Archived decisions
1 Scope of responsibility
1.1 Hampshire Fire and Rescue Authority 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.
1.2 The Authority 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.
1.3 In discharging this overall responsibility, the Authority is also responsible for ensuring that there is a sound system of internal control which facilitates the effective exercise of the Authority's functions and which includes arrangements for the management of risk.
1.4 In accordance with the requirements in the Accounts and Audit Regulations 2003, this statement sets out how the Authority has sought to meet these requirements during 2006/07.
2 The purpose of the system of internal control
2.1 The system of internal control is designed to manage and mitigate 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.
2.2 It is an ongoing process designed to identify and prioritise the risk to the achievement of the Authority's policies, aims and objectives; and to evaluate the likelihood of those risks occurring and to manage them efficiently, effectively and economically.
3 The external context and internal control environment
3.1 The Authority sets out its key aims and objectives in its Integrated Risk Management Plan (IRMP). This is the Authority's primary strategic and corporate plan. It covers a rolling three-year period and is rigorously reviewed and refreshed annually. The IRMP sets out for the benefit of all our stakeholders the key corporate aims and the actions the Authority will take to achieve them. It shows how the Authority will respond to changes and challenges, identifies common aims with its partner organisations and sets priorities and targets for improvement. As part of this process we review annually the impact of the external environment in which we operate - identifying any new or emerging issues under our `STEEPLE' analysis (i.e. examining the external environment from the perspectives of `Social', `Technological', `Economic', `Environmental', `Political', `Legal', and `Ethical' factors). We have a comprehensive programme of consultation with our various stakeholders to ensure that our plans take account of their needs and any specific input they have made as well consulting them widely for views on our proposed actions.
3.2 The IRMP is approved by the full Authority at its February meeting when, significantly, the three-year revenue and capital programme and forward year's budget - is also determined and approved. It is comprehensively reviewed annually and takes fully into account the outcomes of: a comprehensive programme of consultation with stakeholders;
performance results; various review outcomes; and external factors such as local and national policies, expectations and initiatives. The IRMP is supplemented by a number of medium-term functional or business plans which support and complement the actions and activities that will be pursued. Group- and Station-based action plans are also significant to the planning process to ensure what we do is right for the local (or community) operating context. Our `Strengths, Weaknesses, Opportunities, Threats' (SWOT) analysis is reviewed annually and amended to take account of any new or emerging issues that have been highlighted during the previous 12 months, including any significant or relevant issues that have been raised in external or internal audits and reviews. This particular exercise is considered essential if our IRMP is to remain dynamic and responsive to changing needs.
3.3 The Authority's revised staff appraisal arrangements - now called `Personal Development Review System' - have been substantially improved to ensure that all personnel are fully aware and engaged in helping to achieve the Authority's corporate aims. All the Authority's plans are integrated and monitored as part of the Authority's well-established corporate planning process and performance management framework which has been in place since 2000. The improved system ensures that all our staff are fully aware of the Authority's corporate aims and, importantly, what contribution is expected from them in delivering the related strategies, actions and activities.
3.4 The IRMP is available on the Authority's website together with current information on actual performance against targets. It is also published in hard copy for circulation to key partners and staff. The IRMP is supported by promotional activities and campaigns to ensure that the Authority's five corporate aims and targets provide a cornerstone for all internal and external communication activities.
3.5 The Authority's Performance Review Committee has particular responsibility for overseeing service improvement planning and reporting on performance. It monitors progress on implementing the outcomes and recommendations of best value reviews and internal audit reports. The Corporate Management Team (CMT) - a regular joint meeting of leading Members of the Authority and the Directors - also plays an important role in reviewing the Strategic Risk Register. This is presented to the full Authority every year (September meeting). Also, a joint member/officer steering group reviews (approximately every six-weeks) our Improvement Planning Register which is a key monitoring document `signposting' where all our improvement activity is taking place. It provides a useful scrutiny and monitoring role to ensure continuous improvement is being made. This Register is also reviewed by the Performance Review Committee and it is presented to the full Authority every year (May/June meeting.
3.6 The Authority has a constitution, originally adopted with effect from 1 April 1997. It is based on the provisions of Statutory Instrument 1996 No 2923 `The Hampshire Fire Services (Combination Scheme) Order 1996'. The various documents set out the processes by which its policies are made and decisions taken, the terms of reference of the Authority and its Standing Committees. The role of the Governance Committee (established in 2004) provides added scrutiny on governance issues.
3.7 The financial management of the Authority is overseen by the Treasurer (who also fulfils the `Section 151' officer role for the Authority) in conjunction with the Chief Officer. Financial planning and management and is fully integrated with and driven by the corporate planning and monitoring processes set out above. This includes processes for the 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 Authority's Budget Book, which is available on our website, is summarised in the joint council tax leaflet we produce.
3.8 The Constitution is supplemented by a set of Standing Orders (last reviewed, revised and adopted in May 2002), Codes of Conduct for members and officers, and a Protocol for member/officer relations. The Authority has a set of Financial Regulations and Scheme of Delegation to Officers (both of which were reviewed, revised and adopted in 2004/05). In addition the Service has a comprehensive set of `Service Orders' setting out policies and procedures across a wide range of front-line and support functions.
4 Review of effectiveness of internal control
4.1 In order to ensure compliance with policies, procedures and statutory requirements the Authority has a range of controls and processes in place which are summarised in this section under headings taken from the good practice guidance. These processes help the Authority to ensure the economic, effective and efficient use of its resources, to secure continuous improvement in excising its functions, and to provide effective performance management and reporting.
4.2 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.
The role of Monitoring Officer is combined with that of Clerk. Working together with the Authority's Internal Auditor, effective working relationships have been established with both the Standards Committee and Governance Committee. The Standards Committee has responsibility for maintaining high standards of probity amongst members through the provision of advice and training and by carrying out investigations referred to it by the Standards Board. The Governance Committee is responsible for monitoring, reviewing and reporting to the Authority the governance arrangements. The Treasurer is the Authority's designated Section 151 Officer. It has become apparent that there are distinct advantages in having the roles of `Monitoring Officer' and `Section 151 Officer' performed by the Clerk and Treasurer who are not part of the Service's `paid workforce'. It reduces the risk of potential conflicts of interest when the Service's senior officers are involved in external collaborative roles with other organisations (the setting-up of proposed insurance mutual being a particularly relevant and current example).
The Authority, its standing committees and the Chief Officer have a full range of professional officer advice (including legal and financial) to enable them to carry out their functions effectively and in compliance with statutory requirements. Legal and financial services are provided through contracts for services (service level agreements) with
Hampshire County Council. This is supplemented by specialist legal advice (mainly for specific fire and rescue activities and occasional employment advice) by other external providers. The External Auditor is satisfied with the Authority's arrangements (Annual Audit Letter 2004/05) and aware of the Authority's review of the contracts for various services provided by Hampshire County Council. This review has been completed and the findings and recommendations were reported to the Performance Review Committee in June 2006 and actions are being taken to strengthen the management of the various service level agreements.
4.3 Internal Audit provide independent and objective assurances across the whole range of the Authority's activities.
The Governance Committee considers and approves the Internal Audit Strategy and Plan. The Annual Internal Audit Opinions are also presented to the Committee.
The Authority's Internal Auditor has provided an Annual Statement of Assurance which will be included in the Statement of Final Accounts for 2006/07.
4.4 External Audit provide a further source of assurance by reviewing and reporting upon the Authority's internal control processes and any other matters relevant to their statutory functions and codes of practice.
The Audit Commission's Annual Audit and Inspection Letter was presented and considered by the Committee at it's last meeting. It included a summary of the outcomes of the Service (operational) Assessment, Use of Resources assessment, and Direction of Travel assessment. It was a very positive and encouraging Letter. Comments were, however, made about improving the independence (from executive committee roles) of members on this Committee. Our external auditors were present to hear the discussion on how difficult this would be to achieve in the strictest sense and also the view expressed that the `good practice' advice that was being given was more applicable to local authorities operating the cabinet/executive governance model. Nevertheless, the Authority is keen to improve the robustness of the scrutiny function and consideration is being given to strengthening the role of the Performance Review Committee in this regard.
From the benchmark provided by Comprehensive Performance Assessment (CPA) in 2005 in which the Authority was assessed as `good'; it was particularly pleasing to receive confirmation that under the Performance Assessment Framework (2006/07) that significant improvement is being made by the Authority. We were assessed as `performing strongly' in the service (operational) assessment; `performing well' in terms of our use of resources; and `improving well' in our direction of travel.
4.5 Risk Management policies and procedures are in place with the objective of ensuring that the risks facing the authority in achieving its objectives are evaluated, regularly reviewed and mitigation strategies developed.
The Authority has a comprehensive Risk Management Policy and maintains a dynamic Strategic Risk Register. The Register is under a process of continual review which includes a quarterly review by the Service Management Team and twice yearly review by
the Corporate Management Team. The Register is presented annually to the Authority (September) with any major changes highlighted. As previously highlighted, reviews of Register are also regarded as a valuable part of our improvement planning process and the development and prioritisation of actions in the IRMP and supporting plans.
Risk assessment training has been rolled-out to those senior managers with responsibility for business planning so that `risk management' is regarded as part of good day-to-day management practice and firmly embedded across the organisation. The intention is to enhance this level of training to officers and members during 2007/08 and beyond.
Insurance policies and levels of reserves and balances are regularly reviewed - at least annually - to ensure that the Authority's finances are adequately safeguarded. The Authority achieved its aim to establish a £2m level of reserves from 2006/07 and this has been maintained in 2007/08. The Authority is actively involved in the proposal to establish an insurance mutual for fire and rescue authorities from 1 July 2007 (or as soon thereafter as practically possible) and the Audit Commission is being kept appraised of the detail and progress of these arrangements.
4.6 Provision of effective, efficient and responsive systems of financial management.
The Authority's three-year financial management strategy is reviewed annually and incorporated in the Budget Book. The budget is monitored during the year at meetings of the Finance and General Purposes Committee. The Final Accounts report is reported to the Committee at the June/July meetings. Procedures have been reviewed to ensure that the timetable for earlier completion of Final Accounts is achieved. No significant concerns were raised in relation to the Authority's policies and procedures in the use of its resources - but a number of improvements are being pursued in relation to asset management during 2007/08.
Revised Financial Regulations were approved by the Authority in February 2005 and implemented from 1 April 2005.
Internal Audit (provided under a contract for Services from Hampshire County Council) monitor the effectiveness and level of compliance as part of their work during the year. It has been confirmed - in the Audit Opinion - that the systems continue to operate successfully.
4.7 Codes of practice are issued by external bodies in respect of services and processes, with which the Authority is expected to comply.
The Authority complies with the 2003 CIPFA Code of Practice relating to Capital Finance and Treasury Management. This work is undertaken on behalf of the Authority by Hampshire County Council's Treasurers Department under a contract for services. The Authority monitors policies, practices and activities through regular reports.
4.8 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 not dealt with any major issues of concern during 2006/07.
4.9 Governance Committee is charged with governance responsibilities.
The Governance Committee's terms of reference are now well established. As previously reported, during 2005/06 the Governance Committee questioned the status and role of the Corporate Management Team (CMT). Two reports prepared by the Clerk and Director of Corporate Services were considered by the Committee and the conclusion reached was that the CMT performs a useful role in fostering good (all party) member/officer relations; provides a sounding board for exploring new policy initiatives, and encourages member engagement in discussions of topical interest and concern. CMT is not a standing committee or a formal decision-making committee and these points were emphasised in response to the external auditor's concerns about the independence of the Governance Committee.
4.10 Performance Management processes are in place to measure progress against objectives and to provide for remedial action where appropriate.
The entire performance management framework is very well-developed. The Authority has a good track record of monitoring performance via the Performance Review Committee which also now receives reports on compliance with audit recommendations. All performance indicators, both national and local, are clearly set out on the Authority's website and responsibility for monitoring each indicator is allocated to a member of the Service Management Team. Significant progress has been made during 2006/07 in strengthening performance management - notably in the development and roll-out to managers (at all levels) of `Views' - the performance management information software that has been in place for some time.
The Authority continues to be actively involved in regional collaboration across the full six work streams set out in the National Framework for the Fire and Rescue Service and (together with Kent and Isle of Wight) is on the steering group of the Performance Improvement Partnership for the South East Regional Management Board.
Two best value reviews were completed in 2006/07: a review of service level agreements with Hampshire County Council; and a review of the effectiveness of partnership arrangements. Both were facilitated by external consultants who robustly challenged current practices. Implementation of the various recommendations are being monitored by the Performance Review Committee.
The Authority actively participated in the options review for the future provision of fire and rescue services for the Isle of Wight. The Authority concluded that it would be content to see an amalgamation of the two services into an enlarged Combined Fire Authority. In the event the Isle of Wight decided to retain the status quo.
The proposal to set up an insurance mutual for fire and rescue authorities was triggered by a collaborative best value review prompted by this Authority and this involved four other authorities. This initiative was then pursued by Firebuy.
A new best value review commenced at the end of 2006/07 to assess the Authority's environmental impact.
4.11 A corporate procurement policy has been formally approved and communicated to all relevant staff.
This was produced in September 2005 and is supplemented by a `frequently asked questions' section on the `procurement and supplies' pages of our intranet.
The Authority has also committed to active participation in the national and regional procurement initiatives - especially the `Firebuy' consortium arrangement.
4.12 A Corporate Health and Safety Policy has been formally approved and communicated to all relevant staff.
The Authority has a well-established policy (Service Order 8/1/1) which has been communicated widely to its staff. Comprehensive information and advice is available on our website.
4.13 A corporate complaints policy/procedure has been formally approved, communicated to all relevant staff, the public and other stakeholders and is regularly reviewed.
The Authority has a well-established complaints procedure (Service Order 2/8/3/6/2) setting out our policy and procedure for dealing with complaints. Full information is also available on our website.
4.14 Reports received from external agencies and inspectorates. Relevant external inspection reports.
All external assessments are presented to the Authority and its relevant committees. Wherever practically possible we invite the external agency to send representative to present its findings at the meetings. The implementation of all accepted and agreed recommendations are monitored by the Performance Review Committee.
4.15 Delivery of services by trained, skilled and experienced personnel.
The Authority has achieved ISO 9001 accreditation for its Commercial Training function, and has been formally recognised as working towards Investors in People (IiP) accreditation for the whole organisation.
The Authority has made excellent progress in implementing the national Integrated Personal Development System [IPDS] which provides a comprehensive process for identifying personal training and development needs against a set of job role-maps.
5 Areas for improvement and improvement planning process
5.1 The Authority prides itself on being a `learning organisation'. The Improvement Planning Register provides a useful "sign-post" to the various actions and activities being taken to modernise the Service and improve the way we operate and deliver services. These improvements are categorised under five new themes:
· Living our values and meeting our goals
· Driving excellent performance
· Learning and innovation
· Managing our resources better
· Minimising our impact on the environment
The outcomes and recommendations of the various elements of the Performance Assessment framework have already been incorporated into relevant strategies and plans and these are included in the Register.
5.2 We monitor the implementation of recommendations publicly through regular reports to the Performance Review Committee. We take similar action in monitoring the outcomes of the best value reviews. Outstanding actions continue to be reported until they have been successfully implemented.
5.3 Our three-year Integrated Risk Management Plan (IRMP) sets out an ambitious programme of improvements in the way we deliver front-line services. Some of the actions involve conducting trials/pilot schemes during which we will be consulting with the local community, key stakeholders and our staff to ensure that our proposals are sound and that we can be confident that they will deliver the anticipated improvements in service.
Signed: .......................................... .......... Signed: ................................................
Chairman Chief Officer
Date: ............ Date: ............