AGENDA Meeting Audit Panel Date Thursday 20 March 2014 Time 2.00 pm Place Committee Room 1, City Hall, The Queen's Walk, London, SE1 2AA Copies of the reports and any attachments may be found at www.london.gov.uk/mayor-assembly/london-assembly/audit-panel Most meetings of the London Assembly and its Committees are webcast live at http://www.london.gov.uk/who-runs-london/the-london-assembly/webcasts where you can also view past meetings. Members of the Panel John Biggs AM (Chairman) Roger Evans AM (Deputy Chairman) Gareth Bacon AM Len Duvall AM A meeting of the Panel has been called by the Chairman of the Committee to deal with the business listed below. This meeting will be open to the public. There is access for disabled people, and induction loops are available. Mark Roberts, Executive Director of Secretariat Wednesday 12 March 2014 Further Information If you have questions, would like further information about the meeting or require special facilities please contact: Laura Pelling, Committee Officer; telephone: 020 7983 5526; email: [email protected]. For media enquiries please contact Mark Demery, Head of Assembly External Relations, telephone 020 7983 5769 and email: [email protected]. If you have any questions about individual reports please contact the report author whose details are at the end of each report. There is limited underground parking for orange and blue badge holders, which will be allocated on a first-come first-served basis. Please contact Facilities Management (020 7983 4750) in advance if you require a parking space or further information.
If you, or someone you know, needs a copy of the agenda, minutes or reports in large print or Braille, audio, or in another language, then please call us on 020 7983 4100 or email [email protected] .
Certificate Number: FS 80233
Agenda Audit Panel Thursday 20 March 2014 1 Apologies for Absence and Chairman's Announcements To receive any apologies for absence and any announcements from the Chairman. 2 Declarations of Interests (Pages 1 - 4) The Panel is recommended to: (a) That the list of offices held by Assembly Members, as set out in the table at Agenda Item 2, be noted as disclosable pecuniary interests; (b) Note the declaration by any Member(s) of any disclosable pecuniary interests in specific items listed on the agenda and the necessary action taken by the Member(s) regarding withdrawal following such declaration(s); and (c) Note the declaration by any Member(s) of any other interests deemed to be relevant (including any interests arising from gifts and hospitality received which are not at the time of the meeting reflected on the Authority’s register of gifts and hospitality, and noting also the advice from the GLA’s Monitoring Officer set out at Agenda Item 2) and any necessary action taken by the Member(s) following such declaration(s). 3 Minutes (Pages 5 - 12) The Panel is recommended to confirm the minutes of the meeting of the Audit Panel held on 17 December 2013 to be signed by the Chairman as a correct record. 4 Summary List of Actions (Pages 13 - 16) Report of the Executive Director of Secretariat Contact: Laura Pelling, [email protected] , 020 7983 5526 The Panel is recommended to note the completed action arising from the previous meeting of the Audit Panel.
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5 External Audit Report (Pages 17 - 42) Report of the Executive Director of Resources Contact: Tom Middleton; [email protected] ; 020 7983 4257 The Panel is recommended to note the contents of the External Auditor’s Audit Plan 2013/14. Appendix 1 to the report set out on 19 to 42 is attached for Members and officers only but is available from the following area of the GLA’s website: http://www.london.gov.uk/mayor- assembly/london-assembly/audit-panel 6 Internal Audit Reports (Pages 43 - 196) Report of the Executive Director of Resources Contact: Tom Middleton; [email protected] ; 020 7983 4257 The Panel is recommended to note the contents of the internal audit: (a) Reports at Appendices 1a to 1g; (b) Follow up reports at Appendices 2a to 2e; (c) Progress report at Appendix 3; and (d) Internal Audit Plan 2014/15 at Appendix 4. The following appendices are attached to the report. Appendix 1a Precepting Control Framework pages 47 to 57 Appendix 1b London Plan and its Implementation pages 59 to 71 Appendix 1c ICT Incident and Problem Management pages 73 to 84 Appendix 1d Energy and Environment Strategy pages 85 to 104 Framework and Implementation Appendix 1e Sickness Monitoring and Control pages 105 to 118 Appendix 1f Financial Control Framework pages 119 to 132 Appendix 1g Debtors Control Framework pages 133 to 147 4
Appendix 2a External Grant Funding Framework – pages 149 to Follow Up 151 Appendix 2b Risk Management – Follow Up pages 153 to 158 Appendix 2c Creditors Payment Framework – Follow pages 159 to Up 162 Appendix 2d Payroll Control Framework – Follow Up pages 163 to 168 Appendix 2e London European Programmes Control pages 169 to Framework – Follow Up 173 Appendix 3 Internal Audit Progress Report pages 175 to 187 Appendix 4 GLA Internal Audit Plan for 2014-15 pages 189 to 195 7 Risk Management (Pages 197 - 224) Report of the Executive Director of Resources Contact: Tom Middleton; [email protected] ; 020 7983 4257 The Panel is recommended to note the current corporate risk register. Appendix 2 to the report set out on 205 to 224 is attached for Members and officers only but is available from the following area of the GLA’s website: http://www.london.gov.uk/mayor- assembly/london-assembly/audit-panel 8 Monitoring of Expenses and Taxable Benefits - Mayor, Elected Members and Senior Staff - 2013/14 (Pages 225 - 240) Report of the Executive Director of Resources Contact: Doug Wilson; [email protected] ; 020 7983 4968 The Panel is recommended to note the taxable benefits and expenses incurred by the Mayor, London Assembly Members and senior staff for the period 1 November 2013 to 31 December 2013.
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9 Register of Gifts and Hospitality - Mayor and Assembly Members (Pages 241 - 256) Report of the Executive Director of Secretariat Contact: Ed Williams; [email protected] ; 020 7983 4399 The Panel is recommended to note the report and the contents of Appendix 1, which sets out gifts and hospitality declared by the Mayor and Members of the London Assembly in the period from 1 September 2013 (10am) until 1 February 2014 (10am). 10 Re gister of Gifts and Hospitality - Senior Staff (Pages 257 - 268) Report of the Executive Director of Secretariat Contact: Ed Williams; [email protected] ; 020 7983 4399 The Panel is recommended to note the declared gifts and hospitality by (i) staff directly appointed by the Mayor under section 67(1) of the Greater London Authority Act 1999 (as amended) and (ii) senior staff appointed by the Head of Paid Service, namely staff at Head of Unit level and above, during the period from 1 February 2013 (10am) to 1 September 2013 (10am). 11 Annual Report of the Monitoring Officer Regarding Complaints about Elected Members (Pages 269 - 274) Report of the Monitoring Officer Contact: Ed Williams, [email protected] ; 020 7983 4399 The Panel is recommended to note the report. 12 Work Programme for the Audit Panel 2014/15 (Pages 275 - 278) Report of the Executive Director of Secretariat Contact: Laura Pelling, [email protected] ; 020 7983 5526 The Panel is recommended to approve its work programme for the 2014/15 Assembly year and identify any additional issues it wishes to consider at future meetings. 13 Date of Next Meeting The next meeting of the Panel, subject to confirmation by the London Assembly at its Annual Meeting in May, is scheduled for Tuesday 15 July at 3.30pm in Committee Room 5. 6
14 Any Other Business the Chairman Considers Urgent
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Subject: Declarations of Interests Report to: Audit Panel Report of: Executive Director of Secretariat Date: 20 March 2014 This report will be considered in public
1. Summary 1.1 This report sets out details of offices held by Assembly Members for noting as disclosable pecuniary interests and requires additional relevant declarations relating to disclosable pecuniary interests, and gifts and hospitality to be made. 2. Recommendations 2.1 That the list of offices held by Assembly Members, as set out in the table below, be noted as disclosable pecuniary interests 1;
2.2 That the declaration by any Member(s) of any disclosable pecuniary interests in specific items listed on the agenda and the necessary action taken by the Member(s) regarding withdrawal following such declaration(s) be noted; and
2.3 That the declaration by any Member(s) of any other interests deemed to be relevant (including any interests arising from gifts and hospitality received which are not at the time of the meeting reflected on the Authority’s register of gifts and hospitality, and noting also the advice from the GLA’s Monitoring Officer set out at below) and any necessary action taken by the Member(s) following such declaration(s) be noted. 3. Issues for Consideration 3.1 Relevant offices held by Assembly Members are listed in the table overleaf:
1 The Monitoring Officer advises that: Paragraph 10 of the Code of Conduct will only preclude a Member from participating in any matter to be considered or being considered at, for example, a meeting of the Assembly, where the Member has a direct Disclosable Pecuniary Interest in that particular matter. The effect of this is that the ‘matter to be considered, or being considered’ must be about the Member’s interest. So, by way of example, if an Assembly Member is also a councillor of London Borough X, that Assembly Member will be precluded from participating in an Assembly meeting where the Assembly is to consider a matter about the Member’s role / employment as a councillor of London Borough X; the Member will not be precluded from participating in a meeting where the Assembly is to consider a matter about an activity or decision of London Borough X . City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk v11/2013 Page 1
Member Interest Tony Arbour AM Member, LFEPA; Member, LB Richmond Jennette Arnold OBE AM Committee of the Regions Gareth Bacon AM Member, LFEPA; Member, LB Bexley John Biggs AM Andrew Bo ff AM Congress of Local and Regional Authorities (Council of Europe) Victoria Borwick AM Member, Royal Borough of Kensington & Chelsea; Deputy Mayor James Cleverly AM Chairman of LFEPA; Chairman of the London Local Resilience Forum; substitute member, Local Government Association Fire Services Management Committee Tom Copley AM Andrew Dismore AM Len Duvall AM Roger Evans AM Member, LB Havering; Committee of the Regions; Trust for London (Trustee) Nicky Gavron AM Darren Johnson AM Member, LFEPA; Member, LB Lewisham Jenny Jones AM Member, House of Lords Stephen Knight AM Member, LFEPA; Member, LB Richmond Kit Malthouse AM Deputy Mayor for Business and Enterprise; Deputy Chair, London Enterprise Panel; Chair, Hydrogen London; Chairman, London & Partners; Board Member, TheCityUK Joanne McCartney AM Steve O’Connell AM Member, LB Croydon; MOPAC Non -Executive Adviser for Neighbourhoods Caroline Pidgeon MBE AM Murad Qureshi AM Congress of Local and Regional Authorities (Council of Europe) Dr Onkar Sahota AM Navin Shah AM Member, LFEPA; Member, LB Harrow Valerie Shawcross CBE AM Member, LFEPA Richard Tracey AM Chairman of the London Waste and Recycling Board; Mayor's Ambassador for River Transport Fiona Twycross AM Member, LFEPA
[Note: LB - London Borough; LFEPA - London Fire and Emergency Planning Authority; MOPAC – Mayor’s Office for Policing and Crime] 3.2 Paragraph 10 of the GLA’s Code of Conduct, which reflects the relevant provisions of the Localism Act 2011, provides that: - where an Assembly Member has a Disclosable Pecuniary Interest in any matter to be considered or being considered or at (i) a meeting of the Assembly and any of its committees or sub-committees; or (ii) any formal meeting held by the Mayor in connection with the exercise of the Authority’s functions - they must disclose that interest to the meeting (or, if it is a sensitive interest, disclose the fact that they have a sensitive interest to the meeting); and Page 2
- must not (i) participate, or participate any further, in any discussion of the matter at the meeting; or (ii) participate in any vote, or further vote, taken on the matter at the meeting UNLESS - they have obtained a dispensation from the GLA’s Monitoring Officer (in accordance with section 2 of the Procedure for registration and declarations of interests, gifts and hospitality – Appendix 5 to the Code). 3.3 Failure to comply with the above requirements, without reasonable excuse, is a criminal offence; as is knowingly or recklessly providing information about your interests that is false or misleading.
3.4 In addition, the Monitoring Officer has advised Assembly Members to continue to apply the test that was previously applied to help determine whether a pecuniary / prejudicial interest was arising - namely, that Members rely on a reasonable estimation of whether a member of the public, with knowledge of the relevant facts, could, with justification, regard the matter as so significant that it would be likely to prejudice the Member’s judgement of the public interest.
3.5 Members should then exercise their judgement as to whether or not, in view of their interests and the interests of others close to them, they should participate in any given discussions and/or decisions business of within and by the GLA. It remains the responsibility of individual Members to make further declarations about their actual or apparent interests at formal meetings noting also that a Member’s failure to disclose relevant interest(s) has become a potential criminal offence.
3.6 Members are also required, where considering a matter which relates to or is likely to affect a person from whom they have received a gift or hospitality with an estimated value of at least £25 within the previous three years or from the date of election to the London Assembly, whichever is the later, to disclose the existence and nature of that interest at any meeting of the Authority which they attend at which that business is considered.
3.7 The obligation to declare any gift or hospitality at a meeting is discharged, subject to the proviso set out below, by registering gifts and hospitality received on the Authority’s on-line database. The on- line database may be viewed here: http://www.london.gov.uk/mayor-assembly/gifts-and-hospitality .
3.8 If any gift or hospitality received by a Member is not set out on the on-line database at the time of the meeting, and under consideration is a matter which relates to or is likely to affect a person from whom a Member has received a gift or hospitality with an estimated value of at least £25, Members are asked to disclose these at the meeting, either at the declarations of interest agenda item or when the interest becomes apparent.
3.9 It is for Members to decide, in light of the particular circumstances, whether their receipt of a gift or hospitality, could, on a reasonable estimation of a member of the public with knowledge of the relevant facts, with justification, be regarded as so significant that it would be likely to prejudice the Member’s judgement of the public interest. Where receipt of a gift or hospitality could be so regarded, the Member must exercise their judgement as to whether or not, they should participate in any given discussions and/or decisions business of within and by the GLA.
4. Legal Implications 4.1 The legal implications are as set out in the body of this report.
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5. Financial Implications 5.1 There are no financial implications arising directly from this report.
Local Government (Acce ss to Information) Act 1985 List of Background Papers: None Contact Officer: Laura Pelling, Committee Officer Telephone: 020 7983 5526 E-mail: [email protected]
Page 4 Agenda Item 3
MINUTES Meeting: Audit Panel Date: Tuesday 17 December 2013 Time: 3.30 pm Place: Committee Room 4, City Hall, The Queen's Walk, London, SE1 2AA Copies of the minutes may be found at : http://www.london.gov.uk/who-runs-london/the-london- assembly/committees/audit-panel Present: John Biggs AM (Chairman) Roger Evans AM (Deputy Chairman) Gareth Bacon AM 1 Apologies for Absence and Chairman's Announcements (Item 1) 1.1 An apology for absence was received on behalf of Len Duvall AM. 2 Declarations of Interests (Item 2) 2.1 The Panel received the report of the Executive Director of Secretariat. 2.2 Resolved: That the list of offices held by Assembly Members, as set out in the table at Agenda Item 2, be noted as disclosable pecuniary interests. City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 5 Greater London Authority Audit Panel Tuesday 17 December 2013 3 Minutes (Item 3) 3.1 Resolved: That the minutes of the meeting of the Audit Panel held on 22 October 2013 be signed by the Chairman as a correct record. 4 Internal Audit Reports (Item 4) 4.1 The Audit Panel received the report of the Executive Director of Resources. Appended to the report were: six internal audit reports (of which four had received substantial assurances, and two had received adequate assurances); one follow up report (which had received an adequate assurance); and the internal audit progress report. Internal Audit Reports 4.2 The Panel considered the following recent internal audit reports (attached at Appendices 1a to 1f of the report): • The Mayor’s Economic Development Strategy and Implementation Framework; • Review of Desktop Management; • Review of Internet-Based Network Security; • Review of Decision Making Framework – Mayoral and Directorate; • Performance Management Framework; and • General Ledger Control Framework. The Mayor’s Economic Development Strategy and Implementation Framework 4.3 The Director of Audit, Risk and Assurance (MOPAC) noted that the report had received an adequate assurance. There was a clearly defined strategy which identified various interdependencies, although it was recognised that this was a vast area of business with a complex governance structure. She highlighted two key recommendations outlined in the report: taking forward the overarching implementation plan; and streamlining the governance structures. 4.4 The Assistant Director of Economic and Business Policy noted that the Economic Development Strategy (EDS) Implementation Plan had been developed in spring 2011. Since then, the London Enterprise Panel (LEP) had been established. As a result, the detail of the framework did still have to be developed in line with the governance framework, and the recommendations in the report were helpful in achieving this. He agreed that the governance system did need streamlining as the current arrangements could result in duplication. Page 6 Greater London Authority Audit Panel Tuesday 17 December 2013 4.5 Asked by the Chairman if the Strategy was a sufficient guide for the Mayor, the Director of Audit, Risk and Assurance (MOPAC) said that the focus of the review was about whether the Strategy was clearly defined, and the nature of the Implementation Plan. The Assistant Director of Economic and Business Policy noted that the LEP was an advisory body, and that any agreed decisions still had to go through the Greater London Authority’s (GLA) formal decision-making process. 4.6 The Chairman felt that the current process and numbers of strategies was a bit confusing. The Assistant Director of Economic and Business Policy agreed that potentially could be the case. However, now the LEP had been established it would be possible to simplify the governance arrangements which they would now undertake to do. He said that anchoring the LEP to a Strategy helped to focus the LEP to make decisions that supported the overall Strategy, rather than it acting as purely a grant-giving body. The Head of Governance and Resilience noted that efforts had been made to streamline the process. He explained that substantive policy discussions were undertaken by the LEP, whereas the Investment and Performance Board (IPB) focus was on the particular resource decisions for the GLA. This still required a mayoral decision, as the Mayor had not delegated decision-making authority to the LEP. 4.7 The Chairman noted that the abolition of the Regional Development Agencies had left a vacuum which had led to the creation of the LEPs which were, in some respects, still being developed. 4.8 The Deputy Chairman expressed concern that there were no defined performance measures in place, as identified in the report at recommendation 8.2. He wondered why it would take until October 2014 to remedy this. The Assistant Director of Economic and Business Policy hoped that it would be completed before then. He noted there were a raft of documents to be submitted to the Department for Business, Innovation and Skills, and the October 2014 date reflected an intention to tie this work together. He confirmed that they did report against the Key Performance Indicator (KPI) targets in the GLA’s corporate plan. 4.9 Asked by the Chairman about the relevance of the GLA Act on the EDS, the Head of Governance and Resilience confirmed that technically the Act was silent on the content of the Strategy. 4.10 The Director of Audit, Risk and Assurance (MOPAC) agreed that if possible recommendation 8.2 should be implemented sooner than the proposed target date. She felt that once the overarching implementation framework was in place it would help to work through the various measures. 4.11 The Assistant Director of Economic and Business Policy stressed they were not undertaking a formal review of the EDS as this was a lengthy process and would require the new Strategy to be revised by the Secretary of State. Instead, they were reviewing the EDS in light of the Page 7 Greater London Authority Audit Panel Tuesday 17 December 2013 2020 Vision and the introduction of the LEP. Review of Desktop Management and Review of Internet-Based Network Security 4.12 The Director of Audit, Risk and Assurance (MOPAC) noted that substantial assurances had been given for both of these reports. 4.13 The Head of Technology said that these audits represented a major review of technology infrastructure, both of which had been carried out at a time of significant change. Given the amount of change, he felt it was a real achievement of the people running the services. Review of Decision Making Framework – Mayoral and Directorate 4.14 The Director of Audit, Risk and Assurance (MOPAC) said that the report had received a substantial assurance. There were a couple of minor recommendations, but decision making was a well-embedded process that was consistently reviewed, complied with and was transparent. 4.15 The Chairman noted that there were still a high number of Part II decisions. The Director of Audit, Risk and Assurance (MOPAC) observed that written justification had been given for all Part II decisions. The Head of Governance and Resilience confirmed this was often for legal and/or commercial reasons. Performance Management Framework 4.16 The Director of Audit, Risk and Assurance (MOPAC) said there was a well-defined process around performance management. The key framework had recently been introduced and the recommendations from the auditors were focused on embedding the new approach and ensuring the good practise in the guide was put in place. 4.17 The Head of Governance and Resilience said it was a fair report, and all four recommendations had been accepted. He felt it was fair that issues about the KPIs and the need to certify data had been raised as there was scope for data to be misinterpreted. He agreed that where there were red-rated projects it should be clear what action had been taken to rectify any inadequacies. 4.18 Asked about the process of self-certification by the Deputy Chairman, the Head of Governance and Resilience explained that the new process would see owners of data certifying that data was, to the best of their knowledge, accurate. He said it was better practice to have a validation process in place. 4.19 The Deputy Chairman observed that self-certification did not mean data had been subject to an objective test. In agreement, the Head of Governance and Resilience stressed that the new obligation to sign off data would encourage people to make additional checks and take Page 8 Greater London Authority Audit Panel Tuesday 17 December 2013 greater care. He felt this would help limit the number of mistakes which could be sported in advance. 4.20 In response to a question about what best practice looks like, the Director of Audit, Risk and Assurance (MOPAC) explained there were steps in the guidance which signatories were expected to follow. She pointed out that the process of self-certification should still be subject to independent checks by internal auditors or by central management. The Head of Governance and Resilience agreed that the GLA’s Intelligence Unit should play a role in verifying data, and noted that this would be picked up again in an internal audit report to be reported to the Audit Panel’s March 2014 meeting. 4.21 The Chairman felt that the current KPIs could be more sharply honed. He suggested officers compare City Hall’s KPIs with those used by other public sector bodies. General Ledger Control Framework 4.22 The Director of Audit, Risk and Assurance (MOPAC) said the report had received a substantial assurance with one recommendation on ensuring the authorisation of journal entries were in line with the budget holder’s responsibilities. The Head of Financial Services confirmed this recommendation had been accepted and budget holders had been reminded of this good process. Internal Audit Follow up Reports 4.23 The Audit Panel considered the Treasury Management follow up report (attached at Appendix 2). Treasury Management – Follow Up 4.24 The Director of Audit, Risk and Assurance (MOPAC) noted that this review followed recent changes which saw the GLA agree shared service arrangements with the Mayor’s Office for Policing and Crime (MOPAC). She noted that they would soon undertake a review of this arrangement from MOPAC’s perspective, and if any issues arose from that review they would be reported back to the Audit Panel. One recommendation had been made about updating relevant process notes where they applied to the shared service arrangement. This would be reviewed in future reports. 4.25 Asked by the Chairman if the GLA was fit for the new processes it had agreed to undertake under the shared service agreement, the Director of Audit, Risk and Assurance (MOPAC) stressed that the recommendation was simply to ensure greater clarity in the process notes for treasury management functions. 4.26 Gareth Bacon AM noted that recommendation 7.4 on Treasury Management Practices was six months behind its target completion date. He asked why it was not being treated as a Page 9 Greater London Authority Audit Panel Tuesday 17 December 2013 priority. The Director of Audit, Risk and Assurance (MOPAC) agreed it did need to be treated as a priority, and that it must be clear who was responsible for which tasks under the new shared services agreement. The Head of Financial Services stated that it was being treated as a priority and that the document had not been allowed to become out of date. He agreed to provide the Panel with a note as to why the original target date had slipped, and agreed that an officer would attend the next Audit Panel meeting to report to the Panel directly. He assured the Panel that the necessary practices were in place, but the procedures had yet to be updated in relevant supporting documents. 4.27 The Chairman noted that the treasury management functions for policing was a smaller piece of work than other responsibilities the GLA had inherited, therefore it should be feasible for the GLA to make the necessary changes. The Head of Governance and Resilience said it was carried out through the GIS approach which was relatively well documented in the shared service arrangements. He confirmed that a note would be sent to the Mayor making clear that this issue would be considered again at the March Audit Panel meeting. Internal Audit – Progress Report 4.28 The Audit Panel considered the Internal Audit – Progress Report. 4.29 Resolved: That the following be noted: (a) Reports at Appendices 1a to 1f; (b) Follow up Review at Appendix 2; and (c) Progress report at Appendix 3. 5 London's European Programmes (Item 5) 5.1 The Panel received the report of the Executive Director of Resources. 5.2 The European Programmes Director explained that the European Programmes had been subject to a high number of audits, but no adverse findings had been found. He confirmed that the GLA acts as an intermediate body and not a management body. Although there had been suggestions that the GLA would become a management body, the Government had decided to continue with a single national model with programmes devolved to the LEPs. 5.3 Resolved: That the audit environment for European Programmes and the work that is currently underway be noted. Page 10 Greater London Authority Audit Panel Tuesday 17 December 2013 6 Monitoring of Expenses and Taxable Benefits - Mayor, Elected Members and Senior Staff - 2013/14 (Item 6) 6.1 The Panel received the report of the Executive Director of Resources. 6.2 Resolved: That the taxable benefits and expenses incurred by the Mayor, London Assembly Members and senior staff for the period 1 September 2013 to 31 October 2013 be noted. 7 Work Programme for the Audit Panel (Item 7) 7.1 The Panel received the report of the Executive Director of Secretariat. 7.2 Resolved: That the work programme for the remainder of the 2013/14 Assembly Year be approved. 8 Date of Next Meeting (Item 8) 8.1 The next meeting of the Panel was scheduled for 20 March 2014 at 2.00pm in Committee Room 4. 9 Any Other Business the Chair Considers Urgent (Item 9) 9.1 There was no other business the Chairman considered urgent. 10 Close of Meeting 10.1 The meeting ended at 4.25pm.
Page 11 Greater London Authority Audit Panel Tuesday 17 December 2013 Chair man Date Contact Officer: Laura Pelling, Committee Officer; telephone: 020 7983 5526; email: [email protected]
Page 12 Agenda Item 4
Subject: Summary List of Actions Report to: Audit Panel Report of: Executive Director of Secretariat Date: 20 March 2014 This report will be considered in public . 1. Summary 1.1 This report updates the Panel on the progress made on an action arising from the previous meeting of the Panel. 2. Recommendation 2.1 That the Panel notes the completed action arising from the previous meeting of the Panel.
Action Arising From the Meeting of the Audit Panel Held on 17 December 2013 Item Topic Date Due Person 4. Internal Audit Reports Provide the Committee with a note on Received 16 Assistant Director why the target date for implementation of January 2014, of Group Finance the recommendations in the Treasury attached at Management Follow Up report had Appendix 1 . slipped. 3. Legal Implications 3.1 There are none arising from this report. 4. Financial Implications 4.1 There are none arising from this report.
City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 13
List of appendices to this report: Appendix 1 – Response from Assistant Director – Group Finance, received on 16 January 2014 Local Government (Access to Information) Act 1985 List of Background Papers: Minutes to the Audit Panel’s 17 December 2013 meeting. Contact Officer: Laura Pelling, Committee Officer Telephone: 020 7983 526 Email: [email protected]
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Page 16 Agenda Item 5
Subject: External Audit or’s Audit Plan 2 01 3/14 Report to: Audit Panel Report of: Executive Director of Resources Date: 20 March 201 4 This report will be considered in public 1. Summary 1.1 This report presents the External Auditor’s Audit Plan 2013-14 to the Panel. 2. Recommendation 2.1 That the Panel notes the contents of the External Auditor’s Audit Plan 2013/14. 3. Background 3.1 Each year the Authority’s External Auditor, Ernst & Young, presents its Audit Plan to the Panel for its consideration and information. 4. Issues arising 4.1 Members’ attention is drawn to the significant risks listed in section 2 of the Plan. 5. Legal Implications 5.1 There are no legal issues directly arising from this report. 6. Financial Implications 6.1 This report is entirely concerned with financial issues. City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 17
List of appendices to this report: Appendix 1- External Auditor’s Audit Plan 2013/14 Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Tom Middleton, Head of Governance & Resilience Telephone: 020 7983 4257 E-mail: [email protected]
Page 18 Appendix 1
Greater London Authority
Year ending 31 March 2014
Audit Plan
20 March 20 14
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Page 20 Ernst & Young LLP Tel: + 44 20 7951 2000 1 More London Place Fax: + 44 20 7951 1345 London ey.com SE1 2AF
Tel: 023 8038 2000 Fax: 023 8038 2001 www.ey.com/uk
Audit Panel Greater London Authority 20 March 2014 City Hall The Queen’s Walk More London London SE1 2AA
Dear Members, Audit Plan
We are pleased to attach our Audit Plan which sets out how we intend to carry out our responsibilities as auditor. The purpose of this report is to provide the Audit Panel with a basis to review our proposed audit approach and scope for the 2013/14 audit. We will complete our work in accordance with the requirements of the Audit Commission Act 1998, the Code of Audit Practice, the Standing Guidance, auditing standards and other professional requirements. We also want to ensure that our audit is aligned with the Audit Panel’s service expectations.
This report summarises our assessment of the key risks which drive the development of an effective audit for the Greater London Authority, Greater London Authority Holdings Ltd and the GLA Group, and outlines our planned audit strategy in response to those risks.
We welcome the opportunity to discuss this report with you on 20 March 2013 as well as understand whether there are other matters which you consider may influence our audit.
Yours faithfully
Karl Havers Partner For and on behalf of Ernst & Young LLP
Enc
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Page 22 Contents
Contents
1. Overview ...... 1 2. Financial statement risks ...... 3 3. Economy, efficiency and effectiveness ...... 7 4. Our audit process and strategy ...... 8 5. Independence ...... 12 Appendix A Fees ...... 15 Appendix B UK required communications with those charged with governance ...... 18
In March 2010 the Audit Commission issued a revised version of the ‘Statement of responsibilities of auditors and audited bodies’ (Statement of responsibilities). It is available from the Chief Executive of each audited body and via the Audit Commission’s website . The Statement of responsibilities serves as the formal terms of engagement between the Audit Commission’s appointed auditors and audited bodies. It summarises where the different responsibilities of auditors and audited bodies begin and end, and what is to be expected of the audited body in certain areas. The Standing Guidance serves as our terms of appointment as auditors appointed by the Audit Commission. The Standing Guidance sets out additional requirements that auditors must comply with, over and above those set out in the Code of Audit Practice 2010 (the Code) and statute, and covers matters of practice and procedure which are of a recurring nature. This Audit Results Report is prepared in the context of the Statement of responsibilities. It is addressed to the Members of the audited body, and is prepared for their sole use. We, as appointed auditor, take no responsibility to any third party. Our Complaints Procedure – If at any time you would like to discuss with us how our service to you could be improved, or if you are dissatisfied with the service you are receiving, you may take the issue up with your usual partner or director contact. If you prefer an alternative route, please contact Steve Varley, our Managing Partner, 1 More London Place, London SE1 2AF. We undertake to look into any complaint carefully and promptly and to do all we can to explain the position to you. Should you remain dissatisfied with any aspect of our service, you may of course take matters up with our professional institute. We can provide further information on how you may contact our professional institute.
Page 23 EY i Overview
1. Overview
Context for the audit This audit plan covers the work that we plan to perform in order to provide the Authority with:
► An audit opinion on whether the Authority financial statements give a true and fair view of its financial position as at 31 March 2014 and of the income and expenditure for the year then ended
► A statutory conclusion on the Authority’s arrangements to secure economy, efficiency and effectiveness.
We will also review and report to the National Audit Office (‘NAO’), to the extent and in the form required by them, on your Whole of Government Accounts return.
When planning the audit we take into account several key inputs:
► Strategic, operational and financial risks relevant to the financial statements
► Developments in financial reporting and auditing standards
► The quality of systems and processes
► Changes in the business and regulatory environment
► Management’s views on all of the above
By considering these inputs, our audit is focused on the areas that matter. And by focusing on the areas that matter, our feedback is more likely to be relevant to the Authority.
Our audit will also include the mandatory procedures that we are required to perform in accordance with applicable laws and auditing standards.
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Our process and strategy Financial statement audit We will apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified misstatements and in forming our opinion. We set our materiality based on the Authority’s level of gross expenditure. We carry out an initial assessment of materiality using the financial statements for 2021/13 but will update this when we receive the draft and final 2013/14 financial statements. We also consider the size of useable reserves, the Authority’s financial position, its public profile and the reporting and challenge history. Our audit is designed to identify errors above materiality.
We aim to rely on the Authority’s internal controls in the key financial systems. We identify the controls we consider important and seek to place reliance on Internal Audit’s testing of those controls. Where control failures are identified we consider the most appropriate steps to take.
Arrangements for securing economy, efficiency and effectiveness (value for money conclusion) We adopt an integrated audit approach such that our work on the financial statement audit feeds into our consideration of the arrangements in place for securing economy, efficiency and effectiveness.
We have considered the risks relevant to our value for money conclusion and have not identified at this stage any significant risks requiring specific risk-based work. We will keep our risk assessment under review taking into account: our discussions with the Authority; our review of reports and minutes; the results of Internal Audit work; our opinion work; review of the Annual Governance Statement; and the work of other regulators. We will also review progress on the Authority’s financial plans.
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2. Significant risks
Since our appointment as your external auditors in 2012 we have held a number of meetings with the GLA Executive Group and key finance officers. We have also drawn extensively on the knowledge of the Authority to clarify the group structure and to discuss the significant risks being faced by the Authority and the GLA family.
During 2012-2013 the GLA’s responsibilities and structure changed significantly. The GLA acquired a substantial land and property portfolio following the transfer of assets from devolution of the Homes and Communities Agency, abolition of the former London Development Agency and London Thames Gateway Development Corporation. The vast majority of the land and property assets and commercial activities are accounted for in the subsidiary company, GLA Land and Property Ltd. During 2012-13 the GLA also set up a Mayoral Development Corporation, the London Legacy Development Corporation (LLDC), responsible for the legacy development of the Queen Elizabeth Olympic Park. In addition to the above, the GLA also undertook a detailed assessment of its accounting relationship with the functional bodies against the requirements of the Local Government Accounting Code of Practice and International Accounting Standard 27. As a result of this assessment it was concluded that the following four current or former functional bodies did not require consolidation into the GLA Group Accounts: ► London Fire and Emergency Planning Authority (LFEPA) ► Transport for London (TfL) ► Mayor’s Office for Policing and Crime (MOPAC) ► London Development Agency (LDA)
This means that the GLA group now consists of the following entities: ► Greater London Authority ► Greater London Authority Holdings Ltd (including GLAP Ltd) ► London Legacy Development Corporation (LLDC).
Financial statement risks
We outline below our assessment of the key financial statement risks facing the Authority and group. We have identified these through our acquired knowledge of the entity’s operations and ongoing discussion with members and officers.
Significant risks (including fraud risks) Our audit approach Assessment of the GLA Group boundary In light of the significant changes that took place Our approach will focus on:
within the GLA family in 2012-2013, we will ► Assessing where overall control lies continue to assess the GLA group boundary with regard to the operation and against the criteria stipulated in the two relevant delivery of services of the potential international accounting standards IAS27 and group bodies. IFRS10 (adopted from 1 January 2013). ► In relation to the new subsidiary of In 2013/14, LLDC have entered into a Joint LLDC, E20 Stadium Company LLP, Venture with LB Newham. The E20 Stadium to ensure that the accounting Company LLP will take on responsibility for the framework and accounting policies development and subsequent operation of the are aligned to those of the GLA group Olympic Stadium. and that it is appropriately consolidated into the GLA group either directly or via LLDC’s group accounts.
Page 26 Ernst & Young 3 Significant risks
Significant accounting judgments and estimates, particularly provisions and contingent liabilities The financial statements of the GLA are based in Our approach will focus on: certain areas on the significant accounting ► Assessing and testing the judgements of the preparers of those accounts. reasonableness of accounting The accounts also contain material accounting judgments and estimates used in the estimates; particularly provisions and contingent preparation of the accounts. liabilities. ► Specific focus on the Compulsory Purchase Order (CPO) provisions contained within both GLA’s and GLAP Ltd’s financial statements. ► Ensuring that accounting judgments and estimates are correctly disclosed in the accounts as required by IAS 8 and the Code of Practice. Pension valuations and disclosures
The Local Authority Accounting Code of Practice Our approach will focus on: and IAS19 requires the Authority to make extensive disclosures within its financial ► Liaising with the auditors of the statements regarding the Local Government London Pensions Authority, the Pension Scheme (LGPS) in which it is an LGPS administering authority, to admitted body. obtain assurances over the information supplied to the actuary in The Authority’s current pension fund deficit is a relation to the Greater London highly material and sensitive item and the Code Authority. requires this liability to be disclosed on the Authority’s Balance Sheet. ► Assessing the conclusions drawn on The information disclosed is based on the IAS19 the work of the actuary by the report issued to the Authority by the actuaries to Consulting Actuary to the Audit the administering body; the London Pension Fund Commission, PwC. Reviewing and Agency. testing the accounting entries and disclosures made within the Authority’s financial statements in relation to IAS19. Property valuations within LLDC and GLAP Ltd
The GLA Group Balance Sheet contains property Our approach will focus on: assets which are highly material in nature. ► Assessing the valuations assigned to The unique and material nature of LLDC’s these property assets and any Olympic Park non-current assets and the basis on material increases or impairments which they are valued, mean that small changes that arise during 2013/14. in assumptions when valuing these assets can have material impact on the financial statements. ► Assessing the work of the property A similar issue arises on GLAP’s property assets valuers in respect of LLDC and GLAP that are classified as inventory. Ltd’s property portfolio. Consulting with EY Estates team where appropriate and reviewing and testing the accounting entries and disclosures made within the Authority’s financial statements.
Page 27 Ernst & Young 4 Significant risks
Localisation of business rates
There have been significant changes in the ► We will review the detailed arrangements for business rates from April 2013. accounting for business rates to The detailed accounting requirements for the new ensure the Authority’s accounts are arrangements are not yet clear and this therefore materially accurate and compliant presents a risk in terms of the financial with the CIPFA Code of practice. statements. ► We will review the Authority’s One of the main changes is that individual provision for business rate appeals to authorities now need to provide for rating ensure it has been calculated on a appeals. This includes not only claims from 1 reasonable basis. As part of this we April 2013 but claims that relate to earlier periods. will ensure the provision is supported As appeals are made to the Valuation Office, by appropriate evidence including authorities may not be aware of the level of review of information provided by the claims. Authorities may also find it difficult to London borough’s, as GLA’s obtain sufficient information to establish a reliable provision will comprise a share of the estimate. provision made by each borough.
Risk of management override
As identified in ISA (UK & Ireland) 240, Our approach will focus on: management is in a unique position to perpetrate ► Testing the appropriateness of fraud because of their ability to directly or journal entries recorded in the indirectly manipulate accounting records and general ledger and other adjustments prepare fraudulent financial statements by made in the preparation of the overriding controls that otherwise appear to be financial statements; operating effectively. We identify and respond to ► Reviewing accounting estimates for this fraud risk on every audit engagement evidence of management bias; and
► Evaluating the business rationale for significant unusual transactions.
Our 2012/13 audit plan included two significant financial statement risks which in our judgement are no longer significant risks in 2013/14:
• Borrowing controls & compliance with prudential indicators Although the Authority has a highly significant amount of external debt, audit procedures undertaken last year provided sufficient assurance on the adequacy of the Authority’s arrangements for treasury management and managing its borrowing levels within the Prudential Code indicators it sets.
• Accounting for the transfer into GLA and GLA group of the assets and liabilities from the London Development Agency; Housing and Communities Agency (London Region) and the London Thames Gateway Development Agency. There is no such transfer of services, assets and liabilities into the GLA group in 2013/14.
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Respective responsibilities in relation to fraud and error
We would like to take this opportunity to remind you that management has the primary responsibility to prevent and detect fraud. It is important that management, with the oversight of those charged with governance, has put in place a culture of ethical behaviour and a strong control environment that both deters and prevents fraud.
Our responsibility is to plan and perform audits to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatements whether caused by error or fraud. As auditors, we approach each engagement with a questioning mind that accepts the possibility that a material misstatement due to fraud could occur, and design the appropriate procedures to consider such risk.
Based on the requirements of auditing standards our approach will focus on:
► Identifying fraud risks during the planning stages. ► Inquiry of management about risks of fraud and the controls put in place to address those risks. ► Understanding the oversight given by those charged with governance of management’s processes over fraud. ► Consideration of the effectiveness of management’s controls designed to address the risk of fraud. ► Determining an appropriate strategy to address those identified risks of fraud. ► Performing mandatory procedures regardless of specifically identified fraud risks.
We will consider the results of the National Fraud Initiative and may make reference to it in our reporting to you.
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3. Economy, efficiency and effectiveness
Our work will focus on whether the Authority has proper arrangements in place to secure:
► Financial resilience
► Economy, efficiency and effectiveness in its use of resources
Our approach and identification of significant risks Using our review of the GLA group boundary in our 2012/2013 audit, we gained a comprehensive understanding of the GLA’s strategic, finance and operating plans and processes. As a new audit to EY, we supplemented this knowledge with a review of GLA’s value for money arrangements against characteristics and risk indicators set out in the Audit Commission’s Value for Money conclusion guidance. We concluded in 2012/13 that the Authority had proper and sound arrangements to secure its financial resilience and in economy, efficiency and effectiveness in its use of resources.
We will continue to plan and perform our work this year based on our assessment of risk as set out in the Audit Commission’s guidance. At this stage, we have not identified any concern or risk against either of the Value for Money criteria which would require additional risk based work. We have no significant risks to report at this stage. We will keep this assessment up-to- date during the audit, taking account of any relevant findings from our audit of the financial statements, review of the Authority’s Annual Governance Statement, the work of Internal Audit and our regular discussions with senior management. Should we identify any significant audit risks during the audit, we will update this plan to set out our approach and report this to the Audit Panel.
Although we have not identified this area as a significant risk, the Comprehensive Spending Review and the introduction of localisation of business rates will have an impact on the Authority’s budget and medium term financial planning. We found in our 2012/13 audit that the Authority has planned well for this and have sufficient headroom to meet budgetary pressures and risks. Within our planned 2013/14 fee, we will focus on:
••• Achievement of the 2013/14 budget and how the Authority has managed any risks, including under or overspends.
••• Adequacy of the 2014/15 budget setting process and robustness of assumptions and savings plans.
••• Understanding the Authority’s approach to medium to longer term financial planning. We will consider the assumptions, scenarios, options and risks the Authority is facing and how these are being managed. Unless we have any significant concerns, we will not do a detailed review and testing of any associated and available cost reduction and savings plans.
••• The level of exposure the GLA has to the financial and operating performance of LLDC. In 2013/2014 and medium term, the GLA is providing significant levels of capital and revenue funding to LLDC, a lot of which then is used to support LLDC in delivering the targets set out in its 2013/14 to 2015/16 business plan. Should LLDC experience any slippage against its capital programme and operating plan, this may have funding and budgetary consequences for the GLA.
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4. Our audit process and strategy
Objective and scope of our audit Under the Audit Commission’s Code of Audit Practice (‘the Code’), dated March 2010, our principle objectives are to review and report on, to the extent required by the relevant legislation and the requirements of the Code, the Authority’s:
► Financial statements
► Arrangements for securing economy, efficiency and effectiveness in its use of resources
We issue a two-part audit report covering both of these objectives.
Financial statement audit Our objective is to form an opinion on the financial statements under International Standards on Auditing (UK and Ireland). This opinion covers the Authority’s financial statements.
We will also review and report to the National Audit Office (‘NAO’), to the extent and in the form required by them, on the Whole of Government Accounts return.
We will also issue statutory audit opinions on the GLA’s subsidiary companies, Greater London Authority Holdings Ltd and GLA Land and Property Ltd. In respect of these subsidiaries we will plan our audit procedures to identify misstatements that could be material to the statutory financial statements of the individual entity.
Arrangements for securing economy, efficiency and effectiveness The Code sets out our responsibility to satisfy ourselves that the Authority has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources. In arriving at our conclusion, to the fullest extent possible we will place reliance on the reported results of the work of other statutory inspectorates in relation to corporate or service performance. In examining the Authority ’s corporate performance management and financial management arrangements we have regard to the following criteria and areas of focus specified by the Audit Commission:
► Arrangements for securing financial resilience – whether the Authority has robust systems and processes to manage financial risks and opportunities effectively, and to secure a stable financial position that enables it to continue to operate for the foreseeable future.
► Arrangements for securing economy, efficiency and effectiveness – whether the Authority is prioritising its resources within tighter budgets, for example by achieving cost reductions and by improving efficiency and productivity.
Audit process overview Our audit involves:
► Assessing whether the key internal controls in place will prevent and detect errors in the financial statements
► Determine the most efficient audit strategy
► If our audit strategy is controls assurance, we will test the operation of these controls
► Review and re-performance of the work of Internal Audit
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► Reliance on the work of other auditors where appropriate
► Reliance on the work of experts in relation to areas such as pensions and property valuations
► Substantive tests of detail of transactions and amounts
Processes We have completed our initial assessment of the Authority’s control environment, material financial systems and significant classes of transactions. We have concluded that an audit strategy that combines reliance on the control environment as well as substantive testing procedures is efficient and appropriate. We therefore, in certain areas, plan to rely on the Authority's internal controls when carrying out the audit; seeking to place reliance on the work Internal Audit undertakes on material systems where appropriate. Substantive procedures on the draft financial statements will then be undertaken to gain the level of assurance required to issue the audit opinion.
Analytics We will use our computer-based analytics tools to enable us to capture whole populations of your financial data, in particular in respect of payroll and journal entries, and potentially accounts payable and accounts receivable. These tools:
► Help identify specific exceptions and anomalies which can then be subject to more traditional substantive audit tests.
► Give greater likelihood of identifying errors than random sampling techniques.
We will report the findings from our process and analytics work, including any significant weaknesses or inefficiencies identified and recommendations for improvement, to management and the Audit Panel.
Internal audit We will review Internal Audit plans and the results of work undertaken. We will reflect the findings from these reports, together with reports from other work completed in the year, in our detailed audit plan, where issues are raised that could impact the year-end financial statements.
Use of experts We will utilise specialist EY resource, as necessary, to help us to form a view on judgments made in the financial statements. At the moment we expect those areas to include pension’s valuation experts only.
Other procedures In addition to the financial statement risks outlined within this plan, we have to perform other procedures as required by auditing, ethical and independence standards, the Code and other regulations. We outline the procedures we will undertake during the course of our audit . Mandatory procedures required by auditing standards on:
► Addressing the risk of fraud and error
► Significant disclosures included in the financial statements
► Entity-wide controls
► Reading other information contained in the financial statements and reporting whether it is inconsistent with our understanding and the financial statements
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► Auditor independence.
Procedures required by the Code on:
► Reviewing, and reporting on as appropriate, other information published with the financial statements, including the Annual Governance Statement
► Reviewing and reporting on the Whole of Government accounts return, in line with the instructions issued by the NAO
► Reviewing, and where appropriate, examining evidence that is relevant to the Authority’s corporate performance management and financial management arrangements and reporting on these arrangements
Materiality For the purposes of determining whether the accounts are free from material error, we define materiality as the magnitude of an omission or misstatement that, individually or in the aggregate, in light of the surrounding circumstances, could reasonably be expected to influence the users of the financial statements. Our evaluation of it requires professional judgement and necessarily takes into account qualitative as well as quantitative considerations implicit in the definition. We have determined at the planning stage that overall materiality for the financial statements of the GLA is £19.8million based on 1% of gross expenditure (both revenue and capital expenditure).
We will communicate uncorrected audit misstatements greater than £1 million to you.
The amount we consider material at the end of the audit may differ from our initial determination. At this stage, however, it is not feasible to anticipate all of the circumstances that may ultimately influence our judgement about materiality. At the end of the audit we will form our final opinion by reference to all matters that could be significant to users of the accounts, including the total effect of the audit misstatements we identify, and our evaluation of materiality at that date.
Fees The Audit Commission has published a scale fee for all authorities. The scale fee is defined as the fee required by auditors to meet statutory responsibilities under the Audit Commission Act in accordance with the Code of Audit Practice 2010. The indicative fee scale for the Authority’s audit is £140,000. This fee is predicated on the Authority preparing financial statements for audit which are free from material error and which are supported by good quality working papers. Your audit team The engagement team is led by Karl Havers, supported by Neil Harris as Audit Director. Neil is supported by Philip King as Senior Manager who is responsible for the day-to-day direction of audit work, and who is the key point of contact for the Chief Accountant. Timetable of communication, deliverables and insights We have set out below a timetable showing the key stages of the audit, including the value for money work and the whole of government accounts; and the deliverables we have agreed to provide through the Audit Panel cycle in 2014. These dates are determined to ensure our alignment with the Audit Commission’s rolling calendar of deadlines.
We will provide a formal report to the Audit Panel in September, incorporating the outputs from our year-end procedures. From time to time matters may arise that require immediate communication with the Audit Panel and we will discuss them with the Audit Panel Chair as appropriate.
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Following the conclusion of our audit we will prepare an annual audit letter in order to communicate to the Authority and external stakeholders, including members of the public, the key issues arising from our work.
Audit Panel Audit phase Timetable timetable Deliverables High level January - planning February Risk assessment February - Audit Panel Audit Plan and setting of March scopes Testing of routine March-April Reporting of any significant matters if processes and required controls Draft accounts July Accounts received for audit Year-end audit July – August including WGA Reporting September Audit Panel Report to those charged with governance
Audit report (including our opinion on the financial statements and a conclusion as to whether the Authority has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources).
Audit completion certificate Reporting October Annual Audit Letter
In addition to the above formal reporting and deliverables we will seek to provide practical business insights and updates on regulatory matters.
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5. Independence
Introduction The APB Ethical Standards and ISA (UK and Ireland) 260 “Communication of audit matters with those charged with governance”, requires us to communicate with you on a timely basis on all significant facts and matters that bear upon our independence and objectivity. The Ethical Standards, as revised in December 2010, require that we communicate formally both at the planning stage and at the conclusion of the audit, as well as during the course of the audit if appropriate. The aim of these communications is to ensure full and fair disclosure by us to those charged with governance on matters in which you have an interest.
Required communications Planning stage Final stage ► The principal threats, if any, to objectivity ► A written disclosure of relationships and independence identified by EY (including the provision of non-audit including consideration of all services) that bear on our objectivity and relationships between you, your affiliates independence, the threats to our and directors and us. independence that these create, any safeguards that we have put in place ► The safeguards adopted and the and why they address such threats, reasons why they are considered to be together with any other information effective, including any Engagement necessary to enable our objectivity and Quality review. independence to be assessed.
► The overall assessment of threats and ► Details of non-audit services provided safeguards. and the fees charged in relation thereto.
► Information about the general policies ► Written confirmation that we are and process within EY to maintain independent. objectivity and independence. ► Details of any inconsistencies between APB Ethical Standards, the Audit Commission’s Standing Guidance and the Authority’s policy for the supply of non-audit services by EY and any apparent breach of that policy.
► An opportunity to discuss auditor independence issues.
In addition, during the course of the audit, we are required to communicate whenever any significant judgements are made about threats to objectivity and independence and the appropriateness of safeguards put in place, for example, when accepting an engagement to provide non-audit services.
We also provide information on any contingent fee arrangements, the amounts of any future services that have been contracted, and details of any written proposal to provide non-audit services that has been submitted.
We ensure that the total amount of fees that EY and our network firms have charged to you and your affiliates for the provision of services during the reporting period, analysed in appropriate categories, are disclosed.
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Relationships, services and related threats and safeguards We highlight the following significant facts and matters that may be reasonably considered to bear upon our objectivity and independence, including the principal threats, if any. However we have adopted the safeguards noted below to mitigate these threats along with the reasons why they are considered to be effective.
Self interest threats A self interest threat arises when EY has financial or other interests in the entity. Examples include where we receive significant fees in respect of non-audit services; where we need to recover long outstanding fees; or where we enter into a business relationship with you. At the time of writing, there are no long outstanding fees.
We believe that it is appropriate for us to undertake permissible non-audit services and we will comply with the policies that you have approved and that are in compliance with the Audit Commission’s Standing Guidance.
A self interest threat may also arise if members of our audit engagement team have objectives or are rewarded in relation to sales of non-audit services to you. We confirm that no member of our audit engagement team, including those from other service lines, has objectives or is rewarded in relation to sales to you, in compliance with Ethical Standard 4.
There are no other self interest threats at the date of this report.
Self review threats Self review threats arise when the results of a non-audit service performed by EY or others within the EY network are reflected in the amounts included or disclosed in the financial statements.
There are no self review threats at the date of this report.
Management threats Partners and employees of EY are prohibited from taking decisions on behalf of management of the entity. Management threats may also arise during the provision of a non-audit service in relation to which management is required to make judgements or decision based on that work.
There are no management threats at the date of this report.
Other threats Other threats, such as advocacy, familiarity or intimidation, may arise.
There are no other threats at the date of this report.
Overall Assessment Overall, we consider that the safeguards that have been adopted appropriately mitigate the principal threats identified and we therefore confirm that EY is independent and the objectivity and independence of Karl Havers, your audit engagement partner, and the audit engagement team have not been compromised.
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Other required communications EY has policies and procedures that instil professional values as part of firm culture and ensure that the highest standards of objectivity, independence and integrity are maintained.
Details of the key policies and processes in place within EY for maintaining objectivity and independence can be found in our annual Transparency Report which the firm is required to publish by law. The most recent version of this Report is for the year ended 28 June 2013 and can be found here: http://www.ey.com/UK/en/About-us/EY-UK-Transparency-Report-2013
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Appendix A Fees
Our agreed fee is shown below.
Planned Fee Actual Fee Explanation of 2013/14 2012/13 variance £ £ Total Audit Fee – Code work 140,000 140,000 N/A
The agreed fee presented above is based on the following assumptions:
► The Authority provides good quality draft accounts which have undergone senior management review and working papers which have similarly undergone review by 1 July 2014.
► Officers provide appropriate responses to queries and other information we request within agreed timescales.
► We are able to place reliance, as planned, on the work of Internal Audit.
► The level of risk in relation to the audit of accounts is consistent with that in the prior year.
► No significant changes are made by the Audit Commission to the use of resources criteria on which our conclusion will be based.
► Our accounts opinion and use of resources conclusion will be unqualified.
► The Authority maintains an effective control environment.
► There are no questions asked or objections made by local government electors.
If any of the above assumptions prove to be unfounded, we will seek a variation to the agreed fee. This will be discussed with the Executive Director of Resources and the Audit Panel in advance.
Fees for the auditor’s consideration of correspondence from the public and formal objections will be charged in addition to the scale fee.
Notes
1. In addition to the above £140,000 GLA fee, we have agreed an additional open book estimated fee of £112,000 for the audit of Greater London Authority Holdings Ltd and GLAP Ltd.
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Appendix B UK required communications with those charged with governance
There are certain communications that we must provide to the Audit Panel of audited clients. These are detailed here:
Required communication Reference
Planning and audit approach Audit Plan Communication of the planned scope and timing of the audit including any limitations. Significant findings from the audit Report to those ► Our view about the significant qualitative aspects of accounting charged with practices including accounting policies, accounting estimates and governance financial statement disclosures ► Significant difficulties, if any, encountered during the audit ► Significant matters, if any, arising from the audit that were discussed with management ► Written representations that we are seeking ► Expected modifications to the audit report ► Other matters if any, significant to the oversight of the financial reporting process ► Findings and issues regarding the opening balance on initial audits Misstatements Report to those
► Uncorrected misstatements and their effect on our audit opinion charged with governance ► The effect of uncorrected misstatements related to prior periods ► A request that any uncorrected misstatement be corrected ► In writing, corrected misstatements that are significant Fraud Report to those
► Enquiries of the Audit Panel to determine whether they have charged with knowledge of any actual, suspected or alleged fraud affecting the governance entity ► Any fraud that we have identified or information we have obtained that indicates that a fraud may exist ► A discussion of any other matters related to fraud Related parties Report to those Significant matters arising during the audit in connection with the charged with entity’s related parties including, when applicable: governance
► Non-disclosure by management ► Inappropriate authorisation and approval of transactions ► Disagreement over disclosures ► Non-compliance with laws and regulations ► Difficulty in identifying the party that ultimately controls the entity External confirmations Report to those
► Management’s refusal for us to request confirmations charged with governance ► Inability to obtain relevant and reliable audit evidence from other procedures
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Required communication Reference Consideration of laws and regulations Report to those
► Audit findings regarding non-compliance where the non- charged with compliance is material and believed to be intentional. This governance communication is subject to compliance with legislation on tipping off ► Enquiry of the Audit Panel into possible instances of non- compliance with laws and regulations that may have a material effect on the financial statements and that the Audit Panel may be aware of Independence Audit Plan Communication of all significant facts and matters that bear on EY’s Report to those objectivity and independence charged with Communication of key elements of the audit engagement partner’s governance consideration of independence and objectivity such as:
► The principal threats ► Safeguards adopted and their effectiveness ► An overall assessment of threats and safeguards ► Information about the general policies and process within the firm to maintain objectivity and independence For listed companies, communication of minimum requirements as detailed in the ethical standards:
► Relationships between EY, the audited body and senior management ► Services provided by EY that may reasonably bear on the auditors’ objectivity and independence ► Related safeguards ► Fees charged by EY analysed into appropriate categories such as statutory audit fees, tax advisory fees, other non-audit service fees ► A statement of compliance with the ethical standards ► The Audit Panel should also be provided an opportunity to discuss matters affecting auditor independence Going concern Report to those Events or conditions identified that may cast significant doubt on the charged with entity's ability to continue as a going concern, including: governance ► Whether the events or conditions constitute a material uncertainty ► Whether the use of the going concern assumption is appropriate in the preparation and presentation of the financial statements ► The adequacy of related disclosures in the financial statements Significant deficiencies in internal controls identified during the Report to those audit charged with governance Fee Information Audit Plan ► Breakdown of fee information at the agreement of the initial audit Report to those plan charged with ► Breakdown of fee information at the completion of the audit governance and Annual Audit Letter if considered necessary
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Appendix C Detailed Scopes
Our objective is to form an opinion on the group’s consolidated financial statements under International Standards on Auditing (UK and Ireland).
We set audit scopes for each reporting unit which, when taken together, enable us to form an opinion on the group accounts. We take into account the size, risk profile, changes in the business environment and other factors when assessing the level of work to be performed at each reporting unit.
► Full scope: locations deemed significant based on size and those with significant risk factors are subject to a full scope audit, covering all significant accounts and processes using materiality levels assigned by the primary audit team, which is the EY London Office GLA audit team for purposes of the consolidated audit. Procedures are full-scope in nature, but may not be sufficient to issue a stand-alone audit opinion on the local statutory financial statements (as materiality thresholds support to the consolidated audit).
► Specific scope: locations where only specific procedures are performed by the local audit team, based upon procedures, accounts or assertions identified by the EY [name of primary office] audit team.
► Limited Scope: limited scope procedures primarily consist of enquiries of management and analytical review. On-site or desk top reviews may be performed, according to our assessment of risk.
The preliminary audit scopes we have adopted to enable us to report on the group accounts are set out below:
• Greater London Authority Holdings Ltd – Full scope
• London Legacy Development Corporation – Full scope
In both cases, the audit team for these component audits is drawn from the GLA audit team and as such, detailed group audit instructions do not need to be issued.
With regard to the E20 Stadium Company LLP; as part of the LLDC audit we will audit the significant transactions of E20 in order to obtain assurances over this new component of the GLA Group.
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Page 42 Agenda Item 6
Subject: Internal Audit Reports Report to: Audit Panel Report of: Executive Director of Resources Date: 20 March 201 4 This report will be considered in public 1. Summary 1.1 This report informs the Panel of recent internal audits. 2. Recommendations 2.1 That the Audit Panel notes the contents of the internal audit: (a) Reports at Appendices 1a to 1g; (b) Follow up reviews at Appendices 2a to 2e; (c) Progress report at Appendix 3; and (d) Internal Audit Plan 2014/15 at Appendix 4. 3. Background 3.1 The GLA’s Internal Auditor, the MOPAC, have recently issued the following reviews: • Precepting Control Framework; • London Plan and its Implementation; • ICT Incident and Problem Management; • Energy and Environment Strategy Framework and Implementation; • Sickness Monitoring and Control; • Financial Control Framework; and • Debtors Control.
City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 43
3.2 The Auditor has also issued the following follow up review: • External Grant Funding Framework – Follow Up; • Risk Management – Follow Up; • Creditors Payment Framework – Follow Up; • Payroll Control Framework – Follow Up; and • London European Programmes Control Framework – Follow Up. 3.3 These reports are attached as Appendices 1a to 1g and Appendices 2a to 2e respectively. 4. Recent Internal Audit Reports Level of Assurance 4.1 Internal Audit award a level of assurance for each audit they undertake. The four categories of assurance are, as follows:
Level 1 or Substantial Assurance There is particularly effective management of key risks contributing to the achievement of business objectives. Level 2 or Adequate Assurance Key risks are being managed effectively, however a number of controls need to be improved to ensure business objectives are met. Level 3 or Limited Assurance Some improvement is required to address key risks before business objectives can be met. Level 4 or No Assurance Significant improvement is required to address key risks before business objectives can be met.
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4.2 Set out below is a summary of recent internal audit reports showing the level of assurance awarded. Audit Ref Responsibility Level of Assurance
Precepting Control Framework 1a Assistant Director – Group Finance Substantial
London Plan and its 1b Assistant Director - Planning Adequate Implementation
ICT Incident and Problem 1c Head of Technology Substantial Management
Energy and Environment 1d Assistant Director - Environment Adequate Strategy Framework and Implementation
Sickness Monitoring and 1e Assistant Director of Human Resources Adequate Control and Organisational Development
Financial Control Framework 1f Head of Financial Services Adequate
Debtors Control Framework 1g Head of Financial Services Adequate
External Grant Funding 2a Head of Financial Services Adequate Framework – Follow Up
Risk Management – Follow Up 2b Head of Governance and Resilience Adequate
Creditors Payment Framework – 2c Head of Financial Services Substantial Follow Up
Payroll Control Framework – 2d Head of Financial Services Substantial Follow Up
London European Programmes 2e Head of Financial Services Adequate Control Framework – Follow Up 4.3 Attached at Appendix 3 is internal audit’s regular progress report. 4.4 Attached at Appendix 4 is internal audit’s audit plan for 2014/15. 5. Legal Implications
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5.1 There are no legal issues directly arising from this report. 6. Financial Implications 6.1 There are no financial issues arising directly from this report. List of appendices to this report: Internal Audit reports Appendix 1a Precepting Control Framework Appendix 1b London Plan and its Implementation Appendix 1c ICT Incident and Problem Management Appendix 1d Energy and Environment Strategy Framework and Implementation Appendix 1e Sickness Monitoring and Control Appendix 1f Financial Control Framework Appendix 1g Debtors Control Framework Appendix 2a External Grant Funding Framework – Follow Up Appendix 2b Risk Management – Follow Up Appendix 2c Creditors Payment Framework – Follow Up Appendix 2d Payroll Control Framework – Follow Up Appendix 2e London European Programmes Control Framework – Follow Up Appendix 3 Internal audit progress report Appendix 4 GLA Internal Audit Plan 2014/15 Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Tom Middleton, Head of Governance & Resilience Telephone: 020 7983 4257 Email: [email protected]
Page 46 Appendix 1a
DIRECTORATE OF AUDIT, RISK AND ASSURANCE
Internal Audit Service to the GLA
REVIEW OF PRECEPTING CONTROL
FRAMEWORK
Page 47 DISTRIBUTION LIST
Audit Team
David Esling, Head of Audit and Assurance Phil Drysdale, Audit Manager Nish Shah, Risk and Assurance Auditor
Report Distribution List
Martin Clarke, Executive Director - Resources David Gallie, Assistant Director - Group Finance Luke Webster, Treasury Manager Martin Boyle, Senior Treasury Accountant
Page 48 CONTENTS
Page EXECUTIVE SUMMARY
Background 1
Audit Assurance 1
Areas of Effective Control 1
Key Risk Issue for Management Action 2
FINDINGS and RECOMMENDATIONS
Review Objectives 3
Scope 3
Annual Precept Calculation 3
Timetable of Activities 4
Accuracy of Payments 5
Receipt, Payment and Accounting 5
Reconciliations, Monitoring and Reporting 6
ACTION PLAN
Assurance and Risk Rating Definitions 7
Findings and Recommendations 8
February 2014 Review of Precepting Control Framework
Page 49 EXECUTIVE SUMMARY
1. Background
1.1 This review has been carried out as part of the Greater London Authority (GLA) 2013/14 audit plan. The objectives of the Precepting Control Framework are to ensure that: • Precept amounts are accurately calculated and properly approved. • Notification of payments made to the London Boroughs is in accordance with legislation. • Payments are received promptly and are appropriately accounted for.
1.2 In exercise of the powers conferred to the Mayor under section 82 of the Greater London Authority Act 1999 and section 40 of the Local Government Act 1992, the Authority issues Precepts to each London Borough Council.
1.3 Precepts are the amount of Council Tax that each Local Authority is empowered to set and collect from the individual households in order to fund the total council tax requirement of the GLA and its functional bodies. The total consolidated Council Tax requirement for the 2013/14 financial year is approximately £778.7 million.
1.4 At the outset of the review, the potential risks identified to achieving the objectives of the Precept Control Framework were: • Ill-defined criteria for calculation. • Inaccurate calculation of Precept amounts. • Ineffective review and approval of calculated Precept amounts. • Inaccurate application of legislation. • Ineffective billing process. • Inadequate recording and reconciliation of payments received. • Inadequate monitoring and reporting.
1.5 We sought to provide assurance that the key risks are being effectively managed.
2. Audit Assurance
Substantial There is particularly effective management of key risks contributing to the achievement of business objectives.
3. Areas of Effective Control
3.1 The 2013/14 precept amounts were accurately calculated based on the Council Tax base data and information on the previous year’s collection fund surplus/deficit. The calculation was performed in accordance with legislation, documented and approved by Mayoral Decision on 25 February 2013.
February 2014 Review of Precepting Control Framework 1
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3.2 A timetable of precepting activity was created and effectively deployed to ensure that the calculation, verification and notification of precept charges to the London Boroughs were achieved within the agreed timetables.
3.3 Payment schedules for each Local Authority were agreed and distributed to the respective authorities by the stipulated date, resulting in the timely receipt of a majority of precept payments.
3.4 Receipt of precept payments from Local Authorities is effectively monitored and correctly accounted for by GLA Treasury Services. Interest charges for late payments are accurately calculated and applied.
3.5 Receipt of precept payments in the GLA’s bank accounts are reconciled to payment schedules to ensure timely payments are received and cash flow is monitored on a daily basis.
4. Key Risk Issue for Management Action
4.1 Penalty payments that are applied when Local Authorities fail to pay their precept instalments by the scheduled payment date were not recovered in a timely manner, resulting in missed opportunities to maximise income and cash flow.
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FINDINGS AND RECOMMENDATIONS
5. Review Objectives
5.1 Our overall objective was to review the effectiveness of the control framework in place for mitigating the risk in achieving the objective of the Precepting Control Framework. In particular, we sought to give an assurance that: • Precept amounts are calculated in accordance with legislation, are documented and are properly approved. • A timetable is in place to ensure that all associated tasks involved in the calculation, verification and notification of Precept charges to the London Boroughs are carried out in a timely manner. • London Boroughs are accurately and promptly billed in line with the approved Precept and the legislative timetable. • Receipt of Precept payments from London Boroughs is timely, accurate and complete; and is correctly accounted for. • Precept billing and receipts of payment are properly reviewed, reconciled, and reported by authorised officers on a timely basis.
6. Scope
6.1 We reviewed the effectiveness of the GLA Precepting Control Framework for 2013/14 to provide assurance that the calculation, billing and receipting of Precept amounts is accurate, timely, appropriately authorised, in accordance with GLA policies and procedures; and compliant with national legislation.
6.2 We reviewed information supplied by and payment receipts from a sample of Local Authorities to confirm that the control framework was operating effectively.
7. Annual Precept Calculation
7.1 The control framework in which annual precepts are calculated, documented and approved is operating effectively.
7.2 The method for calculating precept amounts is determined by statute (the Local Government Finance Act 1992). The basic amount of Council Tax levied on each Local Authority is determined by apportioning the consolidated Council Tax requirement, excluding the Mayor’s Office for Policing and Crime (MOPAC) component between the combined Council Tax base for all 33 London Boroughs. The MOPAC component is distributed between 32 London Boroughs as the City of London has its own Police force and does not contribute to this aspect of the precept.
7.3 The GLA’s Council Tax requirement on a band D property for 2013/14 has been calculated as £303 for the 32 London Boroughs and £86 for the Common Council of the City of London. This amount when multiplied by the Council Tax base for
February 2014 Review of Precepting Control Framework 3
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FINDINGS AND RECOMMENDATIONS
Local Authority provides the basic precept amount levied on each Local Authority, which is adjusted to take account of any surplus/deficit resulting from the 2012/13 collection of Council Tax. We found there had been no legislative changes that would affect the 2013/14 precept calculation and that current requirements had been applied.
7.4 For a sample of Local Authority precept calculations, we reviewed the original Council Tax base data and collection fund surplus/deficit amounts supplied by the Local Authorities and found that calculation of the precept amount owed by each authority was accurate and had been correctly documented by the GLA Treasury Services Team.
7.5 The precept calculations for 2013/14 were presented to and approved by the London Assembly in the form a final draft consolidated budget, on 25 February 2013. A Mayoral Decision (MD1160) was also granted on the same day approving the precept calculation and its notification to the 33 London Boroughs.
8. Timetable of Activities
8.1 Established controls over the timetabling of Precepting activities are operating effectively.
8.2 A timetable specifying the statutory responsibilities of the GLA and Local Authorities in determining the 2013/14 precept calculation has been documented, indicating the deadlines required to be met and was shared with Local Authorities in November 2012. The timetable is used as a guide to set the budget.
8.3 In order for the GLA to set its budget and then notify the Local Authorities of the precept within stipulated timescales, it required the total number of properties liable for Council Tax from each Local Authority by 31 January 2013 (Council Tax base). For a sample of five Local Authorities, we found that all had supplied this information by the submission date.
8.4 Estimate figures on the surplus/deficit in each Authority’s 2012/13 collection of Council Tax was required by 25 January 2013, for which we found four of the sample of five Local Authorities had supplied on time. Although one authority had supplied this information three days late, there was no impact on the GLA’s budget setting process. Due to varying Local Authority budget setting timetables, there is a little leniency against the GLA timetable.
8.5 Payment schedules were established for each Local Authority indicating the dates when payments should be made to the GLA. For the sample of five Local Authorities, we found that payments dates were set over ten instalments with the first instalment being due on 22 April 2013, in accordance with the Local Authorities Regulations 1992.
February 2014 Review of Precepting Control Framework 4
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FINDINGS AND RECOMMENDATIONS
8.6 The GLA are required to notify Local Authorities of their precept liability by 28 February 2013 allowing for Council Tax bills to be produced and distributed in a timely manner. We found that the GLA notified all authorities of their precept liability on 26 February 2013.
9. Accuracy of Billing
9.1 There are effective controls in place to ensure that calculations are based on reasonable information and that bills are checked for accuracy.
9.2 Year on year variations in excess of 2% in the Council Tax base provided by each Local Authority are queried for accuracy by the GLA. Exceptional variances were noted in the 2013/14 precept calculation which amounted to an overall reduction of 15% in the total Council Tax base. The reduction is a result of an increase in Council Tax discounts and reductions applied to the tax base calculation which stems from the abolition of the Council Tax Benefit scheme and introduction of local Council Tax Support schemes. The tax base calculation (number of chargeable dwellings adjusted to account for the number of discounts and reductions) under the new scheme, saw an additional number of Council Tax discounts being applied to account for dwellings formerly in receipt of Council Tax Benefit. We found the GLA is mitigating against the increased risk and uncertainty in precept income by increasing its Precept Resilience Reserve fund to contain any budgetary pressure.
9.4 We found that precept calculations were subject to checks for accuracy by the Senior Treasury Accountant and Budget Development Manager before presentation for a Mayoral Decision and issuing notifications to Local Authorities.
10. Receipt, Payment and Accounting
10.1 Controls operating over the receipting, payment and accounting of precept income are adequate.
10.2 Payment instalments from the Local Authorities are expected to be received in accordance with the payment schedules, via BACS payments directly into one of the GLA’s bank accounts. Receipts are recorded in the GLA Treasury Service’s cash flow spreadsheet and reconciled to bank statements to ensure payments are received in full and by the expected due date.
10.3 We reviewed a sample of 20 transactions from five Local Authorities across four scheduled payment dates in 2013 and found all payments had been recorded in the cash flow spreadsheet, reconciled to the amount indicated on the payment schedules and received in full in the designated GLA bank account.
10.4 We found that since 1 April 2013, 264 precept payments had been received by the
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FINDINGS AND RECOMMENDATIONS
GLA, of which eight had been recorded as not being received in accordance with the agreed scheduled payment date.
10.5 In accordance with the Local Authorities Regulations 1992, London Boroughs are liable to pay a penalty to the GLA on any payment instalment that arrives later than the date indicated on the payment schedule. The penalty is calculated as an interest fee for every day the payment is late at a rate of 2% above the Bank of England base rate, which at the time of the audit was 0.5%.
10.6 We reviewed the eight late transactions and found that the penalties applied had been accurately calculated and applied, however we found only one penalty payment had been received by the GLA. We found that of the seven outstanding penalties, four were incurred between April and June 2013. The Treasury Services Team is chasing the respective Local Authorities for payment of the seven penalties.
Recommendation Outstanding penalty payments incurred for late precept payments are recovered in timely manner.
11. Reconciliations, Monitoring and Reporting
11.1 The controls in place with regard to reconciliations, monitoring and reporting are operating effectively.
11.2 Reconciliations of the expected income per the payment schedule against the amounts actually received per the bank statement are undertaken promptly when precepts instalments are due. We found the sample of 20 precept transactions received by the GLA had been reconciled to ensure complete payments were received. Income receipts from all income generating activities are recorded in the GLA’s cash flow and reconciled on a daily basis by the Treasury Services Team.
11.3 The GLA is required to submit a Council Tax Requirement Return (CTR3) to the Department for Communities and Local Government (DCLG). The target date for submission of the CTR3 is seven days from approval of the budget. We found the CTR3 was submitted on 28 February 2013, three days following the approval of the budget.
February 2014 Review of Precepting Control Framework 6
Page 55 ACTION PLAN
RISK AND AUDIT ASSURANCE STATEMENT – DEFINITIONS
Overall Criteria Impact Rating There is a sound framework of control There is particularly effective operating effectively to mitigate key risks, management of key risks Substantial which is contributing to the achievement contributing to the achievement of of business objectives. business objectives. The control framework is adequate and Key risks are being managed controls to mitigate key risks are effectively; however, a number of Adequate generally operating effectively, although controls need to be improved to a number of controls need to improve to ensure business objectives are met. ensure business objectives are met. The control framework is not operating effectively to mitigate key risks. A Some improvement is required to Limited number of key controls are absent or are address key risks before business not being applied to meet business objectives can be met. objectives. A control framework is not in place to Significant improvement is required No mitigate key risks. The business area is to address key risks before business Assurance open to abuse, significant error or loss objectives can be achieved. and/or misappropriation.
RISK RATINGS Priority Categories recommendations according to their level of priority. 1 Critical risk issues for the attention of senior management to address control weakness that could have significant impact upon not only the system, function or process objectives, but also the achievement of the organisation’s objectives in relation to: • The efficient and effective use of resources • The safeguarding of assets • The preparation of reliable financial and operational information • Compliance with laws and regulations. 2 Major risk issues for the attention of senior management to address control weaknesses that has or is likely to have a significant impact upon the achievement of key system, function or process objectives. This weakness, whilst high impact for the system, function or process does not have a significant impact on the achievement of the overall organisational objectives. 3 Other recommendations for local management action to address risk and control weakness that has a low impact on the achievement of the key system, function or process objectives ; or this weakness has exposed the system, function or process to a key risk, however the likelihood is this risk occurring is low. 4 Minor matters need to address risk and control weakness that does not impact upon the achievement of key system, function or process or process objectives; however implementation of the recommendation would improve overall control.
February 2014 Review of Precepting Control Framework 7
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Ref. Findings and Risk Priority Recommendations Accepted Management Response Target Date and Responsibility
10.6 Penalty payments are incurred when Local 3 Outstanding penalty payments incurred Yes We have imposed seven Implemented Authorities fail to pay their precept for late precept payments are recovered penalties to date and all instalments by the scheduled payment date. in timely manner. have been recovered. We found seven penalty payments from a There has been no loss of sample of eight had not been received by the income to the GLA in this GLA. Four of the penalties were incurred matter and we will between April and June 2013. continue to seek timely payment of future This gives rise to a risk that income and cash penalties. flow are not being maximised. It should be noted that the total value of penalties applied (£3,731) is not
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Page 58 Appendix 1b
DIRECTORATE OF AUDIT, RISK AND ASSURANCE
Internal Audit Service to the GLA
REVIEW OF THE LONDON PLAN AND IMPLEMENTATION
Page 59 DISTRIBUTION LIST
Audit Team
Karen Welsh, Risk and Assurance Auditor Prakash Gohil, Audit Manager
Report Distribution List
Fiona Fletcher-Smith, Executive Director – Development, Enterprise & Environment Steward Murray, Assistant Director – Planning Richard Linton, Principal Strategic Planner – Planning John Lett, Strategic Planning Manager - Planning
Page 60 CONTENTS
Page EXECUTIVE SUMMARY
Background 1
Audit Assurance 2
Areas of Effective Control 2
Key Risk Issues for Management Action 2
FINDINGS and RECOMMENDATIONS
Review Objectives 3
Scope 3
London Plan Framework 3
Accountabilities, Roles and Responsibilities 5
Monitoring and Implementation Plan 6
Reporting and Review 7
ACTION PLAN
Assurance and Risk Rating Definitions 9
Findings and Recommendations 10
March 2014 Review of the London Plan and Implementation
Page 61 EXECUTIVE SUMMARY
1. Background
1.1 This review has been carried out as part of the Greater London Authority (GLA) 2013/14 audit plan. The London Plan published in July 2011, is the Mayor’s Spatial Development Strategy, the strategic plan for London, setting out an integrated economic, environmental, transport and social framework for the development of London over the next 20-25 years.
1.2 The Mayor’s Vision covering the years to 2031 – and beyond London should excel among global cities – expanding opportunities for all its people and enterprises, achieving the highest environmental standards and quality of life and leading the world in its approach to tackling the urban challenges of the 21 st century, particularly that of climate change. The six objectives supporting the implementation of this Vision are to ensure that London is a City:-
• that meets the challenges of economic and population growth • an internationally competitive and successful city • of diverse, strong, secure and accessible neighbourhoods • that delights the senses • that becomes a world leader in improving the environment • where it is easy, safe and convenient for everyone to access jobs, opportunities and facilities
1.3 At the outset of the review, the potential risks identified to achieving the objectives of the London Plan were:
• Ill-defined programme aims, objectives and strategic approach • Ineffective planning and implementation • Lack of accountability and/or unclear roles and responsibilities • Ineffective programme management • Ineffective engagement with partnerships/ agencies/stake holders • Ineffective communication arrangements • Non-compliance with Regulations • Ineffective management review, oversight and reporting
1.4 We are looking to provide assurance that the key risks are being effectively managed.
1.5 Strategic planning in London is the shared responsibility of the Mayor of London, 32 boroughs, the Corporation of the City of London and the London Legacy Development Corporation. Under the legislation establishing the Greater London Authority (GLA), the Mayor has to produce a spatial development strategy (SDS) which is now known as “the London Plan” and to keep it under review.
March 2014 Review of the London Plan and Implementation 1
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2. Audit Assurance
Adequate Key risks are being managed effectively; however, a number of controls need to be improved to ensure business objectives are met.
3. Areas of Effective Control
3.1 The London Plan was drawn up and published in line with the Greater London Authority Act 1999 Section 334 requirements for a Spatial Development Strategy. The Secretary of State (SOS) can direct changes to the Plan and the London Assembly can reject the Plan by a 2/3 majority.
3.2 A clearly defined strategic framework supports the implementation of the Plan and adequate arrangements are in place to manage updates and consultation. Further Alterations to the London Plan are currently open for comment until 10 April 2014.
3.3 Accountabilities, roles and responsibilities have been defined and allocated for the delivery and oversight of the London Plan with the Mayor having overall responsibility for publishing and updating. The Mayor is supported by the Spatial Strategy Team based in the GLA Planning Unit. The structure of the team has recently been reviewed and approved by the Chief of Staff and Deputy Mayor of Planning.
3.4 An effective Implementation Plan is produced annually along with an Annual Monitoring Report (AMR). Key Performance Indicators have been identified and are reported on within the AMR. A summary of actions is contained within the Implementation Plan for action by policy holders and is monitored by the Spatial Strategy Team.
3.5 Adequate reporting structures are in place and regular meetings are taking place with the Spatial Strategy Team, Chief of Staff and Deputy Mayor of Planning and the Mayor to oversee progress with the Plan. Regular reports are also submitted to the London Assembly Planning Committee and published on the GLA website.
4. Key Issue for Management Action
4.1 Risks were recorded on the submission of a Mayor Decision Form (MD) for the approval for public consultation of draft alterations to the Plan. However, there are no further records to evidence that risks to the implementation of the Plan are identified, evaluated and recorded on an on-going basis.
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FINDINGS AND RECOMMENDATIONS
5. Review Objectives
5.1 Our overall objective was to review the adequacy of the control framework in place to mitigate the risks to the successful delivery of the London Plan. In particular, we looked to provide assurance that:-
• A clearly defined and properly approved strategic framework is in place to support the effective delivery of the London Plan. • Accountabilities, roles and responsibilities are clearly defined and effectively discharged. • An effective implementation plan has been developed and is regularly monitored against defined objectives and targets. • Adequate reporting arrangements are in place to enable effective oversight, decision making, planning and delivery.
6. Scope
6.1 We reviewed the effectiveness of the framework put in place for the implementation of the London Plan. This included reviewing the strategic approach governing the management and delivery of the Plan and the associated lines of accountability and responsibility. We also covered implementation of the plan and evaluated the effectiveness of oversight, review and reporting arrangements.
7. The London Plan Framework
7.1 The Greater London Authority Act 1999 Section 334 details the Spatial development strategy (London Plan) and requirements for preparing and publishing the plan including public participation, withdrawal, publication, Examination in Public (EiP), review of matters affecting the strategy, reviews, alterations or replacement, regulations, Greater London conformity with spatial development strategy, local inquiries, monitoring and data collection, functional bodies, and Mayor’s functions.
7.2 The London Plan dated July 2011 is the overall strategic plan for London, setting out an integrated economic, environmental, transport and social strategic framework for the development of London over the next 20-25 years. Under the legislation which set up the GLA, the London Plan sets out the strategic requirement of most importance to Greater London. Legislation requires that the London Plan takes account of three cross-cutting themes: economic development and wealth creation, social development and improvement of the environment.
7.3 The London Plan is a public document and was first published in 2004 and an updated version was published in February 2008. Following the election of a new Mayor of London, the plan was updated further and published in 2011. The Plan
March 2014 Review of the London Plan and Implementation 3
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FINDINGS AND RECOMMENDATIONS
was developed in line with legislation and clearly identifies areas for development in London and sets key targets for delivery. It is supported by a clearly defined policy and implementation framework.
7.4 On 15 January 2014, the Mayor published Draft Further Alterations to the London Plan (FALP) for a twelve week period of public consultation. The FALP had been prepared primarily to address key housing and employment issues emerging from an analysis of census data released since the publication of the London Plan in July 2011, which indicate a substantial increase in the capital’s population. The FALP also:
• develop the concept of the London Plan as the ‘London expression of the National Planning Policy Framework’; • provide a robust, short to medium term planning framework to provide a clear ‘direction of travel’ for the longer term, recognising that this may well have to be reviewed • deal with minor changes in terms of fact; • respond to changes in national policy; • provide support for the Mayor’s Housing and other strategies.
7.5 A request for Mayoral Decision – MD1295 was submitted for approval for the publication of the Draft Further Alterations to the London Plan for public consultation, in accordance with section 341 of the GLA Act 1999 (as amended). This authorised the Chief of Staff and Deputy Mayor for Planning to approve any outstanding policy matter in the Draft Further alterations to the London Plan prior to publication for consultation. The MD documents the reasons for the alterations and details the changes to the Plan. The MD was approved by the Mayor in December 2013 and the Further Alterations to the London Plan were open for comment from 15 January until 10 April 2014.
7.6 Following the Consultation process a summary of the public consultation responses is compiled by the Spatial Strategy Team. In order that work on the Mayor’s case for the forthcoming Examination in Public (EiP) can commence the summary of the responses is sent to policy specialists in the GLA’s housing and land, environment, demography and regeneration teams, and to Transport for London for comment. An independent examiner has been appointed by the Planning Inspectorate and will hold an EiP in August at which consultation responses to the draft Further Alterations will be examined. The Inspector will then prepare and submit a report to the Mayor with any (non-binding) recommendations. An EiP Secretary has been appointed to assist the Inspector and will be in post by March 2014. As part of the previous review of the Plan (the Revised Early Minor Alterations – REMA in 2012/13) the schedule of the Mayor of London’s responses to the EiP Inspector’s recommendations detailed the Mayor’s acceptance or rejection of the Inspector’s recommendations. A further report contained the Mayor’s responses to comments at the Assembly and Functional Bodies consultation stage. March 2014 Review of the London Plan and Implementation 4
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7.7 The final draft Further Alterations to the London Plan will be submitted to the Secretary of State in January 2015 1 for six weeks who, if they are not content with the Plan as intended to be published can direct changes to it. The London Assembly in March 2015 2 will then have fourteen days within which to convene a meeting of the whole Assembly at which the Plan may be rejected if a two thirds majority of members present is secured. The Assembly cannot approve or amend the Plan. Following this, the Mayor is free to publish the altered Plan.
7.8 On the submission of Mayor Decision (MD) requests, risks are identified and recorded on the MD. These are risks identified by officers which the Mayor should take into account in arriving at the recommended decision. However, no further records were available to show the risks relating to the delivery of the London Plan have been identified, assessed and managed effectively.
Recommendation Risks associated with the delivery of the London Plan are identifie d, recorded, regularly reviewed and effectively managed.
8. Accountabilities, Roles and Responsibilities
8.1 Accountabilities, roles and responsibilities for the London Plan are clearly defined and published on the GLA Planning Unit website. The Mayor has overall responsibility for the London Plan and the Spatial Strategy Team in the Planning Unit within the Development, Enterprise and Environment Directorate are responsible for providing support to the Mayor.
8.2 The Spatial Strategy Team was restructured in March 2013. It comprises of 12 posts working on the London Plan, 4 supporting the London Development Database and 2 providing a secretariat function to the independent inspector. Roles have been further clarified and were confirmed in a meeting held in January 2014.
8.3 A programme for 2013-15 has been established for the further alterations to the London Plan (FALP). A work programme for the Spatial Strategy Team has also been put in place for 2014. The Plan is discussed at team meetings which are held on a regular basis with the GLA Chief of Staff/Deputy Mayor for Planning at his weekly Planning Meetings, and when appropriate with the Mayor at his fortnightly Planning and Spatial Development Strategy (SDS) meetings. The Team are in daily contact with internal and external parties working to deliver the Plan.
1 This timeline is dependent on the EiP inspector submitting the EiP report to the Mayor in good time after the conclusion of the EiP (the guideline time is twice the duration of the EiP – eg. An inspector running a three week EiP should send their report to the Mayor within six weeks of it finishing). 2 As above. March 2014 Review of the London Plan and Implementation 5
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8.4 The Planning Unit are allocated a budget which includes the London Plan. Management Account reports and forecasting are produced on a regular basis and meetings held with the Senior Coordinator within Planning and GLA Finance Business Accountants. The Management Accounts for period 10 showed that the London Plan expenditure is within budget. Notes of meetings and agreed actions are appropriately recorded.
8.5 The London Assembly are responsible for examining and reporting on the strategies, policies and actions of the Mayor as they relate to spatial development and planning matters in London and relating to the London Plan. The London Plan is submitted to the Secretary of State who can direct changes to the Plan and to the London Assembly who can reject the London Plan.
9. Annual Monitoring and Implementation Plan
9.1 An Annual Monitoring Plan (AMR) is produced and there is a clear link with the implementation plan. The AMR evaluates past performance to identify trends and the implementation plan focuses on current and future actions.
9.2 Work is underway on the AMR for the period 2012/13 and will be published in March 2014. It reports on all Key Performance Indicators (KPIs) identified by the GLA in liaison with internal and external parties involved in the London Plan. Performance is categorised as either:-
+ Positive trend / target met - Negative trend / target not met N/A Data insufficient to determine progress/trend
9.3 The 2011/12 AMR reported twenty four KPIs as positive, three negative and one as N/A. The negative trends related to the release of industrial land to be in line with benchmarks in the Industry Supplementary Planning Guidance (SPG), reducing the average class size in primary schools and reduction in proportion of designated heritage assets at risk as a percentage of the total number of designated heritage assets in London. The one N/A referred to the increase in total area of green roofs in the Central Activities Zone and stated that issues with data provision remain unresolved. The negative and N/A KPI have not been changed in the Draft Further Alterations to the London Plan document and the team are confident that the KPIs will be met.
9.4 A tracker/timetable is in place for the submission of information to support the KPIs showing the Target Description, Organisation contact, London Plan Team leader, date request sent and any chase up, response and KPI approval. The timetable is monitored by the Senior Strategic Planner, London Plan. KPI reports for eight performance targets are produced from the London Development Database (LDD), which is managed by the Spatial Strategy Team. Information from LDD and functional bodies also inform the AMR KPIs.
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FINDINGS AND RECOMMENDATIONS
9.5 The London Plan Implementation Plan (LPIP) is intended to be produced on an annual basis and was first published in January 2013. The LPIP sets out how the policies of the London Plan will be put into action. It details reporting on the implementation of actions for the London Plan Policies, provision of Strategic Infrastructure, London’s overall infrastructure needs, transport, water, energy, telecommunications, waste, social infrastructure, green infrastructure, funding opportunities, conclusions and a forward look. The LPIP for 2014 is currently on hold pending the development of the Mayor’s Infrastructure Investment Plan of which an interim report is being prepared for publication in the Spring.
9.6 The LPIP contains a summary of key actions in relation to Policies. It includes the implementation action, policy reference number, action type, London Plan policies, key deliverers and timescales. The Implementation Plan is a public document and is available for review by interested parties.
9.7 Both the LPIP and AMR are published on the web where documents can be monitored by stakeholders. The Spatial Strategy Team are also invited by the Assembly’s Planning Committee to answer questions on the London Plan and are attending the next Committee to discuss the consultation draft FALP.
9.8 Interdependencies with other strategies and plans are managed through day-to- day officer liaison and through membership of various working and steering groups. In the current development of FALP, the team have worked closely with officers in the Environment, Regeneration, Housing and Land and TfL and draft issues and polices were submitted to the Chief Officer / Deputy Mayor’s weekly meetings. Transport, Environment, Business and Regeneration are also part of the GLA and work is closely integrated at Director and Officer Levels. Effective working relationships support the Infrastructure Strategy and coordination meetings are held with TfL specifically on the London Plan. The Spatial Strategy Team also liaise with Housing and Land, including the sharing of databases on housing supply and need which are common to the Housing Strategy and are jointly working on housing policies.
10. Reporting and Review
10.1 Adequate reporting structures are in place to monitor progress against the Plan. Reports are sent to the Mayor’s weekly or fortnightly “Regular Planning Meeting” and to the Chief of Staff and Deputy Mayor for Planning at his weekly “Planning Meetings”, by the Planning Team.
10.2 Reports of meetings held with the Chief of Staff – Deputy Mayor for Planning show they are being held on a regular basis, documented approvals are sought as required and information relating to the London Plan and suggested changes and actions are clearly recorded.
10.3 The Spatial Strategy Team have fortnightly Team Meetings and the last meeting was held in February 2014. The meetings cover areas relating to the FALP March 2014 Review of the London Plan and Implementation 7
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FINDINGS AND RECOMMENDATIONS
timetable, Other Projects and Line Management. Reports also included roles and responsibilities of personnel and work programme for 2014.
10.4 The London Assembly Planning Committee receive reports on the Plan from Assembly Secretariat officers on a regular basis and minutes and reports are published on the GLA website. A report was submitted to the Committee in January 2014 in relation to the Draft Further Alterations to the London Plan Consultation. The report sets out the background to Mayor’s proposals to further amend the Plan and asked Members to agree to use the next Committee in February 2014 to consider the Mayor’s proposals with invited experts as part of the Committee’s responses to the Mayor’s consultation on the revised London Plan. This is in line with the Committee’s terms of reference which require it to examine and report on the strategies, policies and actions of the Mayor as they relate to spatial development and planning matters in London and in particular relating to the London Plan. Minutes also show all items resolved and any further action required.
10.5 Progress against business milestones which include the implementation and changes to the London Plan are reported to the Corporate Management Team (CMT). Projects that seek to implement the London Plan are also reported and monitored at the Investment Project Board (IPB) and elements of the London Plan implementation are included in the Mayoral Commitments / Vision monitoring reports which are submitted to the IPB. The Annual Report which is also considered by the CMT includes all the statutory strategies, including the London Plan and is reviewed each year.
10.6 Following consultation of the London Plan and the implementation of any changes arising from the Inspector’s recommendations received and accepted, the Plan will be submitted to the Secretary of State in January 2015 3 for six weeks who, if they are not content with the Plan as intended to be published can direct changes to it. The London Assembly in March 2015 4 will then have fourteen days within which to convene a meeting of the whole Assembly at which the Plan may be rejected if a two thirds majority of members present is secured. The Assembly cannot approve or amend the Plan. Following this, the Mayor is free to publish the altered Plan.
3 This timeline is dependent on the EiP inspector submitting the EiP report to the Mayor in good time after the conclusion of the EiP (the guideline time is twice the duration of the EiP – eg. An inspector running a three week EiP should send their report to the Mayor within six weeks of it finishing). 4 As above March 2014 Review of the London Plan and Implementation 8
Page 69 ACTION PLAN
RISK AND AUDIT ASSURANCE STATEMENT – DEFINITIONS
Overall Criteria Impact Rating There is a sound framework of control There is particularly effective operating effectively to mitigate key risks, management of key risks Substantial which is contributing to the achievement contributing to the achievement of of business objectives. business objectives. The control framework is adequate and Key risks are being managed controls to mitigate key risks are effectively, however, a number of Adequate generally operating effectively, although controls need to be improved to a number of controls need to improve to ensure business objectives are met. ensure business objectives are met. The control framework is not operating effectively to mitigate key risks. A Some improvement is required to Limited number of key controls are absent or are address key risks before business not being applied to meet business objectives can be met. objectives. A control framework is not in place to Significant improvement is required No mitigate key risks. The business area is to address key risks before business Assurance open to abuse, significant error or loss objectives can be achieved. and/or misappropriation.
RISK RATINGS Priority Categories recommendations according to their level of priority. 1 Critical risk issues for the attention of senior management to address control weakness that could have significant impact upon not only the system, function or process objectives, but also the achievement of the organisation’s objectives in relation to: • The efficient and effective use of resources • The safeguarding of assets • The preparation of reliable financial and operational information • Compliance with laws and regulations.
2 Major risk issues for the attention of senior management to address control weaknesses that has or is likely to have a significant impact upon the achievement of key system, function or process objectives. This weakness, whilst high impact for the system, function or process does not have a significant impact on the achievement of the overall organisational objectives. 3 Other recommendations for local management action to address risk and control weakness that has a low impact on the achievement of the key system, function or process objectives ; or this weakness has exposed the system, function or process to a key risk, however the likelihood is this risk occurring is low. 4 Minor matters need to address risk and control weakness that does not impact upon the achievement of key system, function or process or process objectives; however implementation of the recommendation would improve overall control.
March 2014 Review of the London Plan and Implementation 9
Page 70 ACTION PLAN
Ref. Findings and Risk Priority Recommendations Accepted Management Target Date Response and Responsibility 7.8 Risks associated with the London Plan 2 Risks associated with the London Plan and Yes A formal system to April 2014 and Implementation which are no t Implementation are identified, recorded, monitor the wider clearly identified, documented, reviewed regularly reviewed and addressed. risks attached to or addressed may not be managed the London plan effectively. delivery and implementation will be introduced.
Principal Strategic Planner – Planning
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Page 72 Appendix 1c
DIRECTORATE OF AUDIT, RISK AND ASSURANCE
Internal Audit Service to the GLA
REVIEW OF INCIDENT AND PROBLEM MANAGEMENT
Page 73 DISTRIBUTION LIST
Audit Team David Esling, Head of Audit Assurance, Risk Management Steven Snaith, Baker Tilly Business Services Ltd Tim Moynihan, Baker Tilly Business Services Ltd
Report Distribution List David Munn, Head of Information Technology Jawaid Bhatti, Technology Operations Manager Tom Middleton, Head of Governance and Resilience
Page 74 CONTENTS
Page EXECUTIVE SUMMARY
Background 1 Audit Assurance 1 Areas of Effective Control 1
FINDINGS and RECOMMENDATIONS
Review Objectives 2 Scope of Review 2 Reporting IT Incidents to the Service Desk 3 Roles and responsibilities 3 Process framework 3 Incident Management 4 Track-It! logical security 5 Performance Management 6 TG Communication 7 User satisfaction 7 Problem management 8 Risk and Audit Assurance Statement – Definitions 9
March 2014 Incident and Problem Management Page 75 EXECUTIVE SUMMARY
1. Background 1.1 This review of the GLA’s IT Incident and Problem management control framework was carried out as part of our 2013/14 plan. 1.2 IT Incidents and Problems are managed by the GLA Service Desk (SD) team and support engineers in the Live Team, under the Operations Manager in the Technology Group (TG). Approximately 1000 IT users are supported and these are a mix of corporate and political staff. Most corporate staff are based in City Hall. There are also a number of remote staff e.g. based in Brussels or London Boroughs. Political staff includes the Mayor, Assembly members and their support staff. 1.3 The IT Service Desk is available during work hours from 8am until 6pm from Monday to Friday. In addition, the Mayoralty and high profile GLA staff (VIP) have access to an IT Emergency Out Of Hours (OOH) support service primarily responsible for managing and dealing with access management incidents. 1.4 The Track-IT! Service Desk application has been implemented and is used to manage incident Work Orders. It is also used to manage some other TG Work Order types for example installations or miscellaneous used primarily for software licence requests. 1.5 Users can raise incidents and review the status of submitted requests by accessing the On-line Self Service Centre through the Intranet.
2. Audit Assurance Substantial Assurance There is a sound framework of control operating effectively to mitigate key risks, which is contributing to the achievement of business objectives.
3. Areas of Effective Control 3.1 The IT Incident and Problem management policies and procedures in place adequately set out the range of operational processes. In particular, a comprehensive SD process and protocol document has been designed for receiving and resolving incidents facilitating a controlled approach to incident management.
3.2 Roles and responsibilities are formally defined and communicated, providing an adequate framework to support the consistent management of any IT incidents.
3.3 Adequate monitoring controls are in place to provide TG visibility that SD handling and outcomes of incidents is being actively managed and the Service Level Agreements are being realised. 3.4 Effective problem management processes are in place to help ensure wider problems and underlying systems weaknesses that require escalation are identified and actions initiated, within an overall action planning framework.
March 2014 Review of the London Plan and Implementation 1 Page 76 FINDINGS AND RECOMMENDATIONS
5. Review Objectives
5.1 We reviewed the adequacy and effectiveness of the control framework in place designed to manage IT incidents and problems. In particular, we were looking to provide assurance that: • IT Incident and Problem management policies and procedures are in place that set out the processes to follow to address an IT issue arising. • Operational IT Incident and Problem management operational procedures and defined roles and responsibilities are in place to address and action an IT issue. • IT Incident and Problem management monitoring controls are in place that capture response performance and provide management information to detect any recurring IT issues trends. • IT Incident and Problem management action planning processes are in place, designed to ensure improvement in IT operations where applicable. 6. Scope 6.1 The review included an assessment of IT Incident and Problem management policies and procedures, operational controls, related roles and responsibilities, monitoring processes, reporting and action planning.
6.2 The review did not cover other Technology Group activities that use the Track-It! application such as installations, moves and changes or miscellaneous i.e. new software requests.
March 2014 Review of the London Plan and Implementation 2 Page 77 FINDINGS AND RECOMMENDATIONS
7. Reporting IT Incidents to the Service Desk 7.1 We found adequate communication and escalation processes are in place for users to access the Service Desk (SD) and report an IT issue/ incident. The induction material and the Intranet site provide details of the methods to be used by users to contact the Service Desk. In addition, controls are in place whereby users can raise issues and view the progress of their requests via the Online Service Desk webpage on the Intranet. The Online Self Service Centre provides the ability to view the progress and status of all requests that have been made by the user. The following supporting control processes are in place: • The TG Emergency Guide has been circulated to staff. This provides a self-help toolkit for users to fix common problems themselves. The Online Self Service Centre also enables users to search for solutions to common issues and incidents. • GLA Induction material identifies a number of priorities for incidents with definitions of Urgent, Important and Normal, providing an adequate framework from controlled escalation. • A performance criteria is in place that sets out service Desk target to resolve all faults (incidents) within 5 working days; and priority requests for help within one day. A Service Desk Priority Matrix has been documented that determines the priority of an incident and the Service Level Agreement (SLA) is calculated by referencing the urgency of resolution against the incident’s impact on the business. Track-It! has been configured with 9 Work Order priorities 7.2 Our testing verified that expected incident resolution / closure timeframes have been configured within the system based upon incident creation times that align with the incident SLA priorities. 7.3 Overall, SD processes established to enable users to raise and formally record incidents reduce the risk that corrective action is not initiated that may affect the achievement of business objectives.
8. Roles and responsibilities
8.1 The Senior Systems Engineer – Business Applications has designated overall responsibility for the SD and the Live Team and reports to the Head of Technology. A SD team leader is established with a team of 4 support officers. Responsibilities are described using RACI techniques (Responsible, Accountable, Consulted, and Informed). A spread-sheet is maintained that identifies that Track-It! is a Business Application and the service owner is the TG Security Technician. 8.2 The assignment of responsibilities is effective to reduce the risk that incidents and problems are not being efficiently identified or effectively and consistently handled.
9. Process framework 9.1 Process and procedure manuals have been documented by TG, known locally as Assured Quality Action Procedures (AQAP).These include detailed instructions and are available to SD staff and are controlled by an index. AQAP are subject to formal approval and regular review and update.
March 2014 Review of the London Plan and Implementation 3 Page 78 FINDINGS AND RECOMMENDATIONS
9.2 The process and protocol documents were found to be adequately designed and reduce risk that incidents are not being efficiently identified or effectively and consistently handled.
10. Incident Management 10.1 Procedures are provided to SD and Live Team staff relating to recording and resolving incidents received via phone, email and intranet. The overall process is summarised in Incident Management (Process model). This is supported by a narrative in Logging calls on the Service Desk . The process lifecycle has stages defined i.e. taking phone calls, incident identification, logging, categorisation, initial diagnostics, escalation, investigate & diagnosis, resolution & recovery and incident closure.
Receiving incidents 10.2 GLA has implemented an Automatic Call Distribution System (ACD) to route phone calls made to the SD (extension 4333) to the available Service Desk support officers. If no support officer is available a recorded message is played until one is available. In the event of all officers being engaged on calls the ACD system will alert the Desk when a customer is waiting and an additional alert when more than one is waiting. A support team member is required to follow the Service Desk Call Handling script and verify the caller’s identity/ username, contact details and affected asset and incident details are required to be logged directly into the Track-It! System.
10.3 Mail to the TGServiceDesk mailbox is not automatically processed, instead the designated ‘meet and greet’ support team member on the SD rota will monitor and manage the mailbox. Users will be called back to confirm the issue and verify the assigned Work Order (WO) type e.g. 18 Issue – Email , and agree a priority. Details from the email may be cut and pasted into Track-It! Processed emails are moved from the Inbox to the sub folder “ emails dealt with ”. There is a defined process for Accepting, processing and managing requests via paper forms e.g. internal post. A similar process is used for walk-ins. The following supporting control arrangements are in place.
• After SD staff have completed logging incident details received by phone and email, an email is automatically sent to the user that identifies the assigned TG staff member dealing with the incident and summarises the incident details recorded in Track-It! • As mentioned earlier, users can log directly into the Online Self Service Centre to access Track-It! using a personal login created as a part of the user account creation/starter process. The incident is automatically linked to their individual network login. • As part of the Service Desk Call Handling script the SD will assign one of the 64 incident types that have been configured in the system. The Track-It! system is set up with Service Level Agreements for which the analyst will pick the one appropriate to the issue being reported.
March 2014 Review of the London Plan and Implementation 4 Page 79 FINDINGS AND RECOMMENDATIONS
Incident investigation, escalation and resolution 10.4 Documents have been designed to assist SD staff take a structured approach to incident investigation. These include the Initial Diagnostic Procedure and the Investigate & Diagnose Incident checklist. Where incidents cannot be fixed first time by the SD technician, incidents may be reassigned to the Live Team, or even to third party suppliers. After incident resolution, technicians are required to close down the call by changing the TrackIT Work Order status from Open to Closed. 10.5 Due to the size of the organisation and the SD traffic volumes, Track-It! does not record third party service suppliers. The SD incident owner will own the contact but can escalate to the service owners if required. Only the Incident Progression Team contacts third parties in the event that third party expertise is required to resolve an incident. Any emails from support companies arrive in the TG SD mailbox and are used to update calls/users. 10.6 Documentation for receiving and resolving incidents is clear and sufficient to evidence each stage of contact with the customer. The Service Desk takes ownership for the incident control process and act as the single point of contact for receiving all requests/incidents and progress on incidents regardless of origin, this is done to avoid confusion to users. This reduces the risk the IT incidents are not being efficiently identified or effectively and consistently handled.
11. Track-It! logical security 11.1 Track-It! operates two classes of accounts, namely Users and Technicians. GLA staff and VIPS are listed in the User group to support self-service. The Online Service Desk webpage on the Intranet can be used to access the Online self-service centre for Track-It! Although SD staff can also log in using this route they will typically use client software installed on the TD workstations that does additional functionality. There are 18 Technician accounts that provide console access. Three security groups are in use:
• Group 2 admin = administrators. We reviewed membership and confirmed there is a valid business case for Track-It! access for each of the 4 accounts. • Group 67 Helpdesk team. 10 technician accounts. • Group 102 Asset Team =asset management (out of scope) 11.2 No rules are built into the application, but Technicians have 6 character passwords (they include at least one of each 1 upper, 1 lower case, 1 number and non- alphanumeric required). No passwords are required for self-service users. MS Active Directory can be enabled for authentication on an account by account basis, but not enabled. We verified that only administrators can set and change account passwords.
11.3 Controls over Track-It! privileged accounts and application security were found to be accurate and reduce the risk of accidental changes to the system configuration or overall loss to systems security.
March 2014 Review of the London Plan and Implementation 5 Page 80 FINDINGS AND RECOMMENDATIONS
12. Performance Management 12.1 The ACD system provides visibility of the SD activity on a wall-mounted large screen TV within TG. The top window is a graphical view illustrating the handsets on the TG SD showing the position of each handset is as it is on the helpdesk. The second window illustrates real-time available call statistics for the SD extension. Traffic light colours are used as follows: Red Urgent requires attention; Yellow Calls waiting in queue or/and not enough agents logged in; Green All OK.
12.2 The Track-It! system is set up with Service Level Agreements for which the analyst will determine the one appropriate to the issue being reported. 64 issue types have been configured in Track-It to provide granularity for management information and problem management. Review of the Track-It! Work orders for incidents and the Dashboard Report produced for the weekly Operations Team meeting confirmed categories are used.
12.3 GLA Induction material states that periodic reports will be published on the performance of the TG SD. The TG Online Service Desk web page contains links to historic performance reports. At the time of our fieldwork the most recent uploaded report was dated October 2013. SD reports are generated and sent to the Service Review Team on a monthly basis. We were advised that the Service Review Team meet quarterly to discuss SD performance and we were provided a copy of the January 2014 report.
12.4 The Track-It! system includes a number of locally designed reports that can be identified as they use GLA in title to discriminate from the built-in system view reports. This is supported by daily procedures e.g. Service Desk Morning Check List . Daily checks are made of open Works Orders (WO) including incidents that includes
• GLA - Open calls - Detailed Aged Outstanding Call Report by Engineer . This can be used to monitor SD staff performance including identifying any unassigned work incidents. • GLA Completed Calls - By those within target . This is a monthly report that provides metrics on completed incidents by priority and calculates achievement of service levels. • GLA Snapshot of open calls . Any calls that fail the SLA are highlighted in red.
12.5 Main Track-It! user interface, allows filtering of WO records. This is used for generating monthly report used for Service Review Team stats. Instructions are documented in the Closed Late Calls Stats procedure. Data fields include Assigned Technician, Priority, Date Entered, Summary, Requestor, Expected Completion Date and WO Type.
12.6 The SD statistics for January 2014 identify that on average calls to extension 4333 are answered with minimal waiting time and few are abandoned by users, providing assurance regarding the effectiveness of the process.
March 2014 Review of the London Plan and Implementation 6 Page 81 FINDINGS AND RECOMMENDATIONS
Telephone calls to the service desk during January 2014 Calls made to SD 1485 Calls taken 1385 Calls abandoned 0.7% Average time to answer 0.16 seconds
12.7 In addition, analysis of reports and of Track-It! data exported during the audit confirmed that SLAs are being achieved.
Work Orders completed by the Service Desk during January 2014 Priority Number Percentage Critical under 1 hour 26 issues, 7 installs & 1 misc. 100 Urgent up to 2 hours 45 issues, 14 installs & 1 misc. 100 Important up to 1 day 292 issues, 83 installs & 18 misc. 96 Standard up to 5 63 issues, 133 installs & 18 misc. 100 days Minor up to 15 days 37 issues, 27 installs & 7 misc. 99
12.8 Monitoring controls provide TG visibility that SD handling and outcomes of incidents is being actively managed and the Service Level Agreements are being realised. This reduces the risk that the quality of the service provided by the Service Desk may be impacted, leading to incidents not being effectively addressed affecting GLA operational performance.
13. TG Communication 13.1 A formal process has been established for the ICT Management Team, Project Consultants and the Service Desk Leader to pass important time-critical information to the Service Desk. SD staff are advised to share solutions in the Daily Brief, Service Desk Meeting, Operations Meeting, Project Meetings and the TG daily afternoon meeting. We verified that daily briefings are held and are operating as intended.
13.2 Overall, our testing was able to verify that the TG communication processes support the effective handling of user IT incidents.
14. User satisfaction 14.1 A number of related performance management controls are in place, in particular: • After an incident is logged an email is automatically sent to the user that advises that comments or suggestions please contact the TG Service Desk Manager and provides an extension number. • Feedback is requested from customers when an issue has been resolved. Compliment slips have been designed that SD staff leave during support visits to staff. An online questionnaire Let us know how well we are doing Survey has been designed based upon the compliments slip and is planned for launch on 17th March. It will be integrated into the call closure process.
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• A register of feedback is maintained spreadsheet that lists responses. The Monday TG Operations meeting discusses any user feedback. • There is a formal procedure which sets out the complaint handling process. This includes a number of stages: record, discuss with originator, investigate and propose resolution and escalation. Any complaints that are received by the SD are referred to a team leader. There is a defined escalation route. We found that no complaints have been received during the last year. 14.2 User feedback and complaint processes were found to be adequate to help ensure TG is aware of user satisfaction of the delivered service and provides opportunities to resolve and improve the service.
15. Problem management 15.1 Processes are in place designed to ensure, where applicable, that IT Incidents identified through the Service Desk reflect wider problems and underlying systems weaknesses that require escalation (for example through GLA-wide communications, or within the GLA risk register) or address the root cause in existing systems. Processes for the management of user problems are documented. Stages include recording, classification, investigation and diagnosis. In some instances, the Service Desk may identify areas where investment is required in the IT infrastructure to address underlying weaknesses. These actions may result in a TG change control. 15.2 Moreover, the following supporting controls are in place:
• On the TG shared drive, a Problem Management folder is in place that is organised to record investigations and meetings. • Service Outage Analysis processes can be initiated to require SD staff to capture extra data for Live Team investigation as part of incident handling actions. Management spreadsheets are generated to record the data and support diagnosis. • Monthly SD reports produced for the Service Review Team identify trends in issues raised and compare trends for achieving SLA.
15.3 We found that Problems management processes were adequately designed to provide effective and efficient IT support functions to support business operations.
March 2014 Review of the London Plan and Implementation 8 Page 83 ASSURANCE STATEMENT – DEFINITIONS
RISK AND AUDIT ASSURANCE STATEMENT – DEFINITIONS
Overall Criteria Impact Rating There is a sound framework of control There is particularly effective operating effectively to mitigate key risks, management of key risks Substantial which is contributing to the achievement contributing to the achievement of of business objectives. business objectives. The control framework is adequate and Key risks are being managed controls to mitigate key risks are effectively, however, a number of Adequate generally operating effectively, although controls need to be improved to a number of controls need to improve to ensure business objectives are met. ensure business objectives are met. The control framework is not operating effectively to mitigate key risks. A Some improvement is required to Limited number of key controls are absent or are address key risks before business not being applied to meet business objectives can be met. objectives. A control framework is not in place to Significant improvement is required No mitigate key risks. The business area is to address key risks before business Assurance open to abuse, significant error or loss objectives can be achieved. and/or misappropriation.
March 2014 Review of the London Plan and Implementation 9 Page 84 Appendix 1d
DIRECTORATE OF AUDIT, RISK AND ASSURANCE
Internal Audit Service to the GLA
REVIEW OF ENERGY AND ENVIRONMENTAL
STRATEGY FRAMEWORK AND IMPLEMENTATION
Page 85 DISTRIBUTION LIST
Audit Team
David Esling, Head of Audit Risk and Assurance Prakash Gohil, Audit Manager Nish Shah, Risk and Assurance Auditor
Report Distribution List
Fiona Fletcher-Smith, Executive Director-Development Enterprise and Environment Stephen Tate, Assistant Director - Environment Peter North, Senior Programme Delivery Manager (Decentralised Energy) Elliot Treharne, Principal Policy and Programme Officer (Air Quality) Annette Figueiredo, Principal Policy and Programme Officer (Air Quality) Martin Clarke, Executive Director - Resources Tom Middleton, Head of Governance and Resilience
Page 86 CONTENTS
Page EXECUTIVE SUMMARY
Background 1
Audit Assurance 1
Areas of Effective Control 1
Key Risk Issues for Management Action 2
FINDINGS and RECOMMENDATIONS
Review Objectives 4
Scope 4
Strategy 4
Funding 5
Performance Framework 6
Implementation Plan and Framework 7
Programme Monitoring 9
Management Information 11
ACTION PLAN
Assurance and Risk Rating Definitions 12
Findings and Recommendations 13
March 2014 Review of Energy and Environmental Strategy Framework and Implementation
Page 87 EXECUTIVE SUMMARY
1. Background
1.1 This review has been carried out as part of the Greater London Authority (GLA) 2013/14 audit plan. The objectives of the energy and environment programmes are to ensure the Mayor’s vision for London to create a world class city that is clean, efficient and resilient is delivered.
1.2 At the outset of the review, the potential risks identified to achieving the programme objectives were: • Lack of clear strategy to support Mayor’s vision for London • Failure to comply with statutory requirements • Ineffective planning and implementation • Lack of accountability, unclear roles and responsibilities • Non-compliance with policy and/or procedures • Funding is not aligned with stated objectives • Loss or misappropriation of funds • Inadequate performance management • Inadequate review, monitoring and reporting arrangements
1.3 We are looking to provide assurance that the key risks are being effectively managed. Our review focuses on the Decentralised Energy Programme and the School Clean Air Zone project, which is one of five projects in the Clean Air Fund 2 programme (CAF2). The programmes are key in the delivery of objectives set out in the Mayor’s strategies for Climate Change Mitigation and Energy; and Air Quality, respectively. Both strategies fall within the remit of the Development, Enterprise and Environment Directorate.
1.4 The Decentralised Energy Programme aims to help others deploy new low carbon energy supply infrastructure and support the commercialisation of large-scale decentralised energy projects in contribution towards the Mayor’s decentralised energy target of supplying 25% of London’s energy from Decentralised Energy by 2025 thereby helping London to reduce its carbon footprint. The overall programme budget is £2.6m for a three year period which commenced in September 2011 and at the time of the audit, approximately £196,000 is to be spent by the end of the programme.
1.5 The School Clean Air Zone project seeks to establish “clean air zones” around a number of pilot schools in London located within Air Quality Management Areas or near busy roads to identify the most effective ways of reducing exposure to Nitrogen Dioxide (NO2) emissions and concentrations. The total budget for this project is £260,000, though the GLA’s contribution is £100,000. Funding was made available by the GLA and match funded by Local Authorities and Defra between October 2012 and February 2013. The project is expected to complete by 31 March 2014. At the time of the audit, approximately £74,000 of the total budget had been spent.
March 2014 Review of Energy and Environmental Strategy Framework and Implementation 1
Page 88 EXECUTIVE SUMMARY
2. Audit Assurance
Adequate The control framework is adequate and controls to mitigate key risks are generally operating effectively, although a number of controls need to improve to ensure business objectives are met.
3. Areas of Effective Control
3.1 The vision, key objectives and strategic outcomes for the Mayor’s strategies and policies for the reduction of Carbon Dioxide and Nitrogen Dioxide emissions and concentrations are clearly defined in the Mayor’s Climate Change Mitigation and Energy Strategy and Air Quality Strategy, which were published in October 2011 and December 2010, respectively. Progress of delivery against the Air Quality Strategy was reviewed and published in July 2013 and a review of the Climate Change Mitigation and Energy Strategy is to be undertaken early in 2014.
3.2 The Decentralised Energy Programme and School’s Clean Air Zone Project are clearly scoped and expected outcomes are documented and linked to the respective strategies. Effective performance measures have been developed to support delivery of objectives and priorities and are regularly monitored and reported to measure progress against the programme/project objectives.
3.3 Adequate governance arrangements and programme/project plans have been established defining roles and accountabilities of those responsible for oversight and delivery of the programme/project and timescales and deliverables have been clearly defined and communicated through effective planning.
3.4 Adequate arrangements have been implemented by the respective teams to monitor compliance with the terms and conditions of the agreements through a combination of budget monitoring, performance measures and relationship management.
3.5 Effective reporting arrangements have been established with performance against programmes being regularly reported to key stakeholders and the GLA Investment and Performance Board. At the time of the audit, performance for the School’s Clean Air Zone Project within the CAF2 Programme was reported to be on target of achieving objectives with three of the four projects expected to be complete by the March 2014 deadline and all projects remaining within budget. A time extension for the remaining project has been verbally agreed We found four projects have been delivered within the Decentralised Energy Programme with a further 28 projects and 23 sponsors being supported which are expected to be delivered within the agreed extended timescale. The programme budget remains on track to be fully utilised by the end of the agreement period and it is forecasted that capital investments on projects will exceed the £60.5M target.
March 2014 Review of Energy and Environmental Strategy Framework and Implementation 2
Page 89 EXECUTIVE SUMMARY
4. Key Risk Issues for Management Action
4.1 The Investment and Performance Board initially approved a GLA contribution of £200,000 for the Clean Air Fund 2 programme (CAF2), which was expected to be reimbursed by Transport for London (TfL), however this funding has yet to be secured. A further £90,000 temporarily funded by the GLA for the CAF3 programme is also yet to be secured. Where committed programme funds are not secured, there is risk that the GLA may not be able to sustain the programme and achieve objectives.
4.2 One of the four projects relating to the School’s Clean Air Zone Project had been granted a six month time extension to utilise GLA contributed funds by email. This change in agreement was still in the process of being formally documented and approved by an authorised officer at the time of the audit. Where time extensions to grant funding are not approved in advance, the overall project/programme may be at risk of not being achieved within agreed timescales.
4.3 Although the GLA has entered into agreements with Project Sponsors, such as Local Authorities to deliver the implementation stages the terms do not specifically require the sponsor to formally report the expected/actual project outcomes to the GLA. Failure to monitor performance data on a regular basis could result in programme success not being measured and opportunities to take corrective action would be missed.
4.4 Discrepancies were identified in a sample of Decentralised Energy project budgets initially agreed with the GLA and the information presented in the service provider’s periodical project monitoring reports. Although the GLA monitor the budget at a programme level, we found that the service provider had presented an incorrect unallocated budget figure in their monthly progress reports as result. This has since been reviewed and corrected. We also found that budget monitoring data supplied by Local Authorities for their School Clean Air Zone Projects was not in a standardised format, making it difficult to distinguish the extent of expenditure against GLA contributions. There is a risk therefore that programme/project progress will be inaccurately reflected and inappropriate decisions may subsequently be made.
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5. Review Objectives
5.1 Our overall objective was to review the adequacy of the control framework in place supporting the implementation of energy and environmental objectives. In particular, we sought to give an assurance that: • There is a clearly defined and properly approved strategy and performance measures to support the delivery of agreed objectives and priorities. • An effective implementation plan and framework, which clearly identifies accountabilities and roles and responsibilities is in place. • Appropriate monitoring takes place to ensure that the terms and conditions of the funding for relevant schemes are met and budgets are effectively managed. • Accurate and timely management information is produced and regularly reviewed, monitored and reported.
6. Scope
6.1 This review focussed on the control framework established to support the implementation of energy and environmental objectives, including accountabilities, roles and responsibilities, implementation plan and monitoring and review arrangements.
6.2 In particular, we reviewed the control framework for the Decentralised Energy Programme and the School Clean Air Zone project, one of five projects within the Clean Air Fund 2 programme (CAF2).
7. Strategy
7.1 The Mayor’s Climate Change Mitigation and Energy Strategy is one of eight environmental strategies within the GLA setting out the action the Mayor is taking to improve the quality of life of Londoners and making the city more sustainable. This strategy focuses on reducing CO2 emissions to mitigate climate change, securing a low carbon energy supply for London, and moving London to a thriving low carbon capital.
7.2 The strategy was approved and published in October 2011 setting four clear objectives to reduce London’s CO2 emissions, maximise economic opportunities from the transition to a low carbon capital, secure a reliable energy supply and achieve national climate change and energy objectives. A review of the strategy is due to be undertaken by external consultants early in 2014 to assess and report on the extent to which the strategy is being delivered.
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7.3 The Decentralised Energy Programme is one of the activities aimed at meeting the Mayor’s Decentralised Energy target to reduce CO2 emissions and a Mayoral Decision to enter into the relevant grant agreement and commence procurement to support delivery was approved in June 2011 (Ref MD824). The programme is being delivered by Ove Arup, a contracted service provider on behalf of the GLA who support Project Sponsors (usually Public Authorities) to deliver projects.
7.4 The Mayor’s Air Quality Strategy is a statutory document under the provisions of the GLA Act 1999 aimed at cleaning the air Londoners breathe to improve health and quality of life, particularly for vulnerable groups such as children and older people. It is directed by European and UK legislation and seeks to achieve the standards and targets, most notably those prescribed in the EU Air Quality Directive (2008/50/EC).
7.5 The Air Quality Strategy was approved and published in December 2010 with an overarching objective to reduce air pollution in London to improve the health of Londoners. Specific objectives are categorised into transport and non-transport related measures which include improving energy efficiency in homes and workplaces, raising public awareness and improving information for London’s most vulnerable people enabling them to reduce the risk to their health. Progress against the strategy was reviewed and published in July 2013 to provide an update on the implementation of policies and to announce additional measures to be taken.
7.6 The Clean Air Fund 2 programme (CAF2) was approved by Mayoral Decision (MD1121) in January 2013 and directly supports the Air Quality Strategy by supporting boroughs to improve local air quality. School Clean Air Zone projects are undertaken by the four participating Local Authorities under agreement with the GLA.
8. Funding
8.1 The Decentralised Energy Programme is 90% grant funded by the European Commission through the European Investment Bank (EIB) following a successful application by the GLA to the European Local Energy Assistance programme (ELENA). The remaining 10% is funded by the GLA. The EIB contribution is £2,420,620 and the GLA funding is £268,958, providing a total programme budget of £2,689,578.
8.2 A funding agreement with the EIB has been approved and signed by the Executive Director of Resources covering a three year term and is due to expire on 31 July 2014. The GLA have requested an eleven month time extension on this agreement to allow time for potential projects to reach procurement stage as the programme is currently supporting more projects than there is time remaining in the programme to deliver. This has been reflected as one of the programmes top
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three risks in the programme’s monthly performance dashboard, overseen by the Investment and Performance Board. At the time of the audit, the EIB had verbally indicated a 12 month time extension to August 2015 would be granted and it is anticipated that a contract extension will be agreed and signed in February 2014.
8.3 The School's Clean Air Zones project is funded with £100,000 from the GLA, which is match funded by the four participating Local Authorities and a further £60,000 secured directly by the Local Authorities from the Department for Environment, Food and Rural Affairs (Defra), totalling £260,000. We found signed agreements were in place with the Local Authorities securing their commitment and setting out the terms and conditions to ensure spending is in line with agreed objectives. An agreement has also been made between the Local Authorities and Defra confirming their support.
8.4 As part of the annual budget setting process, decisions and funding on forthcoming projects are agreed through a project prioritisation process. As part of this process it was decided that given the extensive transport-related contribution to air pollution, Transport for London (TfL) would contribute to the cost of the GLA’s air quality programme. In August 2012, the Investment and Performance Board initially approved a GLA contribution of £200,000 for the CAF2 programme based on TfL reimbursing this amount. The transfer of funding has been agreed in principle with TfL, subject to the provision of further details about delivered and future programmes, though at the time of audit the funding had not been received. A further £90,000 temporarily funded by the GLA for the CAF3 programme is also yet to be secured.
Recommendation Action is taken by the GLA to secure and collect funding committed by Transport for London for Air Quality initiatives.
8.5 Further funding was provisionally secured in 2013 following a successful bid for £167,000 of EU funding via the Joint Air Quality Initiative for North West Europe (JOAQUIN). A Partnership Agreement for this funding has been agreed by the Investment and Performance Board in October 2013 and is currently awaiting legal review prior to a Mayoral Decision being signed.
9. Performance Framework
9.1 Performance measures for the Decentralised Energy programme have been defined and agreed with the service provider responsible for supporting projects. Performance Indicators are documented in the programme plan and link directly to
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the programme objectives, which are monitored monthly and reported to the GLA as part of the monthly reporting per the contract with the service provider.
9.2 Performance measures for the School's Clean Air Zones project have been defined by the Local Authorities sponsoring the projects and documented in the project plan. Objectives were defined by Local Authorities and are in line with the performance indicators defined by the GLA. Performance is monitored routinely by the GLA via updates and formally at monthly meetings with representatives from the participating Local Authorities. The number of school’s involved in the Clean Air Zone project and the combined number of children affected by the project feeds directly into a performance indicator for the CAF2 programme, to reduce exposure of pollutants on 6,000 school children.
9.3 The respective teams in the GLA are responsible for monitoring the performance of the programme/project and reporting this via a monthly Performance Dashboard to the Investment and Performance Board. We found for a sample of performance dashboards, supporting documentation from the sponsors delivering the programme/project was held and on reconciliation of the performance information on the dashboard to the supporting documentation, we found that accurate performance data was relayed monthly to the Investment and Performance Board for both the Decentralised Energy and CAF2 programmes.
10. Implementation Plan and Framework
10.1 The Decentralised Energy programme support is being provided by a third party service provider, Ove Arup, under the direction of the GLA’s Decentralised Energy team. Ove Arup was selected following a competitive tendering process and is currently contracted to supply services to the GLA until November 2014. A Decentralised Energy Programme Delivery Unit (DEPDU) has been formed within Ove Arup to manage the delivery of the programme and is overseen by a Project Board consisting of representatives from the GLA and the service provider. Project management meetings take place every month and to aid communication between the GLA and the service provider, a GLA Senior Programme Delivery Manager is based from Ove Arup’s office once a week.
10.2 Roles and responsibilities for those in the DEPDU and GLA staff involved in the programme have been clearly defined and documented in a project plan, which was reviewed and updated in the October 2013. Programme timescales and deliverables have been clearly defined and key tasks for each job function have been identified and documented ensuring accountability for tasks is understood.
10.3 The project execution plan provides an adequate framework within which the programme is delivered, including a definition of performance indicators which assists in the effective monitoring of the delivery of the programme. Progress against planned delivery is reported to the GLA on a four-weekly basis and
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discussed at monthly client-contractor meetings. At the time of the audit, we found that 2013/14 targets were at risk of not being achieved as the number of projects expected to be delivered to date was less than expected, which could result in the European Commission funding being withdrawn and potentially clawed back However, it is recognised that there are a number of projects in the pipeline, which the service provider forecasts will assist the programme in delivering and exceeding expected outcomes. The risk is further mitigated by the time extension on the EIB funding agreement, which is expected to be formally agreed in February 2014.
10.4 The majority of the programme is delivered by the service provider, however GLA staff retain responsibility for the approval of scope, budget and programme of support to be provided to Project Sponsors prior to the commencement of each individual project. This is performed through a process of raising and approving Task Orders setting out the resource requirement for each project. We reviewed a sample of projects and Task Orders and found this process to be operating effectively.
10.5 For the sample of projects we examined, agreements with Project Sponsors were signed off by all parties in the form of Memorandums of Understanding to secure the sponsors’ commitment to the project, assisting the GLA in delivering programme objectives. We found the sponsors for the sample of projects reviewed were complying with their agreements.
10.6 Contractor performance is monitored regularly through client-contractor meetings, the timely production and content of management information reports and an invoice checking procedure whereby service provider timesheets are checked against their management information reports for accuracy prior to invoice approval. We found from an examination of a sample of invoices from the service provider that they were appropriately checked, authorised and recorded against the programme budget.
10.7 The overall responsibility for the School’s Clean Air Zone project remains with the GLA, though local projects are independently managed by the four boroughs involved. A Project Steering Group, chaired by the GLA has been established to oversee the project and take responsibility for monitoring progress. It is formed of representatives from the GLA and the four participating Local Authorities. We found its remit is formally defined in a terms of reference which was last reviewed in October 2013.
10.8 Roles and responsibilities of the project group members have been set out in the terms of reference, defining the functions each group member is required to perform. A project plan has also been created outlining the key tasks to be undertaken during the project and those responsible for delivering the tasks. Project milestones have been mapped out in the plan and monitored through the course of the project during monthly meetings of the project group. During our review , project group members were at varying stages of their projects, and three
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of the four members were anticipating completion and utilisation of funds by the deadline of March 2014. Although the remaining member had agreed an extension to utilise funds by September 2014, we found that that this change in agreement had yet to be formally documented by the GLA to ensure compliance with approved procedures, the Funding Agreement Toolkit and relevant financial advice. This process of formal approval has since commenced.
Recommendation
Project changes that affect the term of the grant funding agreement are formally
documented and approved by the appropriate authority as per approved
procedures.
.
10.9 We found evidence of effective project monitoring exists in the form of documented minutes of regular project group meetings chaired by GLA staff where discussions were held with regard to adherence with project timescales, project specifications and delivery against them, and utilisation of contributed funds. We found that follow up updates were produced and circulated via email in between meetings and a budget monitor was maintained for the group to regularly update and review project spend against agreed budgets.
10.10 For both the Decentralised Energy Programme and School’s Clean Air Zones project, the most significant risks are identified, captured and monitored on a monthly Project Dashboard, used as part of the corporate project management tool. The dashboard provides an at-a-glance view of the overall programme on a month by month basis and on review of a sample of monthly dashboards, there was evidence of changes in risk prioritisation, indicating that risks were monitored adequately.
10.11 The GLA Corporate Risk Register presented to the Audit Panel in October 2013 assessed Air Quality and the prospect of EU infraction proceedings as a significant risk to the GLA even though the GLA is mitigating risk through policy implementation and committing resources to initiatives. London is not the only area to find the EU target to be a challenge and the GLA is working to manage the risk.
11. Programme Monitoring
11.1 Overall responsibility for monitoring the Decentralised Energy programme remains with the GLA and this is done at a programme level whereas as the service provider is charged with monitoring progress at a project level.
11.2 Terms and conditions for 90% of the funding of the Decentralised Energy programme are documented in the grant agreement between the EIB and the GLA
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which was agreed in August 2011. Under this agreement, there is a requirement that the GLA utilise the revenue funding to facilitate Decentralised Energy projects and that funding attracts capital investment of 25 times the amount contributed. Performance against this condition is monitored on a four weekly basis through management information reports and scrutiny of the data during monthly client- contractor meetings. At the time of the audit, reports from the service provider indicated that approximately 50% of the target had been achieved, though there were still a number of projects in the pipeline which the service provider projects can be brought to market and exceed the target agreed with the EIB. The time extension verbally agreed by the EIB will allow a further 12 months for these projects to be completed.
11.3 An interim report on the progress of the programme was presented to the EIB in July 2013 per an agreed requirement to report at pre-defined stages. The report expanded on the service provider’s monthly progress report to the GLA to include works in progress at the time of reporting, a list of started/planned projects, problems and risks encountered during implementation and lessons learnt from programme risks. The report also highlighted the extent to which the budget had been utilised and the areas where expenditure had been incurred. There was no adverse feedback to this report.
11.4 A post contract European Commission Audit of the Decentralised Energy programme was undertaken in 2013 as part of the EIB funding agreement to ensure funds are dispersed accordingly with the agreement terms and conditions. Results of the audit are due in the second financial quarter of 2014.
11.5 The GLA are reliant on project sponsors (usually Public Authorities) to verify completed works which should indicate the predicted CO2 emission reductions that will be achieved as a result of the project. To date, only one project has been completed in 2013/14 for which CO2 emission savings were voluntarily reported, though there was no data for the three projects completed in 2012/13. We found there was no mechanism to require project sponsors to formally report on expected CO2 emission savings following completion of the project.
Recommendation The GLA ensure that agreements with Project Sponsors require them to formally report to the GLA the expected/actual outcomes following the completion of projects and identify any lessons learnt and areas for improvement.
11.6 The GLA is responsible for monitoring the Decentralised Energy programme budget alongside project outputs delivery. This is done monthly at the client- contractor meetings. The service provider is aware of the project budget for each financial year and is allowed to invoice (cumulative) up to that value by the end of the relevant financial year.
11.7 On review of a sample of project budgets, we found discrepancies between the
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initial agreed project budgets, per Task Orders agreed with the GLA and that presented on the service provider’s project/financial monitoring spreadsheet. It was explained that the GLA does not monitor project level budgets using this spreadsheet, but monitors it at a programme level through invoicing. At the time of the audit, we found that the service provider had presented an incorrect unallocated budget figure in their monthly progress reports, though this has since been reviewed and corrected.
Recommend ation Where the GLA are reliant on service providers or project sponsors to monitor project level budgets, assurance is sought on the accuracy of information presented. Also, an agreed budget monitoring reporting framework is required for project sponsors.
11.8 The GLA’s fund contribution for the School’s Clean Air Zone project is £25,000 for each of the four Local Authorities participating in the programme, which we found is documented within the terms and conditions set out in the grant funding agreements with each authority. Our review of the terms and conditions for the four authorities found they were standardised in forma and content and required each of the Local Authorities to spend their proportion by 31 March 2014.
11.9 Delivery of the air quality initiatives in the project is the responsibility of the participating Local Authorities/Schools, who are responsible for procuring and monitoring any third party service providers to deliver physical aspects of the projects. There are nominated contacts at each Local Authority who monitor the individual projects at each school, collate the information and bring it back to the Project Steering Group where the GLA oversee and maintain overall responsibility for the programme. Monitoring of progress is evident in project updates contained within minutes/action plans from regular meetings held and email correspondence.
11.10 Projects are not due to complete until March 2014, verification and measurement of project success, will be performed by the GLA via site visits between February and March 2014 for schools participating in the Schools Clean Air Zones project. It is proposed that assurance will be gained by site visits, further monitoring meetings; risk assessments; and feedback from the schools and its stakeholders. It is the intention of the GLA’s Air Quality Team to document the GLA’s strategic position on air quality around schools based on lessons learnt from the pilot, to assist in future projects of its kind. At the time of the audit, three of the four projects were expected to complete on time, whilst the deadline for the fourth had been extended to September 2014.
11.11 Project expenditure data has only been compiled since October 2013 as expenditure prior to this was relatively little due to the projects being at planning stages. As implementation commenced, expenditure across the four Local Authorities is being monitored to ensure funds are being utilised and committed in accordance with agreed terms and conditions. We examined the October 2013
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budget monitor and found it distinguished expenditure by the contribution type, i.e. from the GLA, Defra or the Local Authority. However, subsequent budget monitoring data produced for November 2013 did not follow this format. It was explained that Local Authorities were required to report to Defra at the same time, so to avoid duplication of efforts, the GLA relied upon this information, which on review did not consistently highlight expenditure against the GLA contribution. (Recommendation 11.7 refers).
12. Management Information
12.1 Adequate Management information and review arrangements are in place for the scrutiny and reporting of Decentralised Energy projects to support the progress against the project plan.
12.2 Under contractual arrangement with Arup, the service provider responsible for supporting the delivery of the Decentralised Energy programme, there is requirement to present the GLA with a four-weekly management information report charting the progress of individual projects and the overall programme. There was evidence to indicate reports were received on a regular basis.
12.3 The four-weekly period progress reports were subject to scrutiny and challenge by GLA officers at their monthly client-contractor meetings where queries with uncertain facts/figures were raised and responded to. Discussion notes and action points made at meetings reflected this process to be effective.
12.4 We found that for the School’s Clean Air Zone project, the participating Local Authorities feedback management information to the GLA during the course of the project as project updates and information is communicated and captured in the Project Steering Group's meeting. Any challenge or concerns with information presented are raised in this environment, which we found to be effectively documented in meeting minutes and correspondence.
12.5 As the participating Local Authorities are subject to the reporting requirements of the agreement with Defra, formal management information reports are compiled, which the GLA also receive. We found the latest reports were made available in November 2013 per the agreement with Defra. Local Authorities will be required to prepare evaluation reports for both the GLA and Defra following closure of their projects in March 2014.
12.6 Both the Decentralised Energy programme and School’s Clean Air Zone project are subject to the GLA’s Programme and Project Management Governance framework, and therefore monthly project dashboards are produced highlighting delivery progress, key risks and financial information. We found summarised project updates had been presented to the GLA’s Investment and Performance Board on a monthly basis for a sample of months, indicating the overall status
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against delivery for all programmes/projects underway. For the sample of updates presented to the IPB, we found the updates were supported by evidence in the form of minutes, emails and progress reports.
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RISK AND AUDIT ASSURANCE STATEMENT – DEFINITIONS
Overall Criteria Impact Rating There is a sound framework of control There is particularly effective operating effectively to mitigate key risks, management of key risks Substantial which is contributing to the achievement contributing to the achievement of of business objectives. business objectives. The control framework is adequate and Key risks are being managed controls to mitigate key risks are effectively, however, a number of Adequate generally operating effectively, although controls need to be improved to a number of controls need to improve to ensure business objectives are met. ensure business objectives are met. The control framework is not operating effectively to mitigate key risks. A Some improvement is required to Limited number of key controls are absent or are address key risks before business not being applied to meet business objectives can be met. objectives. A control framework is not in place to Significant improvement is required No mitigate key risks. The business area is to address key risks before business Assurance open to abuse, significant error or loss objectives can be achieved. and/or misappropriation.
RISK RATINGS Priority Categories recommendations according to their level of priority. 1 Critical risk issues for the attention of senior management to address control weakness that could have significant impact upon not only the system, function or process objectives, but also the achievement of the organisation’s objectives in relation to: • The efficient and effective use of resources • The safeguarding of assets • The preparation of reliable financial and operational information • Compliance with laws and regulations.
2 Major risk issues for the attention of senior management to address control weaknesses that has or is likely to have a significant impact upon the achievement of key system, function or process objectives. This weakness, whilst high impact for the system, function or process does not have a significant impact on the achievement of the overall organisational objectives. 3 Other recommendations for local management action to address risk and control weakness that has a low impact on the achievement of the key system, function or process objectives ; or this weakness has exposed the system, function or process to a key risk, however the likelihood is this risk occurring is low. 4 Minor matters need to address risk and control weakness that does not impact upon the achievement of key system, function or process or process objectives; however implementation of the recommendation would improve overall control.
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Ref. Findings and Risk Priority Recommendations Acce pted Management Response Target Date and Responsibility 8.4 The Investment and 2 Action should be taken by the Yes GLA and TfL officers April 2014 Performance Board initially GLA to secure and collect funding have now agreed that approved a budget of committed by Transport for GLA will cover the £200,000 for the CAF2 London for Air Quality initiatives. £290,000. Discussions programme based on are still ongoing Transport for London (TfL) regarding TfL support for reimbursing this amount, the air quality though this funding has yet to programme in future be secured. A further £90,000 years. Any TfL funding temporarily funded by the GLA for future years will be for the CAF3 programme is subject to Mayoral also yet to be secured. The Direction, as part of the Page 102 sustainability of Air Quality normal approvals programmes and projects are process. at risk if committed funds are The reimbursement not secured. process is now complete. Future years AQ funding will be discussed at the April IPB meeting with a Mayoral Decision shortly thereafter.
Responsibility: Principal Policy and Programme Officer (Air Quality) 10.8 A change in the School’s 3 Project changes that affect the Yes The decision to extend April 2014 Clean Air Zone Project grant term of the grant funding the funding period will be funding agreement period with agreement are formally approved by the the London Borough of documented and approved by the responsible senior Camden has yet to be formally appropriate authority as per officer, appropriately documented, though is in the approved procedures. documented and put into process of being done and has place ahead of the
March 2014 Review of Energy and Environmental Strategy Framework and Implementation 15 ACTION PLAN
Ref. Findings and Risk Priority Recommendations Acce pted Management Response Target Date and Responsibility yet to be approved by the proposed 6 Month officer holding the appropriate extension. authority to do so. Unapproved time extensions could hamper Responsibility: Principal the GLA’s delivery of the Policy and Programme overall project/programme. Officer (Air Quality) 11.5 There is no mechanism in the 3 The GLA should ensure that Yes The GLA DE team will April 2014. Decentralised Energy agreements with Project establish a CO2 Programme to require Project Sponsors require them to formally reporting requirement to Sponsors to formally report on report to the GLA the be included as part of the expected CO2 emission expected/actual outcomes project procurement savings following completion of following the completion of documentation. the project. Programme projects and identify any lessons A CO2 calculator will Page 103 success would not be learnt and areas for improvement. also be made available measurable if performance on the London Heat Map data is not consistently website. obtained. Responsibility: Senior Programme Delivery Manager (Decentralised Energy) 11.7 Part 1 3 Where the GLA are reliant on Part 1 Part 1 Part 1 Project budget data in the service providers or project Yes The Decentralised April 2014 Decentralised Energy sponsors to monitor project level Energy team will Programme contained budgets, assurance is sought on Part 2: introduce its own ‘checks Part 2 discrepancies between the the accuracy of information Yes and balances’ of the Complete initial agreed project budgets presented. Also, an agreed services providers period and that presented on the budget monitoring reporting invoice submission. This service provider’s project framework is required from will include keeping monitoring spreadsheet. project sponsors. duplicates of the Task Orders, a monitoring Part 2 spreadsheet and invoice Budget monitoring data approval routines
March 2014 Review of Energy and Environmental Strategy Framework and Implementation 16 ACTION PLAN
Ref. Findings and Risk Priority Recommendations Acce pted Management Response Target Date and Responsibility supplied by Local Authorities checking to ensure the as part of the School’s Clean total invoicing does not Air Zone Project in October exceed the Task Ceiling. 2013 and December 2013 did not follow a consistent format Responsibility: Senior and expenditure against the Programme Delivery GLA’s contribution could not Manager (Decentralised be distinguished from other Energy) contributors. Where budget monitoring data is not properly Part 2: A reporting scrutinised or presented in a template was issued to consistent format, there is a boroughs to ensure risk that programme/project consistency in reporting. Page 104 progress will be inaccurately However, reflecting the reflected. feedback we have received, we have amended the template to provide further disaggregation of reporting against different funding sources to ensure greater transparency. ##ISA4D87D77654C404A9A924F78FE705525##Finding
March 2014 Review of Energy and Environmental Strategy Framework and Implementation 17 Appendix 1e
DIRECTORATE OF AUDIT, RISK AND ASSURANCE
Internal Audit Service to the GLA
Review of Sickness Monitoring and Control
Page 105 DISTRIBUTION LIST
Audit Team
David Esling, Head of Audit and Assurance (Risk Management) June Lamb, Audit Manager Kayode Yusuff, Risk and Assurance Auditor
Report Distribution List
Martin Clarke, Executive Director - Resources Juliette Carter, Head of Human Resources Patrick Alleyne, HR Manager
Page 106 CONTENTS
Page EXECUTIVE SUMMARY
Background 1
Audit Assurance 1
Areas of Effective Control 2
Key Risk Issues for Management Action 2
FINDINGS and RECOMMENDATIONS
Review Objectives 3
Scope 3
Framework for Sickness Monitoring and Control 3
Effective Monitoring Arrangements Supported by Recordkeeping 4
Monitoring and Reporting 7
ACTION PLAN
Assurance and Risk Rating Definitions 8
Findings and Recommendations 9
March 2014 Review of Sickness Monitoring and Control
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1. Background
1.1 This review has been carried out as part of the Greater London Authority (GLA) 2013/14 audit plan. The objectives for sickness monitoring and control are to optimise attendance of employees using a fair, consistent and effective framework, set out in the relevant policy.
1.2 At the outset of the review, the potential risks identified to achieving the objectives were identified as: non compliance with regulations and policy; inadequate policies and procedures; ineffective monitoring arrangements; inadequate maintenance of records; inefficient use of staff resources and ineffective reporting and decision making.
1.3 There are approximately 724 employees in the GLA. For the six month period ended 30 September 2013, the average number of days lost per employee was 3.28 days. This shows the number of days falling from an average of 4.14 days in 2011. The GLA corporate health indicator for 2013/14 is 6 days per person per year. The figures from the Chartered Institute of Personnel and Development (Absence Management Survey 2013), which show the average number of days lost per employee for Central Government is 8.7 days, for Local Government is 9 days and the Private Sector 7.2 days.
1.4 For the year to 30 September 2013, 2376 days were recorded as sickness absence for the GLA, with colds and flu accounting for 20% of the absences and stress for 15%.
1.5 The HR function is currently procuring a new HR system to increase the efficiency of the reporting on sickness absence. The current system (StARS) has been identified as not providing accurate reporting from the data base of staff information held for sickness absence. The new system is expected to go live in June 2014.
2. Audit Assurance
Adequate The control framework for sickness monitoring and control is adequate, however, a number of controls relating to the management of short term absences and the accuracy of sickness data require improvement to ensure the business objectives are met. A number of these issues will be addressed by the new HR system, enabling more effective reporting and management of sickness absences.
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3. Areas of Effective Control
3.1 The GLA Sickness Absence Policy is in place and specifies the responsibilities of employees, line managers and Human Resources (HR). The policy defines short term and long term absences and chronic ill health and specifies the trigger points on which action should be taken to effectively manage sickness absences.
3.2 Long term sickness absences are being effectively managed, using informal and formal review meetings, and referrals to Occupational Health, to ensure that the well-being of employees is appropriately addressed.
3.3 Monthly reporting on sickness absence is provided to Heads of Service for each of the Directorates within the GLA. Overall sickness absences are reducing and are lower than similar public bodies, based on the average days of sickness per employee. However, there are issues regarding the level of confidence that can be placed on the data. Quarterly reports are provided throughout the GLA, utilising the data for the rolling year to date. A six monthly report on workforce data, which includes sickness absences, is published on the GLA website.
4. Key Risk Issues for Management Action
4.1 The GLA Sickness Absence Policy will need to be reviewed, to ensure that it reflects the current GLA requirements for monitoring sickness absence.
4.2 The reporting function within the current HR system is not reliable; data which is held in the database is not being extracted into reports and the HR team have been unable to utilise the reporting functionality. Data is being extracted but has to be manually examined and cleansed. Three Business Objects consultants have reviewed the business objects universe and have been unable to identify the issues. Efforts have been made to secure support from LFEPA (as part of the shared service arrangement) and from the product supplier to resolve the issues identified. There is no support contract from the product supplier in place and it has not been possible to secure an appropriate support contract. This impacts upon the effectiveness of the sickness monitoring and identifying the levels of sickness. To address these issues identified, a new system has been procured and is expected to go live during summer 2014. User testing will ensure that the current concerns will be addressed.
4.3 Short term sickness absences are not being managed effectively, as informal reviews are not being completed when the trigger points within the Sickness Absence Policy are being reached. This is partly due to the reporting problems identified above but line managers need to manage short term absences more pro-actively.
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5. Review Objectives
5.1 Our overall objective was to review the framework for sickness absence In particular, we sought to give an assurance that:
• A clearly defined and approved framework is in place for the management of Sickness Monitoring and Control which is supported by policies and procedures • Effective monitoring arrangements have been established to ensure compliance with regulations, policies and procedures. • Adequate record keeping is maintained to support the management of Sickness Monitoring and Control • Accurate, relevant, timely management information, including costs, is provided to assist with decision making, monitoring and reporting of attendance to GLA management.
6. Scope
6.1 We reviewed the effectiveness of the framework for Sickness Monitoring and Control including the policy in place and monitoring arrangements. We reviewed the records held to support the management of sickness monitoring and the reporting review arrangements to management.
7. Framework for Sickness Monitoring and Control
7.1 The GLA Sickness Absence Policy was issued in April 2010, with a review date of January 2013, however, the review has not taken place. The policy needs to be reviewed to ensure that it reflects the current requirements of the GLA and is capable of managing absence effectively. The policy identifies the trigger points for management action. If the policy is not reviewed, it may not provide an effective framework to manage sickness absences.
Recommendation The GLA Policy on Sickness Absence is reviewed to ensure that it reflects the current GLA requirements and to take account of any legislative changes in respect of SSP reporting and process changes arising from the new system.
7.2 The objective of the GLA Sickness Absence Policy is to optimise attendance of employees, using a fair, consistent and effective framework for sickness absence within the GLA.
7.3 The policy specifies the responsibility of individuals and line managers to promote good attendance and provides guidelines on the processes for the monitoring and reviewing absences and the return to work. It is available to all staff on the GLA Intranet and line managers are required to explain the requirements as part of the induction of new employees.
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7.4 Responsibilities of managers, employees and the Human resources (HR) function are clearly defined. These include communicating the procedures for absence management, referring employees to Occupational Health (OH), reporting absences promptly and providing support to managers and employees.
7.5 The policy defines long term absence, chronic ill-health, and short term absences where action needs to be taken. It specifies when an informal review meeting should be held by the line manager (where an employee has an absence of five working days or three or more sickness absences in any rolling six month period). The policy also records the process for formal sickness review with support from HR. The policy is not specific on the length of time an employee has to demonstrate improved attendance.
7.6 A phased return to work can be recommended by OH, for normally a period up to eight weeks. Employees are paid for the hours worked for the applied period and the remaining period up to the full number of contracted hours is counted as sickness absence and is counted towards the qualifying period for reducing pay to half pay.
8. Effective Monitoring Arrangements Supported by Recordkeeping
8.1 Employees who are absent through sickness are required to report their absence as soon as possible to their line manager. Each week, this information is collated by a co-ordinator within each Directorate, detailing those employees who have commenced a sickness absence, who are still absent due to sickness or who have returned from a sickness absence. The co-ordinators record whether a self- certification form has been completed and/or whether a GP Fitness for Work Certificate has been received. The co-ordinators seek certificates if they have not been submitted. The weekly return is signed by the Head of the Business Unit before being forwarded to HR.
8.2 We extracted data from reports run by the HR team to test the application of the sickness attendance policy. The latest data available was from November 2013; testing was performed in February 2014. The HR team has to manually cleanse the data extracted from the database, as the reporting facility is not accurately extracting data. It is not clear why this is the case; testing of the database demonstrates that the records are correctly held in the system, however, these are not always subsequently included in the reports extracted. A new HR system is being procured and has been assessed through the tendering process. It is expected that the new system will be operational from summer 2014 and it is expected that user testing before go live will ensure that similar problems do not arise and the resultant reports will be reliable and accurate.
Recommendation The GLA will need to ensure effective implementation of the new HR system to ensure current system issues have been addressed. March 2014 Review of Sickness Monitoring and Control 4
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8.3 We selected a sample of employees from the above data for examination for those who had periods of short term sickness absence and those with longer term sickness absence.
Short Term Sickness Absences
8.4 For the sample selected for short term absences, we established the periods of absence from the data provided by HR and selected those who had a number of periods of absence. Many of the sickness absences identified were of one or two days duration. We examined records for 20 employees.
8.5 For the 20 employees, self-certification forms for sickness absence should have been completed for 108 occasions. We found 93 self-certification forms on files, meaning that 15 were missing. If self-certification forms are not received, this does not enable effective review of the absence.
Recommendation All self-certification forms are submitted for all periods of sickness absence to ensure that sickness can be fully monitored.
8.6 The Sickness Absence Policy states that where an employee’s absence gives cause for concern, the line manager should hold an informal review meeting with the individual to discuss their attendance. Trigger points requiring informal action are certified sickness absences exceeding five working days in any six month period or three or more occasions of sickness absence in any six month rolling period.
8.7 In the sample of 20 employees examined, 13 met one or both of the trigger points in a rolling six month period requiring further follow up, as these individuals had both at least five working days and three occasions of absence in a rolling six month period. Whilst it is understood that the HR system does not currently identify these requirements easily, the line managers should be pro-active and seek advice of HR to manage these absences more effectively. If informal review meetings are not held, effective management of short term absences may not take place and employees will not be supported to return to work.
8.8 For the above 20 employees, 108 days absence was recorded. Of this number, 61 days were single day absences (56.48%) and one employee had 10 single days as absence (9.25% of total of the sample).
Recommendation
Informal review meetings for those employees who have had sickness absence of five working days and/or on 3 occasions in a rolling six month period are completed to effectively manage short term absences.
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Long Term Absences
8.9 The Sickness Absence Policy defines long term absence as a continuous absence lasting for four consecutive weeks or more.
8.10 We selected a sample from the data provided by HR, where the number of days recorded for employees was noted as being the 20 highest number of days for the reporting period of January – November 2013. We selected 15 employees to evaluate how the management of their sickness absence was completed.
8.11 We found that informal review meetings, formal review meetings and referrals to OH were completed at appropriate intervals and that the framework for managing long term sickness absences was in place. One of the employees selected did not reach the four consecutive weeks but had been absence for 33 days over five occasions.
8.12 We found one instance where the GP Fit to Work certification had not been reflected in the database of sickness absences correctly. This record was amended immediately.
9. Monitoring and Reporting
9.1 Monthly reports of sickness absences for all employees are prepared against the key targets within the sickness absence policy are provided for the Heads of Service. This information is used to ensure that sickness absence is monitored and managed.
9.2 Quarterly information reports are also prepared detailing the total number of days taken in the rolling year to that quarter, together with identifying those staff with six or more days and 20 or more days absence. This data is recorded in the eight Directorates and then further divided into the 33 business units within this structure. This information is collated into the KPI report, which also reports quarterly and records sickness performance against the target of 6.0 working days lost. The Quarter 3 report for 2013-14 shows a forecast absence figure of 4.5 days but acknowledges that the problems of confidence in the current report. This is part of the corporate performance monitoring data used across the GLA.
9.3 Six monthly reports on workforce data are drawn up, which cover all aspects of HR including turnover of staff, employee numbers by monitoring categories, salary, sickness and disciplinary issues. Sickness absence noted in this report for the six month period ended 30 September 2013 was 3.28 days averaged across all employees, which compared to 4.14 days averaged in 2011. This compares against figures provided by the Chartered Institute of Personnel and Development, in its survey of Attendance Management in 2013 for Central Government 8.7 days, for Local Government 9.0 days and the Private Sector 7.2 days. However, there is an issue regarding the confidence of data provided to support the absence figure.
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9.4 The HR team has identified that the current HR system is not providing accurate reports. Data held in the data base is not being captured fully in reports run to record certain instances relating to sickness absence. The HR team are currently manually cleansing report to remove duplicates and insert known cases where identified, to try to provide accurate reporting. A new HR system has been tendered and the new system is expected to be in place from summer 2014, when these problems are expected to be resolved.
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RISK AND AUDIT ASSURANCE STATEMENT – DEFINITIONS Overall Criteria Impact Rating There is a sound framework of control There is particularly effective operating effectively to mitigate key risks, management of key risks Substantial which is contributing to the achievement contributing to the achievement of of business objectives. business objectives. The control framework is adequate and Key risks are being managed controls to mitigate key risks are effectively, however, a number of Adequate generally operating effectively, although controls need to be improved to a number of controls need to improve to ensure business objectives are met. ensure business objectives are met. The control framework is not operating effectively to mitigate key risks. A Some improvement is required to Limited number of key controls are absent or are address key risks before business not being applied to meet business objectives can be met. objectives. A control framework is not in place to Significant improvement is required No mitigate key risks. The business area is to address key risks before business Assurance open to abuse, significant error or loss objectives can be achieved. and/or misappropriation.
RISK RATINGS Priority Categori es recommendations according to their level of priority. 1 Critical risk issues for the attention of senior management to address control weakness that could have significant impact upon not only the system, function or process objectives, but also the achievement of the organisation’s objectives in relation to: • The efficient and effective use of resources • The safeguarding of assets • The preparation of reliable financial and operational information • Compliance with laws and regulations.
2 Major risk issues for the attention of senior management to address control weaknesses that has or is likely to have a significant impact upon the achievement of key system, function or process objectives. This weakness, whilst high impact for the system, function or process does not have a significant impact on the achievement of the overall organisational objectives. 3 Other recommendations for local management action to address risk and control weakness that has a low impact on the achievement of the key system, function or process objectives ; or this weakness has exposed the system, function or process to a key risk, however the likelihood is this risk occurring is low. Minor matters need to address risk and control weakness that does not impact upon the achievement of key system, function or process or process objectives; however implementation of the recommendation would improve overall control.
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Ref. Findings and Risk Priority Recommendations Accepted Management Target Date Response and Responsibility 7.1 The GLA Sickness Absence Policy was 3 The GLA Policy on Sickness Absence is Yes A review of the 30 June issued in April 2010, with a review date reviewed to ensure that it reflects the current policy will be 2014 of January 2013. If the policy is not GLA requirements and to take account of any undertaken and reviewed, it may not provide an effective legislative changes in respect of SSP reporting any legislative framework to manage sickness and process changes arising from the new or process absences. system. changes implemented.
HR Manager
Page 116 8.2 The HR team has to manually cleanse 3 The GLA will need to ensure effective Yes The decision on 30 the data extracted from the database, as implementation of the new HR system to the preferred September the reporting facility is not accurately ensure current system issue have been supplier has 2014 extracting data. A new database is being addressed. now been taken. procured if detailed testing is not The need to undertaken similar reporting failing could ensure accurate occur. reporting of data from the system will be a key element of the implementation.
HR Manager 8.5 For the 20 employees, self-certification 3 All self-certification forms are submitted for all Yes Further 30 April forms for sickness absence should have periods of sickness absence to ensure that reminders to 2014 been completed for 108 occasions. We sickness can be fully monitored. absence co- found 93 self-certification forms on files, ordinators meaning that 15 were missing. If self- directly and staff certification forms are not received, this generally does not enable effective review of the through
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Ref. Findings and Risk Priority Recommendations Accepted Management Target Date Response and Responsibility absence. London@work advising staff of the importance of self certification forms and the need for their completion. HR Manager 8.9 13/20 employees had at least one period 2 Informal review meetings for those employees Yes Engaging with 30 May of sickness absence of 5 working days who have had sickness absence of five working line managers 2014 and had been absent for more than three days and/or on 3 occasions in a rolling six on the need to Page 117 occasions in a rolling six month period . month period are completed to effectively follow GLA If informal review meetings are not held, manage short term absences. policy and effective management of short term conduct informal absences will not take place and review meetings employees will not be supported to return for staff to work. reaching trigger points. In addition the staff identified through sampling hitting the triggers will be followed up to ensure the informal meetings take place. HR Manager
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Page 118 Appendix 1f
DIRECTOR ATE OF AUDIT, RISK AND ASSURANCE
Internal Audit Service to the GLA
Financial Control Framework
Page 119 DISTRIBUTION LIST
Audit Team
Karen Welsh, Risk and Assurance Auditor Jeremy Welburn, Audit Manager David Esling, Head of Audit and Assurance – Risk Management
Report Distribution List
Martin Clarke, Executive Director – Resources David Gallie, Assistant Director, Group Finance Doug Wilson, Head of Financial Services
Page 120 CONTENTS
Page EXECUTIVE SUMMARY
Background 1
Audit Assurance 1
Areas of Effective Control 1
Issues for Management Action 2
FINDINGS and RECOMMENDATIONS
Review Objectives 3
Scope 3
Accountabilities, Roles and Responsibilities 3
Shared Services 4
Authorisation Levels 5
Access to Systems 7
ACTION PLAN
Risk and Audit Assurance Statement – Definitions 9
Findings and Recommendations 10
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1. Background
1.1 This review has been carried out as part of the Greater London Authority (GLA) 2013/14 internal audit plan. The objectives for the financial control framework are to ensure that the GLA meets statutory and legal requirements to assist in the effective delivery of the Mayor’s strategic objectives and to ensure effective value for money in the use of public funds.
1.2 We are looking to provide assurance that the following potential risks to achieving the objectives are being effectively managed:
• Insufficient Governance • Lack of accountability and clarity on roles and responsibilities • Inadequate services provided • Insufficient monitoring of performance • Inappropriate division of duties • Unauthorised transactions processed • Unauthorised/inappropriate access levels
1.3 To conduct its business effectively, the GLA ensures that it has sound financial management policies in place. The Financial Regulations set out the financial policies of the Authority, providing a framework for managing the Authority’s financial affairs and govern the way financial decisions, budget setting and monitoring, financial administration and financial controls are exercised.
2. Audit Assurance
Adequate Key risks are being managed effectively; however, some controls need to be improved to ensure business objectives are met.
3. Areas of Effective Control
3.1 Greater London Authority Financial Regulations are in place and set out the financial policies of the Authority which provides a framework for managing its financial affairs and governing financial decisions, budget setting and monitoring. Accountabilities, roles and responsibilities are clearly documented on job descriptions and roles have been adequately allocated within the Finance Team.
3.2 Key elements of the financial support service, including the SAP service and the procurement function is provided by Transport for London (TfL). This service is managed by a service level agreement, which is regularly reviewed by all parties. Monthly key performance indicators (KPI’s) are provided and quarterly
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performance meetings discuss any issues or areas for development with the service.
3.3 Finance authorisation levels have been established and documented and are included on the SAP finance system.
3.4 Three gatekeepers have been identified within the GLA Finance Team for receiving forms from Directorates to set up personnel on the SAP system, monitoring access and liaising with the SAP Data Management Team (DMT) at Transport for London in relation to the SAP system for adding and removing personnel from the SAP system. Weekly reports are sent to the gatekeepers from DMT for monitoring purposes.
4. Issue for Management Action
4.1 A log of personnel who have access to the GLA bank system is in place and is held by GLA Finance. However, a number of individuals on this list have not logged on to the bank system for some time. There is a risk that the list may be out of date and personnel shown do not require access to the GLA bank account any longer.
4.2 Gatekeepers have been allocated Management Accountant access to SAP and are also responsible for processing set up forms and requesting personnel are removed from the system following a review of leaver reports from the GLA Human Resources Unit. Gatekeepers are also responsible for monitoring access logs and substitutes. An independent review of access is not undertaken to ensure that the activity of the gatekeepers themselves is appropriate.
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5. Review Objectives
5.1 Our overall objective is to evaluate the adequacy of the control framework in place to effectively manage the financial control framework. In particular, we are looking to provide an assurance that:
• Financial management accountabilities, roles and responsibilities are clearly defined and appropriately allocated. • Services provided by other bodies are agreed, documented and adequately monitored. • Authorisation levels have been established and clearly documented and are adhered to. • Access to systems is monitored and restricted to authorised officers.
6. Scope
6.1 We reviewed the effectiveness of the framework put in place for financial control. This included reviewing accountabilities, roles and responsibilities, shared service agreements, authorisations levels and access to systems within the finance environment.
7. Accountabilities, Roles and Responsibilities
7.1 The GLA Financial Regulations are in place and are accessed by all GLA personnel. The scope of the Regulations ensure that sound financial management policies are in place, set out the financial policies of the Authority, and provide a framework for managing the Authority’s financial affairs, governing the way financial decisions, budget setting and monitoring, financial administration and financial controls are exercised. The Financial Regulations make reference to statutory duties and list the Acts and Regulations the statutory duties relate to. Roles and responsibilities of the Executive Director of Resources are clearly documented in the Regulations.
7.2 A Senior Management Team (SMT) structure is in place and available to all GLA personnel. The structure shows that the Executive Director of Resources has overall responsibility for Resources which includes the finance function. The Executive Director of Resources is responsible to the Head of Paid Services for the management and development of the functions allocated to the GLA’s Resources directorates and is a member of the Head of Paid Service’s Corporate Management Team, providing corporate support to the Mayor and Assembly and acts as the GLA’s Chief Finance Officer under Section 127 of the GLA Act 1999. The Executive Director of Resources is accountable for operational management and development of the GLA’s Resource Directorate.
7.3 Following a restructure of the Finance Team, the unit was split between the Assistant Director, Group Finance and Head of Financial Services. The Assistant Director, Group Finance is now responsible for leading on the development of the
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Mayor’s component and consolidated budgets for the GLA Group, capital investment plans and prudential borrowing limits in conformity with statutory and recommended practice. The role also includes the provision of treasury management services to the GLA and those functional bodies participating in the GLA’s shared treasury service and managing the relationship with the London Pension Fund Authority. The Assistant Director is accountable for the Senior Group Finance Manager, Group Treasury Manager, Group Finance Manager, Financial Analyst, Accountant Treasury Services and Treasury Assistant.
7.4 The role of Head of Financial Services has been allocated responsibility for leading and managing the Financial Service Team in the provision of financial services including accounting, financial planning and taxation services to the GLA in conformity with statutory and recommended practice. The Head of Financial Services also as part of their role leads on the development of the Mayor and Assembly component budgets and the GLA’s capital investment plans and is accountable for the Chief Accountant, Principal Accountant and their teams and Capital Accountant. Both the Assistant Director, Group Finance and Head of Financial Services lead and participate in high profile projects and provide advice to the Mayor, London Assembly Members and senior managers on financial matters.
7.5 GLA Finance consists of a Chief Accountant, Principal Accountant Revenue, Capital Accountant, Accountants, Senior Finance Officers, Accountant European Funding and a Trainee Accountant. The Chief Accountant’s role is to manage the GLA’s accounting, taxation and exchequer services and is accountable for two Accountants, two Senior Finance Officers and one Technical Accountant or the tax advice function. The job purpose of the Principal Accountant is to lead, manage and co-ordinate the management accounting and finance advice function, to account for and provide financial management support to the Authority’s £0.4bn pa Revenue Budget. The Principal Accountant is accountable for five Accountants, one Senior Finance officer and a trainee Accountant. The Capital Accountant is responsible for accounting for, and providing lead financial management support on the Authority’s £3/4 billion pa Capital Programme. The Chief Accountant, Principal Accountant and Capital Accountant reports to the Head of Financial Services and fortnightly meetings and one to one meetings are held. It would be of benefit, given the level of responsibility allocated to senior finance staff, for spot check on functions undertaken by the Chief Accountant, Principal Accountant and Capital Accountant to be introduced.
7.6 Roles within the Finance Unit have been adequately segregated. Job Descriptions are in place for all members of GLA Finance Team and Executive Director of Resources. Job Descriptions clearly show the job purpose, principle accountabilities and key relationships. Regular meetings are also held with staff and their line managers along with mid-year and annual performance reviews.
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8. Shared Services
8.1 In 2009 the provision of financial support services was delegated to TfL under a shared service agreement that includes a number of stakeholders. This included the provision of accounts payable and receivable; the fixed asset register; bank reconciliations; the procurement function; and, the SAP system. This review has considered the management of the SAP system and the procurement services provided, as the other areas have been covered within other internal audit reviews.
8.2 SAP and procurement (which has an E Procurement module within the SAP system) are managed by a service level agreement (SLA) and performance is monitored through the provision of KPI’s, with the GLA having a nominated relationship manager within the Finance Department to operate as a single point of contact. The performance information is provided on a monthly basis to the relationship manager. The main KPI is the provision of prompt payment to small and medium enterprises (SME’s) and this is consistently achieved.
8.3 There are regular meetings with TfL regarding the service provision. These include the Procurement User Group; the Financial Reporting Managers meeting; and the Information Management Service Review Meeting. These meetings, particularly the Financial Reporting Managers, allow the GLA finance team representatives to raise any specific service issues, and also be kept aware of any changes and developments within the system.
8.4 The GLA has been able to make minor changes to the SAP system through its involvement with the above groups, which have enhanced the functionality of the system for its users, particularly around the development of the procurement module.
8.5 The agreement with the TfL for the provision of the service is reviewed regularly, and any changes have been agreed and signed off by all the stakeholders.
9. Authorisation Levels
9.1 Mayoral Decision (MD) 1166 dated March 2013 identified the need for a revised Mayoral Scheme of Delegation as the previous review had been undertaken in October 2011. The scheme was updated due to the threshold for financial decision making had remained constant at £50K, housing and regeneration functions transferred to the GLA and GLA staffing structure had been subject to change. The proposed scheme set out new thresholds for financial decision making and stated that the Mayor would sign off proposals of unlimited value and all proposals of £125K or over under a Mayoral Decision form, Directors would sign off amounts up to £125K under a Director Decision form (DD), Assistant Directors or Heads would sign off amounts of up to £50K, Managers would sign off amounts up to £5K. The proposals also had the benefit of a greater degree of alignment with the
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procurement thresholds. The MD was approved by the Mayor and details were included in the Financial Regulations dated April 2013.
9.2 A documented list of Finance Authorised Signatories is in place for the different functions within Finance. From a review of a number of functions undertaken by Finance we noted that items had been signed off by the following which was in line with the Authorised Signatory list. Details as follows:-
Function Authorised By Finance Review/Sign Off General Ledger FSC Accountant / Chief Reconciliations Accountant Bank Account Reconciliation FSC Accountant / Chief Accountant Journals Budget Holders Principal Accountant Sales Invoice Requests Budget Holders Chief Finance Officer Credit Notes Budget Holders Chief Accountant BACS Budget Holders Head of Financial Services / Chief Accountant Credit Cards Card Holders Assistant Director, Group Finance Expenses Line Managers Chief Accountant Season Ticket Loan Line Managers Chief Accountant Virements Budget Holders Principal Accountant CHAPS Budget Holders / Assistant Chief Accountant Director / Head of Financial Services Pay Release Forms LFB Principal Accountant Payroll Submissions Directorates Chief Accountant
9.3 Authorisation limits for payments are defined in the Financial Regulations and on the SAP system. In Finance, these are appropriately allocated to the Assistant Director, Group Finance and Head of Financial Services in line with their cost centre responsibilities. No other member of the Finance Unit has the authority to authorise payments.
9.4 Payments are submitted to the GLA Finance from Directorates for processing. All payments are authorised by budget holders and are checked by Finance Officers who are responsible for releasing the payments. Budget Holder threshold limits are contained on the SAP system and authorisation for the release of payments is governed by the approved list maintained by Finance.
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9.5 A record of all personnel who have access to the GLA bank account was provided and showed that forty-one members of staff, of which twenty one are based at GLA and the remaining at Financial Services Group at Transport for London. The list showed status and roles, date created, date last amended and details of the date and time of last log on for each person. In thirteen cases, it was shown that personnel had not logged on for over six months in some cases, log on was last recorded in 2010. There is a risk that too many personnel have access to the bank account and may now not require access.
Recommendation A review of access levels to the bank account is undertaken to identify personnel who do not require access any longer and to reduce the number of staff with access.
9.6 BACS payments are made by the GLA consisting of GLA, GLA Land and Property (GLAP), Internal Management System (IMS), transferred from the Land and Development Agency (LDA) and European Regional Development Fund (ERDF). BACS payments are made on a daily basis for GLA, GLAP; 2/3 times a week for IMS and once a week for ERDF (this may be changing to daily). Daily BACS runs are processed to ensure deadlines for payments within 10 days are made. It may be more beneficial for finance to run BACS payments on set dates rather than on a daily basis.
Recommendation Consideration is given to introducing set dates for processing BACs runs.
9.7 Cost centres have been allocated to the Assistant Director, Group Finance and Head of Financial Services and include threshold amounts per cost centre. Limits have been documented and are also included on the SAP system. We obtained payments made by the GLA to vendors from Finance for the period’s one to seven showing payments made by cost centres. From the payments we reviewed, authorisations were within the threshold amounts allocated.
10. Access to Systems
10.1 The SAP system is managed by the SAP Data Management Team (DMT) based at Transport for London (TfL). Standard forms are completed by GLA personnel and signed off by Head of Financial Services, Assistant Director or Director. Forms are sent to the one of the three allocated GLA gate keepers (Chief Accountant and two Accountants) who send the forms to the SAP DMT. Gate keepers are nominated by the Chief Accountant and attend a gate keeper’s course run by Tfl prior to being approved. The Chief Accountant was included as part of the SAP project and approved by the Head of Financial Services. From a review of set up forms for SAP access, Management Accountant profiles had been requested by Head of Financial Services, Assistant Director or Director and the reason for access was clearly shown on forms. A list of all Management March 2014 Financial Control Framework 7
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Accountants is maintained and set up forms are now being retained by finance as this did not previously happen.
10.2 Role profiles are allocated to GLA personnel on the SAP system as Cost Centre Managers (approvers) and shoppers (placing orders). GLA Finance staff are shown as Management Accountants and will have access to the SAP R3 module which is a financial reporting module responsible for management accounts. As part of this access, all Finance staff will have access to shopping carts, however, the system will not allow any shoppers to authorise expenditure and one member of staff has been allocated responsibility for placing orders. The only transactions input into SAP are in relation to Journals.
10.3 A Log of access to SAP is sent from SAP DMT on a weekly basis to GLA Finance gate keepers for monitoring purposes. GLA Human Resources also provide regular leaver reports to the gate keepers and these are checked to the SAP DMT reports. Monitoring of access to the SAP system including allocating and removing substitutes had been undertaken by the gate keepers on a monthly basis, however, all gate keepers have been allocated Management Accountant access to SAP and an independent review of access has not been undertaken to ensure appropriate activity by these members of staff.
Recommendation An independent review of the SAP access logs to the system is undertaken.
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RISK AND AUDIT ASSURANCE STATEMENT – DEFINITIONS
Overall Criteria Impact Rating There is a sound framework of control There is particularly effective operating effectively to mitigate key risks, management of key risks Substantial which is contributing to the achievement contributing to the achievement of of business objectives. business objectives. The control framework is adequate and Key risks are being managed controls to mitigate key risks are effectively, however, a number of Adequate generally operating effectively, although controls need to be improved to a number of controls need to improve to ensure business objectives are met. ensure business objectives are met. The control framework is not operating effectively to mitigate key risks. A Some improvement is required to Limited number of key controls are absent or are address key risks before business not being applied to meet business objectives can be met. objectives. A control framework is not in place to Significant improvement is required No mitigate key risks. The business area is to address key risks before business Assurance open to abuse, significant error or loss objectives can be achieved. and/or misappropriation.
RISK RATINGS Priority Categories recommendations according to their level of priority. 1 Critical risk issues for the attention of senior management to address control weakness that could have significant impact upon not only the system, function or process objectives, but also the achievement of the organisation’s objectives in relation to: • The efficient and effective use of resources • The safeguarding of assets • The preparation of reliable financial and operational information • Compliance with laws and regulations.
2 Major risk issues for the attention of senior management to address control weaknesses that has or is likely to have a significant impact upon the achievement of key system, function or process objectives. This weakness, whilst high impact for the system, function or process does not have a significant impact on the achievement of the overall organisational objectives. 3 Other recommendations for local management action to address risk and control weakness that has a low impact on the achievement of the key system, function or process objectives ; or this weakness has exposed the system, function or process to a key risk, however the likelihood is this risk occurring is low. 4 Minor matters need to address risk and control weakness that does not impact upon the achievement of key system, function or process or process objectives; however implementation of the recommendation would improve overall control.
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Ref. Findings and Risk Priority Recommendations Accepted Management Response and Target Date Responsibility 9.4 A number of individuals had not 2 A review of access levels to the bank Yes Access to RBS Bankline Already logged on to the banking systems for account is undertaken to identify has been reviewed and Implemented over six months but remained on the personnel who do not require access those officers no longer authorised list of users. There is a any longer and to reduce the number requiring access have been risk that too many personnel have of staff with access. removed. Going forward access to the bank account and may access to the system will be now not require access. regularly reviewed by Treasury Services and updated accordingly.
9.5 BACS payments are made on a daily 3 Consideration is given to introducing No The daily payment run N/A basis for GLA, GLAP; 2/3 times a set dates for processing BACs runs. assists the GLA in meeting week for IMS and once a week for the 10 day target for SMEs, Page 131 ERDF (this may be changing to so there is a trade-off if we daily). Daily BACS runs are agree to less BACS runs. processed to ensure deadlines for Less of an impact on 30 day pa yments within 10 days are made. vendors but the 10 day It may be more beneficial for finance target is so tight, especially to run BACS payments on set dates for any parked invoices, that rather than on a daily basis. reducing BACS runs could result in us losing 1 day which may make some 10 day invoices fail. 10.3 Monitoring of access to the SAP 3 An independent review of the SAP Yes GLA Gatekeepers submit Ongoing system including allocating and access logs to the system is requests to TfL IM to close removing substitutes had been undertaken. SAP accounts which are undertaken by the gate keepers on inactive, to re-activate SAP a monthly basis, however, all gate accounts, to set up new keepers have been allocated accounts or ask SAP users Management Accountant access to to remove incorrect SAP and an independent review of substitutes. The access has not been undertaken to Gatekeepers do not have ensure appropriate activity by these the access to SAP to
March 2014 Financial Control Framework 10 ACTION PLAN
Ref. Findings and Risk Priority Recommendations Accepted Management Response and Target Date Responsibility members of staff. undertake any of these tasks directly. However, we are planning a review of the SAP access linked to each SAP role. So the Gatekeepers will undertake a review of Shopper’s, Cost Centre Managers and Management Accountant’s SAP access and ensure that they only have access to the functions that they need to undertake their Page 132 roles and that there is segregation of duties, for example check that the management accountant role does not have access to payment functions or procurement functions. This will then be reviewed and action taken to remove any access that pose s a risk. Once this has been done, there is no need to monitor activity as it will be limited to what is permitted under the user’s SAP role.
March 2014 Financial Control Framework 11 Appendix 1g
DIRECTORATE OF AUDIT, RISK AND ASSURANCE
Internal Audit Service to the GLA
REVIEW OF DEBTORS CONTROL FRAMEWORK
Page 133 DISTRIBUTION LIST
Audit Team
Karen Welsh, Risk and Assurance Auditor Phil Drysdale, Audit Manager David Esling, Head of Audit and Assurance
Report Distribution List
Martin Clarke, Executive Director - Resources Doug Wilson, Head of Financial Services Frances Nguene, Chief Accountant Anthony Alleyne, Senior Finance Officer
Page 134 CONTENTS
Page EXECUTIVE SUMMARY
Background 1
Audit Assurance 1
Areas of Effective Control 1
Issues for Management Action 2
FINDINGS and RECOMMENDATIONS
Review Objectives 3
Scope 3
Identification of Income and Invoices Raised 3
Receipt of Income 4
Debt Collection and Write Offs 5
ACTION PLAN
Risk and Audit Assurance Statement – Definitions 7
Findings and Recommendations 8
APPENDIX
Follow Up Findings 9
Page 135 EXECUTIVE SUMMARY
1. Background
1.1 This review has been carried out as part of the Greater London Authority (GLA) 2013/14 internal audit plan. The objectives for debtors control are to ensure that all sources of income due to the GLA are identified and collected in a timely and accurate manner, are recorded properly in the accounting system and that outstanding debts are recovered promptly.
1.2 We are looking to provide assurance that the following potential risks to achieving the objectives are being effectively managed:
• Inadequate policy or procedure • Ill-defined roles, responsibilities and accountabilities • Lack of compliance to procedures • Unauthorised transactions • Non-recovery of debts • Inadequate write off procedures • Inadequate production and review of management information
1.3 We also reviewed the progress made in implementing the recommendations made following our audit in February 2013.
1.4 GLA budget holders are responsible for requesting sales invoices. The GLA Finance Team checks sales invoices for coding and VAT and input details onto the SAP system. The Accounts Payable Team at the Financial Services Centre (FSC) based at Transport for London (TfL) are responsible for issuing and chasing up invoices and the receipt of payments. For the Financial Year 2013/14 the total value of sales invoices raised is £13.9m.
2. Audit Assurance
Adequate Key risks are being managed effectively; however a number of controls need to be improved to ensure business objectives are met.
3. Areas of Effective Control
3.1 Sources of income have been properly identified and cost centres established to account for the income. Guidance for the completion of Sales Invoice Request Forms (SIRFs) is available to all GLA personnel and we found they were completed and authorised appropriately and supported by adequate documentation.
3.2 Payments are processed by Accounts Payment FSC at TfL and guidance in place informs that all monies are to be sent to the FSC for processing. Instructions and records are also maintained by GLA Finance for any monies which they may receive. The GLA Finance has also introduced a review of the
February 2014 Debtors Control Framework 1 Page 136 EXECUTIVE SUMMARY
time taken to bank cheques by FSC which are received by GLA Finance Team and transferred to the FSC for banking.
3.3 Monthly age debtor’s reports are received by GLA from FSC and reviewed by GLA Finance personnel. The level of debt at period 10 was reasonable and debts are being recovered promptly.
3.4 Adequate procedures are in place for the authorisation of write offs and authorisation levels have been established Guidance and standard cancellation forms are in place for the raising of credit notes.
3.5 Since our review of the Debtors Control Framework completed in February 2013 four of the agreed recommendations have been fully implemented and three partly implemented. The fees and charges schedule has been reviewed and updated, the five working day target for processing Sales Invoice Requests Forms are being met and negative balances in the aged debtors report are being cleared promptly. A summary of the follow up findings are attached at Appendix.
4. Issues for Management Action
4.1 SIRFs are not being submitted promptly and in a number of instances after the services have been provided, contrary to the requirements of the Financial Regulations 16.
4.2 Supporting information is submitted with the SIRFs; however, it is not always clear how fees and charges have been estimated.
4.3 The issues that remain to be addressed from our February 2013 review are Sales invoices are being raised after events have taken place, however, the Finance Unit are sending out regular reminders to Directorates that Sales Invoices must be raised prior to any goods or services being received. Supporting information is not always included with the Sales Invoice to show how costs have been established and TfL are unable to provide a management report on the level of payments made by BACS and those made by cheque. The GLA Finance Unit has introduced checks to determine the length of time cheques are being banked and this will be monitored.
February 2014 Debtors Control Framework 2 Page 137 FINDINGS AND RECOMMENDATIONS
5. Review Objectives
5.1 We reviewed the control framework in place to mitigate the risks to delivering an effective debtors system. In particular we looked to provide assurance that:
• All sources of income are identified and that, where applicable, invoices are raised in a timely, complete and accurate manner. • All payments are receipted completely, accurately and promptly. • Debt collection and recovery procedures are sufficient to minimise delays in receiving payments and adequate arrangements are in place for the request, review and authorisation of write-offs.
6. Scope
6.1 We focused our review on the operation of the controls around raising invoice requests, debt recovery and write-off of outstanding debt.
6.2 During this review we also followed up the implementation of the recommendations made following our audit of the Debtor Control Framework (incl. Fees and Charges) completed in February 2013. A summary of the follow up findings are attached at Appendix.
7. Identification of Income and Invoices Raised
7.1 The GLA have identified sources of income including land and property and have put in place a coding structure for the allocation of income. Categories include:
• Other Government Grants/Income • Other Public Sector Contributions/Income • Functional Bodies Contribution/Income • NHS Bodies Contribution/income • EU Grants • Other Local Authority Contributions • General Fees and Charges • Property Rental Revenue
7.2 The current coding structure was introduced in July 2011 and no further changes have been required since this time. Following the transfer of the HCA and LDA to the GLA, they were advised to use the same coding structure as the rest of the GLA.
7.3 Sales Invoice Request Forms (SIRFS) are in place and available to all GLA personnel. Guidance is available on the website for their completion and all completed forms are submitted to the GLA Finance Unit. GLA budget holders are responsible for requesting sales invoices. For the Financial Year 2013/14 to January 2014 the total value of sales invoices raised was £38.8m.
7.4 We checked a sample of Sales Invoice Request Forms for the Financial Year 2013/14. Standard SIRFs were located for all requests and had been checked by
February 2014 Debtors Control Framework 3 Page 138 FINDINGS AND RECOMMENDATIONS
GLA finance, they all contained appropriate descriptions, codes and VAT and were properly authorised. Supporting information had been submitted with SIRFs including signed contracts/agreements, purchase order numbers and amounts. However, it was not always clear how fees and charges had been calculated. There is a risk that incorrect costs may be requested and paid.
Recommendation A breakdown of how fees and charges costs have been estimated is submitted with each SIRF.
7.5 The GLA Financial Regulations issued in April 2013 state that invoices must be raised at the point the Authority has committed to provide the goods/services. From our review of SIRFs, 32% of requests had been raised after the services had been provided. GLA Finance send out regular reminders to Directorates in relation to raising invoices after events and this issue was also raised in our previous audit review undertaken in February 2013 but the practice continues .
Recommendation Senior Management are made aware of the Directorates not raising invoices at the point of goods/services being committed and who consistently submit SIRFs following services taking place.
7.6 Following checks undertaken by GLA Finance, SIRFs and supporting documentation are loaded onto the SAP system by the Finance Assistant and checked by the Senior Finance Officer. FSC will then issue invoices and receive payments due. Any issues are raised by FSC with the Senior Finance Officer.
7.7 GLA Finance has put in place a target of five days for processing SIRFs and this is measured from the date the SIRF was received in Finance to the date it was uploaded onto SAP. A monthly SIRF processing time report is prepared by the Senior Finance Officer and reviewed by the Chief Accountant. Reports for August to December 2013 showed the five day target was fully met for the majority of SIRFs and where the target had not been achieved reasons were clearly recorded.
8. Receipt of Income
8.1 The Accounts Receivable section at FSC are responsible for the raising of invoices, receiving payments and chasing outstanding amounts. The GLA Finance receives SIRFs following authorisation from Budget Holders and record details on the SAP system which are input by the Finance Assistant and reviewed by the Senior Finance Officer. BACS payments are received and processed by the FSC, GLA Finance are not involved in the receipt of payments. This provides adequate separation of duties in the raising of invoices, receiving payments and chasing outstanding amounts.
8.2 A Guidance note on cheque handling is in place and available to all GLA personnel. The guidance states that any payment by cheque should not be sent to the Authority but should be sent to Accounts Receivable at FSC. However,
February 2014 Debtors Control Framework 4 Page 139 FINDINGS AND RECOMMENDATIONS
some cheques are brought to the GLA Finance Unit. Instructions on dealing with this have been circulated to GLA Finance when this occurs. A log book maintained by the GLA Finance for the receipt of cheques showed date received, customer name, cheque amount received by and witnessed by. All entries in the book had been signed by two members of GLA finance staff.
8.3 GLA Finance Team carried out a study for the period January to June 2013 to determine how long it took FSC to bank cheques. There were wide variations found in the time to bank cheques between 8-59 days. The reason for the delays in banking was not shown. There is a risk that cheques not being banked promptly may result in delays in clearing debtor’s payments.
Recommendation Cheques received at GLA which are transferred to FSC are banked promptly and regular checks are undertaken to ensure this is in place.
8.4 FSC informed the GLA Finance that the reason for the delays was due to the location of the bank being some distance from their offices so they would wait until they had a collection of cheques before depositing. However, once presented with the information from GLA Finance they advised that they would reduce the lead time by banking more frequently.
8.5 Monthly bank reconciliations are undertaken by both FSC and GLA Finance Unit. Bank reconciliations had been undertaken by the GLA Accountant and reviewed by the Chief Accountant.
9. Debt Collection and Write Offs
9.1 We reviewed Monthly Aged Debtors reports for periods 9 and 10 which showed that outstanding debt for period 9 was £1.1m for GLA and £4.8m for GLA Land and Property and for period 10 £1.2m (GLA) and £4.8m (GLA Land and Property) respectively. We found these are adequately scrutinised by the Senior Finance Officer and reviewed on a regularly basis and the level of debt at period 10 to be reasonable.
9.2 We noted two disputed invoices for £315K and £13m for land and property. Adequate supporting documentation was on file for both. The £315k related to a European Regional Development Fund (ERDF) grant correction that was raised in July 2013. An agreement has been reached for the ERDF and the invoice will be paid in instalments to the GLA. The £13m is the remaining balance from a SIRF for £23.7m owed by Barrett Homes Ltd. The SIRF was supported by a signed contract which clearly detailed payments due to the GLA. Details on the SIRF showed the period over which the service will be covered which commenced September 2011 and will be due to complete in September 2014 when the remaining monies are due to be received.
9.3 The April 2013 Financial Regulations state that provided appropriate steps have been taken to recover monies due to the Authority, the Assistant Director – Finance may authorise the writing off of sums owed by a single debtor up to £50,000, sums between £50K and £125k will require the approval of the Executive
February 2014 Debtors Control Framework 5 Page 140 FINDINGS AND RECOMMENDATIONS
Director of Resources. Sums above £125k will require the approval of the Mayor. An annual report is submitted to the Mayor summarising the sums up to £125k that have been written off in the financial year.
9.4 A request for Assistant Director Decision – ADD91 for October 2013 had been submitted and showed two sums had been written off for £2,954.00 relating to a trust and £690 for overpayment of a final salary in 2008 where payment by the ex- employee had not been received. The ADD had been authorised by the Head of Financial Services. However, following the re-structure in Finance the above mentioned reference to Assistant Director – Finance is now interpreted to mean the Head of Financial Services.
9.5 MD1179, which was submitted to the Mayor in March 2013, requested write offs of two debts totalling £99,000 (£15,000 and £84,000). This related to an organisation who was to provide events in relation to the Olympics but who has since gone into administration in August 2012. The MD had been authorised by the Mayor in March 2013. No further write offs were identified for the current financial year 2013/14. Adequate systems are in place for the processing, recording and the authorisation of write offs.
9.6 Guidance is available to all GLA personnel relating to the cancellation of invoices. Guidance clearly states that cancelling sales invoices can only take place where genuine mistake has taken place and not because the invoice has not been paid. We reviewed a sample of ten credit note requests for the Financial Year 2013/14 and found standard Sales Invoice Cancellation Forms (SICF) were completed, original invoice numbers were recorded and supporting information was submitted with SICFs. All forms had been signed by the originator, authorised and signed by the Chief Accountant. Although forms had been signed there is no requirement on SICFs to print names and it was not always clear who had signed them. There is a risk that unauthorised personnel can approve the cancellation of invoices.
Recommendation The standard cancellation form (SICF) is amended to include a requirement to print names.
9.7 Once checked by GLA finance cancellation forms are input onto the SAP system by the Finance Assistant, checked by the Senior Finance Officer and authorised by the Chief Accountant. Credit notes are then processed by the FSC.
February 2014 Debtors Control Framework 6 Page 141 ACTION PLAN
RISK AND AUDIT ASSURANCE STATEMENT – DEFINITIONS
Overall Criteria Impact Rating There is a sound framework of control There is particularly effective operating effectively to mitigate key risks, management of key risks Substantial which is contributing to the achievement contributing to the achievement of of business objectives. business objectives. The control framework is adequate and Key risks are being managed controls to mitigate key risks are effectively; however, a number of Adequate generally operating effectively, although controls need to be improved to a number of controls need to improve to ensure business objectives are met. ensure business objectives are met. The control framework is not operating effectively to mitigate key risks. A Some improvement is required to Limited number of key controls are absent or are address key risks before business not being applied to meet business objectives can be met. objectives. A control framework is not in place to Significant improvement is required No mitigate key risks. The business area is to address key risks before business Assurance open to abuse, significant error or loss objectives can be achieved. and/or misappropriation.
RISK RATINGS Priority Categories recommendations according to their level of priority. 1 Critical risk issues for the attention of senior management to address control weakness that could have significant impact upon not only the system, function or process objectives, but also the achievement of the organisation’s objectives in relation to: • The efficient and effective use of resources • The safeguarding of assets • The preparation of reliable financial and operational information • Compliance with laws and regulations.
2 Major risk issues for the attention of senior management to address control weaknesses that has or is likely to have a significant impact upon the achievement of key system, function or process objectives. This weakness, whilst high impact for the system, function or process does not have a significant impact on the achievement of the overall organisational objectives. 3 Other recommendations for local management action to address risk and control weakness that has a low impact on the achievement of the key system, function or process objectives ; or this weakness has exposed the system, function or process to a key risk, however the likelihood is this risk occurring is low. 4 Minor matters need to address risk and control weakness that does not impact upon the achievement of key system, function or process or process objectives; however implementation of the recommendation would improve overall control.
February 2014 Debtors Control Framework 7 Page 142 ACTION PLAN
Ref. Findings and Risk Priority Recommendations Accepted Management Response Target Date and Responsibility
7.4 It is not always clear how fees and charges 3 A breakdown of how fees and charges Yes An email will be issued to March 14 had been calculated. costs have been estimated is submitted Directorates requesting a with each SIRF. breakdown of how charges are calculated for fees and There is a risk that incorrect costs may be charges. requested and paid.
7.5 From our review of SIRFs, 32% of requests 3 Senior Management are made aware of Yes The Aged Debtors report will April 14 had been raised after the services had been the Directorates not raising invoices at be reviewed and any late provided. GLA Finance send out regular the point of goods/services being invoices highlighted. reminders to Directorates in relation to raising committed and who consistently submit Budget Holders will be invoices after events and this issue was also SIRFs following services taking place. reminded of the need to raise raised in our previous audit review invoices in advance per the undertaken in February 2013 . Financial Regulations. Page 143 A line of text will be added to the monthly email.
8.3 There are wide variations in the time to bank 3 Cheques received at GLA which are Not Cheques are logged and cheques between 8-59 days. The reason for transferred to FSC are banked promptly applicable couriered to FSC weekly in the delays in banking was not shown. and regular checks are undertaken to accordance with internal GLA ensure this is in place. cheque policy. FSC will be There is a risk that cheques not being reminded of the need to bank banked promptly may result in delays in cheques promptly.FSC are clearing debtor’s payments. unable to produce a report that splits receipts between cheque and bacs which leads to difficulty when attempting to review lead time.
9.1 Although SICFS forms had been signed there 3 The standard cancellation form (SICF) Yes March 14 is no requirement to print names and it was is amended to include a requirement to not always clear who had signed the forms. print names. There is a risk that unauthorised personnel can approve the cancellation of invoices.
February 2014 Review of Debtors Control 8 APPENDIX
FOLLOW-UP FINDINGS
Previous Original Findings and Risk Identified Priority Original Recommendation Target Follow Up Finding report Date Ref.
7.1 A review of the fees and charges was due 3 The review of fees and charges is April 2013 Implemented to be presented to the Mayor in June/July presented to the Mayor in time to agree 2012, but has not yet been completed. a schedule of rates for the financial year A schedule of rates for the financial year 2013/14 and is regularly reviewed. 2013/14 has been produced and is Income opportunities may not be available to all GLA personnel. The maximised. schedule for 2014/15 is in the process of being updated. Page 144
7.5 Sales invoices are not being raised 3 All budget holders are reminded that June 2013 Partly Implemented promptly, and often being charged after Sales Invoice Request Forms are to be the event has taken place. raised promptly once the requirement Reminders are sent to Directorates when has been identified. invoice requests have been raised after The Financial Regulations requires debts events have taken place. to be raised prior to the delivery of goods When processing the Sales Invoice or the provision of service where possible. Request Forms the Finance Team A reminder was sent in January 2014 to all Failure to adhere to this increases the perform a visual check to ensure that Directorates by GLA Finance for sales likelihood of a debt not being paid, and the request has been raised as soon as invoice requests and credit notes for the having to be written off. was practicable, and where it is found prompt completion of forms. The reminder that this was not the case the budget also states that weekly emails will be sent holder is reminded of the requirement. informing Directorates of the need to submit requests and credit notes on a weekly basis. However, a number of requests are still raised after events have taken place.
February 2014 Review of Debtors Control 9 APPENDIX
7.7 A review of the 5 working day target for 3 The review of the five working day target April 2013 Implemented Finance to process Sales Invoice Request for processing Sales Invoice Request Form is underway, but not yet completed. Forms within the Finance Team is The five working day target for processing completed. Sales Invoice request is undertaken on a monthly basis and documented. For the majority of months, the five day target has been met and in cases where invoice have taken longer to process, reasons for the delay are clearly documented.
7.9 Insufficient information is not being 3 Guidance is issued to all budget holders June 2013 Partly Implemented Page 145 recorded on some of the Sales Invoice requesting adequate information in input Request Forms to enable independent onto the Sales Invoice Request Forms Supporting information is submitted with validation of the fees being charged. to properly evidence the amount Sales Invoice Request which show figures charged. however, it is not always clear how fees and charges have been established.
February 2014 Review of Debtors Control 10 APPENDIX
8.1 There is no evidence available to support 3 TfL provide a management report on the June 2013 Partly Implemented the prompt depositing of cheques by TfLs level of payments made by BACS and Financial Services Centre. those made by cheque and provide Tfl are unable to produce a management assurance that cheques received are report on the level of payments made by banked promptly. BACS and cheques. However, GLA finance undertook a review covering the period January to June 2013 to show the time taken for Tfl to process cheque payments. The review showed that cheque payments were not being banked promptly with some payments taking a few months to process.
9.4 There is no requirement for the Finance 3 Where budget holder action is June 2013 Implemented Page 146 Team to assist in the resolution of invoice necessary to ensure dispute resolution disputes and procedures are not is achieved, the Business Accountants It is the responsibility of Tfl and GLA documented. provide further assistance to ensure that Directorates to deal with any disputes in the necessary actions are undertaken relation to invoices. GLA Finance Failure to ensure that invoice disputes are promptly. undertakes checks on receipt of Sales settled promptly could delay payment to Invoice Requests as part of their the Authority and impact upon cash flow. responsibilities in relation to debtor’s control. Tfl have been allocated responsibility for processing invoices, receipt of payments and chasing payments.
However, disputed invoices are shown on aged debtors’ reports and GLA Finance are aware of these and the status.
February 2014 Review of Debtors Control 11 APPENDIX
9.7 Negative balances aged 85 days plus 3 Negative balances in the aged debtors September Implemented column of the aged debtors report have report are cleared promptly. 2013 not been investigated. Regular reviews are undertaken by GLA Finance on the aged debtors for negative There is a risk that reported debtor’s balances which are investigated and figures will be understated. cleared.
From the aged debtor reports for periods 8 and 9 for FY 2013/14 negative balances were not shown.
Page 147
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Page 148 Appendix 2a
DIRECTORATE OF AUDIT, RISK AND ASSURANCEFF Internal Audit Service to the GLA
Follow Up Review Of External Grant Funding Framework
Page 149 EXECUTIVE SUMMARY
1. Background
1.1 This audit follows up the progress made towards implementing the two agreed recommendations from the audit of the External Grant Funding Framework completed in June 2013.
2. Audit Assurance
Adequate
Key risks are being managed effectively; however, a number of controls need to be improved to ensure business objectives are met.
3. Key Findings
3.1 One recommendation has yet to be implemented and one has been partly implemented.
3.2 The comprehensive review of the Grant Funding Toolkit originally planned for completion by March 2014 has been deferred until September 2014 to ensure that the GLA can consider in more depth its future needs. The comprehensive review aims to clarify project managers’ roles and responsibilities, specify what key records should be retained and what checks should be undertaken and how they are evidenced as per our recommendations.
3.3 The improved retention of evidence to support project manager checks, that we recommended, has been encouraged via the delivery of a Grant Funding Agreement Toolkit workshop to Senior Project Managers. Two sessions took place in September 2013 led by the Assistant Director-Group Finance, for which there were 16 attendees. We recommend that similar workshops be developed and delivered after September 2014, reflecting the findings and revised requirements of the comprehensive review.
February 2014 External Grant Funding Framework Follow Up 1 Page 150 ACTION PLAN
Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
7.4 The roles and responsibilities of all the 3 The future revision of the Not Implemented The Grant Funding Toolkit is to be parties involved in the grant funding Grant Funding Toolkit revised and include clear roles process and record keeping requirements includes clear roles and The Head of Financial Services and responsibilities of those are not clearly defined. responsibilities and specifies and Head of Governance and involved in the grant funding the key records that must be Resilience having discussed this process and record keeping A lack of clearly defined roles and maintained. issue, have decided to defer the requirements responsibilities and record keeping review of the funding toolkit until requirements could lead to inconsistent next year to allow more time to Target Date: practices being adopted. consider how best to meet the GLA’s future needs. September 2014
9.1 A lack of retention of supporting evidence 3 Supporting evidence of Partly Implemented
Page 151 The Grant Funding Toolkit is to be of checks performed for all stages of the checks undertaken by project revised and will include a clear grant such as approval, milestones managers for all stages of Awareness of the existing requirement that supporting reached and overall assessment that the grants should be retained Funding Agreement Toolkit evidence of checks undertaken by Mayoral priorities have been met, could and the toolkit revised requirements to document project managers for all stages of lead to difficulties in verifying and accordingly. evidence and carry out checks grants is retained. confirming whether the grants have been has been raised via a workshop spent in accordance with the terms and delivered to Senior Project Target Date: conditions. We also found that the toolkit Managers relating to aspects of does not stipulate the level of checks that external grant funding. Two September 2014 should be carried out based on the type sessions took place in September and value of grant. 2013 led by the Assistant Director We will encourage compliance of Group Finance. with the revised requirements by devising and delivering workshop The comprehensive review due to based training for Senior Project take place for September 2014 Managers. will consider the need for enhanced documentation of Target Date: checks. September 2014
February 2014 External Grant Funding Framework Follow Up 2
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Page 152 Appendix 2b
DIRECTORATE OF AUDIT, RISK AND ASSURANCEFF Internal Audit Service to the GLA (Foundry Forms San/ Font size 20/ RBG: 160, 160, 170) FOLLOW UP REVIEW OF RISK MANAGEMENT FRAMEWORK
Page 153 EXECUTIVE SUMMARY
1. Background
1.1 This audit follows up the progress made towards implementing the agreed recommendations from the audit of Risk Management Framework that was completed in June 2013.
1.2 The original audit report contained six recommendations which were accepted by management.
2. Audit Objectives
2.1 Our objectives during this review were to:
• Establish whether the accepted recommendations have been implemented effectively.
• Assess the impact of any changes to the systems supporting risk management since the original review.
3. Audit Assurance
Adequate The risk management framework is adequate to manage the GLA’s Corporate Risks. Through the adoption of a recognised risk maturity framework the GLA will be able to assess the appropriate level for embedding risk management across the GLA.
4. Key Findings 4.1 Since our original audit review five recommendations have been fully implemented and one partially implemented with further work planned. 4.2 Arrangements have been made to remind all staff to use the Risk Management Framework effectively. Whilst there are no formal measures in place to measure the consistent application of the RMF there are adequate mechanisms in place to ensure that risks are managed effectively. That includes risk reporting for every GLA investment project and summary reports to the Investment and Performance Board. 4.3 A review has been undertaken to align the Corporate Risks Register to the GLA Business Plan 2013-2016. 4.4 A risk maturity framework is due to be presented to the CMT to enhance the risk management in the GLA. 4.5 Although CMT has decided not to mandate directorate and unit wide risk registers, Directors, Assistant Directors and Unit Heads have been reminded and encouraged to actively consider their value and adopt registers where they can assist in risk management locally.
February 2014 Risk ManagementPage Framework 154 - Follow Up 1 ACTION PLAN
Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Ref. Management Response 7.3 Arrangements are not in place 3 Arrangements are put in Implemented None to ensure that the requirements place to ensure that The RMF has been refreshed of the RMF are being applied requirements of the Risk and reminders were issued via on a consistent basis and as Management Framework the front page of the intranet, an intended, throughout the GLA. (RMF) are being applied on a intranet blog, London@Work, It is recognised that the consistent basis and best and, in addition, an email was intention is not to be too practice is adopted and sent to all Directors, Assistant prescriptive in applying the applied across the GLA. Directors and Unit Heads RMF guidance however risks (encouraging them to cascade may not be properly identified the RMF to staff). Although and escalated as appropriate there are no formal without adopting a consistent arrangements in place to approach. measure whether the RMF is
Page 155 being applied on a consistent basis, there are mechanisms in place to ensure all projects report monthly on risk. This culminates in a report to the Investment and Performance Board. 7.4 Although the Corporate Risk 2 A review is undertaken to Implemented None Register covers some of the ensure that the Corporate A review has been undertaken strategic objectives there is a Risk Register is aligned to to ensure that the Corporate need to ensure that all the the strategic objectives stated Risk Register is aligned to the strategic objectives stated in in the GLA Business Plan strategic objectives stated in the the to the GLA’s Business Plan 2013-2016 including shared GLA Business Plan 2013-2016. 2013 to 2016, which was risks. The RMF is updated as Update/refresh will be issued during the audit, are necessary to reflect this. undertaken on a periodic basis. covered fully. This provides an opportunity for ensuring the key risks to the agreed priorities and objectives are captured and evaluated within the GLA.
February 2014 Risk Management Framework - Follow Up 2
ACTION PLAN
Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Ref. Management Response 7.5 A Risk Maturity model provides 3 Consideration should be Partly Implemented Further Recommendation the mechanism for assessing given to adopting a risk Consideration has been given to CMT is presented with a proposal to the degree to which risk maturity model within the adopting the ALARM Risk adopt relevant elements of the management is embedded GLA supported by a risk Maturity Model within the GLA ALARM Risk Maturity Framework and within an organisation. The management plan to increase and discussions have taken asked to set a target’ ‘risk maturity’ GLA does not currently utilise the level of risk maturity and place to introduce this. level. such a model, which could be embed effective risk CMT will be asked to consider used to assist in driving management across the the level the GLA should aim to improvements in risk organisation. achieve. Target Date: 30 May 2014 management across the GLA Internal Audit will review and and in promoting a structured verify the supporting evidence to approach from a corporate assess the level of maturity perspective. This approach also achieved as part of the audit
Page 156 advocates defining the risk plan. appetite and developing a risk The GLA’s Risk Management management plan to increase Framework has been updated to the level of risk maturity and include the new GLA ‘risk fully embed effective risk appetite’ statement setting out management. the acceptable level of risk taking.
10.1 We found evidence of 3 The compilation of directorate Implemented None comprehensive local risk risk registers continues to be Although directorate and unit registers being maintained developed, where wide risk registers are not particularly in respect of appropriate, and mandated (previous CMT projects and programmes. The consideration is given to the decision) by the risk GLA was formerly a strategic revision of the risk management framework (RMF) body, and at that time it was management framework to the Directors, Assistant decided by the Corporate encourage this approach Directors and Unit Heads were Management Team (CMT) that throughout the organisation. reminded and encouraged to directorate risk registers were actively consider their value and not required. This was reported adopt registers where they can in previous audits, however, assist in risk management
February 2014 Risk Management Framework - Follow Up 3
ACTION PLAN
Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Ref. Management Response following the transfer of the locally. LDA and HCA functions, two of Internal Audit will, when the main directorates within the undertaking ongoing audits, GLA i.e. Land and Property and continue to encourage the use also the Development and of risk registers locally. Environment, are actively seeking to reintroduce directorate risk registers to ensure that all relevant risks are captured and escalated as appropriate. Risks are mentioned within the relevant Senior Management Team
Page 157 (SMT) of the directorate and in the associated papers but there is a need to capture the directorate level risks and where necessary escalate these to the corporate risk register.
11.2 Risk management training is 3 Risk management training Implemented None planned but has not yet taken takes place as planned The refreshed Governance place. The RMF was published through the e-learning eLearning includes content on on the GLA intranet and is to be modules as a minimum. risk and will be revised to supported by e-learning include definition of risk and modules which were to be linked appropriately to the RMF. introduced for all staff during Summer 2013.
February 2014 Risk Management Framework - Follow Up 4
ACTION PLAN
Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Ref. Management Response 11.3 Although the RMF document 3 Record keeping Implemented None does not explicitly detail how arrangements are reviewed Record keeping arrangements records relating to risk and the RMF amended with regards to risk management should be accordingly to ensure that all management have been maintained and retained. relevant staff are made reviewed and incorporated in Discussions with staff aware of the requirements of the revised RMF. confirmed that there is no retaining risk documentation. specific method of record keeping and it varies. Failure to maintain records properly could lead to problems with continuity and inadequate retention of corporate knowledge.
Page 158
February 2014 Risk Management Framework - Follow Up 5
Appendix 2c
DIRECTORATE OF AUDIT, RISK AND ASSURANCEFF Internal Audit Service to the GLA
Follow Up Review Of Creditor s Payment Framework
Page 159 EXECUTIVE SUMMARY
1. Background
1.1 This audit follows up the progress made towards implementing the three agreed recommendations from the audit of the Creditor Payment Framework completed in February 2013.
1.2 We also tested a sample of invoice payments for the period April to December 2013 to give assurance that payments are accurate, supported, timely, properly authorised and recorded in the accounting system.
2. Audit Assurance
Substantial
There is particularly effective management of key risks contributing to the achievement of business objectives.
3. Key Findings
3.1 Since our original review all three recommendations have been fully implemented.
3.2 Finance has issued reminders to all users of SAP detailing their responsibility to ensure that payments are supported by adequate documentation.
3.3 There is improved management oversight of key performance indicators which are now reported on a monthly based with timescales by senior management and reported as part of the Budget Monitoring Sub-Committee.
3.4 We tested a sample of 25 payments made since April 2013 and found that all had been correctly authorised in line with GLA delegated authority, were supported by a purchase order and had been correctly receipted.
3.5 The Finance Service Centre (FSC) provides monthly reporting on the number of invoices paid within the payment term. We found that 10 invoices were not paid within the 30 days payments terms but that for each there was a legitimate explanation for delay and no penalty interest, allowable under the Late Payment of Commercial Debt (Interest) Act 1998, had been claimed. We found that GLA Finance Services reviewed delayed or ‘parked’ invoices on a daily basis.
March 2014 Creditors Payment Framework Follow Up 1 Page 160 ACTION PLAN
Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
7.3 There is not always adequate supporting 3 • All approvers are reminded • The Head of Financial Implemented information scanned into SAP, or detailed in of their responsibility in Services has reminded the text box to validate that expenditure ensuring that payments are approvers via e-mail of their against purchase orders has been supported by adequate responsibility in ensuring that appropriately approved. documentation which payments are supported by provides the appropriate adequate documentation There is a risk that expenditure will be authority. which provides the committed without the appropriate authority. • appropriate authority. Where purchase orders are not supported by scanned • Head of Financial Service MDs/DDs, contracts or has reminded staff that other document the where purchase orders are reasons for this are not supported by scanned recorded appropriately Mayoral, Director, Assistant within SAP and evidence of Dir ector decisions, Page 161 verbal / email checks contracts or other documents undertaken is made within the reasons for this are SAP. recorded appropriately within • SAP and evidence of All scanned documentation verbal/email checks on SAP is made undertaken is made within accessible. SAP.
• All scanned documentation on SAP is now accessible. 8.4 Performance out-turns against the payment 3 If the KPIs for payment KPI 18: The percentage of Implemented of supplier invoices set targets are not timescales for SMEs continue to invoices from small and medium being achieved. be affected by delays officers sized enterprises paid within ten will need to consider further days, is reported each month by Failure to ensure suppliers are paid on time steps to improve performance. management to the Budget could result in claims for interest under the Monitoring Sub- Committee. We Late Payment of Commercial Debts reviewed Q1 and 2 submissions (Interest) Act 1998. and can confirm that performance has recovered and for both quarters exceeded the 90% target.
March 2014 Creditors Payment Framework Follow Up 2 ACTION PLAN
Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
9.3 It is not possible to effectively monitor 4 Non-GLA staff expenses claims The Chief Accountant has set up Implemented usage of the one-time vendor account as are processed through a a separate vendor account
payments to non-GLA staff are included in separate, dedicated account to through which non GLA staff the same account a vendors. ensure the use of the one-time expense claims are now supplier account is restricted to processed. This ensures that the
one time creditors as intended use of the one-time supplier and to facilitate effective account is restricted to one time monitoring. creditors as intended and has facilitated effective monitoring.
Page 162
March 2014 Creditors Payment Framework Follow Up 3 Appendix 2d
DIRECTORATE OF AUDIT, RISK AND ASSURANCEFF Internal Audit Service to the GLA
Follow Up Review Of Payroll Control Framework
Page 163 EXECUTIVE SUMMARY
1. Background
1.1 This audit follows up the progress made towards implementing the nine agreed recommendations from our review of the Payroll Control Framework completed in June 2013.
2. Audit Assurance
Substantial
There is particularly effective management of key risks contributing to the achievement of business objectives.
3. Key Findings
3.1 Since our original review eight recommendations have been fully implemented, and one remains outstanding.
3.2 Key performance indicators have been developed through the collaborative shared service arrangement. The Human Resources Team have introduced a monthly dip sampling process to independently review the GLA input details of starters, leavers and changes in basic pay directly into the Cyborg payroll system.
3.3 A new process governing the repayment of overpayments is in place and the level of overpayments has reduced. There is adequate separation of duties between the officer (Principal Accountant) who approves the Pay Release Forms, and the officer (Chief Accountant) who approves payments originating from the Finance Team. Establishment reconciliations are also now completed by Finance Services on a monthly basis; all queries raised are addressed with Human Resources and signed off.
3.4 Our recommendation, that accountabilities for payroll processes be clarified between the GLA Human Resources, GLA Finance and LFEPA, has not been implemented and has been deferred pending the introduction of a replacement for the current HR system, Cyborg. The new HR system is due to be in place by July 2014 and the HR Manager has undertaken to review, agree and document accountabilities for the payroll processes in time for its introduction.
February 2014 Payroll Control Framework Follow Up 1 Page 164 ACTION PLAN
Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
7.2 It is unclear where accountabilities lie for 3 Accountabilities for the The GLA plan to replace the Not Implemented payroll processes between GLA Human processing of payroll related current HR system which is Resources, GLA Finance and LFEPA. transactions between LFEPA, hosted by LFEPA. A decision on Original recommendation GLA Human Resources and the replacement system was applies: This lack of clarity could result in the GLA Finance are agreed and taken in February and following ineffective processing of payroll related documented. configuration the new system Accountabilities for the processing transactions. should be in place by July 2014. of payroll related transactions Following this the GLA HR between LFEPA, GLA Human Manager will implement a Resources and GLA Finance are specification and the working agreed and documented. arrangements for the new system. Management response:
When the new HR system is put Page 165 in place accountabilities for the processing of payroll related transactions between LFEPA, GLA Human Resources and GLA Finance are agreed and documented.
Senior Human Resources Manager
Target Date: July 2014
8.2 The lack of independent review of input into 3 All input into Cyborg is The Senior Human Resources Implemented Cyborg by Human Resources officers has independently verified and Manager has established a resulted in errors occurring. There is a risk validated against the Cyborg process for the periodic review of further errors will occur, or that report that is automatically transactions checking back to unauthorised changes will be made. produced. The reviewer signs source documentation to ensure and dates the Cyborg report as that input is accurate and timely. Management’s requirement that the input evidence that a check has been Monthly random sampling is report produced by Cyborg is retained on fully completed, and the report undertaken with errors recorded file is not being followed, as a number of retained in the HR file as and action taken. We found from
February 2014 Payroll Control Framework Follow Up 2
ACTION PLAN
Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response these had not been retained. evidence of the input and six pay runs that independent review. check of inputters changes were verified, validated, signed off and evidenced.
8.5 The current process for the monitoring and 3 • A policy on the recovery of • The Senior Human Implemented recovery of overpayments is not adequate overpayments is developed, Resources Manager and to ensure that full recovery is made at the approved and circulated Financial Services Team earliest opportunity. The lack of a policy in within Human Resources. have developed and relation to overpayments could result in implemented a new policy to overpayments that are not fully recovered manage the recovery of being written off without proper authority. overpayments including the setting out of clear roles and responsibilities of GLA
Page 166 Human Resources, GLA Finance and LFEPA Payroll.
• We reviewed the outstanding • The Finance Team report payments since our last monthly to Human review and found the Resources on the status of number has reduced through all outstanding action taken to recover the overpayments, and if an debt. The Finance Team expected payment is not report monthly to Human received then action is taken Resources on the status of immediately to recover the all outstanding debt. overpayments,
• A central record of all • Human Resources maintain overpayments is maintained a central record of all and utilised to identify any overpayments and utilised trend in the reasons for this to identify training needs overpayments occurring. and to action the reason for the overpayments.
February 2014 Payroll Control Framework Follow Up 3
ACTION PLAN
Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
9.3 Pay Release Forms are validated to Cyborg 3 The Pay Release Forms are Finance has introduced a new Implemented reports prior to them being signed as signed and dated as verified by control sheet that records the approved by an authorised signatory; the person completing the details of the officer who however they are not signed by the officer validation of the figures. performed the validation checks who performed the validation. and evidence of separation of duties between the officer The separation of duties between the officer completing the reconciliations and completing the reconciliations, and the the officer signing the Pay officer signing the Pay Release Forms Release is shown. cannot therefore be evidenced.
9.4 The Executive Director of Resources is 3 The Executive Director- Following the recent Finance Implemented responsible, under the Financial Resources documents who can reorganisation, authorisation is Regulations, for payroll payments. To approve Pay Release Forms, now undertaken by the Head of Page 167 ensure the effective authorisation of the and this should be properly Financial Services and, in their payroll delegated authority has been given reflected in the authorised absence can be delegated to the to other officers through including them on signatory list supplied to LFEPA Principal Revenue Accountant, the authorised signatory list provided to and also on the Pay Release Assistant Director of Finance, LFEPA. However, the level of delegation Forms. Senior Finance Manager, Finance has not been formally approved by the Manager, all of whom have Executive Director of Resources. signed the delegated authorisation sheet which is held There is a risk that an inexperienced officer by Finance and Payroll. will sign the Pay Release Forms, and that there will be inaccuracies in the supporting reconciliation that they are not aware of.
9.5 Authorisation of the Pay Release Forms is 3 There is an adequate separation We found that there is adequate Implemented being undertaken regularly by the Chief of duties between the officer separation of duties between the Accountant, who should only sign in the who approves the Pay Release officer (Principal Accountant) who absence of the Assistant Director, Finance. Forms, and the officer who approves the Pay Release Forms, This also represents a lack of separation of approves payments originating and the officer (Chief Accountant) duties as the Chief Accountant approves from the Finance Team. who approves payments payroll transactions for season ticket loans originating from the Finance and expenses and benefits. Team.
February 2014 Payroll Control Framework Follow Up 4
ACTION PLAN
Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
9.6 No reasonableness checks are performed 3 A reasonableness check to the Reasonableness checks to the Implemented prior to the Pay Release Forms being previous month’s payroll is previous month’s payroll were signed to ensure that the payroll run is not included in the pay release completed as part of the pay more than 5% different to the previous reconciliation process, with release reconciliation process. month’s. variations greater than a Each pay run showed a signed tolerance level of 5% being covering sheet detailing the Failure to perform a reasonableness check investigated and explained prior variation checks and explanations means that this control is not being applied to the pay run being authorised. where the tolerance was greater and could result in an error in the payroll than a tolerance level of 5%. going undetected.
9.8 Queries raised following the monthly 3 All queries arising from the November 2013 and December Implemented establishment reconciliation are not being establishment reconciliation are 2013 pay queries showed that the
Page 168 fully addressed. investigated and responded to in GLA Human Resources Team a timely fashion, and the had responded to reconciliation Failure to ensure that all queries are reconciliation is then signed off queries within two working weeks responded to means that the reconciliation by an independent third party. of them being raised. All process is ineffective, and could result in supporting documents had been inaccurate payments being made. supplied to finance which ensured a clear audit trail for the queries to be signed off and actioned as necessary.
11.2 The shared service arrangement with 3 The Authority review, at least LFEPA had produced a quarterly Implemented LFEPA is a collaborative arrangement, and annually, the effectiveness of Performance Statistics report. The as such does not contain any performance the shared service arrangement GLA Human Resources Team measures. for payroll against defined and Financial Services Team also performance indicators. meet quarterly with LFEPA to The Authority may not receive the service review and discuss progress that it is expecting. against six defined key performance indicators that have been agreed since our review.
February 2014 Payroll Control Framework Follow Up 5
Appendix 2e
DIRECTORATE OF AUDIT, RISK AND ASSURANCEFF Internal Audit Service to the GLA
London European Programmes Control Framework Follow up Review
Page 169 EXECUTIVE SUMMARY
1. Background
1.1 This audit follows up the progress made towards implementing the agreed recommendations from the audit of London European Programmes Control Framework that was completed in May 2013.
1.2 The internal audit report made three recommendations aimed at improving controls. Management accepted all the recommendations.
2. Audit Assurance
Adequate Key risks are being managed effectively; however, a number of controls need to be improved to ensure business objectives are met.
3. Key Findings
3.1 The overall control framework for London European Programmes has improved. Since the original review one recommendation has been fully implemented and two have been partly implemented.
3.2 The European Programmes Management Unit’s (EPMU) European Regional Development Fund (ERDF) team check ERDF projects expenditure both before and after the payment of claims (Article 13 checks). Department of Communities and Local Government (DCLG) internal auditors also carry out checks after expenditure has been paid on a randomly-chosen sample of projects (Article 16 checks). The payments teams at DCLG for ERDF and Department for Works and Pensions (DWP) for European Social Fund (ESF) also undertake checks. Since our last review DCLG have replaced local methodologies for selecting project claims for spot checks per Article 13, including the GLA’s, with a centralised risk based methodology. The new methodology is more proactive, focussing on claims already receiving Progress and Verification Visits (PAV) prior to their inclusion in the declaration and means that projects will be checked more promptly. A 2014 visit schedule plan has been issued and EPMU has carried out one review so far with another 14 scheduled for later in the year.
3.3 We can confirm that monthly reconciliations are now undertaken by GLA Finance and checked with EPMU personnel.
3.4 The ESF Managing Authority has agreed to provide a summary of actions and recommendations arising from A16 activity and drafts have been produced for the Article 13 reports for 2013. EPMU has started to record recommendations on an issue log and are reviewing the recommendations from A13 and A16 visits to identify the need for any further training or guidance.
March 2014 London European ProgrammesPage 170 Control Framework Follow Up 1 ACTION PLAN Ref. Original Finding and Risk Identified Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
8.4 Although A13 checks are undertaken, it can 3 Further and more prompt Partly implemented EPMU to ensure that the take up to a year or longer following the checks are undertaken on remaining 2014 reviews are submission of claims. As only a 10% expenditure and claims The original management carried out in accordance with sample of expenditure is reviewed on the submitted. response is no longer wholly the PAV schedule. submission of claims, there is a risk that any relevant because, since our last irregularities may not be identified for up to Management Response: - review, DCLG have replaced local Target Date: a year or more. Further action taken to identify methodologies for selecting causes of backlogs. This will project claims for spot checks per December 2014 allow better prioritisation of Article 13, including the GLA’s, claims issues. Formal letters to with a centralised risk based be sent to senior project staff methodology. The new by European Programmes methodology is more proactive, Director where required. focussing on claims already
Page 171 Reviews to be carried out at receiving Progress and least every 3 months in line Verification Visits (PAV) prior to with the quarterly claims cycle. their inclusion in the declaration and means that projects will be Target Date: On-going checked more promptly. A 2014 visit schedule plan has been issued and EPMU has carried out one review so far with another 14 scheduled for later in the year.
EPMU closely monitors the backlog of outstanding claims via the Programme Review Group (a sub-committee of the Local Management Committee) and the number of claims outstanding that are not held up pending resolution of outstanding Article 13, Article 16 or other matters has reduced from 82 at the end of 2012 to 70 at the end of 2013.
March 2014 London European Programmes Control Framework Follow Up 2
ACTION PLAN Ref. Original Finding and Risk Identified Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response
Since our initial review the European Programme Director has formally written to one project owner raising concerns over delays in resolving issues that EPMU have raised on ERDF claims submitted for payment.
9.3 The last reconciliation was carried out in 3 Reconciliations are carried out Implemented None July 2012; this was due to changes in by the Finance team on a staffing. However, if regular reconciliations monthly basis. Monthly reconciliations had been are not carried out any anomalies will not undertaken by EPMU and GLA be promptly identified. Management Response:- Finance.
Page 172 Implemented
Target Date: June 2013
10.3 Results from A13 visits for ESF are not 3 Issues arising from ESF A13 Partly implemented Once all final reports have been reported at LMC as visits are undertaken by and A16 checks are reviewed received from A13 and A16 the DWP. However, A13 reports are sent to to ensure all trends are The ESF Managing Authority has reviews EPMU will review the EPMU and this could facilitate further identified and if necessary agreed to provide a summary of recommendations and identify review. further training/guidance actions and recommendations further training or guidance. provided. arising from A16 activity for London. The summaries will be Target Date: Management Response:- produced in November/December each year following the cycle of June 2014 Issues arising from ESF A16 activity with the first being checks will be reviewed to received by EPMU in January ensure all trends are identified 2014. The final set of reports for and if necessary further the 2013 cycle of A13 on the spot training/guidance will be reviews have not yet been issued provided. by the Managing Authority.
Target Date: June 2013 EPMU have captured on a log all recommendations arising from
March 2014 London European Programmes Control Framework Follow Up 3
ACTION PLAN Ref. Original Finding and Risk Identified Priority Original Recommendation Follow Up Finding Further Recommendations and Management Response A13 and A16 reviews that have been received to date Once all recommendations have been received they will be reviewed and the need for further training or guidance identified.
Page 173
March 2014 London European Programmes Control Framework Follow Up 4
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Page 174 Appendix 3 GREATER LONDON AUTHORITY
INTERNAL AUDIT - PROGRESS REPORT
26 November 2013 to 28 February 2014
1. Summary
1.1 This report summarises the work conducted by the Directorate of Audit, Risk and Assurance (DARA) under the shared internal audit service arrangement with the Mayor’s Office for Policing and Crime (MOPAC). It identifies key areas of work carried out in the fourth quarter of 2013/14 and includes a summary of the audit work for the remainder of the financial year.
2. Audit Work Completed in the Fourth Quarter 2013/14
2.1 The following reviews from the 2013/14 audit plan have been finalised: • Energy and Environmental Strategy Framework and Implementation • London Plan and Implementation • ICT Incident and Problem Management • Precepting Control Framework • Financial Control Framework • Sickness Monitoring and Control • Debtors Control (including follow up) • Payroll - follow up • External Grants Control Framework - follow up • London European Programmes Control Framework – follow up • Risk Management Framework – follow up • Creditor Payments – follow up
(Annex A details the latest position on the implementation of recommendations and the assurance ratings).
2.2 Meetings with senior management have been held to discuss current fraud risks that may impact on the GLA. DARA have developed a fraud risk analysis, Annex B, that identifies and ranks these key fraud risks. A RAG rating has assessed the current likelihood of the fraud occurring. The fraud risk analysis will be used to:-
• Develop, in conjunction with the GLA, fraud prevention and fraud awareness activity. • Identify risk areas for pro-active research and review by the DARA analytical and specialist counter fraud resource. • Select areas of the business in which to deploy dedicated and specialist audit resources (e.g. procurement). • Assist with providing an assurance that areas of fraud risk are examined to highlight any issues at the earliest opportunity.
Page 175 2.3 In line with the requirement contained within the Public Sector Internal Audit Standards, and in consultation with the GLA senior management, the Internal Audit Charter, attached at Annex C, has been drawn up. The Charter is a formal document that defines Internal Audit’s purpose, authority, responsibility and scope of activity. It establishes internal audit’s position defines relationships with senior management and the Mayor of London.
3. Key Work Remaining for the Fourth Quarter 2013/14
3.1 The GLA Recruitment Framework review will be concluded by the end of the fourth quarter. Follow up reviews will include Gifts and Hospitality, Estate Strategy and Management of Assets and the Mayor’s Mentoring Programme will be followed up in the first quarter of 2014/15.
4. Internal Audit Performance
4.1 To date DARA have completed 431 days in respect of the 2013/14 internal audit plan (447 audit days). Annex D contains a summary of work completed to date and that planned for the remainder of the financial year.
4.2 Internal Audit is on target to complete 100% of the work programme to at least draft report stage by the year end.
Page 176 Annex A
Analysis of Assurance Rating and Recommendations
Risk Based Audits Assurance Total Priority Priority Priority Priority Not Level Recs 1 2 3 4 Accepted ICT Incident and Problem Substantial 0 Management
Precepting Control Substantial 1 1 Framework
Energy and Environmental Adequate 4 1 3 Strategy Framework and Implementation
London Plan Adequate 1 1
Financial Control Framework Adequate 3 1 1 1
Sickness Monitoring and Adequate 4 1 3 Control/ Attendance Management Debtors Control * Adequate 4 4
Follow-up Audits Assurance Total Fully Partly Not Additional Level Recs Implemented Implemented Implemented Recs Creditor Payments Substantial 3 3
Payroll Substantial 9 8 1
External Grants Adequate 2 1 1 Control Framework Risk Management Adequate 6 5 1 1 Framework London European Adequate 3 1 2 Programmes Control Framework Debtors Control * Adequate 7 3 4
Key: P1=Priority 1 P2 = Priority 2 P3 = Priority 3 P4 = Priority 4
*Risk Based Audit and follow up of previous audit
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Page 178 Annex B
GLA Fraud Risk Analysis
Introduction
The GLA has a responsibility for the effective stewardship of public money and for safeguarding against losses due to fraud and corruption. The anti-fraud and corruption policy sets outs the commitment to protect the public funds that the GLA administers and the link to effective counter fraud arrangements which help set the ethical standards for members and officers that the public expects.
The possible impacts of fraud include financial loss, reputational loss, breakdown of trust, political fall-out, impact on morale and risk of litigation.’
To understand the level of fraud risk to which the GLA is exposed and the implications for the wider control environment, a fraud risk analysis has been developed.
This analysis includes identifying fraud risk, assessing the likelihood and impact, and working towards minimising the risk to the GLA of the occurrence of fraud.
Methodology
The initial stage of the analysis was to identify the fraud risks within the GLA. This was achieved by evaluating business areas for fraud risks, reviewing findings of audit reports, consulting GLA staff, using information on historic cases of fraud and knowledge of generic fraud risks in public sector organisations.
The next stage was to establish the likelihood and potential effect of the identified fraud risks should they occur. Systems audited by DARA were matched against the potential fraud risks identified at the initial stage. The risks were then weighted using the scoring methodology within the DARA Audit Needs Assessment (ANA).
The risk criteria for scoring each system in the ANA includes the level of expenditure per year, level of income, other funds affected, sensitivity of system or data, expected quality of control, impact of the system on operational objectives and the time elapsed since last audited. To reflect that this was a fraud risk analysis the time factor was taken out of the scoring and two additional criteria were added - staff accessibility and reputational damage. An overall fraud risk score for each system was subsequently determined. The fraud risks were then ranked to give a range and determine if they fell into a high, medium or low risk level. The results have been plotted on the pie chart below.
Page 179 GLA FRAUD RISK IDENTIFICATION Annex B
Misuse of Grant/Project Funding Inappropriate relationships with Forged/false sick notes False loan applications suppliers Inappropriate receipt of gifts/hospitality Collusion- Misuse of treasury monies procurement/Contract Fraudulent letting of building Management space Suppliers submitting false or Employment under false duplicate invoices pretences False creation of suppliers Working elsewhere on sick leave Theft of misappropriation of Unable to discredit GLA monies false civil claims
Page 180 Supplier submitting invoices Temp staff submitting for work contracted but not false/inflated timesheets delivered Improper Use of Mayoral Use of Corporate cards for planning powers personal gain
Diversion/theft of monies due False/inflated expense claims to GLA/Project Funds (members)
Theft of misuse of Assets Misuse of European Funds (mobile and fixed) Estates management Inappropriate giving of (fraudulent letting and contract hospitality False/inflated expense claims fraud) Ghost/echo employees Employment of consultant staff (staff) Overpayment of salary
Annex C
DIRECTORATE OF AUDIT, RISK AND ASSURANCE Internal Audit Service for the GLA
INTERNAL AUDIT CHARTER
Page 181
Introduction
The GLA Head of Paid Service and the Executive Director of Resources are responsible for advising on effective systems of internal risk control. These arrangements need to ensure compliance with the law and proper standards. Arrangements for financial and internal control, and for managing risk, are to be addressed in Annual Governance Reports.
The Executive Director of Resources is responsible for ensuring an adequate and effective internal audit function is operating and for reporting to the Mayor and Assembly should the possibility arise of a failure to maintain this requirement.
The Mayor, on the recommendation of the Executive Director of Resources and in consultation with an appropriate committee of the Assembly, approves the appointment of the Internal Audit supplier.
The Executive Director of Resources will submit an annual audit plan to the Mayor and appropriate committee of the Assembly. The Executive Director of Resources will monitor the operation of the internal audit service against the annual audit plan and a report will be regularly made on internal audit’s performance against the plan to the Mayor and to an appropriate committee of the Assembly.
The Directorate of Audit, Risk and Assurance (DARA) as the Internal Audit Suppiler, provides the internal audit service for the Greater London Authority (GLA).
This Charter defines DARA’s purpose, authority, responsibility and scope of activity. It establishes the DARA position in relation to the GLA, including the nature of the Director of Audit, Risk and Assurance’s reporting relationship with the GLA Head of Paid Service, GLA Corporate Management Team, Executive Director of Resources, Business Directors and the Audit Panel.
The Charter also provides the authority for DARA access to records, personnel and physical properties and helps to explain DARA’s role in providing assurance to the GLA.
Definition and Purpose of Internal Audit
‘Internal Audit is an independent and objective assurance and consulting activity designed to add value and improve activities and operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, internal control and governance processes’1.
DARA is an independent assurance function and has an important role in helping the GLA to demonstrate the highest standards of corporate governance, public accountability and transparency in the conduct of its business.
Responsibility of Internal Audit
The Director of Audit, Risk and Assurance has a statutory responsibility to give an annual opinion on the effectiveness the risk management, internal control and governance framework supporting the achievement of GLA objectives. The audit approach is based on supporting the delivery of agreed objectives, giving assurance that key risks to the 1 Chartered Institute of Internal Auditors
Page 182 INTERNAL AUDIT CHARTER MARCH 2014
achievement of strategic priorities and outcomes are properly identified and effectively managed.
Statutory Authority
Internal Audit is a statutory service in the context of the Accounts and Audit Regulations 2003 (and 2006 and 2011 amendments), which require the GLA to maintain an adequate and effective system of internal control to facilitate the effective exercise of its functions and this includes the arrangements for the management of risk.
DARA requires access to records, assets, personnel and premises and has the authority to obtain such information and/or explanations that it considers necessary to fulfill its statutory responsibility (access also extends to partner bodies or external contractors). This statutory role is recognised and endorsed within the GLA Financial Regulations, which give DARA the necessary authority.
Regulation 4 of the 2011 Accounts and Audit Regulations requires that ‘the relevant body is responsible for ensuring that the body has a sound system of internal control which facilitates the effective exercise of that body’s functions and which includes the arrangements for the management of risk. .’ The GLA is also required to review at least once a year the effectiveness of its internal control systems for inclusion in the annual governance statement. The work of DARA informs that standard.
Internal Audit has a key role to play in assisting the GLA to fulfil the statutory roles required by this legislation.
Professional Standards and Codes of Ethics
DARA’s internal auditors are required to follow professional standards including the Chartered Institute of Internal Auditors (CIIA), International Professional Practices Framework (IPPF) and the Public Sector Internal Auditing Standards (PSIAS). Each include A Code of Ethics based on the core principles of integrity, objectivity, confidentiality and competence. These principles are supported by rules of conduct to direct the behaviour of internal auditors. The Director of Audit, Risk and Assurance is required to report any areas of non-compliance with the standards on an annual basis.
Independence and Objectivity
The requirement for the independence of internal audit is specified in the CIIA Standards, IPPF and PSIAS. Internal Auditors must exhibit the highest level of objectivity and make balanced assessments ensuring they are not unduly influenced by their own interests or by others in forming judgements. In meeting these standards;
The Director of Audit, Risk and Assurance: • Has direct and unrestricted access to the Mayor of London, GLA Head of Paid Service, and the Chair of the Audit Panel. • Reports at a senior level within the GLA allowing DARA to fulfil its responsibilities. • Communicates and interacts directly with the GLA Corporate Management Team, Executive Director of Resources, Directors and the Head of Risk and Governance. • Confirms annually, the organisational independence of DARA.
Page 183 INTERNAL AUDIT CHARTER MARCH 2014
• Is responsible for producing the DARA annual work programme. • Is free to determine the scope of internal auditing, perform audit activity and communicate results. • Discloses to an appropriate party any conflict of interest that could impair their objectivity. • Ensures assignments for audit responsibilities are rotated periodically within the DARA team.
DARA staff: • Provide an annual declaration of any actual or potential conflicts of interest that might compromise their objectivity in the conduct of particular audits. • Make a declaration if such a conflict of interest is identified in the course of any piece of audit or consultancy work. • Provide advice but cannot assume management responsibility for decision making. • Provide consultancy services but cannot give assurance services on areas where they have previously undertaken consultancy work. • Cannot provide assurance or services to areas they were previously responsible for. • If a personal conflict of interest is identified do not conduct work in that area. • .
Reporting Arrangements
The PSIAS require the Director of Audit, Risk and Assurance to report to senior management and Audit Panel under their own name and have ultimate authority for the content and conclusions of audit reports. (See also the section on independence.) The Director of Audit, Risk and Assurance reports periodically on DARA’s purpose, authority and responsibility and regularly reports on: • Significant risk exposures and control issues, including fraud risks and governance issues and any emerging themes or trends. • The adequacy and effectiveness of the GLA control framework. • Progress against the approved annual plan.
The frequency and content of reporting is determined in discussion with senior management and the joint Audit Panel and depends upon the importance of the information and the urgency of related actions to be taken.
Scope of Work
DARA evaluates and contributes to the improvement of governance, risk management and the internal control framework;
Governance Assessing and making appropriate recommendations for improving governance, including the arrangements for promoting appropriate ethics and values, ensuring effective performance management, communicating appropriate risk and control information and ensuring governance arrangements support GLA priorities and objectives.
Risk Management Evaluating the effectiveness of and contributing to the improvement of risk management activities. This includes an assessment of whether significant risks to the achievement of
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agreed strategic priorities and objectives are identified, appropriate risk responses are selected that align risks with the GLA risk appetite and whether there are suitable arrangements for monitoring and reporting on risks.
Internal Control Framework Reviewing the efficiency and effectiveness of the internal control framework and providing an assessment of the extent to which it manages the risks that may impact on the achievement of strategic objectives. In making this assessment DARA consider whether controls established by management within the GLA provide assurance on the:
• Reliability and integrity of financial and operational information. • Effectiveness and efficiency of operations and programmes. • Safeguarding of assets, resources, staff and information. • Compliance with applicable laws, regulations, policies and procedures.
Fraud Related Work
Responsibility for the prevention and detection of fraud and corruption is a matter for all GLA employees. The Executive Director of Resources must be kept informed of any instances of suspected fraud or corruption. A confidential reporting mechanism is available for employees of the GLA. The DARA Counter Fraud Team investigates matters of internal fraud relating to GLA staff and contractors.
DARA conduct a pro-active fraud prevention programme and provide assurance on the management of relevant fraud risks within the corporate risk management framework.
Consulting Services
DARA provide independent and objective advice to help management improve their risk management, control and governance arrangements in key areas of the business that are subject to significant change. Change management and control advice assists the GLA in delivering value for money resulting in the more economic, effective and efficient use of resources.
Resourcing
The Director of Audit, Risk and Assurance informs GLA senior management and the Audit Panel of DARA plans and resource requirements, including any significant interim changes for review and approval. The Director ensures resources are appropriate, sufficient and effectively deployed to achieve the approved the plan.
High standards of competency and qualification are specified. Professional competence is maintained through an appropriate on-going learning and professional development programme that incorporates Continuing Professional Development to meet the PSIAS.
Assurance Framework
Assurance can come from a number of sources. The ‘Three Lines of Defence’ model is widely considered to be best practice and helps organisations to understand where and how assurance is achieved;
Page 185 INTERNAL AUDIT CHARTER MARCH 2014
First Line Broadly for the GLA, the first line covers management assurance which is day to day risk management activity and monitoring and managing performance to establish agreed targets are being met.
Second Line This work is associated with oversight of management review activity. It is separate from those who have responsibility for delivery but not independent of the GLA management chain of command. This includes compliance assessments or reviews carried out to determine policy and key process are being met in line with specific areas of risk.
Third Line This relates to independent and more objective assurance and in the GLA focuses on the role of DARA, which through an agreed programme of work are able to provide an objective opinion on governance, risk management and internal control. DARA can take assurance where appropriate from internal review activity and other independent assurance providers e.g. External Audit. DARA are also responsible for reporting on the effectiveness of the assurance framework to senior management and the Audit Panel.
The Director of Audit, Risk and Assurance meets regularly with the External Auditors, and other assurance providers as appropriate, to discuss respective approaches, scope of work, annual plans and the areas of work upon which they may place reliance.
Page 186 INTERNAL AUDIT CHARTER MARCH 2014 GLA Internal Audit Plan 2013/14 Annex !
RISK BASED REVIEWS April May June July Aug Sept Oct Nov Dec Jan Feb Mar
Mayor's Mentoring Programme (2012/13) CC Estate Strategy and Management of Assets (2012/13) CC Mayor's Economic Development Strategy CC Housing Grants - Monitoring and Control Framework CC Housing Programmes (1) Affordable Homes CC Housing Programmes (2) Decent Homes C C Energy and Environmental Policy Development and CC Implementation London Plan and Implementation CC Performance Management Framework C Regeneration Funding Control Framework CC Decision Making Framework - Mayoral and Directorate CC GLA Recruitment Control Framework WIP Sickness Monitoring and Control/Attendance Management CC
MATERIAL SYSTEMS April May June July Aug Sept Oct Nov Dec Jan Feb Mar
Members Allowances and Expenses Control Framework follow C up Treasury Management Control Framework follow up C General Ledger C Creditor Payments C Debtors Control C Precepting Control Framework C Payroll C Financial Control Framework C External Grants Control Framework follow up C SPECIALIST REVIEWS - PROCUREMENT
April May June July Aug Sept Oct Nov Dec Jan Feb Mar
ICT Procurement CC Contract Monitoring follow up C SPECIALIST REVIEWS - ICT
April May June July Aug Sept Oct Nov Dec Jan Feb Mar
Network/Internet Security C Desktop Management C ICT Incident and Problem Management C
FOLLOW UP REVIEWS April May June July Aug Sept Oct Nov Dec Jan Feb Mar
2012 Employment and Skills Legacy Programme C Cheque Handling Process C Facilities Management C Gifts and Hospitality P Use of Agency Staffing and Consultants C Capital Programme Monitoring and Control C Estate Strategy and Management of Assets P Risk Management C External Grant Funding - European Programmes C
Legend Completed - C Work in progress - WIP Planned - P
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Page 188 Appendix 4
GLA Internal Audit Plan 2014/15
Introduction This report outlines the strategic approach taken by the MOPAC Directorate, Audit, Risk and Assurance in providing the internal audit service to the GLA under a shared service arrangement. It also contains the proposed GLA audit plan for 2014/15.
Roles and Responsibilities Internal Audit’s role is to provide an assurance function giving an independent and objective opinion on the risk management, control and governance arrangements in the GLA. It also objectively examines, evaluates and reports on the adequacy of the control environment in contributing to the economic, efficient and effective use of GLA resources.
The responsibility for effective control, risk management and governance rests with management. The internal audit opinion and supporting work programme will assist the Executive Director of Resources in the discharge of his statutory responsibilities but does not supersede them.
Audit Independence The Head of Audit for the GLA reports to the Executive Director of Resources and has direct access to the Mayor and Chair of the Audit Panel. Internal Audit staff have the required access to all GLA records, assets and personnel, and the GLA Head of Audit reports independently to senior management in line with professional standards. Audit independence and appropriate reporting lines within the GLA group are preserved under this arrangement.
Strategic Approach The overall approach is risk based and focused on reviewing areas that are key to achieving GLA priorities and objectives. It is designed to meet the statutory requirement for an annual opinion on the adequacy and effectiveness of the GLA internal control environment, whilst recognising this is a time of significant change with a demand for improving efficiency and achieving better value for money.
Audit Planning and Work Programme Review activity is planned on a three year cycle and is supported by a risk assessment informed by management’s evaluation of current risk. The annual plan (attached at Annex) will be reviewed on a quarterly basis. Completion of the annual plan enables the GLA Head of Audit to provide the opinion on the effectiveness of the control environment which, in turn, informs the Annual Governance Statement published with the GLA Annual Accounts.
Internal Audit works in consultation with management, striking the appropriate balance between providing assurance, challenge and advice. Opportunities for improving efficiency and value for money are considered in all aspects of work conducted.
Key strands to the work programme for 2014/15 include;
Risk based audits - provide much of the evidence to support the annual opinion. Internal Audit reports give an opinion on the effectiveness of controls in place to manage key risks to achieving objectives and identify areas for improvement. Key reviews planned for 2014/15 include; London’s European Office; GLA Income from Estates; Rough Sleepers projects; Investment Partners management framework; Delivery of the Mayor’s Outer London Fund and Mayor’s Regeneration Fund; Sport’s Legacy Programme; Youth European Fund and GLA Procurement.
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An annual review of the GLA risk management and corporate governance arrangements - to provide assurance and recommend improvements as appropriate. We plan to follow up our audit of risk maturity completed in 2012/13 and conduct risk based reviews in key governance areas including; Analytical review of Performance Management; and Mayor’s Planning Powers.
Follow Up audits – to ensure audit recommendations arising from the internal audit reviews carried out in 2013/14 have been implemented effectively.
Specialist reviews - focusing on specialist areas of the business, in particular ICT. Specialist skills will be utilised to evaluate the risks and identify areas for improvement in key areas such as Remote working and Data Management; Mobile Portable Devices and ICT key application reviews (Financial systems).
Material systems - reviewing key financial systems and testing key controls in operation. This work will be conducted in liaison with external audit. In 201415 there will be a particular focus on providing assurance around the key financial controls in place within the GLA Finance Directorate and operating within SAP under the shared service arrangement with TfL.
Analytical review – analysing key financial systems to identify potential areas of concern and provide assurance on the management of high risk/cost and sensitive areas. This work will be used to support the review of key material systems.
Advising change programmes and projects - utilising expertise in risk and control to advise on new and developing systems at an early stage in the development process. This work will also provide assurance to senior management on the effectiveness of programme and project management .
Counter fraud activity – contributing to a pro-active fraud awareness programme as agreed with GLA senior management and investigating any potential instances of fraud and abuse. Where fraud occurs there will be analysis of the underlying risk and compliance issues to inform preventative action.
Service Provision
Professional Standards All audit work is conducted in line with professional standards and recognised best practice. Internal Audit adopts the CIPFA ‘Code of Practice for Internal Audit in Local Government in the UK 2006’. External Audit use the standards laid down in the Code to assess the effectiveness of internal audit and to provide independent assurance on the quality of the service we provide. Each member of the Audit Team is also bound by the professional standards and code of ethics of their professional body, for example, CIPFA and the Chartered Institute of Internal Auditors. All aspects of our work are also subject to the appropriate level of supervision and review.
Conduct of Assignments Key stages for each aspect of the work programme are summarised as follows;
Risk Based Reviews: • Scope area of activity identifying key risks, audit objectives and approach • Agree terms of reference with senior management prior to review • Assess key risks and identify and evaluate key controls in place • Test operation of key controls • Evaluate management of key risks
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• Report to senior management giving assurance based on pre-defined criteria • Issue a discussion draft report to confirm factual accuracy • Issue formal draft for senior management response • Issue final report including an agreed action plan
Advisory Work: • Issue terms of reference to the Chair of the project/programme board • Attend project boards • Review and advise on project documentation • Report to project/programme lead/Chair on any emerging risk or governance issues • Provide ad hoc advice to management on risk and control issues
Counter Fraud Activity: • Agree preventative work programme with senior management • Conduct investigations in line with recognised best practice • Maintain confidential whistleblowing line • Inform senior management of any allegation as appropriate • Conduct investigations confidentially and securely • Preserve evidential trail • Report to senior management on the outcome and make recommendations to address any underlying issues with risk and control
Integrated Assurance Review activity will be co-ordinated with external audit. This will include the exchange of risk assessments and work plans and meeting on a regular basis. Reliance will also be placed on internal review activity within the GLA group where appropriate. The level of reliance placed on other review activity will be based on an evaluation of the adequacy of their review framework.
Audit Performance All audit work is supported by a robust performance management framework. The GLA Head of Audit provides regular reports to the GLA Audit Panel on audit performance. This includes an annual report giving an independent annual opinion on the control environment and a summary of audit performance.
Staff Resources
Head of Audit A professionally qualified Head of Audit for the GLA fulfils the professional responsibilities required of the role including; • Producing a dynamic risk based annual audit plan for the GLA • Reporting to senior management following the completion of each audit review • Ensuring all work is delivered to meet professional standards • Giving quarterly updates on progress against the plan to the Audit Panel • Maintaining an effective relationship with external audit • Producing an annual report providing an independent annual opinion on the GLA internal control environment • Meeting on a regular basis with the GLA senior management team, the Executive Director of Resources and the Chair of the Audit Panel (if necessary)
Audit Team A professionally qualified Audit Manager (qualified to CCAB or CMIIA) oversees the risk review and advisory work conducted by a Risk and Assurance Auditor (qualified to at least AAT or PIIA),
Page 191 and will also conduct the more complex reviews. All work is delivered to meet CIPFA standards. The specialist audits are conducted by appropriately qualified and trained auditors.
Counter Fraud Counter fraud activity is carried out by counter fraud specialists under the supervision of a senior manager in counter fraud, and supported by analysis.
GLA Internal Audit Plan 2014/15
The attached Annex highlights the areas for audit coverage in 2014/15 and includes a provision of 443 days, which is in line with the allocation for 2014/15.
The work programme is based on a review of the GLA risk register, the GLA objectives and the current Internal Audit plan and assessment of need. Discussions with GLA senior managers have also informed the plan. Further work will be completed in the first quarter of the year to confirm the exact scope and timing of each review with the appropriate senior manager. A plan for each quarter of 2014/15 will then be produced. The annual plan will be reviewed on a quarterly basis to ensure it remains responsive to any key emerging risks. Any suggested changes will be subject to the approval of the Executive Director of Resources and the Audit Panel.
Cost The total cost of this level of service provision is £178,097.
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Draft GLA Internal Audit Plan 2014/15
Governance Framework Days Quarter Performance Management Analytical Review – An analytical review of 20 1 the accuracy and integrity of data gathered to effective support performance management and review. Mayor’s Office Days Quarter London’s European Office – A review of the business support framework 15 2 and monitoring arrangements for the Brussels Office and associated activities. Housing and Land Days Quarter Income from the GLA Estate – A review of arrangements in place with 25 1 legacy organisations and related parties such as GLAP and GVC for income collection generated from the estate.
Rough Sleepers Project – A review of the rough sleeping services and 25 3 projects funded by the GLA.
Housing - A review of the Investment Partners management framework 25 2 supporting delivery of the Mayor’s Housing Covenant. This will focus on Intermediate Housing and Homes for working Londoners evaluating bids from suppliers and the monitoring and reporting on programme delivery.
Development, Enterprise and Environment Days Quarter Delivery of Mayor's Outer London Fund & Mayor’s Regeneration Fund 15 1 Following a review of the framework in the 2013/14 audit plan this audit will cover a detailed examination of a sample schemes.
Growing Places Fund – Following our review of the Mayor’s Economic 15 4 Development Strategy a detailed review will be undertaken of the Growing Places Fund covering the programme delivery via LEP including reviewing the effectiveness of monitoring and reporting arrangements for the Programme.
15 3 Mayor’s Planning Powers (incl. income from fees and charges) -
Review of the framework for processing planning applications concentrating on income collection.
London Enterprise Fund (with MRF) – A review of the evaluation of bids 15 4 for and the effectiveness of the monitoring and funding of the delivery programmes. Communities and Intelligence Days Quarter Sports Legacy Programme – A review of the outcomes determined for 15 2 the achievement and delivery of the Sports Legacy Programme.
Youth European Social Fund (ESF) Projects – A review of the 15 1 framework in place to manage delivery of the programme and compliance with the ESF funding requirements. Resources Days Quarter Procurement – A review of the shared service procurement arrangements 15 2 in place to ensure effective services are delivered.
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Follow Up Reviews Days Quarter
Performance Management Framework 3 2
Estates Strategy and Management of Assets 3 1
Housing Grants Monitoring and Control 3 4
Decent Homes Programme 3 1
Mayors Economic Development Strategy 3 3
Energy and Environment Policy Development and Implementation 3 2
London Plan Implementation 3 2
Regeneration Funding Control 3 3
ICT Procurement 3 3
Recruitment 3 4
Sickness Absence Monitoring 3 3
Mayor’s Mentoring Programme 3 2
Decision Making Framework – Mayoral and Directorate 3 1 Specialist Reviews - ICT Days Quarter Remote Working and Data Management 15 2
Mobile Portable Devices 15 3
Key application Reviews – Finance (TfL etc) 15 2 Material Systems – Key Financial Systems Days Quarter Risk Based Reviews Budgeting Control Framework 15 3
Payroll – Review of main areas 15 3
Key Controls and Analytical Review Creditors – Ordering, Receiving & Payments 15 3
Treasury Management 5 4
Sundry Income / Debtors (incl. fees and charges) 5 3
Follow Up Reviews Precepting Control Framework 3
General Ledger 3
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Financial Control Framework 3
Counter Fraud Activity Days Fraud Awareness Programme 5
NFI and Financial System Data Analysis 5
Fraud Investigations 15 Advisory/Systems Development Activity Days Advising Change Programmes/Developing Systems 10
Planning and Management Days Planning/Liaison 15
Audit Panel – Attendance and Reporting 10
Contingency 20 Total Days 443
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Page 196 Agenda Item 7
Subject: Risk Management Report to: Audit Panel Report of: Executive Director of Resources Date: 20 March 2014 This report will be considered in public 1. Summary 1.1 The GLA’s corporate risk register is presented to the Panel every six months . The current register is attached at Appendix 1 . 2 Recommendation 2.1 That the Panel notes the corporate risk register.
3 Background 3.1 The GLA’s corporate risk register captures and describes the Authority’s most significant risks – with the focus on cross-cutting risks and major programmes . It is reviewed and refreshed on a six- monthly cycle. The final stage of the process, once the risks have been reviewed by risk owners and directors , is for the Panel to consider and comment on the register. 4. Issues for consideration Changes to the risks 4.1 The GLA’s risk profile has remained fairly stable since the previous report to the Panel in October. No risks have been removed or added to the register. However, some changes have been made to individual risks , including updates to control measures . The more substantive of these include: o Air quality (P1) The risk has increased in severity. This reflects that the European Commission began
infraction proceedings against the UK for non -compliance with NO 2 legal limit value on 20 February 2014. This is a lengthy , multi-year legal process. The immediate impact is reputational damage; but the UK could ultimately be fi ned (not expected before 2020) . Provisions in the Localism Act 2011 provide a mechanism for Government to potentially pass - down or share these fines with other tiers of government, including the GLA. There is also additional legal complexity caused by the ongoing Client Earth/Defra Supreme Court case, which may accelerate the normal EU legal process. o Land Assets (P4) The previous risk register update to Audit Panel highlighted that additional controls pertaining to estates management would be added to the register. This has now been done.
City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 02020 7983 4458 www.london.gov.ukPage 197
o London 2012 Legacy (P5) The scope of this risk has been widened to capture the potential risks flowing the transfer of the Cofely District Energy Concession to the LLDC in March 2014. Risk Management Framework 4.2 The guiding document for compiling the risk register – and for managing risk generally within the Authority – is the GLA’s risk management framework. The framework is reviewed periodically and updated when necessary. 4.3 In December senior officers, including the Head of Paid Service and the Executive Director for Resources, signed off a number of updates to the framework. The updates are relatively few and for the most part minor. The one substantive change is a clearer statement of the Authority’s risk appetite.
4.4 An internal communications exercise accompanied the revision of the framework, reminding GLA staff of the need to comply with the expectations it sets out.
4.5 The updated framework is attached at Appendix 2 for information. 5. Legal Implications 5.1 There are no direct legal implications arising from this report. Risk C4 lists control measures in place to help the GLA meet its legal requirements, and other risks also refer to controls that will reduce the risk of legal challenge. 6. Financial Implications 6.1 There are no direct financial implications. However, many of the risks relate to financial issues.
List of appendices to this report: Appendix 1 – The GLA’s corporate risk register Appendix 2 – The GLA’s Risk Management Framework Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Tom Middleton, Head of Governance and Resilience Telephone: 020 7983 4257 E-mail: [email protected]
Page 198 Date of review February/March 2014 Appendix 1: Corporate risk register Date of next review September/October '14
Ref The Risk Inherent risk assessment Reducing the risk [planned controls shown in yellow ] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) Date / In place Prob. Impact Overall DoT PROGRAMME AND DELIVERY RISKS A) Prioritised within the Environment Unit's work plan In place B) Frequently raised at Mayor/Minister meetings and through letters; raised by Deputy In place C) Policy initiatives to improve air quality in those areas of London worst affected including In place Low Emission Zone; bus retrofit programme; New Bus for London and roll-out of hybrid buses; taxi age limit; building retrofit of more than 90,000 homes, public buildings and schools D) £5.4m for boroughs over next two years, as part of £20m ten year 'Mayor's Air Quality In place Fund' to support boroughs to target local pollution hotspots Air quality E) Awareness raising programme to help minimise exposure, including supporting airTEXT, In place - legal proceedings; promoting air quality within public health system, and launching new "Breathe Better BBT Sept 14 Air quality / EU policy such that Fiona Fletcher- P1 London is at risk of penalties - significant fine and financial loss; and 4 4 16 Together" (BBT) campaign 4 3 12 Smith arising from EU infraction - reputational damage. F) Ongoing media work in partnership with Government and others to manage potential In place processes. reputational impact G) Ensuring the GLA fulfils its statutory duties under the GLA Act and Environment Act In place 1995; including pressing boroughs to fulfil their statutory responsibility to prepare Local Air Quality Management (LAQM) reports Additional measures announced in February 2013: i) Ultra Low Emissions Zone, ii) zero i) 2020 emission capable taxi compulsory for new taxis from 2018, iii) enhanced measures at ii) 2018 construction sites, iv) further retrofit of 170,000 homes, v) new LAQM structure for London iii) 2015 iv) 2014-16 Page 199 v) 2014 A) Strong GLA representation on the London Enterprise Panel (LEP) and GLA retains In place ultimately accountability for GPF funding - with investments subject to GLA governance and project gateway processes as well as LEP input B) Rigorous approval processes in place for MRF and OLF schemes/projects, and ultimately In place subject to IPB and GLA decision making processes. Substantial audit assurance rating secured Regeneration C) Assessment process to select/prioritise GPF infrastructure spending, involving the LEP In place Not spending regeneration funds and/or ineffective D) Dedicated staff resource and programme management processes at unit level, supported - delayed decision making and activity, In place processes for allocating and by high-level reporting and accountability to the Investment and Performance Board and in turn, underspends; assuring the use of regeneration - the benefits sought are not realised; funding (Growing Places Fund Fiona Fletcher- E) Boroughs in receipt of funding required to provide a minimum of 30 per cent of total P2 - overspends and/or over-runs; 3 4 12 In place 2 3 6 (GPF), Outer London Fund project cost. OLF Round 2 partners required to provide 30 per cent match funding - conditions are not met on the Smith (OLF), Mayor's Regeneration Government element of funding; and Fund(MRF)), and a lack of - reputational damage. F) All MRF and OLF overspends met by boroughs. Systems have been set as such that In place partner buy-in, means the expenditure over and above the approved budget for financial year will automatically be impact of the funding is not rejected maximised. H) In-house programme management expertise to provide advice to project managers and In place external delivery partners and ensure risk management and issue escalation procedures are rigorous I) Process to ensure rigorous governance and decision making arrangements where funding In place decisions are coordinated with TfL J) Single Regeneration Unit ensuring appropriate focus, joined-up processes and single In place strategic overview of all regeneration funding A) Three new bid rounds launched since September 2012 for new investment partners to In place offer new schemes. The directorate is also open to new bids from new and existing Affordable homes investment partners on an ongoing basis. The Mayor has also launched a new bids round Not spending affordable for 2015-18 following agreement with DCLG on additional funding - an underspend against budgets; housing funds and/or delivery - shortfall against the Mayor's target to B) Strong programme management arrangements to monitor progress and issues at In place P3 partners underperform and David Lunts 3 3 9 2 3 6 deliver 100k affordable homes; and scheme, partner, sub-region and directorate level. This enables mitigating actions to be therefore do not achieve the - reputational damage. agreed and implemented swiftly to maintain programme delivery volume of completions required Ref The Risk Inherent risk assessment Reducing the risk [planned controls shown in yellow ] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) Date / In place Prob. Impact Overall DoT volume of completions required C) Comprehensive quarterly review meetings with each investment partner to track In place to take up full allocations. programme delivery and agree action plans to remediate any issues D) Re-allocations of funds linked to schemes that are at risk of non delivery to ensure that In place overall number of homes delivered is in line with the Mayor's target A) Analysis of potential costs, risks, mitigations and future options for each of the major In place strategic sites plus any other high cost sites not covered B) Use of the LDP to speed up the disposal process and reduce risks associated with In place Land assets contracting with private sector contractors The GLA fails to exploit its C) Retaining and enhancing the existing estate and facility management arrangements for In place significant land assets by: a) not - unexpected liabilities and/or higher than the portfolio pending reprocurement of new supplier from 1/4/15 bringing surplus land to the necessary costs; market in a timely manner, or in - loss of revenue; D) Regular, high level land strategy meetings In place P4 ways which maximise the - an inability to maximise housing, David Lunts 3 3 9 E) Close working with Finance on maintaining financial control, assisting in maintaining the In place 2 3 6 contribution to delivery of regeneration and other outcomes; and asset register and delivering annual revaluation programme Mayoral jobs, homes and - increase in statutory and reputational G) Capacity to undertake core activities in-house (supplemented by TfL and framework In place economic regeneration damage. suppliers) in the unlikely event of the failure of a service provider ambitions; and b) not managing H) Maintaining close contact with the market to minimise the risk of targets being missed In place its assets effectively. due to a downturn in the property market An asset strategy setting out the principles underpinning the development and February 14 management of the land and property portfolio, including an action plan for bringing land forward for development A) Mayor chair of LLDC In place - LLDC is not sufficiently focussed on B) Major LLDC decisions (including Stadium concession(s) and development agreements) In place Mayoral London 2012 legacy priorities; subject to close GLA scrutiny through observer status on the LLDC Board and Committees.
Page 200 - the Mayor not seen to deliver an Six-weekly meetings between ED Housing & Land and LLDC Deputy Chair and Chief Exec. Olympic and Paralympic legacy, including and regular informal briefings at officer level 'convergence', economic and community C) Support from Housing & Land for the Mayor's continuing role on the Olympic and In place ambitions; Paralympic Legacy Cabinet Committee - GLA unable to influence approach to D) Mayor’s Olympic & Paralympic Legacy Adviser appointed to oversee and coordinate the In place realising receipts from Olympic Park land legacy programme of work across the GLA Group and London and Partners, is deputy chair required to service GLA debt, hold down of the Legacy Corporation, and is directly involved in strategic and operational decision call on GLA Group resources and meet making. Mayor's Chief of Staff appointed Observer on LLDC Board Mayor's obligations under the London Settlement and legal agreement with E) LLDC budget and business plans have to be developed in line with Mayoral guidance as In place DCMS; London 2012 Legacy part of the GLA's consolidated budget. Informed by ongoing work to align plans and - financial consequences affecting the The GLA does not have robust budgets Ten-year business plan subject to Mayoral decision. GLA as major funder and funder of last mechanisms to exert influence Neale F) LLDC directly owns legacy risks and maintains its own risk register and has processes in In place resort; P5 on and support the London Coleman / 3 4 12 place to actively review and reduce risks 2 3 6 - GLA unable to deliver legal commitments Legacy Development G) Accelerated housing delivery to meet Mayoral objectives In place under the Event Organisation Agreement David Lunts Corporation (LLDC), impeding H) Stadium deal and funding concluded In place for the 2017 IAAF World Athletics delivery of Mayoral priorities. Championships and the 2017 IPC Athletics I) Direction issued by Mayor governing the relationship between the GLA and LLDC, In place World Championships (to be held in the including those decisions and business planning arrangements of LLDC's that must have the Stadium); Mayor's consent or involvement, with specific reference to land transactions/receipts - GLA exposed to financial and reputational risk when Cofely District In respect of the Cofely District Energy Concession risk specifically: Energy Concession is transferred to LLDC LLDC will have parent company guarantee from largest independent utility company in the March 2014 (March 2014), because unlike the world regulated utility sector there is no The Concession provides for time to negotiate a replacement agreement with alternative March 2014 automatic alternative provider protection provider for district energy in the event of supplier The operator has no right to terminate the agreement voluntarily March 2014 failure and LLDC would be responsible for The Independent Heat Customer Protection Scheme expected to be rolled out in 2015 Potentially 2015 ensuring continuity of supply; and would include a requirement to arrange for a supplier of last resort, if Cofely were - reputational damage. registered
A) Annual project prioritisation process, informed by Mayoral priorities and commitments In place and corporate resources Prioritisation and delivery of B) Project gateway process ensures all major projects are reviewed by IPB and assessed for Mayoral / business plan In place alignment with Mayoral priorities priorities
Ref The Risk Inherent risk assessment Reducing the risk [planned controls shown in yellow ] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) Date / In place Prob. Impact Overall DoT priorities - delays in launching/meeting Mayoral C) London Dashboard to track progress against priorities, bring focus and allow the public Business planning processes fail In place commitments; to hold the Mayor and GLA to account to incorporate adequately - failure to achieve Mayoral and business Jeff Jacobs / D) Medium-term vision (Vision 2020) document identifying drivers, articulating Mayoral In place P6 Mayoral priorities into GLA 2 3 6 1 2 2 plan targets; CMT vision and setting out policy priorities, with process to track delivery strategies and plans and to - ineffective use of resources; and E) GLA business plan in place, helping to translate Mayoral priorities into operational plans. translate them into programmes In place - reputational damage. CMT tracking progress against milestones that deliver Mayoral and Business Plan objectives and F) GLA suite of KPIs to monitor delivery against Mayoral priorities, with associated In place targets. reporting process G) Monthly updates to IPB on project delivery and quarterly finance and performance In place reports CROSS-CUTTING PROCESS AND GOVERNANCE RISKS A) Quarterly GLA resilience meetings chaired by the Executive Director of Resources In place - denial of access to City Hall (for B) Business continuity arrangements for all teams. Arrangements to provide back-up In place example, as a result of fire, flood, recovery site and remote working capacity enhanced malicious incident; or of failure of control Business continuity C) Planned preventative maintenance of infrastructure; response procedures in place to systems, services or infrastructure); In place Inadequate business continuity deal with emergency incidents such as fire and bomb threats - failure of equipment or services at plans / preventative D) Fire and emergency precautions: fire detection/suppression throughout City Hall; fire Trafalgar Square or Parliament Square In place arrangements contributing to a wardens trained and appointed; evacuation plans; regular fire evacuation drills C1 Garden; Martin Clarke 2 4 8 1 3 3 failure of or damage to physical - service/project delivery delayed or infrastructure and potentially E) IT Disaster Recovery arrangements strengthened with regular back-up to TfL data centre impeded; In place also core systems (including - loss or unauthorised access to data; and regular testing programme. Remote access capacity enhanced finance systems). - inability to account for use of resources F) Service Level Agreement with Transport for London's Financial Services Centre, In place - financial loss and legal challenge; and monitoring of KPIs under the procurement shared service arrangement, and formal shared Page 201 - reputational damage. services arrangements with LFEPA for payroll G) Internal Audit focus on core financial systems in Annual Audit Plan (and shared service In place arrangement with MOPAC to provide robust Internal Audit Function) A) Health and safety procedures which are updated on a regular basis, and health and In place safety checks B) Health and safety training for all new starters In place C) Health and safety assessments conducted quarterly within City Hall In place D) Health and safety plan, and advice, for each directorate In place E) Event specific Risk Assessment and Method Statements in place for all major events and In place implemented in collaboration with other agencies. Safety plans and protection measures; Health & Safety - City Hall including appropriate stewarding/staffing plans, food risk assessment and monitoring of and Squares alcohol consumption - potential or actual injury or loss of life; Breach in processes/procedures F) Appropriate levels of insurance, including public liability insurance for all events In place - financial loss / impact on value of asset; C2 (or procedures not rigorous Martin Clarke 2 4 8 1 3 3 - break down in public order; and enough) leading to a health and G) Scalable security measures and building access policy in place at City Hall. Security In place - reputational damage. safety or security incident Officers trained in conflict management and physical intervention. GLA is a member of the (including an act of terrorism). Southwark Community Security Zone. First Aid arrangements in place. More London Estates installing hostile vehicle mitigation measures to protect the estate perimeter
H) Heritage Wardens - trained in conflict management, physical intervention and first aid - In place deployed on the Squares 24/7. Wardens and GLA Officers appointed and trained as Authorised Enforcement Officers to uphold legislation specific to the Squares, backed up by the police. Close liaison with the police I) Heritage Wardens patrol the Squares 24/7; trained in conflict management, first aid and In place liaise closely with the police A) In-house expertise to provide advice to Managers and GLA staff and ensure Health and In place Health & Safety - Land & Safety procedures are rigorous Property B) Health and safety due diligence assessment on developers and contractors In place Procedures/processes are not - environmental degradation; C) Public liability and property insurance In place sufficiently rigorous causing a - actual or potential injury or loss of life; D) Risk management system in place to manage construction and design, property and In place Health, Safety and C3 - financial loss / impact on value of assets; David Lunts 3 3 9 equipment, environmental and health and safety risks 2 2 4 Environmental (HS&E) incident and E) Health and safety performance monitoring of Managing Agents and Delivery Partners to In place on the GLA's Land & Property - reputational damage. ensure HS&E compliance Portfolio (Excluding City Hall Ref The Risk Inherent risk assessment Reducing the risk [planned controls shown in yellow ] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) Date / In place Prob. Impact Overall DoT Portfolio (Excluding City Hall F) Risk assessing, and then managing accordingly, every property and asset In place and Trafalgar/Parliament Squares). G) Statutory checks to ensure regulatory HS&E Compliance In place H) Event Safety Plan for all events In place A) Officer-level Governance Steering Group to oversee approach to corporate and In place information governance and ensure procedures are robust B) Policies and procedures in place to maintain high standards of behaviour and integrity, In place including: Members' Code of Conduct, Code of Ethics and Conduct for Staff; Use of Resources Policy and Gifts & Hospitality Policy C) Polices and procedures to promote sound use of financial resources, including: Financial In place Regulations (and robust approvals, systems and monitoring processes), Expenses and Benefits Framework, Procurement Guidelines and Funding Agreement Toolkit
Governance D) Anti-Fraud Policy, Strategy and Response Plan, Whistleblowing Policy and Confidential In place Processes and procedures are Jeff Jacobs / Reporting Line insufficiently developed to - legal challenge; Martin Clarke E) High profile commitment to transparency and regular reporting of payments over £250, In place ensure compliance with legal - inefficient use of officer time; C4 (officers); Ed 3 4 12 expenses, gifts & hospitality and maintenance of a register of interests for the Mayor, 2 2 4 and regulatory requirements, - financial loss; and Mayoral Team, Assembly Members and Senior Staff Williams prevent fraudulent use of GLA - reputational damage F) Risk Management Framework and six-monthly reporting to Audit Panel and the In place resources and maximise (Members) Investment and Performance Board effective use of funds. G) Strong Governance focus in induction arrangements, including a compulsory e-learning In place module H) Specialist Teams provide guidance on specific requirements such as contracts, In place procurement (via Transport for London) and the Freedom of Information Act I) Annual internal and external audits In place Page 202 J) Insurance procured, with an annual review of insurance cover with broker In place K) Fidelity guarantee Treasury Management Strategy In place Internal Audit fraud testing work, focussed on relatively high-risk areas, with report to March & July Audit Panel 2014 A) Timely recruitment to fill vacancies In place B) Sickness and absence monitoring at team and corporate level In place C) Establishment kept under review, particularly during organisational change In place D) Use of secondments, apprentices and temps if necessary (subject to formal approval) In place
E) Formal change management policies and procedures In place Staffing capacity - Mayoral and Assembly priorities and F) People Performance Management Framework and requirement to carry out performance In place statutory duties not delivered on time or Lack of staff numbers and skills - Jeff Jacobs / reviews C5 and/or a deterioration in to quality standards; and 2 3 6 G) Induction programme for new members of staff In place 1 2 2 CMT employee relations - - legal challenges arising from employee H) Retention plans, including career development and unit development plans In place constraining capacity. relations issues. I) Organisational structure reflects remit and responsibilities of GLA and Mayoral priorities In place
J) People processes/procedures - including Capability Procedure, Disciplinary and In place Grievance Policy and Managing Change Policy - in place and regularly reviewed. Also training for managers and support from HR&OD K) Assessment of training needs and training delivery on an ongoing basis In place L) Regular consultative committee to ensure effective relationship with unions. In place A) Processes for appraising and monitoring co-financing organisations and projects, and In place ERDF and ESF oversight making payments, in accordance with national and European Commission rules Inadequate oversight of projects in GLA's regional management role for London 2007-13 and - legal challenge; C6 2014-20 European Regional - financial loss; and Martin Clarke 2 2 4 1 2 2 B) Issues arising from any systems audits by Government and European Commission Development Fund (ERDF) and - reputational damage. In place auditors addressed via action plans European Social Fund (ESF) programmes, leading to misuse of funding. Ref The Risk Inherent risk assessment Reducing the risk [planned controls shown in yellow ] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) Date / In place Prob. Impact Overall DoT EXTERNALLY ARISING THREATS & OPPORTUNITIES A) Funding settlement with DCLG, providing certainty over the Spending Review period In place and setting out a debt repayment schedule B) Savings targets set as part of a well-established budget setting process, including from In place shared services Funding constraints C) Adequate reserves and a contingency fund In place - financial commitments cannot be met; Government grant and other D) Treasury Management Strategy, complemented by twice yearly reporting In place - existing plans and programmes cannot external funding falls, placing be delivered in full; Jeff Jacobs & E) Seeking a biannual credit rating to promote and underline the GLA's commitment to In place E1 significant constraints on the 4 4 16 3 3 9 - Mayoral priorities cannot be pursued; Martin Clarke sound fiscal management GLA's budget that cannot be and F) Budget and project spend monitoring, complemented by financial modelling, with In place managed without impacting on - business as usual suffers. regular reporting to the Investment and Performance Board services and Mayoral priorities. G) Formal decision making process and financial regulations providing a control over In place spending H) Centralised programme budget with approval process In place I) Letter being prepared to make London's case for funding ahead of Autumn Statement In place
A) Dedicated workstream on the new financial regime as part of the preparation of the In place Funding regime GLA's 2014/15 budget The changes to the local B) Increased the Mayor's Resilience Reserve to cover potential shortfall in business rates In place government finance regime from April 2013 (Council Tax - reduced funding and/or reduced funding C) Ongoing Informal and formal representations, including at a high-level, to Government E2a Martin Clarke 3 4 12 In place 2 3 6 benefits localisation; Business stability impairing forward planning. in order to influence the form of the regimes Rates Retention) have an D) Established the Mayor's Finance Commission which reported in May 2013. In place adverse impact on the GLA's Recommendations aim to favourably influencing funding and financing mechanisms over Page 203 financial standing and flexibility. the medium to long-term. Ongoing influencing taking place with key stakeholders, including preparation of an Infrastructure Plan (spring 2014). A) Clear deadlines and well-established processes with FBs, which align to their internal In place approval processes and the Assembly scrutiny process GLA budget setting B) Effective working relationships with third parties to obtain a better understanding of In place The unique process for setting likely impacts of funding settlements the GLA Group /GLA budgets - - legal challenge; C) Monitoring of the exercising of the Mayor's statutory functions and use of Assembly's In place involving the Mayor, Assembly - inability to deliver savings and prioritise Martin Clarke powers under the GLA Act and functional bodies - creates resources; E2b / Mark 3 4 12 D) Well-established process for Assembly questioning, investigation and scrutiny, including In place 2 4 8 complexity that means statutory - delay to schemes or projects; Mayor's Question Time, plenary meetings, Budget and Performance Committee, Audit requirements are not fulfilled, - services negatively impacted; and Roberts Panel and agreed scrutiny work programme scrutiny is inadequate and - reputational damage. E) Clear rationale set out for proposals arising from need for savings In place budgetary priorities are not adequately reflected. F) Budget training provided to key staff to ensure fully conversant with legislative changes In place arising from 2011 Localism act and Local Government Finance Act 2012, which affect Mayor's budget process and statutory calculations This page is intentionally left blank
Page 204 Appendix 2
Finding the right balance: The GLA’s framework for managing risk
January 2014 Version 2 Next review due December 2014
Page 205 1 Foreword
Carrying out analysis. Making judgements. Taking decisions. Implementing policy. Running projects. We do all of these things constantly for the benefit of London and Londoners. It is why the Greater London Authority exists. Of course we do not operate in a vacuum. Indeed the GLA serves perhaps the most dynamic city on the planet. Our environment is perpetually shifting. Events are constantly unfolding. Some of these events we can anticipate with a good deal of certainty. Others, conversely, are characterised by their uncertainty. Just as these events vary in their predictability, so they differ in their potential impact. At the positive end of the spectrum there are opportunities for us to grasp. And at the negative end there are threats which we must manage and mitigate. We cannot eliminate this uncertainty. But we can use risk management to help us chart a course in an uncertain world. It allows us to scan the horizon, to understand our environment, to take informed decisions, and to identify where and how things might go wrong so we can put in place measures that will increase our chances of success. In other words, risk management gives us a framework within which we can try new things, be fleet of foot and find that difficult balance between boldness and caution, risk and reward, cost and benefit. Good risk management practice is also about finding a different sort of balance: that between an approach which is excessively bureaucratic and burdensome and one which lacks rigour. The guiding principle of this framework is that risk management is most successful when it is interwoven with our existing decision making and management processes, rather than an add- on. That is why it is an integral element of Mayoral Decision forms and our project lifecycle, for example. And it is why this framework asserts that risk management must be owned and applied by managers in their own spheres, rather than being something that is left for the corporate centre to worry about. We hope you agree that we have got this balance right – and that this framework helps you find the right balance between innovating and seizing opportunities on the one hand and guarding against threats on the other. We keep our approach under review. So if you have ideas about how it could be improved, do get in touch with the Governance Unit. Jeff Jacobs Head of Paid Service Martin Clarke Director of Resources and GLA Risk Management Champion
Page 206 2 Section 1: The GLA’s approach to managing risk
Why a risk management framework?
Life is messy, complicated and uncertain; serving a major world city particularly so. Threats rise and recede. Opportunities appear on the horizon, but can also fade from view. At the same time, our actions have consequences – both positive and detrimental – beyond the core outcomes we are seeking to achieve. We call these uncertain threats and opportunities, whether they arise from outside the GLA or from our own actions, risks. We cannot avoid or eliminate risk entirely. Moreover to attempt to do so would be prohibitively costly – in money, time and opportunities foregone. But we can manage risk. We can identify and understand how, where and when threats and opportunities might happen. We can influence the likelihood of a given risk arising, together with the nature and extent of the impact. And we can consider when and how much calculated risk to take given the rewards at stake. Looked at another way, risk management helps us to act proactively to make the most of our circumstances. The benefits of sound risk management, and the outcomes sought from GLA risk management practices, are: • a broader and deeper understanding of our operating context; • a reduced incidence and impact of threats; • an enhanced ability to seize opportunities; • a sharper assessment of the trade-offs between risk and reward, cost and benefit; • better informed decision making; • a corporate culture that promotes innovation, new ways of doing things, and organisational learning; and ultimately • improved outcomes for London and Londoners. This document helps us realise these benefits by: • communicating the value derived from, and the importance the GLA places on, effective risk management; • setting out ten principles to underpin the GLA’s approach to risk management; • highlighting the practices and mechanisms that are at the core of the GLA’s risk management framework; • being clear about what the GLA expects of its staff – our roles and responsibilities – in managing risk; and • providing practical guidance, grounded in best practice, for staff to follow. Risk management is one of a number of disciplines we use to determine strategy, implement Mayoral objectives and make the best use of our resources – while acting properly and transparently. It is therefore closely related to and interwoven with corporate governance,
Page 207 3 business planning and performance management. It also has close links with other GLA policies and guidance, including those for project management, procurement, partnerships, information governance, data quality and business continuity.
The GLA’s risk management principles
The principles below underpin the GLA’s risk management framework. They are both practical and aspirational: practical because they inform and guide our approach to risk management; aspirational in that they are objectives for us to progress towards. • Embedded – Risk management is: an integral part of decision making; interwoven with governance, business planning and performance management disciplines; and rooted in and an influence on the GLA’s culture. • Dynamic – Risk management is ongoing and continuous, operating vertically and horizontally at different levels and across different areas. • Proactive – Risk management is not seen as a compliance activity; rather it is actively used to look forward, to take charge of events and circumstances, and to mitigate threats and seize opportunities. • Proportionate – Risk management focuses on the things that matter, adds value and helps ensure controls are commensurate with potential threats. • Enabling – Risk management helps the organisation to be agile, to innovate, to take calculated risks and to learn from successes and mistakes alike. • Owned – Risk management is owned and driven by everyone, but there are also clear and specific accountabilities for risk management processes, for individual risks and for their associated actions. • Communicated – The importance the organisation places on risk management is effectively communicated, and different areas of the business talk to each other about shared and cross-cutting risks. • Understood – There is a shared understanding of the GLA’s approach to risk management, of the organisation’s appetite for risk and the range and nature of risk it faces, and of strategies for minimising threats and maximising opportunities. • Robust – GLA risk management practices are coherent, accord with best practice and supported by helpful and practical guidance. • Evaluated – The efficacy of the GLA’s management of risk and the risk management framework are regularly reviewed, leading to improved approaches and practices.
Looking at risk from different perspectives
Risk is ever present. It exists within and across all of those areas in which we seek to make a difference for London and Londoners. And it operates at and spans different levels. So our risk management approach must also be holistic and cross-cutting. This framework identifies four specific levels, or perspectives, as a focus for risk management.
Page 208 4 Corporate risk The GLA’s most serious risks. While corporate risks come in all shapes and sizes, they tend to be either broad in impact (that is, they have the potential to impact significantly on the capability, vitality or success of the Authority as a whole) or deep in impact (the effects of the risk event occurring are especially serious). A corporate risk is likely to have one or more of the following characteristics: • strategic and cross-cutting, with the potential to impact on a range of different areas or functions; • related to the GLA’s ability to successfully deliver one or more Mayoral objectives; • affects the outcomes sought from one of the GLA’s major programmes; • operates over the medium or long-term; • the potential to enervate the organisation’s capacity, for example by limiting, reducing or failing to maximise financial or human resources; • linked to the organisation’s ability to successfully deliver transformational change and major initiatives, while continuing with business as usual; • concerned with the wellbeing of Londoners and/or GLA staff; and • may impact on the GLA’s reputation. The number of corporate risks should vary depending on the GLA’s risk profile. But in normal circumstances it is helpful to think of corporate risks as the top ten to 20 most serious risks faced by the Authority. Corporate risks are captured on the corporate risk register, which is owned by the Corporate Management Team. The approach to corporate risks sets the context for decisions at other levels of the Authority. Programme risks These are risks that relate to a specific GLA programme. They are likely to comprise a mixture of the most serious project risks (see below) and cross-cutting risks that could affect two or more of the projects within the programme. All major investment programmes must have a risk register, owned by the programme manager. It should be reviewed by the programme board and at the most senior level of the directorate in question. The risks associated with each major programme should be captured on the corporate risk register. In most cases this is likely to be at a high-level for the programme as a whole. However, specific risks that are particularly serious should also be documented on the corporate register, particularly where they impact outside the scope of the programme. Project risks These risks relate to or flow from a specific project. A project risk has the potential to impact on the project’s scope, outcomes, budget or timescales. Where the risk could impact on other projects or objectives, or the project is considered a high priority and the level of risk is such that it could lead to a failure to deliver project objectives, the risk should be escalated to the programme level. The quantum of risk associated with an individual project should also be taken into account when assessing programme-wide risk.
Page 209 5 All investment projects must as a minimum complete a ‘mini risk register’, using the GLA project dashboard. However, it is recommended that this is backed up by a more comprehensive register. Risks associated with decision making These are the potential risks that flow from a decision to pursue, or not to pursue, a particular course of action and which may impact on the delivery of the associated outcomes. Risk assessment at this level is likely to be at a relatively early stage, forming the basis of future risk management at one or more of the levels above. Considering risk whenever significant decisions are made is a central plank of the GLA’s approach to risk management. The different levels described above do not exist in isolation or in a strict hierarchy. Indeed, it is a fundamental principle of this framework that risk management is dynamic. Risks must be escalated from bottom to top according to the risk characteristics highlighted above, and in turn cascaded down for management action. Furthermore, these are not the only levels at which risk operates. We all manage risk on a daily basis to achieve our personal objectives. Directors, heads of unit and team managers will want to put in place mechanisms to monitor and manage risks that cut across projects and programmes and/or operate outside programmes/projects at an operational, unit and team level.
The GLA’s risk appetite
In many ways, risk appetite is the backcloth to the GLA’s approach to risk management. Without knowing how much and what types of risk are acceptable, we cannot expect to make sound decisions on the balance between risk and reward. Risk appetite applies at the corporate, programme and project level. At the corporate level it refers the overall exposure to risk the organisation is willing to accept; and at the programme and project level to the level of risk beyond which a programme and project would not be considered viable. When risk appetite is defined rigidly it can impede innovation and make an organisation overly cautious. It can also fail to reflect the complexity and diversity of decision making in an organisation such as the GLA. However as general rules, the GLA: • will not tolerate risks rated red on the risk scoring matrix where they are avoidable – other than in exceptional circumstances that should be formally documented; • has zero tolerance for risks that cannot be mitigated to avoid the potential for a breach of law / formal regulation; • has an extremely low tolerance for taking risk where there is the potential to actively cause harm to individuals or groups – all such risks should be avoided as far as possible; • has a low tolerance for risks that might cause harm to the environment; and • has a relatively high tolerance for risk flowing from the delivery and communication of Mayoral priorities, and in particular where the work is innovative and with the potential to catalyse broader beneficial outcomes. Examples include some extant youth, volunteering and regeneration projects. Of course, projects should always be intelligently designed in order to maximise outcomes. Here it is the opportunity cost that should be considered in
Page 210 6 particular; that is, whether resources might be better deployed in order to seek similar outcomes – either for incurring reduced costs or risk. Where a given project is proposing to tolerate a relatively high-level of risk, the rationale must be outlined within the project initiation documentation. The Corporate Management Team monitors risk exposure every six months as part of the periodic review of the corporate risk register. But the GLA also takes the view that risk appetite should be an integral part of strategic and financial planning and of decision making. That is why, for example, we have an annual budget prioritisation process linked to our business planning cycle which allows an overview of financial and other types of risk. Below the corporate level, the guidance and tools that follow are designed to help managers and others consider risk appetite in a systematic way; in particular by categorising and scoring risks. Risk appetite should be considered at the very outset of project conception – and especially within the formal decision making process – and throughout delivery, actively guiding project management.
An overview of the risk management process
Risk management is as much an art as it is a science. It relies first and foremost on good judgement. Yet by applying a recognised and methodical process, and grounding risk management in evidence based analysis, we can increase our chances of identifying and managing risk successfully. The GLA uses a four stage process for managing risk. In summary it involves: • identifying what could happen; • assessing the probability of a given thing happening and the extent of its potential impact ; • addressing the risk by taking steps to reduce its probability or constrain its impact; and • reviewing and reporting on the efficacy of risk controls and mitigations.
Page 211 7 Although the four stages are generally sequential, there will be times when it is necessary to return to earlier stages. As the diagram implies, the process should also be ongoing given that our risk environment is always changing. The different stages, and techniques that can be used to support each stage, are explained in more detail in section 2 of this framework.
Putting the GLA’s risk management framework into practice
Risk management cannot be effective if it is seen either as a function solely of the corporate centre or as a box ticking exercise. The GLA expects directors and managers, at team and project level, to take ownership of, drive and review risk management within their respective areas using this document as a frame of reference. Yet equally risk management will be ineffective if it is devolved entirely or if robust, rigorous and consistent practices and mechanisms are not in place. This section highlights those practices, together with related roles and responsibilities, that form the spine of our approach to risk management. It also identifies how we will evaluate and review the success of our approach. In most cases roles and responsibilities are integrated within existing remits. But there are three roles that exist specifically to support effective risk management: a GLA risk champion, risk owners, and risk action owners. The Investment and Performance board should: • take an overview of and consider the top-level risks facing the authority, their likelihood and potential impact; • review the corporate risk register every six months; and • use information about risks to inform strategic direction and decision making, including on investment decisions. The Corporate Management Team must: • carry out horizon scanning and ensure there are early warning indicators; • make active and ongoing use of risk management to effectively conduct the GLA’s business; • promote a culture in which risk management is used proactively, enables innovation and organisational learning, and is owned by everyone; • help to review and monitor how much risk the GLA is willing to tolerate (the organisation’s risk appetite); • take an overview of and consider the top-level risks facing the authority, their likelihood and potential impact and the total quantum of risk faced by the authority; • own the GLA’s corporate risk register and formally review and refresh it every six months, facilitating the escalation of programme and project level risks to the corporate level; • assign accountability for top level risks; • cascade strategies for controlling risks; and • review and sign off major updates to the GLA’s risk management framework.
Page 212 8 The Governance Steering Group, led by the Executive Director of Resources (the GLA’s risk management champion) must: • ensure the risk management framework is aligned and embedded with the GLA’s approach to and disciplines for sound corporate governance and strong internal control; • advise on the development of the GLA’s risk management framework; • review and sign off updates to the GLA’s risk management framework; and • champion the importance of effective risk management across the Authority. Directors must: • work with their departmental management team to scan the horizon, put in place early warning mechanisms, and to take an overview of risk within their directorate; • use information about risks to inform decisions (in particular via the Decisions process) develop strategy and implement policy; • champion and embed proactive, enabling and robust risk management practices within their directorate, in line with the risk management framework; • review and monitor risk appetite for their directorate; • lead strategies to address corporate risks within their directorate; • ensure risk registers are held for any major GLA programmes; • assign responsibility for managing and controlling specific risks; • serve as the primary link between risks emerging at the directorate level and the corporate risk register, cascading risks up and action down; and • monitor the implementation and efficacy of risk management within their directorate. Programme and project managers must: • embed risk management, in line with the GLA’s risk management framework, within the programme/project lifecycle to support project definition, approval, change control, decision making and delivery; • agree risk appetite with the programme/project sponsor and the overall approach for managing and escalating risk; • maintain a project/programme risk register (a mini risk-register for projects, via Project Dashboards, and a full risk register for major programmes) and an overview of total risk exposure; • align risks with programme/project objectives and outcomes; • assign clear accountabilities for risk, including risk owners and risk action owners; • put in place early warning mechanisms; • communicate clearly risks to stakeholders and the Investment and Performance Board, and ensure risk is comprehensively covered in stage 1 (concept proposal) and stage 2 (investment decision) project documentation and any other reports to the Board; • escalate risks to directors and senior managers where appropriate, and if the overall risk exposure or a specific risk is particularly serious, to the corporate risk register;
Page 213 9 • seek out expertise to help effectively identify and control risks; and • maintain records of historic and current risk registers forming an effective audit trail. Other managers must: • manage operational risk and the risks associated with policy implementation in accordance with the GLA’s risk management framework; • escalate serious risks to the directorate and corporate levels as appropriate, as well as advising when operational risk may impact on project delivery; • use the GLA’s competency framework and personal development plans to enhance risk management skills; • identify training needs; and • take account of risk management issues when setting staff performance targets. Risk owners must: • seek out relevant expertise to help in the assessment of risk and appropriate control measures; • review and report on the proximity and status of assigned risks; • identify risk action owners for implementing control measures; and • escalate risks to the directorate or corporate level as and when necessary. Risk action owners must: • put in place actions to control risks, drawing on the advice of relevant experts; • monitor risk and control measures; and • feedback on the progress in implementing controls and their efficacy. Internal Audit is expected to : • use risk assessment to inform its annual audit plan; • carry out risk-based audits, evaluating controls and providing an opinion of levels of assurance; • carry out an annual audit to test the suitability and implementation of the risk management framework; and • make recommendations for improving risk management practices. The Audit Panel’s remit includes : • reviewing the outcome of the annual risk management audit and associated officer responses; • reviewing the GLA’s risk management framework documentation on a periodic basis; and • reviewing and challenging the GLA’s corporate risk register every six months.
Page 214 10 The Governance and Resilience Unit’s remit is to: • own the GLA’s risk management framework documentation; • ensure there is clear and robust guidance for managing risk; • keep abreast of best practice and draw on Internal Audit recommendations to review and coordinate improvements to the risk management framework; • communicate and promote the GLA’s risk management framework, including by using the induction process and corporate governance training; • maintain a risk management intranet page; • be available to provide support to those undertaking risk management; • maintain and administer the corporate risk register and support the Corporate Management Team in ensuring it t is comprehensive and accurate; • coordinate six-monthly reports to the Audit Committee on the corporate risk register; and • promote, integrate and reinforce risk management within other disciplines, in particular project governance and management (via project guidance and lifecycle documentation) and decision making (via Mayoral, Director and Assistant Directorate Decision Forms). All of us should: • understand the GLA’s approach to risk management; • make active and effective use of risk management in our work; • escalate risks to the project, directorate or corporate level as appropriate, via managers or, in the case of corporate risks, by liaising direct with the Governance Unit; and • provide feedback to the Governance Unit on the usefulness of the risk management framework.
Page 215 11 Section 2: A guide to managing risk
The guidance that follows is not intended to be a detailed instruction manual for managing risk. Different situations demand different approaches. But it does offer a process that can be adapted to different circumstances, together with tools and techniques that will help you at the different stages the risk management cycle. A risk register template is at Appendix A. The risk management process is linear in the sense that each stage builds on the stages that preceded it. But, as the word cycle indicates, it is also ongoing. So the different stages will need to be revisited at different times. It is important to remember that risk management should not be conducted in isolation. Involving different people increases the range of perspectives and leads to a deeper understanding of the operating environment, risks and how best to control them. It is also vital to draw on the expertise available to you within the GLA and the procurement and legal functions provided by Transport for London. Furthermore, risks are often ‘shared’. That is, they flow from the work of and have the potential to impact on two or more organisations. In these instances, the process below should be undertaken collaboratively. In such circumstances, it is especially important that risk and action ownership is clear. It may on occasion be difficult to agree a shared view of or approach to risk. In such instances, the GLA should maintain its own risk register detailing how it ranks and is responding to the risks in question.
Stage 1: Identify
The first stage of the risk management process is, naturally enough, about understanding and identifying. There are three things in particular to understand and identify at the outset of a given project, work-stream or when implementing risk management afresh. The first is the context within which the activity is taking place; the second is the level of risk appetite; and the third is the risks themselves – ie. the uncertain threats and opportunities. You should seek to: • clarify the scope and objectives of the activity/project/work and the outcomes that are being sought; • use tools such as horizon scanning and SWOT 1 and PESTLE 2 analysis to help understand the wider operating context; • identify and understand constraints and interdependences; • consider the flow of cause and effect and any unintended consequences that might arise for pursuing the outcomes; • use common and generic areas of risk as a stepping off point for identifying specific risks; • align risks to objectives so that at the next stage it is easier to establish their potential impact; 1 Considering Strengths, Weaknesses, Opportunities and Threats. 2 Considering the context from Political, Economic, Social, Technological, Legal and Environmental perspectives.
Page 216 12 • involve a range of people with different perspectives and areas of expertise; • establish a risk register and begin to record the risks; and • describe risks clearly and plainly, setting out the cause, the ‘risk event’ and the potential impacts. This stage of the process is not just about identifying risks. You should also identify: • the risk appetite for the project or work area – ie. the total quantum of potential risk that is tolerable given the benefits and/or opportunities at stake; • a risk owner for each risk; and • agree tolerances to trigger reporting or escalation of risk to the programme/project team and director (see pages 4 and 5 for an explanation of the different levels of risk). Some common types and sources of risk are set out below. The list is neither prescriptive nor exhaustive. Areas of risk
• Changes in government policy, legislation • Stakeholder and partner capacity and or regulation attitudes • Legislative breaches • Threats to the health and safety of employees and citizens • Financial/funding threats and opportunities • Business continuity and resilience issues • arising from incidents such as fire, flood, Other limits on resources terrorism and damage to buildings and/or • Changes in the economic climate plant • Uncertainty arising from transformational • Organisational or service capacity and change capability • Social or demographic flux • Unintended consequences and externalities • Technological change and failure • Perverse incentives • Environmental issues • Difficulties arising from working across organisational boundaries • Reputational impacts • Staff morale • Governance and internal control arrangements • Procurement • Information governance • Shifting priorities • Changes in demand or citizen expectations By the end of this stage you should have: • a partially populated risk register containing a long list of clearly articulated threats and opportunities with an owner for each; • an agreed risk appetite for the area of work that is clearly documented, including within relevant project documentation (such as the project initiation document);
Page 217 13 • clear thresholds for escalating risks to those with ultimate accountability for the work; and • an understanding of when and how to escalate risks to the directorate and corporate levels.
Stage 2: Assess
It is not enough to simply have a sense of the risks that might impact on a given area or activity. The risks need to be understood and prioritised. This involves assessing risks against two main dimensions: • probability : the likelihood of a particular threat or opportunity actually occurring; and • impact : the estimated effect on one or more objectives of a particular threat or opportunity actually occurring. There is also likely to be merit in undertaking a proximity assessment to estimate when a risk might occur. Risks are assessed using a probability/impact gird. By plotting a risk against the two different dimensions we can derive a score and associated traffic light, and therefore understand the seriousness of individual risks and also compare different risks. At this stage you are assessing the inherent risk ; that is the probability and potential impact before any actions are taken to make the risk less likely to arise and/or to mitigate its impact if it does. You should draw on and develop the information gathered at stage 1. 4 3 2 Probability 1 1 2 3 4 Impact The risk score is arrived at by multiplying the probability rating and the impact rating. Using the grid above, the possible scores therefore range from one to 16. The scores should be derived with reference to the following descriptors. Probability scoring criteria Score Level Descriptors (life -time of project or five year period) 1 Remote 0 to 25 per cent chance of materialising 2 Improbable 26 per cent to 50 per cent chance 3 Probable 51 per cent to 75 per cent chance 4 Highly likely 76 per cent to 100 per cent chance
Page 218 14 Impact scoring criteria
Score Level Financial Health and Environment Reputation Legal/ Capacity Schedule Outputs and Impact Safety Regulatory Targets 1 Moderate Containable Minor injury Temporary and Temporary loss of Improvement/ Short -term A delay of less Key target missed within budget and localised damage standing among prohibition notice disruption or than 10 per cent by up to 10% not more than or degradation partners/ impairment to a Lower priority £50k stakeholders non-critical work output not Minor local area / service delivered to the adverse press expected standard coverage or complaints 2 Significant Containable Major injury Medium or long - Medium -term Prosecution with Short -term A delay greater Key target missed within overall term localised damage to fine disruption or than 10 per cent by up to 20% budget but might damage or reputation impairment to of original Lower priority require resources degradation among partners several non- timescale output not to be reprioritised Major local or critical work areas delivered Page 219 and not more minor London- / services or to than £250k wide adverse one critical work press coverage area / service 3 Substantial Not containable Fatality or several Long -term or Long -term Director charged Medium -term More than 25 per Key target missed within existing major injuries permanent damage to Major disruption or cent increase on by up to 30% budget and not localised damage reputation among compensation impairment to original timescale Several lower more than £1 or degradation; or partners claims several non- or such that the priority outputs million widespread short- Significant critical work areas work/project will not delivered to term damage London-wide / services or to fail to meet core expected standard adverse press one critical work objectives as a Or Mayoral coverage area / service result of the delay commitment not achieved 4 Catastrophic Cannot be Several fatalities Long -term or Permanent Director convicted A fundamental More than 50 per Key target missed resourced within or numerous permanent damage to Major impact on the cent increase on by > 40% existing major injuries widespread reputation among compensation GLA’s ability to original timescale Several lower contingencies or damage partners claims exceeding achieve its or such that the priority outputs more than £1 National adverse available cover objectives or to work/project will not delivered million press coverage Central meet the needs of be unable to Or significant government its service users achieve its underachievement action primary purpose against a key Mayoral commitment 15 The impact criteria above are neither exhaustive or entirely prescriptive. Below the level of corporate risk they are intended as a guide. You should always use the 4 x4 scoring system – and apply it consistently – but at the same time you must take context into account. A risk may be ‘red’ in the context of a given project, but escalated to the corporate risk register it may only be ‘amber’. You may wish to document your own descriptors at the start of the project. By the end of this stage you should have: • a risk register that has been updated to include the probability of each threat and opportunity materialising, the potential impact and the risk score; • an overview of the aggregate amount of risk exposure, for example by putting a financial value on possible risk impacts or creating a heat map (this involves plotting all the risks onto a probability/impact grid to understand how they are distributed); • a clearer sense of whether a given activity or proposal has a favourable balance between risk and reward, ie. whether to accept the risks given the benefits that may be accrued and/or the outcomes that are planned to be delivered; • a hierarchy of risks, and an understanding of the urgency associated with individual risks, so that effort and resources can be directed effectively; • a better understanding of which risks might need to be escalated to senior managers and corporate levels; and • an understanding of the correlation between risks.
Stage 3: Address
Prevention is better than cure. That is the crux of this stage of the process, and indeed risk management in general. Putting in place effective controls to address risks relies on good judgement and thorough analysis, which can be aided by drawing on the advice of experts. That is because there is an obvious trade-off between the time and cost of putting in place risk controls and the benefit derived from reducing the probability and impact of a given risk. There is no value in investing in controls if there is not a commensurate benefit. And the most extensive control measures may not offer the best balance between cost and benefit. The best response is the one which has the biggest impact on the level of risk exposure for the lowest cost. That means putting in place controls that are proportionate, economical, efficient, effective, timely, straightforward and practical. The key steps at this stage are to: • determine which risks need to be controlled; • identify and implement control mechanisms that strike the optimum balance between cost and benefit;
Page 220 16 • using the probability/impact grid, assess and record the residual 3 probability and impact and revised score for each risk, taking into account the likely efficacy of control mechanisms; and • implementing the controls – to not do so would be to waste much of the time and effort expended up to this point. The main methods for controlling risks are known as the ‘four Ts’. You may wish to use a combination of these for a given risk. Treat Either the probability or the impact of the risk can be ‘treated’, as described below. • Acting to reduce the risk probability by putting in place preventative controls is the most common response to risk. Examples include strengthening governance arrangements, putting in place new or more rigorous management practices, or enhancing quality controls. • Acting to reduce the potential impact of a risk is about having a ‘Plan B’. This should be your chosen response when you cannot economically lower the probability of the risk to a tolerable level. • Putting in place measures to detect when undesirable outcomes have occurred. This approach is appropriate only when it is possible to accept the loss or damage incurred up to the point of identification. Examples include financial reconciliation, monitoring and post implementation reviews. Treatment is likely to be more effective when both the probability and the potential impact are acted upon. Transfer Part or all of the risk may be transferred to another party, normally at a cost. This can be done through partnership agreements and commissioning where others are better placed to manage the risk. Purchasing insurance will transfer the financial impact of a risk. Be careful to avoid transferring control of the risk without also transferring the potential negative impacts, for example reputational damage – particularly when that party has a lower capacity and capability for managing the risk than the GLA itself. Terminate In other words, eliminating the risk by not pursuing the activity in question. This could be done by changing the scope of the programme/project or the delivery mechanism. However unless done early on, this can be costly or difficult to achieve. It is likely there were good reasons for deciding on the original scope or delivery mechanism. And often it will not be a viable option, given political or regulatory considerations. Tolerate This means accepting the risk without putting any controls in place, ie. taking a calculated chance. This may be an appropriate response when:
3 While the residual risk rating is forward looking, in that it looks at the position once control measures are in place, you need to consider and be realistic about the likelihood of the controls being successfully implemented, in sufficient time and having the intended mitigating effect. If their success is uncertain, you need to reflect that in the rating.
Page 221 17 • there is nothing that can be practically done to limit the risk; • implementing control measures would shift the balance between costs and benefits from favourable to unfavourable; • control of the risk is properly the responsibility of another party, for example central government; or • the risk is of low probability and negligible impact. By the end of this stage you should have: • a residual probability and impact score for each risk; • a completed (but not static) risk register; • where risks are particularly complicated or involved, a risk response plan; • escalated risks as appropriate to directorate and corporate levels; • a good sense of the total quantum of risk (and an updated heat map, if you created one) associated with the activity; and • where relevant, a sound basis for deciding whether overall benefits and rewards outweigh the potential threats and associated controls.
Stage 4: Reviewing and reporting
New risks will continue to emerge, existing risks will change in nature, and the perceived efficacy of controls will also change based on experience and evolving circumstances. It is essential, therefore, that risk is reviewed and reported on a periodic basis, but also flexibly when there are significant changes in circumstances or key decisions to take. Risk review, like risk identification and assessment, should be a collaborative exercise drawing on input from risk and risk action owners and from others involved in the project or work area. Risk review and reporting should be integrated with other monitoring and reporting mechanisms, to help identify linkages and ensure there is a comprehensive picture of progress and future prospects. Early warning mechanisms should also be monitored, and there may be merit in returning to some of those techniques deployed at stage 1, such as horizon scanning. By the end of this stage you should have: • refreshed your environmental analysis, if there have been changes in the operating context; • added and removed risks from the risk register; • assured yourself that controls are in place or that good progress is being made to implement them; • reviewed the efficacy and impact of controls and considered different approaches where necessary; • refreshed risk assessments, both inherent and residual;
Page 222 18 • considered and where relevant amended the risk hierarchy; • reassessed the overall level of risk, and in some cases risk appetite, associated with the activity; and • decided whether or not to escalate any risks to the directorate or corporate level. Note that historic risk registers and associated reports should be retained (rather than only the most recent being kept) so as to aid review the efficacy of risk mitigation, facilitate project evaluation and serve as an audit trail. This requirement is also documented in the GLA’s Record Retention Schedule.
Page 223 19 Appendix: Risk register template
Note that an Excel format risk register is available via the risk intranet page. This includes a format that allows more detailed information to be captured. Inherent risk Residual risk Risk Action Risk Risk description and impact assessment Control measures/Actions Deadline/Completed assessment # owner owner Prob. Impact Overall Prob. Impact Overall [Cause, ‘risk event’, potential 1 [1-4] [1-4] [1-16] [1-4] [1-4] [1-16] impacts] 2 3 4
5 Page 224 6 7 8 9 Example risk Consultation with Mayoral Advisors Poor KPIs and senior officers on the scope of Tim S Completed 21/12/12 Poor definitions, inadequate systems the KPIs. or shaky rationales mean that the Named performance and data In progress. To complete Tim S GLA’s suite of KPIs does not provide managers for each indicator. by 25/1/13 1 insight into the performance of the 3 3 9 Lead process to ensure systems are 1 2 2 Tom M Begin 28/1. To complete Authority in key areas. In turn, this established, including data quality Tim S by 1/3/13 will impair the organisation’s ability to checks. take remedial action, achieve its goals Put in place process to monitor KPI and celebrate success. scope and data quality on an Tim S To be in place by 1/4/13 ongoing basis.
20 Agenda Item 8
Subject: Monitoring of Expenses and Taxable Benefits – Mayor, Elected Members and Senior Staff – 2013/14 Report to: Audit Panel Report of: Executive Director of Resources Date: 20 March 201 4 This report will be considered in public 1. Summary 1.1 This report sets out the taxable benefits and expenses incurred by the Mayor, London Assembly Members and senior staff for the period 1 November 2013 to 31 December 2013. 2. Recommendation 2.1 That the Panel notes the taxable benefits and expenses incurred by the Mayor, London Assembly Members and senior staff for the period 1 November 2013 to 31 December 2013 . 3. Background 3.1 This report presents taxable benefits and expenses claimed, processed and approved during the period 1 November 2013 to 31 December 2013. The reporting and monitoring of taxable benefits and expenses in a public meeting supports the transparency and openness of GLA activity to ensure accountability to Londoners. Appendix 1 provides details of expenses for the Mayor and Assembly Members, Appendix 2 provides details of taxable benefits for the Mayor and Assembly Members, and Appendix 3 provides details of expenses for senior staff. 4. Issues for Consideration Taxable benefits – Travel card 4.1 The Mayor and Assembly Members are entitled to an annual six-zone travel card. Members have the discretion to decide how many zones they require. The provision of a travel card is a taxable benefit and travel cards issued during the period from 1 April 2013 to 31 December 2013 totalled £39,120. Details are set out at Appendix 2 .
City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 225
Business Expenses Use of taxis 4.2 Taxi expenses reported during the period 1 November 2013 to 31 December 2013 totalled £92 for Assembly Members. Senior staff incurred £738 on taxi expenses during this period. Other expense claims 4.3 In the course of their official duties the Mayor, Assembly Members and senior staff may incur business expenses. Wherever possible, the Authority books services in advance and all valid business expenses are reimbursed in accordance with the approved Expenses and Benefits Framework. 4.4 During the period 1 November 2013 to 31 December 2013, the Mayor claimed £5,816 on Foreign Travel. The Deputy Mayor for Business and Enterprise claimed 4,816 on Foreign Travel. Senior staff claimed £14,329 on Foreign Travel and £3,598 on Other Expenses and £1,127under Other Domestic Travel. The category of Other Expenses includes subsistence, civic hospitality, hotel accommodation, eye tests and other miscellaneous expenses. 4.5 The GLA also provides mobile devices for the Mayor, Assembly Members and senior staff for business purposes as appropriate. The cost of these devices, which are paid direct by the GLA, is not included in this report. Statistics 4.6 Summary totals for the periods April 2012 to December 2012 and April 2013 to December 2013 show an overall increase in expenses incurred by the Mayor and Assembly Members. Inevitably, any comparisons during the course of the year will be heavily influenced by the scheduling of foreign visits and this is particularly evident for the period under review. Accordingly variances will only be reported at the end of the financial year. April 2012 April 2012 April 2013 to March to December to December 2013 Total 2012 Total 2013 Total (£) (£) (£) Taxi Expense Claims 306 275 506 Other Domestic Travel 394 243 329 Foreign Travel 10,195 1,409 15,967 Other Expenses 3,241 922 1,730 Total 14,136 2,850 18,531 4.7 Summary totals for the periods April 2012 to December 2012 and April 2013 to December 2013 show an overall increase in expenses incurred by Senior Staff. Inevitably, any comparisons during the course of the year will be heavily influenced by the scheduling of foreign visits and this is
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particularly evident for the period under review. Variances will only be reported at the end of the financial year. April 2012 April 2012 April 2013 to March to December to December 2013 Total 2012 Total 2013 Total (£) (£) (£) Taxi Expense Claims 2,080 699 2,653 Other Domestic Travel 3,718 2,856 3,150 Foreign Travel 22,613 621 34,430 Other Expenses 16,723 1,538 19,523
Total 45,134 5,715 59,755 Exceptions 4.8 All expenses and benefits have been authorised and paid in accordance with the Expenses and Benefits Framework. The Framework provides for exceptions to be approved and during the period from 1 November 2013 to 31 December 2013 there is one such expenses claim listed in the table below.
Claimant Value (£) Outside of the Framework Reasons for approval 80.88 Chief of Staff and Deputy Mayor, Claim included expenses more than Expenses properly incurred on Policy and Planning 3 months old GLA business Carbon Emissions 4.9 The Authority is committed to reducing its carbon footprint and this has been reflected in the Expenses and Benefits Framework and there is an expectation that all claimants will use public transport wherever possible. The Authority calculates the carbon emissions on all flights and in line with the Government Carbon Offsetting Fund formulae pays the offsetting costs. 5. Legal Implications 5.1 Under section 127(2) of the Greater London Authority Act 1999 the Mayor is required to make arrangements for the proper administration of the financial affairs of the Authority and to secure that one of the Authority’s officers, the Chief Finance Officer, has responsibility for the administration of those affairs. The Chief Finance Officer of the Authority is the Executive Director of Resources. The adoption of the Expenses and Benefits Framework is one of the arrangements made by the Mayor on the recommendation of the Chief Finance Officer for the good administration of the financial affairs of the Authority.
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6. Financial Implications 6.1 EXPENSES - Total expenditure on business expenses for the Mayor and Assembly Members for the period 1 November 2013 to 31 December 2013 totaled £10,729 and for Senior Officers it totaled £19,792. These costs have been met from respective budgets. 6.2 TAXABLE BENEFITS - Expenditure on travel cards for Elected Members for the period 1 April 2013 to 31 December 2013 totaled £39,120. These are taxable benefits and have been met from the relevant budget. List of appendices to this report: Appendix 1 - Details of expenses for the Mayor and Assembly Members Appendix 2 - Details of taxable benefits for the Mayor and Assembly Members Appendix 3 - Details of expenses for senior staff Local Government (Access to Informatio n) Act 1985 List of Background Papers: None Contact Officer: Doug Wilson, Head of Financial Services Telephone: 020 7983 4038 E-mail: [email protected]
Page 228 APPENDIX 1: MAYOR AND MEMBERS EXPENSES 01 APRIL 2013 to 31 DECEMBER 2013 Reporting Taxi Other Period Total 1 Taxi Expense Domestic Other Nov 2013 to 31 Year to Date Invoices Claims Travel Foreign Travel Expenses Dec 2013 Total
Mayor Johnson, Boris - - - 5,816.39 - 5,816.39 11,368.19
Deputy Mayor Borwick, Victoria - 17.00 - - - 17.00 17.00
Current Assembly Members Assembly Member Arbour, Tony ------Assembly Member Arnold, Jennette ------Assembly Member Bacon, Gareth ------Assembly Member Biggs, John ------Assembly Member Boff, Andrew ------Assembly Member Cleverly, James ------Assembly Member Copley, Tom ------Assembly Member Dismore, Andrew ------132.84 Assembly Member Duvall, Len ------25.98 Assembly Member Evans, Roger ------Assembly Member Gavron, Nicky ------Assembly Member Johnson, Darren ------Assembly Member Jones, Jenny - 75.00 4.80 - - 79.80 399.30 Assembly Member Knight, Stephen ------Assembly Member Malthouse, Kit - - - 4,815.54 - 4,815.54 6,540.84 Assembly Member McCartney, Joanne ------Assembly Member O'Connell, Stephen ------Assembly Member Pidgeon, Caroline ------Assembly Member Qureshi, Murad ------Assembly Member Sahota, Onkar ------Assembly Member Shah, Navin ------Assembly Member Shawcross, Valerie ------Assembly Member Tracey, Richard ------Assembly Member Twycross, Fiona ------47.00
Reporting Period Total - Nov 13 to Dec 13 - 92.00 4.80 10,631.93 - 10,728.73
Year to Date Total - 505.75 328.50 15,966.69 1,730.21 18,531.15
Page 229 APPENDIX 1
Boris Johnson Mayor of London
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL REF Date Details 5,816.39 5,816.39 CCDECwk2B 16/09/13 Flights from London to Beijing and return from Hong Kong for the Mayor Official Trade Visit to China
0.00 0.00 0.00 5,816.39 0.00 5,816.39
Victoria Borwick Statutory Deputy Mayor
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL REF Date Details 7.00 7.00 EXPNOVwk2C 04/10/13 Taxi from Kensington to Trafalgar Square to represent the Mayor at two events - Malaysia Night at Trafalgar Square then on to speech at Zonta International in Lansdowne Club, Mayfair 10.00 10.00 EXPNOVwk2C 04/10/13 Taxi from Trafalgar Square Lansdowne Club, Mayfair due to limited time between the two meetings
0.00 17.00 0.00 0.00 0.00 17.00
Jenny Jones Assembly Member
Invoices Expense Domestic Travel Expenses TOTAL REF Date Details 10.00 10.00 EXPNOVwk2G 11/06/13 Taxi from Oxford Street to St Pancras (home, canal boat) - after State of London debate finished after 9pm 17.00 17.00 EXPNOVwk2G 12/06/13 Taxi from Westminster to Camberwell (home) following State of London meeting which finished after 10pm 16.80 16.80 EXPNOVwk2G 02/10/13 Taxi from Mansion House to Camberwell (home) after Lord Mayor's Dragon Awards dinner which finished after 10pm 18.00 18.00 EXPNOVwk2G 08/10/13 Taxi from Westminster to Camberwell (home) following LBC 40th event which finished after 10pm 4.80 4.80 EXPDECwk1C 22/10/13 Train travel from Paddington to Southall - Site visit to waste facility. Journey took place before 9.30am when Jenny’s Freedom Pass is not valid. 6.60 6.60 EXPDECwk1C 22/10/13 Taxi taken from Southall Station to Beaver Industrial Park for site visit to a waste facility. Could not find practical bus route. 6.60 6.60 EXPDECwk1C 22/10/13 Taxi from Beaver Industrial Park to Southall Station following Site visit to a waste facility. Could not find practical bus route
0.00 75.00 4.80 0.00 0.00 79.80
Kit Malthouse Assembly Member
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL REF Date Details 3,659.63 3,659.63 CCDECwk2K 17/09/13 Flight from London to Beijing for the Mayor's Official Trade Visit to China in October 2013 1,155.91 1,155.91 CCDECwk2L 17/09/13 Flight from Hong Kong to London - return from the Mayor's Official Trade Visit to China in October 2013
0.00 0.00 0.00 4,815.54 0.00 4,815.54
No expense claims were made by the following members between 01 November 2013 to 31 December 2013:
Tony Arbour Roger Evans Navin Shah Darren Johnson Gareth Bacon Jennette Arnold Andrew Boff Joanne McCartney Tom Copley Stephen O'Connell Nicky Gavron Caroline Pidgeon John Biggs Murad Qureshi James Cleverly Valerie Shawcross Stephen Knight Onkar Sahota Tracey Richard Len Duvall Andrew Dismore Fiona Twycross
Page 230 APPENDIX 2: MAYOR AND MEMBERS TAXABLE BENEFITS 01 APRIL 2013 to 31 DECEMBER 2013 Reporting Period Total 1 Nov 2013 to 31 Year to Date Travel Card Dec 2013 Total
Mayor Johnson, Boris - --
Deputy Mayor Borwick, Victoria - - 2,224.00
Current Assembly Members Assembly Member Arbour, Tony - - 2,224.00 Assembly Member Arnold, Jennette - - 2,224.00 Assembly Member Bacon, Gareth - - 2,224.00 Assembly Member Biggs, John - - 2,072.00 Assembly Member Boff, Andrew - -- Assembly Member Cleverly, James - - 2,224.00 Assembly Member Copley, Tom - - 2,224.00 Assembly Member Dismore, Andrew - - 1,216.00 Assembly Member Duvall, Len - - 2,224.00 Assembly Member Evans, Roger - - 2,224.00 Assembly Member Gavron, Nicky - -- Assembly Member Johnson, Darren - - 1,744.00 Assembly Member Jones, Jenny - -- Assembly Member Knight, Stephen - - 2,224.00 Assembly Member Malthouse, Kit - -- Assembly Member McCartney, Joanne - - 1,744.00 Assembly Member O'Connell, Stephen - - 2,224.00 Assembly Member Pidgeon, Caroline - - 1,687.80 Assembly Member Qureshi, Murad - - 2,224.00 Assembly Member Sahota, Onkar - - 2,224.00 Assembly Member Shah, Navin - -- Assembly Member Shawcross, Valerie - - 1,744.00 Assembly Member Tracey, Richard - -- Assembly Member Twycross, Fiona - - 2,224.00
Reporting Period Total - Nov 13 to Dec 13 - -
Year to Date Total - 39,119.80
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Page 232 APPENDIX 3: SENIOR EMPLOYEES EXPENSES 01 APRIL 2013 TO 31 DECEMBER 2013
Reporting Other Period Total 1 Taxi Taxi Expense Domestic Other Nov 2013 to 31 Year to Date Invoices Claims Travel Foreign Travel Expenses Dec 2013 Total
Private Office
Chief of Staff and Deputy Mayor, Policy and Planning - 346.08 63.74 6,136.45 2,374.06 8,920.33 22,296.50 Deputy Mayor for Transport ------5,061.88 Deputy Mayor for Housing, Land and Property - - 111.30 497.31 124.00 732.61 1,404.98 Deputy Mayor for Policing and Crime ------Deputy Mayor for Education and Culture - 34.54 - - - 34.54 559.81 Director of Communications & External Affairs - 185.00 84.00 7.97 590.95 867.92 2,728.79 Advisor for Olympic and Paralympic Legacy ------Environment and Political Advisor - 36.75 63.23 - - 99.98 844.56 Senior Advisor for Team London, Volunteering, Charities & Sponsorship - 22.10 213.50 - 61.25 296.85 420.29 Senior Adviser - Mentoring ------Chief Economic Advisor - 39.00 106.40 4,526.19 9.76 4,681.35 12,430.72 Cycling Commissioner - 54.72 36.65 - 130.24 221.61 1,299.70 Chair of London Food ------483.38
Assembly & Secretariat
Executive Director of Secretariat ------14.50 Head of Special Projects and Elections ------60.39 Head of Assembly External Relations ------Head of Scrutiny and Investigation ------Head of Committee and Member Services ------
External Affairs
Assistant Director - London Engagement ------175.00 Head of Public Liaison and Community ------Head of Media ------2,407.00 Commercial Director ------
Community & Intelligence
Head of Paid Service and Executive Director - Communities & Intelligence ------Assistant Director - Intelligence and Analysis ------559.79 Assistant Director - Health and Communities ------1,351.00 Head of Education and Youth - 5.00 - - 158.40 163.40 163.40 Head of Governance and Resilience ------Programme Director, Team London and Sustainable Development Manager ------14.60 Programme Director Team London ------
Development & Environment
Executive Director of Development, Enterprise and Environment - - - 833.41 - 833.41 846.59 Assistant Director - Economic and Business Policy - - - 274.22 36.95 311.17 311.17 Assistant Director - Environment ------886.49 Head of Transport ------Assistant Director - Regeneration ------40.00 Assistant Director Capital Projects and Design ------Assistant Director - Planning - - - 751.41 - 751.41 853.51
Resources
Executive Director - Resources ------180.00 Assistant Director - Group Finance ------64.40 Head of Financial Services ------72.60 Head of Technology Group ------Assistant Director - Human Resources & Organisational Development ------Head of Facilities Management ------European Programme Director - - 5.40 11.25 64.62 81.27 864.06
Housing and Land
Executive Director of Housing and Land - - 22.90 - - 22.90 1,130.68 Assistant Director - Programme Policy and Services ------Head of Area, North East London - 5.00 110.80 - - 115.80 309.10 Head of Area, North West London - - 37.90 - - 37.90 37.90 Assistant Director - Strategic Projects and Property - 10.00 270.90 1,290.36 48.00 1,619.26 1,837.09 Head of Area, South London (Left 10/06/13) ------45.30
Reporting Period Total - 01 November 2013 to 31 December 2013 - 738.19 1,126.72 14,328.57 3,598.23 19,791.71
Year to Date Total - 2,652.78 3,149.65 34,429.70 19,523.05 59,755.18
Page 233 APPENDIX 3
Chief of Staff and Deputy Mayor, Policy and Planning
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 45.00 45.00 15/09/13 Taxi from home (SW18) to Heathrow Airport Terminal 5 for trade visit recce to China - due to luggage for a 2 week trip 3.56 3.56 22/09/13 Tickets to Temple of Heaven recce before Mayor's visit for a possible photo opportunity. The costs were proportioned between the Chief of Staff, International Relations Manager and a L&P staff 8.13 8.13 22/09/13 Tickets to the Forbidden City recce before Mayor's visit in October for a possible photo opportunity. The costs were proportioned between the Chief of Staff, International Relations Manager and a L&P staff 7.21 7.21 28/09/13 Single train ticket from Kowloon to airport during the recce trip to China ahead of the Mayor trade Visit to China in October 55.00 55.00 29/09/13 Taxi from Heathrow Airport Terminal 5 to home following the recce trip to China ahead of the Mayor's trade visit - due to luggage and early arrival 20.68 20.68 13/10/13 Lunch while in China during the Mayor's trade visit to China. Costs were proportioned equally between Chief of Staff, Director of Communication, Private Secretary to the Mayor, L&P staff and a Photographer 9.58 9.58 28/06/13 Taxi from City Hall to Guildhall to attend 60th anniversary Kuwait Investment Office lunch. Taxi taken as short of time from late meeting 36.30 36.30 18/07/13 Business lunch with CEO of London & Partners to discuss future Mayoral trips and L&P work 35.00 35.00 19/08/13 Taxi from South Audley St, W1 to home (SW18), late finish after dinner with Chairman of Canary Wharf Group 80.00 80.00 27/08/13 Business lunch with Member of Parliament for Bromley & Chislehurst about London Finance Commission 12.00 12.00 29/08/13 Taxi taken from City Hall to British Museum to attend a ParaOlympics reception and was late for an event at British Museum 25.00 25.00 05/09/13 Taxi from Hyde Park to home (SW18) after attending an event at The Serpentine Gallery due to late finish 18.00 18.00 12/09/13 Taxi taken from W1 to home (SW18) after a late finish from dinner with Delancey property company 19.12 19.12 30/09/13 Train ticket from London to Manchester for Party Conference 7.50 7.50 29/09/13 Taxi from Manchester Station to Radisson Blu Edwardian for Party Conference 32.17 32.17 01/10/13 Train ticket from Manchester to London - returning from party conference 330.00 330.00 01/10/13 Accommodation at the Radisson Blu Edwardian during Party Conference in Manchester 151.59 151.59 02/10/13 Business lunch with Mayor of London, Mayor of Newham, Chief Executive of Newham and Mayor Advisor on Olympic and Paralympic Legacy to discuss issues of common interest 46.00 46.00 06/10/13 Taxi from home to Heathrow airport - Taxi taken due to early departure
12.45 12.45 08/10/13 Taxi taken from hotel to NY to meet Global Head of Government Relations and Communications from Bloomberg L.P. for lunch 53.00 53.00 09/10/13 Taxi from Heathrow to home due early arrival 192.51 192.51 07/10/13 Hotel expenses at Conrad NY, whilst attending CityLab Conference - 2 internet charges on 6/10/13 and 7/10/13, breakfast on 7/10/13 and an extra night's accommodation on 7/10/13. Room charge due to late charge to stay for meetings with Bloomberg and to catch flight in the evening 544.77 544.77 10/09/13 Hotel accomodation whilst in kuala Lumpur to attend WIEF steering group meeting (16/09/13 - 20/09/13) 4,273.79 4,273.79 16/09/13 Flights from London to Beijing and return from Hong Kong for the Mayor Official Trade Visit to China 279.58 279.58 20/09/13 Phone calls and meals expenses whilst in Kuala Lumpur to attend WIEF steering group meeting (16/09/13 - 20/09/13) 813.14 813.14 24/09/13 Hotel accommodation whilst in Beijing preparing for the Mayor's Visit in October 2013 150.16 150.16 26/09/13 Business entertaining dinner between the Chief of Staff, International Relations Manager and representatives from Goldman Sachs during the China recce trip 438.62 438.62 28/09/13 Hotel accommodation whilst in Hong Kong to prepare for the Mayor's Visit in October 2013 226.05 226.05 04/10/13 Transport cost travelling between Airport and hotel in New York when attending the City Lab conference at the inviation of the Mayor of New York 35.00 35.00 11/10/13 Taxi from home to Heathrow Airport for the Mayoral Trade Visit to China - due to heavy luggage 30.00 30.00 15/10/13 Dinner while in China on Mayoral Trade Visit. Costs were proportioned equally between Chief of Staff, Director of Communication and Principle Policy Officer 9.85 9.85 19/10/13 Airport Express ticket from Hong Kong Central to Airport during the Mayoral Trade Visit to China 60.00 60.00 20/10/13 Taxi from Heathrow Airport to Home (SW19) returning from the Mayoral Trade Visit to China - due to early arrival and heavy luggage 108.16 108.16 12/10/13 Business entertaining dinner with L&P representatives during the Mayoral Trade Visit to China
Page 234 751.41 751.41 17/12/13 Return flights from London to Nice for MIPIM 2014
0.00 346.08 63.74 6,136.45 2,374.06 8,920.33
Deputy Mayor for Housing, Land and Property
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 77.30 77.30 30/09/13 Travel from London to Manchester to attend the Convervative Party Conference 124.00 124.00 30/09/13 Hotel accommodation in Manchester for Conservative Party Conference and to attend four speaking engagements over two days plus meeting 34.00 34.00 10/10/13 Travel from Paddington to Heathrow to catch flight to Hong Kong for the Mayor's trade visit to China 497.31 497.31 17/12/13 Return flights from London to Nice for MIPIM 2014
0.00 0.00 111.30 497.31 124.00 732.61
Deputy Mayor for Education and Culture
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 18.48 18.48 03/09/13 Taxi from home to BBC London Three Mill studios carrying heavy equipment to take part in BBC tv interview 16.06 16.06 03/09/13 Return taxi journey from BBC London studios with heavy equipment
0.00 34.54 0.00 0.00 0.00 34.54
Director of Communications and External Affairs
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 30.00 30.00 13/09/13 Taxi from City Hall to Hammersmith to a long- standing private engagement whilst taking part in a conference call with the Chief of Staff and other 65.00 65.00 30/09/13 Travel from London to Manchester to attend Conservative Party Conference 19.00 19.00 01/10/13 Travel from Manchester to London returning from the Conservative Party Conference 22.00 22.00 30/09/13 Taxi from Shepherds Bush to Euston Railway Station to catch train to Manchester due to early departure time 30.00 30.00 30/09/13 Dinner while attending the Party Conference in Manchester 4.00 4.00 01/10/13 Taxi from Midland Hotel to speaking venue with the Mayor at Manchester Central - carrying briefing paraphernalia 13.20 13.20 01/10/13 Cost of newspapers which were essential while staying at Midland hotel for the Party Conference in Manchester 5.00 5.00 01/10/13 Breakfast while staying at Midland hotel for the Party Conference in Manchester 27.00 27.00 02/10/13 Taxi from Euston Station to Shepherds Bush returning from the Party Conference in Manchester 37.00 37.00 11/10/13 Taxi from City Hall to Hammersmith carrying briefing material for the Mayor's trade visit to China 30.00 30.00 12/10/13 Taxi from Hammersmith to Airport carrying briefing material for the Mayor's trade visit to China 20.68 20.68 13/10/13 Lunch while in China during the Mayor's trade visit to China. Costs were proportioned equally between Chief of Staff, Director of Communication, Private Secretary to the Mayor, L&P staff and a Photographer 4.89 4.89 13/10/13 Dinner at hotel during the Mayor's trade visit to China
85.78 85.78 14/10/13 Business entertaining lunch with Photographer from I-Image to discuss photo opportunities 10.00 10.00 14/10/13 Breakfast at hotel during the Mayor's trade visit to China
21.49 21.49 14/10/13 Dinner at hotel during the Mayor's trade visit to China
10.00 10.00 15/10/13 Breakfast at hotel during the Mayor's trade visit to China
56.65 56.65 15/10/13 Business entertaining lunch with Photographer from I-Image to discuss photo opportunities 45.22 45.22 15/10/13 Business entertaining dinner with Photographer from I-Image to discuss photo opportunities 30.00 30.00 17/10/13 Dinner at hotel during the Mayor's trade visit to China
10.00 10.00 18/10/13 Breakfast at hotel during the Mayor's trade visit to China
Page 235 200.54 200.54 18/10/13 Business entertaining event for the Press accompanying the Mayor during the Mayor's trade visit to China. Attendees: Political Editor from ITN, two Journalists from ITN, Political Correspondent from LBC, City Hall Editor from the Independent and the London Evening Standard, Political Editor from BBC London, Photographer from I-Images, Chief Photographer from Press Association, Political Correspondent from Press Association and Cameraman from BBC London
17.50 17.50 18/10/13 Hire charges for a printer for the Mayor
7.97 7.97 20/10/13 Train fare to Hong Kong airport during the Mayor's trade visit to China
35.00 35.00 21/10/13 Taxi from Heathrow to Hammersmith returning from the Mayor's trade visit to China - early arrival 30.00 30.00 15/10/13 Dinner while in China for the Mayor Trade Visit. Costs were proportioned equally between Chief of Staff, Director of Communication and Principle Policy Officer
0.00 185.00 84.00 7.97 590.95 867.92
Environment and Political Advisor
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 43.23 43.23 26/09/13 Travel from London to Manchester and return to attend Conservative Party Conference 18.00 18.00 29/09/13 Taxi from Manchester to Temperley accommodation following Canary Wharf dinner at Conference 18.75 18.75 01/10/13 Taxi from Manchester to Temperley accommodation followin City of London Corporation dinner at Conference 20.00 20.00 21/10/13 Heathrow Express from airport following late landing of flight in order to attend Mayoral Team meeting
0.00 36.75 63.23 0.00 0.00 99.98
Senior Advisor - Team London, Volunteering, Charities & Sponsorship
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 4.00 4.00 05/04/13 Train ticket to Kidbrooke for Mizen Charity visit
11.25 11.25 17/09/13 Continental breakfast for Team London Advisory Group 50.00 50.00 27/07/13 Flowers for staff - thank you for Go Local event on which she worked so hard to make it such a success 11.00 11.00 31/07/13 Visiting London's National Citizen Service Elephant & Castle - taxi taken due to overrunning meeting 108.50 108.50 30/09/13 Travel from Euston to Manchester for Conservative Party Conference
67.00 67.00 30/09/13 Cost of unused train ticket due to earlier arrival necessary for networking dinner 5.00 5.00 30/09/13 Taxi from Piccadilly Station Manchester to Midland Hotel - Conservative Party Conference 6.10 6.10 01/10/13 Taxi from Midland Hotel to Piccadilly Station post party conference
34.00 34.00 01/10/13 Travel from Manchester to Euston post Party Conference
0.00 22.10 213.50 0.00 61.25 296.85
Chief Economic Advisor
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 10.25 10.25 25/06/13 Taxi from Gare du Nord to Hotel in Paris - speaking at Institute of International Finance Forum 17.15 17.15 27/06/13 Taxi from restaurant to Gare du Nord following post forum drink International Finance Forum 9.76 9.76 09/07/13 Business entertaining lunch with journalist from The Guardian 4.20 4.20 15/07/13 Travel from London Bridge to Westminster and return for meeting with MP to discuss EU report 4.20 4.20 16/07/13 Travel from London Bridge to Canary Wharf and return - speaking at Mayor's Music Fund 4.20 4.20 23/07/13 Travel from London Bridge to Chatham House and return for meeting and lecture 11.00 11.00 24/07/13 Taxi to meeting at the Centre Point following overran meeting with the Mayor 2.10 2.10 24/07/13 Travel back to office from CBI meeting 77.30 77.30 30/09/13 Travel from London to Manchester for Conservative Party Conference
12.00 12.00 30/09/13 Taxi from home to train station with luggage for party conference
Page 236 10.20 10.20 30/09/13 Travel from Oxted to Victoria - interchange for the trip to Manchester for Conservative Party Conference 2.10 2.10 30/09/13 Travel from Victoria to Euston - interchange for the trip to Manchester for Conservative Party Conference 4.50 4.50 01/10/13 Taxi from late working dinner at conference to hotel 2.10 2.10 01/10/13 Travel from Euston to Victoria - returning from the Conservative Party Conference 11.50 11.50 01/10/13 Taxi from Oxted station to home with luggage returning from the Party Conference 4,498.79 4,498.79 17/09/13 Flights from London to Beijing and return from Hong Kong for the Mayor's Official Trade Visit to China in October 2013
0.00 39.00 106.40 4,526.19 9.76 4,681.35
Cycling Commissioner
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 16.49 16.49 16/04/13 Business entertaining with Sustrains Directors - Quiteways Site Visit 18.45 18.45 11/07/13 Business entertaining with Cycling Consultant - Cycle Vision 8.05 8.05 11/07/13 Business entertaining with Cycling Consultant - Cycle Vision 16.65 16.65 12/07/13 Travel from London to Brighton and return to see new cycle tracks 20.00 20.00 24/07/13 Train from Paddington to Heathrow to see BAA to discuss Cycle Hub at Heathrow 83.25 83.25 29/07/13 Business entertaining with Sustrains Directors - Quiteways Site Visit 2.00 2.00 20/08/13 Hire Barclays Bike 54.72 54.72 29/08/13 Taxi from Greenwich to Wanstead - Take bike to Eddie Nestor BBC 2.00 2.00 04/09/13 Hire Barclays Bike
0.00 54.72 36.65 0.00 130.24 221.61
Head of Education and Youth
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 5.00 5.00 13/11/13 Taxi from Westminster to Pimlico for meeting at EEF due to time constraint 31.00 31.00 21/11/13 Refreshment for contributors and staff for their achievement on a major international education conference 30.00 30.00 19/11/13 Refreshment for contributors and staff for their achievement on a major international education conference 62.40 62.40 22/11/13 Refreshment for contributors and staff for their achievement on a major international education conference 35.00 35.00 22/11/13 Flower to staff as reward for her contribution for a successful conference
0.00 5.00 0.00 0.00 158.40 163.40
Executive Director of Development, Enterprise and Environment
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 833.41 833.41 17/12/13 Return flights from London to Nice for MIPIM 2014
0.00 0.00 0.00 833.41 0.00 833.41
Assistant Director - Economic and Business Policy
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details Charge for baggage while flying with Easyjet for travelling to the 22.00 22.00 04/10/13 ExpoReal property conference in Munich Charge for chossing seat while flying with Easyjet for travelling to the 6.00 6.00 04/10/13 ExpoReal property conference in Munich Taxi from Airport to hotel in Munich for ExpoReal property conference 8.80 8.80 06/10/13 in Munich Taxi from conference venue to Airport for ExpoReal property 8.80 8.80 07/10/13 conference in Munich Train from Airport to hotel to attend a meeting of the HyFive European 3.62 3.62 16/10/13 project in Frankfurt 8.95 8.95 16/10/13 Dinner during meeting of the HyFive European project in Frankfurt Travel from London to Brussels to attend a HyFive meeting on 26 253.00 253.00 24/09/13 September 2013
0.00 0.00 0.00 274.22 36.95 311.17
Assistant Director - Planning
Page 237 Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 751.41 751.41 17/12/13 Return flights from London to Nice for MIPIM 2014
0.00 0.00 0.00 751.41 0.00 751.41
European Programme Director
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 2.00 2.00 02/07/13 Travel to Morden and return to attend the LEP Engagement event with South London Partnership 3.40 3.40 08/08/13 Travel to Enfield and return for meeting to discuss Euro structural funds 22.17 22.17 07/10/13 Dinner with staff from British Library while attending Open Day event in Brussels 11.25 11.25 08/10/13 Brussels Metro ticket for 10 journeys while attending the Open Day events both in July and October 15.40 15.40 08/10/13 Dinner with DCLG colleagues while attending the Open Day event in Brussels 27.05 27.05 09/10/13 Breakfast at Atlanta Hotel Brussels while attending the Open Day event in Brussels
0.00 0.00 5.40 11.25 64.62 81.27
Executive Director of Housing and Land
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 4.90 4.90 11/09/13 Travel from Elephant & Castle to Ladbroke Grove and return to London Bridge for meeting with Catalyst Housing 4.20 4.20 20/09/13 Travel from London Bridge to Waterloo and return for Woodberry Down site visit 2.10 2.10 08/10/13 Travel from Sloane Square to London Bridge and return for meeting with consultant 5.40 5.40 10/10/13 Travel from London Bridge to Alperton and return for Network HG event and tour. 2.10 2.10 11/10/13 Travel from London Bridge to Warren Street for meeting with HCA.
4.20 4.20 14/10/13 Travel from London Bridge to Green Park and return for PRS Roundtable Meeting.
0.00 0.00 22.90 0.00 0.00 22.90
Head of Area, North East London
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 1.60 1.60 09/08/13 Lewisham DLR-East India DLR-Project Board Meeting-Tower Hamlets 2.70 2.70 09/08/13 Canning Town-Lon Bridge -Project Board Meeting-Tower Hamlets 3.80 3.80 15/08/13 London Bridge-Barking-Visit to Barking riverside 1.40 1.40 15/08/13 Barking-Bus 387-Visit to Barking riverside 2.70 2.70 15/08/13 Canning Town-Lon Bridge -Visit to Barking riverside 2.80 2.80 16/08/13 Leicester square-finsbury park-Site Visit Hackney 1.40 1.40 16/08/13 Bus 48-Site Visit Hackney 3.80 3.80 29/08/13 London Bridge - Barking-HIG meeting in Rivergate Centre, Barking 2.70 2.70 29/08/13 Barking-Fenchurch Street-HIG meeting in Rivergate Centre, Barking 1.40 1.40 05/09/13 Bus 29-NLA breakfast Event 2.10 2.10 05/09/13 Tottenham Court Road- London Bridge-NLA breakfast Event 2.10 2.10 09/09/13 Tower Gateway DLR- Langdon Park DLR -Spotlight Youth centre visit 1.60 1.60 09/09/13 Langdon Park DLR-Bow Church DLR-Spotlight Youth centre visit 1.60 1.60 09/09/13 Bow Church DLR - Canary Warf DLR -Spotlight Youth centre visit 1.60 1.60 09/09/13 Canary Wharf DLR-Lewisham DLR-Spotlight Youth centre visit 2.70 2.70 11/09/13 London Bridge-Seven Sisiters-Meeting in Tottenham Town Hall 2.70 2.70 11/09/13 Seven Sisiters-London Bridge-Meeting in Tottenham Town Hall 3.20 3.20 12/09/13 London Bridge-Blackhorse Road-LBWF Quarterly Meeting in 1.40 1.40 12/09/13 Bus 123-LBWF Quarterly Meeting in Walthamstow 1.40 1.40 12/09/13 Bus 275-LBWF Quarterly Meeting in Walthamstow 1.50 1.50 12/09/13 Walthamstow Central-Seven Sisters-LBWF Quarterly Meeting in 2.70 2.70 12/09/13 Seven Sisters-London Bridge-LBWF Quarterly Meeting in 1.60 1.60 13/09/13 Lewisham DLR-East India DLR-Project Board Meeting-Tower Hamlets 2.10 2.10 13/09/13 Blackwall DLR - Bank-Programme Meeting in Haringey Council 2.70 2.70 13/09/13 Bank- Wood Green-Programme Meeting in Haringey Council 2.70 2.70 13/09/13 Wood Green-Leicester Square-Programme Meeting in Haringey 1.40 1.40 16/09/13 Bus 133-ELHP Chief Officers Meeting in Havering Town Hall 5.70 5.70 16/09/13 Liverpool Street-Romford-ELHP Chief Officers Meeting in Havering 3.50 3.50 16/09/13 Romford-Liverpool Street-ELHP Chief Officers Meeting in Havering 1.40 1.40 16/09/13 Bus 42-ELHP Chief Officers Meeting in Havering Town Hall 2.80 2.80 27/09/13 London Bridge-North Greenwich-H&L Away Day Page 238 3.20 3.20 27/09/13 Cable car-Emirates Greenwich-H&L Away Day 3.20 3.20 27/09/13 Cable car-Emirates Greenwich-H&L Away Day 2.10 2.10 27/09/13 North Greenwich-London Bridge-H&L Away Day 2.70 2.70 22/10/13 Travel from London Bridge-Barking-Barking Riverside for Site visit and 1.40 1.40 22/10/13 Bus EL1 -Barking Riverside for Site visit and Board Meeting 2.70 2.70 22/10/13 Travel from Upney - London Bridge -Barking Riverside for Site visit and 2.10 2.10 24/10/13 Travel from London Bridge to Westminster for RICS London Regional 1.40 1.40 25/10/13 Bus 47 to Watermill Lane, Enfield for Opening of The Bloc scheme 2.50 2.50 25/10/13 Liverpool Street-Silver Street for Opening of The Bloc scheme, 1.40 1.40 29/10/13 Bus 47-Upper Lea Valley for site visit 9.40 9.40 29/10/13 Liverpool Street-St Margarets-Liverpool Street for Lea Valley site visit 3.20 3.20 30/10/13 London Bridge-Tottenham Hale - Meeting at Newlon office 2.70 2.70 30/10/13 Tottenham Hale-London Bridge - Meeting at Newlon office 5.00 5.00 07/11/13 Taxi from Walthamstow Central to Walthamstow E17 - meeting the
0.00 5.00 110.80 0.00 0.00 115.80
Head of Area, North West London
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 8.90 8.90 15/10/13 Travel from City Hall to Teddington and return - site visit at Richmond Housing Partnership 29.00 29.00 18/10/13 Travel from London to Milton Keynes and return for site visit to Extracare
0.00 0.00 37.90 0.00 0.00 37.90
Assistant Director - Strategic Projects and Property
Taxi Other Taxi Expense Domestic Foreign Other Invoices Claims Travel Travel Expenses TOTAL Date Details 2.10 2.10 10/10/13 Warren St - London Bridge -GBB Projects Exec mtg 2.10 2.10 10/10/13 Charing C - Warren St -GBB projects exec mtg 2.10 2.10 08/10/13 Warren St - Charing -GBB/Build to Rent mtg 2.10 2.10 08/10/13 London Bridge - Warren St -GBB/Build to rent mtg 2.70 2.70 08/10/13 Royal vic - Tower G'Way -TSP/ ABP intro to RoDMA 2.10 2.10 08/10/13 Blackheath - Royal Vic -TSP/ABP intro to RoDMA 4.40 4.40 01/10/13 Crystal Palace- London Bridge return -site visit 2.70 2.70 30/09/13 Gallions R - Tower G'way -Albert Island site visit 2.10 2.10 30/09/13 Blackheath - King George DLR - Albert Island Site Visit 1.40 1.40 27/09/13 Bus journey route 108 - H&L away day 7.80 7.80 27/09/13 Emirates airline ticket -awayday 2.10 2.10 24/09/13 Bond St - London Bridge -PCG mting with Quintain 2.10 2.10 24/09/13 London Bridge - Bond St -PCG mting with Quintain 2.10 2.10 11/09/13 Victoria - London Bridge -NHS Lon Trusts PLIF bid 2.10 2.10 11/09/13 London Bridge - Victoria -NHS Lon Trusts PLIF bid 2.10 2.10 10/09/13 Warren St - Charing C -GBB/Build to Rent mtg 2.10 2.10 10/09/13 London Bridge - Warren St -GBB/Build to Rent 2.10 2.10 05/10/13 Bond St - London Bridge -PCG mting Quintain 2.10 2.10 05/10/13 London Bridge - Green Park -PCG mting Quintain 2.10 2.10 04/10/13 Westminster - London Bridge -DCLG board meeting 2.10 2.10 04/10/13 London Bridge-Victoria -DCLG board meeting 1.90 1.90 30/08/13 London Bridge - S. Bermondsey -awayday 2.70 2.70 29/08/13 Barking - Fenchurch St -external HIG meeting 2.50 2.50 29/08/13 Blackheath - Barking -external HIG meeting 5.40 5.40 27/08/13 City Airport - London return -visit to LCA 48.00 48.00 28/08/13 HiddenCity - discover Southwark -awayday/training 538.95 538.95 24/10/13 Travel from London to Boston to attend Multifamily study tour 751.41 751.41 17/12/13 Return flights from London to Nice for MIPIM 2014
0.00 10.00 270.90 1,290.36 48.00 1,619.26
No expense claims were made by the following officers between 01 November 2013 to 31 December 2013:
Private Office Development & Environment Deputy Mayor for Transport Assistant Director - Environment Chair of London Food Head of Transport Advisor for Olympic and Paralympic Legacy Assistant Director Capital Projects and Design Senior Adviser - Mentoring Assistant Director - Regeneration
Assembly & Secretariat Resources Executive Director of Secretariat Executive Director - Resources Head of Special Projects and Elections Head of Financial Services Head of Assembly External Relations Head of Technology Group Head of Scrutiny and Investigation Assistant Director - Human Resources & Organisational Development Head of Committee and Member Services Head of Facilities Management Assistant Director - Group Finance External Affairs Assistant Director - London Engagement Housing and Land
Page 239 Head of Public Liaison and Community Assistant Director - Programme Policy and Services Head of Media Commercial Director
Community & Intelligence Head of Paid Service & Executive Director, Communities and Intelligence Assistant Director - Intelligence and Analysis Assistant Director - Health and Communities Head of Governance and Resilience Programme Director Team London Programme Director, Team London and Sustainable Development Manager
Page 240 Agenda Item 9
Subject: Register of Gifts and Hospitality – Mayor and Assembly Members Report to: Audit Panel Report of: Monitoring Officer Date: 20 March 2014 This report will be considered in public 1. Summary 1.1 This report sets out details of the gifts and hospitality declared by the Mayor and Assembly Members in the period 1 September 2013 to 1 February 2014. 2. Recommendation 2.1 That the Panel notes this report and the contents of Appendix 1, which sets out gifts and hospitality declared by the Mayor and Members of the London Assembly in the period from 1 September 2013 (10am) until 1 February 2014 (10am). 3. Background 3.1 The Mayor and Assembly Members are required to register with the Monitoring Officer any gift or hospitality received in connection with their official duties that has a value of £25 or over, and also the source of the gift or hospitality. 3.2 Gifts and hospitality were last reported to the Audit Panel on 22 October 2013 covering declarations from 1 February 2013 (10am) until 1 September 2013 (10am), a period of approximately seven months. 3.3 Appendix 1 sets out gifts and hospitality declared by the Mayor and Assembly Members for a period of five months. 3.4 The Mayor and Members are required to make declarations within 28 days of receiving and/or becoming aware of gifts, hospitality or interests. The Panel is asked to note that not all declarations may have been made in relation to gifts and hospitality received during the period. Any declarations of gifts and hospitality which are made in relation to the period but declared after 10am on 1 February 2014 will be reported to the next Audit Panel meeting that considers this item. City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 241
4. Issues for Consideration 4.1 A number of points arise from the declared items set out in Appendix 1 : Ø A total of 185 declarations were made by the Mayor and Members of the Assembly in relation to gifts or hospitality of a value of £25 or over registered within this period of five months compared with 146 in the preceding reporting period, which covered approximately seven months. Ø 84 declarations were made by the Mayor, Boris Johnson, and 101 declarations were made by the Members of the Assembly. Ø The schedule of declarations from 10am on 1 September 2013 until 10am on 1 February 2014, is as follows: 84 decla rations The Mayor, Boris Johnson 0 declarations 6 Members 1 declarations 6 Members 2 declarations 2 Members 3 declarations 3 Members 4 declarations 1 Member 5 declarations 2 Members 6 declarations 1 Member 10 declarations 1 Member 16 declarations 2 Members 20 declarations 1 Member Ø In this period, the highest number of declarations registered by any one person was by the Mayor, Boris Johnson. Ø As for previous reports, a significant proportion of the declarations made by the Mayor were related to gifts and hospitality in relation to liaison with suppliers, stakeholders, professional networks and partner companies. Ø Common declarations continue to be in relation to hospitality in the form of lunches or dinners provided for Assembly Members and in respect of ceremonial gifts. Ø Some Members register gifts and hospitality that have a value of under £25. Although this is not a legal requirement, they are published on the on-line database, but are not recorded in this report. 5. Legal Implications 5.1 The Under the Corporate Governance Framework Agreement, the GLA has committed to requiring its elected members to declare the receipt of any gifts and hospitality with an estimated value of at least £25.
Page 242
5.2 The GLA Code of Conduct provides that: Ø the procedures under which registration and declaration of interests, gifts and hospitality are to be made are set out in Appendix 5 of the Code (at section 17); and Ø all Members are required to continue to declare the receipt of any gifts and hospitality in accordance with the Authority’s existing procedures and guidance, by registering gifts and hospitality received on the Authority’s on-line database (Appendix 5, paragraph 1.6). 5.3 Standing Order 11.1 C of the GLA Standing Orders provides that the Mayor, each Assembly Member, and every other co-opted member of an Assembly committee or subcommittee shall comply with the Code of Conduct and shall comply with any guidance, procedures or requirements relating to the Code that are approved and issued by the Authority’s Monitoring Officer. The Monitoring Officer wrote to the Mayor and all Assembly Members in June 2012 to confirm the requirements in relation to the registration and disclosure of gifts and hospitality.
6. Financial Implications 6.1 There are no financial implications arising from this report. List of appendices to this report: Appendix 1 – Schedule of gifts and hospitality of Mayor and Elected Members Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Bharti Keshur, Executive Support Officer Telephone: 020 7983 4207 E-mail: [email protected]
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Page 244 Appendix 1
Gifts and Hospitality Mayor and Elected Members 01.09.2013 (10am) - 01.02.2014 (10am) Name Date of Gift/ Detail of Gift/ Hospitality Donor/ Provider of Gift/ Hospitality Hospitality Andrew Boff 21/11/2013 Westminster Property Association Annual Lunch at Mr Daniel van Gelder and Mr Jace Tyrrell, Westminster Property Grosvenor House Hotel, W1 Association Andrew Boff 22/10/2013 Dinner at the Royal Horseguards Hotel Max Wind -Cowie, Demos Andrew Boff 14/10/2013 Lunch at the Institution of Civil Engi neers Martin Baggs, Thames Water Andrew Boff 10/10/2013 Drinks and canapés reception Lohan Presencer, Ministry of Sound Andrew Dismore 27/11/2013 Board of Deputies of British Jews annual gala dinner Board of Deputies of British Jews
Andrew Dismore 03/11/2013 Visit to Israel and the Palestinian Territories with Trade Trade Union Friends of Israel Union Friends of Israel - attended in personal capacity
Boris JohnsonPage 245 16/01/2014 Dinner at official speaking engagement - London City of London Government dinner Boris Johnson 13/01/2014 Lunch Tom Bradby, ITN Boris Johnson 09/01/2014 Biro and Stylus for smartphone Mayor Delanoe, Mayor of Paris
Boris Johnson 08/01/2014 Commemorative Trowel BNP Paribas
Boris Johnson 06/01/2014 Embroidered Screen in display case Chairman Zhang, Greenland
Boris Johnson 30/12/2013 Hamper Embassy of Qatar Boris Johnson 20/12/2013 Smoked Salmon H. Forman & Son
Boris Johnson 16/12/2013 Photograph in a Waterford Crystal Frame London Citizens
Boris Johnson 12/12/2013 Fortnum and Mason Hamper The Hinduja Family Boris Johnson 11/12/2013 Two nights’ accommodation at the Jumeirah Messilah Amir of Kuwait, HH the Amir Sheikh Sabah Al Ahmed Al Sabah Hotel, Kuwait - on the official trade visit to the Gulf Appendix 1
Boris J ohnson 10/12/2013 Car provided for the WISH dinner, Qatar Qatar Foundation
Boris Johnson 10/12/2013 1 night ’s accommodation, Four Seasons Hotel, Qatar Qatar Foundation
Boris Johnson 10/12/2013 Return flight to Qatar; Business Class (outward) First Qatar Foundation Class (return)
Boris Johnson 10/12/2013 Gala Dinner at WISH, Qatar Qatar Foundation Boris Johnson 09/12/2013 Rug H.E Mr Muhammad Nawaz Sharif, Prime Minister of the Islamic Republic of Pakistan Boris Johnson 09/12/2013 Framed Picture Battersea Power Station
Boris Johnson 09/12/2013 Lunch at official speaking engagement Hong Kong Association
Boris Johnson 09/12/2013 Wine, T -shirt, plate, books Mayor Jankovic , Mayor of Ljubljana Boris JohnsonPage 246 06/12/2013 Dinner Rupert Murdoch, News International Boris Johnson 20/11/2013 Dozen bottles of Champagne Odgers Bendtson
Boris Johnson 13/11/2013 Flight upgrade from premium economy to first class British Airways Boris Johnson 12/11/2013 Lunch at the Chairman's Club, Kuwait City Governor of Al - Ahmadi
Boris Johnson 12/11/2013 Private Dinner Mohammed Alshaya
Boris Johnson 11/11/2013 Vehicles, escort for the Mayoral team Amir of Kuwait, HH the Amir Sheikh Sabah Al Ahmed Al Sabah
Boris Johnson 11/11/2013 Silver Falcon HH Sheikh Nasser Mohammed Ahmed Jaber Sabah
Boris Johnson 11/11/2013 Lunch Kuwait Investment Authority
Boris Johnson 11/11/2013 Gifts: Bisht (cloak) and Dishdash (head scarf) Mohammed Alshaya Boris Johnson 11/11/2013 Dinner - Sheraton Hotel HH Sheikh Nasser Mohammed Ahmed Jaber Sabah
Boris Johnson 10/11/2013 Access to the BA business departure lounge British Airways Appendix 1
Boris Johnson 07/11/2013 Hövding 1.0, Bicycle Helmet H.R.H Crown Princess Victoria & H.R.H Prince Daniel, Duchess and Duke of Västergötland Boris Johnson 07/11/2013 Traditional Daleccarlia Miniture Ewa Björling, Minister for Trade, Sweden
Boris Johnson 04/11/2013 Bask et of fruit, nuts & saffron Hinduja Family Boris Johnson 23/10/2013 Model Airport Express train Jay Walder, MTR Corporation Limited
Boris Johnson 22/10/2013 Two tickets - From Here to Eternity Sir Tim Rice
Boris Johnson 18/10/2013 Limited Edition Model of Gold bus KMB Group, Hong Kong Boris Johnson 18/10/2013 Reception: BCG Residence, Hong Kong on the official British Consul General, Hong Kong trade visit to Hong Kong
Boris Johnson 18/10/2013 Commemorative Silver Plate Island Shangri La Hotel, Hong Kong
Boris JohnsonPage 247 18/10/2013 Lunch: Island Shangri La Hotel, Hong Kong, on the British Chamber of Commerce, Hong Kong official trade visit to Hong Kong Boris Johnson 18/10/2013 Glass paperweight Tony Pidgley, Berkeley Gro up, Hong Kong
Boris Johnson 17/10/2013 Room upgrade: Island Shangri La Hotel, Hong Kong on Island Shangri La Hotel, Hong Kong the official trade visit to China Boris Johnson 17/10/2013 Helicopter flight over Hong Kong, on official trade visit to CEO of Hong Kong China
Boris Johnson 17/10/2013 Chairman Mao Cupid figure Mandarin Oriental Hotel, Intercontinental Hotel, on the official trade visit to China Boris Johnson 16/10/2013 Room Upgrade: Mandarin Oriental Hotel, Shanghai, on Mandarin Oriental Hotel, Shanghai the official trade visit to China
Boris Johnson 16/10/2013 Dinner, Zhongrong Offices, Shanghai Mr Ni, Zhongrong Group on the official trade visit to China
Boris Johnson 16/10/2013 Porcelain Vase Mr Zhang Yuliang, Greenland, Shanghai on th e official trade visit to China Appendix 1
Boris Johnson 16/10/2013 BFC Glass Cube and USB stick Mr Guo Guangchang, CEO Fosun, on the official trade visit to China Boris Johnson 16/10/2013 Picture Vice Mayor of Shanghai, on the official trade visit to China
Boris Johnson 15/10/2013 Dinner Mr Xu, ABP, Beijing, on the official trade visit to China Boris Johnson 14/10/2013 Drinks, China World Hotel, on the official trade visit to Sir Michael Hintze China
Boris Johnson 14/10/2013 Drinks, China World Hotel, on the official trade visit to Leo Lewis, News International China
Boris Johnson 14/10/2013 Glass Sculpture, presented at China Entrepreneurs Club, China Entrepreneurs Club on the official trade visit to China
Boris Johnson 14/10/2013 Dinner, China Club, Beijing, on the official trade visit to Sir David Tang Page 248 China
Boris Johnson 14/10/2013 Lunch at the offices of Wanda, on the official trade visit Chairman Wang, Wanda to China
Boris Johnson 14/10/2013 Tie & Book, presented on the official trade visit to China President of Peking University Boris Johnson 13/10/2013 Room upgrade: Kerry Hotel, Beijing, 3 nights, on the Kerry Hotel official trade visit to China
Boris Johnson 13/10/2013 Book of China photographs, presented on the official Reignwood, Beijing trade visit to China
Boris Johnson 13/10/2013 Dinner at the Reignwood Theatre, Beijing, on the official Reignwood trade visit to China
Boris Johnson 13/10/2013 Blue and White porcelain flask, presented on the official Mayor of Beijing trade visit to China Appendix 1
Boris Johnson 07/10/2013 Australian Wine Lowey Institute
Boris Johnson 06/10/2013 Car, Luton airport - home Sarah Sands, Editor, Evening Standard
Boris Johnson 04/10/2013 2 nights’ accommodation, Terranova, Perugia, Italy Evgeny Lebedev
Boris Johnson 04/10/2013 2 return flights to Perugia, Italy Evgeny Lebedev Boris Johnson 01/10/2013 Lunch at Conservative Party Conference Joe Murphy, Evening Standard
Boris Johnson 28/09/2013 Balliol 750th Anniversary Dinner - Speaking engagement The Master , Balliol College, Oxford Boris Johnson 21/09/2013 Hospitality received at an official speaking engagement Evening Standard Evening Standard - Influential Party
Boris Johnson 20/09/2013 Koznik Yildiz vase limited edition from the Osmanli HE Sheikha al Mayassa of Qatar Page 249 collection
Boris Johnson 20/09/2013 4 coffee table books HE Sheikha al Mayassa of Qatar
Boris Johnson 20/09/2013 Anframa Pen from Museum of Qatar HE Sheikha al Mayassa of Qatar Boris Johnson 20/09/2013 Diana F Camera from Museum of Modern Art HE Sheikha al Mayassa of Qatar
Boris Johnson 20/09/2013 Cufflinks HE Sheikha al Mayassa of Qatar
Boris Johnson 20/09/2013 Ceramic Plate HE Sheikha al Mayassa of Qatar Boris Johnson 19/09/2013 Reception and Dinner for 2 - Opening of the Sackler Michael Bloomberg Gallery Boris Johnson 18/09/2013 Lunch Bill Castel, Welcome Trust
Boris Johnson 12/09/2013 2 Pens Qatar Foundation
Appendix 1
Boris Johnson 12/09/2013 Collection of signed photographs taken of Doha's Souk HH Sheikha Moza bint Nasser of Qatar Waqif, by Robert Van der Hils Gift accepted on behalf of the people of London
Boris Johnson 10/09/2013 Belt, Planter & Compost Capel Manor College
Boris Johnson 10/09/2013 Framed picture presented at the Asian Business Dinner Ajay Seth, Copal Art Pvt Ltd Boris Johnson 04/09/2013 Gifts presented at GQ Man of the Year Awards: Hugo Conde Nast Boss watch, Cufflinks, Champagne
Boris Johnson 29/08/2013 Lunch Richard Desmond Boris Johnson 05/08/2013 Hiplock (Cycle chain) Belt Hiplock Team
Page 250 Boris Johnson 28/07/2013 Ticket for Olympic Park Paralympic Anniversary event - London Legacy Development Corporation official engagement Boris Johnson 27/07/2013 6 tickets for Olympic Park Paralympic Anniversary event - London Legacy Development Corporation official engagement Boris Johnson 26/07/2013 Ticket and hospitality for Olympic Park Anniversary event Sainsbury - official engagement Boris Johnson 14/07/2013 2 tickets and hospitality for the Wireless Festival, Olympic London Legacy Development Corporation Park. Caroline Pidgeon 16/01/2014 London Government Dinner City of London Corporation
Caroline Pidgeon 08/01/2014 Business First Return Heathrow Express train ticket Heathrow Airport Caroline Pidgeon 18/10/2013 Mothercare voucher Mohammed Karim Caroline Pidgeon 18/10/2013 2 tickets to the screening of 'Inside Llewyn Davis' at the Centrepiece Gala/57th BFI London Film Festival Odeon Leicester Square
Caroline Pidgeon 19/09/2013 1 Ticket x London Evening Standard Power 1000 Event Evening Standard Ltd Appendix 1
Darren Johnson 16/01/2014 London Government Dinner City of London Corporation Darren Johnson 24/10/2013 Lunch hosted by Presiding Officer of National Assembly, National Assembly, Wales Wales - Rosemary Butler AM
Darren J ohnson 24/10/2013 Gift of presentational plate given by Presiding Officer of Presiding Officer of National Assembly, Wales - Rosemary Butler National Assembly Wales, Rosemary Butler AM AM Dr Onkar Sahota 21/09/2013 Canary Wharf Group Dinner at Hush Heath Room on Canary Wharf Group Saturday 21st September at Hotel du Vin and Bistro, 2 Ship Street, Brighton, BN1 1AD Fiona Twycross 16/12/2013 FBU Christmas Dinner at the Master Gunner Fire Brigades Union
05/12/2013 Dinner at Cinnamon Club, London SW1 Claire Fox, Director, Institute of Ideas James Cleverly 27/11/2013 Presidents Dinner, Mansion House, London EC4 Vivian Wineman, President, The Board of Deputies of British James Cleverly Page 251 Jews 20/11/2013 Reception at Lincolns Inn Commanding Officer of First Aid Nursing Yeomanry (Princess James Cleverly Royal's Volunteer Corps) 11/11/2013 Armistice Day dinner, Cavalry and Guards Club, attended Oliver Hylton, Oliver Hylton Ltd James Cleverly by James Cleverly and wife 06/11/2013 London Chamber of Commerce and Industry annual Colin Stanbridge, Chief Executive, LCCI James Cleverly Defence and Security dinner, Tower of London 21/10/2013 Reception at the Guildhall for Gibraltar Day attended by Albert Poggio, UK Repre sentative, HM Government of Gibraltar James Cleverly James Cleverly and wife 12/10/2013 Lunch and rugby match in Orpington attended by James Paul Woodhouse, Chairman, Westcombe Park RFC James Cleverly Cleverly, wife and children 02/10/2013 Dragon Awards dinner, Mansion House, London EC4 Alderman Roger Gifford, Lord Mayor of London James Cleverly 30/09/2013 Reception, Manchester Central London & South East Region Conservatives James Cleverly James Cleverly 30/09/2013 Drinks reception, Manchester Murdoch MacLennan, Chief Executive, Telegraph Media Group James Cleverly 30/09/2013 City of London dinner, Manchester Mark Boleat, City of London Corporation James Cleverly 29/09/2013 London First dinner, Manchester Baroness Jo Valentine, London First Appendix 1
James Cleverly 29/09/2013 Reception, Midland Hotel, Manchester Conservative Way Forward
James Cleverly 26/09/2013 Lunch at Kiku, London W1 Mr Shunsuke Nakamura, First Secretary, Embassy of Japan James Cleverly 25/09/2013 Lunch at Roast, Borough Market Dan Ritterband, Senior VP, Teneo Strategy UK James Cleverly 24/09/2013 2 VIP tickets for concert at 02 Arena attended by James Sir Michael Hintze, Chief Executive, CQS Cleverly and wife Jenny Jones 16/01/2014 London Government Dinner City of London Corporation Joanne McCartney 16/01/2014 London Government Dinner City of London Corporation Kit Malthouse 11/11/2013 Dinner & Drinks Ethical Medical Industries Group Kit Malthouse 07/11/2013 Lunch for the Crown Princess of Sweden Level 39 Kit Malthouse 06/11/2013 State Banquet for the President of Korea x 2 Corporation of London Kit Malthouse 04/11/2013 Lunch, Dinner, Drinks Bio Europe Conference Kit Malthouse 30/10/2013 Lunch Science Museum Kit Malthouse 29/10/2013 Gala Supper WIEF
Kit MalthousePage 252 24/10/2013 2 by signed American Football Helmets and one signed National Football League Game Ball Kit Malthouse 21/10/2013 Lunch Victoria Bid Kit Malthouse 18/10/2013 Reception at Consul General's Residence, Hong Kong BCG Residence, Hong Kong Kit Malthouse 15/10/2013 Huawei Mobile Broadband Router R& D Corporation, Shanghai Kit Malthouse 14/10/2013 Dinner at China Club Beijing Sir David Tang Kit Malthouse 13/10/2013 Dinner at Reignwood Theatre, Beijing Reignwood Kit Malthouse 08/10/2013 LBC 40th Birthday Party LBC Kit Malthouse 30/09/2013 Lunch Chairman of Ernst & Young Kit Malthouse 25/09/2013 Lunch Kamal Ahmed, The Telegraph Kit Malthouse 20/09/2013 Lunch Deloitte Kit Malthouse 19/09/2013 Evening Standard Influential Party Evening Standard Kit Malthouse 18/09/2013 Lunch London & Partners Kit Malthouse 18/09/2013 Dinner Wellcome Trust Kit Malthouse 10/09/2013 LCCI/Asian Business Association Dinner Copal, DVK, RationalFX Murad Qureshi 26/12/2013 Dinner with Abul Taher at Fatoush restaurant, 183 Mr Abul Taher Edgware Road London W2 1ET on the 26th of December 2013 Appendix 1
Nicky Gavron 20/09/2013 As a member of the Rockefeller Foundation's Centennial Rockefeller Foundation Urban Challenge Reference Group, Nicky Gavron participated in the Rockefeller Foundation's "Informal City Dialogues: The 2040 Challenge" which took place from 16 September to 20 September 2013 at the Rockefeller Foundation Bellagio Centre Richard Tracey 23/01/2014 London First Dinner London First Richard Tracey 22/01/2014 Drinks reception for the launch of the Blackfriars solar Network Rail bridge Richard Tracey 16/01/2014 The London Government Dinner The Corporation of London Richard Tracey 18/11/2013 Dinner at the Institute of Civil Engineers, sponsored by ICE Bechtel Richard Tracey 21/09/2013 Two tickets to the Worshipful Company of Firefighters Master of the Company, Beryl Jeffery Charity Ball (Mr& Mrs Tracey attended)
Richard TraceyPage 253 12/09/2013 Pride of London briefing trip on "The Georgian" The National Trust Roger Evans 06/12/2013 Trustees Lunch Trust for London
Roger Evans 26/11/2013 Tour and Reception Tower of London Colonel Dick Harrold OBE, Tower Group Director, Historic Royal Palaces Stephen Knight 17/09/2013 Dinner at Liberal Democrat Party Conference London & Quadrant (Housing Association) and Shelter (housing and homelessness charity) Stephen Knight 16/09/2013 Dinner at Liberal Democrat Party Conference Corporation of London
Stephen Knight 27/07/2013 Two tickets to the Sainsbury Anniversary Games at the London Legacy Development Corporation Olympic Stadium, Stratford Steve O'Connell 13/11/2013 Complimentary ticket for Develop Croydon Conference, White Label Consultants, Carolyn Hse, 22 -26, Dingwall Rd, CR0 13th November 2013, Fairfield Halls, Croydon 9XF Steve O'Connell 05/10/2013 Ticket for Liverpool vs Crystal Palace - 5th October 2013 Crystal Palace Football Club Steve O'Connell 10/08/2013 4 x match tickets for CPFC vs Lazio - 10th August 2013 Aqua Blue Cleaning Company Tom Copley 10/01/2014 Two tickets to pantomime Katherine Ives, Trustee, Above the Stag Theatre
Tom Copley 08/01/2014 Lunch with Jace Tyrrell, Chief Executive, City & City & Westminster Property Associations Westminster Property Association Appendix 1
Tom Copley 07/01/ 2014 Two tickets to Hamlet at the New Diorama Theatre New Diorama Theatre Tom Copley 05/12/2013 £150 for a speaking engagement, donated to the British London Communications Agency Humanist Association Tom Copley 15/11/2013 Two tickets to In the Next Room at St James Theatre Peter Huntley, Peter Huntley Productions
Tom Copley 30/10/2013 Ticket to the Labour List dinner Trade Union and Labour Party Liaison Organisation (TULO) Tom Copley 15/10/2013 x2 tickets to BFI Centrepiece Gala (each ticket worth British Film Institute £26) Tom Copley 23/09/2013 Generation Y don't I have a job' dinner at Hotel du Vin - City of London/Social Market Foundation Labour Conference Tom Copley 22/09/2013 London First Dinner at Labour Party Conference - Hotel Bechtel (sponsor) Du Vin, Brighton Tom Copley 13/09/2013 Two tickets to Farragut North at the Southwark Peter Huntley, Peter Huntley Productions Playhouse and hospitality after the show
Tony ArbourPage 254 16/01/2014 London Government Dinner Corporation of London Tony Arbour 30/09/2013 Informal private Dinner (with Mrs Arbour) Corporation of London Tony Arbour 30/09/2013 Reception at Conservative Party Conference Telegraph Media Group Dinner (with Mrs Arbour) at Conservative Party Tony Arbour 29/09/2013 Conference London First Tony Arbour 29/09/2013 Drinks Reception at Conservative Party Conference Law Society Victoria Borwick 16/01/2014 Local Government Dinner Alderman Fiona Woolf, Lord Mayor of London Victoria Borwick 07/01/2014 Lunch & 2 tickets to London Boat Show Howard Pridding Chief Executive British Marine Federation Victoria Borwick 18/12/2013 Lunch & Box, Olympia Horse Show Nigel Nathan Group Managing Director Earls Court & Olympia Victoria Borwick 25/11/2013 Dinner Worshipful Company of Hackney Carriage Dri vers Victoria Borwick 20/11/2013 Reception Princess Royal's Volunteer Corps Victoria Borwick 18/11/2013 Dinner Institute of Civil Engineers, sponsored by Bechtel. Victoria Borwick 04/10/2013 1 Hand embroidered silk stole £50.00 Malaysia External Trade Development Corporation 1 Basket of exotic Malaysian Fruit £20.00 1 Hamper of sweetmeats £30.00 Victoria Borwick 30/09/2013 Reception at the Conservative Party Conference at Murdock MacLennan, CEO, Telegraph Media Group Birmingham x2 Victoria Borwick 30/09/2013 Dinner at the Conservative Party Conference City of London Corporation Victoria Borwick 30/09/2013 Lunch at the Conservative Party Conference x 2 Society of Motor Manufacturers and Traders ltd. Appendix 1
Victoria Borwick 29/09/2013 Dinner at the Conservative Party Conference - London First Birmingham Victoria Borwick 26/09/2013 Award Ceremony Young Enterprise North Central London Victoria Borwick 25/09/2013 2 books British Postal Museum & Archive. Victoria Borwick 23/09/2013 Framed painting Dr Amy Khor, Ministry of Health, Singapore Victoria Borwick 03/09/2013 2 books. "Georgian London. Into the Streets" Eleo Gordon. Editor. Victoria Borwick 01/09/2013 Reception for the Installation of the Chief Rabbi Jeremy Jacobs, Chief Executive United Synagogue Page 255 This page is intentionally left blank
Page 256 Agenda Item 10
Subject: Register of Gifts and Hospitality: Members of Staff – Report of the Monitoring Officer Report to: Audit Panel Report of: Monitoring Officer Date: 20 March 2014 This report will be considered in public 1. Summary 1.1 This report sets out details of the gifts and hospitality received by staff in the period from 1 September 2013 (10am) to 1 February 2014 (10am). 2. Recommendation 2.1 That the Panel notes the declared gifts and hospitality by (i) staff directly appointed by the Mayor under section 67(1) of the Greater London Authority Act 1999 (as amended) and (ii) senior staff appointed by the Head of Paid Service, namely staff at Head of Unit level and above, during the period from 1 February 2013 (10am) to 1 September 2013 (10am) 3. Background 3.1 This report notifies the Panel of gifts and hospitality declared by staff from the period of 10am on 1 September 2013 to 10am on 1 February 2014. 3.2 Appendix 1 sets out gifts and hospitality declared by staff directly appointed by the Mayor under section 67(1) of the GLA Act 1999 (as amended) during the relevant period; and 3.3 Appendix 2 sets out gifts and hospitality declared by senior staff (Heads of Unit and above) appointed by the Head of Paid Service during the relevant period. 3.4 Staff gifts and hospitality were last reported to the Audit Panel on 22 October 2013and covered the period from 1 February 2013 (10am) until 1 September 2013 (10am).
City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 257
3.5 The Code of Ethics for Staff requires members of staff to notify the Monitoring Officer of all gifts and hospitality which they have received where the value is £25 or over, within 28 days of receipt. The Panel is asked to note that it is possible that not all gifts and hospitality received during the relevant period will have been declared to the Monitoring Officer. Any gifts and hospitality received during the relevant period but declared to the Monitoring Officer after 10am on 1 February 2014 will be reported to the next Audit Panel meeting that considers this item.
3.6 Employees directly appointed by the Mayor under section 67 (1) of the GLA Act 1999 and Senior staff appointed by the Head of Paid Service have agreed, under their contracts of employment, that any gifts and hospitality and interests that they register will be open to public inspection. The gifts, hospitality and interests are itemised on Registers which are published on the GLA website; paper copies are also kept with the Monitoring Officer. 3.7 This report relates only to the Registers maintained in relation to gifts and hospitality received by members of staff. The notification of the receipt of gifts and hospitality by the Mayor and members of the Assembly in accordance with the Authority’s statutory Code of Conduct is the subject of a separate report on this agenda. Unlike the register for Members of the Authority the register for all staff (apart from the mayoral appointees and senior staff appointed by the Head of Paid Service) is not accessible to the public. 4. Issues for Consideration 4.1 A number of points arise from the declared items set out in Appendices 1 and 2: Ø A total of 169 declarations were made by members of staff in relation to gifts and hospitality received at a value of £25 or over within the period covered by the report (approximately five months). This compares with 179 notifications by members of staff in the preceding reporting period, which covered approximately seven months Ø A total of 8 members of staff, directly appointed by the Mayor under section 67(1) of the GLA Act 1999 (as amended), including one Mayoral Board appointment, made 88 of the staff declarations. Ed Lister, Chief of Staff and Deputy Mayor for Planning, registered the highest number amongst the Mayoral Appointees, with 35 declarations. Ø 11 members of senior staff appointed by the Head of Paid Service (namely Heads of Unit and above) made 20 of the 169 declarations . Ø 61 declarations were made by other officers of the GLA.
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Ø The breakdown of the 61 declarations by Directorate is - Mayor’s Office – (section 67 (2) appointed staff) – 32 Assembly & Secretariat – 1 External Affairs - 1 Communities and Intelligence - 6 Development, Enterprise and Environment – 4 Resources – 4 Housing and Land – 13 Ø Staff may have changed Directorate between the period of registering any gifts and hospitality and collation of the database for this report. The above breakdown is based on the Directorate staff worked in at the time they registered the gift or hospitality. Ø The notifications are varied relating to liaison with suppliers, stakeholders and professional networks and to the receipt of ceremonial gifts received from visitors and the Monitoring Officer continues to review declarations registered. 5. Legal Implications 5.1 The Greater London Authority has adopted the Code of Ethics and Standards for staff. The Code is not a statutory requirement but compliance with it is a term of the contract of employment of each member of staff of the GLA. 5.2 Paragraph 2.13(a) of the GLA’s Code of Ethics and Standards for staff provides – Offers of hospitality must be treated with caution whenever any suggestion of improper influence could arise. To prevent any improper behaviour, or suggestion of improper behaviour arising staff must take great care when hospitality is offered. Hospitality accepted should not be extravagant and nor should it be taken from the same client/individual on a frequent basis.
5.3 Paragraph 2.13(b) further provides that- If staff are in doubt about whether hospitality offered can be accepted advice should be sought from the relevant Director. Staff must register receipt of any hospitality. 5.4 The detailed requirements relating to the registration of the receipt of gifts and hospitality by members of staff are set out in the ”Policy and Procedure for the Acceptance of Gifts and Hospitality by staff” which was adopted by the Business Management and Appointments Committee. This requires that staff must notify the Head of Law as Monitoring Officer on the prescribed form of any gifts or hospitality to the value of £25 or over that they receive. The receipt
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of any gift or hospitality must be approved and the relevant declaration form signed by the Director (or line manager in the case of Mayoral appointees) responsible for the member of staff. 5.5 New mayoral appointees have a different term in their written statement of employment particulars. This states:
Hospitality and gifts You must treat any offers of hospitality or gifts with caution. You should get advice from Legal and Procurement if in doubt. If you receive any hospitality or gifts, you must record it on the Gifts and Hospitality Register… Your register is open to public inspection, and will be placed on the Authority’s intranet and internet, in accordance with the Authority’s commitment to the principles of good governance (integrity, openness and accountability.)
5.6 Senior staff appointed by the Head of Paid Service (namely Heads of Unit and above) have also agreed for their register entries to be published.
6. Financial Implications 6.1 There are no financial implications arising from this report. List of appendices to this report: Appendix 1 – Schedule of gifts and hospitality of staff directly appointed by the Mayor Appendix 2 – Schedule of gifts and hospitality of senior staff appointed by the Head of Paid Service Local Governme nt (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Bharti Keshur, Executive Support Officer Telephone: 020 7983 4207 E-mail: [email protected]
Page 260 Appendix 1 Gifts and Hospitality Mayoral Appointments 01.09.2013 (10am) - 01.02.2014 (10am) Name Date of Gift/ De tail of Gift/ Hospitality Provider/ Donor of Gift/ Hospitality Hospitality Andrew Gilligan 08/11/2013 Flight to Scotland and 2 nights’ accommodation Scottish Government Andrew Gilligan 29/10/2013 Lunch at Roast restaurant Jonathan Oliver - Prudential Gerard Lyons 18/10/2013 Reception British Consul General Gerard Lyons 18/10/2013 Lunch British Chamber of Commerce in Hong Kong Gerard Lyons 16/10/2013 Dinner Mr Ni, Zhongrong Group Gerard Lyons 15/10/2013 Dinner Mr Xu, ABP Gerard Lyons 14/10/2013 Dinner Sir David Tang
Page 261 Gerard Lyons 19/09/2013 Evening Standard 1000 Influentials Reception Evening Standard
Matthew Pencharz 02/12/2013 Hotel stay in Brussels Forum Europe Matthew Pencharz 02/12/2013 Eurostar ticket to Brussels Forum Europe Matthew Pencharz 28/11/2013 Shell Dinner Ed Daniels, Shell
Matthew Pencharz 21/11/2013 Dinner British Gas
Matthew Pencharz 20/11/2013 Lunch Crown Estate Matthew Pencharz 30/09/2013 City of London Corporation Dinner City of London Corporation Matthew Pencharz 29/09/2013 Canary Wharf Group Dinner Canary Wharf Group
Matthew Pencharz 24/09/2013 Breakfast Bloomberg Philanthropies
Matthew Pencharz 19/09/2013 Reception Evening Standard
Matthew Pencharz 04/09/2013 C40 Climate Action Awards Siemens
Matthew Pencharz 23/08/2013 Lunch Lucy Gilchrist, Hanover Munira Mirza 19/09/2013 Evening Standard Annual Power List 2013 Evening Standard Munira Mirza Lunch with Nicholas Allot - Cameron McIntosh Ltd, 20/05/2013 with Justine Simons Nicholas Allot - Cameron McIntosh Ltd Richard Blakeway 16/10/2013 Dinner - Zhongrong Offices, Shanghai Mr Ni, Zhongrong Group
Richard Blakeway 15/10/2013 Dinner - ABP, Beijing Mr Xu, ABP Richard Blakeway 15/10/2013 Paperweight ABP (China) Holdings Group Richard Blakeway 14/10/2013 Dinner - China Club, Beijing Sir David Tang Richard Blakeway 14/10/2013 Painted Leaf Vice Mayor of Beijing Richard Blakeway 13/10/2013 Dinner at Reignwood Theatre, Beijing Reignwood Theatre Richard Blakeway 12/10/2013 Dinner - Renaissance Hotel, Beijing Sammy Lee - Knight Dragon Richard Blakeway 11/10/2013 Dinner - Jumbo Kingdom, Beijing William Cheng, Zhongrong Group Richar d Blakeway 12/09/2013 Return travel London to Newport for RESI United Business Media Conference plus accommodation at Celtic Manor and
Page 262 dinner Richard Blakeway 06/09/2013 Lunch at Magdalen, 152 Tooley Street, SE1 2TU William Cheng, ZhongRong Group Richard Blakeway 03/09/2013 Dinner at Roux, Parliament Square, 11 Great George Berkeley Group Street, SW1P 3AD Richard Blakeway 28/08/2013 Dinner - St John Restaurant, 26 St John Street EC1M Tony Pidgley - Berkeley Homes (Capital) 4AY plc Richard Blakeway 07/08/ 2013 Dinner at Plum & Spilt Milk, Kings Cross, N1C 4TB David Grover - MACE Richard Blakeway 22/07/2013 Dinner at Hutong Restaurant, The Shard ABP (China) Holdings Group Richard Blakeway 15/10/2013 Tie EVE Ruth Anderson 13/07/2013 Two tickets to the Rolling Stones concert in Hyde The Royal Parks Park Sir Edward Lister 20/12/2013 Smoked Salmon H. Forman & Son
Sir Edward Lister 17/12/2013 Bronze Sculpture Mohamed Alabbar
Sir Edward Lister 10/12/2013 Flights from London to Qatar Qatar Foundation
Sir Edward Lister 10/12/2013 Gala dinner at WISH Qatar Foundation Sir Edward Lister 10/12/2013 One night at the Four Seasons Hotel, Qatar Qatar Foundation
Sir Edward Lister 10/12/2013 Car provided from the airport to the dinner Qatar Foundation Sir Edward Lister 04/12/2013 Dinner Alexander Lebedev Sir Edward Lister 04/12/2013 Ceremonial Dish Moscow City Government
Sir Edward Lister 04/12/2013 Two nights at the Ritz Carlton, Moscow Moscow Urban Forum
Sir Edward Lister 18/10/2013 Lunch British Chamber of Commerce - Hong Kong Sir Edward Lister 18/10/2013 Lunch British Consul General
Sir Edward Lister 16/10/2013 Dinner Mr Zhang Yuling, Greenland Sir Edward Lister 15/10/2013 Dinner Mr Xu, ABP Sir Edward Lister 14/10/2013 Dinner Sir David Tang Page 263 Sir Edward Lister 14/10/2013 Lunch Wanda
Sir Edward Lister 13/10/2013 Dinner Reignwood
Sir Edward Lister 02/10/2013 Lunch Battersea Power Station, Robert Ticknell Sir Edward Lister 30/09/2013 Dinner City of London, Mark Boleat
Sir Edward Lister 30/09/2013 Lunch Leaders of Westminster, Kensington & Chelsea and Hammersmith & Fulham Sir Edward Lister 27/09/2013 Lunch Lunch with Susan Chow of Hutchison Whampoa Sir Edward Lister 27/09/2013 Dinner Far East Group
Sir Edward Lister 26/09/2013 Lunch Henry Kar Shin, Knight Dragon
Sir Edward Lister 25/09/2013 Lunch Greenland Sir Edward Lister 25/09/2013 Dinner Zhongron Group - Mr Ni Sir Edward Lister 23/09/2013 Dinner Asian Business Park
Sir Edward Lister 22/09/2013 Dinner British Ambassador to China Sir Edward Lister 20/09/2013 Cartier Pen HE Sheikha Al Mayassa of Qatar Sir Edward Lister 20/09/2013 Cartier Silver Cufflinks HE Sheikha Al Mayassa of Qatar Sir Edward Lister 19/09/2013 Lunch Mayor of Kuala Lumpur
Sir Edward Lister 18/09/2013 Dinner Maybank Sir Edward Lister 17/09/2013 Dinner High Commissioner of Malaysia Sir Edward Lister 01/08/2013 Lunch Matt Cooke, Chief of Staff to Evgeny Lebedev Sir Edward Lister 17/07/2013 Lunch Rajeev Chandrasekhar Sir Edward Lister 16/07/2013 Dinner London First Sir Edward Lister 05/07/2013 Lunch Preston Haskell, Haskell Group
Page 264 Veronica Wadley 30/09/2013 Dinner in Manchester whilst at the Conservative Bell Pottinger Party Conference
Veronica Wadley 19/09/2013 Evening Standard Power 1000 List 2013 Evening Standard
Veronica Wadley 09/09/2013 Lunch at KPMG in their headquarters at Canary KPMG Wharf. Amelia Richards - Commercial Director, Greater London Authority Marianne Fallon - UK Head of Corporate Affairs, KPM Richard Hamilton - Director, Corporate Citizenship, KPM Veronica Wadley 06/08/2013 Lunch at Perkin Reveller Andrew Porter, Brunswick Group Veronica Wadley 10/07/2013 Summer Reception, King Pavilion, Hyde Park AEG and Royal Parks Veronica Wadley 29/06/2013 Lunch at Guildhall The Kuwait Investment Office Veronica Wadley 22/04/2013 Drinks Thomas Goode, Free the Children Veronica Wadley 26/06/2013 Dinner at the Savoy Mayor's Fund for London, trustee Lord Fink Will Walden 13/01/2014 Lunch Tom Bradby - Journalist Will Walden 14/10/2013 Drinks Reception Sir Michael Hintze
Will Walden 14/10/2013 Drinks Rec eption Leo Lewis (The Times)
Will Walden 13/10/2013 Dinner Reignwood, Beijing Reignwood
Will Walden 26/09/2013 Lunch meeting to discuss matters of mutual interests David Wooding, The Sun
Will Walden 25/09/2013 Lunch meeting to discuss matters of mutual interest Kamal Ahmed, Daily Telegraph Will Walden 19/09/2013 Evening reception, Evening Standard Power List Evening Standard 2013
Page 265 Will Walden 12/09/2013 Lunch meeting Alex Chandler and Simon Harris (ITN)
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Page 266 Appendix 2 Gifts and Hospitality Senior Sta ff Member 01.09.2013 (10am) - 01.02.2014 (10am) Name Date of Gift/ Hospitality Detail of Gift/ Hospitality Donor/ Provider of Gift/ Hospitality David Lunts 17/01/2014 Lunch A2Dominion Group David Lunts 05/12/2013 Dinner Garden City Developments Community Interest Company David Lunts 21/11/2013 NHBC Annual lunch NHBC
David Lunts 28/08/2013 Dinner following site visit of Woodberry Down Berkeley Homes (Capital) plc Debbie Jackson 06/09/2013 Lunch at Magdalen with William Cheng, William Cheng/ZRG representative of ZRG
Page 267 Ed Williams 18/09/2013 Small decorative screen Guangzhou Municipal delegation Jamie Ratcliff 28/11/2013 Private dinner at Child and Co. RBS
Jamie Ratcliff 26/11/2013 The Climate Change Forum's Evening Reception The Climate Change Forum Jamie Ratcliff 21/11/2013 Mill Group Winter Residential Investment Lunch Mill Group
Jamie Ratcliff 09/10/2013 Lunch at Hilton, Park Lane Hunters
Juliette Carter 12/11/2013 Dinner at the Public Service Awards 2013 Guardian/Hays Juliette Carter 11/10/2013 Candlesticks Delegation of representatives from Denmark/City of Copenhagen Kevin Austin 20/11/2013 Tickets to Ice Skating at Westfield Westfield Mark Demery 26/11/2013 Tour of Tower of London and reception Historic Royal Palaces Mark Demery 22/10/2013 Attendance and dinner at PR Week Awards PR Week / Haymarket Events ceremony
Mark Demery 24/09/2013 Decorative wooden boxes, wallet and watch Yonghoon Park, Senior Staff Director, Administration & Autonomy Committee, Seoul Metropolitan Council Mark Kleinman 14/11/2013 Dinner at the Migration Policy Institute Migration Policy Institute Transatlantic Council on Migration at City Hall
Mark Roberts 16/0 1/2014 London Government Dinner City of London Corporation
Simon Grinter 06/11/2013 Ticket to the Premises and Facilities Management Premises and Facilities Management awards dinner. To sit on the judges table with the magazine other judges
Stephen Tate 20/11/2013 Lunch Crown Estates Page 268 Agenda Item 11
Subject: Annual Report of the Monitoring Officer Regarding Complaints about Elected Members Report to: Audit Panel Report of: Monitoring Officer Date: 20 March 2014 This report will be considered in public
1. Summary 1.1 This report provides details of the complaints-related matters dealt with by the Monitoring Officer under the new GLA Standards regime established under the provisions of the Localism Act 2011 in the period since March 2013. 2. Recommendation 2.1 That the report be noted.
3. Background 3.1 When establishing the Authority’s new Standards regime in May 2012, the Assembly agreed that the Monitoring Officer should produce an annual report in relation to the handling of complaints made against GLA Members. This paper is the second such report. 3.2 The details of the complaints received and considered by the Monitoring Officer in the period since March 2013 (the point of the last annual report to the Panel) are set out at Appendix 1 . 4. Issues for Consideration 4.1 This report covers a period when the new regime had been established under the provisions of the Localism Act 2011, operational since 1 July 2012, under which the Authority decided not to establish a Standards Committee but instead to delegate all complaints-related functions to the Authority’s Monitoring Officer. The new regime also includes the role of the Independent Person, a person appointed by the Authority from whom the Monitoring Officer must seek views prior to making any determinations on complaints.
4.2 The transition from the previous regime to the new model appears to have been reasonably smooth and there are no substantive issues to report in this regard, although there is yet to have been a period where a significant number of complaints have been received within the same period.
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4.3 The Authority appointed four people to act as Independent Persons for the year until July 2013. The Authority (the Mayor and the Assembly, acting jointly) then appointed two people to act as Independent Persons until 30 June 2014; after which the Authority would be asked to make new appointments. In the period relating to this report an Independent Person has been engaged in all four complaints.
4.4 There has been a reasonably constant (but not high) amount of activity in relation to the new system for complaints about the conduct of office-holders of the Mayor’s Office for Policing and Crime (MOPAC) – namely, the Mayor and the Deputy Mayor for Policing and Crime. That regime is established under a separate piece of legislation (the Police Reform and Social Responsibility Act 2011) and related regulations and the Monitoring Officer provides regular, public update reports on those matters to the London Assembly’s Police and Crime Committee. As such, MOPAC-related complaints matters are not included within this report.
4.5 In addition to handling complaints, the Monitoring Officer is responsible for giving advice on the registration and disclosure of relevant interests, gifts and hospitality. A new statutory regime for disclosable pecuniary interests was established by Regulations issued by the Secretary of State for Communities and Local Government in June 2012. The previous rules in respect of gifts and hospitality (declarations of receipt of items of a value of £25 or more) have been continued, pending a review (of the Corporate Governance Framework Agreement for the GLA Group) – which the Monitoring Officer is currently undertaking.
4.6 It may not, if asked, be possible for the Monitoring Officer to disclose full details in public in respect of particular matters referred to in the Appendix, and in any case these are matters that have either been determined. 5. Legal Implications 5.1 The Greater London Authority has established a Standards regime, including delegating all functions such as can be delegated in that regard to the Monitoring Officer, under the relevant provisions on the Localism Act 2011. Decisions on Standards-related matters are therefore for either the Mayor and London Assembly acting jointly or the Monitoring Officer. The Assembly’s Audit Panel can, in the meantime, review the operation of the regime on behalf of the London Assembly. 6. Financial Implications 6.1 There are no financial implications arising from this report.
List of appendices to this report: Appendix 1 – Details of Standards complaints received since March 2013 Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Ed Williams, Monitoring Officer Telephone: 020 7983 4399 Email: [email protected] Page 270 Appendix 1
An nual report – Complaints (1 March 2013 to date) Len Duvall AM – complaint against Boris Johnson, Mayor of London, March 2012 Further to the appendix to the report of the Monitoring Officer on 20 March 2013: ‘The complaint concerns the hosting of Mayor of London’s Twitter account. The Complainant alleges that, on 20 March 2012 (the start of the formal pre-elections period for the 2012 GLA elections), the Mayor of London’s Twitter account was migrated to, and was therefore transformed into, the BackBoris2012 campaign Twitter account. The Complainant contends that the Mayor of London Twitter account is maintained by GLA resources and belongs to the office of the Mayor of London, not to the current mayor, Boris Johnson. The Complainant alleges that the migration / transfer of that account breaches the Authority’s Use of Resources and Pre-Election Guidance, and its Code of Conduct. The Complainant states that, on 20 March 2012, the Mayor of London’s Twitter account was reverted to being used for official purposes only “to correct a misuse of City Hall resources,” but contends that at 6.40pm a tweet was sent out from the official account “which mentioned Boris Johnson’s political twitter account and which linked directly to it.” The Complainant alleges that this is a further misuse of GLA resources and a further breach of the Code of Conduct and that there may have been similar issues in respect of the Mayor’s Facebook account. An external solicitor has been reviewing the material (as provided by the GLA in September 2012) and is shortly to make a recommendation to the Deputy Monitoring Officer appointed by the Monitoring Officer to deal with this matter.’ The Deputy Monitoring Officer concluded, having received the report of Mr Jonathan Goolden, of Wilkin Chapman Goolden and the views of the Independent Person, that whilst in principle the use by the Mayor of the Twitter and Facebook account was capable of being conduct falling within his official capacity and thus within the scope of the GLA Code of Conduct, there is no evidence to indicate that the Mayor was either personally responsible for the misuse of the accounts nor that he authorised others to do so. As such, the Deputy Monitoring Officer decided that the Mayor had not failed to comply with the GLA’s Code of Conduct. The Deputy Monitoring Officer did recommend that the Monitoring Officer wrote to the Chief of Staff, the Director of Communications and all staff in the GLA’s External Affairs Department to provide further guidance to them on the application of the Authority’s Use of Resources rules, with particular reference to social media issues. The Monitoring Officer wrote to the persons concerned in September 2013. Andrew Dismore AM – complaint against Andrew Boff AM, May 2013 The Complainant, Andrew Dismore AM, alleged that a sealed item of post clearly identified as addressed to him was ‘illicitly both opened and read without permission’ by Andrew Boff AM. The Complainant considered that the alleged activity would, if undertaken, constitute to a breach of the GLA’s Code of Conduct. The Complainant also alleged that Andrew Boff’s actions in this regard were potentially unlawful, by being in contravention of section 84 of the Postal Services Act 2000. The Monitoring Officer
Page 271 considered the complaint and the evidence relating to it in detail and also considered whether a reasonable member of the public in full possession of the facts would concluded that Mr Boff’s conduct could reduce the public confidence in Mr Boff being able to fulfil the role of an Assembly Member or in the Authority being able to fulfil its functions and duties. The Monitoring Officer’s opinion was that a reasonable member of the public would not regard Mr Boff’s conduct as lowering the reputation of the Authority or lowering public confidence in Mr Boff’s ability to fulfil his role as a Member of the London Assembly. The Monitoring Officer sought legal advice and also provided all documents, transcripts and background information to the Independent Person appointed to assist in this matter. The Monitoring Officer concluded that no further action should be taken on this complaint. Mr Harry Phibbs – complaint against Darren Johnson AM, Chair of the London Assembly, September 2013 The Complainant alleged that Darren Johnson AM, as Chair of the London Assembly. failed to maintain order at the London Assembly meeting on 11 September 2013 and that Darren Johnson AM therefore failed to treat the Mayor and Assembly Members with respect. As such, it was alleged that Darren Johnson AM failed to comply with the GLA Code of Conduct. In addition, it was alleged that, in failing to maintain order at that meeting, Darren Johnson AM brought himself and the Assembly into disrepute and thus failed to comply with paragraph 5 of the GLA Code of Conduct. It was further alleged that Darren Johnson AM did not “act in accordance with your authority's reasonable requirements” and thereby failed to comply with paragraph 6(b)(i) of the GLA’s Code of Conduct. The Complainant confirmed that he wished the matter to be treated as a formal complaint under the GLA’s Code of Conduct. The GLA’s Monitoring Officer decided that, since he had given procedural advice to the Chair of the Assembly at that particular meeting in his capacity as the GLA’s Head of Committee & Member Services, it would not be appropriate for him personally to consider these allegations as Monitoring Officer. David Lunts, Executive Director, Housing and Land, was therefore appointed as a Deputy Monitoring Officer with delegated authority to discharge functions of the Monitoring Officer under the Guidance on Making a Complaint about a GLA Member’s Conduct in relation to this complaint. The Deputy Monitoring Officer considered the evidence for this complaint along with the rules on chairing an Assembly meeting in the Authority’s Standing Orders. The Deputy Monitoring Officer also considered the views of the Independent Person and concluded that the Chair’s actions lay within the scope of the discretion with which the Chair is entrusted, and, in accordance with Stage 3 of the approved complaints-handling procedures, the Deputy Monitoring Officer decided that no further action should be taken on the complaint. Councillor Benjamin Dennehy – complaint against Dr Onkar Sahota AM The complaint was that Dr Onkar Sahota AM had improperly used his position as an Assembly Member to approach the Leader of Ealing Council and secure a meeting with the Leader, the Director of Built Environment at Ealing Council and architects regarding his, Dr Sahota’s, planning application for improvements to his private property in the
Page 272 borough of Ealing. The Complainant considered that the alleged activity constituted in a breach the GLA’s Code of Conduct. The Monitoring Officer considered the complaint and all associated material and views received in detail. The Monitoring Officer also considered whether a reasonable member of the public, in full possession of the facts, would be likely to conclude that Dr Sahota’s could have been, or have been perceived to have been, acting as a GLA Member during the period of the alleged conduct. Based on the information available, which included statements from the Leader of the Council and a chief officer of that Council, and noting the incidental use of GLA resources applied by Dr Sahota to these matters, the Monitoring Officer has concluded that a reasonable member of the public would not regard Dr Sahota as having been acting in his capacity as a Member of the Greater London Authority. The Monitoring Officer also sought the views of the Independent Person, who having read the material for the complaint agreed that no formal action would be taken with regards to this complaint. The Monitoring Officer did, however, provide further guidance to Dr Sahota as regards the (albeit incidental) use of GLA resources in connection with his personal matters that occurred during the course of the planning application process.
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Page 274 Agenda Item 12
Subject: Work Programme for the Audit Panel 2014/15 Report to: Audit Panel Report of: Executive Director of Secretariat Date: 20 March 201 4 This report will be considered in public 1. Summary 1.1 The Audit Panel is requested to approve its draft work programme for 2014/15. The Panel receives an update on its work programme at each meeting. 2. Recommendation 2.1 That the Panel approves its work programme for the 2014/15 Assembly year and identifies any additional issues it wishes to consider at future meetings. 3. Background 3.1 The Panel was established in line with the CIPFA (the Chartered Institute of Public Finance and Accountancy) guidance recommending the establishment of audit committees. The Audit Panel’s terms of reference, as agreed at the Annual Meeting of the Assembly on 1 May 2013, are as follows: 1. The Audit Panel will be concerned with ensuring the security of and monitoring of financial systems, ensuring that there is an anti-fraud culture, and promoting probity and good practice within the core GLA. 2. To liaise with the external auditors over their annual programme and, with the Mayor as appropriate, to approve the annual internal audit programme. 3. To deal as appropriate with matters raised by the external auditors’ management letters and reports and, where a report is made in respect of the GLA, to make recommendations to the Assembly at the meeting at which the report is to be formally considered in the presence of the Mayor in accordance with Schedule 8 in the 1999 Act. City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 275
4. To deal as appropriate with matters arising from the internal auditors’ reports and to comment to the Mayor on matters relevant to his/her responsibilities. 5. To review the GLA’s Risk Management Policy and comment to the Mayor as appropriate. 4. Issues for Consideration 4.1 The Panel meets four times per year to receive and comment upon a range of reports, including: - internal audit reports; - external audit reports; - the GLA Expenses and Benefits Framework; - the GLA’s Anti-Fraud and Corruption Strategy, Policy and Response Plan; - future audit arrangements; - GLA Risk Management Framework; - the Annual Governance Statement; - monitoring of expenses – Mayor, Elected Members and Senior Staff; - register of gifts and hospitality – Mayor and Assembly Members; - register of gifts and hospitality – senior staff; and - Annual Report of the Monitoring Officer regarding the complaints against elected Members with which he has dealt. 4.2 CIPFA stresses that audit committees have a key role in corporate governance and should be clearly integrated into an authority’s governance framework. An audit committee should be able to improve corporate focus on the issues arising from risk management, internal control and reporting. In the past year the Audit Panel has considered reports on the Annual Governance Statement and it will continue to play an active part in corporate governance in the future. 4.3 The table set out below sets out the business for the remaining meetings of the Panel in the 2014/15 Assembly year.
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Date of meeting Agenda Items July 2014 - External Audit Reports - Internal Audit Reports - Internal audits (From 2013/14 GLA Recruitment Framework) (Performance Management Analytical Review; Income from the GLA Estate; Delivery of Mayor's Outer London Fund & Mayor’s Regeneration Fund; Youth European Social Fund Projects) - Follow-up Audits (From 2013/14 Estate Strategy and Management of Assets; Mayor’s Mentoring Programme; Gifts and Hospitality) (Decent Homes Programme; Decision Making Framework – Mayoral and Directorate) - Progress Report - Annual Report 2013/14 - Draft Annual Governance Statement - Monitoring of expenses and Taxable Benefits – Mayor, Elected Members and Senior Staff; - Work Programme for the Audit Panel for 2014/15. October 2014 - External Audit Reports - Annual Governance Report; - Internal Audit Reports - Internal audits (London’s European Office; Housing; Sports Legacy Programme; Procurement; Remote Working and Data Management; Key Application Reviews - Finance) - Follow-up Audits - Progress Report; Energy and Environment Police Development and Implementation; London Plan Implementation; Mayor’s Mentoring Programme; - London’s European Programmes; - Corporate Risk Register; - Monitoring of expenses and Taxable Benefits – Mayor, Elected Members and Senior Staff; - Register of Gifts and Hospitality – Mayor and Assembly Members; - Register of Gifts and Hospitality – senior staff; and - Work Programme for the Audit Panel for 2014/15. December 2014 - External Audit Reports Annual Management Letter - Internal Audit Reports - Internal audits (Rough Sleepers Project; Mayor’s Planning Powers; Mobile Portable Devices; Budgeting Control Framework; Payroll; Creditors; Sundry Income/Debtors) - Follow-up Audits (Performance Management Framework; Mayor’s Economic Development Strategy; Regeneration Funding Control; ICT Procurement; Sickness Absence Monitoring; - Progress Report - Monitoring of expenses and Taxable Benefits – Mayor, Elected Page 277
Date of meeting Agenda Items Members and Senior Staff; - Work Programme for the Audit Panel for 2014/15. March 2015 - External Audit Reports - Audit Plan 2014/15; - Internal Audit Reports - Internal audits (Growing Places Fund; London Enterprise Fund) - Follow-up Audits (Housing Grants Monitoring and Control; Recruitment; Treasury Management) - Progress Report - Draft Internal Audit Plan 2015/16; - Corporate Risk Register - Monitoring of Expenses and Taxable Benefits – Mayor, Elected Members and Senior Staff; - Register of Gifts and Hospitality – Mayor and Assembly Members; - Register of Gifts and Hospitality – senior staff; and - Annual Report of the Monitoring Officer regarding the complaints against elected Members with which he has dealt. - Work Programme for the Audit Panel for 2014/15. 5. Legal Implications 5.1 The Assembly has the power to establish committees to discharge its functions, and the Audit Panel is one such committee. The work programme is in accordance with the Panel’s terms of reference, as agreed by the Assembly at its Annual Meeting on 1 May 2013. 6. Financial Implications 6.1 There are no financial implications for the purposes of this report. List of appendices to this report: None. Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officers: Laura Pelling, Committee Officer Telephone: 020 7983 5526 E-mail: [email protected]
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