 2016 and was agreed by the Governance Committee in March 2017. The Council’s Local Code of Corporate Governance sets out the main principles of good governance for the Council. The Code is based on existing good practice and the core principles of the CIPFA/SOLACE framework.
2.2 The CIPFA/SOLACE framework defines the principles that should underpin the governance of local councils. To achieve good governance the Council should be able to demonstrate that its governance structures comply with the core principles contained in the framework. It has therefore developed and maintained a Local Code of Governance including the core principles set out in the framework.
2.3 The seven principles included in the framework are:
- Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law;
- Ensuring openness and comprehensive stakeholder engagement;
- Defining outcomes in terms of sustainable economic, social and environmental benefits;
- Determining the interventions necessary to optimise the achievement of the intended outcomes;
- Developing the entity’s capacity, including the capability of its leadership and the individuals within it;
- Managing risks and performance through robust internal control and strong public financial management; and
- Implementing good practices in transparency, reporting, and audit, to deliver effective accountability.
2.4 The Council’s corporate governance framework is underpinned by a number of key documents and processes and the Local Code of Corporate Governance reflects the CIPFA/SOLACE Framework with the seven (7) core principles of the Framework being included as the Council’s principles of good governance. The main policies and processes that underpin the Council’s corporate governance framework have been reviewed against the seven core principles as set out in Annex A of Appendix 1.
2.5 Evidence shows that the Council continues to have in place good arrangements for corporate governance and that they are working effectively. A review of the AGS was undertaken by Internal Audit during 2021/22 and an opinion of Substantial Assurance was given. This opinion means that controls are in place and are operating as expected to manage key risks to the achievement of system or service objectives. The minor actions agreed for further improvement have been implemented.
2.6 A review of the Council’s governance arrangements for 2021/22 has been undertaken. Each document or process in the framework has been assessed and named officers have been required to provide an assurance as to whether the document is being complied with, the level of awareness of the document amongst staff and stakeholders, whether it reflects Council policy and best practice, and arrangements for reviewing it. Where further improvements are identified these are set out within Annex E to Appendix 1 and form part of departmental business plans for the year ahead.
2.7 In addition, all Chief Officers have signed their own Directorate Assurance Statement confirming that proper governance arrangements, effective risk management and a sound system of internal control are in place within their department. They are also asked to identify any exceptions and any actions being taken to address them. These actions will also be monitored through the relevant business plans. The Chief Finance Officer has signed an Assurance Statement regarding the Council’s governance arrangements.
2.8 The overall corporate governance assessment and review of effectiveness has also been informed by the sources of assurance set out in Annex A to Appendix 1. As part of the assurance gathering process, the CIPFA/SOLACE guidance on corporate governance was taken into account and is reflected in the Local Code.
3. Annual Governance Statement
3.1 A draft AGS from the Leader of the Council and the Chief Executive is attached at Appendix 1. It includes the mandatory disclosure of any significant governance issues identified through the Council’s governance and internal control arrangements.
3.2 Sound corporate governance is crucial if the Council is to continue to provide leadership, direction and control. It is important that Members are aware of the documents and activities that work together to provide assurances about the Council’s governance measures in place. The AGS provides an opportunity for the Council to assess and report transparently to the public how it ensures that it is doing the right things, in the right way, for the right people, in a timely, inclusive, open, honest and accountable manner.
PHILIP BAKER
Assistant Chief Executive
Contact officers:
Russell Banks, Orbis Chief Internal Auditor, 07842 362739
Bekki Freeman, Solicitor 07584 262522
Local Member: All
BACKGROUND DOCUMENTS: Pro formas returned by document “owners” setting out whether the various codes, policies and strategies are being complied with.