Archived decisions

Statement of Internal Control for Hampshire County Council

1 Scope of responsibility

    Hampshire County Council is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively.

    The Council also has a duty under the Local Government Act 1999 to make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

    In discharging this overall responsibility, the Council is also responsible for ensuring that there is a sound system of internal control which facilitates the effective exercise of the Council's functions and which includes arrangements for the management of risk.

    In accordance with the requirements in the Accounts and Audit Regulations 2003, this statement sets out how the Council has sought to meet these requirements during 2003/04.

2 The purpose of the system of internal control

    The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

    The system of internal control is based on an ongoing process designed to identify and prioritise the risk to the achievement of the Councils' policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

    The system of internal control has been in place at the Council for the year ended 31 March 2004 and up to the date of approval of the annual report and accounts. The next section outlines the internal control environment in which the Council operates and reviews the effectiveness of the controls.

3 The internal control environment

    The key elements of control are as follows:

    · The Council sets out its objectives through the corporate strategy. Linked to this are Service Plans, the Workforce Plan, the Asset Management Strategy, the four Cabinet priorities, the Local Public Service Agreement, the Community Strategy, the Revenue and Capital Budgets, Action Plans arising from Best Value Reviews and External Inspection reports.

    · The Council facilitates policy and decision making through the arrangements set out in its Constitution which operate in accordance with a range of policies and processes including financial regulations, standing orders, codes of conduct and procedures for delegation of decision taking.

    · The financial management of the Council is led by the County Treasurer and is integrated with and influenced by the processes set out above. It includes processes for forward planning of expenditure, consultation on budget proposals, setting and monitoring income and budgets, and completion of final accounts. All are intended to be accurate, informative, timely and within statutory requirements. The approaches taken are summarised annually in the Council's Financial Management Policy included in the Council's Budget Book.

    · In order to ensure compliance with policies, procedures and statutory requirements the Council has a range of controls and processes in place, as set out and reviewed below. These processes also help the Council to ensure the economical, effective and efficient use of resources, to secure continuous improvement in excising its functions, and to provide effective performance management and reporting.

Review of Effectiveness of Internal Controls

Control

Review of Effectiveness

Statutory roles of Monitoring Officer and Section 151 Officer to ensure internal control procedures are efficient and effective and are being complied with on a routine basis to ensure legality and sound financial standing.

Council, Cabinet, Committees and Chief Officers have a full range of professional officer advice to enable them to carry out their functions effectively and in compliance with statutory requirements. The External Auditor is satisfied with the Council's arrangements (Annual Audit Letter 2002/03).

Internal Audit provide independent and objective assurances across the whole range of the Council's activities.

The Standards Committee has approved the Internal Audit Plan for 2004/05 and noted the progress against the 2003/04 Plan.

The Chief Internal Auditor has provided an Annual Statement of Assurance which is considered in conjunction with the Final Accounts.

External Audit provide a further source of assurance by reviewing and reporting upon the Council's internal control processes and any other matters relevant to their statutory functions and codes of practice.

The Annual Audit Letter for 2002/03 commented positively on the Council's service performance and future plans, the management of its financial affairs and standards of financial conduct, and stated that the External Auditor was able to place reliance on the work performed by Internal Audit.

Risk Management policies and procedures are in place with the objective of ensuring that the risks facing the Council in achieving its objectives are evaluated, regularly reviewed and mitigation strategies developed.

A cross departmental Risk Management Board chaired by the Chief Executive has been established and actively manages and reviews on behalf of the Council the risks identified and recommends appropriate action.

Insurance policies and funds are in place and are regularly reviewed to ensure the Council is adequately safeguarded.

Provision of effective, efficient and responsive systems of financial management.

The Council's Financial Management Strategy is incorporated annually in the Budget Book. Progress against it is reviewed annually with the Final Accounts report. Procedures have been reviewed to ensure that the timetable for earlier completion of Final Accounts is achieved. As part of Comprehensive Performance Assessment process, the Council received the top rating of four for its policies and procedures in relation to use of resources. New and revised Financial Regulations were implemented from 1 September 2001. They have worked successfully to date.

Codes of practice are issued by external bodies in respect of services and processes, with which the Council is expected to comply.

The Council has complied with the 2003 CIPFA Code relating to Capital Finance & Treasury Management.

The role of the Standards Committee is to promote and maintain high standards of conduct by councillors and co-opted members.

The Standards Committee has met regularly in the last financial year .

Performance monitoring processes are in place to measure progress against objectives and to provide for remedial action where appropriate.

Regular performance monitoring reports are brought to the Cabinet showing progress against the Best Value Performance Indicators, Local Public Service Agreement targets and the Corporate Strategy as a whole.

Continued implementation of best value reviews and related improvement plans.

A programme of Best Value reviews is in place. These are reported to appropriate Performance Review Committees.

Reports received from external agencies and inspectorates. Relevant external inspection reports.

The Council's "excellent" status under the Comprehensive Performance Assessment was reaffirmed in December 2003.

Delivery of services by trained, skilled and experienced personnel.

The Council has demonstrated its commitment through Investors in People accreditation; its attention to training needs including for example the Leading Success programme and the proposed development of Hampshire Apprenticeship schemes; and the implementation of a County-wide Enterprise Resource Management IT Systems and IT2000 facilities to support staff. Overall planning for Workforce needs takes place through the annual Workforce Plan.

Signed : ______________________ Signed : ___________________________

    Chief Executive Leader