Annual Governance Statement 2021-22
North Lanarkshire Council · 8 September 2022
Back to Audit and Scrutiny Panel — 8 September 2022 and its agenda
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North Lanarkshire Council Report Audit and Scrutiny Panel Does this report require to be approved? ☒ Yes ☐ No Ref KH/SL Date 08/09/22 Annual Governance Statement 2021/22 From Katrina Hassell, Head of Business and Digital E-mail HassellK@northlan.gov.uk Telephone 07903 096 121 Executive Summary The council is required to produce an Annual Governance Statement in line with The Local Authority Accounts (Scotland) Regulations 2014. This Statement requires to be included within the council’s Annual Accounts and it is subject to review by the external auditors as part of their year-end Annual Audit Report (AAR) process. The Statement for 2021/22, attached as Appendix 1, outlines the council’s governance arrangements for the last financial year and demonstrates how the council complies with the Delivering Good Governance in Local Government: Framework (2016). It also supports the council’s Best Value duty in terms of securing continuous improvement. Included in the Annual Governance Statement is the annual Internal Audit opinion from the Head of Audit and Risk on the council’s internal control systems which states that “reasonable assurance can be placed on the adequacy and effectiveness of the council’s framework of governance, risk management, and internal control for the year ended 31st March 2022”. The Annual Governance Statement is presented herewith for the consideration of the Audit and Scrutiny Panel. This has been prepared with evidence gathered from various different sources (which includes the annual opinion from the Head of Audit and Risk) to ensure that it properly reflects the effectiveness of the council’s governance arrangements during 2021/22. Recommendations It is recommended that the Audit and Scrutiny Panel: (1) Consider and note the Annual Governance Statement for 2021/22, and (2) Confirm the inclusion of the assurance statement - as set out in section 2.1.3 (3) regarding the management of the risk of fraud and corruption - in the Annual Governance Statement for 2021/22. The Plan for North Lanarkshire Priority All priorities
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1. Background 1.1 The production of the council’s Annual Governance Statement is underpinned by statute through the Local Authority Accounts (Scotland) Regulations 2014: • Regulation 5(2) requires an authority to conduct a review at least once in each financial year of the effectiveness of its system of internal control. • Regulation 5(3) states that the findings from the review at 5(2) “must be considered at a meeting either of the local authority or of a committee of the local authority whose remit includes audit or governance functions”. • Regulation 5(4) requires that for a local authority in Scotland the statement is an annual governance statement. • Regulation 5(5) states that the annual governance statement must be signed by the Chief Executive and Leader of the Council. 1.2 Compliance with the legislation also ensures the council demonstrates its commitment to the good governance principles as set out in the Delivering Good Governance in Local Government: Framework (2016) and accompanying Guidance Notes for Scottish Local Authorities (2016) published by Chartered Institute of Public Finance and Accountancy (CIPFA) in association with Society of Local Authority Chief Executives (SOLACE). 1.3 The essence underpinning the Delivering Good Governance in Local Government: Framework is that local government develops and shapes its own approach to governance, taking account of the environment within which it operates. Within this context, it is therefore up to each local authority to: • Set out its commitment to the principles of good governance outlined in the Delivering Good Governance in Local Government: Framework. • Determine its own governance arrangements, or local code, underpinned by these principles. • Ensure that the local code operates effectively in practice. 1.4 In line with the Delivering Good Governance in Local Government: Framework all councils are required to test their governance arrangements (local code) against these principles by: • Reviewing existing governance arrangements. • Developing and maintaining an up to date local code of governance that takes into account the environment within which it operates and includes arrangements for ensuring ongoing effectiveness. • Reporting publicly on compliance with the local code on an annual basis, including how the governance arrangements have been monitored for effectiveness in the year and identifying planned changes. 1.5 The council’s own governance arrangements, or local code, is set out in the Strategic Governance Framework. The accompanying report to the Audit and Scrutiny Panel details the process in place for annual review, assessment, assurance, and reporting purposes and the role of the Strategic Governance Framework in terms of informing the Annual Governance Statement. 1.6 In line with the regulations set out in paragraph 1.1 and the good governance requirements outlined in paragraph 1,4, this report presents the Annual Governance Ambition statement All ambition statements
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Statement for 2021/22 to ensure due consideration by the Audit and Scrutiny Panel in line with the terms of reference for the Panel as set out in the Scheme of Administration “to review the Annual Governance Statement prior to approval and consider whether it properly reflects the risk environment and supporting assurances, taking into account Internal Audit’s opinion on the overall adequacy and effectiveness of the council’s framework of governance, risk management and control”. 1.7 In light of the Committee structure still being finalised following the local government elections and the changes approved at the Council meeting on 9th June 2022, the Audit Director of Audit Scotland (the external auditors) confirmed in a conversation with the Head of Financial Solutions that, in this instance, the Annual Governance Statement could remain unsigned in the unaudited Annual Accounts for 2021/22 when submitted to the external auditors in line with the statutory deadline of 30th June 2022. It was also confirmed that consideration by the Audit and Scrutiny Panel would, in this instance, be able to be undertaken at the first available meeting of the new committee structure. 1.8 As part of the Annual Accounts for 2021/22, the Annual Governance Statement for 2021/22 is presented herewith for due consideration by the Audit and Scrutiny Panel in line with the requirement set out in paragraph 1.1 to ensure that the findings from the annual governance review “must be considered at a meeting either of the local authority or of a committee of the local authority whose remit includes audit or governance functions”. Following Audit and Scrutiny Panel consideration, the Annual Governance Statement will be signed off by the Chief Executive and Leader of the Council. 2. Annual Governance Statement 2021/22 2.1 The Annual Governance Statement has been prepared with evidence gathered from various different sources to ensure that it properly reflects the effectiveness of the council’s arrangements during 2021/22. The information gathered to inform the evidence base is summarised in paragraphs 2.1.1 to 2.1.5 below. 2.1.1 Heads of Service have reviewed the effectiveness of governance arrangements within their area of responsibility and signed off the Chief Officer Certificate of Assurance to support the preparation of statements on corporate governance and internal financial control for year ending 31 March 2022 and completed the accompanying 75 point checklist covering the following nine areas: 1. The control environment 2. Risk management 3. Business planning, information, and reporting 4. Financial control processes 5. Project management 6. Monitoring and corrective action 7. Human resources 8. Arm’s length bodies 9. Assessing whether key controls have been applied during the year Through this process Heads of Service have confirmed corporate governance arrangements and financial controls in their area of responsibility have been, or are, working well and there are no other significant matters arising which would require to be raised specifically in the Annual Governance Statement. 2.1.2 The council’s seven arm’s length external organisations (ALEOs) have also completed a Certificate of Assurance to support the preparation of the council’s statements on
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corporate governance and internal financial control for year ending 31 March 2022 and completed the accompanying 58 point checklist covering areas 1 to 7 and 9 listed in paragraph 2.1.1 above. • In this respect, the Chief Executive or Senior Representative for each of the ALEOs has confirmed corporate governance arrangements and financial controls in their organisation have been, or are, working well and there are no other significant matters arising which would require to be raised specifically in the council’s Annual Governance Statement. 2.1.3 In line with the guidance set out by the external auditors (Audit Scotland) in 2021, there are four specific CIPFA statements which the council is required to demonstrate that they comply with in the Annual Governance Statement. (1) The CIPFA Statement on the role of the Head of Internal Audit in public service organisations (2019). In line with the Public Sector Internal Audit Standards (PSIAS), and the council’s Internal Audit Charter, the Head of Audit and Risk is required to provide an annual opinion on the “overall adequacy and effectiveness of the organisation’s framework of governance, risk management, and control”. The CIPFA Statement considers this to be the most important output from the Head of Audit and Risk and one of the main sources of objective assurance that the Chief Executive and the Corporate Management Team have to support the Annual Governance Statement. In this respect, the Corporate Management Team considered and noted the Internal Audit annual report 2021/22 from the Head of Audit and Risk on 7th June 2022. This report stated that the annual Internal Audit opinion is unqualified and offers a generally positive view of the council’s governance and internal control arrangements. More specifically the Internal Audit annual report 2021/22 states that it is the opinion of the Head of Audit and Risk that “reasonable assurance can be placed on the adequacy and effectiveness of the council’s framework of governance, risk management, and internal control for the year ended 31st March 2022”. (2) CIPFAs Position Statement: Audit Committees in Local Authorities (2018). In this respect the activities and functions of the council’s Audit and Scrutiny Panel are required to reflect the standards set out in the CIPFA Statement. The Strategic Governance Framework sets out the evidence in this respect and confirms that during 2021/22 the purpose of the Audit and Scrutiny Panel was to “provide independent assurance to the council and those charged with governance on the adequacy of the council's risk management framework and internal control environment” and its activities included providing an “independent review of the council's governance, risk management, performance, and control frameworks and oversees the financial reporting and annual governance processes” - as set out in the Scheme of Administration (December 2019). (3) The CIPFA Code of Practice on Managing the Risk of Fraud and Corruption (2014). This statement looks for compliance in terms of developing a strategy and identifying the risks. In this respect the council has a number of policies and procedures in place as noted below: • Corporate Anti-Fraud Policy and Response Plan (updated in June 2017, review scheduled to be undertaken during 2022/23).
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• Whistleblowing Procedures (update approved in March 2022). • Gifts and hospitality policy for employees (incorporated into the Employee Code of Conduct in 2018) with a register that is updated every six months. • Employee Code of Conduct (update approved in March 2021). • Code of Conduct for Chief Officers (updated in November 2017, review scheduled to be undertaken during 2022/23). • Information Security Policy (update approved in June 2021). The identification of risks is carried out in line with the council’s Risk Management Strategy and through the risk for serious organised crime, fraud, and corruption which sits within the Corporate Risk Register. The Head of Legal and Democratic Solutions (the council’s Monitoring Officer) is the identified lead for this risk. The CIPFA statement also requires responsibility to be acknowledged. In this respect the Internal Audit annual report 2021/22 from the Head of Audit and Risk specifies that Internal Audit “has responsibility for investigating, as appropriate, alleged frauds and irregularities brought to our attention in accordance with the council’s anti-fraud policy. Where detailed work is carried out, the findings are reported to the Chief Executive and/or the relevant Head of Service with recommendations made which are designed to address any weaknesses identified. Such work is reported to the Audit and Scrutiny Panel, as appropriate, in line with the approved Internal Audit reporting protocol which forms part of the Internal Audit Charter.” The Internal Audit annual report 2021/22 from the Head of Audit and Risk has confirmed that “All audit investigations of suspected fraud and/or irregularities are reported to the Panel in line with the agreed Internal Audit reporting protocol. I am also pleased to be able to report that there were no material frauds or irregularities identified in 2021-22 that I require to bring to your attention”. Having considered information presented above to support the council’s arrangements to manage the risk of fraud and corruption and, in line with the CIPFA Statement, the Audit and Scrutiny Panel are asked to approve the following statement for inclusion in the Annual Governance Statement prior to signing off by the Chief Executive and Leader of the Council: “Having considered all the principles, I am satisfied that the organisation has adopted a response that is appropriate for its fraud and corruption risks and commits to maintain its vigilance to tackle fraud”. (4) The CIPFA Statement on the role of the Chief Financial Officer in Local Government (2016). It is specified in this CIPFA Statement that the Annual Governance Statement is required to “address the authority’s arrangements for financial and internal control and for managing risk”. This is addressed through the annual audit opinion provided by the Head of Audit and Risk (referenced above). The extent of the council’s compliance in this respect (and the role of the Chief Financial Officer therein) is further demonstrated through the self-evaluation exercise which concluded that the council’s financial management practices comply with all aspects of the CIPFA Financial Management Code. The self- evaluation also confirmed that the council’s Chief Financial Officer operates in a way that is consistent with the CIPFA Statement. 2.1.4 Various self-evaluation exercises have been undertaken by the council as part of the governance and performance management arrangements. This followed consideration
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of the refreshed Strategic Self-Evaluation Framework and rolling review programme at the Audit and Scrutiny Panel in September 2021. During 2021/22 five self-evaluation exercises were completed in terms of: • Compliance with the CIPFA Financial Management (FM) Code. This self- evaluation concluded that the council’s financial management practices comply with all aspects of the CIPFA FM Code with an average overall rating of 98% from the assessment team in terms of strongly agreeing or agreeing the extent of compliance across all of the 17 financial management standards. This is supported by a significant bank of evidence collected through a desktop exercise and substantiated by the assessment team which comprised members of the Corporate Management Team. • Reviewing the adequacy and effectiveness of the revised Corporate Management Team arrangements including how well it operates as a vehicle for monitoring and scrutinising progress implementing The Plan for North Lanarkshire and individual Programme of Work items. This self-evaluation identified that the Corporate Management Team has a clear vision and effective leadership with a sound approach that provides a clear direction for its work. In terms of deployment and assessment and review, it was considered that the new arrangements had not yet had the time to be embedded fully. Notwithstanding this, a number of improvements (with responsibilities and timelines) have been agreed for action during 2022/23 to ensure that the arrangements are implemented to their full potential. • Risk governance arrangements in respect of DigitalNL. This self-evaluation supported the annual review of the DigitalNL Programme Risk Register and, while focusing on both the risk management arrangements and the risks themselves for the DigitalNL programme, it also considered the inter-relationships of associated programme risks across the three levels in the organisation (project, service, corporate). The findings from the self-evaluation exercise were reported to the Transformation and Digitisation Committee in November 2021. One improvement action was identified - this was to consider the inter-connectedness of the DigitalNL programme risks with those on the Corporate Risk Register and the Business Solutions service risk register to ensure risks are managed at the appropriate level in the organisation, and the mitigating actions and controls are aligned and implemented accordingly. • Reviewing whether the arrangements for the Data Governance Board (DGB) adequately contribute to the achievement of the council’s vision as detailed in the Roadmap. Undertaken at a time that followed changes to the membership of and arrangements for the DGB, this self-evaluation identified two areas requiring improvement for which an action plan has been agreed by the Board. These improvement actions focus on (a) those which require to be considered within the context of the efficient operation of the DGB, and (b) those which require to be aligned to the combined Action Plan for the Board (which comprises the Information Governance Action Plan and Data and Information Management Strategic Roadmap work packages) to avoid any duplication and ensure a fully integrated approach to improvement. • The effectiveness of current arrangements for the North Lanarkshire health and social care IJB and how well the Board meets its intended outcomes. Findings from this self-evaluation exercise demonstrate the extent of the positive results and good practice examples identified by the assessment team. Only three areas for improvement were identified and these aim to further strengthen existing arrangements and add value to existing practices, rather than fill any gap or address any significant issue in terms of effectiveness. Findings from this exercise also serve to reassure the new members of the IJB (both Elected Members and executive members) of the effectiveness of the current arrangements for the Board
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and its supporting governance, and sets out the priorities for improvement in this respect. 2.1.5 The evidence has also included an annual review and refresh of the council’s Strategic Governance Framework and its supporting review programme which is set out in the accompanying report to the Audit and Scrutiny Panel. In this respect: • An annual review process is in place to fulfil the requirements of the national Delivering Good Governance in Local Government: Framework. This process also sets out the role of the Chief Officers and Elected Members who are responsible for implementing the council’s governance arrangements and ensuring the local code is assessed on an annual basis to ensure ongoing effectiveness and compliance. The Strategic Governance Framework also sets out the role of the Corporate Management Team in terms of identifying any improvement actions and/or future planned developments in relation to key governance arrangements and continuous improvement activity and this annual evaluation role was carried out at their meeting on 21st June 2022. • In line with the annual review process, each of the elements and mechanisms on the review programme which supports the Strategic Governance Framework have been reviewed with updates made as required to the relevant documentation and hyperlinks, as well as the review timeframe and date of next update, and the assessment of the current position (which includes the corresponding RAG status). This process ensures all elements and mechanisms are as up to date as they require to be while providing a method by which to identify and prioritise items requiring to be reviewed and updated further. • An Internal Audit on Corporate Governance in March 2022 cited the formal assessment process now in place through the Strategic Governance Framework and its accompanying review programme as good practice. It was also cited that there are now “formal and robust arrangements” in place to ensure that such reviews are undertaken on an annual basis. • The Internal Audit on Corporate Governance also reported on the assessment of the council’s local code against the Delivering Good Governance in Local Government: Framework and found that this process was “generally robust and effective”. The findings also noted that the assessment had indicated a “high level of compliance with the Corporate Governance framework, which was broadly consistent with Internal Audit’s assessment undertaken of Principles A and B”. 2.2 The evidence presented above in section 2.1 (paragraphs 2.1.1 to 2.1.5), and the results of these processes, are considered sufficient to support the Chief Executive and the Leader of the Council signing the Annual Governance Statement (after due consideration by the Audit and Scrutiny Panel) and stating that reasonable assurance can be placed on the adequacy and effectiveness of the corporate governance systems operating within the council, and that the council complies with relevant corporate governance principles in all significant respects. Next steps 2.3 As part of the annual process, the Annual Governance Statement for 2021/22 will be reported publicly through the website to demonstrate the council’s compliance with the principles of good governance. Information will also be included to demonstrate how the governance arrangements have been monitored for effectiveness in the year and planned changes will be identified. 3. Measures of success
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3.1 Measures of success include the production of an Annual Government Statement in line with the Local Authority Accounts (Scotland) Regulations 2014 and good governance principles, that is considered by the Audit and Scrutiny Panel, signed off by the Chief Executive and Leader of the Council, included in the Annual Accounts, and reported publicly on the council’s website. 4. Supporting documentation 4.1 Appendix 1 - Annual Governance Statement 2021/22 Katrina Hassell Head of Business and Digital 5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Delivering Good Governance in Local Government: Framework (2016) positions the attainment of sustainable economic, societal, and environmental outcomes as a key focus of governance processes and structures. As such this is reflected in the Strategic Governance Framework. If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☒ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Development and publication of the Annual Governance Statement ensures the council complies with the CIPFA Statement on the Role of the Chief Financial Officer in Local Government 2016 in terms of financial controls. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐
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If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☒ No ☐ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Production of the council’s Annual Governance Statement is underpinned by statute through the Local Authority Accounts (Scotland) Regulations 2014, as noted in paragraph 1.1. 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The Delivering Good Governance in Local Government: Framework (2016) positions the attainment of sustainable economic, societal, and environmental outcomes as a key focus of governance processes and structures. As such this is reflected in the Strategic Governance Framework. 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Through publication of the Annual Governance Statement on the website, the council will ensure it meets the requirements to report publicly on compliance with the principles of good governance. 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts,
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highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Development and publication of the Annual Governance Statement in line with the Local Authority Accounts (Scotland) Regulations 2014, the principles set out within the Delivering Good Governance in Local Government: Framework (2016), and in line with the Best Value duty, contributes towards the mitigation of the risk on the Corporate Risk Register for Governance, Leadership, and Decision Making.
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Appendix 1 Annual Governance Statement 2021/22 1. Scope of responsibility 1.1 North Lanarkshire Council is committed to ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded, properly accounted for, and used economically, efficiently, and effectively. 1.2 The council also has a duty under the Local Government in Scotland Act 2003 to demonstrate Best Value by securing continuous improvement in performance. Good governance is central to meeting Best Value obligations as effective governance and accountability arrangements, with openness and transparency in decision-making, schemes of delegation, and effective reporting of performance are essential for taking informed decisions and ensuring effective scrutiny of performance and stewardship of resources. 1.3 To maintain compliance in terms of ensuring good governance and delivering continuous improvement, the council has adopted the principles and requirements of the Delivering Good Governance in Local Government: Framework (2016) and accompanying Guidance Notes for Scottish Local Authorities (2016) published by Chartered Institute of Public Finance and Accountancy (CIPFA) in association with Society of Local Authority Chief Executives (SOLACE). 1.4 To ensure its good governance arrangements are sound and the highest standards are met, the council has set out its commitment to the national principles of good governance by determining its own governance structure (local code) underpinned by these principles. This local code is set out in the Strategic Governance Framework. 1.5 In discharging these duties Chief Officers and Elected Members are responsible for implementing the council’s governance arrangements and ensuring the local code, the Strategic Governance Framework, is assessed on an annual basis to ensure ongoing effectiveness and compliance. 1.6 In this respect, the council has arrangements in place through the Corporate Management Team to ensure appropriate and regular oversight, management, and reporting at a strategic level to support delivery of The Plan for North Lanarkshire and Programme of Work. A standing agenda item for governance and risk further demonstrates the commitment to ensuring effective corporate governance arrangements are in place. As part of their annual evaluation process of the Strategic Governance Framework and supporting review programme, the Corporate Management Team is also responsible for identifying improvement actions and/or future planned developments in relation to key governance arrangements and continuous improvement. 1.7 Independent and objective assurances are provided by Internal Audit whose function is designed to add value and improve the council’s operations. This in turn helps the council accomplish its strategic ambitions by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of the council’s risk management, internal control, and governance processes. The council’s internal audit arrangements are consistent with the CIPFA Statement on the role of the Head of Internal Audit in public service organisations (2019). 1.8 Internal Audit activity is planned to enable an independent opinion to be given by the Head of Audit and Risk each year on the adequacy and effectiveness of internal controls within the council, including the systems designed to achieve the strategic ambitions of the council and those that manage the material risks faced by the council. It is noted, however, that the presence of an effective internal audit function contributes towards, but
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is not a substitute for, effective control. 1.9 The purpose of the Audit and Scrutiny Panel, whose activities and functions comply with the standards set out in CIPFA’s Position Statement: Audit Committees in Local Authorities (2018), is to provide independent assurance to the council and those charged with governance on the adequacy of the council's risk management framework and internal control environment. In this respect, the Panel is responsible for providing independent review of the council's governance, risk management, performance, and control frameworks, and overseeing the financial reporting and annual governance processes. It also oversees the council's internal and external audit arrangements, helping to ensure efficient and effective assurance arrangements are in place. 1.10 This statement also covers the organisations consolidated in the council’s Group Accounts. 2. Strategic Governance Framework 2.1 In February 2020, the Audit and Scrutiny Panel approved the council’s Strategic Governance Framework as the council’s local code of governance aligned to the national Delivering Good Governance in Local Government: Framework. This sets out the elements and mechanisms which form the council’s local code of governance and demonstrates North Lanarkshire Council’s commitment to the principles of good governance. 2.2 The Strategic Governance Framework is one of six inter-related corporate frameworks (Policy, Governance, Performance, Self-Evaluation, Project Management, and the Framework for Demonstrating Improved Outcomes for Communities) which are key to assessing the success of The Plan for North Lanarkshire and monitoring delivery of the Programme of Work, while ensuring each stage of delivery towards achieving the overall ambitions is appropriately planned, guided, implemented, and governed. 2.3 The council recognises that a crucial aspect in delivering good governance is the way that it is applied. The ethos of good governance cannot be achieved by structures, rules, and procedures alone. Effectively, good governance needs to be embedded within the council and its culture and the need for, and value of, good governance must be explicit. As such, any references that require to be made to any one of the frameworks supporting The Plan for North Lanarkshire references them all together at all times for completeness and to raise awareness of the role of good governance in delivering the strategic ambition through the Programme of Work. 2.4 The Strategic Governance Framework outlines the elements and mechanisms in place to ensure appropriate oversight and governance of The Plan for North Lanarkshire and supporting Programme of Work and enable the council to monitor the delivery of its ambitions while ensuring arrangements for corporate governance, risk management, and internal financial controls are sound. This is based on the following: • Identifying and setting out the council’s long-term strategic ambition and priorities in The Plan for North Lanarkshire and ensuring the vision for inclusive growth and prosperity for all is embedded throughout all other policy statements agreed by the council as well as all strategic management, service delivery, and corporate governance approaches. • Establishing the six inter-related corporate frameworks (Policy, Governance, Performance, Self-Evaluation, Project Management, and the Framework for Demonstrating Improved Outcomes for Communities) and ensuring these frameworks remain aligned to The Plan for North Lanarkshire and Programme of Work through a regular review and refresh programme. • Standing Orders that allow the council to delegate decision making to committees, sub-committees, or officers and sets out the rules which apply to the running and operation of council and committee meetings.
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• A Scheme of Administration which clearly sets out functions, terms of reference, and powers of the council and its committees and sub-committees and which is aligned to the organisational structure to facilitate decision making in line with the council’s strategy. • A Scheme of Delegation to Officers which sets out the functions delegated to the Chief Officers of the council. • Financial Regulations and a Scheme of Financial Delegation which, as an integral part of the council’s framework of internal financial controls, are designed to ensure effective stewardship of North Lanarkshire Council funds. Compliance with these regulations ensures that public money is safeguarded and properly accounted for, and all financial transactions are undertaken in a manner which demonstrates openness, transparency, and integrity. The Financial Regulations form a key part of the overarching Financial Strategy and the corporate governance arrangements of the council. • The Financial Strategy which - as the overarching framework that establishes the financial strategies and policies to ensure effective financial governance, planning, and management - also sets out the responsibility for safeguarding public funds within the council and the role of the Section 95 Officer. The strategies and policies covered by the Financial Strategy include the Capital Strategy, Treasury Management Strategy, Revenue Budget Strategy, and the Medium-Term Financial Plan. • A Risk Management Strategy with arrangements that reflect the council’s strategic ambition at a corporate, service, and project level. A key part of the system of internal control, the council’s risk management arrangements are designed to identify, assess, prioritise, and mitigate risks which impact on achievement of the council’s priorities. These arrangements are designed to enable the council to perform well, to manage risk effectively, and to minimise any potential impacts on service delivery and the achievement of planned outcomes. • Codes of Conduct for Elected Members, Chief Officers, and Employees which provide frameworks within which individuals are expected to undertake their duties in a manner which meets the required standards for good governance. This includes ensuring declarations of interests and declarations for conflicts of interest and gifts and hospitality are appropriately (and regularly) made and published. • Ensuring legislative obligations are fulfilled through the statutory officer roles, i.e. the posts of head of paid service, monitoring officer, chief financial officer (section 95 officer), and the chief social work officer. • An Anti-Fraud Policy and Fraud Response Plan which sets out the council’s expectations (which extends to all individuals and organisations with whom it deals) in terms of acting honestly and with integrity and in safeguarding public resources. • A Whistleblowing Procedure which provides a mechanism for employees of the council, and other workers within the council, to report a concern about serious wrongdoing within the council and to do so with security and in confidence. • A Corporate Management Team with a supporting meetings structure comprising service Senior Management Team meetings, and Operational Management Team meetings to cascade the context, deliverables, and accountabilities and ensure consistency of message in the vision set out in The Plan for North Lanarkshire and the delivery required through the Programme of Work. All Heads of Service are members of the Corporate Management Team; this includes those Heads of Service who hold a statutory officer role. • An Audit and Scrutiny Panel whose activities and functions comply with the standards set out in CIPFA’s Position Statement: Audit Committees in Local Authorities (2018), and whose purpose is to provide independent assurance to the council and those charged with governance on the adequacy of the council's risk management framework and internal control environment. • A Strategic Performance Framework that aims to enable performance to be measured and assessed at three levels within the council and includes target setting and service and statutory reporting in line with an annual schedule. • Comprehensive revenue budget and capital expenditure guidelines, with well- established processes and systems to ensure regular monitoring and reporting, as well as oversight and scrutiny by management and Elected Members.
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• A range of programme Boards and working groups aligned to the delivery of specific Programme of Work items, e.g. Strategic Capital Delivery Group, DigitalNL, Hub Delivery Programme Board, and Data Governance. • An Information Governance Policy Framework, comprising policies in terms of records and information management, data protection, information handling and classification, information risk, and information security to ensure proper recording of information, appropriate access to that information including by the public, and compliance with legislation. • An Information Security Policy which aims to protect the council’s information systems and physical assets including supporting processes, networks, and equipment. This is essential to ensure the council can continue to operate and successfully deliver its functions, while finding the right balance between the benefits and risks to the processing of information. • Publicly available complaints and freedom of information procedures with management, monitoring, and reporting arrangements. • A range of employment and other policies and the associated guidance documents and forms which promote and support ethical behaviour and standards of conduct by employees, along with an employee Performance Review and Development (PRD) process, and access to a range of employee and Elected Members’ training and development programmes and opportunities through LearnNL. • Independent and objective assurances provided by Internal Audit whose function is designed to add value and improve the council’s operations. The Internal Audit function operates within the Public Sector Internal Audit Standards (PSIAS) and the council’s Internal Audit Charter. The service undertakes an annual programme of work approved by the Audit and Scrutiny Panel which is based on the Internal Audit Annual Plan. This plan is risk based and is periodically updated to reflect evolving issues and changes. • Independent and objective assurances provided by the external auditors through their Annual Audit Report (AAR) process and a range of other external audit and inspection bodies. 3. Review of effectiveness of governance arrangements 3.1 The Annual Governance Statement has been prepared with evidence gathered from various different sources to ensure that it properly reflects the effectiveness of the council’s arrangements during 2021/22. The information gathered to inform the evidence base is summarised in paragraphs 3.1.1 to 3.1.6 below. 3.1.1 Heads of Service have reviewed the effectiveness of governance arrangements within their area of responsibility by completing a Certificate of Assurance and updating a 75 point checklist covering: the control environment, risk management, business planning / information / reporting, financial control processes, project management, monitoring and corrective action, human resources, arm’s length bodies, and assessing whether key controls have been applied during 2021/22. • Through this process Heads of Service have confirmed corporate governance arrangements and financial controls in their area of responsibility have been, or are, working well and there are no other significant matters arising which would require to be raised specifically in the Annual Governance Statement. 3.1.2 The council’s seven arm’s length external organisations (ALEOs) have also completed a Certificate of Assurance and updated the accompanying 58 point checklist to support the preparation of the council’s statements on corporate governance and internal financial control for year ending 31 March 2022. • In this respect, the Chief Executive or Senior Representative for each of the ALEOs has confirmed corporate governance arrangements and financial controls in their organisation have been, or are, working well and there are no other significant matters arising which would require to be raised specifically in the council’s Annual Governance Statement.
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3.1.3 Compliance with four specific CIPFA statements. (1) The CIPFA Statement on the role of the Head of Internal Audit in public service organisations (2019). To enable the Head of Audit and Risk to fulfil his role in this respect, the Corporate Management Team are required to ensure they “set out how the framework of assurance supports the Annual Governance Statement and identify internal audit’s role within it”. This assurance is provided through the Strategic Governance Framework (which has undergone an annual review and refresh process in order to identify how the effectiveness of the council’s governance arrangements has been monitored and evaluated in the year) and which was endorsed by the Corporate Management Team at its meeting in June 2022. In line with the Public Sector Internal Audit Standards (PSIAS), and the council’s Internal Audit Charter, the Head of Audit and Risk has provided an annual opinion on the “overall adequacy and effectiveness of the organisation’s framework of governance, risk management, and control”. The Corporate Management Team considered and noted the Internal Audit annual report 2021/22 and annual opinion from the Head of Audit and Risk on 7th June 2022. This report stated that the annual Internal Audit opinion is unqualified and offers a generally positive view of the council’s governance and internal control arrangements. More specifically the Internal Audit annual report 2021/22 states that it is the opinion of the Head of Audit and Risk that “reasonable assurance can be placed on the adequacy and effectiveness of the council’s framework of governance, risk management, and internal control for the year ended 31st March 2022”. (2) CIPFAs Position Statement: Audit Committees in Local Authorities (2018). In this respect the activities and functions of the council’s Audit and Scrutiny Panel are required to reflect the standards set out in the CIPFA Statement. The Strategic Governance Framework sets out the evidence in this respect and confirms that during 2021/22 the purpose of the Audit and Scrutiny Panel was to “provide independent assurance to the council and those charged with governance on the adequacy of the council's risk management framework and internal control environment” and its activities included providing an “independent review of the council's governance, risk management, performance, and control frameworks and oversees the financial reporting and annual governance processes” - as set out in the Scheme of Administration (December 2019). (3) The CIPFA Code of Practice on Managing the Risk of Fraud and Corruption (2014). This statement looks for compliance in terms of developing a strategy and identifying the risks. In this respect the council has a number of policies and procedures in place as noted below: • Corporate Anti-Fraud Policy and Response Plan (updated in June 2017, review scheduled to be undertaken during 2022/23). • Whistleblowing Procedures (update approved in March 2022). • Gifts and hospitality policy for employees (incorporated into the Employee Code of Conduct in 2018) with a register that is updated every six months. • Employee Code of Conduct (update approved in March 2021). • Code of Conduct for Chief Officers (updated in November 2017, review scheduled to be undertaken during 2022/23). • Information Security Policy (update approved in June 2021). The identification of risks is carried out in line with the council’s Risk Management Strategy and through the risk for serious organised crime, fraud, and corruption which sits within the Corporate Risk Register. The Head of Legal and Democratic Solutions (the council’s Monitoring Officer) is the identified lead for this risk.
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The CIPFA statement also requires responsibility to be acknowledged. In this respect the Internal Audit annual report 2021/22 from the Head of Audit and Risk specifies that Internal Audit “has responsibility for investigating, as appropriate, alleged frauds and irregularities brought to our attention in accordance with the council’s anti-fraud policy. Where detailed work is carried out, the findings are reported to the Chief Executive and/or the relevant Head of Service with recommendations made which are designed to address any weaknesses identified. Such work is reported to the Audit and Scrutiny Panel, as appropriate, in line with the approved Internal Audit reporting protocol which forms part of the Internal Audit Charter.” The Internal Audit annual report 2021/22 from the Head of Audit and Risk has confirmed that “All audit investigations of suspected fraud and/or irregularities are reported to the Panel in line with the agreed Internal Audit reporting protocol. I am also pleased to be able to report that there were no material frauds or irregularities identified in 2021-22 that I require to bring to your attention”. (4) The CIPFA Statement on the role of the Chief Financial Officer in Local Government (2016). It is specified in this CIPFA Statement that the Annual Governance Statement is required to “address the authority’s arrangements for financial and internal control and for managing risk”. This is addressed through the annual audit opinion provided by the Head of Audit and Risk (referenced above). The extent of the council’s compliance in this respect (and the role of the Chief Financial Officer therein) is further demonstrated through the self-evaluation exercise undertaken in 2022 which concluded that the council’s financial management practices comply with all aspects of the CIPFA Financial Management Code. The self-evaluation also confirmed that the council’s Chief Financial Officer operates in a way that is consistent with the CIPFA Statement. 3.1.4 Various self-evaluation exercises have been undertaken by the council as part of the governance and performance management arrangements. This has been undertaken in line with the refreshed Strategic Self-Evaluation Framework and rolling review programme which were approved by the Audit and Scrutiny Panel in September 2021. During 2021/22 five self-evaluation exercises were completed in terms of: • Compliance with the CIPFA Financial Management (FM) Code. This self- evaluation concluded that the council’s financial management practices comply with all aspects of the CIPFA FM Code with an average overall rating of 98% from the assessment team in terms of strongly agreeing or agreeing the extent of compliance across all of the 17 financial management standards. This is supported by a significant bank of evidence collected through a desktop exercise and substantiated by the assessment team which comprised members of the Corporate Management Team. • Reviewing the adequacy and effectiveness of the revised Corporate Management Team arrangements including how well it operates as a vehicle for monitoring and scrutinising progress implementing The Plan for North Lanarkshire and individual Programme of Work items. This self-evaluation identified that the Corporate Management Team has a clear vision and effective leadership with a sound approach that provides a clear direction for its work. In terms of deployment and assessment and review, it was considered that the new arrangements had not yet had the time to be embedded fully. Notwithstanding this, a number of improvements (with responsibilities and timelines) have been agreed for action during 2022/23 to ensure that the arrangements are implemented to their full potential. • Risk governance arrangements in respect of DigitalNL. This self-evaluation supported the annual review of the DigitalNL Programme Risk Register and, while focusing on both the risk management arrangements and the risks themselves for the DigitalNL programme, it also considered the inter-relationships of associated programme risks across the three levels in the organisation (project, service,
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corporate). The findings from the self-evaluation exercise were reported to the Transformation and Digitisation Committee in November 2021. One improvement action was identified - this was to consider the inter-connectedness of the DigitalNL programme risks with those on the Corporate Risk Register and the Business Solutions Service Risk Register to ensure risks are managed at the appropriate level in the organisation, and the mitigating actions and controls are aligned and implemented accordingly. • Reviewing whether the arrangements for the Data Governance Board (DGB) adequately contribute to the achievement of the council’s vision as detailed in the Roadmap. Undertaken at a time that followed changes to the membership of and arrangements for the DGB, this self-evaluation identified two areas requiring improvement for which an action plan has been agreed by the Board. These improvement actions focus on (a) those which require to be considered within the context of the efficient operation of the DGB, and (b) those which require to be aligned to the combined Action Plan for the Board (which comprises the Information Governance Action Plan and Data and Information Management Strategic Roadmap work packages) to avoid any duplication and ensure a fully integrated approach to improvement. • The effectiveness of current arrangements for the North Lanarkshire health and social care IJB and how well the Board meets its intended outcomes. Findings from this self-evaluation exercise demonstrate the extent of the positive results and good practice examples identified by the assessment team. Only three areas for improvement were identified and these aim to further strengthen existing arrangements and add value to existing practices, rather than fill any gap or address any significant issue in terms of effectiveness. Findings from this exercise also serve to reassure the new members of the IJB (both Elected Members and executive members) of the effectiveness of the current arrangements for the Board and its supporting governance, and sets out the priorities for improvement in this respect. 3.1.5 The evidence has also included an annual review and refresh of the council’s Strategic Governance Framework. In this respect: • An annual review process is in place to fulfil the requirements of the national Delivering Good Governance in Local Government: Framework. This process also sets out the role of the Chief Officers and Elected Members who are responsible for implementing the council’s governance arrangements and ensuring the local code is assessed on an annual basis to ensure ongoing effectiveness and compliance. The annual review and update of the Strategic Governance Framework was endorsed by the Corporate Management Team at their meeting in June 2022 in line with their role to also identify any improvement actions and/or future planned developments in relation to key governance arrangements and continuous improvement activity. • In line with the annual review process, each of the elements and mechanisms within the Strategic Governance Framework have been reviewed with updates made as required to the relevant documentation and hyperlinks, as well as the review timeframe and date of next update, and the assessment of the current position (which includes the corresponding RAG status). This process ensures all elements and mechanisms are as up to date as they require to be while providing a method by which to identify and prioritise items requiring to be reviewed and updated further. • An Internal Audit on Corporate Governance in March 2022 cited the formal assessment process now in place through the Strategic Governance Framework and its accompanying review programme as good practice. It was also cited that there are now “formal and robust arrangements” in place to ensure that such reviews are undertaken on an annual basis. • The Internal Audit on Corporate Governance also reported on the assessment of the council’s local code against the Delivering Good Governance in Local Government: Framework and found that this process was “generally robust and effective”. The findings also noted that the assessment had indicated a “high level of compliance with the Corporate Governance framework, which was broadly consistent with Internal Audit’s assessment undertaken of Principles A and B”.
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3.1.6 Comments made by the external auditors and other audit and inspection bodies, feedback from Elected Members and committees in their scrutiny role, and issues considered by the Audit and Scrutiny Panel. 4. Continuous improvement 4.1 The Plan for North Lanarkshire sets the long-term strategic direction for the council, partners, and other stakeholders and, most importantly, for each unique local community and the people who Live, Learn, Work, Invest, and Visit within North Lanarkshire. It’s a Plan with a shared ambition of inclusive growth and prosperity for all and a fairer distribution of wealth across all local communities. The Plan provides a very clear and compelling narrative for the shared ambition which the council (and partners) are working towards; a narrative that has become well embedded throughout the strategic management, service delivery, and corporate governance approaches across the council. 4.2 The Programme of Work process (established in 2019) provides a clear roadmap for work across council services and with partners. Directing policies and plans to support delivery of The Plan for North Lanarkshire, the Programme of Work is therefore instrumental in bringing together the elements that support strategic planning, local development, enterprise activities, and community investment in a cohesive manner. 4.3 Sitting alongside this - as a key aspect of the council’s strategic planning framework - is the Strategic Policy Framework. This specifies the hierarchy of strategies, policies, and plans which underpin delivery of the long-term vision set out in The Plan for North Lanarkshire and ensures that strategy and policy remain connected to delivery in order to collectively facilitate a co-ordinated approach to identifying the resources and working practices needed to support delivery of the long-term vision. Through a structured approach, the Strategic Policy Framework aims to ensure that strategies, policies, and plans are formulated, developed, implemented, monitored, and reviewed in a consistent and transparent manner across the council. The annual update to the Strategic Policy Framework was approved by the Policy and Strategy Committee in March 2022. The supporting review programme ensures each of the strategies, policies, and plans are up to date, reviewed and updated at an appropriate interval, and reported to the relevant committee. 4.4 The fourth annual iteration of the Programme of Work (for 2022/23) was approved by the Policy and Strategy Committee in March 2022. This reflects the changes required to deliver on the long-term ambition and the broad range of innovative and transformative programmes of work and projects required in order to maintain services for residents in local communities which are efficient and effective, while targeting resources towards those individuals in the most vulnerable situations and ensuring value for money. 4.5 The council has long since recognised that it does not have the luxury of a traditional once and done approach to strategic planning and change and the Programme of Work has enabled a recurring and dynamic approach in this respect. It has enabled delivery of the long-term vision to be informed by an annual strategic planning process that is influenced by national policy changes and new developments which impact on the achievement of the vision and which require due consideration in future strategies, policies, plans, and programmes of work. However, the considerable challenges that remain across North Lanarkshire - as demonstrated by the latest performance results reported to the Policy and Strategy Committee in March 2022 - means that an even greater focus is required to escalate the pace and depth of change in order to maximise positive outcomes for the people and communities of North Lanarkshire. As such, a commitment has been made to ensure further work is undertaken during 2022/23 to fundamentally evaluate activities undertaken, resources expended, and results achieved against the direction of travel in order to assess the impact towards achieving The Plan for North Lanarkshire’s long-term vision of inclusive growth and prosperity for all. 4.6 Key to assessing the success of The Plan for North Lanarkshire and monitoring delivery of the Programme of Work (while ensuring each stage of delivery towards achieving the
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overall ambitions is appropriately planned, guided, implemented, and governed) are six inter-related corporate frameworks: • Strategic Policy Framework • Strategic Governance Framework • Strategic Performance Framework • Strategic Self-Evaluation Framework • Project Management Framework • Framework for Demonstrating Improved Outcomes for Communities 4.7 To ensure these frameworks remain aligned to The Plan for North Lanarkshire and Programme of Work, all are on an annual review and refresh programme. This also helps the council to ensure it is proactive in responding to social, economic, and environmental trends and changes in legislation and governance, as well as the broad range of national policy changes and new developments. 4.8 The Strategic Governance Framework has been developed taking into account the local environment within which the council operates. It brings the principles of good governance together with legislative requirements and management processes by which the council is directed and controlled and through which it is accountable to, engages with, and leads the local community. This aims to ensure the council is able to effectively pursue the long-term ambition set out in The Plan for North Lanarkshire, while ensuring this is underpinned with control and the management of risk, and: • Resources are directed in accordance with agreed policies and according to priorities and in line with corporate programme and project management procedures. • There is sound and inclusive decision making. • There is clear accountability for the use of those resources in achieving defined outcomes for service users and local communities. 4.9 The annual review process now established through the Strategic Governance Framework ensures that the council’s governance arrangements are regularly assessed for ongoing effectiveness within the context of The Plan for North Lanarkshire. 4.10 Following publication of the Accounts Commission’s Best Value Assurance Report (BVAR) for North Lanarkshire Council in May 2019, updates on implementation of the eight recommendations for improvement were reported to the Policy and Strategy Committee in September 2019 and again in March 2020. The report in March 2020 consolidated the eight improvement actions within the Programme of Work to strengthen a corporate and integrated approach to improvement that supports delivery of The Plan for North Lanarkshire. The external auditors Annual Audit Report (AAR) for 2020/21 (reported to the Audit and Scrutiny Panel in December 2021) concluded that four of the improvement actions were now complete, and noted good or reasonable progress was being made regarding the remaining four. 4.11 During 2021/22, the COVID-19 pandemic continued to impact on the council’s delivery of planned day to day activities and achievement of strategic priorities, albeit to a lesser extent than the previous year. The impact of this is also recognised in the annual audit opinion from the Head of Audit and Risk. In line with the guidance set out by the Scottish Government, a COVID Operating Model was approved at the Council meeting in March 2022. This provides a template as to how the council will operate over the next six months in a manner which recognises the ongoing risks associated with the pandemic, sets out the routine protection measures to be adopted across all council facilities, and allows for delivery of all council services in a manner more reflective to what existed pre- pandemic. 4.12 In line with the commitment to review the new hybrid working model (approved at Committee in December 2021), there will also be a review of the COVID Operating Model within a similar timeline. The purpose of this will be to reflect on any issues arising through its implementation and to have regard to any change in national policy which is
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likely to be kept under review over the same time period. 4.13 Following the decision taken by the Policy and Strategy Committee at its meeting in January 2020 the insourcing of culture, sport and leisure services was effective from 1 April 2021, under the new, focussed, and integrated Active and Creative Communities (ACC) team. 4.14 Six monthly reports during 2021/22 have provided the Audit and Scrutiny Panel with oversight and assurance of governance, financial governance, and risk management arrangements within the council’s Arm’s Length External Organisations (ALEOs). The reports have also highlighted where Covid has impacted on company operations, including the safeguards that were put in place during the pandemic to maintain service delivery and ensure safe working practices and the recovery strategies developed to resume service delivery as Covid restrictions were lifted. 5. Current year issues arising from Internal Audit activity during 2021/22 5.1 In his Internal Audit annual report for 2021/22, presented to the Chief Executive and Corporate Management Team in June 2022, the Head of Audit and Risk provided an overview of the activities of the Internal Audit section for the year 2021/22. 5.2 This included highlights of issues arising from Internal Audit activity during the year. In this respect, the Head of Audit and Risk commented on the following: • The significant proportion of Internal Audit staff who were temporarily seconded to other duties for a period during part of the year, in response to the pandemic. This impacted on the ability of Internal Audit to undertake planned work and details of the impact on the work programme and how outstanding work was prioritised were reported to the Audit and Scrutiny Panel in March 2022. Although this has had some impact on Internal Audit’s ability to deliver all planned work, the Head of Audit and Risk reported that “I am content that sufficient work has been undertaken to support the preparation of my annual opinion”. • A small number of audit assignments reported during 2021/22 which offered only limited assurance. In all cases, management committed to a range of relevant improvement actions, some of which have already been completed. In this respect Internal Audit will continue to monitor progress on these issues during 2022/23 to provide senior management and the Audit and Scrutiny Panel with further assurance that relevant key controls are operating effectively. • The results from detailed Internal Audit work examining the council’s corporate governance arrangements which suggest that compliance with the requirements of the corporate governance framework adopted by the council continued to be positive with no significant weaknesses or areas of concern highlighted. • Internal Audit work which suggests that despite significant and increasing challenges, key financial controls and financial management arrangements continued to operate to a generally high standard within the council. • All audit investigations of suspected fraud and/or irregularities are reported to the Audit and Scrutiny Panel in line with the agreed Internal Audit reporting protocol. There were no material frauds or irregularities identified in 2021/22 that required to be brought to the attention of the Corporate Management Team. • The ongoing need for the council to continue to respond to challenges arising from the public health emergency, but there was less direct pressure on governance and internal controls than in 2020/21 when the council had to transition very quickly to significantly different ways of operating with consequential impacts on governance, internal control, and risk management arrangements. • While there are no issues that require the Head of Audit and Risk to quality his annual opinion, there are a small number of areas highlighted which will continue to be the focus of future audit coverage: - Programme of Work reports to committee - which are considered not to always easily allow elected members to monitor and/or assess progress against plans (timescales and budgets). Similarly, there is currently no mechanism to easily
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allow senior management to review progress across the range of Programme of Work activities. Management has previously committed to improving the ability of key stakeholders to monitor the progress of major projects / programme of work activities. - The Strategic Performance Framework - supportive of the approach adopted, Internal Audit recognises that implementation of effective, timely, and regular performance reporting on key strategic and operational performance measures to the Corporate Management Team and Service Committees has been significantly impacted over the last two years due to the need to respond to, and prioritise resources as a result of, the pandemic. - Current and future operating model - and the linked planned developments impacting upon workforce, digital transformation, service re-design, assets, and governance and how these actions are managed and progressed and the extent to which these contribute towards the achievement of the council’s ambitions. 5.3 Despite the challenges presented by the pandemic and notwithstanding the results of some specific individual audit assignments, overall the Head of Audit and Risk reported that he was satisfied that the council’s internal control and governance arrangements remained reasonably robust throughout 2021/22. 6. Previous year issues - 2020/21 6.1 In his Internal Audit annual report for 2020/21 the Head of Audit and Risk provided an overview of the activities of the Internal Audit section for that year. While this included highlights of a number of the more significant issues which arose from the work undertaken by Internal Audit during the year, none of these required actions which carried forward into the following year or which have not already been identified in paragraph 5.2 above. 7. Certification 7.1 In compliance with the Delivering Good Governance in Local Government: Framework (2016) the council has systems in place to review and improve the governance and internal control environment throughout the year. Issues for action have been identified and implementation will be monitored and reported as part of the next annual review. 7.2 It is our opinion that reasonable assurance can be placed upon the adequacy and effectiveness of North Lanarkshire Council and its Group systems of governance. The annual review process has demonstrated sufficient evidence that the council’s corporate governance arrangements have operated effectively, and the council and its group companies comply with the relevant corporate governance principles in all significant respects. Chief Executive Leader of the Council