Contact: Jeff Pattison, (01962) 84 7321; [email protected]

Ejner Knudsen, (01962) 84 7403; [email protected]

1 Summary

1.1 The County Council's Code of Corporate Governance was adopted in 2001 in line with the Chartered Institute of Public Finance and Accountancy/Society of Local Authority Chief Executives (CIPFA/SOLACE) "A Keystone for Community Governance". As reported at the September 2007 meeting of this Committee, revised guidance from CIPFA/SOLACE has redefined the core and supporting principles needed to be met by local authorities and also changed the reporting requirement from a Statement of Internal Control into an Annual Governance Statement. It has therefore been necessary to update the Code of Corporate Governance for Hampshire County Council and demonstrate full compliance with the latest CIFPA/SOLACE framework and guidance notes contained in the publication of "Delivering Good Governance in Local Government".

1.2 The Accounts and Audit (Amendment) (England) Regulations 2006 also introduced a new statutory requirement that an annual review of the effectiveness of the System of Internal Audit is undertaken. Detailed guidance and an exact definition of the term "the system of internal audit" is still awaited but arrangements for this review have been included in the revised Corporate Governance framework attached to the report and the opinion will be included in the Annual Governance Statement for each year.

1.3 The draft of the revised Code of Corporate Governance for Hampshire County Council is attached at Appendix A for members' consideration.

1 Recommendation

That the Governance Committee consider and approve the updated Code of Corporate Governance for Hampshire County Council (Appendix A).

2 Background

2.1 The County Council remains committed to the principles of good Corporate Governance. The Code of Corporate Governance for Hampshire County Council, adopted in 2001, was based on the guidance set out in the CIPFA/SOLACE document "A Keystone for Community Governance." This guidance identified best practice for authorities to adopt when establishing their own local Code of Corporate Governance (the Code). The County Council's Code was fully compliant with this guidance. Since the introduction of the County Council's Code, the Code has been regularly reviewed and changes have been made on an annual basis in response to specific requirements of central government or the recommendations from the Audit Commission as part of its regulatory and inspection roles.

2.2 CIPFA/SOLACE have recently decided to update the previously published guidance in order to satisfy the requirements of Regulation 4(2) of the Accounts and Audit (Amendment) (England) Regulations 2006 which had previously included the preparation of an annual statement of internal control in accordance with "proper practices". The updated CIPFA/SOLACE framework and guidance notes "Delivering Good Governance in Local Government" defines the "proper practices" to be followed by local authorities. These comprise the setting out of a framework of the interrelated systems and procedures to demonstrate how the legislative requirements, governance principles and management processes necessary to achieve good corporate governance are delivered. An annual governance statement is to replace the statement of internal control retrospectively, with effect from 1^st April 2007.

2.3 The revised framework defines six core principles that underpin good governance and emphasises that these relate to the whole of the County Council:

· focusing on the purpose of the authority and on outcomes for the community and creating and implementing a vision for the local area

· members and officers working together to achieve a common purpose with clearly defined functions and roles

· promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour

· taking informed and transparent decisions which are subject to effective scrutiny and managing risk

· developing the capacity and capability of members and officers to be effective

· engaging with local people and other stakeholders to ensure robust public accountability.

2.4 The draft revised Code, attached at Appendix A, explains how the County Council adheres to these principles. A summary of the various policies, procedures and systems which constitute the updated framework in the form of a chart, is included as Appendix B.

2.5 The Monitoring Officer will continue to be responsible for an annual review of compliance with the Code and conducting a review of the system of internal audit. The Chief Internal Auditor will conduct an independent review of Corporate Governance, on an annual basis, and the results of these reviews will be reported to the Governance Committee.

2.6 The Governance Committee will be responsible for the approval and regular review of the Code. The Governance Committee will also be responsible for recommending the draft annual governance statement prior to its signature by the Leader of the County Council and the Chief Executive, as specified by the Accounts and Audit (Amendment) (England) Regulations 2006. The statement will be drafted on the basis of the annual report to the Committee of the Monitoring Officer and Chief Internal Auditor and other sources of evidence of compliance received throughout the year. The various sources of assurance available to the Governance Committee are summarised at Appendix C in the form of an assurance map .

2.7 It is the joint responsibility of the Leader of the County Council and the Chief Executive to publish with the Annual Statement of Accounts, an assurance on the effectiveness of the County Council's governance arrangements in the form of an Annual Governance Statement.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

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