Committee:    

Governance Committee

Date:

16 July 2024

Title of report:

Assessment of the Corporate Governance Framework for 2023-24

By:

Assistant Chief Executive

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.

 

RECOMMENDATIONS: The Governance Committee is recommended to:

1.      approve the action plan for 2024/25 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 2024/25.

 

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.

 

2.       Assessment of the Corporate Governance Framework for 2023-24

 

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    Annually, the Chief Internal Auditor is required to provide an overall opinion on the Council’s internal control environment, risk management arrangements and governance framework to support the Annual Governance Statement and this is provided in the Internal Audit Annual Report and Opinion. Based on the internal audit work completed, the Orbis Chief Internal Auditor has provided reasonable assurance that the Council had in place an adequate and effective framework of governance, risk management and internal control for the period 1 April 2023 to 31 March 2024.

 

2.6     A review of the Council’s governance arrangements for 2023/24 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.

 

2.9     The recently published ‘Best value standards and intervention: a statutory guide for best value authorities’ has been considered as part of producing the Annual Governance Statement. The guidance notes that Annual Governance Statements should include lessons learned and steps taken to address mistakes and poor performance; how recommendations on improvement from external parties are being implemented; and how specific references to work on ongoing continuous improvement across all of the best value themes, which should be delivered at pace. Decisions taken on interventions are based on the priorities agreed in the Council Plan and are regularly reviewed through the quarterly Council Monitoring report. Improvements being implemented based on recommendations from external parties are set out within the AGS where the relevant inspection is referenced, such as the Ofsted Inspection and the LGA Peer Review. The targets set out at Annex E as part of the Directors Assurance Statements demonstrate the ongoing continuous improvement across all the best value themes and that they will be delivered at pace.

 

 

 

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.

 

3.3     The Governance Committee is therefore recommended to:

·         approve the action plan for 2024/25 as set out in Annex E of Appendix 1;

·         note that actions identified to enhance governance arrangements are reflected in Business Plans and that implementation will be monitored throughout the year;

·         confirm that Members are satisfied with the level of assurance provided to them through this report and the Council’s governance framework and processes;

·         consider any comments from the Audit Committee;

·         identify any significant governance issues that should be included in the Council’s Annual Governance Statement;

·         approve the draft Annual Governance Statement for signature by the Leader and the Chief Executive and publication within the Statement of Accounts; and

·         approve the Local Code of Corporate Governance for 2024/25.

 

 

 

PHILIP BAKER

Assistant Chief Executive

 

Contact officers:

Russell Banks, Orbis Chief Internal Auditor, 07842 362739

Bekki Freeman, Solicitor 07584 262522

Stuart McKeown, Member Services Manager, 01273 481583

Local Member:  All

 

BACKGROUND DOCUMENTS:  None