REPORT OF THE

STANDARDS COMMITTEE

PART II

CORPORATE GOVERNANCE, INTERNAL AUDIT AND INTERNAL CONTROL

1. The Committee has considered a detailed report on the outcomes of a review undertaken by internal audit, relating to compliance with the Code of Corporate Governance. They are pleased to report that, both corporately and departmentally, there is an effective framework of controls in place. They have suggested that there is scope for evidence of delegation and partnership arrangements to be properly recorded, and also for officers systematically to declare their interests in the same way as Members do. In the latter connection, publication of a Code of Conduct for Officers is still awaited.

2. The Committee has also considered the detailed annual internal audit report and opinion for 2003/04, which sets out the background to the opinion that Hampshire County Council has an effective framework of internal financial control. The report has been endorsed by Cabinet. There were several issues arising, notably procedures for placing children with foster carers; procedures for ensuring proper checks on individuals and agencies involved in providing services for children and other vulnerable people; and corporate information security. The Committee has suggested that these should all be the subject of detailed monitoring and should be drawn to the attention of the Governance Committee for them to pursue in future. Subject to that, the Committee is satisfied that the framework of controls is working well in practice and provides reasonable assurance regarding the effective, efficient and economic achievement of the County Council's objectives.

3. The Committee has also given approval to the statement of internal control for the signature of the Chief Executive and the Leader. This is a document which requires the County Council to identify the risks involved in achieving its objectives and to ensure that controls are in place to mitigate these through the application of a risk management process. It therefore goes far beyond the previous statement of internal financial control signed by the County Treasurer in previous years.

4. The items summarised in the three paragraphs above will in future be the responsibility of the newly established Governance Committee. The subject matter relates to Aims 5 and 6 of the Corporate Strategy.

J.W. STOCKS

Chairman

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