Deloitte Governance Review
The Director of Transformation presented a report to inform Members of the Deloitte Governance Review. Following the restructure of the Corporate Management Team during 2013, Deloitte were commissioned to review the Councils governance arrangements. The scope of the review was divided into backward and forward looking considerations of the arrangements at the Council.
The backward looking reviews covered the following areas:
- Mapping of the governance structures to show the links and information flows between Members, Committees of the Council and Senior Council Officers.
- Reviewing a selection of significant decisions made by the Council to determine whether the levels of Senior Officer and Member involvement were appropriate.
- Reviewing cost improvement plans to confirm the savings generated.
- Reviewing the revenue budget monitoring processes to consider its timeliness and accuracy.
- Reviewing the arrangements for debt management and the write-off of low value debt.
The forward looking reviews covered:
- Reviewing the new Senior Management structure including the role of the Section 151 Officer.
- Reviewing the principles of the Middlesbrough Manager Scheme.
- Reviewing the Change Programme Board and its role.
- Reviewing the position of the Head of Internal Audit.
A copy of the final report issued by Deloitte in December 2013 was attached at Appendix A to the submitted report and the summary of the findings of the review were included. The findings had been agreed by the Director of Resources and an Action Plan was under construction in response. The Plan would be reported to a future meeting of the Audit and Governance Committee. A number of specific recommendations had already been implemented.
The External Auditor commented that one of the reasons that the report was commissioned was the restructure of the leadership team which led to the Section 151 Officer no longer sitting on the Chief Executives Management Team (CEMT). The Chartered Institute of Public Finance and Accountancy (CIPFA) guidelines recommended that the Section 151 Officer should be a member of the CEMT.
Informal processes had been developed with the aim of ensuring that the Director of Resources, in his role as Section 151 Officer, had access to, and was able to influence, the leadership team. These arrangements now needed to be formalised to ensure they were understood by all parties, and also documented, as they would need to be disclosed in the Councils Annual Governance Statement to accompany the 2013/2014 Statement of Accounts.
In addition, the Councils budget monitoring reports showed significant variances between each quarters reporting and there was a time lag in terms of reporting to Senior Officers. In future, the Council would aim to produce high-level budget monitoring reports for Members of CEMT within two weeks of the month end. Managers would receive a monthly update on their individual budgets, and a twice yearly projected outturn, rather than the currently quarterly reports.
The External Auditor also highlighted that one of the themes that came out of the review was training and communication. With the roll-out of the Middlesbrough Manager Programme, a cultural shift needed to take place in terms of levels of accountability and communication between departments.
Reference was made to future agenda setting for the Audit and Governance Committee and the Chair stated that the Committee was happy to accept draft reports if necessary, and equally, when appropriate, to exempt the press and public when commercially sensitive material needed to be discussed.
AGREED as follows:
1. that the Audit and Governance Committee noted the outcome of the Deloitte Governance Review and the actions taken to date in response to the recommendations made.
2. a full response, in the form of an action plan would be presented to a future meeting of the Audit and Governance Committee.
Audit and Governance Committee - Joint Training
The Chair extended thanks to the Internal Audit Manager for arranging the recent joint training session with Members of the Redcar and Cleveland Audit Committee.