Agenda item

The Authority was required to produce an Annual Governance Statement as part of the year end process for 2018/19 along with the Authority’s financial statements, following a review of the effectiveness of the internal controls in place. The report and the statement set out the key elements of the Authority’s governance framework, how these had been evaluated, the outcome of the assessment of effectiveness and any areas for improvement.

The Audit Committee had previously approved a revised Code of Corporate Governance, in line with guidance produced jointly by CIPFA (Chartered Institute of Public Finance Accountants) and SOLACE (Society of Local Authority Chief Executives). The Code defines corporate governance as the way an authority 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.

In order to assess the effectiveness of the Authority’s current arrangements a self-assessment had been undertaken by the Executive Board who had considered the various sources of assurance that supported the core principles outlined in the report and the outcome of this was considered by Members under appendix 1 as now presented.  One of the key elements of this was external assurance on our systems, and this was provided by our auditors, both of whom provided positive reports, andby the HMICFRS Inspection which rated the Service as Good.

The assessment also considered recommendations made as part of last year’s Annual Governance Statement, and an update on the position in respect of these was considered as presented.

It was noted that the Internal Auditors undertook a review of Sources of Assurance in the first quarter of 2018/19, as part of the internal audit programme. This review confirmed that LFRS had sufficient, relevant sources of assurance to satisfactorily manage its risks in order to ensure compliance with the Code of Corporate Governance and achieve overall Service objectives.

The various reviews highlighted a number of areas for further improvement.  As part of the review, the Service was required to identify and disclose any significant internal control issues, of which there had been none, hence the overall conclusion was that the system of internal controls was adequate.

The Chairman commented that on page 43 of the agenda pack the key element of governance in relation to compliance with the principles of data transparency was assessed as ‘adequate’.  In addition the review of effectiveness on page 56 confirmed the corporate governance arrangements were in all cases ‘at least adequate’ with the majority areas good.  She then queried how all areas could move to a good assessment.  In response, the Director of Corporate Services confirmed that the term adequate did mean the Authority complied with the transparency code.  If there was an area that Members wanted to be looked at again, he would need to discuss it with the Executive Board who would consider any implications (time constraints, other priorities etc) to make a considered decision. 

Mr Baker added that the external auditors did consider and provide a view on the annual governance statement; including whether it had been produced in accordance with the guidelines and that it represented their understanding of the Authority.  He confirmed that substantial assurance had been received from internal audit and that if something did happen he would expect a recertification.

RESOLVED: - That the Committee noted and endorsed the self-assessment and the Annual Governance Statement.