2026-06-04-MIJB-A&R-Item-5.2-Annual-Governance-Statement-Appendix-1
Midlothian Council · 4 June 2026
Back to Midlothian Integration Joint Board - Audit and Risk Committee — 4 June 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Appendix 1: MIJB Annual Governance Statement 2025/26 Introduction The Annual Governance Statement explains the MIJB’s governance arrangements and system of internal control and reports on their effectiveness. Scope of Responsibility The MIJB is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for and used economically, efficiently and effectively. To meet this responsibility, the MIJB has established arrangements for governance which includes a system of internal control. The system is intended to manage risk to support the achievement of the MIJB’s policies, aims and objectives. Reliance is also placed on NHS Lothian and Midlothian Council’s (the partners) systems of internal control that support compliance with both organisations’ policies and promotes achievement of each organisation’s aims and objectives, as well as those of the MIJB. The system can only provide reasonable and not absolute assurance of effectiveness. The Governance Framework and Internal Control System The Board of the MIJB comprises voting members, nominated by either NHS Lothian or Midlothian Council, as well as non-voting members including a Chief Officer appointed by the Board. The current MIJB Local Code of Corporate Governance (MIJB Local Code), which was approved by the Board on 8 April 2021, sets out the framework and key principles, which require to be complied with, to demonstrate effective governance. The MIJB Local Code reflects the changing context of integration and is consistent with the principles and recommendations of the CIPFA/SOLACE Framework ‘Delivering Good Governance in Local Government’ (2016) and the supporting guidance notes for Scottish authorities. The overall aim of the Framework is to ensure that: resources are directed in accordance with agreed policy and according to priorities; there is sound and inclusive decision making; and there is clear accountability for the use of those resources in order to achieve desired outcomes for service users and communities. The main features of the governance framework and internal control system associated with the seven core principles of good governance defined in the MIJB Local Code in existence during 2025/26 included: A. Behaving with integrity, demonstrating strong commitment to ethical values, and respecting rule of law The roles and responsibilities of Board members and statutory officers and the processes to govern the conduct of the Board’s business are defined in the Scheme of Integration which was approved by the Board and NHS Lothian in June 2022, which serves as the approved constitution, and Standing Orders, a revision of which was approved by the Board in February 2023, to make sure that public business is conducted with fairness and integrity The standing orders were reviewed at the MIJB Audit & Risk Committee in September 2025 and no changes were proposed in the review and this was approved by the MIJB Board in February 2026. The Ethical Standards in Public Life (Scotland) Act 2000 provides for Codes of Conduct for local authority councillors and members of relevant public bodies. As a Public Body listed in schedule 3 of the Act, the MIJB is required to produce a Code of Conduct, which was approved by the Board in April 2022, continued adherence to this Code of Conduct provides appropriate assurance against this principle. The MIJB is dependent upon arrangements within the partner organisations for areas such as: ensuring legal compliance in the operation of services; handling complaints; ethical awareness training and whistleblowing policies and procedures; staff appointment and appraisal processes which take account of values and ethical behaviour; identifying, mitigating and recording conflicts of interest, hospitality and gifts; and procurement of goods and services which are sustainable, represent value of money and which reinforce ethical values.
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Other areas where the MIJB places significant reliance on arrangements in place within the partner organisations are set out in the remainder of the statement. The Chief Officer is responsible for ensuring that agreed procedures are followed and that all applicable statutes and regulations are complied with. Professional advice on the discharge of duties is provided to the Board by the MIJB Chief Officer supported by Chief Financial Officer, Chief Internal Auditor and Board Clerk as appropriate. B. Ensuring openness and comprehensive stakeholder engagement Board meetings are held in public unless there are good reasons for not doing so on the grounds of confidentiality. Board papers are available to the public on the Council website. Unless confidential, decisions made by the Board are documented in the public domain. Community engagement was encouraged as part of the development of the Scheme of Integration and the Strategic Plans of the Health and Social Care Integration Joint Board were developed following consultations with interested parties including members of the public. The Midlothian IJB complaints procedure was established in 2017, revised in 2021 and is currently being revised to be brought to the Audit & Risk Committee in 2026.Work is ongoing to revise the complaints processes in conjunction with Midlothian Council during 2026. C. Defining outcomes in terms of sustainable economic, social, and environmental benefits The vision, strategic objectives and outcomes are reflected in the Midlothian Health & Social Care Integration Joint Board Strategic Plan 2025-35 was approved in October 2025 and has been updated to reflect on-going assessment of need and priorities following public consultation and has review the sustainable economic, social and environmental benefits and challenges over the period of the plan. Implementation is underpinned by the associated Directions, on which progress reports are presented to the Board. Implications are considered during the decision-making process within the standard report template covering Policy, Equalities, Resources, Risk, and Involving People. D. Determining the interventions necessary to optimise the achievement of the intended outcomes In determining how services and other courses of action should be planned and delivered, the MIJB has a statutory responsibility to involve patients and members of the public. The MIJB Strategic Plan is based on both routine engagement and statutory consultation to inform its review and update. The statutory consultation plan for the Midlothian IJB draft Strategic Plan was approved by Midlothian IJB Board in June 2024. Substantial stakeholder consultation was undertaken in the development of the draft Midlothian IJB Strategic Plan 2025-2035. The MIJB has issued Directions to the partners, in March 2025 for 2025/26 Directions for service delivery and for service redesign and recommissioning in line with the transformation programme. E. Developing the entity’s capacity, including the capability of its leadership and the individuals within it The MIJB Chief Officer is responsible and accountable to the Board for all aspects of management including promoting sound governance and providing quality information/support to inform decision-making and scrutiny. Regular meetings are held between the Chief Officer and the Chair and Vice Chair of the MIJB. The MIJB Chief Officer also meets regularly with representatives from the partner organisations. Members of the MIJB Board are provided with the opportunity to attend Development Sessions relevant to their role as part of their development programme. The MIJB has also undertaken a Self-Assessment first completed in August 2023 with an improvement plan being approved. Midlothian IJB review this plan in April 2025 with formal approval the due from the MIJB Board in 2026. A 3 year Integrated Workforce Plan 2025-28 was approved by the MIJB in February 2025 to allow delivery to the Scottish Government in March 2025. The Workforce This plan is aligned to the MIJB medium-term financial strategy and supports the delivery of the MIJB Strategic Plan 2025-2035 to improve outcomes for people and communities. Midlothian IJB awaits feedback from Scottish Government where after an improvement plan and a publication date will be agreed.
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F. Managing risks & performance through robust internal control & strong public financial management The MIJB Chief Officer has overall responsibility for directing and controlling the partnership to deliver health and social care services. The MIJB Board is responsible for key decision-making. The MIJB has approved a Risk Management Strategy which includes: the reporting structure; types of risks to be reported; risk management framework and process; roles and responsibilities; and monitoring risk management activity and performance. This Strategy has been updated and presented to the June 2024 Audit & Risk Committee with the Risk Management Policy being approved by the MIJB Board in October 2024 Regular risk reporting is completed to the MIJB Audit & Risk Committee. The MIJB Chief Financial Officer is responsible for the proper administration of all aspects of the MIJB’s financial affairs including ensuring advice is given to the Board on all financial matters. The MIJB’s system of internal financial control is dependent upon the framework of financial regulations, regular management information (including Revenue Budget Monitoring reports to the Board), administrative procedures (including segregation of duties), management supervision and systems of delegation and accountability within the partner organisations. The MIJB also relies upon the partners for: Counter fraud and anti-corruption arrangements; and Management of data in accordance with applicable legislation. G.Implementing good practices in transparency, reporting, and audit to deliver effective accountability The Shared Chief Internal Auditor of Midlothian Council was the MIJB’s Chief Internal Auditor for 2025/26 whose role was to provide an independent and objective annual opinion on the effectiveness of the MIJB’s internal controls, risk management and governance. This is carried out in conformance with the Global Internal Audit Standards as amended by the UK Public Sector Application note. The MIJB responds to the findings and recommendations of Internal Audit, External Audit, Scrutiny and Inspection bodies. The MIJB Audit and Risk Committee is integral to overseeing assurance and monitoring improvements in internal controls, risk management and governance. The Audit & Risk Committee updated the terms of reference in June 2024 and have now recruited an independent member in line with CIPFA best practice. Performance Reports are regularly presented to the Board for monitoring and control of achievement of Improvement Goals. An Annual Performance Report for 2024/25 was presented to the IJB Board for review prior to publication in August 2025. The Annual Accounts and Report for 2025/26 will set out the financial position in accordance with relevant accounting regulations and is being prepared. Review of Adequacy and Effectiveness The MIJB is required to conduct an annual review of the effectiveness of its governance framework. The review was informed by: an annual self-assessment carried out by Internal Audit against the MIJB’s Local Code of Corporate Governance; Internal Audit reports for the MIJB; External Audit reports for the MIJB; relevant reports by other external scrutiny bodies and inspection agencies; and relevant partners’ (NHS Lothian and Midlothian Council) Internal Audit and External Audit reports. In respect of the three improvement areas of governance identified by the MIJB in 2024/25, there have been developments during the year in all three of these. Specifically, the Medium Term Financial Strategy 2025-2028 approved at the special Board Meeting in March 2026 provides a link to the Strategic Plan 2025-35 identifying 2 main strategic financial priorities. Transformation and feedback work remains ongoing to resolve the challenge of the current financial projections within that Medium Term Financial Strategy 2025-28 which reported a £13.68million annual overspend by the 2028/29 financial year. Financial monitoring processes are in place and risks are acknowledged including that MIJB’s immediate focus must be on financial recovery to ensure stability limiting the ability to invest in service changes. The IJB Reserves Policy was updated and approved at the September 2025 Audit & Risk Committee
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Improvement Areas of Governance The review activity during the 2025/26 year outlined above has identified the following areas where further improvement in governance arrangements can be made to enhance compliance with the Local Code: 1 The Internal Audit of the IJB Strategic planning process identified that IJB management should ensure that the Consultation and Engagement Statement, Housing Contribution Statement and Market Facilitation plan were finalised as soon as possible, and this occurred at the IJB Board in October 2025. 2 The MIJB Medium Term Financial Strategy 2025-2028 approved at the March 2026 IJB Board projects a £13.68million annual overspend by the 2028/29 financial year and therefore continued focus on the transformation and feedback processes in place is required to ensure financial sustainability of the MIJB remains in place. Substantial control processes are in place and operating, however these must remain under review to ensure that they remain effective. 3 The MIJB review of the complaints process and policy remains to be complete in conjunction with Midlothian Council. The implementation of these actions to enhance the governance arrangements in 2026/27 will be driven and monitored by the MIJB Chief Officer and Chief Financial Officer in order to inform the next annual review. Internal Audit work planned in 2026/27 is designed to test improvements and compliance in governance. Look forward on Governance in 2026/27 During 2026/27 the following key areas of governance will be developed as part of the ongoing programme of improvement and development for the MIJB: The refresh of the MIJB Local Code of Corporate Governance will also be put forward for MIJB approval. Conclusion and Opinion on Assurance It is our opinion that reasonable assurance can be placed upon the adequacy and effectiveness of the MIJB’s governance arrangements and system of internal control, while recognising that further improvements are required to fully demonstrate compliance with the Local Code in order for the MIJB to fully meet its principal objectives. Systems are in place to regularly review and improve governance arrangements and the system of internal control. ___________________ ______________________ Morag Barrow Val De Souza Chief Officer MIJB Chair of the MIJB