Archived decisions

Aim: To raise Use of Resources overall score from 3 to 4

This requires improvement of

· both financial management and internal control from 2s to 3s, and

· VFM and at least one of financial reporting or financial standing from 3s to 4s.

Ref

KLoE and Recommendations

Impact on scores

1

Financial Reporting

To raise score from 3 to 4, need to improve both 1.1 and 1.2

1.1

· Annual accounts

Continue to apply rigorous criteria in monitoring and reporting

1.1.12 (4)

· Ensure that accounts presented for audit are free from error

No specific action

1.1.13 (4)

· Further enhance supporting documentation by ensuring comprehensive and indexed, and include analytical review

Carry out analytical review on 2005/06 accounts, and enhance indexing - NG

1.2

External accountability

Raise score from 2 to 3

1.2.4 (3)

· Carry out consultation with stakeholders to establish preferred form of summary financial information to be published

Document how this has featured in Hampshire Now, review the outcomes and repeat that or a related process at a frequency to be determined - NG

1.2.5 (3)

· Publish accessible and intelligible summary financial information in accordance with results of consultation

Follows on from the above

2

Financial Management

To raise score from 2 to 3, need to improve at least one of 2.1, 2.2 or 2.3

2.1

Plans for delivering strategic priorities

Raise score from 3 to 4

2.1.10 (2)

· Carry out cash flow monitoring to inform investment decisions

Set out a summary presentation of the cash flow monitoring carried out for Treasury Management purposes - NG

2.1.19 (3)

· Regularly review financial management arrangements to ensure they remain fit for purpose.

Continue to keep the Financial Management Strategy under review - PCK/NG

2.1.21 (4)

· Incorporate joint plans agreed with partners and other stakeholders into the MTFS

Build in cross-references to LPSA, LAA, and Partnerships such as for Mental Health, Crime and Disorder, Youth, Children Act issues - NG

2.1.22 (4)

· Model balance sheets and cash-flows over the 3 years of the MTFS.

Assess what can be done at outline level without further detailed work, which is not considered to be good value for money - NG

2.2

Managing performance against budgets

Raise score from 2 to 3

2.2.15 (3)

· Develop a training programme to provide regular training on financial issues for members and non-finance staff.

Develop a four-year strategy for such training based around the political term - PCK

2.2.18 (3)

· Relate budget monitoring to operational activity indicators that are lead indicators of spend.

Require this in a specified format for the first monitoring reports in 2006/07 and develop activity drivers (eg headcount, input measures) which drive spending - PCK/TMT as a whole/Consultancy involvement

2.2.19 (3)

· Report regularly to senior management the progress in achieving planned savings and efficiency gains, with developed action plans.

Continue (as in revised budget 2005/06) to require this as part of standard format

2.2.23 (4)

· Provide the Executive with fully accrued financial monitoring reports as appropriate.

Review outcomes from 2005/06 pilot exercises for in-year closure, and assess what aspects it is sensible to take further - NG

2.3

Managing the asset base

Raise score from 2 to 3

2.3.3 (2)

· Maintain asset register up to date

There are three requirement:

· PB&R to update register for changes (eg property transactions as they occur) - Sue Lapham to pursue on behalf of JP

· PB&R to ensure that five-year cycle for re-evaluation takes place - SL to pursue on behalf of JP

· System is used be resolved to facilitate this input - NG to take up with Enterprise

2.3.10 (3)

· Report to members on maintenance backlog levels so that they can accept or plan to reduce the level of backlog as appropriate.

Ensure that a note is available (eg within the asset management plan) to set out policies and intended impact - NG

2.3.11 (3)

· Develop a set of local performance measures in relation to assets that evaluate asset use in relation to corporate objectives.

Liaise with Environment and PB&R to develop (eg energy use, office space per fte, % buildings disabled accessible, maximisation of capital receipts, reduction of backlog by closing poor assets) - NG/EK

2.3.12 (3)

· Ensure that investment and disposal decisions are based on thorough option appraisal and whole life costing.

Take forward through capital appraisal working group - NG

3

Financial Standing

To raise score from 3 to 4 need to improve 3.1 from 3 to 4

3.1

Managing spending within available resources

Raise score from 3 to 4

3.1.8 (2)

· Set and monitor targets for income collection and recovery of arrears based on the age profile of debt.

Incorporate targets in quarterly reports to TMT on 2006/07 data - CM/BI

3.1.12 (4)

· Members to monitor key financial health indicators and set challenging targets

Review Financial Management policies to ensure there is enough quantification to enable this - PCK/NG

3.1.13 (4)

· Monitor the opportunity costs of maintaining the levels of reserves and balances and compare them to the benefits accrued.

Policy change not required, but prepare appropriate note - NG

4

Internal Control

To raise score from 2 to 3 need to improve 4.1 or 4.3 from 2 to 3, or 4.2 from 3 to 4

4.1

Managing significant business risks

Raise score from 2 to 3

4.1.6 (3)

· Review and update the risk management process at least annually

No new action required

4.1.8

· The council has a business continuity plan in place which is regularly reviewed

Clarify requirements and identify appropriate contributors EK

4.1.9 (3)

· Provide risk management awareness training for those members with specific responsibility for risk management

Liaise with Michelle Smith to provide for Governance Committee - EK

4.1.10 (3)

· Provide regular reports to the member committee with responsibility for risk management, and ensure that corporate business risks are being actively managed including reporting to full council at least annually.

Liaise with Michelle Smith to ensure reports to Governance Committee and to Cabinet annually - EK

4.1.11 (4)

· Designate a senior officer and member as joint champions with overall responsibility for embedding risk management throughout the Council

Check with Michelle Smith whether she or new Risk Manager are to take officer role, ask the Governance Committee to appoint one of their members as a Champion - EK

4.1.13 (4)

· Ensure all members with specific responsibility for risk management receive risk management awareness training.

Build into Member training plan - PCK / Michelle Smith

4.2

Arrangements are in place to maintain a sound system of internal control

Raise score from 3 to 4

4.2.11 (2)

· Have partnership agreements in place for all significant arrangements

Internal Audit to collect and validate the returns from departments to show this - EK

4.2.15 (3)

· Ensure that an appropriate members' group provides effective leadership on audit and governance issue, is proactive and has a forward programme of meetings and agenda items to ensure comprehensive coverage of all responsibilities in relation to the internal control environment

Produce annual forward plan of regular topics (to be supplemented by specific items) by meeting for Governance Committee - EK

4.2.21 (4)

· Establish an audit committee that is constituted as a full committee of the council and is independent of the executive and scrutiny functions

Look to phase in for next administration (though not now a `must have' under KLoE) - JP/EK

4.2.22 (4)

· Take steps to ensure that the audit committee chair has either previous knowledge of or has received appropriate training on financial and risk management, accounting concepts and standards and the regulatory regime.

Build into Member training programme - PCK

4.2.23 (4)

· Provide audit committee members with specific training relevant to their responsibilities

Build into Member training programme - PCK

4.2.25 (4)

· Ensure standing orders, financial instructions and the scheme of delegation have specific reference to partnerships

Check and review as appropriate - EK

4.2.26 (4)

· Ensure partnership agreements are subject to regular review and updating

Clarify the requirements from departments (consistent guidance on what is a partnership for these purposes, mechanism for reporting to the Centre, format requirements for that, timing) and report to TMT (February 2006) on the proposals for this and the outcomes from the 2005/06 audit of this area - EK

4.3

Arrangements are in place to promote and ensure probity and propriety in the conduct of the business

Improve score from 2 to 3

4.3.10 (3)

· Ensure the Council is proactive in its role to raise the standards of ethical behaviour amongst members and staff, including the provision of ethics training.

Liaise with Jeff Pattison to ensure roll- out of ethical training is proceeding - EK

4.3.12 (3)

· Ensure that members and staff are aware of the need to make appropriate disclosures of gifts, hospitality and pecuniary interests and that there is evidence that appropriate disclosures are being made in the registers and are regularly reviewed

Liaise with Jeff Pattison to assess what reminders are required and ensure that they occur - EK

4.3.13 (3)

· Ensure there is a strong counter-fraud culture supported and promoted by members and senior officers

Annual report to Governance Committee to incorporate outcomes of fraud investigations - EK

4.3.14 (3)

· Undertake pro-active counter-fraud and corruption work which is determined by a formal risk assessment

Build in additional support (systems, staffing) for Internal Audit in order to enable more proactive counter-fraud work to take place - PCK

1

Financial Reporting

To raise score from 3 to 4, need to improve both 1.1 and 1.2

1.1

Annual accounts

Raise score from 3 to 4

1.1.12 (4)

· Ensure that accounts presented for audit are free from error

No specific action

Ref

KLoE and Recommendations

Impact on scores

5

Value for Money

To raise score from 3 to 4 need to improve 5.1 from 3 to 4 and 5.2 from 2 to 3

5.1

Achieving value for money

Raise score from 3 to 4

· Develop the benchmarking of service costs

· This is being improved as part of the developing process to respond to the AC VfM profiles

· Integrate the monitoring and management of performance and cost information

· Meetings with 3 key disciplines (Finance, Performance and HR) in each department in January / February 2006 - set the scene for requirements and set out expectations.

· The Integrated Planning Steering Group continues to develop the approach, which is also monitored by the Corporate Performance and Efficiency Group

· Quarterly corporate budget monitoring also addressing this issue

· Ensure greater consistency across services in making explicit the links between quality, cost and value for money

· The template for service plans includes a specific outcome on VFM - with training and support available via websites and e-learning.

· The developing Corporate Business Plan will carry forward the previous Corporate Strategy aim of achieving VfM

· Address the relatively high cost areas

· The Devolved Finance Managers have been asked to provide evidence / explanations in their commentaries on the VfM profiles.

· The Adult Services Budget Special Review addressed the major area.

· The Corporate Review programme provides a continuing mechanism for reviewing and challenging these areas.

· Gain an understanding of whether the relatively poor performance in some aspects of social services is linked to low spend.

· As above.

· In relation to Adult Services, CSCI make specific commentaries in the DIS on the relationship between cost and performance - this feeds into budget and service planning.

5.2

Managing and improving value for money

Raise score from 2 to 3

· Ensure that information comparing cost and quality is available consistently across all services, that links between cost and quality are understood and that results are challenged.

· This is being revisited within the exercise to revise the Corporate Strategy and develop the Corporate Business Plan, as well as part of the Integrated Planning Project.

· It is also being addressed generally through the development of performance and financial management - in terms of the longer term goals in relation to encouraging the appropriate culture.

· Benchmarking is considered from the perspective of comparison with other organisations and in relation to past performance / future targets.

· Ensure that ambitious targets to improve efficiency and value for money are set and achieved consistently across all services

· This is being addressed through the work to deliver the forward looking Annual Efficiency Statement. In particular departmental representatives have been engaged in identifying and setting targets for key Quality Cross-check PIs.

· Complete the development of performance management of procurement

· The Corporate Performance Team have been actively engaged in the revision of the Corporate Procurement Strategy and the development of SMART targets in the outcome-focused improvement plan.

· External consultants, Qualitar, have validated the approach to procurement and opportunities for efficiency gains.

· Ensure that service planning and performance management are consistent across services and fully linked to value for money and related targets.

· As above the service plan templates and guidance support this.

· The Corporate Performance and Efficiency Group monitor progress with the corporate approach, which is not yet fully embedded.

· The implementation of the Pay and Benefits project and in particular the use of individual performance targets to identify contribution and potential financial reward, will reinforce the overall approach.