Agenda item

The Committee considered the report of the Internal Audit Manager regarding the Annual Governance Statement which detailed the key elements of the systems and processes of the Council’s governance arrangements.

The Annual Governance Statement is a report produced at the end of the year on the control environment of the Council and is a statutory document that accompanies the statutory Statement of Accounts once adopted. The Statement provided a structure in which to consider the Council’s governance arrangements and their effectiveness. This ensured that major control issues were identified and action taken to address these issues.

Appendix 1 of the report detailed the framework for gathering the assurances and how that affected the relationship with partners, stakeholders and the community. Following the framework should ensure that the Council meets the six principles of corporate governance.

A timetable for the gathering of assurances to produce the Annual Governance Statement was set out in Appendix 2 of the report.

Appendix 3 showed the Manager’s Assurance Statement which included coverage of the Bribery Act, Safeguarding, Regulation of Investigatory Powers Act 2000 (RIPA) and frauds over £10K. The statement was intended to cover the operational, project and partnership responsibilities of the Heads of Service. It could also be used to highlight any concerns and subsequent actions required to improve governance throughout the Council.

Once these statements had been completed by the relevant Heads of Service they are passed through the Chief Executive and Deputy Chief Executive. The comments made on the statements are considered for inclusion in the Annual Governance Statement.

The Internal Audit Manager reported that a review of the layout of the Annual Governance Statement had been carried out during this year incorporating the requirements of the Chartered Institute of Public Finance and Accountancy (CIPFA) alongside findings and comments made in the document “Improving Council Governance – A Slow Burn”, issued by Grant Thornton in 2013.

The new layout aimed to make the information easier to read and understand with the different areas being given fuller descriptions of how the points are dealt with at Eastbourne. The Council’s external auditors BDO had also viewed the new layout and responded that the additional information had added contextual information around what the Council does to set priorities, manage performance and assess risk. A new section had also been added which reflected on the significant issued identified in the previous year – Theatre Reconciliations and how these had been addressed.

The governance issues and subsequent action plan had been compiled from a number of sources including reports of internal and external audit, the Corporate Management Team (CMT), Scrutiny and Standards reports, external review bodies, managers assurance statements, evidence from the Council’s Monitoring Officer and review by the Chief Finance Officer, Deputy Chief Executive and Internal Audit Manager.

The Internal Audit Manager advised that completed Managers’ Assurance Statements had been returned from all Heads of Service and from Eastbourne Homes Limited. Four of these Managers’ Statements mentioned minor concerns over capacity. It was acknowledged that with shrinking economic resources, the capacity profile of the organisation had changed and needed to be considered as part of ongoing and future restructures and changes in service delivery. It was felt that at this stage this did not represent a significant governance issue.

After consultation with the Council’s Corporate Management Team, the Internal Audit Manager reported that there was one area of internal governance that met the criteria to report as an issue that required disclosure. The area of significant governance issues was Catering and the issue with control weaknesses, identified when the service was taken back in-house. The Committee had been given assurances that the required controls were being put in place.

Once the Statement had been approved by the Audit and Governance Committee it would be given to the Chief Executive and Leader of the Council to sign before it is published alongside the Statement of Accounts.

Councillor Cooke made reference to the Annual Governance Statement and advised that the section which stated “the committee conforms to the best practice identified in CIPFA (Chartered Institute of Public Finance and Accountancy) was not correct and the Audit and Governance Committee was not fully compliant in terms of membership. Councillor Ungar responded that given the size of the authority, it would be difficult to omit Cabinet and Scrutiny Committee members from sitting on Audit and Governance Committee.

The Chief Finance Officer clarified that the Annual Governance Statement reported on the Council’s governance framework for the year ending 31 March 2014. It did however recognise the evolution of Audit and Governance Committee following a recent member briefing and this would be reflected in the final statement. Councillor Ungar requested that Councillor Cooke email his concerns that had been previously raised regarding terms of membership following the Committee and this would be taken on-board and incorporated into the final statement. This was agreed by the Committee.

The Committee thanked the Council’s Internal Audit Team for their significant efforts in preparing the Annual Governance Statement.

RESOLVED: (Unanimous) That the Annual Governance Statement for 2013/14 as appended to the report be approved subject to the caveat in respect of the Committees membership.