Annual Governance Statement 2018/19

SCOPE OF RESPONSIBILITIES

1.1 The Chief Constable is responsible for delivery of operational policing for the county of Cambridgeshire and for ensuring that public money granted to him to deliver policing is safeguarded and accounted for properly. The Chief Constable also has a duty to secure continuous improvement in the way in which Constabulary functions are exercised, having regard to the economy, efficiency and effectiveness of the police force.

1.2 In discharging this overall responsibility, the Chief Constable is also responsible for putting in place proper arrangements for the governance of his affairs and facilitating the exercise of his functions, which includes ensuring a sound system of internal control is maintained through the year and that arrangements are in place for the management of risk.

1.3 The Chief Constable, in conjunction with the Office of the Police and Crime Commissioner, has approved and adopted a revised set of Financial Regulations which includes a Code of Corporate Governance consistent with the principles of the CIPFA/SOLACE Framework: Delivering Good Governance in Local Government. This Annual Governance Statement explains how the Chief Constable has complied with the Code. It also meets the requirements of Regulation 6(1) and 6(4) of the Accounts  and Audit Regulations 2015 in relation to conducting a review of the effectiveness of internal control systems at least annually and preparing an annual governance statement in accordance with accounting regulations and proper practices, and Regulations 6(2) and 10(1) ( with transitional provisions at Regulation 21) regarding the requirement to approve an Annual Governance Statement in advance of the approval of the statement of accounts and which has to be published alongside the Statement of Accounts and the narrative statement.

1.4 The Police Reform and Social Responsibility Act 2011 changed the governance and scrutiny of policing in November 2012 introducing elected Police and Crime Commissioners. The Commissioner holds the Chief Constable to account and the Police and Crime Panel provide support and challenge to the Commissioner. The Policing and Crime Act 2017 received Royal Assent on 31 January 2017, the main area for noting in the AGS is that the act placed a duty on police, fire and ambulance services to work together.

1.5 The financial management arrangements for the Constabulary conform to the governance requirement of the CIPFA statement on the "Role of the Chief Financial Officer in Local Government (2010)"

 

2. THE PURPOSE OF THE GOVERNANCE FRAMEWORK

2.1 The governance framework comprises the systems and processes by which the Chief Constable is directed and controlled and the activities through which he is accountable. It enables the Commissioner to monitor the achievements of the Chief Constable through the delivery of the Local Policing Plan and to take account of the delivery of appropriate, cost-effective services, including achieving value for money.

2.2 The system of internal control is a significant part of the framework and is designed to manage risk to a reasonable and foreseeable level. It cannot eliminate all risk of failure to achieve policies, aims and objectives; therefore it can only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an on-going process designed to identify and prioritise the risk to the achievement of the Constabulary's policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them effectively, efficiently and economically.

3. THE GOVERNANCE FRAMEWORK

3.1 The purpose of the framework is to give clarity to the way the two legal entities, the Commissioner and the Chief Constable (each one a corporation sole), will govern, both jointly and separately, and do business in the right way, for the right reason at the right time.

3.2 The statutory framework within which each corporation sole will operate is:
• Police Reform and Social Responsibility Act 2011, and the Policing and Crime Act
2017
• Policing Protocol Order 2011,
• Financial Management Code of Practice,
• Strategic Policing Requirement,
• The Police and Crime Commissioner Elections (Declaration of Acceptance of Office)
Order 2012.
• Police Act 1996
• Duty on the Chief Constable to collaborate with Fire and Ambulance.

3.3 This framework further creates a public sector relationship based upon the commissioner provider arrangement but with unique elements such as the single elected Commissioner and operational independence of the police service. It has Therefore been appropriate to further consider the corporate governance arrangements and the framework.

3.4 The core principles adopted by the Chief Constable are those highlighted by the good governance standard for public services:
• Focus on outcomes for local people,
• Clarity of roles and functions,
• Promotion of values and demonstrating these through behaviour,
• Informed, transparent decisions and managing risk,
• Developing capacity and capability
• Engaging with local people to ensure robust accountability.

3.5 The Chief Constable is responsible for operational policing matters, the direction and control of Constabulary personnel and for putting in place proper arrangements for the governance of the Force. The Commissioner is required to hold the Chief Constable to account for the exercise of those functions. Therefore it follows that the Chief Constable must satisfy himself that the Force has appropriate mechanisms in place for the maintenance of good governance and that these operate in practice.

3.6 This Annual Governance Statement provides a summary of the extent to which the aspirations set out in the Code of Corporate Governance are currently being met. This statement is informed by assurances on the six principles of the Code and by on-going audit and inspection.

3.7 The reliability of financial reporting and internal financial controls are also reported as part of this statement. See (7) below.

{1} Focus on outcomes for the local people.

3.8 The Chief Constable is responsible for the delivery of the Local Policing Plan which is derived from the Police and Crime Plan which the Commissioner widely consulted upon. The Plan sets out the policing priorities to be delivered and how they will be measured. The Plan includes both local priorities and those informed nationally by government.

{2} Working together to achieve a common purpose with clearly defined functions and roles.

3.9 As set out above, the governance arrangements have been developed in line with the Police Reform and Social Responsibility Act 2011 and The Policing and Crime Act 2017, the statutory Policing protocol and the Home Office Financial Management Code of Practice.

3.10 The Scheme of Governance includes details of the various duties delegated to senior officers. Financial Regulations (including Contract Standing Orders) are in place and regularly reviewed ensure that the financial responsibilities of the Chief Constable are clear.

3.11 The Commissioner has a good working relationship with the Chief Constable. On a regular basis the Business Coordination Board, comprising senior leaders of both organisations, meets to review activities and take decisions relating to strategy, governance, business and holding the Chief Constable to account.

3.12 The Commissioner continued to endorse Section 22 (of the Police Act 1996) collaboration agreements with Strategic Alliance partners in 2018/19 and mechanisms to hold these collaborated services to account are in place. The governance arrangements for the BCH strategic alliance are reviewed periodically as part of the Internal Audit Programme.

3.13 The strategic direction of the Strategic Alliance is managed via the Strategic Alliance Summit (SAS), which is made up of the six corporation soles of the organisations. The operational implementation of the collaboration units are managed via the Joint Chief Officers Board (JCOB)which is made up of the three Chief Constables and the relevant Senior leaders.

3.14 In addition, Collaboration across Bedfordshire, Cambridgeshire, Hertfordshire, Norfolk and Suffolk, Essex and Kent known as 7Force has established a programme to progress consideration of joint working across the region and to collaborate specific business cases as agreed. Severn Force Procurement is well underway and a section 22 agreement has been signed to enable the Seven Force Team to be created. It went live in April 2019 with operational teams being brought together over the next six months.

3.15 The Cambridgeshire Joint Audit Committee have endorsed a joint strategic risk register and continue to review the risk register to ensure a shared understanding of strategic risks including collaboration and transition.

3.16 Partnership arrangements are in place with local authorities, including an overarching Countywide Community Safety Board and Criminal Justice Board. Looking to the future, partnership governance arrangements continue to be reviewed and advanced as the financial climate puts further emphasis on joint working in the public sector.

3.17 Emergency service collaboration arrangements are in place and monitored through
BCB.

(3) Promoting values for the authority and demonstrating the values of good governance through upholding high standards of conduct and behaviour.

3.18 The Professional Standards Department (PSD) look after all of the conduct and behaviour policies for the Force. This is a tri-force unit under the direction and control of the Cambridgeshire Chief Constable. The policies are designed to encourage prevention, promote detection and identify a clear pathway for investigation of fraudulent and/or corrupt activities or behaviour.

3.19 The policies include: confidential reporting, anti-corruption and bribery, public complaints, conduct cases, business interests, gifts and hospitalities, domestic abuse reporting and welfare.

3.20 The Code of Ethics was embedded within the Constabulary by the Ethics Board chaired by the Deputy Chief Constable, this board was set up to implement the code. The Constabulary now has an Ethics, Equality and Inclusion Group with external members that offer external scrutiny of the Constabulary's compliance with the Code of Ethics in support of the organisation's overriding commitment to ethical decision-making, integrity and standards.

3.21 To supplement the Ethics, Equality and Inclusion Group, the Constabulary is reinvigorating 'The 100 Club' a virtual participation group which aims to get public opinion via surveys on a variety of topics.

3.22 Force policy is developed and assessed for equality impact. This ensures that compliance with legislation and the interest of stakeholders are considered prior to producing policy. Policy is managed corporately and individual policies are the responsibility of Heads of Business or the collaborated units.

(4) Taking informed and transparent decisions which are subject to effective scrutiny and managing risk.

3.23 All decision making is carried out in accordance with the Governance framework.

3.24 The Governance arrangements ensure that the key decisions taken by the Chief Constable are made in the light of all necessary information and analysis and are made public (unless exempt under the Provision of Access to Information rules). Appropriate legal, financial, human resources and other professional advice is considered as part of the decision-making process. The Chief Constable has appropriate oversight and scrutiny of Constabulary decision-making through the Force Executive Board with minutes of meetings posted on the Constabulary website.

3.25 The Constabulary is subjected to an extensive internal and external inspection regime and the results of these inspections are published to ensure appropriate scrutiny of decision-making.

3.26 Risk management is embedded into the work of the Constabulary on an ongoing and continuous basis. A Joint Strategic Risk Register is in place and endorsed by the Joint Audit Committee. The aim of this strategy is to ensure that risk management is embedded into the governance structure and that it effectively underpins and enables the business

3.27 The Constabulary maintains its own corporate Risk Register and the risk management process is managed by the Corporate Development Department through the Risk Review Board chaired by the Deputy Chief Constable. This is a monthly meeting and risk owners are called in to update as required. A highlight risk report goes to Force Executive Board monthly. The Joint Audit Committee oversees the risk management arrangements of the Force and ensures that the Constabulary's processes are aligned with the Commissioner's.

(5) Developing the capacity and capability of staff and officers to be effective.

3.28 The Chief Constable takes a pro-active approach to staff development. The tri-force People Board, chaired by the Deputy Chief Constable, oversees these arrangements.

3.29 Cambridgeshire Constabulary undertakes a yearly staff survey using the Durham University Business School Staff Survey. This survey is used by 28 forces nationally. We use the results of the survey to improve our effectiveness through "you said we did" feedback.

3.30 All officers and staff complete a regular Personal Development Review process with their named line manager. This process will continue to identify training requirements for individuals.

(6) Engaging with local people and other stakeholders to ensure robust public accountability.

3.31 The corporate communications strategy was a two-year plan to help us build confidence and trust across our workforce, our partners and the people who live and work in Cambridgeshire.

3.32 Aligned to the force mission, vision and values, the strategy was developed to support a culture of transparent and open approach to communications, making the most of a variety of channels to help us communicate effectively and efficiently with people in the county.

3.33 Now completed, good progress has been made against the priorities, and continues to be developed into the force visibility strategy. As part of the Spring Development Day a new communications strategy is being worked on that reflects the subtle change in our priories for the community.

3.34 The Force Website was built around demand, focusing key areas of the site on those types of business that reduce demand in the PSCby shifting people to digital first and the uptake of online services has been impressive. We are due to have a new website in April and are further engaged in the national Single On-Line Homes project which will enable even more on-line interaction with us for the public.

3.35 Social media continues to be a significant channel of communication. We continue to shape how we use social media as a communications tool, specifically how we reach key audiences.

3.36 The focus for the communications team has been on the force priorities, with campaigns running for each of the strategic priorities. There have been a number of examples where campaigns have resulted in significant operational outcomes, such as an increase in specials applications, following a recruitment campaign and an increase in intelligence submissions for county lines.

3.37 Telephone research regarding public confidence levels is carried out by the Constabulary's Corporate Performance Department. Citizens attending neighbourhood panels are able to set local priorities for their local policing teams.

(7) Reliable financial reporting and internal financial controls.

3.38 Financial control involves the existence of a structure which ensures that all resources are used as efficiently and effectively as possible to attain the overall objectives and targets. Internal financial control systems are in place to minimise the risk of loss, unlawful expenditure or poor value for money, and to maximise the use of the assets and limited resources.

3.39 The Constabulary's financial management framework follows national and/or professional best practice and its key elements are set out below:

• The corporation sole has a Chief Finance Officer (CFO) with responsibility under
  Section 151 of the Local Government Act 1972 to ensure that there are
  arrangements in place for the proper administration of financial affairs. The (FO
  also has certain statutory obligations under Section 114 of the Local Government
  Finance Act 1988 which cannot be delegated, namely, reporting any potentially
  unlawful decisions by the Constabulary on expenditure and where a loss or
  deficiency may arise. The CFO must also report in the event that spending in the
  year is likely to exceed available resources. The organisations fully comply with
  the CIPFA Statement on the Role of the Chief Financial Officer in the Police
  Service).
  • The finance function is governed by the Financial Regulations which are framed
  under the Home Office Code of Financial Management. The Chief Constable is
  responsible for adherence to Police Regulations and the Constabulary is
  monitored for additional compliance by HMICFRS and HM Revenue and Customs,
  • Responsibility and accountability for resources rests with managers who are
  responsible for service provision,
  • The Commissioner has adopted the CIPFA Code of Practice on Treasury
  Management requiring approval of an annual Treasury Management Strategy
  including an annual investment strategy to which the Constabulary adheres,
  • In accordance with the CIPFA Prudential Code and best accounting practice a four-year
  medium-term financial plan (MTFP) and a four-year capital programme are
  produced,
  • The revenue budget provides an estimate of the annual income and expenditure
  requirements for the police service (Commissioner and Constabulary) and sets out
  the financial implications of the Police and Crime Plan. It provides chief officers
  with the authority to incur expenditure and the basis on which to monitor the
  financial performance,
  • The Commissioner is required to set the budget and precept,
  • Capital expenditure is an important element in the development of the policing
  business since it represents major investment in new and improved assets. The
  Commissioner approves the capital programme each year and monitors its
  implementation and funding closely. The Commissioner has required a policy of
  no borrowing to finance capital spending unless it is for long term structural
  change. The Chief Constable has adhered to this policy.

4. REVIEW OF EFFECTIVENESS

4.1 The Chief Constable's role in maintaining the effectiveness of the governance framework extends to ensuring that there is an approved Code of Corporate Governance and that the Code includes the arrangements for review thereof.

4.2 The Chief Constable manages the Force through a series of Boards. The Force Executive Board (FEB), which is responsible for governance and strategic direction, is chaired by the Chief Constable. All Heads of Business are members of the FEB,which meets monthly. The Board has responsibility for financial management, corporate governance and the risk management process and also oversees areas of business such as Professional Standards, Human Resources, and the Change Programme. Performance is monitored and managed through the monthly Force Performance Board. As part of tri-force arrangements there are various organisational boards i.e. People Board which report to Organisational Support Governance Board. Matters such as HR and ICT that affect Cambridgeshire are still discussed at the FEB with representative attendees from the departments.

4.3 Collaboration Boards are in place for the three areas of collaboration with each of the three Forces chairing the area of business for which they are responsible. Cambridgeshire is responsible for Organisational Support which comprises HR, Finance, ICT, Procurement and Information Management. The Board is chaired by the DCC with OPCC officers in attendance.

4.4 The Constabulary is subject to regular external scrutiny of the quality of service by Her Majesty's Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS). In the latest annual assessment of Police Effectiveness, Efficiency and Legitimacy (PEEL) 2017, Cambridgeshire Constabulary was assessed as GOOD for Efficiency and Legitimacy and Requires Improvement Effectiveness.

4.5 The Joint Audit Committee undertook the core functions of an audit committee in accordance with the guidance set out in the CIPFA publication 'Audit Committees - Practical Guidance for Local Authorities'.

4.6 The Joint Audit Committee played a pivotal role in the system of internal control through its oversight of audit arrangements. The Committee approved the external audit plan and received the annual audit letter from the external auditor. The Committee also approved the annual internal audit plan, received regular internal audit reports and monitored management performance against agreed action plans to address any weaknesses identified. In addition, the Committee oversaw progress on Risk Management and related issues.

4.7 The Head of Internal Audit's Annual Report for the year ended 31 March 2019 has been received and will be considered by the Joint Audit Committee on 25th July 2019. The Report includes an opinion on the internal financial control framework.

4.8 The opinion is as follows:-

The organisation has an adequate and effective framework for risk management, governance and internal control. However, our work has identified further enhancements to the framework of risk management, governance and internal control to ensure that it remains adequate and effective.

4.9 The Head of Internal Audit noted that the following factors and findings informed the opinion above:

• Governance - Our Cambridgeshire only reviews of governance have included the arrangements for Business Planning & Force Management Statements (Reasonable Assurance), Communication Strategy - Constabulary (Reasonable Assurance) and Governance - Delivery of Major Projects (Partial Assurance). Within the Governance Delivery of Major Projects report we found that the controls expected to be in place to manage a change programme were broadly in place however, compliance of these
  controls needed to be more robust for future major projects. The actions agreed were
  across each stage of the project management process from setup through to closure
  and benefits realisation, and the project governance structure.
  We have not undertaken any specific reviews of the Bedfordshire, Cambridgeshire
  and Hertfordshire Collaborative governance arrangements within 2018/19, however,
  aspects have been covered within each of our collaborative reviews
• Risk Management - Our audits of Risk Management within the OPCC and Constabulary
  included a review of the Risk Register update, review, monitoring and reporting where
  the organisations could take reasonable assurance on the arrangements in place.
• Control - For our Cambridgeshire only reports, we have issued in total three reports
  where the organisations can take substantial assurance, seven where the organisations
  can take reasonable assurance and one where the organisation can take partial
  assurance (Governance - Major Projects). We have not issued any no assurance
  opinions in 2018/19.
  For Bedfordshire, Cambridgeshire and Hertfordshire Police joint reports, we have
  issued in total one reports where the organisations can take substantial assurance,
  four where the organisations can take reasonable assurance and four advisory reviews
  where no formal opinion was provided. We currently have one draft report where the
  organisation can take reasonable assurance (Performance Management).
• Based on the work we have undertaken on the Police and Crime Commissioner and
  Constabulary's system on internal control, we do not consider that within these areas
  there are any issues that need to be flagged as significant control issues within the
  Annual Governance Statements (AGSs). However, we would expect the Police and
  Crime Commissioner and Constabulary to consider in the formulation of the AGSs,the internal control weaknesses identified within our partial assurance opinions
  summarised above, along with the actions being taken to address the issues identified.
• All recommendations outlined by the auditors are being acted upon and the update of
  those actions is reported to FEB on a monthly basis and the Audit Committee quarterly.
  This ensures that both Chief Officers and Audit Committee members are sighted on
  the progress on recommendations and can act accordingly if progress is not being
  made.

4.10 The most recent external audit annual audit letter was issued by Ernst & Young in September 2018. This noted an unqualified opinion on the financial statements and that proper arrangements were in place to secure value for money in the use of resources. There were no matters of public interest to report and that the information published with the financial statements was consistent with the Annual Accounts.

4.11 Both internal and external audit have detailed audit plans upon which assurance is gained and these are available on our website.

5. SIGNIFICANT GOVERNANCE ISSUES

5.1 In 2018/19 no major governance issues were identified.

5.2 There were no "no assurance" audit reports.

5.3 Based on the opinion of the Chief Internal Auditor and our own ongoing work, we are satisfied that our arrangements for governance, risk management and control are adequate and effective. Seized Property needed to show sustained improvement following the no assurance report in 2017/18. We are pleased to report that the Seized Property obtained a Reasonable Assurance following a full re-audit in 2018/19

5.4 Looking ahead, the Chief Constable considers that external financial pressures and complexity in crime will be our two biggest pressures; however the performance

Signed

Nick Dean MSt (Cantab)
Chief Constable

Niki Howard CPFA
Chief Finance Officer to the Chief Constable

Date: 31st May 2019