The Committee is asked to review and approve the Annual Governance Statement, Local Code of Corporate Governance and County Wide Assurance Map 2017/18.
Theresa Mortimer, Chief Internal Auditor (CIA), presented the report. It was explained that the Council was required under the Accounts and Audit Regulations 2015 to produce an Annual Governance Statement (AGS) which was a public statement, detailing how the Council directs and controls its resources, which is signed by the Leader of the Council, Chief Executive and Director of Strategic Finance. It was noted that the AGS was published alongside the Annual Statement of Accounts.
Members were informed that GCC operate through a governance framework that had been summarised within a revised Local Code of Corporate Governance 2017/2018 and a Council Wide Governance Assurance Map, which was consistent with the seven core principles of the CIPFA/SOLACE Delivering Good Governance in Local Government framework, 2016 edition.
The CIA explained the Council’s Local Code of Corporate Governance was a public statement of the Council's commitment to these principles and specifically identified the key actions taken by GCC in relation to each of the core principles. It was noted that the code was reviewed and updated annually and should be read in conjunction with the AGS.
The CIA explained that to enable the development of the AGS, an embedded assurance framework was required, that not only provided the relevant assurances, but also a framework that underpinned and evidenced the statements made within the AGS.
A strengthened governance assurance process was implemented and provided a framework for the annual assessment of the effectiveness of the governance arrangements operating within the Council. This included the relevant Lead Cabinet Member overview and oversight, governance assurance statements obtained from Directors and Heads of Service
The CIA referred the Committee to page 233 of the report, which detailed the Council’s Governance Assurance Framework i.e. the three lines of defence model, which supports effective governance arrangements. In response to a question, it was noted that Cabinet Members were a key part of the governance assurance arrangements i.e. the second line of defence, providing oversight of governance arrangements.
Members were informed that the key 2017/2018 improvement areas identified to further enhance the governance arrangements, related to:
1. Future Financial Sustainability;
2. Ofsted Inspection of Children’s Services;
3. Contracting / Commissioning Care Services; and
4. New CIPFA guidance on Audit Committees.
It was noted that new CIPFA guidance was due to be published and the CIA would review the guidance and would support the Audit and Governance Committee to evaluate itself against the revised guidance and make recommendations for improvements where necessary.
The CIA explained that the Committee would receive management updates on actions taken to address the governance issues identified to the January 2019 Committee meeting.
Members were reminded that the CIA had provided a detailed presentation on the AGS and the Local Code of Corporate Governance at the training session on 18th July 2018.
In response to a question, members were informed that whilst there were generic principles/assessments that were required to be covered within the statement, the AGS included reference to all the key governance issues that were identified as part of the 2017/2018 annual review.
The Director of Strategic Finance added that since the signing of the AGS, a whistle blowing allegation covering probity issues in the Gloucestershire Fire and Rescue Service had been received by the Council. This has resulted in an investigation by Internal Audit. On completion of this investigation, Internal Audit will report to management outlining recommendations, which will form the basis of an action plan. This action plan and progress against it will be overseen by the Audit and Governance Committee, thereby providing the relevant assurances that these recommendations are being addressed in a timely manner.
This report and action plan will be presented at the October 2018 Audit and Governance Committee. The Committee agreed that this action should be included within the AGS action plan. (Action – TM)
The Committee referred to the Council Wide Assurance Map and the red, green, amber indicators. Some members questioned the reliability of the management assessments provided. Members felt that lessons needed to be learnt and it was essential that officers were open and transparent when completing the Assurance Statement questions.
The Committee discussed the gaps in service as recognised by the Ofsted inspection, members felt if all the areas were marked as green then it would present an untrue and unrealistic picture of the service and could raise serious questions, particularly in terms of safeguarding. The Director of Strategic Finance added that not all areas in terms of Children’s services were green and the Authority was on a journey to improve.
In response to a question, it was noted that the assurance map questions were not in a hierarchical order, the CIA added that it was not within her remit to prioritise the principles as they are based on CIPFA/SOLACE guidance and all had equal status.
The CIA explained that Internal Audit would include within the annual audit plan 2019/2020 an audit on testing the adequacy of the statements made within a selected sample of the assurance statements, to provide the Committee with the independence assurance on their integrity. Members welcomed this approach proposed. (Action – TM/JW)
The CIA reaffirmed that the AGS was a high level statement of the governance arrangements operating within the Council and that the AGS and associated action plan is underpinned by a governance assurance framework i.e. the three lines of defence model. In respect of children services, the Committee’s attention was referred to Page 246 of the report, which provided detailed information in relation to the actions taken in relation to the Ofsted report.
In response to a question, the CIA explained that the AGS interlinked with the Risk Management activity arrangements, which would highlight any red residual risks. The risk register was being monitored by the Overview Scrutiny Management Committee.
During the discussion, a member asked if the Council had cultural issues in one service area, how officers/members would know if the Council had similar cultural issues within other service areas. Discussions were then held in relation to the whistle blowing policy. The Director of Strategic Finance explained that whistle blowing forms part of the Council’s governance arrangements and enables employees to speak up if they feel something is not right. The Monitoring Officer added that all whistle blowing allegations were taken seriously and acted upon swiftly.
The Committee was reminded that the Statement of Accounts and AGS should be read in conjunction to give a balanced view.
During the discussion, members agreed that the Committee would receive updates on the AGS actions taken to address the issues identified, at the January 2019 Committee meeting.
It was agreed, to accept the Annual Governance Statement and Local Code of Corporate Governance 2017/18, subject to the inclusion of the additional GFRS action as agreed, within the AGS Action Plan.
That the Committee reviewed and approved the Annual Governance Statement and Local Code of Corporate Governance 2017/18, and the inclusion of the GFRS action as agreed, within the AGS Action Plan.
That the Committee would receive an update on actions taken to address the governance issues identified, at the January 2019 Committee meeting.