Item 12 Appendix 1 - Code of Good Governance and Annual Governance Statement 2024-25
West Dunbartonshire Council · 11 June 2025
Back to Audit Committee — 11 June 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
Item 12 Appendix 1 Annual Governance Statement The Annual Governance Statement explains the Council’s governance arrangements as it meets the requirements of the “Code of Practice for Local Authority Accounting in the UK” (the Code) and reports on the effectiveness of its system of internal control, including the reliance placed on the governance frameworks of our partners. It is included within the Council’s Financial Statements to assure stakeholders on how the Council directs and controls its functions and how it relates to communities in order to enhance transparency and scrutiny of the Council’s activities. Scope of Responsibility The Council is responsible for ensuring its business is conducted in accordance with the law and proper standards, and public money is safeguarded and properly accounted for, and used economically, efficiently and effectively. It also has a statutory duty to make arrangements to secure best value under the Local Government in Scotland Act 2003. In discharging this responsibility, the Council's Elected Members and Corporate Management Team (CMT) are responsible for putting in place proper arrangements for the governance of its affairs and facilitating the effective exercise of its functions, which includes arrangements for the management of risk. The Council has established an arms-length external organisation: West Dunbartonshire Leisure Trust – to deliver leisure services more effectively on the Council’s behalf, which reports regularly to Elected Members. From 1 July 2015 the West Dunbartonshire Health and Social Care Partnership was established to continue the development of the integration of social care and health services between the Council and NHS Greater Glasgow and Clyde. The Council has approved and adopted a Local Code of Corporate Governance (the Local Code), which is consistent with the principles of the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) Framework: “Delivering Good Governance in Local Government”. The Local Code evidences the Council's commitment to achieving good governance and demonstrates how it complies with the governance standards recommended by CIPFA. A copy of this Code is available from the Council website at: http://www.west-dunbarton.gov.uk/media/4312582/wdc-local-code.pdf This statement explains how the Council expects to comply with the Local Code and also meets the Code of Practice on Local Authority Accounting in the UK, which details the requirements for the Annual Governance Statement. The Purpose of the Governance Framework The governance framework comprises the systems, processes, and culture and values by which the Council is directed and controlled and through which it accounts to and engages with communities. It enables the Council to monitor the achievement of the strategic objectives set out in the Strategic Plan and whether they have led to the delivery of appropriate and value for money services. The Council has a system of internal control to manage risk to a reasonable level. Internal controls cannot fully eliminate risk of failure to achieve policies, aims and objectives and can therefore only provide reasonable assurance of effectiveness. The system of internal control is based on an ongoing process designed to: • identify and prioritise the risks to the achievement of the Council's policies, aims and objectives • evaluate the likelihood of those risks being realised and the impact should they be realised • manage the risks efficiently, effectively and economically. The governance framework has been in place at the Council for the year ended 31 March 2025 and up to the date of the approval of the Statement of Accounts. Page 1
Page 2
Appendix 1 The Governance Framework The main features of our governance arrangements are described in the Local Code but are summarised below: • The overarching strategic vision and objectives of the Council are detailed in the Strategic Plan 2022/27, which sets out the Council’s key priorities and key outcomes the Council is committed to delivering with its partners, as set out in the Local Outcome Improvement Plan. • Services are able to demonstrate how their activities link to the Council's vision and priorities through their Delivery Plans. Performance management and monitoring of service delivery is reported through service committees and monitored by the CMT. The Council regularly publishes information about its performance. • The West Dunbartonshire Community Alliance, which supports Community Planning West Dunbartonshire, represents the views of community organisations, communities of interest and geographical communities. Furthermore the Council has an Engaging Communities Framework setting out its approach to engaging with citizens, community organisations and stakeholders. Consultation on the future vision and activities of the partnership is undertaken in a range of ways, including seeking the views of the Alliance and through specific service consultations. The Council actively engages with its partners through community planning arrangements. • The Council has adopted a Code of Conduct and employment policies for its employees. Elected members adhere to the nationally prescribed Code of Conduct for Members in a localised format. The Council also has a protocol on member/officer relations and an inter-party protocol. • The Council has an established procedural framework which incorporates a Scheme of Delegation, Standing Orders and Financial Regulations. These describe the roles and responsibilities of Elected Members and officers and are subject to regular review. The Council facilitates policy and decision making through the agreed committee structure. • Responsibility for maintaining and operating an effective system of internal financial control rests with the Council’s Chief Officer Resources as Section 95 Officer. The system of internal financial control is based on a framework of regular management information, the Financial Regulations, administrative procedures (including separation of duties), management and supervision, and a system of delegation and accountability. Development and maintenance of the system is undertaken by managers within the Council. • The functions of the Audit Committee are undertaken as identified in CIPFA Guidance - Audit Committees: Practical Guidance for Local Authorities. • The Council’s approach to risk management is set out in the Risk Management Framework. A strategic risk register is in place and an update report on this is regularly submitted to the Corporate Services Committee and Audit Committee. The approach is embedded within the Council’s strategic planning and performance management framework with regular reporting of risk management arrangements to service committees. • Comprehensive arrangements are in place to ensure Elected Members and officers are supported by appropriate training and development. • The Council has adopted a response that is appropriate for its fraud and corruption risks and commits to maintain its vigilance to tackle fraud in accordance with the Code of Practice on Managing the Risk of Fraud and Corruption. • The Council continues to assess and monitor ongoing compliance with the CIPFA Financial Management Code. Review of Effectiveness The Council has a responsibility to review, at least annually, the effectiveness of its governance framework including the system of internal financial control. The review of effectiveness of the framework is informed by the work of the CMT which has responsibility for the development, implementation and maintenance of the governance environment, the Shared Service Manager – Audit & Fraud’s (the Council’s Chief Internal Auditor) annual report; and reports from the external auditors and other review agencies and inspectorates. The Council’s current Code of Good Governance was approved at the Audit & Performance Review Committee on 8 March 2017. An assessment of the Council’s compliance with the Code of Good Governance is supported by a process of self-assessment and assurance certification by Chief Officers and the outcome of this assessment was reported to the Audit Committee on 11 June 2025. Page 2
Page 3
Appendix 1 Each Chief Officer was presented with a self-assessment checklist to complete and return as evidence of review of the seven key areas of the Council’s governance framework which provided assurance for their service areas. The Audit Committee performs a scrutiny role in relation to the application of the Code of Good Governance and regularly monitors the performance of the Council's Internal Audit service. In relation to the effectiveness of governance arrangements and systems of internal control for the Council’s group entities, the Council places reliance upon the individual bodies’ management assurances in relation to the soundness of their systems of internal control. The Internal Audit service operates in accordance with the Public Sector Internal Audit Standards (PSIAS) 2017 and reports to the Audit Committee. An annual programme of work is determined and undertaken by Internal Audit, approved by the Audit Committee, based upon an established risk- based methodology. The Shared Service Manager – Audit & Fraud provides an independent opinion on the adequacy and effectiveness of the Council’s System of Internal Control. The Audit Committee performs a scrutiny role in relation to the application of PSIAS and regularly monitors the performance of the Internal Audit service. The Council's Shared Service Manager – Audit & Fraud has responsibility for reviewing independently and reporting to the Audit Committee annually, to provide assurance on the adequacy and effectiveness of the Standards and the extent of compliance. From 1 April 2025 the new Global Internal Audit Standards came into effect for the UK Public Sector and a transition plan is in place to ensure the Internal Audit service is compliant with the requirements by 31 March 2026. It is our view that the Council has in place a sound system of internal control and that appropriate mechanisms are in place to identify areas of weakness. This is corroborated by an annual assurance statement prepared by the Shared Service Manager – Audit & Fraud stating that the overall control environment opinion was “Generally Satisfactory with some improvements needed” such that reasonable assurance can be placed upon the adequacy and effectiveness of the Council's internal control systems. There was one audit which received an overall opinion of “Requires Improvement”, namely Housing Repairs and Maintenance. An action plan is in place to address all issues identified in relation to the audit which will be monitored and reported to CMT and Audit Committee. Due to vacancies arising in the team, some audits from 2023/24 were completed in the first 6 months of 2024/25 which has impacted on the completion of the fieldwork for the 2024/25 audit plan. However, the overall audit plan is set within the context of a multi-year approach to audit planning such that key risk areas are reviewed over a 5-year cycle. The system of governance (including the system of internal control) can provide only reasonable and not absolute assurance that the assets are safeguarded, that transactions are authorised and properly recorded, that material errors or irregularities are either prevented or would be detected within a timely period and that significant risks impacting on the achievement of the Council's objectives have been mitigated. Governance Issues and Planned Actions The following main issues and areas for improvement during 2024/25 have been identified through the self-assessment exercise carried out by Chief Officers against key aspects of the Code of Good Governance. These will be monitored as part of the next annual review in 2025/26. Improvement Area identified by 2024/25 Exercise Responsible Officer Embedding Be the Best Conversations within all service teams. Chief Officer Citizen, Communities and Facilities Management Business Classification Scheme will be rolled out to relevant service areas in relation to electronic records. Chief Officer, Resources Work is ongoing to implement the Council’s information classification policy and procedure as part of the Microsoft Office 365 project. Data Protection/Information Governance Officer Process for reporting on the status of external audit actions regularly to Audit Committee will be developed and implemented. Chief Officer, Resources Page 3
Page 4
Appendix 1 Guidance for keeping school funds has been updated, following audit. Work with establishments this session to ensure compliance with guidance Chief Officer, Education, Learning and Attainment Improvements have been recognised in terms of how global share is organised in relation to how we structure our data on the shared drive and comply with document retention timescales. Preparation for move to Microsoft 365 in session 2025/26. Chief Officer, Education, Learning and Attainment There are different induction and performance appraisal processes across HSCP services reflecting the differences in organisations. Work is ongoing to review and improve the induction process. Chief Officer, HSCP Weekly, monthly and quarterly management information is supplied to all HSCP managers and relevant governance forums however it is recognised trhese reports could be further developed to improve the quality of the data and ensure the provision of robust management information across the HSCP. Chief Officer, HSCP In relation to self-evaluation, it is recognised that the HSCP would benefit from a more structured approach to self-evaluation. Chief Officer, HSCP In relation to staff training and development, it is recognised this is an area for improvement with clarity of input from partners to be achieved. Chief Officer, HSCP Succession planning is recognised as an area of improvement for the HSCP and positive steps have been taken to address this across the HSCP. Chief Officer, HSCP Key business continuity plans are in place. Work is ongoing to develop business impact analysis documentation across the HSCP. Chief Officer, HSCP Levels of procurement compliance remain consistent but it is recognised that further work is required to strengthen procurement and commissioning arrangements within the HSCP to ensure costs and risks are managed appropriately. Chief Officer, HSCP Improvement actions arising from external inspection are monitored by the HSCP Board however further work is required in this area. Chief Officer, HSCP Financial procedures are being developed for Area Resource Group to ensure risk focused decision-making underpins all agreed packages of care/placements to care homes and an escalation pathway to ensure Chief Officer sign off where there is potential for emergency care packages to breach regulations. Chief Officer, HSCP The 2023/24 Annual Governance Statement highlighted a range of areas for improvement during 2024/25. The following table provides an update on progress with these with a number having been completed or are areas which continue to have an ongoing focus: Improvement Area identified by 2023/24 Exercise Status Embedding Be the Best Conversations within all service teams. Ongoing Work is required in some services to review and update business continuity planning documentation. Complete Business Classification Scheme will be rolled out to relevant service areas. Ongoing Work is ongoing to implement the Council’s information classification policy and procedure as part of the Microsoft Office 365 project. Ongoing Page 4
Page 5
Appendix 1 The refreshed engagement policy and procedure is being reviewed and will be presented for approval in September 2024. Complete Process for reporting on the status of external audit actions regularly to Audit Committee will be developed and implemented. Ongoing A review of Guidance for Administration of School Funds is underway following an Internal Audit review. Ongoing Action plans arising from reviews and inspections from Statutory Bodies including HMIE and the Care Inspectorate will be published online. Complete A review of workforce and succession plans is underway to ensure the plans take cognisance of future needs. Complete Best Value Assurance Report A new approach to auditing Best Value has been introduced by the Accounts Commission. This work is now integrated into annual audit reporting from 2023/24 to build local audit knowledge and reduce the scrutiny burden on councils. External audit also conduct thematic reviews as directed by the Accounts Commission. For 2023/24 this work focused on Workforce Innovation. The Council’s appointed external auditors completed their work in this during 2023/24 with a report presented to Audit Committee in September 2024. The overall conclusion was that “the council’s workforce planning strategy is aligned with its strategic plan and supports the “our council is inclusive and adaptable” strategic priority. The council could make better use of data available at organisation and service level, and through the workforce planning console, to identify future resource needs and improve succession planning.” Health and Social Care Integration The Council, as the funder of the Social Care services within the West Dunbartonshire Health and Social Care Partnership (HSCP) has an interest in the governance arrangements within the HSCP Board. Internal Audit arrangements for the HSCP is provided jointly by the Council’s Internal Audit service and the Health Board’s Internal Audit Service, with the Council’s Internal Audit service providing audit arrangements for social care services and the general oversight of the HSCP Board’s governance arrangements. The HSCP Board has arrangements in place to review its own ongoing compliance with the revised Code of Governance. Due to the Council’s role as social care service provider Internal Audit’s process outcomes on such services are reported to the Council’s Audit Committee as well as that of the HSCP Board. The Chief Social Worker provides the Council with an annual report on the performance of the HSCP. The financial arrangements for the Council’s funding to the HSCP Board are aligned and budget processes run parallel to ensure that appropriate budgets for the HSCP Board are aligned with Council policy and budgeting approaches. On an ongoing basis the Council continues to receive budgetary control information in relation to HSCP Board services funded by the Council. Compliance with Best Practice Statement on the role of the Chief Financial Officer in local government The Council complies with the requirements of the CIPFA Statement on “The Role of the Chief Financial Officer in Local Government 2010”. The Council’s Chief Financial Officer (Section 95 Officer) has overall responsibility for the Council’s financial arrangements and is professionally qualified and suitably experienced to lead the Council’s finance function and to direct finance staff. Statement on the role of the Head of Internal Audit in Public Service Organisations The Council complies with the requirements of the CIPFA Statement on “The Role of the Head of Internal Audit in Public Service Organisations 2019”. The Council’s Chief Internal Auditor has responsibility for the Council’s Internal Audit function and is professionally qualified and suitably experienced to lead and direct the Council’s Internal Audit staff. The Internal Audit service generally operates in accordance with the CIPFA “Public Sector Internal Audit Standards 2017”. Page 5
Page 6
Appendix 1 Assurance Subject to the above, and on the basis of the assurances provided, we consider the governance and internal control environment operating during 2024/25 provides reasonable and objective assurance that any significant risks impacting on the achievement of our principle objectives will be identified and actions taken to avoid or mitigate their impact. Systems are in place to continually review and improve the governance and internal control environment with plans in place to address improvement areas. Martin Rooney Peter Hessett Laurence Slavin Leader of the Council Chief Executive Chief Officer – Resources Date: Date: Date: Page 6