FINANCIAL MANAGEMENT & CORPORATE GOVERNANCE WORKING PARTY MINUTES P R E S E N T

Transcription

1 AGENDA ITEM NO. 10 FINANCIAL MANAGEMENT & CORPORATE GOVERNANCE WORKING PARTY MINUTES Minutes of a Meeting held in Committee Room 2, The Grange, Nutholt Lane, Ely on Wednesday 11 January 2012 at 3:00pm. P R E S E N T Councillor Derrick Beckett Councillor Kevin Ellis Councillor Gareth Wilson OTHER ATTENDEES Trevor Bowd - Principal Auditor Linda Grinnell Head of Finance Adrian Scaites-Stokes Democratic Services Officer 1. ELECTION OF CHAIRMAN 2. APOLOGIES It was resolved: That Councillor Gareth Wilson be elected as Chairman of the Working Party for the municipal year. No apologies were received. 3. DECLARATIONS OF INTEREST No declarations of interest were made. 4. REVIEW OF CORPORATE AND OPERATIONAL RISKS The Working Party considered a report, reference L254, previously circulated, which detailed the Council s Corporate Risk Register and the work undertaken to date to compile an Operational Risk Register. Operational Risk Register The Principal Auditor advised the Working Party how the Operational Risk Register had been devised. It had been split between the Council departments with the data linked into a summary document. The scores were shown for each risk highlighting whether they were higher or lower than before. The register had been kept simple as if it were more complex then the possibility of errors would increase. It had been put onto an Excel spreadsheet so the data could be sorted by department or by score. Agenda Item 10 page 1

2 The register indicated the control methods used to manage the risks with additional control measures that could be added. The proposal was to review the Register every 6 months, as it would be arduous to review it every 3 months, by the Principal Auditor. The responsibility for managing the actual risks would be with the Heads of Service. The Head of Finance reminded the Working Party that Members saw quarterly reports on corporate risks only. The process for monitoring these risks had to be more robust and needed more Member involvement. Now operational risks were also being considered. Judging when an operational risk could become a corporate risk would depend on the issues involved. Risks were scored by looking at their likelihood against their potential impact. Almost by default any operational risk scoring 16 or higher could be regarded as a corporate risk. However, there were no operational risks at that level. Currently the scores were working within the current strategy but this would be reviewed in April, potentially leading to changes in the future. A number of suggested improvements to the Operational Risk Register were made by the Working Party: Reports should be made to officers and Members; Officers and Members should be kept up-to-date on the risks; The Register should be accessible to other officers, so they can update their department s data; Updating should be done regularly; The Heads of Service should decide how they would update the Register; Cross-checking should be done to check any changes and to ensure that risks were not deleted, as a score of 0 would be acceptable; Any operational risk scored over 16 could become a corporate risk. Councillor Kevin Ellis reminded the Working Party that the Audit & Budget Monitoring Sub-Committee would receive reports relating to corporate risks, whilst the Working Party would consider operational risks. If anything was found when looking at the operational risks this could be referred to the Sub- Committee. Councillor Gareth Wilson thought that the work of this Working Party should continue under the new committee system that was being mooted. Councillor Ellis agreed, provided the work continued to be useful. Councillor Gareth Wilson was happy with the spreadsheet used and suggested each Head of Service be given access to one each for their departments, with those spreadsheets linked to the summary spreadsheet. The Principal Auditor was concerned about the resources that would be needed for this work. With 6 monthly meetings, quarterly reporting, Working Party meetings and reporting to other meetings it was difficult to know what impact this would have on resources. The Working Party thought that if resources became a problem then a business case should be produced and put to Strategic Policy & Resources Committee. Agenda Item 10 page 2

3 Performance Management Councillor Gareth Wilson demonstrated a spreadsheet that produce a balanced scorecard and which could be adapted to report on anything, including performance. The scores could indicate various grades of performance, using a traffic light system. It consisted of various spreadsheets, with information being put in at this lower level, linked together to enable data to be looked at using different methods. Councillor Kevin Ellis thought this spreadsheet could be used as the framework to consider anything but would have to be developed so that our own targets could be included. This spreadsheet could be used to monitor performance and it was understood that a more robust reporting system was being developed. The Principal Auditor informed the Working Party that the Chief Executive had been working on setting performance indicators for each Council area. These would be reported using a reporting system that would be developed. However, the Head of Finance warned that nothing had progressed due to a problem with resources. Councillor Kevin Ellis wanted to see performance management reporting continue but, rather than being overseen by a separate department as before, it should be done on a departmental basis. Each department would input their information and the software would pull that information together to give an overall picture. It was acknowledged that though it would be time consuming to keep the data up-to-date, the figures should be reported to the individual committees with an overall report going to full Council. Councillor Derrick Beckett wanted to keep the number of performance indicators to a minimum and queried who would set those indicators. Councillor Kevin Ellis suggested that the committees should agree 6 key issues that should be focussed on and be monitored for each department. Each Head of Service should propose which 6 they should monitor, run that through Management Team and then bring them to this Working Party for consideration. It was proposed that the method be: the setting of performance indicators for each department should be suggested by Management Team, then considered by the relevant officers, then considered by this Working Party, referred back to Management Team if there were any concerns, relayed back to this Working Party and finally onto the relevant committee for agreement. This was agreed. It was resolved: (i) That the Corporate Risk Register as set out in Appendix 1 be noted and the work undertaken in relation to the compilation of an Operational Risk Register be noted; Agenda Item 10 page 3

4 It was resolved to RECOMMEND TO STRATEGIC POLICY & RESOURCES COMMITTEE: (ii) That the setting of performance indicators for each department should be suggested by Management Team, then considered by the relevant officers, then considered by this Working Party, referred back to Management Team if there were any concerns, relayed back to this Working Party and finally onto the relevant committees for agreement. The meeting concluded at 4:34pm. Agenda Item 10 page 4

5 5. APOLOGIES FINANCIAL MANAGEMENT & CORPORATE GOVERNANCE WORKING PARTY MINUTES Minutes of a Meeting held in Committee Room 2, The Grange, Nutholt Lane, Ely on Wednesday 21 March 2012 at 2:00pm. P R E S E N T Councillor Gareth Wilson (Chairman) Councillor Derrick Beckett Councillor Kevin Ellis OTHER ATTENDEES Trevor Bowd - Principal Auditor Linda Grinnell Head of Finance John Hill Chief Executive Adrian Scaites-Stokes Democratic Services Officer No apologies were received. 6. DECLARATIONS OF INTEREST No declarations of interest were made. 7. MINUTES It was resolved: That the minutes of the meeting held 11 th January 2012 be confirmed as a correct record and be signed by the Chairman. 8. REVISED PERFORMANCE AND RISK MANAGEMENT FRAMEWORK The Working Party considered a report, reference L317, previously circulated, which outlined the proposed Performance and Risk Management Framework. The Chief Executive advised the Working Party that the framework was intended to be fit-for-purpose and reflected the changes in resources and targets that were being no longer set centrally. It was suggested that performance indicators be kept to a minimum without affecting the effectiveness of the services. Monitoring of performance would now be the responsibility of each department but a central point of overall control would be needed. Responsibility would also lie with the policy committees Lead Officers. The Terms of Reference of this Working Party had been revised to include performance management, as this and risk management were issues that Agenda Item 10 page 5

6 went together. Appendix 1 summarised the revised framework for performance and risk management, which started with the Corporate Objectives. New objectives were proposed, one internal and one external objective, and these would be considered by other Member bodies before adoption. The Finance and Governance Committee would receive 6 monthly reviews only if there was an escalation of an operational risk to make it significant. The previous service plan process had been of value to officers but gave little opportunity for Members to engage. The process had been resource intensive so attempts were being made to rationalise and focus the process. Two examples of service plans from other authorities were tabled for the Working Party to consider. A compromise may have to be made on long-term service plans, as it was difficult to focus on the long-term. The process would ensure that the committees set their own objectives around the service plans and that, for the first time, full Council would look at corporate risk and corporate performance. Mechanisms would be considered on how to monitor the performance and risks. Attempts were being made to secure additional resources for the Principal Auditor so he could oversee and moderate the process. Moderation was necessary so appropriate risk levels were set, as the Risk Register did not fully reflect the operational risks. The Corporate Risk Plan would be controlled by the Chief Executive, with reports going to the new Finance and Governance Committee. The Finance and Governance Committee would play a real role in the process, particularly with responsibility for the Council s Medium Term Financial Strategy (MTFS), and have an oversight of all risks. A timetable had been drawn up giving the framework for 2012/2013 and 2013/2014. During 2012/2013 the Council would be catching up with its performance and risk monitoring and the framework gave opportunities to report on relevant risks. The priority for officers was to get training completed for service plan authors to help with performance and risk monitoring. The Principal Auditor advised that the intention was for service plans to be two sides of A4 paper, similar to the examples tabled. Previously service plans could be up to forty pages long, which was too much. A template would be needed based on one of the examples chosen. Councillor Gareth Wilson reminded officers that not too many targets were wanted and around six per service would be reasonable, though more could be used if the committees decided. Producing a two-page service plan would encourage more people to consider it. However, some measure would also be needed to check on performance. The individual managers could have their own indicators to monitor, which might not necessarily go to the committee. This was acceptable, as the system needed to be flexible, provided the same system of monitoring was employed. Members should also highlight significant risks if they identified them. Agenda Item 10 page 6

7 Councillor Kevin Ellis thought the MTFS would only be met if all the committees met their own targets. Some mechanism was needed to ensure that the committees monitored its targets properly. Councillor Derrick Beckett agreed with the service plans being two sides of A4 and expected the relevant performance indicators to fit on one page. He was concerned that Members of the policy committees would not be at the same stage as Members of this Working Party with regards understanding the issues. It was noted that the timetable had not included a Quarter 1 review. The Chief Executive advised that the timetable would give opportunities for Members to get to grips with the matter, as service plans were due to go to the committees in July. The committees would set their performance indicators and then would need to understand their responsibilities relating to them. Some indicators would not be included amongst the committees indicators but these should be checked by officers and highlighted before the service failed. A Quarter 4 report would be presented to the Audit and Budget Monitoring Sub-Committee on 11 th April, instead of a Quarter 1 report which would not be appropriate. The new appraisals system would be the first indicator of any cracks in service delivery. This would be part of the integrated approach. It could be possible for team meetings to consider their own indicators. Councillor Gareth Wilson queried why the Corporate Risk Register would be reviewed quarterly. The Chief Executive explained that corporate risks were very significant and some risks could be missed and action delayed if the reviews were not conducted quarterly. Caution therefore should be used before changing this, though the whole process could be reviewed yearly. The Chief Executive revised the recommendations within the report: 2.1 (i) to reflect the requirement for an additional report to the Sub-Committee meeting on 11 th April, the word amended be inserted before the word timetable ; 2.1 (ii) to reflect the Working Party s choice of service plan format, the words including the preferred service plan format be added to the end of the recommendation. The Working Party agreed to the revised recommendations, stating its preference for the service plan format of South Lakeland District Council (as previously tabled). It was resolved to RECOMMEND TO STRATEGIC POLICY & RESOURCES COMMITTEE: (i) That the revised Performance Management framework be agreed in accordance with the amended timetable set out in Appendix 2; Agenda Item 10 page 7

8 It was resolved to RECOMMEND TO THE AUDIT AND BUDGET MONITORING SUB-COMMITTEE (ii) That the revised Risk Management framework as detailed in para 4.2 be agreed, including the preferred service plan format. The meeting concluded at 2:55pm. Agenda Item 10 page 8