ITEM 7.1 Appendix 4 - Final Audit Report - HSCP Governance Arrangements
North Lanarkshire Council · 25 February 2025
Back to IJB Performance, Finance and Audit Committee — 25 February 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 1 REVIEW OF NORTH LANARKSHIRE HEALTH AND SOCIAL CARE PARTNERSHIP GOVERNANCE ARRANGEMENTS ITEM 7.1 Appendix 4 INTERNAL AUDIT REPORT Contents 1. Executive Summary 2. Findings and Recommendations 3. Action Plan Appendix 1: Audit grading Appendix 2: Good Governance Principles Appendix 3: Management actions assessed as ‘not yet complete’ Issued to: Chief Officer (North Lanarkshire HSCP) Copied to: Chief Financial Officer (North Lanarkshire HSCP) and Service Support Project Manager (NHS Lanarkshire) Headlines The primary purpose of this audit was to provide independent assurance on the adequacy and effectiveness of the processes in place to enable the North Lanarkshire Health and Social Care Partnership (HSCP) to review and assess its governance arrangements against expected good practice. As part of a review of the effectiveness of the governance arrangements in place, the North Lanarkshire HSCP have undertaken a self-assessment in respect of their compliance with the principles outlined in the CIPFA Delivering Good Governance in Local Government Framework (2016) (see Appendix 2). This Framework places a responsibility on an authority to ensure additional assurance on the overall adequacy and effectiveness of the framework of governance, risk management and control is provided by the internal auditor. The self-assessment was undertaken using a Governance Self-Assessment Checklist developed by the Chief Internal Auditor (NHS). This was based on professional judgement and relevant guidance, as well as the CIPFA Delivering Good Governance in Local Government Framework (2016). NLC Internal Audit thereafter undertook a high-level review of both the Governance Self-Assessment Checklist completed by the North Lanarkshire HSCP and the draft Annual Governance Statement for 2023-24, to identify areas where it is considered improvements could be made to strengthen these arrangements. Part of the work undertaken by NLC Internal Audit during this exercise included assessing the extent to which management have implemented those actions previously committed to in response to both recommendations contained in previous Internal and External Audit reports and improvement actions identified by management in previous years’ Annual Governance Statements (AGS). We have categorised this audit as providing ‘adequate assurance’ meaning that we have concluded that the arrangements the North Lanarkshire HSCP has in place for reviewing and assessing its governance framework are largely satisfactory and that this framework is generally consistent with legislative requirements and expected good practice. However, during our review we did identify the following areas for improvement: • improvement actions identified in the governance self-assessment undertaken by the North Lanarkshire HSCP have not been taken forward to the Annual Governance Statement (AGS); • appropriate and timely action is required to progress previously agreed outstanding actions; and • there is a need to review the North Lanarkshire Health and Social Care Partnership Audit Charter. Detail on these findings and the associated recommendations made by NLC Internal Audit are included in the action plan at section 3 of this report. Assurance Opinion (see definition at Appendix 1) Adequate assurance Report status FINAL Audit ref 0500/2024/001 Date issued 12/08/2024 Audit Team Lynn McCrum and Paula Hendry
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 2 1. Executive Summary Objectives The primary purpose of this audit was to provide independent assurance on the adequacy and effectiveness of the processes in place to enable the North Lanarkshire Health and Social Care Partnership (HSCP) to review and assess its governance arrangements against expected good practice. As part of a review of the effectiveness of the governance arrangements in place, the North Lanarkshire HSCP have undertaken a self-assessment in respect of their compliance with the principles outlined in the CIPFA Delivering Good Governance in Local Government Framework (2016) (see Appendix 2). This Framework places a responsibility on an authority to ensure additional assurance on the overall adequacy and effectiveness of the framework of governance, risk management and control is provided by the internal auditor. The self-assessment was undertaken using a Governance Self-Assessment Checklist developed by the Chief Internal Auditor (NHS). This was based on professional judgement and relevant guidance, as well as the CIPFA Delivering Good Governance in Local Government Framework (2016). NLC Internal Audit thereafter undertook a high-level review of both the Governance Self-Assessment Checklist completed by the North Lanarkshire HSCP and the draft Annual Governance Statement for 2023-24, to identify areas where it is considered improvements could be made to strengthen the arrangements. This engagement has been conducted in accordance with the ‘Public Sector Internal Audit Standards’. The Internal Audit section reports formally on conformance with these standards to the Performance, Finance and Audit Committee. Work undertaken: Follow-up of previously agreed actions All Internal and External Audit reports contain management responses to audit recommendations which generally include a commitment to specific actions by a stated timescale. Part of the work undertaken by NLC Internal Audit during this exercise included reviewing the extent to which management have implemented those actions previously committed to in response to recommendations contained in both previous Internal and External Audit reports and with regards to improvement actions identified by management in previous years’ Annual Governance Statements (AGS). Information is contained in respect of those Internal Audit, External Audit and Annual Governance Statement actions previously reported as outstanding in the ‘Follow-Up of Actions Previously Agreed by Management in Response to Audit Recommendations’ report issued by NL Internal Audit in June 2023. We have also included an assessment of the current position in respect of actions agreed in response to recommendations made in the 2022/23 External Audit Report. It should be noted that the improvement actions identified by management in the 2022/23 AGS all relate to actions raised in previous Internal Audit or External Audit reports or in previous AGS. An update in respect of progress to date regarding the previously agreed outstanding actions was reported to the Performance, Finance and Audit Committee in October 2023 with a further update included in the draft Annual Governance Statement 2023/24. These updates were thereafter reviewed by NLC Internal Audit in June 2024 to assess and verify progress made, with testing carried out/evidence reviewed accordingly for those actions reported as being complete. The status of the action was then updated accordingly to reflect our assessment of progress made. It should be noted that this review has focussed on whether planned actions have been completed as previously committed to and this does not include detailed testing of whether the implemented actions have been effective in addressing the previously detailed weaknesses. Detail in respect of each of these recommendations is provided in Appendix 3. The action plan at section 3 of this report includes a recommendation for management in relation to the progress of these outstanding actions.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 3 2. Findings and Recommendations Number and category of recommendations raised (see definition of priority at Appendix 1) High Medium Low 0 3 0 Key areas requiring management action (High) There were no areas requiring urgent management attention identified. Good practice identified We noted the following areas of good practice during the audit: • The North Lanarkshire HSCP includes an Annual Governance Statement (AGS) in their Annual Accounts. The AGS provides an assessment of the adequacy and effectiveness of the HSCP’s governance arrangements and system of internal control and provides an explanation as to how the HSCP complies with the Code of Corporate Governance and meets the requirements of the CIPFA Delivering Good Governance in Local Government Framework (2016). • The AGS also includes an update on how continuous improvement actions identified in previous years’ in respect of internal controls, risk management and other governance arrangements have been/are being progressed, with regular updates on progress of these agreed actions being presented to and monitored by the IJB Performance, Finance and Audit Committee. • The North Lanarkshire HSCP have undertaken a self-assessment in respect of their compliance with the principles outlined in the CIPFA Delivering Good Governance in Local Government Framework (2016). Other areas for improvement (Medium) A small number of other areas for improvement were identified: • Improvement actions identified in the governance self-assessment undertaken by the North Lanarkshire HSCP have not been taken forward to the Annual Governance Statement (AGS); • Appropriate and timely action is required to progress previously agreed outstanding audit actions; and • There is a need to review the North Lanarkshire Health and Social Care Partnership Audit Charter.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 4 3. Action Plan Review of North Lanarkshire HSCP Governance Arrangements 0500/2024/001 Ref Finding 1 Improvement actions identified in the governance self-assessment undertaken by the North Lanarkshire HSCP have not been taken forward to the Annual Governance Statement (AGS). As part of a review of the effectiveness of the governance arrangements in place, in April 2024 the North Lanarkshire HSCP undertook a self-assessment in respect of their compliance with the principles outlined in the CIPFA Delivering Good Governance in Local Government Framework (2016) using a Governance Self-Assessment Checklist developed by the Chief Internal Auditor (NHS) which is based on professional judgement and relevant guidance, as well as the aforementioned CIPFA Delivering Good Governance in Local Government Framework (2016). NLC Internal Audit has used this as a basis for independently assessing compliance with the Framework, obtaining and reviewing evidence to substantiate management’s self-assessment of governance arrangements and identifying areas where we considered improvements could be made to strengthen the arrangements. To ensure continual improvement of the North Lanarkshire HSCP’s governance arrangements, any actions identified from the self-assessment on the effectiveness of these arrangements, together with improvement areas identified by Internal and External Audit, are generally included in an action plan in the North Lanarkshire HSCP’s Annual Governance statement (AGS). Regular updates on the progress of the agreed actions are thereafter presented to the Performance, Finance and Audit Committee. While we were pleased to note that previous actions identified have been monitored and progress on these reported in the 2023/24 AGS, improvement actions identified from the self- assessments undertaken in either 2022/23 or the current assessment for 2023/24 to this year’s AGS have not been taken forward to the action plan contained in the AGS. There were a small number of areas highlighted in the self-assessment undertaken by the North Lanarkshire HSCP which we consider should have been taken forward to the improvement action plan within the AGS in the 2023/24 Annual Accounts and progress thereafter monitored. These include the following points: • development of a revised framework for North Lanarkshire which will ensure engagement and participation in the development of the Strategic Commissioning Plan across the entire health and social care system. While we understand that a refreshed performance scorecard for the partnership has been developed, with a refined set of performance indicators, this has not yet been finalised and used in practice; • reference to work requiring to be undertaken around performance output and associated data from other Health Boards and Local Authorities; • recognition that there is a formalised risk sharing agreement in place with NHSL, NLC and SL IJB within the risk management strategy but no reference to similar in relation to performance and finance. Implication Recommendation Priority Management response Implementati on Month/Year The North Lanarkshire HSCP may not be being fully transparent and may not be able to fully demonstrate compliance with the Code of Corporate Governance and the requirements of the Delivering Good Governance in Local Government Framework. Improvement actions may not be adequately identified and/or acted upon. The Chief Officer (North Lanarkshire HSCP) should ensure that going forward the Annual Governance Statement (AGS) fully reflects any improvement actions arising from the annual self-assessment undertaken in respect of compliance with the principles outlined in the CIPFA Delivering Good Governance in Local Government Framework (2016), and that these actions are thereafter monitored, and their progress periodically reported to the Performance, Finance and Audit Committee. Medium Agree Amanda Kilburn, Chief Finance Officer This action will be taken forward for the 2024/25 and ensuing years Annual Governance Statement to further support the IJB in carrying out their strategic oversight and assurance role. April 2025
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 5 3. Action Plan (continued) Review of North Lanarkshire HSCP Governance Arrangements 0500/2024/001 Ref Finding 2 Appropriate and timely action is required to progress previously agreed outstanding audit actions. All Internal and External Audit reports contain management responses to audit recommendations which generally include a commitment to specific actions by a stated timescale. Part of the work undertaken by NLC Internal Audit during this exercise included reviewing the extent to which management have implemented those actions previously committed to in response to recommendations contained in both previous Internal and External Audit reports and with regards to improvement actions identified by management in previous years’ Annual Governance Statements (AGS). A management update in respect of progress to date regarding the previously agreed outstanding actions was reported to the Performance, Finance and Audit Committee in October 2023 with a further update included in the draft Annual Governance Statement 2023/24. These updates were thereafter reviewed by NLC Internal Audit to assess and verify progress made, with testing carried out/evidence reviewed accordingly for those actions reported as being complete. The status of the action was then updated accordingly to reflect our assessment of progress as at time of audit fieldwork which was concluded in June 2024. This is depicted in the table below. Source Report Complete Partially Not yet No longer Total implemented due relevant Internal Audit 1 4 0 0 5 External Audit 3 1 0 0 4 Actions in AGS 0 2 0 0 2 TOTAL 4 7 0 0 11 There are seven actions which we consider are not yet complete and detail in respect of these are included at Appendix 3. Four of the actions relate to similar recommendations in respect of the disaggregation of Children, Families and Justice Social Work Services and need for hosting arrangements to be finalised for cross-cutting services. While the disaggregation exercise has now been complete, work is currently underway to agree, approve and implement the new Service Level Agreement (SLA) in partnership with Children, Families and Justice Services. The delay in implementation is primarily due to slippage in the timeframe with regards to the National Care Service. We understand that as there have been further delays reported by the Scottish Government, the Service will now look to prepare their own SLA. While management consider, and have reported, the two previously agreed actions pertaining to the Performance Management audit as being complete, NLC Internal Audit do not consider this to be the case. This is primarily due to the refreshed Chief Executive’s balance scorecard not yet having been finalised and presented to the Performance, Finance and Audit Committee. The remaining outstanding point relates to an improvement action identified by management in the 2021/22 AGS and centres around developing a sound understanding of the impact for the North Lanarkshire HSCP of the outputs of the National Care Service legislation. As with the action relating to the SLA in partnership with Children, Families and Justice Services this has been delayed due to the uncertainty around the National Care Service and further updates will be presented to the IJB as they become available. We acknowledge that, for both of these actions, the delays are due to circumstances outwith the control of North Lanarkshire. (continued overleaf)
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 6 3. Action Plan (continued) Review of North Lanarkshire HSCP Governance Arrangements 0500/2024/001 Implication Recommendation Priority Management response Implementation Month/Year Risks previously identified may not be appropriately mitigated, exposing the HSCP to these risks and leaving them vulnerable. (1) The Chief Officer (NL Health and Social Care Partnership) should ensure that, to fully address previously agreed audit recommendations, appropriate and timely action is sought and thereafter undertaken to: Medium Agree Amanda Kilburn, Chief Finance Officer (1) The North Lanarkshire Health and Social Care Partnership are awaiting guidance from the Scottish Governance with regards to which services will be included in the new National Care Service and which will not. Once this guidance has been received, the issues at bullet points 1 and 3 will be addressed. Once finalised the revised performance scorecard, referenced at bullet point 2, will be reported to the Performance, Finance and Audit Committee. (2) The proposed actions for each of the recommendations will be included on an action plan and tracked, with progress on the agreed actions reported to the Performance, Finance and Audit Committee. (1) March 2025 • determine, agree and fully document in a Service Level Agreement, the proposed arrangements for those services which are ‘hosted’ by Education and Families and accessed by Adult Health and Social Work Services and vice versa. • finalise the revised performance scorecard ensuring that this clearly details the rationale for, and approval of, the targets and trajectories set for the indicators and thereafter report this to the Performance, Finance and Audit Committee; and (2) September 2024 • determine a timeline for developing a sound understanding of the impacts for the North Lanarkshire HSCP of the outputs of the National Care Service legislation. (2) The Chief Officer (NL Health and Social Care Partnership) should ensure that each of the recommendations stated at (1) above are included on an action plan which details actions proposed, together with responsible officers and expected implementation dates and that these are thereafter monitored until completion.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 7 3. Action Plan (continued) Review of North Lanarkshire HSCP Governance Arrangements 0500/2024/001 Ref Finding 3 There is a need to review the North Lanarkshire Health and Social Care Partnership Audit Charter The Public Bodies (Joint Working) (Scotland) Act 2014 requires the HSCP to comply with the accounts and audit regulations and legislation under Section 106 of the Local Government (Scotland) Act 1973 and to comply with Article 7 of the Local Authority Accounts (Scotland) Regulations 2014, the HSCP requires a professional and objective internal audit service. At its inception, it was agreed Internal Audit coverage for the North Lanarkshire HSCP would be jointly provided by the Chief Officer (Audit and Risk) for North Lanarkshire Council and the Chief Internal Auditor for NHS Lanarkshire. NHS Lanarkshire Internal Auditors are responsible for undertaking audit assignments in relation to operational matters across in-scope NHS services, with North Lanarkshire Council Internal Auditors undertaking audit assignments in relation to operational matters across social work. Joint working arrangements are in respect of ‘Board only’ audits and any cross-cutting audits. A formal document, the North Lanarkshire HSCP Audit Charter, is in place which sets out the responsibility and authority for, and approach to, North Lanarkshire HSCP’s internal audit activity. The Charter was approved in December 2016 and while it states that it will be subject to a full review at least biennially, there has been no formal review since its approval. Implication Recommendation Priority Management response Implementati on Month/Year The Chief Internal Auditors may not be in a position to conclude on the level of assurance that can be placed upon the overall adequacy and effectiveness of the HSCP’s framework of governance, risk management and internal control arrangements. The Chief Officer (North Lanarkshire HSCP) should liaise with the Chief Officer (Audit and Risk) and Chief Internal Auditor (NHS Lanarkshire) to ensure that the North Lanarkshire HSCP Audit Charter is reviewed and updated as necessary. Medium Agree Ross McGuffie, Chief Officer (North Lanarkshire HSCP) The Chief Officer (North Lanarkshire HSCP) will instruct the Chief Officer (Audit and Risk) and Chief Internal Auditor (NHS Lanarkshire) to undertake a review of the North Lanarkshire HSCP Audit Charter and update the document as necessary to reflect the current environment and working arrangements. September 2024
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 8 Audit reports are graded with an overall assurance opinion, and any issues and associated recommendations are classified individually to denote their relative importance, in accordance with the definitions in the tables below. Definition of audit assurance and recommendation categories Assurance Confidence based on sufficient evidence that internal controls are in place, operating effectively and objectives are being achieved. Assurance opinion Level of Assurance Definition Substantial Assurance Sound systems for risk, control and governance are in place and should be effective in mitigating risks to the achievement of business and control objectives. Some minor improvements to existing controls in a few areas may be required. Adequate Assurance The systems for risk, control and governance are largely satisfactory, but there is some scope for improvement as the present arrangements could undermine the achievement of business and/or control objectives and/or leave them vulnerable to some risk of error/abuse. Limited Assurance The systems for risk, control and governance have some satisfactory aspects, but contain a number of significant weaknesses that are likely to undermine the achievement of business and/or control objectives and leave them vulnerable to an unacceptable risk of error or abuse. Recommendation priority Priority Definition High Significant weaknesses which management needs to address to achieve objectives. Medium Weaknesses which require prompt action to avoid exposure to risks in achieving objectives. Low Action advised/area for improvement to enhance control or improve efficiency. Appendix 1 - Audit Grading
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 9 Appendix 2 – Good Governance Principles The core principles and sub principles of good governance set out in the 2016 CIPFA/Solace ‘Delivering good governance in Local Government Framework (‘the framework’) are taken from the International Framework: Good Governance in the Public Sector (IFAC/CIPFA 2014) and interpreted for a local government context. It is the responsibility of each local government body to: (1) Set out its commitment to the principles of good governance included in the framework; (2) Determine its own governance structure or local code by these principles; and (3) Ensure that it operates effectively in practice. Principle A: Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law Sub-principles 1. Behaving with integrity 1.1 Ensuring members and officers behave with integrity and lead a culture where acting in the public interest is visibly and consistently demonstrated thereby protecting the reputation of the organisation. 1.2 Ensuring members take the lead in establishing specific standard operating principles or values for the organisation and its staff and that they are communicated and understood. These should build on the Seven Principles of Public Life (the Nolan Principles). 1.3 Leading by example and using these standard operating principles or values as a framework for decision making and other actions. 1.4 Demonstrating, communicating and embedding the standard operating principles or values through appropriate policies and processes which are reviewed on a regular basis to ensure that they are operating effectively. 2. Demonstrating strong commitment to ethical values 2.1 Seeking to establish, monitor and maintain the organisation’s ethical standards and performance. 2.2 Underpinning personal behaviour with ethical values and ensuring they permeate all aspects of the organisation’s culture and operation. 2.3 Developing and maintaining robust policies and procedures which place emphasis on agreed ethical values. 2.4 Ensuring that external providers of services on behalf of the organisation are required to act with integrity and in compliance with high ethical standards expected by the organisation. 3. Respecting the rule of law 3.1 Ensuring members and staff demonstrate a strong commitment to the rule of the law as well as adhering to relevant laws and regulations. 3.2 Creating the conditions to ensure that the statutory officers, other key post holders and members are able to fulfil their responsibilities in accordance with legislative and regulatory requirements. 3.3 Striving to optimise the use of the full powers available for the benefit of citizens, communities and other stakeholders. 3.4 Dealing with breaches of legal and regulatory provisions effectively. 3.5 Ensuring corruption and misuse of power are dealt with effectively.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 10 Appendix 2 – Good Governance Principles (continued) Principle B: Ensuring openness and comprehensive stakeholder engagement Sub-principles 1. Openness 1.1 Ensuring an open culture through demonstrating, documenting and communicating the organisations commitment to openness. 1.2 Making decisions that are open about actions, plans, resource use, forecasts, outputs and outcomes. The presumption is for openness. If that is not the case, a justification for the reasoning for keeping a decision confidential should be provided. 1.3 Providing clear reasoning and evidence for decisions in both public records and explanations to stakeholders and being explicit about the criteria, rationale and considerations used. In due course, ensuring that the impact and consequences of those decisions are clear. 1.4 Using formal and informal consultation and engagement to determine the most appropriate and effective interventions/courses of action. 2. Engaging comprehensively with institutional stakeholders (Note: institutional stakeholders are the other organisations that local government needs to work with to improve services and outcomes (such as commercial partners and suppliers as well as other public or third sector organisations) or organisations to which they are accountable.) 2.1 Effectively engaging with institutional stakeholders to ensure that the purpose, objectives and intended outcomes for each stakeholder relationship are clear so that outcomes are achieved successfully and sustainably. 2.2 Developing formal and informal partnerships to allow for resources to be used more efficiently and outcomes achieved more effectively. 2.3 Ensuring that partnerships are based on: trust; a shared commitment to change; a culture that promotes and accepts challenge among partners and that the added value of partnership working is explicit. 3. Engaging with individual citizens and service users effectively 3.1 Establishing a clear policy on the type of issues the organisation will meaningfully consult with or involve communities, individual citizens, service users and other stakeholders to ensure that service (or other) provision is contributing towards the achievement of intended outcomes. 3.2 Ensuring that communication methods are effective and that elected members and officers are clear about their roles with regard to community engagement. 3.3 Encouraging, collecting and evaluating the views and experiences of communities, citizens, service users and organisations of different backgrounds including reference to future needs. 3.4 Implementing effective feedback mechanisms in order to demonstrate how views have to be taken into account. 3.5 Balancing feedback from more active stakeholder groups with other stakeholder groups to ensure inclusivity. 3.6 Taking account of the impact of decisions on future generations of taxpayers and service users.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 11 Appendix 2 – Good Governance Principles (continued) Principle C: Defining outcomes in terms of sustainable economic, social and environmental benefits Sub-principles 1. Defining outcomes 1.1 Having a clear vision, which is an agreed formal statement of the organisations purpose and intended outcomes containing appropriate performance indicators, which provide the basis of the organisation’s overall strategy, planning and other decisions. 1.2 Specifying the intended impact on, or changes for, stakeholders, including citizens and service users. It could be immediately or over the course of a year or longer. 1.3 Delivering defined outcomes on a sustainable basis within the resources that will be available. 1.4 Identifying and managing risks to the achievement of outcomes 1.5 Managing service users’ expectations effectively with regard to determining priorities and making the best use of the resources available. 2. Sustainable economic, social and environmental benefits 2.1 Considering and balancing the combined economic, social and environmental impact of policies and plans when taking decisions about service provision. 2.2 Taking a longer term view with regard to decision making, taking account of risk and acting transparently where there are potential conflicts between the organisation’s intended outcomes and short term factors such as the political cycle or financial constraints. 2.3 Determining the wider public interest associated with balancing conflicting interest between achieving the various economic, social and environmental benefits, through consultation where possible, in order to ensure appropriate trade-offs. 2.4 Ensuring fair access to services.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 12 Appendix 2 – Good Governance Principles (continued) Principle D: Determining the interventions necessary to optimise the achievement of the intended outcomes Sub-principles 1. Determining interventions 1.1 Ensuring decision makers receive objective and rigorous analysis of a variety of options indicating how intended outcomes would be achieved and associated risks. Therefore ensuring best value is achieved however services are provided. 1.2 Considering feedback from citizens and service users when making decisions about service improvements or where services are no longer required in order to prioritise competing demands within limited resources available including people, skills, land and assets and bearing in mind future impacts. 2. Planning interventions 2.1 Establishing and implementing robust planning and control cycles that cover strategic and operational plans, priorities and targets. 2.2 Engaging with internal and external stakeholders in determining how services and other courses of action should be planned and delivered. 2.3 Considering and monitoring risks facing each partner when working collaboratively, including shared risks. 2.4 Ensuring arrangements are flexible and agile so that the mechanisms for delivering goods and services can be adapted to changing circumstances. 2.5 Establishing key performance indicators (KPIs) as part of the planning process in order to identify how the performance of services and projects is to be measured. 2.6 Ensuring capacity exists to generate the information required to review service quality regularly. 2.7 Preparing budgets in accordance with objectives, strategies and the medium term financial plan. 2.8 Informing medium and long term resource planning by drawing up realistic estimates of revenue and capital expenditure aimed at developing a sustainable funding strategy. 3. Optimising achievement of intended outcomes 3.1 Ensuring the medium term financial strategy integrates and balances service priorities, affordability and other resource constraints. 3.2 Ensuring the budgeting process is all-inclusive, taking into account the full cost of operations over the medium and longer term. 3.3 Ensuring the medium term financial strategy sets the context for ongoing decisions on significant delivery issues or responses to changes in the external environment that may arise during the budgetary period in order for outcomes to be achieved while optimising resource usage. 3.4 Ensuring the achievement of ‘social value’ through service planning and commissioning.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 13 Appendix 2 – Good Governance Principles (continued) Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it Sub-principles 1. Developing the entity’s capacity 1.1 Reviewing operations, performance use of assets on a regular basis to ensure their continuing effectiveness. 1.2 Improving resource use through appropriate application of techniques such as benchmarking and other options in order to determine how the authority’s resources are allocated so that outcomes are achieved effectively and efficiently. 1.3 Recognise the benefits of partnerships and collaborative working where added value can be achieved. 1.4 Developing and maintaining an effective workforce plan to enhance the strategic allocation of resources 2. Developing the capacity of the entity’s leadership and other individuals 2.1 Developing protocols to ensure that elected and appointed leaders negotiate with each other regarding their respective roles early on in the relationship and that a shared understanding of roles and objectives is maintained. 2.2 Publishing a statement that specifies the types of decisions that are delegated and those reserved for the collective decision making of the governing body. 2.3 Ensuring the leader and the chief executive have clearly defined and distinctive leadership roles within a structure, whereby the chief executive leads the authority in implementing strategy and managing the delivery of services and other outputs set by members and each provides a check and a balance for each other’s authority. 2.4 Developing the capabilities of members and senior management to achieve effective shared leadership and to enable the organisation to respond successfully to changing legal and policy demands as well as economic political and environmental changes and risks by ensuring: (a) members and staff have access to appropriate induction tailored to their role and that ongoing training and development matching individual and organisational requirements is available and encouraged; (b) members and officers have the appropriate skills, knowledge, resources and support to fulfil their roles and responsibilities and ensuring that they are able to update their knowledge on a continuing basis; and (c) personal, organisational and system-wide development through shared learning, including lessons learnt from both internal and external governance weaknesses. 2.5 Ensuring that there are structures in place to encourage public participation 2.6 Taking steps to consider the leadership’s own effectiveness and ensuring leaders are open to constructive feedback from peer review and inspections 2.7 Holding staff to account through regular performance reviews which take into account of training development needs 2.8 Ensuring arrangements are in place to maintain the health and wellbeing of the workforce and support individuals in maintaining their own physical and mental wellbeing
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 14 Appendix 2 – Good Governance Principles (continued) Principle F: Managing risks and performance through robust internal control and strong public financial management Sub-principles 1. Managing risk 1.1 Recognising that risk management is an integral part of all activities and must to considered in all aspects of decision making 1.2 Implementing robust and integrated risk management arrangements and ensuring that they are working effectively 1.3 Ensuring that responsibilities for managing individual risks are clearly allocated 2. Managing performance 2.1 Monitoring service delivery effectively including planning specification, execution and independent post- implementation review 2.2 Making decisions based on relevant, clear objective analysis and advice pointing out the implications and risks inherent in the organisation’s financial, social and environmental position and outlook. 2.3 Ensuring an effective scrutiny or oversight function is in place which encourages constructive challenge and debate on policies and objectives before, during and after decisions are made thereby enhancing the organisation’s performance and that of any organisation for which it is responsible (OR for a committee system). Encouraging effective and constructive challenge and debate on policies and objectives to support balances and effective decision making. 2.4 Providing members and senior management with regular reports on service delivery plans and on progress towards outcome achievement 2.5 Ensuring there is consistency between specification stages (such as budgets) and post-implementation reporting (e.g. financial statements). 3. Robust internal controls 3.1 Aligning the risk management strategy and policies on internal control and achieving objectives 3.2 Evaluating and monitoring risk management and internal control on a regular basis 3.3 Ensuring effective counter fraud and anti-corruption arrangements are in place 3.4 Ensuring additional assurance on the overall adequacy and effectiveness of the framework of governance, risk management and control is provided by the internal auditor. 3.5 Ensuring an audit committee or equivalent group of function which is independent of the executive and accountable to the governing body (a) provides a further source of effective assurance regarding arrangements for managing risk and maintaining an effective control environment; and (b) that its recommendations are listened to and acted upon 4. Managing data 4.1 Ensuring effective arrangements are in place for the safe collection, storage, use and sharing of data, including process to safeguard personal data. 4.2 Ensuring effective arrangements are in place and operating effectively when sharing data with other bodies. 4.3 Reviewing and auditing regularly the quality and accuracy of data used in decision making and performance monitoring. 5. Strong public financial management 5.1 Ensuring Financial management supports both long-term achievements of outcomes and short term financial and operating performance. 5.2 Ensuring well-developed financial management is integrated at all levels of planning and control including management of financial risks and controls.
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https://nlcgov-my.sharepoint.com/personal/scottfr_northlan_gov_uk/Documents/Documents/Appendix 4 - Final Audit Report - HSCP Governance Arrangements.docx 15 Appendix 2 – Good Governance Principles (continued) Principle G – Implementing good practices in transparency, reporting, and audit, to deliver effective accountability. Sub-principles 1. Implementing good practice in transparency 1.1 Writing and communicating reports for the public and other stakeholders in an understandable style appropriate to the intended audience and ensuring that they are easy to access and interrogate. 1.2 Striking a balance between providing the right amount of information to satisfy transparency demands and enhance public scrutiny while not being too onerous to provide and for users to understand. 2. Implementing good practice in reporting 2.1 Reporting at least annually on performance, value for money and the stewardship of its resources. 2.2 Ensuring members and senior management own the results 2.3 Ensuring robust arrangements for assessing the extent to which the principles contained in the Framework have been applied and publishing the results on this assessment including an action plan for improvement and evidence to demonstrate good governance (annual governance statement). 2.4 Ensuring that the Framework is applied to jointly managed or share service organisations as appropriate 2.5 Ensuring the performance information that accompanies the financial statements is prepared on a consistent and timely basis and the statements allow for comparison with other similar organisations. 3. Assurance and effective accountability 3.1 Ensuring that recommendations for corrective action made by external audit are acted upon 3.2 Ensuring an effective internal audit service with direct access to members is in place which provides assurance with regard to governance arrangements and recommendations are acted upon. 3.3 Welcoming peer challenge, reviews and inspections from regulatory bodies and implementing recommendations 3.4 Gaining assurance on risks associated and delivering services through third parties and that this is evidenced in the annual governance statement 3.5 Ensuring that when working in partnership, arrangements for accountability are clear and that the need for wider public accountability has been recognised and met.
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Appendix 3 Management actions assessed as ‘not yet complete’ Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment INTERNAL AUDIT Financial due diligence (May 2020) – 2 actions EXTERNAL AUDIT Annual Audit Report 2019/20 – 1 action ANNUAL GOVERNANCE STATEMENT Continuous improvement actions for 2019/20 – 1 action Risk: A lack of formally documented arrangements may increase the risk that the resources transferred from the IJB to the Council do not reflect the cost of the relevant services in terms of delegated and non- delegated functions. Recommendation: Each of the reports listed contained similar recommendations in respect of the disaggregation of Children, Families and Justice Social Work Services and need for hosting arrangements to be finalised for cross-cutting services. The budget disaggregation exercise has been concluded and the revised IJB direction to NLC issued in March 2021 excludes the total budget transfer in respect of Children, Families and Justice Services. Management recognises that the finalisation of the Service Level Agreement (SLA) for future hosting arrangements and associated budgets is overdue. Once finalised, the SLA will be presented to a future meeting of the NLC Adult Health and Social Care Committee, the NLC Education and Families Committee and the IJB for approval. The Scottish Government have advised that the timeframe around the National Care Service has now slipped further than intended and, as a result, the Service will now consider creating their own Service Level Agreement between Children, Families and Justice Services. Original timescale: March 2021 Revised timescales: September 2021 June 2022 Ongoing We are pleased to note that the budget disaggregation exercise has been concluded. We acknowledge that Covid has had a significant impact on the Health and Social Care Partnership which has in turn impacted on the prioritisation of resources. In addition, we welcome the Services’ intentions to now exploring the option for creating their own Service Level Agreement between Children, Families and Justice Services. INTERNAL AUDIT REPORT Performance management (August 2019) Risk: There is no formal documented record or clear rationale for the targets and trajectories set. Recommendation: Management should ensure that a formal record is retained detailing the rationale for, and approval of, the targets and trajectories set for the indicators on the performance scorecard and this information should be shared with the Performance, Finance and Audit Committee. Category: Amber The Annual Performance Report presented to the Performance, Finance and Audit Committee in October 2023 includes details of the targets and trajectories set for the indicators on the performance scorecard. There is however currently no formal record detailing the rationale for the targets and trajectories set for the indicators on the performance scorecard. The scorecard is currently being finalised and this action will now be progressed with a view to completion and reporting to the Performance, Finance & Audit Committee in August 2024. Original timescale: October 2019 Revised timescales: March 2022 September 2023 August 2024 We are pleased to note that action is being taken to progress this action, however it is imperative that the performance scorecard is finalised and that this clearly details the rationale for the targets and trajectories set for each of the indicators.
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Appendix 3 (continued) Management actions assessed as ‘not yet complete’ Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment INTERNAL AUDIT REPORT Performance management (August 2019) Risk: The IJB may not provide adequate performance information to key stakeholders to enable the, to make informed decisions and recommend remedial actions to address concerns arising. The IJB Performance, Finance and Audit Committee may not be in a position to fulfil its remit which includes the requirement to ‘review quarterly performance and recommend remedial action to address concerns’ and to ‘ensure effective arrangements are in place to register all performance and operational risks’. Recommendation: Management should undertake a formal review of the current arrangements for monitoring and reporting performance to reflect on whether reports are fit for purpose and contain relevant, comprehensive information useful to stakeholders. This could include comparison with other IJB published reports. Particular consideration should be given to the areas identified in the finding, i.e.: • an overview of all indicators on the performance scorecard including a mechanism to provide an update on indicators previously reported but now considered satisfactory; • areas for improvement listed should include proposed actions with timescales, progress with these and how effective they are; • greater use of benchmarking with other IJBs and trend information; and • incorporating reporting by locality. Category: Amber In August 2022, the IJB’s Performance, Audit and Finance Committee endorsed the development of a revised whole system performance framework for the partnership, which it was expected would address all outstanding points raised in the finding. The range of associated performance measures within both the national outcome indicators and the local performance framework have been refreshed alongside the development of the Strategic Commissioning Plan 2023- 26 and the continued development of the Programme of Work. However, the revised balanced scorecard reflecting the new indicators has not yet been finalised. This will be finalised and reported to the Performance, Finance and Audit Committee in August 2024, with the scorecard populated to reflect the Quarter 1 data. Original timescale: October 2019 Revised timescales: March 2022 September 2023 August 2024 We were pleased to note that significant action has been taken in this area, to fully implement the recommendations made. However, we consider it is imperative that the performance scorecard is finalised and reported to the Performance, Finance and Audit Committee.
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Appendix 3 (continued) Management actions assessed as ‘not yet complete’ Report Details Details from original recommendation Current position per management update Original and revised timescales Internal Audit comment ANNUAL GOVERNANCE STATEMENT Continuous improvement actions for 2021/22 Risk: N/A Recommendation: To develop a sound understanding of the impact for the North Lanarkshire Health and Social Care Partnership (NLHSCP) of the outputs of the National Care Service legislation. Category: N/A There has been very little movement in this area primarily due to the uncertainty and lack of detail currently available from the Scottish Government. This will be revisited once further clarity has been obtained. A paper was presented to the IJB in January 2024 giving an update on the status of the action. Further details will be reported to the IJB as details are released. Original timescale: March 2023 Revised timescale: To be determined once further clarity obtained regarding National Care Service proposals. We acknowledge that implementation of the recommendation has been delayed as a result of the uncertainty and lack of detail available in respect of the new National Care Service.