AGENDA

Meeting Audit Panel Date Tuesday 17 October 2017 Time 3.30 pm Place Committee Room 4, 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 www.london.gov.uk/mayor-assembly/london-assembly/webcasts where you can also view past meetings.

Members of the Panel Peter Whittle AM (Chairman) Leonie Cooper AM Keith Prince AM (Deputy Chairman) Tom Copley AM

A meeting of the Panel has been called by the Chairman of the Panel to deal with the business listed below. Ed Williams, Executive Director of Secretariat Monday 9 October 2017

Further Information If you have questions, would like further information about the meeting or require special facilities please contact: Polly Hanford, Committee Assistant; telephone: 020 7983 5520; email [email protected];

For media enquiries please contact London Assembly External Relations on 020 7983 4283. If you have any questions about individual items please contact the author whose details are at the end of the report.

This meeting will be open to the public, except for where exempt information is being discussed as noted on the agenda. A guide for the press and public on attending and reporting meetings of local government bodies, including the use of film, photography, social media and other means is available at www.london.gov.uk/sites/default/files/Openness-in-Meetings.pdf.

There is access for disabled people, and induction loops are available. 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 on 020 7983 4750 in advance if you require a parking space or further information.

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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 Tuesday 17 October 2017

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)

Report of the Executive Director of Secretariat Contact: Polly Hanford, [email protected], 020 7983 5520.

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 19 July 2017 to be signed by the Chairman as a correct record.

The appendices to the minutes are not attached to this agenda but are available from the GLA’s website here: www.london.gov.uk/mayor-assembly/london-assembly/audit-panel

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4 Internal Audit Reports (Pages 13 - 118)

Report of the Executive Director of Resources Contact: Tom Middleton, [email protected], telephone: 020 7983 4257

The Panel is recommended to:

(a) Note the contents of recent internal audit report attached to the report at Appendices 1a to 1d;

(b) The internal audit follow-up reports attached to the report at Appendices 2a to 2d;

(c) The other internal audit reviews attached at Appendices 3a to 3c; and

(d) The internal audit progress report attached to the report at Appendix 4.

The following appendices are attached to the report.

Appendix 1a – Capital Programme – Monitoring and Pages 17 to 28 Return Appendix 1b – Partnership Governance - Film London Pages 29 to 46 & London Design Festival Appendix 1c - Governance Arrangements for New Pages 47 to 62 Year’s Eve Appendix 1d - GLA Payroll Pages 63 to 74

Appendix 2a - Expenses and Benefits Framework Pages 75 to 82

Appendix 2b - Mayor’s Community Infrastructure Levy Pages 83 to 86

Appendix 2c - Regeneration Funding Due Diligence Pages 87 to 90 Framework Appendix 2d - Use and Control of Social Media Pages 91 to 94

Appendix 3a - Review of Local Growth Fund Grant Pages 95 to 104 Declaration 2016/17 Appendix 3b - Accountant’s Report for the Commercial Pages 105 to 110 Electric Vehicle Trial Appendix 3c - Additional Internal Audit Report Pages 111 to 112

Appendix 4 - Internal Audit Progress Report Pages 113 to 118

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5 External Auditor's GLA Group Audit Results Report 2016/17 (Pages 119 - 172)

Report of the Executive Director of Resources Contact: Tom Middleton; email: [email protected]; telephone 020 7983 4257

The Panel is recommended to note the contents of the External Auditor’s GLA Group Audit Results Report 2016/17.

6 Corporate Risk Register (Pages 173 - 194)

Report of the Executive Director of Resources Contact: Tim Somerville, [email protected], telephone: 020 7983 5780

The Panel is recommended to note the Corporate Risk Register.

7 Register of Gifts and Hospitality - Mayor and Assembly Members (Pages 195 - 202)

Report of the Monitoring Officer Contact: Ed Williams, [email protected], 020 7983 4399

The Panel is recommended to note the report.

8 Register of Gifts and Hospitality - Members of Staff - Report of the Monitoring Officer (Pages 203 - 214)

Report of the Monitoring Officer Contact: Ed Williams, [email protected], 020 7983 4399

The Panel is recommended to note the report.

9 Monitoring of Expenses and Taxable Benefits - Mayor, Elected Members and Senior Staff (Pages 215 - 230)

Report of the Executive Director of Resources Contact: Tom Middleton, [email protected]; 020 7983 4257

The Panel is recommended to note the taxable benefits and expenses submitted by the Mayor, London Assembly Members and senior staff during the period 1 April 2017 to 31 August 2017.

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10 Work Programme (Pages 231 - 234)

Report of the Executive Director of Secretariat Contact: Polly Hanford, [email protected], 020 7983 5520.

The Panel is recommended to agree its updated work programme for the remainder of the 2017/18 Assembly year and identifies any additional issues it wishes to consider at future meetings.

11 Date of Next Meeting

The next meeting of the Panel is scheduled for Tuesday 12 December at 3.30pm in Committee Room 4.

12 Any Other Business the Chair Considers Urgent

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Agenda Item 2

Subject: Declarations of Interests

Report to: Audit Panel

Report of: Executive Director of Secretariat Date: 17 October 2017

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 interests1;

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 v1/2017 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 Shaun Bailey AM Sian Berry AM Member, LB Camden Andrew Boff AM Congress of Local and Regional Authorities (Council of Europe) Leonie Cooper AM Member, LFEPA; Member, LB Wandsworth Tom Copley AM Unmesh Desai AM Member, LFEPA; Member, LB Newham Tony Devenish AM Member, City of Westminster Andrew Dismore AM Member, LFEPA Len Duvall AM Florence Eshalomi AM Member, LB Lambeth Nicky Gavron AM Susan Hall AM Member, LFEPA; Member, LB Harrow David Kurten AM Member, LFEPA Joanne McCartney AM Deputy Mayor Steve O’Connell AM Member, LB Croydon Caroline Pidgeon MBE AM Keith Prince AM Member, LB Redbridge Caroline Russell AM Member, LFEPA; Member, LB Islington Dr Onkar Sahota AM Navin Shah AM Fiona Twycross AM Chair, LFEPA; Chair of the London Local Resilience Forum Peter Whittle AM

[Note: LB - London Borough; LFEPA - London Fire and Emergency Planning Authority. The appointments to LFEPA reflected above take effect as from 3 April 2017]

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

- 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. Page 2

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.

5. Financial Implications

5.1 There are no financial implications arising directly from this report.

Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Polly Hanford, Committee Assistant Telephone: 020 7983 5520 E-mail: [email protected]

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Page 4 Agenda Item 3

MINUTES

Meeting: Audit Panel Date: Wednesday 19 July 2017 Time: 2.30 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:

Keith Prince AM (Deputy Chairman) Leonie Cooper AM Tom Copley AM

1 Apologies for Absence and Chairman's Announcements (Item 1)

1.1 Apologies for absence were received from the Chairman, Assembly Member Whittle.

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 Wednesday 19 July 2017

3 Membership of the Panel (Item 3)

3.1 Resolved:

That the following membership and chairing arrangements for the Panel, as agreed by the London Assembly at its Annual Meeting on 3 May 2017, be noted: Peter Whittle AM (Chairman); Keith Prince AM (Deputy Chairman); Leonie Cooper AM; and Tom Copley AM.

4 Terms of Reference (Item 4)

4.1 Resolved:

That the terms of reference of the Panel, as agreed by the London Assembly at its Annual Meeting on the 3 May 2017, as set out at Agenda Item 4, be noted.

5 Standing Delegations of Authority (Item 5)

5.1 Resolved:

That it be noted that the Annual Meeting of the Assembly on 3 May 2017, agreed the following standing delegation to the Chairman:

That a general authority to Chairs of all ordinary committees and sub-committees to respond on the relevant committee or sub-committee’s behalf, following consultation with the lead Members of the party Groups on the committee or sub-committee, where it is consulted on issues by organisations and there is insufficient time to consider the consultation at a committee meeting.

6 M inutes (Item 6)

6.1 Resolved:

That the minutes of the meeting of the Audit Panel held on 28 March 2017 be signed by the Chairman as a correct record.

Page 6 Greater London Authority Audit Panel Wednesday 19 July 2017

7 Internal Audit Reports (Item 7)

7.1 The Panel received the report of the Executive Director of Resources. Appended to the report were three audit reports (two of which had received adequate assurance and one of which had received substantial assurance), five follow-up audit reports, the Annual Report for 2016/17, and the Quarter 1 Progress Report.

RE:NEW Programme Framework (Appendix 1a)

7.2 The Panel considered the internal audit report on the review of the RE:NEW Programme Framework.

7.3 The Programme Manager assured Members that there had not been any funding issues so far. Panel Members asked to be kept up to date with any such issues that did arise at the next meeting as new funding structures were implemented.

7.4 The Panel noted the adequate assurance rating.

Procurement Shared Service (Appendix 1b)

7.5 The Panel considered the internal audit report on the review of the Procurement Shared Service and noted the substantial assurance rating.

Planning Shared Service Income (Appendix 1c)

7.6 The Panel considered the internal audit report on the review of the Planning Shared Service Income – Health Check.

7.7 A concern was raised over the confusion about the timescale for raising invoices. The Assistant Director of Planning agreed that this was a problem and that there was a mismatch between pre-application meetings and invoice dates. It was explained to Members that there was going to be a move over to an electronic system that would reduce the amount of double-handling and duplication.

7.8 The Panel noted the adequate assurance rating.

Follow up Disclosure and Barring Service (Appendix 2a)

7.9 The Panel considered the internal audit follow-up review of the Disclosure and Barring Service.

7.10 A concern was raised about the lack of monitoring of the record of self-declaration. The Panel asked that reminders be sent out to people periodically.

7.11 Members requested an update after the meeting from the Head of Finance and Governance about what stage the updating of the Child Protection Policy procedures was at.

Page 7 Greater London Authority Audit Panel Wednesday 19 July 2017

Follow up Partnership Governance – World Athletics Championship (Appendix 2b)

7.12 The Panel considered the internal audit follow-up review of the World Athletics Championship Partnership Governance.

7.13 The Head of Finance and Governance undertook to provide Members of the Panel with the information on when the various contracts were signed.

Follow up Health and Safety Framework (Appendix 2c)

7.14 The Panel considered the internal audit follow-up review of the Health and Safety Framework.

Follow up The Bribery Act 2010 (Appendix 2d)

7.15 The Panel considered the internal audit follow-up review of The Bribery Act 2010.

7.16 Members expressed disappointment that the reviews of the Codes of Conducts and Ethics were not being conducted as a matter of urgency so as to include explicit references to the Authority’s compliance with the Bribery Act 2010. This report was first bought to the Panel in October 2016 and there had now been a significant time lag between the initial discussion and the updates being made. The Head of Finance and Governance agreed to find out when these updates would be taking place.

Follow up the London Growth Hub – Grant Return (Appendix 2e)

7.17 The Panel considered the internal audit follow-up review of the London Growth Hub Grant Funding.

Internal Audit Annual Report for 2016-17 (Appendix 3)

7.18 The Panel considered the Internal Audit Annual Report for 2016-17.

7.19 The Head of Risk and Assurance, MOPAC, highlighted to Members that the GLA has an effective internal control environment supporting the achievement of its overall strategic objective. It was also noted that there was an improved assurance rating from the previous year with no reports being given a limited assurance rating.

7.20 The Head of Risk and Assurance, MOPAC, also pointed out to Members that the majority of recommendations made by the Panel last year had been accepted.

7.21 It was suggested that it would be useful if Members were given a breakdown of what specifically had been accepted already and what was still under discussion. The Head of Risk and Assurance, MOPAC, agreed to provide a list of the prioritisation of recommendations.

Page 8 Greater London Authority Audit Panel Wednesday 19 July 2017

Internal Audit Progress Report (Appendix 4)

7.22 The Panel considered the Internal Audit Progress Report for Quarter 1.

7.23 The Head of Risk and Assurance, MOPAC, stated that the report represented work that had taken place during the first quarter of 2017-18 and work that was currently ongoing.

7.24 Resolved:

a) That the contents of recent internal audit reports at Appendices 1a to 1c of the report be noted;

b) That the contents of internal audit follow-up reports at Appendices 2a to 2e of the report be noted;

c) That the Annual Report 2016/17 at Appendix 3 of the report be noted; and

d) That the progress report at Appendix 4 of the report be noted.

8 Annual Governance Statement 2016/17 (Item 8)

8.1 The Panel received the report of the Head of Paid Service and Executive Director of Resources.

8.2 The Head of Finance and Governance, GLA, explained that the Draft Annual Governance Framework set out the GLA’s management processes and existing safeguards. It also set out the GLA’s governance challenges from the point of view of the London Assembly and GLA management team.

8.3 The External Auditor suggested that next year the Annual Governance Statement could be updated to reflect any changes in risk appetite in the new Mayoral priorities, considering reports together rather than judging them in isolation.

8.4 Resolved:

That the Draft Annual Governance Statement be noted.

Page 9 Greater London Authority Audit Panel Wednesday 19 July 2017

9 Monitoring of Expenses and Taxable Benefits - Mayor, Elected Officials and Senior Officers (Item 9)

9.1 The Panel received the report of the Executive Director of Resources.

9.2 The reduction in foreign travel was noted but concern was expressed that other expenses had risen by £9,000.

9.3 Members asked who was monitoring where the claims come from and questioned that it should not be common practice that people are given allowances if they cannot produce a receipt. The Head of Finance and governance explained that if people did lose their receipts they could not claim unless there were exceptional circumstances.

9.4 In answer to a question about what not insured for business travel meant and how it became a one off exception, the Head of Finance and Governance explained that people had sometimes not appreciated that if you do not have prior permission to drive your car for work purposes then you are not insured. Concern was expressed that by allowing a one off exception in any circumstances, the GLA could be seen as encouraging people who do not have insurance to use their cars for business purposes. Members felt that there should be no grey area where this was concerned.

9.5 It was noted that the two appendices to the report had not been circulated. Members asked that these be circulated to them following the meeting and are attached as an appendix to these minutes.

9.6 Resolved:

That the report on the Monitoring of Expenses and Taxable Benefits, claimed by the Mayor, elected officials and senior officers be noted.

Order of Items

In accordance with Standing Order 2.2D, and with the consent of the Panel, the Chairman stated that he would vary the order of the agenda and would take Agenda Items 11 to 13 before Agenda Item 10.

10 Work Programme 2017/18 (Item 11)

10.1 The Panel received the report of the Executive Director of Secretariat.

10.2 Resolved:

That the work programme for the remainder of 2017/18 Assembly year be noted.

Page 10 Greater London Authority Audit Panel Wednesday 19 July 2017

11 Date of Next Meeting (Item 12)

11.1 The next meeting of the Panel was scheduled for Tuesday 17 October 2017 at 3.30pm in Committee Room 4.

12 Any Other Business the Chairman Considers Urgent (Item 13)

12.1 There was no other business the Chairman considered urgent.

13 Anti -Fraud Update (Item 10)

13.1 The Panel received the report of the Executive Director of Resources.

13.2 The report was introduced by the Senior Governance Manager who explained to Members that updates had been made to the GLA’s Anti-Fraud & Corruption and Whistleblowing policies as well as introducing a new Anti-Money Laundering Policy.

13.3 Resolved:

That the Anti-Fraud Update be noted.

14 Exclusion of Press and Public

14.1 Resolved:

That public and press be excluded from the remainder of the meeting to consider an additional update from the External Auditors in respect of financial risks set out in Item 5, External Audit Plan 2016/17, noting that consideration of this update would involve the likely disclosure of exempt information, as defined under paragraph 3 of Schedule 12A of the Local Government Act 1972, and that the public interest in maintaining this exemption outweighed the public interest in disclosing the information.

15 Anti -Fraud Update (Item 10)

15.1 The Panel received an update from the Senior Governance Manager on two specific instances of alleged fraud (the 2016/17 instance and the historic case).

15.2 Resolved:

That the current position regarding two specific instances of alleged fraud be noted.

Page 11 Greater London Authority Audit Panel Wednesday 19 July 2017

Chairman Date

Contact Officer: Polly Hanford, Committee Assistant, telephone: 020 7983 5520; email: [email protected]

Page 12 Agenda Item 4

Subject: Internal Audit Reports

Report to: Audit Panel

Report of: Executive Director of Resources Date: 17 October 2017

This report will be considered in public

1. Summary

1.1 This report informs the Panel of recent internal audits.

2. Recommendation

2.1 The Panel is recommended to:

(a) Note the contents of recent internal audit report attached to the report at Appendices 1a to 1d;

(b) The internal audit follow-up reports attached to the report at Appendices 2a to 2d; and

(c) The other internal audit reviews attached at Appendices 3a to 3c; and

(d) The internal audit progress report attached to the report at Appendix 4.

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3. Background

3.1 The GLA’s Internal Audit function, provided by MOPAC, has recently issued the following reviews:  Capital Programme – Monitoring and Return (substantial rating);  Partnership Governance - Film London & London Design Festival (adequate);  Governance Arrangements for New Year’s Eve (substantial); and  GLA Payroll (substantial).

3.2 The Auditor has issued the following follow-up reviews:  Expenses and benefits framework (adequate rating);  Mayor’s Community Infrastructure Levy (substantial);  Regeneration Funding Due Diligence Framework (substantial); and  Use and Control of Social Media (adequate).

3.3 The Auditor has also issued the following other reviews:  Review of Local Growth Fund Grant Declaration 2016/17;  Accountant’s Report for the Commercial Electric Vehicle Trial; and  Additional Internal Audit Report.

3.3 These reports are attached as Appendices 1a to 1d, Appendices 2a to 2d and Appendices 3a to 3c.

4. Assurance levels

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 A summary analysis of assurance ratings and recommendations in the above mentioned audits is within Appendix 4, as part of the auditors’ regular report of progress against the Annual Audit Plan.

5. Legal Implications

5.1 There are no legal implications directly arising from this report.

6. Financial Implications

6.1 There are no financial implications directly arising from this report.

Local Government (Access to Information) Act 1985 List of Background Papers: None

Contact Officers: Tim Somerville, Senior Governance Manager Telephone: 020 7983 5780 E-mail: [email protected]

List of appendices to this report: Internal Audit Reviews  Appendix 1a: Capital Programme – Monitoring and Return  Appendix 1b: Partnership Governance - Film London & London Design Festival  Appendix 1c: Governance Arrangements for New Year’s Eve  Appendix 1d: GLA Payroll (substantial)

Internal Audit Follow-Up Reviews  Appendix 2a: Expenses and benefits framework  Appendix 2b: Mayor’s Community Infrastructure Levy  Appendix 2c: Regeneration Funding Due Diligence Framework  Appendix 2d: Use and Control of Social Media

Other Internal Audit Reviews  Appendix 3a: Review of Local Growth Fund Grant Declaration  Appendix 3b: Accountant’s Report for the Commercial Electric Vehicle Trial  Appendix 3c: Additional Internal Audit Report

Internal Audit Progress Report  Appendix 4 – Internal Audit Progress Report Page 15 This page is intentionally left blank

Page 16 Appendix 1a

DIRECTORATE OF AUDIT, RISK AND ASSURANCE

Internal Audit Service to the GLA

Review of Capital Programme – Monitoring and Return

Page 17 DISTRIBUTION LIST

Audit Team

David Esling, Head of Audit and Assurance Karen Welsh, Senior Risk and Assurance Auditor

Report Distribution List

Debra Redhead-Allen, Capital Accountant Jyoti Chotai, Finance Manager Tom Middleton, Head of Finance and Governance Martin Clarke, Executive Director – Resources

Page 18 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 3

Scope 3

Programme Objectives and Expected Benefits 3

Programme Governance Framework 4

Capital Programme Funding Streams 5

Approval of Funding 6

Reporting of Performance 7

ACTION PLAN

Assurance and Risk Rating Definitions 8

Findings and Recommendations 9

September 2017 Review of Capital Programme – Monitoring and Return

Page 19 EXECUTIVE SUMMARY

1. Background

1.1 This review was carried out as part of the Greater London Authority (GLA) 2017/18 audit plan. The objectives are to ensure that capital funds are allocated to support the GLAs strategic objectives and priorities and that programmes deliver on their agreed objectives within the approved budget and timescales.

1.2 At the outset of the review, the potential key risks identified to achieving the objectives of the Capital Programme were:

 Capital funds are not allocated in accordance with GLA strategic priorities and objectives  Ineffective governance arrangements  Non-compliance with Financial Regulations and Scheme of Delegation  Lack of ownership and accountability for capital programme objectives and performance  Lack of robust monitoring and control of projects at corporate and local level  Ineffective budgetary control  Failure to track deliverables and budget variances  Insufficient or inadequate management information  Failure to achieve value for money

1.3 Failure to manage these risks could result in capital programme objectives not being achieved and reputational damage for the GLA. We are looking to provide assurance that the key risks are being effectively managed.

1.4 The Mayor is required under section 122 and 123 of the GLA Act 1999 to prepare a capital spending plan for the following financial year for the five functional bodies; London Fire and Emergency Planning Authority (LFEPA); the Mayor’s Office for Policing and Crime (MOPAC); the London Legacy Development Corporation (LLDC); Transport for London (TfL); and the Old Oak Common and Park Royal Development Corporation (OPDC). The audit review looked at the Capital Programme for the GLA only. The Capital Expenditure Plan for 2017/18 for GLA showed total expenditure of £639.2m.

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 Clearly defined programme objectives and expected benefits have been documented and adequately approved. The format of the Capital Spending Plan and its contents are set out in the GLA Act 1999. The Capital Spending Plan was approved by the Mayor in February 2017 and submitted to the appropriate Committees. Elements of the plan are clearly documented within the Spending Plan. September 2017 Review of Capital Programme – Monitoring and Return 1

Page 20 EXECUTIVE SUMMARY

3.2 A Governance programme framework is in place with roles, responsibilities and accountabilities being clearly allocated. The Executive Director of Resources is responsible for ensuring the Mayor and the Assembly have information and advice to comply with the statutory requirements. The Capital Spending Plan is supported by up to date Mayor’s Budget Guidance and Financial Regulations.

3.3 Capital Programme Funding Streams are contained with the Capital Spending Plan. Funding for the capital is also included in the Capital Spending Plan. Monthly monitoring of the funding streams takes place by GLA Directorates and Financial Services. Updates of the plan are submitted to the Budget Monitoring Sub Committee on a quarterly basis and monthly Management Account Reports are produced and submitted to Directorates. Funding streams take account of Mayor Priorities and objectives.

3.4 Adequate decision making processes are in place including Decision Thresholds and details are available all GLA staff. Requests for Mayor, Assistant Director and Executive Director Decisions forms had been submitted and were adequately approved.

3.5 Regular reporting of performance of programmes takes place by Directorates and Financial Services. Quarterly GLA Financial and Performance reports are produced by Finance Services and submitted to the Budget Monitoring Sub Group. Monthly monitoring of the plan is undertaken by the Capital Accountant including the identification of any variances.

4. Key Risk Issues for Management Action

4.1 A summary of completed capital projects is not produced. There is a risk that capital projects may remain on the Capital Programme Plan following completion. The Capital Accountant may not be aware of projects that are due to be completed at year end.

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5. Review Objectives

5.1 Our overall objective was to review the effectiveness of the control framework in relation to the Capital Programme – Monitoring and Return to support Mayoral objectives. In particular, we sought to give an assurance that:

 Programme objectives and expected benefits are clearly defined and properly approved.  A clearly defined programme governance framework is in place setting out roles, responsibilities and accountabilities.  The capital programme has clear funding streams and is effectively planned to meet the objectives of GLA.  Funding is reviewed and approved in accordance with Financial Regulations and the Scheme of Delegation.  Performance against programme objectives is reported on a regular basis and is reviewed by senior management and budgets are effectively managed and reported on a regular basis.

6. Scope

6.1 We reviewed the governance arrangements in place for capital programme preparation, approval and monitoring and reviewed a sample of capital projects to determine if funding had been correctly allocated, is regularly monitored and that project benefits had been adequately defined and tracked.

7. Programme Objectives and Expected Benefits

7.1 The GLA is a strategic authority with a London-wide role to design a better future for the Capital. The Mayor of London sets a citywide vision of improvement, develops strategies, policies and investment programmes to realise the vision and provides funding and encouragement to help make it a reality. (Capital Spending Plan 2017-18).

7.2 The prescribed format of the capital spending plan and its contents are set out in Section 122 of the GLA Act 1999, as amended by the Local Government Act 2003. The Capital sending plan has been prepared for each of the functional bodies of the GLA group for 2017-18 and includes the Mayor’s Office for Policing and Crime (MOPAC), the London Fire and Emergency Planning Authority (LFEPA), Transport for London (TfL) and the London Legacy Development Corporation. The capital plans for GLA are also included in the spending plan and this enables the proposed capital expenditure for the entire GLA Group to be presented in one place.

7.3 The Budget Guidance requests that the GLA and its functional bodies integrate their capital and revenue planning together in their initial budget submission in October and final budget submission by the end of November 2016. The Mayor then consulted on one integrated capital and revenue budget in December.

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7.4 Under section 123 of the GLA Act the Mayor sent a copy of the draft plan to the London Assembly in January inviting them to submit written comments to him within 21 days. The capital plan is also sent to the Secretary of State (DCLG) in February with copies to the Assembly and Functional Bodies. The GLA Group Capital Spending Plan for 2017-18 was approved by the Mayor in February 2017 via Mayoral Decision – MD2076 and the plan was submitted to the Budget and Performance Committee in March 2017.

7.5 The Mayor of London’s Capital Spending Plan 2017-18 reports the elements of the plan as the following:-

 A Housing programme of £278.6m in 2017-18 relating to a proportion of the recently announced £3.15b for 90,000 affordable housing starts to 2021;  A regeneration programme estimated at £100.2m including £39.9m investment in Further Education, £36.0m on Growing Places Fund projects to create jobs and skills in emerging sectors; £15.4m on London Regeneration Fund projects investing in high streets and £5.0m to begin new programmes on Supporting Local Economies, Unlocking Small sites and Air Quality funded from the £141.2m additional Growth Deal grant funding for 2017-18 to 2020-21.  Funding of £189.0m in 2017-18 is forecast to be paid to TfL to fund the Northern Line extension to Battersea.

7.6 The GLA Capital Expenditure plan shows the budget for 2017-18 as £639.2m.

8. Programme Governance Framework

8.1 The Executive Director of Resources is responsible for ensuring the Mayor and the Assembly have sufficient information and advice to comply with the statutory requirements. Authorisations and threshold limits have been established and are displayed on the GLA web site with access by all GLA officers. A capital accountant has been allocated responsibility for the day to day management of the capital programme including spending.

8.2 Effective systems are in place for the submission and review of capital proposals. Surgeries (meetings) were held with Directorates and Senior Management to discuss funding proposals. Proposals were submitted by Directorates for their projects for example Housing and Land who have a number of capital programmes running. The proposal included detailed information relating to links to Mayoral Manifesto, Priorities and Commitments, Proposed activities, outcomes that will be delivered, budget information and delivery.

8.3 Quarterly reporting of the Capital Plan is submitted to the Budget Monitoring Sub Committee via the GLA Financial and Performance Report. Day to day monitoring of the capital projects is by the individual Directorates. Monthly dashboards are produced by project leads reporting on the projects and GLA and are submitted to Corporate Governance Directorate for submission to the Corporate Investment Board and Budget Monitoring Sub Committee.

8.4 The Capital Spending Plan is supported by the Mayor’s Budget Guidance for

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2017-18 which includes details of information required and timetables and the Financial Regulations. Both documents are available to all staff.

9. Capital Programme Funding Streams

9.1 Capital Programme Funding Streams are clearly documented within the GLA Capital Spending Plan. The Capital Expenditure Plan shows expenditure for the four years 2017-2021 for each of the projects. For 2017-18 expenditure is recorded as £639.2m increasing to £2,835.8m in 2020-21. The forecast outturn for 2016-17 is also contained within the spending plan and was reported as £630m. The Capital Programme Outturn report for 2016/17 reported a revised budget of £661.6m and the actual outturn as £513.6m. For the current financial year 2017/18 the capital programme monitoring report for period 5 showed a budget of £710.5m and the actual spend as £92.9m. Forecasted outturn for period 5 was reported at £740.5m resulting in a variance of £30m. Much of the variance relates to underspending in the previous year by LLDC (£28.5m). The funding was available in the previous year and has now been brought forward to the current year.

9.2 Funding for the Capital fund is included in the spending plan and shows funding from CPO provision, borrowing and developer contributions, capital receipts and other sales income, other grants and contributions, recycled capital grant funding, right to buy, DCLG Loans and capital grant. Funding for the current Financial year of £336m had been received from DCLG. Monies for NLE and LLDC is funded by the GLA and are available when required. No further grants have been received in 2017/18, however, funds from the previous year were brought forward to assist with the delivery of the Capital Programme. GLA Capital funding costs have been recorded and show the total costs for 2017-18 as £17.8m reducing to £13.2m in 2020-21.

9.3 Monthly Management Accounts budget reports are produced by Financial Services and provided to the individual Directorates. The Management Account reports contained details of budget allocations for the financial year and actual spends to date. Individual Directorates also maintain their own budget records in relation to funding allocated. 9.4 Detailed monthly standard dashboards are completed by project leads for submission to GLA Directorates for completion of their dashboards which are submitted to Corporate Governance for review at the Corporate Investment Board and submission to the Budget Monitoring Sub Committee. From a review of dashboards submitted for regeneration, information reported included the delivery progress, the current top three items to report, project risks and issues, current issues, milestones, outputs and finance data. The project was shown as being at an amber status. One risk was shown as high risk and this related to the Café tender returns being over budget, however, this has now been resolved and a tender has been awarded for the works.

9.5 The GLA Financial and Performance Report for quarter one 2017-18 which was submitted to the Budget Monitoring Sub Committee in July reported on the programme performance showing the status of each project as either red, amber

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and green. The Crystal Palace Park which is part of the regeneration programme was recorded as green.

10. Approval of Funding

10.1 Adequate decision making procedures are in place and details are available to all staff. Decision Thresholds have been established and are as follows:-

 Delegated Authority Record (DAR) up to £10k for approval by Managers  Assistant Director Decision (ADD) up to £50K for approval by Assistant Directors  Executive Director Decision (DD) up to £150k for approval by Executive Directors  Mayoral Decision (MD) Non-routine and programme decisions with a value of £150k or more.

10.2 From the Spending Plan for 2017/18 we reviewed three programmes consisting of Regeneration (Crystal Palace Park), Mayor’s Housing Covenant (Affordable Housing Programme) and the Northern Line Extension.

10.3 The Crystal Palace Park Regeneration project was allocated funding of £2m for the overall project in June 2014. A Request for Mayoral Decision (MD140) was submitted in October 2014 for the approval of an entry into a grant agreement with the London Borough of Bromley for £160K for the first stage costings work on the Crystal Palace Park Regeneration Park. A further MD1462 was submitted in June 2015 for the approval for expenditure of £1.84m to undertake the capital works on the Crystal Palace Park Regeneration Project. Both MDs were approved by the Mayor.

10.4 MD2125 was submitted for the Homes for Londoners – Affordable Homes programme 2016-21 – approval of programme budget in June 2017. The Mayor as part of the MD approved the Affordable Housing Programme Budget of £3.25b to deliver at least 90,000 affordable housing starts through the Homes for Londoners: Affordable Homes Programme 2016-17 and the reopening of the Homes for Londoners: Affordable Homes Programme 2016-21 for new bids under Continuous Market Engagement.

10.5 MD1269 approved the GLA’s preparation to be able to borrow up to £1 billion to finance the Northern Line Extension (NLE). MD1324 received the Mayor’s approval to a borrowing limit for the GLA for 2014-15 of £5b to allow for the maximum flexibility in relation to the expected borrowing to be undertaken to finance the GLA’s contribution towards the NLE. DD1300 requested the approval of the Executive Director of Resources for the GLA’s arrangements for borrowing to be undertaken to finance a grant of £960m to Transport for London and the GLA’s entry into contracts with the European Investment Bank to open a facility to borrow £480m to meet the requirements of part of the grant. The DD was approved in December 2014.

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11. Reporting of Performance

11.1 The Capital Spending plan is reported to the Budget Monitoring Sub Group on a quarterly basis. The GLA Financial and Performance Report is prepared by Finance Services and submitted to the Committee. The Financial and Performance Report for Q1 2017-18 provided an analysis of the 2017-18 Capital Budget and reported that the plan of £639.2m was adjusted for 2016-17 carry forward budget of £59.6m and new projects with a budget of £11.7m which was funded from the Revenue Reserve. This is an increase on the Capital budget to £710.5m. Two of the new projects were in Development, Enterprise and Environment and five in Communities and Intelligence. The Financial and Performance Report was submitted to the Committee in July 2017. 11.2 The GLA Financial and Performance Report also reported on the individual capital projects stating a forecasted net overspend of £1.2m in relation to the Housing and Land programme, forecasted increases on budget for the Affordable Housing Programme, Homelessness Change and Platform for Life. Reductions in spending were recorded as forecasted for Care and Support, London Housing Bank, High Street and Digital Skills. Other projects were forecasted spend to budget. We found that actions to address issues recorded in the report were effective.

11.3 Monthly monitoring of the capital programme is undertaken by the Capital Accountant. Management Accounts reports are produced and contained information relating to the budget, actual spends, year to date total, variance and full year budget. Forecast data had also been included in the report. The report for period 12 also contained an outturn report for the period 2016-17.

11.4 We found that a summary of completed capital projects is not produced. The Capital Accountant may not be aware of projects that are due to be completed at year end. There is a risk that capital projects may remain on the Capital Programme Plan following completion.

Recommendation A summary of completed Capital Projects is submitted to Financial Services at year-end.

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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 Responsibility Target Date 11.4 A summary of completed 3 A summary of completed Capital Yes Financial Services are made aware of Implemented capital projects is not Projects is submitted to Financial completion dates for Capital Projects produced. The Capital Services at year-end. as part of the surgery funding Accountant may not be aware meetings held with Directorates and of projects that are due to be Senior Managers and details are completed at year end. There included in their proposals. is a risk that capital projects may remain on the Capital Capital Projects will not be included Programme Plan following on the Capital Plan following their completion. completion date.

Page 28 Page

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Appendix 1b

DIRECTORATE OF AUDIT, RISK AND ASSURANCE

Internal Audit Service to the GLA

Review of Partnership Governance - Film London & London Design Festival

Page 29 DISTRIBUTION LIST

Audit Team

David Esling, Head of Audit and Assurance Phil Drysdale, Audit Manager Andrew Dimon, Risk and Assurance Auditor

Report Distribution List

Jeff Jacobs, Head of Paid Service and Executive Director Jackie McNerney, Acting Head of Culture Jacqueline Rose, Acting Head of Culture Adam Cooper, Senior Cultural Strategy Officer - Creative Industries Dominic Trembath, Programme Governance Officer Martin Clarke, Executive Director - Resources Tom Middleton, Head of Finance and Governance

Page 30 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 3

Scope 3

Strategy and Policy 3

Accountabilities, Roles and Responsibilities 5

Funding and Resourcing 6

Management Information 8

ACTION PLAN

Assurance and Risk Rating Definitions 11

Findings and Recommendations 12

September 2017 Review of Partnership Governance - Film London & London Design Festival

Page 31 EXECUTIVE SUMMARY

1. Background

1.1 This review was carried out as part of the Greater London Authority (GLA) 2016/17 audit plan. The objectives in relation to the governance arrangements for Film London and the London Design Festival are to ensure arrangements are entered in support of the Mayor’s strategies, vision and priorities for London and are delivered effectively and efficiently, resulting in the achievement of agreed outcomes.

1.2 At the outset of the review, the potential key risks identified to achieving the objectives of partnership governance were:  Unclear policy and guidance governing partnership arrangements  Ill-defined criteria supporting decisions to enter partnerships  Lack of clear objectives, roles, responsibilities and accountabilities  Inadequate/inappropriate level of funding  Creating partnerships with inappropriate bodies  Inadequate recording of partnerships entered into  Withdrawal of funding from partner organisations  Inconsistent or inaccurate monitoring of objectives and budgets  Insufficient or inaccurate reporting of management information  Ineffective evaluation of partnership objectives and outcomes

1.3 Failure to manage the above risks could result in objectives not being achieved, poor value for money and adverse publicity/reputational damage for the GLA. We are looking to provide assurance that the key risks are being effectively managed.

1.4 London hosts over 250 festivals every year contributing £3.2 billion to the London economy through creating jobs, regenerating local areas, and encourage tourism through a wide breadth and quality of arts and culture. Businesses locate to London attracted by creative, dynamic professionals from a range of sectors and people with 1 in every 6 jobs in London is in the creative economy, the creative industries generate £10 million every hour, and London dominates the UK visual arts sector, around 30% of the global art market. London is the world's third busiest film production centre with over 14,000 ‘shooting days’.

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

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3.1 The strategy and policy for developing and managing the Partnerships with external organisations and stakeholders is clearly defined, properly approved and supported by adequate guidance.

3.2 Accountabilities, roles and responsibilities are clearly defined for the Partnerships and are supported by appropriately approved agreements, which include agreed terms and conditions.

3.3 Funding and resources for the Partnerships are properly approved and are effectively monitored and evaluated against the achievement of the agreed objectives and contractual arrangements.

4. Key Risk Issues for Management Action

4.1 Film London submits invoices and expenses to support it bimonthly funding claims, however there was no cross referring of information and some inconsistent percentage claims being applied against staff hours, overheads and project costs. Invoices for services/goods did not have sufficient details of what was being claimed and increased assurance could be sought through confirming Film London’s internal processes for payments made to bona fide supplier, and clarity is sought that office equipment is recorded on the assets register.

4.2 Film London has no guidance in place that sets out what is acceptable in terms of gifts, hospitality and entertainment. We also found that there is no policy in place covering what is acceptable when staff are claiming subsistence and expenses, it was unclear what Film London Policy was in place.

4.3 London Design Festival submits claims on a monthly basis, which are supported in line with the scheduled claimed however there, are no evidence supplied to support the claims.

4.4 The GLA project manager for Film London, and the London Design Festival has regular contact with the projects there is however no regular structured meetings notes or agreed actions recorded, there is a risk that partners can not be held to account and objectives not achieved.

4.5 The audit review has highlighted that as the Culture Team delivers more projects and expands, additional specialist resource is required within the Team in terms of project and programme governance. Dedicated staff who are responsible for programme governance across the team would ensure that any risks of project objectives not being achieved and projects providing value for money would be dealt with.

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5. Review Objectives

5.1 Our overall objective was to review the effectiveness of the control framework in relation to partnership governance to support Mayoral objectives. In particular, we sought to give an assurance that:  The strategy and policy for developing and managing the partnerships with external organisations and stakeholders is clearly defined, properly approved and supported by adequate guidance.  Accountabilities, roles and responsibilities are clearly defined for the partnerships and are supported by appropriately approved agreements, which include agreed terms and conditions.  Funding and resources for the partnerships are properly approved and are effectively monitored and evaluated against the achievement of the agreed objectives and contractual arrangements.  Accurate, relevant and timely management information is produced and used effectively to inform decision making, reporting and review.

6. Scope

6.1 This review focussed on the control environment supporting the partnership governance of Film London, and the London Design Festival. We evaluated the effectiveness of the controls in place for ensuring the effectiveness of the control framework supporting the development and management of the governance arrangements for the partnerships. This involved reviewing guidance in place, compliance with contractual objectives and arrangements, roles and responsibilities, funding arrangements and approval of expenditure, monitoring and management information to support decision making.

7. Strategy and Policy

7.1 Clearly defined, properly approved and adequate guidance is in place to ensure partnerships are in place through using the GLA Contracts and Funding code with clear guidance for developing and managing partnerships with external organisations and stakeholders.

7.2 The GLA Act (1999) requires that the Mayor publish and deliver a Cultural Strategy for London. The Mayor’s Culture Strategy 2017-2020 key priorities are to maintain London’s position as a world capital of culture, through widening the reach to excellence, skills and careers, infrastructure, and promoting the 24-hour economy. The Mayor’s Cultural Strategy aims to promote economic development and wealth creation, social development and tourism throughout London.

7.3 The Culture Strategy aims to ensure Londoners will be the primary beneficiaries of this investment in the arts and culture of London either as direct participants, audiences, visitors to the London Design Festival, fashion industry businesses, or increased tourism spend across retail and hospitality sector. In terms of the creative industries investment and cultural tourism programmes the aim of the promotion of London as a place to work and visit is expected to bring wide

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ranging benefits of 80,000 jobs, growth and international profile to all Londoners interested.

7.4 Key risks to the achievement of the Strategy were set out in the concept papers presented to the Corporate Investment Board and Assembly Budget & Performance Sub-Committee in March 2016 and are Creative Industries Projects fail to leverage investment, failure to deliver an ambitious culture strategy that addresses the needs of London’s creative and culture sector. To mitigate these risks the organisations in the Creative Industries Portfolio programme all have strong track records of leveraging external investment with a high level of returning sponsors for these projects. Each organisation has dedicated staff resources to income rising backed by a commercial sponsorship.

7.5 To maintain the GLA’s creative industries investment portfolio, the GLA have awarded grant funding to:  Film London - a contribution of up to £1.55 million towards the costs of its film international promotion programme which supports over 100 productions in the capital and its TV and animation programme which supports £140 million of new inward investment;  The London Design Festival - a contribution of up to £0.25m towards the costs of its annual international design festival.

7.6 Signed partnership agreements between the GLA and Film London and London Design Festival dated March 2016 and July 2016. We reviewed both agreements and confirmed that they include standard legal terms and conditions, defined project objectives, milestone schedule, funding claims, designated capital and revenue funding, payment, performance and monitoring, ineligible expenditure, financial accountability, procurement and state aid, compliance with legislation and policies, liability and insurance, data protection, Freedom of Information, confidentiality and transparency and clearly defines the relationship between the parties.

7.7 The Funding and Contracts Code requires officer to use the GLA Funding Agreement toolkit and TfL Commercial to set up the partnership agreements. The GLA’s Funding Agreement Toolkit must be followed to obtain approval of funding arrangements before informing the proposed recipient that funding is to be granted and the request for approval should include:  details of the proposed recipient and how they have been selected;  the purpose of funding;  why it should be granted;  the duration and amount of the funding;  the measures the GLA will take to ensure that the funding is used only for the prescribed purpose; and  a copy of the funding agreement for signature.  Funding arrangements are not subject to VAT.

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7.8 We reviewed the funding agreements and can confirm that the Contract and Funding Code was followed and both were reviewed and signed off by TfL Commercial. 8. Accountabilities, Roles and Responsibilities

8.1 Accountabilities, roles and responsibilities are clearly defined for the partnerships and are supported by appropriately approved agreements, which include agreed terms and conditions.

8.2 Responsibility for managing the GLA’s role in the each of the culture area has been delegated to project managers with set objectives that are detailed in the funding agreements. GLA Project Officers make regular contact with project staff from both funded organisations. Evidence and reporting is submitted to the GLA prior to any payments being made to ensure KPI’s in the Funding agreement have been reached.

London Design Festival 8.3 The London Design Festival aims to use the £500k funding provided over two years to enable London and UK based design enterprises increase sales earnings, –, develop new business opportunities, raise the profile of London's established and emerging design talent; and promote London as a design destination providing opportunities for trade and investment. Its detailed objectives are:  Objective One: deliver £26 million in new business for design companies.  Objective Two: leverage £500k, of which £350k is from private sources.  Objective Three: ensure 1,200 design companies make sales at the festival."

8.4 Accountabilities are documented in the funding agreement and include reporting and legal compliance requirements. The agreement sets out the terms and conditions upon which the GLA will make funding available. The project manager meets with the chief executive regularly for update meetings and the programme is monitored by the Deputy Mayor of Culture and Creative Industries.

8.5 Roles and responsibilities are discussed in project board meeting in advance of the festival to ensure that roles and responsibilities are known and discussed and to monitor the involvement of sponsors in the programme. This is also followed up with a post survey to look at what went well and not so well to then be used to feed into the next year’s event.

Film London 8.6 Film London aims to use the £1.55m funding provided to enable Film London to attract inward investment, increase sales and exports, enable film production in the capital and promote London’s film industry in overseas markets. Its detailed objectives are:  Objective One: Maximize inward investment into London’s film, TV, and animation sectors. Strengthen the London offer to productions.  Objective Two: Strengthen the export and sales of the London film industry and reinforce the promotion of London as a financial hub for production

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FINDINGS AND RECOMMENDATIONS

investment. Address skills gaps in partnership with key stakeholders and industry.  Objective Three: Promote London as a unique destination and brand for the film, television, and animation industry and as a cultural city of film to ensure that London retains its competitive place in the global marketplace." 8.7 Accountabilities are documented in the funding agreement. Roles and responsibilities are discussed at regular meetings between the Chief Executive and the Chief Operating Officer and the programme is monitored by the Deputy Mayor of Culture and Creative Industries.

9. Funding and Resourcing

9.1 Funding and resources for the partnerships are properly approved and are effectively monitored and evaluated against the achievement of the agreed objectives and contractual arrangements.

9.2 The previous Mayor authorised an investment of £2,697,000 in film, TV, fashion and design programmes via MD1603 in February 2016. It also authorised the continued appointment of an administrator to provide support for the Culture Team to deliver the Mayor’s Culture Strategy. A further Directors Decision DD2007 signed 9 August 2016 by Head of Paid Service for the development of the Mayor’s manifesto pledges during 2016-17 centring on putting mechanisms in place to legitimately and effectively research, evidence and scope relevant policies and programmes as directed by the Culture Delivery Group and the Mayor’s Culture Strategy Group for London. The total annual Culture Strategy budget is £121,000 with £38,000 already approved in MD1603.

Film London 9.3 The GLA provide 32% of funding, with the funding requirement being that it must be used for core functions, such as accommodation and staffing. The value of funding to Film London is £1.55m from the culture programmes budget which was approved via MD1603. The funding is claimed against a schedule of milestones which is included in the payment schedule within the funding agreements.

9.4 The project manager is responsible for monitoring expenditure against the budget. Film London submit invoices on a bimonthly basis, which are supported by the names of staff and hours, and copies of the invoices and travel/subsistence expenses being claimed. We reviewed the three claim periods for the 2016/17 financial year and found that:  there was no cross referring of information and some inaccuracies percentage being applied against staff hours,  it was not clear for the reasoning for varying percentage of funding applied each claim for overheads and project costs.  travel and expense claims were signed however it was not clear if they were supported by receipts, (covered in point 9.5)  invoices for services/goods did not have sufficient details of what was being claimed There is a risk that the GLA are paying for services and goods outside of the funding agreement, we would encourage increased information and scrutiny of

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FINDINGS AND RECOMMENDATIONS

supporting information submitted and clarity of Film London processes for bona fide supplier checks, and clarity is sought that office equipment is recorded on the assets register. Additional assurance to be obtained by cross referencing invoices to monthly performance information and including a declaration that the claim for payment is an accurate reflection of the work carried out. Recommendation  Verification is sought with Film London Finance Manager on the percentage claimed for staff hours, cross referencing in the bimonthly reports, and invoices details from their suppliers.  Project manager seeks assurance on the sample checks of Film London’s processes for due diligence on suppliers and services, expense claims process, and internal recording of assets.

9.5 There is no guidance in place that sets out what is acceptable in terms of gifts, hospitality and entertainment. We also found that there is no policy in place covering what is acceptable when staff are claiming subsistence and expenses, it was unclear what Film London Policy was in place.

Recommendation Guidance and policy covering gifts, hospitality, entertainment and the claiming of subsistence and expenses is made available to the GLA.

London Design Festival 9.6 The GLA provides £250k towards the LDF, which amounts to 40% of the LDF’s total budget. GLA funding derives from the Culture Programme budget which was approved by the Mayor via MD1603. The funding is claimed against a schedule of milestones which is included in the payment schedule within the funding agreements.

9.7 LDF submit claims for payment each month and the GLA project manager records and monitors spend against budget via a tracking spreadsheet. We reviewed three LDF claims for the 2016/17 and found that they were supported by a breakdown of costs but they were not supported by invoices or proof of payment.

PRecommendation rLondon Design Festival to provide invoice evidence to support claims for opayment. ject and Programme Governance 9.8 The audit review has highlighted that as the Culture Team delivers more projects and expands, additional specialist resource is required within the Team in terms of project and programme governance. Dedicated staff who are responsible for programme governance across the team would ensure that any risks of project objectives not being achieved and projects providing value for money would be dealt with. The Culture Team have a new Assistant Director starting in the autumn 2017 who will be reviewing the staffing requirements of the Culture team. This will provide the opportunity to address this issue.

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Recommendation F Programme governance requirements is reviewed and guidance and training is u put in place to support the project and programme managers within the culture t team. u re Funding 9.9 The Mayor authorised MD2110 in April 2017 committed to ensuring that London retains and reinforces its global position as a leading city for cultural and creative industries. To reinforce this position continued funding is authorised to maintain the Mayor’s investment portfolio across key creative sectors; Film, Fashion and Design. The previous GLA funding towards creative industries detailed in the report was approved under cover of MD1603. The Mayor approved the following:  Film London – Grant funding up to a maximum of £1.3m per financial year from 2017/18 – 2020/21 to continue to support the work of Film London.  Film London – Grant Funding up to a maximum of £0.25m per financial year from 2017/18 – 2020/21 to continue to support the TV and Animation strand of Film London activities.  The London Design Festival – Grant Funding up to a maximum of £0.25m per financial year from 2017/18 – 2020/21 to contribute towards the costs of holding the annual International Design Festival.

10. Management Information

10.1 Accurate, relevant and timely management information is produced and used effectively to inform decision making, reporting and review. The Culture Team provide updates through the GLA’s dashboard performance monitoring which is completed by Culture Team officers and submitted back to GLA Governance and Performance team. This also includes a table of milestones, target completion dates, RAG ratings for the project as well as a narrative of project updates, including commentary on risks and issues. The Culture team GLA project Officers also keeps in regular contact with relevant project staff from both funded organisations.

10.2 The partnerships are subject to the GLA’s Programme and Project Management Governance framework and monthly project dashboards are produced highlighting delivery progress, key risks and key financial information. Detailed progress updates for programmes are presented to the Corporate Investment Board and Assembly Budget & Performance Sub-Committee Corporate Investment Board and Assembly Budget & Performance Sub-Committee on a quarterly basis and include a summary of the remedial actions taken to address programme slippage, indicating the overall status against delivery for all projects underway.

10.3 Performance against the partnership objectives is monitored and reported by the project managers responsible for the partnership based largely on information provided by the partners. GLA project managers have regular contact with Film London and LDF officers, there are regular meetings to discuss progress against objectives, however there are no meeting notes or agreed actions recorded.

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FINDINGS AND RECOMMENDATIONS

There is a risk that partners can not be held to account and objectives not achieved. We would recommend at least an action log is maintained.

Recommendation Formal performance review meetings are minuted and action logs are maintained and followed up at each meeting.

10.4 The Programme Manager produces the quarterly performance dashboard, that includes current risks to the programme with a RAG status, budget and spend, and a commentary update since the last dashboard. Budgetary information is collated by the GLA business accountant and transferred onto the project dashboard monthly, which provides the basis of budget reporting to the Budget and Performance Review meeting, and the Corporate Investment Board and Assembly Budget & Performance Sub-Committee.

Film London 10.5 We found that the monthly dashboard was updated regularly using the information supplied from the partners claims. We reviewed a sample of monitoring reports for the second and third quarter of 2016/17. The dashboard reports confirmed that project progress was documented and updated against the agreed milestones, which corresponded with the original project objectives. The top three current issues and top three risks are detailed within the dashboard reports to enable evaluation of the current progress status. Delivery progress, project risks and issues, project deliverables and financial progress are all recorded in RAG (red, amber, and green) status. The latest report in February 2017, based on January 2017 performance information, gave the programme an green rating overall, broken down as follows:  Timescale: is milestone delivery on schedule - Green  Issues: are they simple and manageable - Green  Risks: potential risks unlikely to affect delivery - Green  Targets: are outputs on track - Green  Expenditure: is spend as budgeted – Green

10.6 The programme risk register is compiled annually by the joint Acting Head of Culture but project risks are reviewed quarterly by the GLA Programme Manager through the dashboard reports and risks are escalated to the Acting Head of Culture if required. The culture team has put in mitigating control and rate all risk as green RAG status.

London Design Festival 10.7 We found that the monthly dashboard was updated regularly using the information supplied from the partners claims. We reviewed a sample of monitoring reports for the second and third quarter of 2016/17. The dashboard reports confirmed that project progress was documented and updated against the agreed milestones, which corresponded with the original project objectives. The top three current issues and top three risks are detailed within the dashboard reports to enable evaluation of the current progress status. Delivery progress, project risks and issues, project deliverables and financial progress are all recorded in RAG (red, amber and green) status. The latest report in February 2017, based on January

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2017 performance information, gave the programme a green rating overall, broken down as follows:  Timescale: is milestone delivery on schedule - Green  Issues: are they simple and manageable - Green  Risks: potential risks unlikely to affect delivery - Green  Targets: are outputs on track - Green  Expenditure: is spend as budgeted – Green

10.8 The programme risk register is compiled annually by the Acting Head of Culture but project risks are reviewed quarterly by the GLA Project Manager through the dashboard reports and risks are escalated to the Acting Head of Culture if required. The culture team has put in mitigating control and rate all risk as green RAG status.

September 2017 Review of Partnership Governance - Film London & London Design Festival 10 Page 41 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.

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Ref. Findings and Risk Priority Recommendations Accepted Management Response and Target Date Responsibility 9.4 Film London submit invoices 2  Verification is sought with Film Accepted Culture Team Project Manager to 30 October on a bimonthly basis, which London Finance Manager on establish a Project Group 2017 are supported by the names of the percentage claimed for comprising Film London Chief staff and hours, and copies of staff hours, cross referencing Operating Officer, Culture team the invoices and travel and in the bimonthly reports, and Programme Governance Officer, expenses being claimed. We invoices details from their GLA Risk and Assurance Auditor, reviewed the three claim suppliers. and hold initial meeting with Film periods for the 2016/17  Project manager seeks London. financial year and found that: assurance on the sample  there was no cross checks of Film London’s Management Responsibility referring of information processes for due diligence Senior Cultural Strategy Officer - and some inaccuracies on suppliers and services, Creative Industries percentage being expense claims process, and Page 43 Page applied against staff internal recording of assets. hours  it was not clear for the reasoning for varying percentage of funding applied each claim for overheads and project costs  travel and expense claims were signed off there were not supported by receipts, (covered in point 9.5)  invoices for services/goods did not have sufficient details of what was being claimed.

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Ref. Findings and Risk Priority Recommendations Accepted Management Response and Target Date Responsibility 9.5 There is no guidance in place 2 Guidance and policy covering Accepted Project Group to work together to 31 December that sets out what is acceptable gifts, hospitality, entertainment deliver new guidance and policy 2017 in terms of gifts, hospitality and and the claiming of subsistence covering gifts, hospitality and entertainment. We also found and expenses is made available entertainment, and to agree system that there is no policy in place to the GLA. for sharing information with GLA covering what is acceptable when staff are claiming Management Responsibility subsistence and expenses, it Senior Cultural Strategy Officer - was unclear what Film London Creative Industries Policy was in place. 9.7 LDF submit claims for payment 3 London Design Festival to provide Accepted Culture team Programme 30 October each month and the GLA invoice evidence to support Governance Officer, GLA Risk and 2017 project manager records and claims for payment. Assurance Auditor, and Culture

Page 44 Page monitors spend against budget Team Programme Manager to meet via a tracking spreadsheet. We London Design Festival. reviewed three LDF claims for the 2016/17 and found that Management Responsibility they were supported by a Senior Cultural Strategy Officer - breakdown of costs but they Creative Industries were not supported by invoices or proof of payment. 9.8 The audit review has 3 Programme governance Programme governance will be 31 December highlighted that as the Culture requirement is reviewed and reviewed and where necessary 2017 Team delivers more projects guidance and training is put in guidance and training put in place to and expands, additional place to support the project and support the project and programme specialist resource is required programme managers within the managers. within the Team in terms of culture team. project and programme Management Responsibility governance. Dedicated staff Assistant Director – Creatives who are responsible for Industries programme governance across the team would ensure that any

September 2017 Review of Partnership Governance - Film London & London Design Festival 13 ACTION PLAN

Ref. Findings and Risk Priority Recommendations Accepted Management Response and Target Date Responsibility risks of project objectives not being achieved and projects providing value for money would be dealt with. 10.3 GLA project managers have 3 Formal performance review Accepted Culture Team Project Manager to 30 October regular contact with Film meetings are minuted and with compile, and retain, action logs of 2017 London and LDF officers action logs are maintained and all performance-related meetings. through regular meetings to that are followed up at each discuss progress against meeting. Management Responsibility objectives, however no Senior Cultural Strategy Officer - meeting notes or agreed Creative Industries actions are recorded. There is a risk that partners cannot be Page 45 Page held to account and objectives not achieved. We would recommend at least an action log is maintained. ##ISA4D87D77654C404A9A924F78FE705525##Finding

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Page 46

Appendix 1c

DIRECTORATE OF AUDIT, RISK AND ASSURANCE

Internal Audit Service to the GLA

Review of Governance Arrangements For New Year’s Eve

Page 47 DISTRIBUTION LIST

Audit Team

David Esling, Head of Audit and Assurance Phil Drysdale, Audit Manager Andrew Dimon, Risk and Assurance Auditor

Report Distribution List

Martin Clarke, Executive Director – Resources Tom Middleton, Head of Finance and Governance Emma Strain, Assistant Director - External Relations Kim Hobbs, Events Manager, External Affairs

Page 48 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

Strategy and Policy 3

Accountabilities Roles and Responsibilities 6

Funding and Resourcing 7

Management Information 9

Assurance and Risk Rating Definitions 11

September 2017 Review of Governance Arrangements for New Year’s Eve Page 49 EXECUTIVE SUMMARY

1. Background

1.1 This review was carried out as part of the Greater London Authority (GLA) 2016/17 audit plan. The objectives are to ensure arrangements are entered into in support of the Mayoral Strategies, Vision and Priorities for New Year’s Eve celebrations and are delivered effectively and efficiently, resulting in the achievement of agreed outcomes.

1.2 At the outset of the review, the potential key risks identified to achieving the objectives of New Year’s Eve celebrations were:  Inadequate management and planning of events  Non-compliance with Statutory requirements and Regulations  Unclear policy and guidance governing partnership arrangements  Ill-defined criteria supporting decisions to enter partnerships  Lack of clear objectives, roles, responsibilities and accountabilities  Inadequate/inappropriate level of funding  Inconsistent or inaccurate monitoring of objectives and budgets  Insufficient or inaccurate reporting of management information  Absence of risk management  Poor contract and programme management  Inadequate ticketing system  Inadequate security arrangements  Inadequate management reporting and escalation  Ineffective evaluation of partnership objectives and outcomes

1.3 Failure to manage the above risks could result in objectives not being achieved, poor value for money and adverse publicity/reputational damage for the GLA. We are looking to provide assurance that the key risks are being effectively managed.

1.4 New Year’s Eve attracts 800,000 visitors to the banks of the Thames to welcome in the New Year, and provide an estimated £23m in economic benefit to London from ticketholders. The total cost of organising New Year’s Eve in 2016 was £3m of which £900k was recovered via ticket sales. In 2016, the New Year’s Eve celebrations were viewed by 10.87m people on BBC1, as well as 1.5m views on YouTube, with approximately £6m advertising value.

2. Audit Assurance

Substantial

There is a sound framework of control operating effectively to mitigate key risks, which is contributing to the achievement of business objectives.

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3. Areas of Effective Control

3.1 The strategy for developing and managing New Year’s Eve, commissioning and partnerships workings with external organisations and stakeholders is clearly defined, properly approved and supported by adequate guidance in line with legislation, regulations and international standards.

3.2 Accountabilities, roles and responsibilities are clearly defined for New Year’s Eve and are supported by appropriately approved partnership and stakeholder agreements, which include agreed terms and conditions.

3.3 Funding and resources for the New Year’s Eve celebrations are properly approved and are effectively monitored and evaluated against the achievement of the agreed objectives and contractual arrangements.

3.4 Accurate, relevant and timely management information is produced and used effectively to inform decision making, reporting and review.

4. Key Risk Issues for Management Action

4.1 There are no key issues for management action.

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5. Review Objectives

5.1 Our overall objective was to review the adequacy and effectiveness of the control framework established by management to mitigate the risks to delivering a successful New Year’s Eve (NYE) celebrations. In particular, we sought to give an assurance that:  The strategy and policy for developing and managing New Year’s Eve, commissioning and partnerships workings with external organisations and stakeholders is clearly defined, properly approved and supported by adequate guidance in line with legislation and regulations.  Accountabilities, roles and responsibilities are clearly defined for New Year’s Eve and are supported by appropriately approved partnership and stakeholder agreements, which include agreed terms and conditions.  Funding and resources for the New Year’s Eve celebrations are properly approved and are effectively monitored and evaluated against the achievement of the agreed objectives and contractual arrangements.  Accurate, relevant and timely management information is produced and used effectively to inform decision making, reporting and review.

6. Scope

6.1 This review focussed on the control environment supporting the New Year’s Eve celebrations. We evaluated the effectiveness of the controls in place for ensuring the effectiveness of the governance arrangement supporting the development and management of the New Year’s Eve celebration including security and ticketing arrangements with partners and stakeholders. This will involve reviewing guidance in place, compliance with contractual objectives and arrangements, roles and responsibilities, funding arrangements and approval of expenditure, monitoring and management information to support decision making ensuring expenditure complies with the GLA’s Financial Regulations, Contracts & Funding Code and Expenses and Benefits Framework.

7. Strategy and Policy

7.1 The strategy for developing and managing New Year’s Eve, commissioning and partnerships workings with external stakeholders is clearly defined, properly approved and supported by adequate guidance and is in line with legislation, and regulations. There is no specific New Year’s Eve policy however it does deliver against policy objectives around cultural tourism and promoting London as committed to in the Mayor’s manifesto.

7.2 The strategy comes under the Mayor’s Strategic Objectives to promote London through the Mayor’s Events Programme to bring Londoners together and to stimulate London’s economy by creating publicity to increase visitors and investors. The Mayor’s Events programme has been delivered since 2003.

7.3 The Mayor’s Events Programme is delivered through the Events for London department within the GLA’s External Affairs directorate, including cultural events,

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festivals and outdoor events for special occasions. Events delivered are either directly organised by the GLA in association with other organisations or organised by external agencies with support from the Mayor.

7.4 The GLA’s strategy using the GLA’s Events Framework is to procure an external event organiser to deliver three years (2014 – 2016) NYE event. A three-year event plan was approved under this MD1277 with IPB approval in September 2013 that included GLA budget and sponsorship which the event organiser will be responsible for securing as part of their contract terms.

7.5 The event organiser is responsible for delivering the event to an agreed specification and the quality and safety measures to the satisfaction of the GLA and statutory agencies including the Metropolitan Police Service, TfL, British Transport Police, along with National Rail, and the local authorities.

7.6 The key objectives for the New Year’s Eve Fireworks are to promote London nationally and internationally and deliver economic benefits to London. The events for 2014-16 and 2017 were approved by the Mayor via Mayoral Decisions 1277, 1460, 1387 and 2093. The GLA Event Guidance Framework which has been agreed with partners and sponsoring organisations covers partnership workings with the event organiser, local authorities, businesses and residents that are impacted by the New Year celebrations. The Event Guidance Framework includes an ‘Activity Timeline’, and covers budgeting, Mayoral and Corporate Investment Board approval, call off contracts, sponsorship proposals, proposed charging arrangements, project delivery, evaluation and closure.

7.7 In addition to the Event Guidance Framework, the event organiser is required to have a specific Event Management Plan in place that details the strategy and plans for NYE and includes management plans and systems and actions which ensure the safety of the audience, and to promote a unified, co-ordinated response to any emergency arising. The plans and actions have been formulated to fulfil the organisers’ obligations in respect of the key licensing objectives, namely: o Public Safety o Prevention of Crime and Disorder o Prevention of Public Nuisance o Protection of Children and Minors from harm

7.8 The Event Management Plan include the purpose, production management, project description, audience, media, road closures, organisation, site location and access, river specific plans, programme, communication methods, safety management, first aid facilities, emergency procedures, logistics, liaison with partners and statutory authorities, physical security, car parking, weather, event inspection, pyrotechnics, river safety and bridges, protection, training, briefing and preparation, security and event risk assessment.

7.9 Following a review of options and consultation with statutory agencies and emergency services, it was agreed through MD1387, that a paid-for-ticketing plan could be implemented for three years (2014-2016). The event footprint and operational plans are to be reviewed for 2017, alongside key partner agencies

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including the MPS, TfL, impacted local authorities, The Royal Parks, landowners and businesses and residents.

7.10 The Events Management Plan ensures that all relevant legislation as indicated by the HSE is adhered too. The Event Management plan has been compiled acknowledging the guidance contained in the ‘Event Safety Guide’ issued by the HSE in November 1999 which has been adapted to suit this particular event. The relevant regulations include: o Health and Safety at Work & etc Act (1974) o The Health & Safety (First-Aid) Regulations (1981) o The Control of Substances Hazardous to Health Regulations (2002) o The Construction (Head Protection) Regulations (1989) o The Noise at Work Regulations (2005) o The Manual Handling Operations Regulations (1992) o The Personal Protective Equipment at Work Regulations (2002) o The Workplace (Health Safety and Welfare) Regulations (1992) o The Construction (Design and Management) Regulations (2015) o The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (2013) o The Health and Safety (Safety Signs & Signals) Regulations (1996) o The Fire Precautions (Workplace) Regulations (1997) o The Lifting Operations and Lifting Equipment Regulations (1998) o The Management of Health and Safety at Work Regulations (1999) o The Provision and Use of Work Equipment Regulations (1998) o HSE Managing Crowds Safely (2000) The Guide to Fire Precautions in Places of Entertainment Regulatory Reform (Fire Safety) Order (2005) o Working At Height Regulations (2005)

7.11 The GLA appointed Jack Morton Worldwide (JMW) as the event organiser following a completive tender process for the period 2014-2016 and this was rolled over into 2017 via a one year extension. We reviewed the agreements and confirmed that they include standard legal terms and conditions, defined project objectives, milestone schedule, funding claims, designated capital and revenue funding, payment, performance and monitoring, ineligible expenditure, financial accountability, procurement, compliance with legislation and policies, liability and insurance, data protection, Freedom of Information, confidentiality and transparency and clearly defines the relationship between the parties.

7.12 We reviewed the contract with the event organiser and confirm that the Contract and Funding Code was followed and both were reviewed and signed off by TfL Commercial and the GLA Director of Resources.

7.13 To ensure that a fully competitive tender process is achieved for future New Year’s Eve Fireworks, the GLA will undertake a mini-competition off the existing Events Framework for the 2018 event. An OJEU procurement exercise to establish a new Events Framework, from which a mini-competition for New Year’s Eve events 2019-2022, will be undertaken before end of March 2018. The budget aligned to the tender exercise for New Year’s Eve would be broadly in line with the 2017

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event, but would be subject to further budget clarification and formal budget approvals.

8. Accountabilities Roles and Responsibilities

8.1 The delivery and management of the event has been designated by the GLA through a contractual agreement with JMW as the event organiser to deliver the event and to co-ordinate with stakeholders. Accountabilities, roles and responsibilities are clearly defined in the Event Management Plan and are supported by appropriately approved partnership and stakeholder agreements, which include agreed terms and conditions.

8.2 Responsibility for managing the GLA’s oversight role of the contract delivery role has been delegated to event manager with set objectives that are detailed in the works specification, contract and Event Guidance Framework. The GLA events officer makes regular contact with event organiser and stakeholders to ensure that the NYE event is delivering on time in line with set milestones in the contract agreement. Evidence and reporting is submitted to the GLA prior to any payments being made to ensure contractual milestones in the contract agreement have been reached.

8.3 The GLA under its contract with JMW, requires JMW, as its event producer, to produce and implement a crowd control plan (CCP). JMW with the expert assistance of police and security advise the GLA on crowd control and health and safety issues and recommended courses of action.

8.4 The GLA in consultation with JMW and the GLA Communications Team lead on designing and managing an appropriate and timely event communication campaign to communicate the event as a ticketed event and the travel options available with the aim to sell all the tickets, whilst limiting the number of people attending central London without a ticket, but with a desire to watch the fireworks, to reduce risk of overcrowding outside of the event viewing area.

8.5 On NYE, the GLA will be represented on the Event Liaison Team and officers from the Events for London team retain GLA responsibility for all operational decision- making regarding the NYE event. Any such strategic decision-making will take full account of the views of other key agencies such as the MPS, TfL and event organiser.

8.6 The GLA is responsible for obtaining Temporary Traffic Orders (TTO) necessary to facilitate road closures for the designated viewing areas. The GLA requests the assistance of TfL in this regard and of the MPS with the implementation of their TTO beyond the designated viewing areas and their approaches until the end of the event.

8.7 Partnership working and responsibilities are delivered through the Licensing Operational Planning Safety Group (LOPSG). Members include the Westminster City Council, City of London, Lambeth Council, Port of London Authority, Metropolitan Police Service, London Ambulance Service, London Eye, and TfL.

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The Group works to an agreed Terms of Reference to support event planning, and their responsibilities in event delivery are outlined in the Event Management Plan, which includes reporting lines in emergency situations detailing which organisation will take the lead in crisis circumstances, that is supported by a Crisis Communication plan.

8.8 The LOPSG operates through regular meetings with minutes and action points. To ensure responsibilities are discussed in more focussed forums there are sub groups in place that report to the LOPSG, the sub groups are: o Crowd and Visitors o Transport o Health o Communications and Marketing We reviewed a sample of LOPSG minutes and actions from group meetings and found that actions were assigned to personnel and actions were documented in an Action Tracker and were also recorded in the meeting minutes.

8.9 To ensure delivery there is a clear activity timeline in the Project Plan and Senior Management Dashboards which ensures authorisations are sought in a timely manner. The plan has set milestones for the following:  Scoping and draft budget  Mayoral Decisions and Corporate Investment Board approval  Call off production contract  Sponsorship proposition formally out to market  Announcement e.g. Ticket sales  Final evaluation start and finish (self/external)  Delivery End Date  Project Closure:

8.10 The event organiser maintains a Project Plan Workbook that includes an oversight of the event including checklists of activities to complete, stakeholder engagement, risk register, schedule of activities, budgeting, meetings schedules and lesson learnt. We found that following the 2016 NYE event that the lessons learnt were fully completed and used to inform the following years plan ensuring reputational and financial risks are managed.

9. Funding and Resourcing

9.1 Funding and resources for the New Year’s Eve celebrations are properly approved and are effectively monitored and evaluated against the achievement of the agreed objectives and contractual arrangements.

2016 NYE 9.2 The GLA budget of £1.75m for 2014-16 was approved per MD1277, and the ticketed event model approved under MD1387. The GLA underwrite up to £1.26m in 2016 under MD1460 if income from ticket and sponsorship is not achieve. Whilst sponsorship was not secured, the event was sold out and therefore the full additional funding that was underwritten was not required.

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9.3 The GLA Events Manager is responsible for monitoring expenditure against the budget. JMW submit invoices in line with milestones, which are required to be supported by invoices/receipts to be reclaimed that are checked and authorised by the GLA Events Managers. We reviewed the three claims for the 2016 event and found that they were supported as required, by an invoice in line with the schedule of payments in the contract. The final report is supported by a closedown report of the event including lesson learned for the following years event.

Cost 9.4 The cost of delivering New Year’s Eve had increased significantly over the years, mainly due to the increased numbers of people turning up in central London and the growth of the event footprint and plans required to mitigate the crowd management issues that have ensued. Implementing the ticketing system in 2014 increased the event delivery costs. However, the GLA successfully achieved its aim of offsetting these costs with ticketing income as far as is possible; this has been achieved in each of the three years of ticketing to date.

9.5 The event production contract is not a fixed price contract, as it is not possible to fully determine all the costs upfront. This is due to the dynamic planning process involving multiple stakeholders, partners and landowners, who can all have an impact on the final costs. Changes in the London landscape (for example buildings, roads, stations and access points) can all potentially change during the planning process, which can also impact on costs. The GLA events team work closely with the event producer and event stakeholders to try to contain these costs and adapt the budget to accommodate increases where possible.

Ticketing and Sponsorship 9.6 There has been varying degrees of success in securing a sponsor for New Year’s Eve, with significant sponsorship levels only being achieved in 2008, 2013 and 2015. This is due to the limited brand opportunities and benefits that a sponsor could achieve; particularly since potential sponsor rights that could be offered are in many cases subject to approval by third parties and the statutory and licensing agencies and are not within the GLA’s control.

9.7 The introduction of ticketing and the enhanced communications campaign creates more opportunities for potential sponsors to engage with an audience and achieve brand value. The Commercial Partnerships Team at the GLA are responsible for identifying and targeting potential sponsors. Whilst there is a risk that sponsorship will not be secured, the GLA has agreed a budget that covers the full cost of the event (excluding the ticketing element), and any additional sponsorship income will just offset this financial commitment. The risk of not securing sponsorship will be covered as part of the Audit of Commercial Sponsorship and therefore not covered in this audit. The GLA have met with organisers of similar events in Scotland and Sydney (in the case of Sydney during their visit to London), to understand and take learnings from their commercial and delivery models.

9.8 In 2014, Westminster City Council and the Licensing Operational Planning Safety Group (LOPSG) agreed to approve concessions at the New Year’s Eve event.

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However, the restrictions put on concessions, in terms of location, set up and trading times, and items permitted to sell, has limited the concession operators ability to earn revenue and as a consequence the income from commercial rates the GLA has been able to secure reduced.

9.9 The ticket price is currently set at £10 per person and covers the cost of implementing the ticketing system, costs associated with ticketing are projected to remain broadly similar to 2016 and as result it is anticipated that the ticket price for 2017 will remain at £10.

2017 NYE 9.10 Mayoral Decision 1277 allocates £2.3m to the 2017 New Year’s Eve event and covers the financial risk associated with unconfirmed sponsorship and concessions income. It also outlines the risks associated with not ticketing the event, and the contractual arrangements in regard to an event producer. The costs associated with implementing the ticketing system is still a budget risk, but given the previous experience of tickets selling out very quickly, this is perceived that this is a very low risk as the ticketing implementation costs would be covered by ticket sales.

9.11 The expenditure for the delivery of the New Year’s Event for 2017 will be via a combination of GLA funding, ticket revenue, sponsorship and concession income. In line with previous year’s events, the GLA will underwrite the sponsorship and concessions revenue for the 2017 event, both of which have yet to be secured.

9.12 The proposed tender for a new event producer to deliver the event for 2018 will be based on a similar indicative budget used for 2017, but will be subject to a separate Mayoral approval.

10. Management Information

10.1 Accurate, relevant and timely management information is produced and used effectively to inform decision making and reporting and review of progress. The Events Team provide updates through the GLA’s dashboard as required by the GLA’s corporate performance monitoring framework. Dashboards are completed by Senior Events officers and include a table of milestones, target completion dates, RAG ratings for the project as well as a narrative of project updates, including commentary on risks and issues. The Events team also keeps in regular contact with the Events Producers and key stakeholder on a regular basis.

10.2 Detailed progress updates for programmes are presented to the Corporate Investment Board and Assembly Budget and Performance Sub-Committee on a quarterly basis and include a summary of the remedial actions taken to address programme slippage, indicating the overall status against delivery for all projects underway.

10.3 Performance against the partnership objectives is monitored and reported by the project managers responsible for the partnership based largely on information provided by the partners. GLA project managers have regular contact with officers

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FINDINGS AND RECOMMENDATIONS

with schedule of regular structured meetings to discuss progress against objectives, with meeting notes and agreed actions are recorded.

10.4 We reviewed a sample of monthly dashboards and found that they had been updated regularly using the information supplied from the partners. We reviewed a sample of monitoring reports for period five seven and ten in 2016/17. The dashboard reports confirmed that project progress was documented and updated against the agreed milestones, which corresponded with the original project objectives. The top three current issues and top three risks are detailed within the dashboard to enable evaluation of the current progress status. Delivery progress, project risks and issues, project deliverables and financial progress are all recorded in RAG (red, amber, and green) status. The latest report from June 2017 gave the programme a green rating overall, broken down as follows:  Timescale: is milestone delivery on schedule - Green  Issues: are they simple and manageable - Amber  Risks: potential risks unlikely to affect delivery - Green  Targets: are outputs on track - Green  Expenditure: is spend as budgeted – Amber

10.5 The risk register is compiled annually by the Events Team for the dashboard reports. The current risks for NYE identified by the team are;  The Budget may increase due to external factors over which the GLA have little control, e.g. incremental increases in cost across the board and the sourcing or partnership contributions.  The target audience capacity will not be achieved if the GLA loses viewing capacity  Increasing pressure on non-ticketed viewing areas. Risk that landowners and others will expect these areas to be incorporated into the event footprint, thus increasing costs. Mitigating risk management factors are put in place to manage the risks in place. We reviewed the risk register and concluded that all that was being done was in place.

September 2017 Review of Governance Arrangements for New Year’s Eve 10 Page 59 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.

September 2017 Review of Governance Arrangements for New Year’s Eve 11

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Page 62

Appendix 1d

DIRECTORATE OF AUDIT, RISK AND ASSURANCE

Internal Audit Service to the GLA

Review of GLA Payroll

Page 63 DISTRIBUTION LIST

Audit Team

David Esling, Head of Audit and Assurance Phil Drysdale, Audit Manager

Report Distribution List

Martin Clarke, Executive Director - Resources Tom Middleton, Head of Finance and Governance Patrick Alleyne, Senior Human Resources Manager

Page 64 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 3

Scope 3

Roles, Responsibilities, Accountabilities and Timetables 3

Processing of Payroll Transactions 4

Release of Funds and Reconciliations 6

ACTION PLAN

Assurance and Risk Rating Definitions 8

Findings and Recommendations 9

August 2017 ReviewPage of GLA 65 Payroll

FINDINGS AND RECOMMENDATIONS

1. Background

1.1 This review has been carried out as part of the Greater London Authority (GLA) 2016/17 audit plan. The objectives of the payroll system are to ensure accurate payments are made to bona fide employees in a timely manner.

1.2 At the outset of the review, the potential risks identified to achieving the objectives of the payroll system were:

 Ill-defined roles, responsibilities and accountabilities  Ineffective processing of starters and leavers  Inaccurate or unauthorised processing of changes to standing data  Failure to process transactions promptly  Over/under payments made  Ineffective reconciliation processes

1.3 Failure to manage these risks could result in incorrect payments or breach of legislation resulting in financial penalty. We are looking to provide assurance that the key risks are being effectively managed.

1.4 The GLA has approximately 800 employees on the payroll, with average monthly payroll payments of £3.8m. The processing of the payroll has been undertaken by the London Fire and Emergency Planning Authority (LFEPA), under a shared services agreement since 1 October 2011.

2. Audit Assurance

Substantial 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 There is detailed Payroll Procedure Manual in place that clearly defines roles, responsibilities and accountabilities between LFEPA, GLA Human Resources and GLA Finance.

3.2 GLA and LFEPA have an agreed processing timetable which clearly sets out the cut–off dates for processing transactions and which has been communicated to staff. Payroll transactions are processed promptly and accurately, and HR record keeping is consistent the GLA’s Record Retention Policy.

3.3 Validation of payroll figures and reasonableness checks take place prior to the release of pay and are subject to management review and authorisation in accordance with the scheme of delegation and list of approved signatories.

August 2017 ReviewPage of GLA 66 Payroll 1

FINDINGS AND RECOMMENDATIONS

3.4 Establishment reconciliations are completed each month and queries raised with GLA HR by GLA Finance are resolved promptly and are supported by evidence.

3.5 The journal and reconciliation process ensures that the monthly main and supplementary payrolls are entered accurately onto the GLA’s main accounting system, SAP. There is adequate evidence to support key financial data, and reconciliations are appropriately authorised.

4. Key Risk Issues for Management Action

4.1 No key risk issues for management action were identified.

August 2017 ReviewPage of GLA 67 Payroll 2

FINDINGS AND RECOMMENDATIONS

5. Review Objectives

5.1 Our overall objective was to review the control framework established by management to mitigate the risks relating to payments to staff through the payroll. In particular, we sought to give an assurance that:

 Roles, responsibilities and accountabilities are clearly defined and timetables for processing payroll transactions have been agreed and circulated.  All payroll transactions are processed promptly, accurately and with appropriate authority.  Regular reconciliations are performed, and signed off by an appropriate officer.

6. Scope

6.1 We reviewed the effectiveness of the payroll control framework, to ensure that all transactions are processed accurately, promptly and with appropriate authority. We checked the flow of information and data between the GLA staff, Human Resources, Finance Team and LFEPA, who provide payroll services under a shared service arrangement.

7. Roles, Responsibilities, Accountabilities and Timetables

7.1 Since October 2011 GLA’s payroll function has been carried out by LFEPA as part of a shared service agreement, as permitted by section 401 of the Greater London Authority Act 1999 and approved by the Mayor in August 2011. The arrangement is governed by an Instrument for Discharge of Functions, and provision of associated services (the Shared Services Agreement). We reviewed the Shared Services Agreement and confirm that it clearly defines the services to be provided, covers the procedures to be followed to ensure reliability, responsiveness, reporting problems, sets out the arrangements for monitoring and reporting, and the consequences for not meeting service obligations.

7.2 There is a detailed Payroll Procedure Manual in place that clearly defines the roles, responsibilities and accountabilities between LFEPA, GLA HROD and GLA Finance. We reviewed the Payroll Procedure Manual and confirmed that it is comprehensive and up to date, and that it covers all expected procedures, including the following:

 Enquiries, Correspondence, Helpdesk and Escalation  Authorised Signatures  System Security  Posts and Hierarchies  New Starters  Amendments/Changes  Leavers  Main Payroll  Supplementary Payroll

August 2017 ReviewPage of GLA 68 Payroll 3

FINDINGS AND RECOMMENDATIONS

 Third Party Payments  Manual Payments  Expense Payments  Season Ticket, Gym Membership, Tenancy Deposit and Bicycle Loans  Travel Cards  Overpayments  Maternity Leave  Sickness Absence  Pension Schemes  Annual Pay Award  Payroll Control and Output  Payroll Reconciliation  General Ledger Interface  Archiving and Retention of Records  Change Management

7.3 Since 2015 GLA have used the iTrent automated human resources application which feeds HR information directly to LFEPA via overnight reports. There is a detailed iTrent Operator's Guide, written by the GLA's HR Systems Information Officer, available to GLA HROD staff

7.4 A comprehensive timetable for the processing of both the main and supplementary payroll runs was agreed between LFEPA and the GLA for the financial year. The timetable provides deadline cut-off dates and scheduled events for:

 Input  Processing of Starters  Pay release and reports from LFEPA  Pay release to LFEPA  BACS submission  Availability of on-line payslips  General ledger report from LFEPA  Payday  Third party payments

7.5 A summary timetable is available on the GLA’s intranet site to ensure that employees are able to submit payroll information in time for transactions to be processed in the following pay run. In addition we confirmed that on-line payslips include the cut off dates for overtime and expenses claims.

8. Processing of Payroll Transactions

8.1 We selected a sample of starters, leavers, amendments to pay and National Insurance, PAYE and pension deductions to ensure that all transactions are supported by adequate documentation and are being processed accurately. We found the following:

August 2017 ReviewPage of GLA 69 Payroll 4

FINDINGS AND RECOMMENDATIONS

Starters: 8.2 That for all starters reviewed there was a signed Letter of Engagement, New Starter Form and Written Statement of Employment on file and that employment dates and salaries per HR records had been accurately input onto Cyborg.

8.3 For all starters tested there was a signed New Starter Form, Written Statement of Employment, and Proof of Residency on file and employment dates and salaries per HR records had been accurately input onto Cyborg. However, we found the following documents missing:

 In one case there was no Reference on file  In one case the Proof if ID on file, a photo driver’s licence, was inadequate.

8.4 We have discussed the missing documents with HR and they are in the process of obtaining them, from the employee in the case of Proof of ID and the former employer in the case of the Reference.

Leavers: 8.5 We reviewed a sample of leavers and our testing confirmed that there was adequate documentation relating to the leaver on file including a Resignation Letter, GLA Acknowledgment Letter, Notice of End of Fixed Term Contract or equivalent for Mayoral Appointments and Redundancy Notice Letter, where appropriate.

8.6 In all cases the agreed last day of service had been correctly input into Cyborg ensuring that final pay was accurate. Where appropriate redundancy pay and pay lieu of notice had been accurately calculated and input onto Cyborg.

Amendments to Pay 8.7 Amendments to pay include various changes in employees’ circumstances, such as a change of job, various allowances, maternity, honorarium and recognition payments, annual pay increments and salary sacrifice arising from the receipt of child care vouchers.

8.8 For a sample of amendments to pay tested we found that in all cases there was a signed request form on file, evidence of HR review and approval and that amendments had been accurately actioned on Cyborg.

National Insurance, PAYE and pension deductions 8.9 We reviewed a sample of employees to ensure that monthly NI, PAYE and Local Government Pension Scheme (LGPS) deductions generated by Cyborg had been accurately calculated in accordance with HMRC rates for 2016/17 and LGPS banding rules. Our review confirmed that NI and PAYE deductions were accurate and that LGPS contributions were based on the correct banding per LPGS rules. Where PAYE had been under or over paid for the month tested due to changes in tax coding, we confirmed the accuracy of under/over payments.

8.10 Overall, the processing of payroll transactions was timely and accurate and the standard of record keeping was consistent the GLA’s Record Retention Policy

August 2017 ReviewPage of GLA 70 Payroll 5

FINDINGS AND RECOMMENDATIONS

which defines the records to be retained and specifies how long they should be retained for.

8.10 Inputs onto Cyborg are subject to independent review on a sample basis by the HR Systems Information Officer, who checks a random sample of transactions each month to ensure that inputs are correct and legitimate.

9. Release of Funds and Reconciliations

9.1 The main payroll run is approved and processed in the middle of each month and approximately a week later a supplementary payroll, capturing post cut-off transactions, is approved and processed. Approvals are also given for payments in relation to statutory third parties, such as tax, National Insurance and pensions, and non-statutory payments, such as trade union dues and deductions from earnings orders such as for the Child Support Agency.

9.2 Pay Release Forms are sent to GLA by LFEPA for review and authorisation and provide the authority to process the payroll. Pay Release Forms are supported by Cyborg reports to enable GLA to review and verify the accuracy of payments. We reviewed the verifications for the June, September and December 2016 payrolls and found that they had been performed effectively and had been signed as approved by a GLA Finance Manager. We confirmed that the GLA Finance Manager is included on the approved signatory list held by LFEPA.

9.3 Reasonableness checks to ensure that the payroll run is within an agreed tolerance level to the previous month are completed as part of the Pay Release Reconciliation process. We confirmed for June, September and December 2016 that there was a signed cover sheet on file, setting out the checks carried out and confirming that variances greater than 5% had been explained.

9.4 Reconciliations of starters and leavers are included in a monthly establishment reconciliation performed by the GLA Finance. To complete the reconciliation, payees on the LFEPA payroll run are matched to an establishment list provided by HR. This process identifies where pay for the month differs to the expected pay for that grade, as well as differences in the headcount. Queries identified are passed to the HR for investigation.

9.5 We reviewed the establishment reconciliation completed by the GLA Finance Team for June, September and December 2016, and found that queries had been raised by Finance with HR and had been answered promptly and evidence to support the resolution of queries had been retained. 9.6 GLA Finance authorise LFEPA to pay staff and third parties via Pay Release Forms and payments are made via BACS from LFEPA’s GLA Payroll bank account. LFEPA request reimbursement via email each month and include Payment Transfer forms, signed by the LFEPA Payroll Manager, as evidence to support the amount requested.

9.7 We reviewed the reimbursement requests for the June, September and December 2016 payrolls and found that they agreed to the amounts on the Pay Release

August 2017 ReviewPage of GLA 71 Payroll 6

FINDINGS AND RECOMMENDATIONS

Forms. Once the payment is made by GLA Finance it is lodged on SAP as an unallocated payment. GLA Finance checks this against the Pay Release records that were initially approved by them to confirm that the amount claimed is correct.

9.8 Following the payroll runs GLA Finance journal payroll information into SAP. We reviewed the journals for the June, September and December 2016 Main and Supplementary payrolls, and found that journal entries were supported by primary evidence and that the reconciliations had been reviewed prior to being loaded on to SAP.

August 2017 ReviewPage of GLA 72 Payroll 7

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.

##ID77654C404A9A924F78FE705525##Finding

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Page 74 Appendix 2a

DIRECTORATE OF AUDIT, RISKFF AND ASSURANCE Internal(Foundry Audit Forms Service San/ Font size to 20/ the RBG: 160,GLA 160, 170)

Follow Up Review Of

Expenses and Benefits Framework

Page 75 EXECUTIVE SUMMARY

1. Background

1.1 This audit follows up the progress made towards implementing the six agreed recommendations from the audit of Expenses and Benefits Framework that was completed in October 2016.

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 the Expense and Benefits Framework has improved. Since the original review four recommendations have been implemented and two partly implemented.

3.2 The Expenses and Benefits Framework has been reviewed and updated to take account of the changes to the procedures for incurring and claiming expenses, through the HR iTrent online system. The framework was approved by senior management in March 2017 and the Mayor in April 2017, under MD2085.

3.3 There is an effective system in place for the issue and monitoring of the season ticket loans for staff and Assembly Members. The season ticket loan application form has been updated to reflect that the GLA reserves the right to request evidence that the travel card remains active during the loan period and reminders for submission of ticket purchase are sent to ticket holders in a timely manner.

3.4 Checks on GLA staff and Assembly Members travel and oyster cards have not been undertaken by Financial Services to confirm that they are active and remain in use.

3.5 A corporate credit card guidance note has been produced which provides direct links to relevant documents such as the Expense and Benefits Framework and the Credit Card Payment Requisition Form for purchases. The guidance also covers areas such as travel which will assist with the credit card logs being completed and adequately supported.

September 2017 Expenses and Benefits Framework Follow Up 1 Page 76 ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response 7.1 The Greater London Authority 2 The GLA Expenses and Implemented None. Expenses and Benefits Framework Benefits Framework is The Expenses and Benefits which was effective from 1 June 2014 reviewed and updated to Framework document was includes information relating to take account of the new reviewed and updated in early Expense Claims, Travel, Annual online expenses system 2017 and will be due to be Travel Cards and Loans, Hotel iTrent and approved. reviewed again in March 2019. Accommodation, Subsistence, The document reflects recent Entertaining and Hospitality, Party Management Response changes and provides links to Conferences, Training, Conferences The review of the the procedure for incurring and and Away Days, Staff Benefits, Expenses and Benefits claiming expenses, through Payments to external persons and Framework will be the HR iTrent online system. Corporate Credit Card. The undertaken in early 2017 framework has not been reviewed as part of a wider The framework was approved since 2014 and the processing of governance review, which by the following: Page 77 Page claims has now changed with claims will also include a review  The Assembly on 8th being processed on-line via iTrent. of the Financial March 2017; Regulations and the  The Head of Paid Mayoral Scheme of Services on 11th April Delegation. 2017; and  The Mayor on 24th April Target Date: 2017, under MD2085 March 2017 as part of ‘updates to the GLA’s Corporate Governance’.

8.3 GLA personnel are entitled to apply 3 All Season Ticket loan Partly Implemented Financial Services to for a season ticket loan. Standard request forms are signed Financial Services maintain a undertake checks on season season ticket application forms are in by Financial Services to loan tracker for season ticket and oyster card holders on a place and available to all personnel. indicate authorisation of holders, whose applications regular basis. We reviewed a sample of seven loan. have been approved. season ticket loan applications and The intranet page on loan for found standard forms had been Periodic checks are As part of the terms and annual season ticket purchase

September 2017 Expenses and Benefits Framework Follow Up 2

ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response submitted and signed by the claimant introduced to ensure conditions of the loan, the should be updated to reflect and their line manager. Three forms season tickets continue to ticket holder is required to the inspection of travel and had not been authorised by Financial be held by personnel. submit evidence of the rail oyster cards. Services and evidence of the ticket to Financial Services purchased rail ticket had been Management Response after ten days of purchase. Management Response submitted to Finance for all but one of The periodic checks can Financial Services will send loans processed. Periodic checks of only be conducted on out a reminder to ticket holders An inspection of travel and season tickets are not undertaken to oyster cards and will if evidence of the travel ticket oyster card holders will be ensure that season tickets remain in require the travel card is not received. carried out in September. use. holder to provide a print out of their journeys over From our review of season Target Date: September 2017 the last two weeks which ticket applications, we found should indicate journeys to forms had been authorised by and from work. Financial Services and

Page 78 Page evidence of the purchased Target Date: travel ticket had been November 2016 submitted to Financial Services.

Following the audit in October 2016 Internal Audit recommended that season ticket holders produce their Annual travel card to Financial Services to confirm that they remain active. The season ticket loan application form has also been updated to take account of this requirement in the Annual Season Ticket - Conditions of Loan Guidance.

At the time of our review

September 2017 Expenses and Benefits Framework Follow Up 3

ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response checks on travel cards had not been undertaken by Financial Services to confirm that travel tickets remained in use.

8.4 Assembly members’ are entitled to 2 Standard forms are Partly Implemented Financial Services should travel cards up to Zone 6. The travel processed for the claiming The ‘BACs request for travel undertake checks on Assembly card is obtained either by an of travel cards. card form’ for Assembly Member’s travel cards to application form being submitted to Members’ is available on the confirm that cards remain in Financial Services and funds are Forms are signed by GLA intranet. use. transferred via bank transfer to the Assembly Members’ Assembly Members’ bank account claiming the travel card Financial Services maintain a Management Response who then purchase the travel card or and evidence of the list of the Assembly Members’ travel cards are purchased by the purchased card is that have applied for a travel We will implement a system of Page 79 Page Mayor or Member and are claimed submitted to Financial card and a record of the checks on Assembly Members’ back via an expense claim form. A Services. application form and evidence travel cards to ensure they sample of 10 claims submitted to of the purchased ticket is held. remain current. Financial Services showed that BACS Management Response Sixteen assembly members’ requests for travel cards had been Travel Card Request had applied for a travel card at submitted for seven claims and three Forms have already been the time of the review, of which Target Date: related to Travel Card Funds Request standardised and are three had not provided September 2017 Transfer Form. Evidence of the available on the internet. evidence of the purchased purchased rail card was not provided ticket. Financial Services had for 8 of the claims reviewed. The sent out a reminder email to BACS request form had been signed Target Date: the individuals concerned. by the Assembly Member claiming the n/a ‘BACs request for travel card travel card, however, the three travel forms’ had been signed by card fund request forms had not been Assembly Members’. signed by the claimant. Periodic checks of travel cards are also not Periodic checks of Assembly undertaken to ensure travel cards Members’ travel cards had not remain in use. been undertaken to ensure travel cards remained in use

September 2017 Expenses and Benefits Framework Follow Up 4

ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response 8.6 Credit card logs had been completed 3 Financial Services Implemented None for all transactions and for each ensures the correct Credit A reminder was sent to all payment a Credit Card Payment Card Payment Requisition credit card holders in February Requisition Form had been completed Form with all the required 2017 by Financial Services showing Supplier, Reason for the use information is used for advising of the correct credit of the Credit Card, Details of credit card transactions. card form to use. Expenditure, Expense Code, Cost Centre, currency and amount. The Management Response The Credit Card Payment forms are required to be signed by the The correct version of the Requisition Form which is person requesting the payment, the form includes the credit located on the GLA intranet person authorising and approval by card holder’s signature also includes a requirement for the card holder. Forms were located and this is the version that the card holder’s signature on for transactions processed and had is available on the intranet. the form. been signed except in two cases

Page 80 Page where the requester had not signed A reminder will be sent to the form. It was also noted that two all credit card holders to different forms had been used with only accept the correct one including the signature of the card version of the form. holder and the other not. Target Date:

October 2016

8.7 Supporting documentation was 2 Supporting receipts for all Implemented None. included with the Credit Card credit card transactions An email was sent out to all Payment Requisition Form except for are submitted with credit card holders in February four transactions. Two had been payments made. 2017 by Financial Services identified by Finance and treated as informing of the need to submit exceptions and guidance issued. Management Response to Financial Services, card Payments relating to the same Hotel Credit card holders will be logs that are adequately booking in May were charged twice. reminded of the need to supported by invoices, e- On further review and discussion with ensure all transactions are invoices and order

September 2017 Expenses and Benefits Framework Follow Up 5

ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response the credit card holder it was identified adequately supported. confirmations. that an extra payment may have been taken on the credit card by the Hotel. Financial Services staff In addition, Financial Services There was no supporting will reject credit logs that has prepared a corporate documentation for the second are not adequately credit card guidance note with payment. The credit card holder has supported. direct links to relevant contacted the Hotel and requested a documents such as the refund for the second payment. Target Date: Expense and Benefits Framework for the credit card October 2016 users to refer to and the Credit Card Payment Requisition Form.

Page 81 Page 8.10 We reviewed a number (37) of staff 3 Supporting receipts are Implemented None. expense claims submitted to Finance submitted for all expenses Expense claims are submitted and located all claims submitted. Our claimed for. through the HR iTrent system. findings from the review of claims Claimants are required to were as follows:- The name and submit with their claims organisation of recipients scanned receipts. Claims will Supporting receipts were located for should be disclosed on not be approved without the 86% of the claims reviewed and one claims submitted for supporting information claim for was a meal categorised as Business Entertaining. Business Entertaining but did not include details of the recipients. Management Response Financial Services send out Expense claims not emails to claimants, who have supported by receipts will not provided sufficient proof to be put on hold by Finance support their claim, and claims and the claimant will be are not processed until the asked to provide receipts requested receipt or proof of to support the amounts payment is submitted. claimed.

September 2017 Expenses and Benefits Framework Follow Up 6

ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response Target Date: October 2016

Page 82 Page

September 2017 Expenses and Benefits Framework Follow Up 7

Appendix 2b

DIRECTORATE OF AUDIT, RISKFF AND ASSURANCE Internal Audit Service to the GLA

Follow up Review of Mayor’s Community Infrastructure Levy

Page 83 EXECUTIVE SUMMARY

1. Background

1.1 This audit follows up the progress made towards implementing the one agreed recommendations from the audit of Mayor’s Community Infrastructure Levy that was completed in December 2016.

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. Key Findings

3.1 The overall control framework for the Mayor’s Community Infrastructure Levy has improved. Since the original review the two recommendations has been implemented.

3.2 There is clearly defined and approved guidance, policy and procedures in place for MCIL that complies with legislation; the working arrangements, roles, responsibilities and accountabilities between the GLA and TfL’s Planning Obligations Team and for the MCIL Steering Group have been documented. There are comprehensive terms of reference in place for the CIL Collection Group. Roles and responsibilities will be reviewed again following a planned TfL restructure in Spring 2018.

July 2017 Mayor’s Community Infrastructure Levy Follow Up 1 Page 84 ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response 7.3 We found that there are no 3 Working arrangement, Working arrangement, roles None documented working instructions or roles and responsibilities and responsibilities of GLA protocols in place, to define TfL and of GLA and TfL in the and TfL in the MCIL process GLA’s respective roles and MCIL process are have been documented as of responsibilities within the MCIL documented and reviewed April 2017 and will be reviewed working process. This increases the every two years. every two years. risk of legislative responsibilities not Management Response: being complied with. The relationships have developed, and have become custom and practice. Documenting these will be beneficial and provide clarity / reduce risk. Page 85 Page Responsibility: Team Manager, Planning Obligations - TfL

Target Date: April 2017

10.6 The MCIL Steering Group’s terms of 4 Terms of Reference for Terms of reference have been None reference have not been reviewed the MCIL Steering Group produced dated April 2017 and since 2011 and this may increase the to be reviewed every two reflect MCIL Steering Group & risk that they are out of date and do years. CIL Collection Group not reflect the lessons learned since respectively. 2011. Management Response: Terms of reference will be produced / reviewed for both MCIL Steering Group & CIL Collection Group respectively. These will be

July 2017 Mayor’s Community Infrastructure Levy Follow Up 2

ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response reviewed every two years.

Responsibility: Team Manager, Planning Obligations - TfL

Target Date: April 2017

Page 86 Page

July 2017 Mayor’s Community Infrastructure Levy Follow Up 3

Appendix 2c

DIRECTORATE OF AUDIT, RISKFF AND ASSURANCE Internal Audit Service to the GLA

Follow Up Review of Regeneration Funding Due Diligence Framework

Page 87 EXECUTIVE SUMMARY

1. Background

1.1 This audit follows up the progress made towards implementing the one agreed recommendations from the audit of Regeneration Funding Due Diligence Framework that was completed in November 2016.

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. Key Findings

3.1 The overall control framework for the Regeneration Funding Due Diligence Framework has improved. Since the original review the one recommendation has been implemented.

3.2 There are processes in place to obtain assurance that third parties who receive grant funding from the GLA have processes in place which enable them to comply with the Bribery Act and money laundering legislation.

3.3 The Regeneration team have incorporated the following clause (below) into new funding agreement since the audit took place and recognise that the key is to undertake checks pre-award. ‘…shall ensure it complies and its Sub-Grantees, suppliers and sub- contractors comply with the provisions of Bribery Act 2010 and all money laundering legislation and any guidance issued by the Secretary of State under the same (whether or not so obliged expressly by that act or such guidance).’

3.4 The regeneration team have altered the application processes for new funds, by introducing an Expression of Interest (EOI) stage to the process, and now reference the Bribery Act and money laundering legislation in the prospectus. The prospectus outlines and explains full due diligence checks will take place during the Full Application stage. The Regeneration Team have also updated and documented the full due diligence process for all new starters to use as part of the Regeneration Team staff welcome pack.

September 2017 Regeneration Funding Due Diligence Framework Follow Up 1 Page 88 ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response 7.3 The GLA anti-fraud and corruption 3 Where appropriate, We reviewed the new funding None policy requires all third parties with assurance is sought that agreements and found that whom the GLA deals to act honestly delivery partners have assurances are sought as part and with integrity in order to safeguard procedures in place for of the application appraisal the public resources for which they anti-fraud and corruption process referencing that the are responsible. However there is no to ensure compliance with applicant will comply with the process in place to obtain assurance the Bribery Act 2010 and Bribery Act 2010 and money that third parties who receive grant money laundering laundering legislation as part funding from the GLA have processes legislation. of the Funding Agreements. in place which enable them to comply This requirement is detailed in with the Bribery Act and money Management Response: all new funding prospectuses. laundering legislation. There is a As part of our application need to maintain necessary control appraisal process and influence over delivery partners appropriate assurances Page 89 Page conduct so that the risk of the misuse will be sought and will of funds and reputational damage to begin to include reference the GLA is avoided. to the Bribery Act 2010 and money laundering legislation in all future Funding Agreements the regeneration team enter into. This will also be highlighted in prospectuses produced for future rounds of funding.

Management Responsibility Senior Manager - Capital Projects and Programmes

Target Date: 30 November 2016

September 2017 Regeneration Funding Due Diligence Framework Follow Up 2

This page is intentionally left blank

Page 90 Appendix 2d

DIRECTORATE OF AUDIT, RISKFF AND ASSURANCE Internal(Foundry Audit Forms Service San/ Font size to 20/ the RBG: 160,GLA 160, 170)

Follow Up Review Of

Use and Control of Social Media

Page 91 EXECUTIVE SUMMARY

1. Background

1.1 This audit follows up the progress made towards implementing the three recommendations from the audit of the Use and Control of Social Media that was completed in September 2015.

2. Audit Assurance

Substantial There is particularly effective management of key risks contributing to the achievement of business objectives.

3. Key Findings

3.1 The overall control framework for the Use and Control of Social Media has improved. Since the original review all three recommendations have been fully implemented.

3.2 Risks relating to Social Media are included on the External Relations risk register and further risks relating to social media are in the progress of being included.

3.3 Social media audit recommendations have been submitted to the September 2017 Digital Board for action. In relation to the requirement for more Senior Management action, members were requested to feedback on their impressions of how social media is running, their satisfaction with the channel they manage and whether they still need it, resources to run it and support available. The feedback from the Board was that Senior Management are aware of the GLA’s social media channels and no problems have been experienced. There is also strong engagement with the Mayor’s office and a number of new Mayoral channels have been established with close scrutiny from across the office.

3.4 A quarterly digital report (was monthly) is produced. General feedback has been received that the report is read by staff who reported that the report is interesting, useful and engaging. The format of the report is currently being reviewed to ensure it usefulness to teams across the GLA.

October 2017 Use and Control of Social Media Follow Up 1 Page 92 ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response 7.9 The opportunities associated with Social 2 Risks associated with social Implemented None Media were considered in developing the media are identified, Strategy but any risk assessment and on- assessed and recorded, Risks associated with social going management of risk has not been regularly reviewed and media are now included on the captured. Regular monitoring of sites by appropriate mitigation agreed External Relations Unit risk channel managers takes place and any and taken. register. inappropriate use of Media should be identified promptly. However, risks have Management Response: not been properly identified, assessed Social media risk and recorded to ensure effective assessment will be mitigation is taken across all areas of incorporated into the External potential risk to the GLA. Relations Unit risk management process and recorded in the External Affairs risk register. Page 93 Page Target Date: October 2015 10.5 Monthly Social Media meet ups take place 2 Senior Management further Implemented None which are led by the Senior Digital promotes and supports the Marketing Officer and are open to all use of Social Media and Recommendations from the members of staff. Information and best actively encourages a original audit review of the Use practice is shared and requests can be greater level of engagement. and Control of Social Media have made to post contents on social media been reported to the September channels at the meetings. However, the Management Response: 2017 Digital Board. The feedback recent external review did highlight an This point will be raised at from the Board was positive and issue relating to the effectiveness of the Digital Board meeting in that Senior Management are sharing of information between sites and November 2015 with the aware of the Social Media Channel Managers stated they often have recommendation that this is Channels and that no problems difficulty in encouraging others to provide disseminated across the have been reported. content for the sites. It is considered that GLA. there needs to be a greater degree of buy There has also been strong in supported by senior management. Target Date: November engagement with the Mayor’s 2015 office with a number of new Mayoral channels being established.

October 2017 Use and Control of Social Media Follow Up 2

ACTION PLAN

Further Recommendations and Ref. Original Finding and Risk Priority Original Recommendation Follow Up Finding Management Response 11.5 Although the above reports are produced 3 Management information Implemented None management information requirements requirements for social have not been clearly defined and there is media are clearly defined, A quarterly Digital report has been no formal oversight of the output to subject to regular produced and provides digital demonstrate how the contents of reports management review and highlights for the first quarter of are used to inform and enhance social used to inform the further 2017. media activity. enhancement of social media activity within the The report was submitted to the GLA. September 2017 Digital Board meeting to obtain feedback on the Management Response: information the reader requires or The management information any other suggestions. Feedback provided with the External from the Board reported that Relations Digital Report will members found the report be reviewed and relevant interesting, useful and engaging. feedback provided to channel Page 94 Page managers through the The format of the report is Monthly Social Media meet- currently being reviewed to ups. ensure the report is as useful as possible to teams across the At the Digital Board meeting GLA. in November 2015 the issue of on-going assurance and reporting will be discussed and agreed.

Target Date: December 2015

October 2017 Use and Control of Social Media Follow Up 3

Appendix 3a

MAYOROF LONDON M0 P 4 C OFFICE FOR POLICINO AND CRME DIRECTORATEOF AUDIT, RISKANDASSURANCE Internal Audit Service to the GLA

Review of Local Growth Fund Grant Declaration 2016/17

Page 95 Environment

and

Enterprise

Programmes

Director

and

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Auditor

Executive

Projects

LEP

Governance

Regeneration Page 96 - -

Resources

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Team

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DISTRIBUTION

David Karen

Audit Report

Fiona Debbie Jeff

Martin

Tim Sarah

Tom CONTENTS

Page EXECUTIVESUMMARY

Background 1

ReviewObjectives 2

Scope 2

AuditOpinion 2

FINDINGS

MayoralApprovaland FundingAgreement 3

Agreementto the GeneralLedger 3

GrantsAwardProcessand FundingAgreements 4

EligibilityofExpenditure 4

APPENDICES

Appendix1SignedGrantDeclarationand Statement 5 ofGrantUsage

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2. ReviewObjectives

2.1 Our overall objective is to provide assurance that the conditions of the grant have been met for the ‘Local Growth Fund’ received by the GLA in 2016/1 7. In particular, we are looking to provide assurance that:

• There is Mayoral approval for the use of LGF funds • Grant income and expenditure per DCLG remittances and FE College and the London Regeneration Fund claims agree with the GLA expenditure and income accounts. • Funding has been fairly awarded and signed funding agreements are in place with FE Colleges, LRFA and Digital Skills. • There is an adequate and effective control framework in place to ensure that only eligible expenditure as specified in the Grant Determination is included.

3. Scope

3.1 We reviewed the adequacy and effectiveness of the control framework in place including a review of the governance and monitoring arrangements for ensuring that LGF funds were spent in accordance with the conditions attached to the Grant Determination. Drawing on work completed on the control framework in September 2016 we checked appropriate authorisations and supporting documentation on a sample of claims by Further Education Colleges and London Boroughs in 2016/17 and we tested the eligibility of expenditure. We also reviewed the process of awarding funding to LRF delivery partners that support the grant.

4. Audit Opinion

4.1 We have reviewed the LGF expenditure for 2016/17 and carried out appropriate checks and concluded that there is an adequate and effective control framework in place to ensure that the conditions of the grant have been met for the ‘Local Growth Fund’ received by the GLA in 2016/1 7.

August2017 ReviewofLocalGrowthFundGrantDeclaration2016/17 2 Page 99 3 —

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for 2017

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6. 6.1

FINDINGS August FINDINGS

7. GrantsAwardProcessand FundingAgreements

7.1 The Contract and Funding code does not require a competitive selection process when potential funding agreements are not for goods and services; however it requires funds to be disbursed in a fair and transparent manner. The GLA adopted a competitive process as this was the most effective strategy for ensuring fairness and transparency, achieving the programmes aims and securing value for money.

7.2 The Further Education Capital Investment Prospectus, approved by the Further Education Capital Steering Group in August 2014, clearly sets out the eligibility requirements, application and bid evaluation process, delivery requirements, budget and payment model, due diligence and credit worthiness criteria and output definitions.

7.3 Following evaluation by GLA officers against the four weighted criteria as specified in the Prospectus, 14 bids for Round 1 and 7 for Round 2 were approved by the IPB, the LEP and the Executive Director - Development, Enterprise and Environment in July 2015 for Round 1 and March 2016 for Round 2.

7.4 Overall we found that the bidding process for FE Capital Funds was compliant with the requirements of the Contract and Funding Code and that grants were awarded fairly and consistently in accordance with the evaluation criteria set out and communicated to bidders in the Prospectuses.

7.5 The London Regeneration Fund Prospectus sets out the background to the LRF, what will be funded and how to prepare and apply for funding including who can apply, how the funding will work, outputs and outcomes, assessment of applications and key dates. Sixty-nine applications were received requesting a total of58.6m. The applications were appraised and moderated, and reviewed by a Task and Finish Group including Mayoral Advisors and LEP SME working group members. For 2016/17 seventeen boroughs had been awarded funding. We found from a sample of grants that they were awarded in line with the evaluation criteria.

7.6 Our review of FE Colleges and LRF found that funding agreements, signed by the Executive Director-Development, Enterprise and Environments, are in place.

8. EligibilityofExpenditure

8.1 We reviewed a sample of quarterly payment claims made by FE Colleges and LRF Boroughs and confirmed that they were submitted on the prescribed claim return form and that all parts had been completed, including a signed declaration by the Project leads and Chief Finance Officers. Further checks are undertaken by GLA on claims submitted to supporting invoices. We confirmed that the amounts claimed were supported by and agreed in total to submitted invoices.

August2017 ReviewofLocalGrowthFundGrantDeclaration2016/17 4 Page 101 5

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£77,528,400.00 £77528400.00 Page 104 Appendix 3b

Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Appendix 3c

Subject: Additional Internal Audit Review

Report to: Audit Panel

Report of: Executive Director of Resources Date: 17 October 2017

This report will be considered in public

1. Summary

1.1 This report informs the Audit Panel of work undertaken by the internal auditors for the GLA in addition to the agreed Internal Audit programme for the 2017-18 year.

2. Recommendation

2.1 That the report be noted.

3. Issues arising

3.1 A GLA employee was suspended on 12 July 2017 following initial enquiries conducted by the GLA IT Department that revealed a potential unauthorised disclosure to the media of internal Mayor’s Office for Policing and Crime (MOPAC) documents.

3.2 Internal Audit was asked to conduct an initial review of the analysis provided by GLA IT of the suspended GLA employee’s IT account, and then a further, detailed investigation. A full report was provided to the GLA’s Head of Paid Service and relevant Executive Director in September 2017.

3.3 Management action was undertaken during and after this investigation, in line with the GLA’s policies and procedures. The individual concerned no longer works for the GLA.

4. Legal Implications

4.1 Legal advice was taken in relation to the activities referred to in this report.

5. Financial Implications

5.1 The additional internal audit activity referred to in this report will be funded from within existing resources.

City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 111

List of appendices to this report: None

Local Government (Access to Information) Act 1985 List of Background Papers: None Contact Officer: Tom Middleton, Head of Finance and Governance, GLA Telephone: 020 7983 4257 Email: [email protected]

Page 112 Appendix 4a GREATER LONDON AUTHORITY

INTERNAL AUDIT - PROGRESS REPORT

8 July 2017 to 17 October 2017

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 second quarter of 2017/18 and includes a summary of the audit work for the remainder of the third quarter.

2. Audit Work Completed in the Second Quarter 2017/18

2.1 The following reviews from the 2017/18 audit plan have been finalised:

 Payroll – Review of Main Areas  Review of Governance Arrangements for New Year’s Eve  Partnership Governance – Film London and London Design Festival  Capital Programme – Monitoring and Return  Regeneration Funding Due Diligence Follow Up  Mayor’s Community Infrastructure Levy Follow Up  Use and Control of Social Media Follow Up  Expenses and Benefits Framework Follow Up

(Annex A details the latest position on the implementation of recommendations, the assurance ratings and direction of travel).

2.2 The reviews of Fourth Plinth Programme, Agency and Consultancy Staff and LLDC – Governance and Oversight are with senior management for final sign- off and the Material Financial Systems (Key Controls) and London Lumiere are in progress and all will be submitted to the December Audit Panel.

2.3 The audit review of Government Grant Returns Framework will not take place. This area will be covered with the increased requests for the submission of the various grant returns.

2.4 In addition to our planned work programme we completed a review of the DCLG: Local Growth Fund Grant Return 17/18 and Gnewt Electric Vehicle Trail Grant Return. We have included our Report for DCLG in the Audit Panel papers for the panel to note.

Page 113 3. Counter Fraud Work Completed in the Second Quarter 2017/18

3.1 In respect of the government funded national grant award programme, DARA have maintained liaison with the MPS Complex Fraud team and the Crown Prosecution Service, in order to assess the evidence and confirm there was a sufficiency to charge. Further commitment from DARA will be given to address issues of disclosure and to ensure cases are ready for trial. DARA continue to assist the MPS Complex Fraud team with case preparation. The trial has been fixed for 4th June 2018 and it is anticipated that it will last for six weeks. 3.2 In respect of false claims in an employment creation programme, DARA have worked closely with GLA personnel, reviewed and clarified evidence already available and obtained further evidence where necessary. Referral to and liaison with, the MPS resulted in the Complex Fraud team taking on responsibility for the investigation. DARA will maintain a liaison role. This is an ongoing criminal investigation by the MPS Complex Fraud team and they are liaising direct with senior GLA representatives. DARA staff will assist with interviews and taking statements where appropriate. DARA receive regular updates from the GLA 3.3 It is intended that during the next quarter DARA will review previous cases with a view to informing any future DARA activity DARA are coming towards the conclusion of a recruitment process. Once the additional resources are in place a more structured proactive approach can be developed.

4. Key Work Planned for the Third Quarter 2017/18

4.1 The reviews of Programme and Project Management Framework – Technology Group Projects, Further Education Capital Grant, Housing Zones – Programme Management and Reporting, iTrent – Post Implementation Review, Operating Systems – Configuration and Security, ISO 20121 – Event Sustainability Management Systems are due in the third quarter. Follow up reviews of Policy Development Implementation and Review Framework, Housing Zones – Award of Contracts and Employment Checks are also due for completion.

5. Internal Audit Performance

5.1 To date we have completed 200 days in respect of the 2017/18 internal audit plan (445 audit days). Annex B contains a summary of work completed to date and that planned for the remainder of the financial year.

5.2 Internal Audit is on target to complete 100% of the work programme to at least draft report stage by the year end.

Page 114 Analysis of Assurance Ratings, Recommendations and Direction of Travel Annex A

Risk Based Audits Assurance Level and Total Recs Priority 1 Priority 2 Priority 3 Priority 4 Not Direction of Travel Accepted Payroll – Review of Main Areas Substantial 0 0 0 0 0 0

Substantial New Year’s Eve 0 0 0 0 0 0

Partnership Governance – Film London Adequate and London Design Festival 4 0 3 1 0 0

Capital Programme – Monitoring and Substantial 1 0 0 1 0 0 Return

Follow-up Audits Assurance Level and Total Recs Fully Partly Not Additional Direction of Travel Implemented Implemented Implemented Recs Regeneration Funding Due Diligence Substantial

Page 115 Page 1 1(1 x P3) 0 0 0

Substantial 2 (1 x P3 Mayor’s Community Infrastructure Levy 2 0 0 0 1 x P4)

Substantial 3 (2 x P2 Use and Control of Social Media 3 0 0 0 1x P3))

Adequate 4(2 x P2 Expenses and Benefits Framework 6 2 0 0 2 x P3)

Key

P1 = Priority 1 Control Environment has Improved The control environment effectiveness has improved in the mitigation of risks arising since the last audit.

P2 Priority 2 Control Environment Remains the Same The control environment effectiveness has remained at the same level for the mitigation of risks arising since the last audit.

P3 = Priority 3 Control Environment has Deteriorated The control environment effectiveness has reduced in the mitigation of risks arising since the last audit.

P4 = Priority 4 Not Previously Audited/ Assessment Not Possible

Analysis of Assurance Ratings, Recommendations and Direction of Travel Annex A

The audit completed has either not previously been undertaken by Internal Audit or it has been undertaken previously but the control framework has changed to such an extent that a direction of travel assessment is not possible.

Page 116 Page

Annex B GLA Internal Audit Plan 2017/18

RISK ASSURANCE AUDITS April May June July Aug Sept Oct Nov Dec Jan Feb Mar

Procurement Shared Service C

Planning Advice Service Income - Health Check C

New Year’s Eve C

Fourth Plinth Programme WIP Government Grant Returns Framework*

LLDC - Governance and Oversight WIP

Agency and Consultancy Staff Employment Status WIP

Lumiere – Lessons Learned WIP

Further Education Capital Grant P Housing Zones - Programme Management and Reporting P

London & Partners - Partnership Governance P

Business Continuity P

Training Needs and Delivery P

KEY FINANCIAL SYSTEMS April May June July Aug Sept Oct Nov Dec Jan Feb Mar

Material Financial Systems – Key Controls 1 WIP

Capital Programme – Monitoring and Return C

Material Financial Systems – Key Controls 2 P

SPECIALIST REVIEWS AND CONTROL ADVICE April May June July Aug Sept Oct Nov Dec Jan Feb Mar

London Growth Hub - Grant Return C

TSB: Gnewt Electric Vehicle Trial Grant Return C iTrent – Post Implementation Review P

Operating System: Configuration and Security P

GLA-Open Project System P

Cloud Computing: Governance and Security P

ISO 20121 - Event Sustainability Management Systems P

FOLLOW UP REVIEWS April May June July Aug Sept Oct Nov Dec Jan Feb Mar

Disclosure and Barring Service C

Health and Safety C

The Bribery Act 2010 C

Partnership Governance – World Athletics Championship C

Regeneration Funding due diligence C

Use and Control of Social Media C

Expenses and Benefits Framework C

Mayor’s Community Infrastructure Levy C Policy Development, Implementation and Review Framework P

Housing Zones – Award of Contracts P

Employment Checks P Programme and Project Management Framework - Technology Group Projects P Partnership Governance - Film London and London Design Festival P

Data Protection and Freedom of Information P

RE:NEW Programme P

Procurement Shared Service P

Open Source Software P

Payroll P Legend Completed - C * Audit Review is not going to be undertaken. The submission of Work in progress - WIP the various grant claims will cover this area. Planned - P

Page 117 This page is intentionally left blank

Page 118 Agenda Item 5

Subject: External Auditor’s GLA Group Audit Results Report 2016/17

Report to: Audit Panel

Report of: Executive Director of Resources Date: 17 October 2017

This report will be considered in public

1. Summary

1.1 This report presents the External Auditor’s Greater London Authority (GLA) Group Audit Results Report for the financial year ending 31 March 2017 to the Panel (Appendix 1).

2. Recommendation

2.1 That the Panel notes the contents of the External Auditor’s GLA Group Audit Results Report 2016/17.

3. Background

3.1 Each year the Authority’s external auditor, presently EY, presents its annual audit results report to the Panel for its consideration.

4. Issues arising

4.1 EY, at the time of issuing the report, had substantially completed its audit of the financial statements of the GLA Group for 2016/17. The final conclusion EY expected to issue, is in Section 3 of its report and includes the following opinions on the Authority and Group’s financial statements: In our opinion the financial statements:  give a true and fair view of the financial position of the Greater London Authority and Group as at 31 March 2017 and of its expenditure and income for the year then ended; and  have been prepared properly in accordance with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.

City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 119

In our opinion, the information given in the Statement of Accounts 2016/17 for the financial year for which the financial statements are prepared is consistent with the financial statements.

The value for money conclusion is: …we are satisfied that, in all significant respects, the Greater London Authority put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2017.

4.2 The outstanding matters that needed to be completed before the final audit opinion could be issued, noted in the report at Appendix C, have now been completed and the opinion and audit completion certificate were issued on 14 September 2017.

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.

List of appendices to this report: Appendix 1- External Auditor’s Greater London Authority Group Audit Results Report 2016/17

Local Government (Access to Information) Act 1985 List of Background Papers: None

Contact Officer: Tom Middleton, Head of Finance and Governance Telephone: 020 7983 4257 E-mail: [email protected]

Page 120 Appendix 1

Greater London Authority Group Audit results report

Year ended 31 March 2017 Page 121 Page Private and Confidential September 2017

Dear Mayor We have substantially completed our audit of the Greater London Authority Group (the Authority and Group) for the year ended 31 March 2017. Subject to concluding the outstanding matters listed in our report, we confirm that we expect to issue an unqualified audit opinion on the financial statements in the form in Section 3 before the statutory deadline of 30 September 2017. We also have no matters to report on your arrangements to secure economy, efficiency and effectiveness in your use of resources.

This report is intended solely for the use of the Mayor, Directors of Greater London Authority Holdings and GLA Land and Property, the Audit Panel, other members of the Authority, and senior management. It should not be used for any other purpose or given to any other party without obtaining our written consent.

Page 122 Page We would like to thank your staff for their help during the engagement. We look forward to discussing with you any aspects of this report or any other issues arising from our work.

Yours faithfully

Karl Havers

Partner For and on behalf of Ernst & Young LLP United Kingdom ContentsContents

Executive Areas of 03 Audit Audit 01Summary 02 Audit Focus Report 04 Differences Page 123 Page

Value for Other Assessment Appendices 05 Money 06 Reporting 07 of Control 08 Issues Environment

In April 2015 Public Sector Audit Appointments Ltd (PSAA) issued “Statement of responsibilities of auditors and audited bodies”. It is available from the via the PSAA website (www.PSAA.co.uk). The Statement of responsibilities serves as the formal terms of engagement between 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 “Terms of Appointment (updated February 2017)” issued by the PSAA sets out additional requirements that auditors must comply with, over and above those set out in the National Audit Office Code of Audit Practice (the Code) and in legislation, and covers matters of practice and procedure which are of a recurring nature.. This report is made solely to the Mayor, Directors of Greater London Authority Holdings and GLA Land and Property, the Audit Panel, other members of the Authority, and senior management in accordance with the statement of responsibilities and our engagement letter dated 1 March 2017. Our work has been undertaken so that we might state to the Audit Committee, other members of the Authority and management of Greater London Authority those matters we are required to state to them in this report and for no other purpose. To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the Mayor and Directors, other members of the Authority and management of Greater London Authority for this report or for the opinions we have formed. It should not be provided to any third-party without obtaining our written consent. Page 124 Page

01 Executive Summary Executive Summary

Scope and materiality Overview of the audit In our Audit Plan presented to the 28 March 2017 Audit Panel, we gave an overview of how we intended to carry out our responsibilities as your auditor. We carried out our audit in accordance with this plan, with the following changes:

• In our Audit Plan we stated that we intended to place reliance on both IT and manual controls for accounts payable and accounts receivable processes. As part of our interim procedures, we assessed whether it would be more efficient to instead continue with a fully substantive approach. We determined that a fully substantive approach would be more efficient. We did, however, use our IT team to audit the IT controls at Transport for London (who host some of the Greater London Authority’s IT systems). • During the course of our audit changes were made to the design of the Cultural and Education District and to the business plan for E20 Stadium LLP, which reduced expected future receipts. Both the Cultural and Education District and E20 Stadium LLP are funded in part by the London Legacy Development Corporation, which in turn receives funding from the Greater London Authority. We therefore considered

Page 125 Page the recoverability of loans made to the London Legacy Development Corporation in light of the reduced anticipated receipts from these two areas. Our findings are reported in section 2. • Our Audit Plan included a risk concerning the impact of the valuation of the London Stadium in the group financial statements. We also noted in the Plan that E20 Stadium LLP would need to consider the profitability of its contracts. Following the completion of the transformation of the Stadium, the value of the Stadium has been impaired to nil based on the onerous nature of the contracts associated with it. The risk identified in our Plan is therefore now limited to the valuation of the onerous contract provision, which has a material impact on the GLA group accounts through the consolidation of London Legacy Development Corporation Group.

We planned our procedures using a materiality of £30.8 million for the Greater London Authority Group. We reassessed this using the actual year-end figures and as a result our materiality has increased to £32.1 million. The threshold for reporting audit differences has increased from £1.4 million to £1.6 million. The basis of our assessment of materiality has remained consistent with prior years at 1% of gross expenditure. We also identified areas where misstatement at a lower level than materiality might influence the reader and developed a specific audit strategy for them. They include: • Remuneration disclosures including any severance payments, exit packages and termination benefits: We tested remuneration disclosures back to payslips. We agreed exit packages to supporting evidence, including termination agreements where relevant. • Related party transactions: We have audited declarations of interest forms and checked for transactions with known related parties. We have also tested completeness of these declarations using Companies House and our knowledge of the Authority and Companies.

5 Executive Summary

Executive summary (continued)

Status of the audit

We have substantially completed our audit of Greater London Authority (GLA) Group‘s financial statements for the year ended 31 March 2017 and have performed the procedures outlined in our Audit Plan. Further information on this is included in section 2. Subject to satisfactory completion of the following outstanding items we expect to issue unqualified opinions on the Authority, Greater London Authority Holdings (GLAH), and GLA Land and Property (GLAP) financial statements. However until work is complete, further amendments may arise:

• Receipt and review of the signed financial statements and management representation letter • Completion of procedures required by the National Audit Office (NAO) regarding the Whole of Government Accounts submission Page 126 Page

We expect to issue the audit certificate at the same time as the audit opinion. The draft opinion for GLA Group is at section 3.

Areas of audit focus

Our Audit Plan identified key areas of focus for our audit of Greater London Authority Group financial statements. This report sets out our observations and conclusions, including our views on areas which might be conservative, and where there is potential risk and exposure. They include: the most significant of which is the recoverability of the loan to London Legacy Development Corporation, for which no impairment is currently recognised in the financial · LLDC and E20 funding issues, including recoverability of loans to LLDC statements. We summarise our consideration of these matters, and any others identified, in the "Key Audit Issues" section of this report. · Pension valuations · Property valuations · The valuation of the impact of onerous contracts within E20 Stadium LLP (£200 million) · Business rates appeal provision · GLA group boundary assessment and the treatment of E20 Stadium LLP as a joint venture of London Legacy Development Corporation

We summarise our consideration of these matters, and any others identified, in section 2 of this report ‘Areas of Audit Focus’ on pages 11 to 18.

6 Executive Summary Executive summary (continued)

Areas of audit focus (cont.)

There are some significant issues and judgements in relation to these key areas of focus. We therefore ask you to review these and any other matters in this report to ensure:

• There are no other considerations or matters that could have an impact on these issues • You agree with the resolution of the issues • There are no other significant issues to be considered.

There are no matters, apart from those reported by management or disclosed in this report, which we believe should be brought to the attention of the Mayor. Page 127 Page

Audit differences

We identified one audit difference in the draft GLA financial statements which management has chosen not to adjust, relating to the over accrual of income.

We agree with management’s assessment that the impact is not material. We ask that it be corrected or a rationale as to why they are not corrected be approved by the Mayor and included in the Letter of Representations.

To date there have been no material corrected audit differences to the GLA Group financial statements.

Further detail can be found in Section 4 Audit Differences.

7 Executive Summary Executive summary (continued)

Value for money

We have considered your arrangements to take informed decisions; deploy resources in a sustainable manner; and work with partners and other third parties. In our Audit Plan we identified one significant risk which concerned governance of the London Legacy Development Corporation’s (the Corporation) key projects.

During the year, we have revisited our risk assessment to take into account developments during the period of the audit. As a result, we have expanded this risk to consider the funding of the Corporation’s financial obligations in relation to the operation of the London Stadium, and the level of uncertainty regarding the range of future funding the Corporation needs to provide for the operation of the Stadium. We note that the Mayor of London has announced an investigation into the finances of the Stadium, which at the time of this report, is still ongoing. We have considered the GLA’s role in overseeing the Corporation’s response to this risk and to securing financial sustainability.

Page 128 Page Our findings are detailed in section 5.

We have concluded our assessment of your arrangements and have no matters to report about your arrangements to secure economy efficiency and effectiveness in your use of resources.

Other reporting issues

We have audited the information presented in the Annual Governance Statement for consistency with our knowledge of the Greater London Authority. We have no matters to report as a result of this work.

We are in the process of completing the procedures required by the National Audit Office (NAO) on the Whole of Government Accounts submission. To date we have no issues to report.

We have no other matters to report.

8 Executive Summary Executive summary (continued)

Control observations

We have not identified any significant deficiencies in the design or operation of an internal control that might result in a material misstatement in your financial statements and which is unknown to you.

Some of the GLA’s IT systems are hosted by Transport for London (TFL). Our audit of IT controls at TFL identified a number of access and control points which apply equally to Greater London Authority but are not considered to be significant deficiencies. We have communicated these to management for information.

Independence Page 129 Page Please refer to Appendix B for our update on Independence. There are no issues to bring to your attention.

9 Page 130 Page

02 Areas of Audit Focus Areas of Audit Focus Audit issues and approach: LLDC and E20 funding issues

Consequences of Matters arising since the issue of our Audit Plan related to LLDC and E20 funding LLDC and E20 Funding issues Capital loans to third parties This was identified as an area of focus after the issue of our Audit Plan. We audited the Authority’s assessment of the recoverability of their capital loans to third parties (£649 million), particularly for London Legacy Development Corporation (LLDC) in the light of changes to anticipated future receipts relating to the Cultural and Education District and E20 Stadium LLP. The loan is anticipated to be recovered through capital receipts. The Authority’s assessment of recoverability has taken into consideration the latest long-term forecast produced by LLDC. Based on current forecasts, which take into account the changes noted above, the existing borrowing remains recoverable. There are, however, factors which could alter the LLDCs anticipated capital receipts. These include:

Page 131 Page · E20 Stadium LLPs financial position and the impact on future support required · Increased and accelerated provision of affordable housing in LLDC’s residential schemes · The design of the Cultural and Education District · Corporation tax The GLA and LLDC are both required to comply with the Prudential Code which specifies that borrowing must be affordable, prudent and sustainable. They are modelling various options to ensure that future capital plans result in sufficient receipts to repay the loan.

Funding Requirements As noted above, LLDC’s future commitments in relation to the ongoing operation of the Stadium are uncertain. LLDC is party to two of the LLP’s key contracts. As a result of uncertainties in the arrangements between the Members of E20 in relation to future funding, as well as historic contractual arrangements which occurred before the current accounting period, there is a potential gap in LLDC’s future funding to ensure it will be able to meet its commitments. It is not yet possible to fully quantify this gap and therefore any resulting impact on GLA funding of LLDC. As the ultimate funder of LLDC, the Greater London Authority is exposed to the financial risks arising from the Stadium and to some extent E20 LLP, as well as any funding shortfalls arising from changes to LLDC’s residential schemes. Additionally, the GLA is a funder to the Cultural Education District, the scope of which has not yet been finalised.

This is important context for the consideration of the level of reserves held by the Authority and we have therefore asked that further disclosure of this is included in the Narrative Statement.

Relationship of E20 to the rest of the Group Since its creation, E20 Stadium LLP has been considered to be a joint venture of LLDC. The Authority has considered whether or not the funding, risks and rewards would indicate that it now represents a subsidiary of the Greater London Authority. It has concluded that during 2016/17, it did not indirectly or directly direct the activities of the LLP. We have agreed with this judgement, however, the Authority will need to make this assessment again for 2017/18 in light of the changing circumstances of the LLP. Areas of Audit Focus

Audit issues and approach: Revenue and expenditure recognition

Fraud in revenue and What is the risk? What did we do? expenditure recognition Risk of fraud in revenue and expenditure recognition To address this risk we considered the nature of income and Under ISA240 there is a presumed risk that revenue expenditure recognised by Greater London Authority Group. may be misstated due to improper recognition of revenue. In this public sector this requirement is For Greater London Authority single entity, we assessed the level modified by Practice Note 10, issued by the Financial of risk against each significant income and expenditure stream. Reporting council, which states that auditors should GLA capital expenditure is immaterial, and therefore there is no also consider the risk that material misstatements may material risk that this is over-stated. GLA income comes from What are our conclusions? occur by manipulating expenditure recognition. grants, taxation and interest receipts. Each of these sources are

Page 132 Page easily predicted and verified, and therefore we rebutted the risk of Our testing has not identified any inappropriate recognition in these streams. material misstatements from revenue and expenditure recognition. We noted that for London Legacy Development Corporation (LLDC), a significant component of the group, there would be an incentive to treat capital expenditure as revenue expenditure due to the nature of GLA funding arrangements which requires LLDC to repay capital loans. We placed reliance on the audit work performed at LLDC which found no material issues either in the classification of revenue expenditure or the recognition of its Significant Risk significant income streams.

The significant income streams in GLAP are: • Income from property disposals • Rental and other property income from investment properties • Overage • Contributions from developers

We applied a higher level of testing to these income streams and also tested cut-off. We identified no material issues. Areas of Audit Focus Audit issues and approach: Management override

Management override of What is the risk? What did we do?

controls Risk of management override of controls Our testing of journal entries has not identified adjustments which As identified in ISA 240, management is in a unique were outside of the normal course of business. All journals tested position to perpetrate fraud because of its ability to have an appropriate business rationale. manipulate accounting records directly or indirectly and to prepare fraudulent financial statements by overriding The most significant accounting estimates in the financial controls that otherwise seem to be operating effectively. statements relate to the net pension liability, property valuations We identify and respond to this fraud risk on every audit and the business rates appeal provision. We have undertaken the What are our conclusions? engagement. following procedures in relation to these areas:

Based on the work we have completed Page 133 Page • We audited the method of determining the appeals provision, to date, we have not identified any and ensured that there was a justification for significant material weaknesses in controls or movements through liaison with London Borough external evidence of material management auditors. override. • We assessed the independence and competence of We have not identified any instances of management’s experts in relation to property valuations and the inappropriate judgements being determination of the pension liability. We concluded that applied. experts were appropriately qualified and sufficiently We did not identify any other independent from the Authority. transactions during our audit which Significant Risk appeared unusual or outside the Our work on the appeals provision is still in progress, and cannot be Group’s normal courses of business. completed until we have received the outstanding information from the auditors of a number of London boroughs. However, our work to date has found no indication of management bias in these estimates. Areas of Audit Focus Audit issues and approach: Pension valuations

Pension valuations What is the risk? What did we do? Risk of error in Pension Valuations We liaised with the auditors of the London Pensions Fund Authority, The Authority’s current pension fund deficit is a highly the LGPS administering authority, to obtain assurances over the material and sensitive item. Small changes in information supplied to the actuary in relation to the Greater London assumptions when valuing these assets can have a Authority. They reported to us that no exceptions were noted in material impact on the financial statements. The Code their testing concerning the accuracy and completeness of data requires the Authority to disclose this liability on the supplied to the actuary (Barnet Waddingham). Authority’s Balance Sheet. We performed procedures which enabled us to place reliance on What are our conclusions? The information disclosed is based on the IAS 19 report issued by the actuaries to the administering body; the Barnet Waddingham as management’s expert which included

Page 134 Page assessing their independence and objectivity, understanding their The assumptions employed by the London Pensions Fund Authority. methods and assessing their methods with the support of our own actuary are overall within an specialists. acceptable range. For Barnet Waddingham, discount rates and RPI inflation The methodologies used to derive the Significant Risk assumptions fall outside the range expected by our experts. We discount rate and RPI inflation have concluded that the RPI assumption of 3.6% per annum is assumptions should be revisited in slightly prudent. However, since the impact of the discount rate future years to avoid the potential for assumption has the opposite effect, we are satisfied that the material misstatement in the value of overall basis is appropriate. the pension liability. We also noted that the methodologies used to derive the discount rate and RPI inflation assumptions do not take adequate account of the specific duration of the scheme’s liabilities. In future years, this could lead to unacceptable assumptions. We have performed sufficient work to conclude that this does not present a material issue for 2016/17. The Authority will need to consider the impact of this approach on their liability in future years to satisfy themselves that the net pension liability is not materially misstated.

We tested the accounting entries made within the Authority's financial statements in relation to IAS 19 and noted no issues. Areas of Audit Focus Audit issues and approach: Property valuations within LLDC and GLAP

Property valuations What is the risk? What did we do?

We have assessed the Group property balance and focused our Risk of error in Property valuations testing on the elements which we have determined carry the most The GLA Group Balance Sheet contains property assets risk of material error. which are highly material in nature. In addition, the unique and material nature of LLDC’s Olympic Park non-current The valuation of the Queen Elizabeth Olympic Park is significant to assets and the basis on which they are valued, mean that the balance and reduced significantly this year. We have engaged small changes in assumptions when valuing these assets can our internal expert to assess the appropriateness of the What are our conclusions? have a material impact on the financial statements. methodology applied by the valuer. Our valuation expert has concluded that the methodology applied is reasonable. Our work has found that the Authority A similar issue arises in relation to GLAP’s property assets, Page 135 Page which are classified as property plant and equipment, has appropriately reflected the The valuation of Crystal Palace National Sports Centre is material investment assets or inventory. The classification impacts findings of the valuer in their financial to GLAP although not to the GLA Group. We have considered the directly on the appropriate valuation basis. statements and we are able to rely on reasonableness of the valuation, noting that it has not moved the valuers as management experts. materially from the prior year. We have also considered the appropriateness of the valuation basis and concluded that the Depreciated Replacement Cost method is appropriate.

Another significant movement was in the value of Investment Significant Risk Property in GLAP – we have understood the reason behind the movement to ensure that it is appropriate.

We have confirmed that the valuers are members of RICS and registered valuers.

We assessed the instructions provided to the valuer against the requirements of the Code of Accounting Practice for Local Government and IAS 16 and have not identified any issues.

We have confirmed that the information provided by the valuer as the management’s expert has been appropriately reflected in the financial statements. Areas of Audit Focus Audit issues and approach: E20 Stadium LLP onerous contracts

E20 Stadium LLP What is the risk? What did we do? onerous contracts Risk of error in E20 Stadium LLP E20 Stadium LLP management has recognised the Stadium at a nil carrying value and used the valuation of the Stadium to determine the value of the onerous E20 Stadium LLP is a limited liability contract provision. The valuation is undertaken by independent valuers, based on partnership between the London Legacy a 10 year forecast, extrapolated, which has been produced by E20 Stadium LLP Development Corporation (LLDC) and the management. This has resulted in a provision of £200 million, based on an NPV London Borough of Newham’s subsidiary calculation of the current Business Plan 10 year cash flow, with a reversion to a steady state annual deficit of approximately £14 million. The discount rate used What are our conclusions? Newham Legacy Investment (NLI). is 3.5%.

Page 136 Page The objective of the LLP was to transform We have concluded that the basis of The valuation and provision assume that E20 is a going concern, and that it will and then operate the Olympic Stadium. continue to receive funding from its joint venture partners. (NLI and LLDC). the estimated onerous contract During 2016/17 the transformation We have undertaken the following procedures: provision is appropriate and that the works have been completed and the value is within a reasonable range. business of the LLP is now operation. • Assessing the decision to use the valuation of the stadium as a proxy for The 2015/16 business plan showed an the value of the onerous contract provision. The Authority has agreed to enhance average profit across 10 years of • Assessing the possible upsides and downsides in this forecast, as well as their disclosure concerning the approximately £600,000. During the known changes that have occurred since the forecast was produced. estimation uncertainty that is inherent 2016/17, assumptions were revised • Auditing the sensitivity analysis performed by E20 Stadium LLP in the consolidated loss in E20 Stadium based on known changes, including; the management on the valuation. LLP as a result of the judgements cost of transitioning the stadium from We note that the provision is highly dependant on future actions and business made concerning this calculation. football to athletics mode; lifecycle plans. It could therefore vary significantly from the amounts currently used. replacement costs, anticipated income However we believe the onerous contract provision is a reasonable estimate of We will continue to assess the from sponsorship; other income from the future losses without substantial changes to the business plan. Any substantial appropriateness of the accounting venue. changes to the plan would require contractual renegotiation. Our assessment has treatment and disclosure up to the Alongside this revision, E20 Stadium LLP assumed no substantial changes to the plan. date of approval of the accounts. management reviewed the profitability of We have used updated assumptions supported by a business review commissioned its ongoing contracts in line with IAS 37 by the LLP to assess the level of estimation uncertainty in the context of our and determined that a provision was materiality level and the context of the estimate itself. The range identified is required to recognise the ongoing cost £166 million to £228 million. We have concluded that the estimate is reasonable, that the contracts represent to the as the extremes of those assumptions are less likely to occur. organisation. We will also remain alert to changes in circumstances which could significantly alter this estimate up to the date of approval of the accounts and ensure any significant changes are appropriately disclosed. Significant Risk Areas of Audit Focus Audit issues and approach: Localisation of business rates and rating appeals

What did we do? Localisation of business What is the risk? rates and rating appeals We have obtained the underlying information the Authority has used to calculate its share of the appeals provision, namely returns Risk of error localisation of business rates and rating produced by the London Boroughs. Based on our work we are satisfied appeals that the GLA share has been calculated accurately and disclosed appropriately. Significant changes in the arrangements for the The GLA provision of £176 million (15/16: £186 million) in note 41 is distribution of business rates were made by the not analysed between new provisions made in year, and the release of

Page 137 Page Government in April 2013 following the introduction unused provisions. Appropriate narrative disclosure has been What are our conclusions? of the 50% local rates retention scheme. In 2016/17 included to reflect the fact that the provision movement has been the GLA received 20% of all business rates income in disclosed net as there has not been a consistent apportionment of Our work in this area is ongoing. London and also records the same share of these numbers reported by the London Boroughs. Based on the work completed to date, we provisions and debtors and creditors on its balance We have identified the London Boroughs that form the bulk of the are satisfied that the Greater London sheet. Its share will increase to 37% from 1 April provision and undertaken further procedures in relation to these Authority provision accurately reflects its 2017. Authorities; liaising with their auditors to understand the procedures share of the London Boroughs’ provisions As a result there was a requirement for individual undertaken and assurance gained. as reflected in their returns to the authorities to make provision for potential refunds to We have made inquiries of these auditors to understand the Secretary of State. ratepayers arising from successful appeals against methodology employed by each entity, and the reason for significant We have liaised with auditors of the their property valuations. The significance of this movements. The most significant movements in relation to the GLA’s London Boroughs which contribute to the for GLA was reflected in the provision in 2015/16 of 20% share and their explanations are: bulk of the GLA’s provision to assess the £186 million – reflecting its share of the total £930 · Westminster - £29 million decrease – due to a net reduction in robustness of these calculations. We are million provision determined by London billing the number of appeals unresolved compared to 2015/16. currently awaiting some responses and authorities. · City of London Corporation - £23 million increase – due to a will audit them when they have been significant increase in the number of appeals unresolved received. Appeals are made to the Valuation Office (VOA), and compared to 2015/16. The Authority has made inquiries of a authorities are required to make judgements on the · Southwark - £4 million increase primarily due to the ongoing likelihood of appeals being successful and the sample of London Boroughs with the most uncertainty arising from the impact of a Supreme Court ruling financial impact of those appeals. Authorities may material provisions in order to support affecting the rating treatment of ratepayers occupying therefore find it difficult to obtain sufficient their assessment of the adequacy of the multiple floors in a building. provision. Their assessment is incomplete information to establish a reliable estimate as they · We have audited the detailed accounting transactions and concluded as they are awaiting one response. are ultimately subject to the decisions and actions of third parties. that the disclosures in the Authority’s accounts are compliant with the Significant Risk CIPFA Code of practice. Areas of Audit Focus

Audit issues and approach: Other Risks

Other risks Other Risks Identified in the Audit Plan

We identified two further areas of focus in our Audit Plan, and have subsequently identified a third as noted below:

Assessment of GLA Group Boundary The role of the Authority, along with its structure and working relationships, has continued to evolve over time. During 2016/17, the Policing and Crime Act received royal assent. Under this Act, the Government will bring fire and rescue services in London under the direct responsibility of the Mayor of London by abolishing the London Fire and Emergency Planning Authority (LFEPA) and creating the London Fire Page 138 Page Commissioner as a corporation sole. The timing of the transfer of governance arrangements when we completed our planning procedures was expected to be 1 October 2017. However the timetable has been revised and this is now expected to be 1 April 2018, subject to the passing of secondary legislation. It is important that the GLA continues to revisit on an annual basis its assessment of the group boundary. The assessment will need to consider all entities both within the GLA family and beyond under IFRS 10: Consolidated Financial Statements and IFRS 11: Joint Arrangements.

We have undertaken appropriate audit procedures in relation to this area of focus and not identified any issues. We have no matters to report.

Presentation of expenditure and funding analysis statement and restatement of CIES and MiRS New CIPFA reporting requirements impact the Comprehensive Income and Expenditure Statement (CIES) and Movement in Reserves Statement (MiRS), and include the introduction of the new ‘Expenditure and Funding Analysis’ note as a result of the ‘Telling the Story’ review of the presentation of local authority financial statements.

As a result of these changes, the service analysis is based on the organisational structure under which the Authority operates and shows the Authority’s segmental analysis.

Our procedures have identified required amendments to the presentation of the CIES and EFA and the addition of a restated disclosure note. Management have agreed to make these amendments. Page 139 Page

03 Audit Report Audit Report

Draft audit report

Below is the draft opinion for the GLA Group. We will also anticipate issuing unqualified opinions for GLA Land and Property and Greater London Authority Holdings.

Our opinion on the financial statements

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE GREATER LONDON AUTHORITY

Opinion on the Authority’s financial statements

We have audited the financial statements of the Greater London Authority for the year ended 31 March 2017 under the Local Audit and Accountability Act 2014. The financial statements comprise the:

Page 140 Page · Authority and Group Comprehensive Income and Expenditure Statement, · Authority and Group Movement in Reserves Statement, · Authority and Group Balance Sheet, · Authority and Group Cash Flow Statement; · related notes 1 to 55, · Fund Account, · Business Rates Supplement Revenue Account; and · related note 56

The financial reporting framework that has been applied in their preparation is applicable law and the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.

This report is made solely to the members of the Greater London Authority, as a body, in accordance with Part 5 of the Local Audit and Accountability Act 2014 and for no other purpose, as set out in paragraph 43 of the Statement of Responsibilities of Auditors and Audited Bodies published by Public Sector Audit Appointments Limited. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Authority and the Authority’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Executive Director of Resources and auditor

As explained more fully in the Statement of the Executive Director of Resources’ Responsibilities set out on page 11, the Executive Director of Resources is responsible for the preparation of the Statement of Accounts, which includes the financial statements, in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17, and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

20 Audit Report Draft audit report (continued)

Our opinion on the financial statements

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Authority and Group’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Executive Director of Resources; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Statement of Accounts 2016/17 to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Page 141 Page Opinion on financial statements In our opinion the financial statements: · give a true and fair view of the financial position of the Greater London Authority and Group as at 31 March 2017 and of its expenditure and income for the year then ended; and · have been prepared properly in accordance with the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.

Opinion on other matters

In our opinion, the information given in the Statement of Accounts 2016/17 for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we report by exception We report to you if: · in our opinion the annual governance statement is misleading or inconsistent with other information forthcoming from the audit or our knowledge of the Authority; · we issue a report in the public interest under section 24 of the Local Audit and Accountability Act 2014; · we make written recommendations to the audited body under Section 24 of the Local Audit and Accountability Act 2014; · we make an application to the court for a declaration that an item of account is contrary to law under Section 28 of the Local Audit and Accountability Act we make an application to the court for a declaration that an item of account is contrary to law under Section 28 of the Local Audit and Accountability Act 2014; · we issue an advisory notice under Section 29 of the Local Audit and Accountability Act 2014; or · we make an application for judicial review under Section 31 of the Local Audit and Accountability Act 2014. We have nothing to report in these respects.

21 Audit Report

Our opinion on the financial statements

Conclusion on the Greater London Authority’s arrangements for securing economy, efficiency and effectiveness in the use of resources

Authority’s responsibilities The Authority is responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance, and to review regularly the adequacy and effectiveness of these arrangements.

Auditor’s responsibilities

Page 142 Page We are required under Section 20(1)(c) of the Local Audit and Accountability Act 2014 to satisfy ourselves that the Authority has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the National Audit Office (NAO) requires us to report to you our conclusion relating to proper arrangements.

We report if significant matters have come to our attention which prevent us from concluding that the Authority has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources. We are not required to consider, nor have we considered, whether all aspects of the Authority’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

Scope of the review of arrangements for securing economy, efficiency and effectiveness in the use of resources We have undertaken our review in accordance with the Code of Audit Practice, having regard to the guidance on the specified criterion issued by the Comptroller and Auditor General (C&AG) in November 2016, as to whether the Greater London Authority had proper arrangements to ensure it took properly informed decisions and deployed resources to achieve planned and sustainable outcomes for taxpayers and local people. The Comptroller and Auditor General determined this criterion as that necessary for us to consider under the Code of Audit Practice in satisfying ourselves whether the Greater London Authority put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2017.

We planned our work in accordance with the Code of Audit Practice. Based on our risk assessment, we undertook such work as we considered necessary to form a view on whether, in all significant respects, the Greater London Authority had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

22 Audit Report

Our opinion on the financial statements

Conclusion

On the basis of our work, having regard to the guidance issued by the C&AG in November 2016, we are satisfied that, in all significant respects, the Greater London Authority put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2017. Certificate

We certify that we have completed the audit of the accounts of the Greater London Authority in accordance with the requirements of the Local Audit and Accountability Act 2014 and the Code of Audit Practice issued by the National Audit Office. Page 143 Page

Karl Havers (senior statutory auditor) for and on behalf of Ernst & Young LLP, Appointed Auditor London TBC

23 Page 144 Page

04 Audit Differences Audit Differences Audit differences

In any audit, we may identify misstatements between amounts we believe should be recorded in the financial statements and disclosures and amounts actually recorded. These differences are classified as ‘known’ or ‘judgemental’. Known differences represent items that can be accurately quantified and relate to a definite set of facts or circumstances. Judgemental differences generally involve estimation and relate to facts or circumstances that are uncertain or open to interpretation.

Summary of adjusted and unadjusted differences

We communicate to you corrected misstatements which we consider to be significant. For Greater London Authority there are no adjusted audit differences which we consider to be significant either individually or in aggregate. Disclosure amendments have been required to the Narrative Statement and the presentation of the Comprehensive Income and Expenditure Statement and Expenditure and Funding Analysis. Page 145 Page

We highlight the following misstatement in the financial statements which were not corrected by management. We ask you to correct this uncorrected misstatement or give a rationale as to why it has not been corrected. This should be considered and approved by the Mayor and included in the Letter of Representation:

Account Comprehensive income and Balance sheet 31st March 2017 expenditure statement (Decrease)/Increase (£’000) (Increase)/Decrease (£’000)

Greater London Authority and Group: Projected misstatement due to the incorrect recognition of income relating to 2017/18 in 2016/17; income of £5,500 was accrued but the service was not delivered until July 2017. This results in a projected misstatement of £2.3 million: 2,305 (2,305) Dr Gross Income Cr Sundry Debtors

25 Page 146 Page

05 Value for Money Value for Money Value for Money

Economy, efficiency and effectiveness Informed decision making We must consider whether you have ‘proper arrangements’ to secure economy, efficiency and effectiveness in your use of resources. This is known as our value for money conclusion.

Proper arrangements are defined by statutory guidance issued by the National Audit Office. They comprise your arrangements to: • take informed decisions; • deploy resources in a sustainable manner; and Proper arrangements for securing value for money • work with partners and other third parties. Page 147 Page In considering your proper arrangements, we use the CIPFA/SOLACE framework for local government to Sustainable Working with ensure that our assessment is made against an already existing mandatory framework which you use in resource partners and deployment third parties documents such as your Annual Governance Statement.

Overall conclusion

We identified one significant risks around these arrangements. The tables below present our findings in response to the risk in our Audit Plan. We therefore expect having no matters to report about your arrangements to secure economy, efficiency and effectiveness in your use of resources.

27 Value for Money VFM risks

We are only required to determine whether there is any risk that we consider significant within the Code of Audit Practice, where risk is defined as: “A matter is significant if, in the auditor’s professional view, it is reasonable to conclude that the matter would be of interest to the audited body or the wider public” Our risk assessment supports the planning of enough work to deliver a safe conclusion on your arrangements to secure value for money, and enables us to determine the nature and extent of any further work needed. If we do not identify a significant risk we do not need to carry out further work. The table below presents the findings of our work in response to the risks areas in our Audit Plan.

What is the significant VFM risk? What arrangements did this What are our findings? affect?

Governance of the London Legacy Development • Take informed decisions Our approach has focused on seeing how the Authority is holding Corporation (the Corporation)’s key projects • Deploy resources in a sustainable the Corporation to account at Board and officer level, on their key manner projects.

Page 148 Page The Cultural and Education District (CED) Project is by • Work with partners and other third far the most significant project which the Corporation During the course of our audit, changes were made to the design of parties has undertaken. Its main objective is the continued the Cultural and Education District and to the business plan for E20 development of the Olympic Park and the securing of Stadium LLP. This has meant that original forecasts concerning the Olympic legacy. The project has a highly the income generated by these projects have been revised significant funding requirement and the GLA are downwards, and the funding requirements have therefore providing funding directly to the Corporation in increased. relation to this. The GLA has remained an engaged partner in the CED project, with Although the majority of total funding is being representation on the CED Board, which provides strategic provided by third parties, including the Government, direction and oversight of the project. a specific charitable fund and a number of The GLA have also engaged with the Corporation’s management educational and cultural bodies involved in the regularly to understand the developments during the year. We are project, the GLA are required to underwrite the cost therefore satisfied that the GLA’s arrangements to date have been of the project. As a result, the GLA is exposed to any appropriate. It is critical that this liaison continues during shortfalls in the funding being provided by third 2017/18, when the CED masterplan is expected to be finalised. parties in the medium to long term. The commencement of stadium operations, along with other Similarly, London Legacy Development Corporation developments during the year, have made it clear that the LLP’s provides funding to E20 Stadium LLP. The LLP contractual expenditure exceeds contractual income. E20 LLP is commenced operations during 2016/17. Any losses therefore reliant on the Members (NLI and the Corporation) for funding incurred by the LLP will be financed by the to continue operations. During 2016/17, the GLA have liaised with the Corporation and NLI in line with their membership Corporation on the future plans of the partnership and the extent of agreement. support required in order for the GLA and the Corporation to achieve their strategic objectives for the London Stadium. 28 Value for Money

Other matters to bring to your attention

We noted the following issues as part of our audit

What are our findings?

The value for money opinion considers arrangements in place between 1st April 2016 and 31st March 2017. We are required to consider whether or not circumstances following this period indicate failings in arrangements made during the period in question:

“While auditors do not need to gather evidence of outcomes in order to conclude on the adequacy of arrangements in place, they should take account of evidence drawn

from 149 Page outcomes where it comes to their attention, and especially where outcomes suggest that there may be significant weaknesses in those arrangements.”

In early 2017/18, London Legacy Development Corporation’s commitments in relation to the ongoing operation of the Stadium are uncertain. The Corporation is party to two of the LLP’s key contracts. As the ultimate funder of the Corporation, the Greater London Authority is exposed to the financial risks arising from the Stadium and E20 LLP.

We have considered whether not this represents a failing in arrangements in year: ► The contractual arrangements giving rise to an annual deficit at the LLP were the product of a previous tender process which resulted in a fair contract award. ► The increase in costs to transition the Stadium between football and athletics mode was due to the design of the seating rather than a management decision during the year. ► Revenue assumed in the 2015/16 business plan relating to sponsorship was not realised, which was previously unforeseen. ► The worsening financial position has triggered discussion between the Members in relation to future funding, which are allowable under the Members’ Agreement. ► The Greater London Authority has exercised oversight and challenge throughout the transformation process.

Therefore the potential gap in the Corporation’s funding to ensure it will have sufficient funding to meet its commitments in all eventualities has been triggered by agreements between the Members of E20 in relation to future funding, as well as historic contractual arrangements which occurred outside of the period under review. We have concluded that this situation is not indicative of a lack of proper arrangements during 2016/17 either at the Corporation or a governance failure at the Greater London Authority, but that it is the product of historic contractual decisions.

It is imperative, however, that all parties concerned make decisions regarding the future of E20 LLP as soon as possible so that progress can be made and cost to the public purse minimised.

29 Page 150 Page

06 Other reporting issues Other reporting issues Other reporting issues

Consistency of other information published with the financial statements, including the Annual Governance Statement

We must give an opinion on the consistency of the financial and non-financial information in the Statement of Accounts 2016/17 with the audited financial statements

We must also review the Annual Governance Statement for completeness of disclosures, consistency with other information from our work, and whether it complies with relevant guidance.

We also review the Directors’ Report and the Strategic Report in Greater London Authority Holdings and GLA Land and Property.

Following some minor numerical amendments to the Narrative Report, financial information in Statement of Accounts 2016/17 and published with the financial Page 151 Page statements was consistent with the audited financial statements.

We have reviewed the Annual Governance Statement and can confirm it is consistent with other information from our audit of the financial statements and we have no other matters to report.

Whole of Government Accounts

Alongside our work on the financial statements, we also review and report to the National Audit Office on your Whole of Government Accounts return. The extent of our review, and the nature of our report, is specified by the National Audit Office. Our work is currently ongoing in this area. However, to date we have no issues to raise.

31 Other reporting issues Other reporting issues

Other powers and duties

We have a duty under the Local Audit and Accountability Act 2014 to consider whether to report on any matter that comes to our attention in the course of the audit, either for the Authority to consider it or to bring it to the attention of the public (i.e. “a report in the public interest”). We did not identify any issues which required us to issue a report in the public interest.

We also have a duty to make written recommendations to the Authority, copied to the Secretary of State, and take action in accordance with our responsibilities under the Local Audit and Accountability Act 2014. We did not identify any issues.

Page 152 Page Other matters

As required by ISA (UK&I) 260 and other ISAs specifying communication requirements, we must tell you significant findings from the audit and other matters if they are significant to your oversight of the [Authority]’s financial reporting process. They include the following:

• Significant qualitative aspects of accounting practices including accounting policies, accounting estimates and financial statement disclosures; • Any significant difficulties encountered during the audit; • Any significant matters arising from the audit that were discussed with management; • Written representations we have requested; • Expected modifications to the audit report; • Any other matters significant to overseeing the financial reporting process; • Related parties; • External confirmations; • Going concern; • Consideration of laws and regulations; and • Group audits

At the time of writing, some of the requested external confirmations are outstanding. We will consider whether or not alternative procedures are required. We have no other matters to report.

32 Page 153 Page

Assessment of Control 07 Environment Assessment of Control Environment Assessment of control environment

Financial controls

It is the responsibility of the Authority to develop and implement systems of internal financial control and to put in place proper arrangements to monitor their adequacy and effectiveness in practice. Our responsibility as your auditor is to consider whether the Authority has put adequate arrangements in place to satisfy itself that the systems of internal financial control are both adequate and effective in practice.

As part of our audit of the financial statements, we obtained an understanding of internal control sufficient to plan our audit and determine the nature, timing and extent of testing performed.

Although 154 Page our audit was not designed to express an opinion on the effectiveness of internal control we are required to communicate to you significant deficiencies in internal control.

We have not identified any significant deficiencies in the design or operation of an internal control that might result in a material misstatement in your financial statements of which you are not aware. Page 155 Page

08 Appendices Appendix A Required communications with the Mayor

There are certain communications that we must provide to those charged with governance of UK clients, which for Greater London Authority Group is the Mayor. We have done this by:

Our Reporting to you

Required communications What is reported? When and where

Terms of engagement Confirmation by the Authority of acceptance of terms of engagement as written in the The statement of responsibilities serves as engagement letter signed by both parties. the formal terms of engagement between the PSAA’s appointed auditors and audited bodies.

Planning 156 Page and audit approach Communication of the planned scope and timing of the audit, including any limitations. March 2017 Audit Plan

Significant findings from the • Our view of the significant qualitative aspects of accounting practices including September2017 audit accounting policies, accounting estimates and financial statement disclosures Audit Results Report • Any significant difficulties encountered during the audit • Any significant matters arising from the audit that were discussed with management • Written representations we have requested • Expected modifications to the audit report • Any other matters significant to overseeing the financial reporting process

Going concern Events or conditions identified that may cast significant doubt on the entity’s ability to No conditions or events were identified, continue as a going concern, including: either individually or together to raise any ► Whether the events or conditions constitute a material uncertainty doubt about the Greater London Authority, Greater London Authority Holdings or GLA ► Whether the use of the going concern assumption is appropriate in the preparation and presentation of the financial statements Land and Property’s ability to continue for the 12 months from the date of our report. ► The adequacy of related disclosures in the financial statements

Misstatements ► Uncorrected misstatements and their effect on our audit opinion September 2017 ► The effect of uncorrected misstatements related to prior periods Audit Results Report ► A request that any uncorrected misstatement be corrected ► Significant corrected misstatements, in writing

36 Appendix A

Our Reporting to you

Required communications What is reported? When and where

Fraud ► Asking the Authority whether they have knowledge of any actual, suspected or alleged We have asked management and those fraud affecting the Authority charged with governance about ► Unless all those charged with governance are involved in managing the entity, any fraud arrangements to prevent or detect fraud. identified or information obtained indicating that a fraud may exist involving: We have not become aware of any fraud or (a) management; illegal acts during our audit. (b) employees with significant roles in internal control; or (c) others where the fraud results in a material misstatement in the financial statements. ► A discussion of any other matters related to fraud, relevant to Authority responsibility.

Related parties Significant matters arising during the audit in connection with the Authority’s related parties We have no matters to report. including, where applicable: Page 157 Page ► Non-disclosure by management ► Inappropriate authorisation and approval of transactions ► Disagreement over disclosures ► Non-compliance with laws and/or regulations ► Difficulty in identifying the party that ultimately controls the entity

Subsequent events ► Where appropriate, asking the Authority whether any subsequent events have occurred Our procedures in this area are ongoing. that might affect the financial statements. We will ask management and those charged with governance. To date, we have no matters to report.

Other information ► Where material inconsistencies are identified in other information included in the We have no matters to report. document containing the financial statements, but management refuses to make the revision.

External confirmations ► Management’s refusal for us to request confirmations At the time of writing, we have received all ► We were unable to obtain relevant and reliable audit evidence from other procedures. requested confirmations]

Consideration of laws ► Audit findings of non-compliance where it is material and believed to be intentional. This We have asked management and those and/or regulations communication is subject to compliance with legislation on “tipping off” charged with governance. We have not ► Asking the Authority about possible instances of non-compliance with laws and/or identified any material instances or non- regulations that may have a material effect on the financial statements, and known to compliance with laws and regulations the Authority.

37 Appendix A

Our Reporting to you

Required communications What is reported? When and where

Significant deficiencies in ► Significant deficiencies in internal controls identified during the audit. September 2017 internal controls identified Audit Results Report during the audit October 2017 Annual Audit Letter

Group Audits ► An overview of the type of work to be performed on the financial information of the March 2017 components Audit plan ► An overview of the group audit team’s planned involvement in the component auditors’ Page 158 Page work on the financial information of significant components September 2017 ► Instances where the group audit team’s evaluation of a component auditor’s work of Audit Results Report gave rise to a concern about its quality Any limitations on the group audit, for example, where the group engagement team’s access to information may have been restricted ► Fraud or suspected fraud involving group or component management, employees with significant roles in group-wide controls, or others where the fraud resulted in a material misstatement of the group financial statements.

Independence Communication of all significant facts and matters that have a bearing on EY’s objectivity March 2017 and independence. Audit Plan Communicating key elements of the audit engagement partner’s consideration of independence and objectivity such as: September 2017 ► The principal threats Audit Results Report ► Safeguards adopted and their effectiveness ► An overall assessment of threats and safeguards ► Information on the firm’s general policies and processes for maintaining objectivity and independence Communications whenever significant judgments are made about threats to objectivity or independence and the appropriateness of safeguards,

38 Appendix A

Our Reporting to you

Required communications What is reported? When and where

Fee Reporting Breakdown of fee information when the audit plan is agreed March 2017 Breakdown of fee information at the completion of the audit Audit Plan Any non-audit work September 2017 Audit Results Report Page 159 Page

39 Appendix B Independence

As part of our reporting on our independence, we set out below a summary of the fees paid for the year ended 31 March 2017 We confirm that there are no changes in our assessment of independence since We confirm that we have undertaken non-audit work outside the PSAA Code our confirmation in our audit planning board report dated 1 March 2017. requirements. We have adopted the necessary safeguards in completing this We complied with the APB Ethical Standards and the requirements of the PSAA’s work and complied with Auditor Guidance Note 1 issued by the NAO in Terms of Appointment. In our professional judgement the firm is independent and December 2016. the objectivity of the audit engagement partner and audit staff has not been compromised within the meaning of regulatory and professional requirements. We consider that our independence in this context is a matter which you should Description Final Fee Planned Fee Scale Fee Final Fee review, as well as us. It is important that you consider the facts known to you and 2016/17 2016/17 2016/17 2015/16 Page 160 Page come to a view. If you would like to discuss any matters concerning our GLA Audit Fee – code 109,500 109,500 109,500 109,500 independence, we will be pleased to do this. work

GLAP Audit Fee 112,000 112,000 N/A 112,000

Non-Audit Work: 2,300 2,300 N/A 4,000 Certification of grant claims

40 Appendix C Outstanding matters

The following items are outstanding at the date of this report:

Item Actions to resolve Responsibility

The financial statements Finalisation and review of the final versions of the EY and management financial statements

Management representations Receipt of the signed management representation Management letter.

Whole of Government Accounts Completion of procedures required by the National EY and management Page 161 Page Audit Office (NAO) regarding the Whole of Government Accounts submission

41 Appendix D Accounting and regulatory update

Accounting update The following table provides a high level summary the new accounting standards and interpretations that have the potential to have the most significant impact on you:

Name Summary of key measures Impact on Greater London Authority Group

IFRS 9 Financial Applicable for company and local authority accounts from the 2018/19 financial year The Authority has identified that the biggest impact Instruments and will change: on the Company accounts will be on the treatment • How financial assets are classified and measured of their mortgage assets. • How the impairment of financial assets are calculated • Financial hedge accounting Although some initial thoughts on the approach to • The disclosure requirements for financial assets. adopting IFRS 9 have been issued by CIPFA, until Page 162 Page the Code is issued and any statutory overrides are • Transitional arrangements are included within the accounting standard, however as confirmed there remains some uncertainty. the 2018/19 Accounting Code of Practice for Local Authorities has yet to be issued However, what is clear is that the Authority will it is unclear what the impact on local authority accounting will be and whether any have to: accounting statutory overrides will be introduced to mitigate any impact. • Reclassify existing financial instrument assets • Re-measure and recalculate potential impairments of those assets; and • Prepare additional disclosure notes for material items

The Authority is awaiting clarification of the exact requirements before investing time in the above work.

42 Appendix D

IFRS 15 Revenue from Applicable for local authority accounts from the 2018/19 financial year. This new As with IFRS 9, some initial thoughts on the Contracts with standard deals with accounting for all contracts with customers except: approach to adopting IFRS 15 have been issued by Customers • Leases; CIPFA. However, until the Code is issued there • Financial instruments; remains some uncertainty. However, what is clear • Insurance contracts; and is that for all material income sources from • for local authorities; Council Tax and NDR income. customers the Authority will have to: • Disaggregate revenue into appropriate The key requirements of the standard cover the identification of performance categories obligations under customer contracts and the linking of income to the meeting of those • Identify relevant performance obligations performance obligations. and allocate income to each • Summarise significant judgements • There are transitional arrangements within the standard; however as the 2018/19 Accounting Code of Practice for Local Authorities has yet to be issued it is unclear The Authority anticipates a material impact but is what the impact on local authority accounting will be. awaiting clarification of the exact requirements before investing time in the above work. Page 163 Page

IFRS 16 Leases IFRS 16 will be applicable for local authority accounts from the 2019/20 financial year. Until the 2019/20 Accounting Code is issued and any statutory overrides are confirmed there Whilst the definition of a lease remains similar to the current leasing standard; IAS 17, remains some uncertainty in this area. for local authorities who lease in a large number of assets the new standard will have a significant impact, with nearly all current leases being included on the balance sheet. However, what is clear is that the Authority will need to undertake a detailed exercise to classify all There are transitional arrangements within the standard, although as the 2019/20 of its leases, and the leases of its companies, and Accounting Code of Practice for Local Authorities has yet to be issued it is unclear therefore must ensure that all lease arrangements what the impact on local authority accounting will be or whether any statutory are fully documented. overrides will be introduced. The Authority has yet to commence work in this area due to the timing of implementation.

43 Appendix D Accounting and regulatory update (continued)

Regulatory update

Name Summary of key measures Impact on Greater London Authority Group

Policing and Crime Act The key measures summarised here are those that are likely to have implications for • The GLA will determine governance 2017 the audit of the financial statements and the VFM conclusion: arrangements of the LFC • Abolition of The London Fire and Emergency Planning Authority and the transfer of • The GLA will need to assess its group boundary functions, property, rights and liabilities to London Fire Commissioner (LFC) which to determine whether or not the London Fire will form part of the GLA. Commissioner forms part of the group. Page 164 Page

44 Appendix D

Earlier deadline for The Accounts and Audit Regulations 2015 introduced a significant change in statutory These changes provide challenges for both the production and audit of deadlines from the 2017/18 financial year. From that year the timetable for the preparers and the auditors of the financial the financial statements preparation and approval of accounts will be brought forward with draft accounts statements. from 2017/18 needing to be prepared by 31 May and the publication of the audited accounts by 31 July. To prepare for this change the Authority has taken a number of steps as outlined below: • Critically reviewed and amended the closedown process to achieve draft accounts production by mid-June for 2016/17 • Streamlined the Statement of Accounts removing non-material disclosure notes

As auditors, nationally we have: • Issued a thought piece on early

Page 165 Page closedown • As part of the strategic Alliance with CIPFA jointly presented accounts closedown workshops across England, Scotland and Wales • Presented at CIPFA early closedown events and on the subject at the Local Government Accounting Conferences in July 2017 Agreed areas for early work which has included testing of major income and expenditure streams and journals at month 9.

45 Appendix E Management representation letter

Below is the GLA Group Letter of Representation. We will also require a letter of representation for GLA Land and Property and Greater London Authority Holdings.

Management Rep Letter (raft)

[To be prepared on GLA letterhead]

14th September 2017 Karl Havers Partner Ernst & Young Page 166 Page This letter of representations is provided in connection with your audit of the consolidated and Authority financial statements of the Greater London Authority (“the Group and Authority”) for the year ended 31 March 2017. We recognise that obtaining representations from us concerning the information contained in this letter is a significant procedure in enabling you to form an opinion as to whether the consolidated and Authority financial statements give a true and fair view of the Group and Authority financial position of the Greater London Authority as of 31 March 2017 and of its financial performance (or operations) and its cash flows for the year then ended in accordance with CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.

We understand that the purpose of your audit of our consolidated and Authority’s financial statements is to express an opinion thereon and that your audit was conducted in accordance with International Standards on Auditing, which involves an examination of the accounting system, internal control and related data to the extent you considered necessary in the circumstances, and is not designed to identify - nor necessarily be expected to disclose - all fraud, shortages, errors and other irregularities, should any exist.

Accordingly, we make the following representations, which are true to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves:

A. Financial Statements and Financial Records

1. We have fulfilled our responsibilities, under the relevant statutory authorities, for the preparation of the financial statements in accordance with the Accounts and Audit Regulations 2015 and CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.

2. We acknowledge, as members of management of the Group and Authority, our responsibility for the fair presentation of the consolidated and Authority financial statements. We believe the consolidated and Authority financial statements referred to above give a true and fair view of the financial position, financial performance (or results of operations) and cash flows of the Group in accordance with the CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17 and are free of material misstatements, including omissions. We have approved the consolidated and Authority financial statements.

46 Appendix E

Management Rep Letter

3. The significant accounting policies adopted in the preparation of the Group and Authority financial statements are appropriately described in the Group and Authority financial statements.

4. As members of management of the Group and Authority, we believe that the Group and Authority have a system of internal controls adequate to enable the preparation of accurate financial statements in accordance with the CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17] for the Group and for the Authority that are free from material misstatement, whether due to fraud or error.

5. We believe that the effects of any unadjusted audit differences, summarised in the accompanying schedule, accumulated by you during the current audit and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the consolidated and Authority financial statements taken as a whole. We have not corrected these differences identified by and brought to our attention by the auditor because the amount calculated is an extrapolation based on one instance of an over accrual of income valued at £5,500.00. Page 167 Page B. Fraud

1. We acknowledge that we are responsible for the design, implementation and maintenance of internal controls to prevent and detect fraud.

2. We have disclosed to you the results of our assessment of the risk that the consolidated and authority financial statements may be materially misstated as a result of fraud.

3. We have no knowledge of any fraud or suspected fraud involving management or other employees who have a significant role in the Group or Authority’s internal controls over financial reporting. In addition, we have no knowledge of any fraud or suspected fraud involving other employees in which the fraud could have a material effect on the consolidated or authority financial statements. We have no knowledge of any allegations of financial improprieties, including fraud or suspected fraud, (regardless of the source or form and including without limitation, any allegations by “whistleblowers”) which could result in a misstatement of the consolidated or authority financial statements or otherwise affect the financial reporting of the Group or Authority.

C. Compliance with Laws and Regulations

1. We have disclosed to you all identified or suspected non-compliance with laws and regulations whose effects should be considered when preparing the consolidated and Authority financial statements.

D. Information Provided and Completeness of Information and Transactions

1. We have provided you with:

47 Appendix E

Management Rep Letter

· Access to all information of which we are aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;

· Additional information that you have requested from us for the purpose of the audit; and

· Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.

2. All material transactions have been recorded in the accounting records and are reflected in the consolidated and Authority financial statements.

3. We have made available to you all minutes of the meetings of the Authority, and committees or summaries of actions of recent meetings for which minutes have not yet been prepare held through the year to the most recent meeting dated 7th September 2017.

Page 168 Page 4. We confirm the completeness of information provided regarding the identification of related parties. We have disclosed to you the identity of the Group and Authority’s related parties and all related party relationships and transactions of which we are aware, including sales, purchases, loans, transfers of assets, liabilities and services, leasing arrangements, guarantees, non-monetary transactions and transactions for no consideration for the year ended, as well as related balances due to or from such parties at the year end. These transactions have been appropriately accounted for and disclosed in the consolidated and Authority financial statements.

5. We believe that the significant assumptions we used in making accounting estimates, including those measured at fair value, are reasonable.

6. We have disclosed to you, and the Group and Authority has complied with, all aspects of contractual agreements that could have a material effect on the consolidated and Authority financial statements in the event of non-compliance, including all covenants, conditions or other requirements of all outstanding debt.

E. Liabilities and Contingencies

1. All liabilities and contingencies, including those associated with guarantees, whether written or oral, have been disclosed to you and are appropriately reflected in the consolidated and Authority financial statements.

2. We have informed you of all outstanding and possible litigation and claims, whether or not they have been discussed with legal counsel.

3. We have recorded and/or disclosed, as appropriate, all liabilities related litigation and claims, both actual and contingent, and have disclosed all guarantees that we have given to third parties.

F. Subsequent Events

1. There have been no events subsequent to year end which require adjustment of or disclosure in the consolidated and Authority financial statements or notes

48 Appendix E

Management Rep Letter

thereto.

G. Group audits

1. Necessary adjustments have been made to eliminate all material intra-group unrealised profits on transactions amongst Authority, subsidiary undertakings and associated undertakings.

H. Other information

1. We acknowledge our responsibility for the preparation of the other information. The other information comprises the Annual Governance Statement and Narrative Statement.

Page 169 Page 2. We confirm that the content contained within the other information is consistent with the financial statements.

I. Pensions, Property and Provision valuation estimates

1. We believe that the measurement processes, including related assumptions and models, used to determine the accounting estimate(s) have been consistently applied and are appropriate in the context of CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.

2. We confirm that the significant assumptions used in making the pensions, property and provisions estimates appropriately reflect our intent and ability to carry out the specific courses of action on behalf of the entity.

3. We confirm that the disclosures made in the consolidated and Authority financial statements with respect to the accounting estimate(s) are complete and made in accordance with CIPFA LASAAC Code of Practice on Local Authority Accounting in the United Kingdom 2016/17.

4. We confirm that no adjustments are required to the accounting estimate(s) and disclosures in the consolidated and Authority financial statements due to subsequent events.

J. Retirement benefits

1. On the basis of the process established by us and having made appropriate enquiries, we are satisfied that the actuarial assumptions underlying the scheme liabilities are consistent with our knowledge of the business. All significant retirement benefits and all settlements and curtailments have been identified and properly accounted for.

K. Related Party Transactions

1. We confirm that all identified and material related party transactions are disclosed within Note 48 to the financial statements.

49 Appendix E

Management Rep Letter

L. Specific Representations

Environmental Liabilities

1. We have disclosed to you all liabilities or contingencies arising from environmental matters. These liabilities or contingencies have been recognised, measured and disclosed, as appropriate, in the consolidated and Authority financial statements. The environmental liability(ies) included in the consolidated and Authority balance sheet(s) represents our best estimate of the potential loss(es) using assumptions that we believe represent the expected outcomes of the uncertainties. With respect to the valuation of related assets, we have considered the effect of environmental matters, and the carrying value of the relevant assets is recognised, measured and disclosed, as appropriate, in the consolidated and Authority financial statements. Any commitments related to environmental matters have been measured and disclosed, as appropriate, in the consolidated and authority financial statements. Page 170 Page Ownership of Assets

1. Except for assets capitalised under finance leases, the Group and Authority has satisfactory title to all assets appearing in the balance sheet(s), and there are no liens or encumbrances on the Group and Authority’s assets, nor has any asset been pledged as collateral, other than those that are disclosed in the financial statements. All assets to which the Group and Authority has satisfactory title appear in the balance sheet(s).

2. The Group has included within it accounts all relevant long term assets within the categories of property, plant and equipment and investment property in line with IAS 16 and IAS 40.

Reserves

1. We have properly recorded or disclosed in the consolidated and Authority financial statements the useable and unusable reserves.

Income and Indirect Taxes

1. We acknowledge our responsibility for the tax accounting methods adopted by the Group, which have been consistently applied in the current period, and for the current year income tax provision calculation.

2. We also acknowledge our responsibility for the plans with respect to future taxable income, which represent our estimates as to the outcome of those plans, based on available evidence, and for the significant assumptions used in our analysis. We would implement such strategies as necessary to prevent a tax operating loss or credit carryforward from expiring.

We have disclosed to you all tax opinions, correspondence with tax authorities, or other appropriate information that served as support for the accounting for potentially material matters.

50 Appendix E

Management Rep Letter

Use of the Work of a Specialist

1. We agree with the findings of the specialists that we engaged to evaluate the Pension Liability and Property Valuation and have adequately considered the qualifications of the specialists in determining the amounts and disclosures included in the consolidated and Authority financial statements and the underlying accounting records. We did not give or cause any instructions to be given to the specialists with respect to the values or amounts derived in an attempt to bias their work, and we are not otherwise aware of any matters that have had an effect on the independence or objectivity of the specialists.

The Orbit Loan

1. Having made appropriate enquiries, we are satisfied that there are no undisclosed guarantees or secondary loan agreements that underwrite the loan agreement in place between the Legacy Corporation and ArcelorMittal.

Page 171 Page Classification of Property

1. We confirm that the classification of property assets across property, plant & equipment; investment property; and inventory property within the financial statements is based on the best information we hold at this point in time.

Funding of and Loans to group entities

1. Having made appropriate enquiries, we are satisfied that the long term loans, including those made to GLA Land and Property Ltd and the London Legacy Development Corporation disclosed within long term debtors are fully recoverable and do not require impairment to the carrying value.

2. We confirm that we will have regard to London Legacy Development Corporation’s requirement to repay its borrowings from capital receipts in our decisions concerning how the Corporation will support our affordable housing policy strategy. Our decisions will ensure that any shortfall in capital receipts resulting from our strategy will be funded.

Yours faithfully,

______Martin Clarke Executive Director – Resources ______Sadiq Khan Mayor of London

51 EY | Assurance | Tax | Transactions | Advisory

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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. ey.com Agenda Item 6

Subject: Corporate Risk Register

Report to: Audit Panel

Report of: Executive Director of Resources Date: 17 October 2017

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 and 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 GLA’s most significant risks – with the focus on cross-cutting risks and major programmes. It is formally reviewed and refreshed on a six- monthly cycle. Once the risks have been reviewed by risk owners and directors, the register is presented to the Panel for comment.

4. Issues for consideration

4.1 The GLA’s risk profile has been stable over the past six months. No risks have been closed (ie. removed from the register); one risk has been added to the register for the first time; three risks have increased in severity; and one has decreased in severity. A few risks have also changed in scope or focus. As is normal, there have been minor changes to control measures across the risk portfolio.

4.2 The GLA’s risk scoring matrix is at Appendix 2.

4.3 The one risk added to the register is: London Plan (P12)  A delay to the publication of the London Plan would have significant implications for the delivery of Mayoral priorities, including affordable housing.

City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk

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 London Plan preparation has, however, progressed on schedule so far. The Strategic Housing Land Availability Assessment is nearly finished and this reduces the element of risk flowing from borough capacity to complete this process in a timely manner. Other elements of risk, such as changes to government policy, remain.

4.4 The three risks that have increased are set out below. London 2012 Legacy (P3)  Since the previous update, Sir Peter Hendy has been appointed Chair of LLDC and this has a positive bearing on this risk. David Goldstone, Chief Executive, is, however, moving to a new role at the Ministry of Defence and a recruitment process is in train to ensure a high calibre replacement is found.  Good progress has been made on the Cultural and Education District and an update to the Outline Business Case has been submitted to Government.  A current priority is work to review the London Stadium, managed by E20 Stadium LLP: both historic decision-making and finances – so as to ensure its future financial sustainability. The risk description has been amended to be more explicit about the financial risk flowing from the Stadium.  The direction of travel of this risk remains upwards (though not enough to trigger a rescore), given the critical stage the CED project is now at and the importance of securing the financial sustainability of the Stadium. Corporate Governance (C4)  The risk score has increased. The change was primarily to ensure risks are scored consistently across the GLA's risk portfolio: strong governance is central to the management of risk across the GLA, and it is important this is reflected in the risk score.  A new aspect of this risk to emerge, however, is the increasing complexity of the GLA's governance relationships and interactions with subsidiary and arms-length entities and organisations the GLA has had a hand in establishing. This will be subject to review to ensure attendant risks are well-managed.  At the time of writing, a new Monitoring Officer was due to be appointed imminently – subject to approval by the Mayor and Assembly – following an internal competition.  The GLA has agreed a refreshed anti-fraud framework since the previous update. The framework was report to the previous Audit Panel meeting. Information Governance (C9)  There continues to be an increase in complex FoI requests. Since these cases are difficult and resource intensive to answer, there has been a proportional increase in the risk of representations being made by third parties to the ICO.  Work is underway to prepare for the introduction of the General Data Protection Regulation. The GLA can expect significant interest in how it is complying with the new, more stringent, legislation (both in terms of requirements and penalties) through public and internal scrutiny.  For these reasons, the level of risk has increased and the risk has been rescored.

4.5 The one risk that has decreased is: 2017 IPC and IAAF World Athletics Championships  The risk has decreased given the successful delivery of the events, hailed as the best ever by both the IAAF and IPC, and the increased certainty of the GLA’s financial exposure.  Post-event arrangements for company closure are ongoing. The Boards are targeting their meeting of 28 November to finalise the accounts, at which point the final financial position of the GLA will be made clear. Page 174

4.6 Progress and developments relevant to select other risks in the corporate portfolio is set out below. All these risks remain at about the same level of severity. Air quality (P1)  The implementation of the Mayor's air quality programme has continued at pace, with improvements to the bus fleet and the first Low Emission Bus Zone delivered. Pre-compliance

rates with the T-charge are high. Recorded average concentrations of NO2 are lower than usual for this time of year.  The Government has published its new Air Quality Plan. Yet it lacks the supporting actions required to achieve significant improvements in air quality in London as soon as possible. The GLA is waiting to see if further legal challenges are brought by Client Earth, or if additional actions are included in the Budget.  The scope of the risk has been amended to reflect the theoretical possibility of the Mayor's air quality programme being challenged in the courts. This element of risk is mitigated by adopting sound consultation and implementation processes supported by legal advice. Museum of London (P9)  Further detail of the proposed scheme is expected to emerge over the autumn. The cap on the GLA contribution remains the primary mitigation. Regeneration (P2)  Both the Mayor’s Regeneration Fund and High Streets Fund work programmes are nearing completion. The programmes will shortly be subject to evaluation.  The scope of this risk now includes the Skills for London Capital Fund, through which £114 million will be invested into the estate and equipment of skills providers over the next four years. Approximately £40 million is available now and is delivered through the LEAP.  In addition, the risk now also factors in the Good Growth Fund. The fund will provide over £66 million capital funding from sources including the Local Growth Fund and European Social Fund, as well as expert regeneration advice design support and knowledge sharing opportunities. The Good Growth Fund is open to a broad range of public, private and third-sector. These new funds will be administered with essentially the same tried and tested assurances processes as previous programmes, mitigating associated risks. Affordable Homes (P4)  Work continues to push forward innovative and flexible approaches to increase the supply of housing in London. The GLA has launched and successfully allocated funding to support the delivery of 49,000 affordable homes through the Affordable Homes 2016-21 programme. This, combined with previous allocations, means almost 80,000 genuinely affordable homes have been allocated funding.  The draft Housing Strategy sets out clearly the Mayor's aims in tackling the housing issues Londoners face. When published, it will enable the GLA to make further headway in increasing housing supply.  Work is underway to address issues around land supply and the GLA is working with others to find innovative ways of making land more accessible for increased and early development. Land Assets (P5)  The GLA’s Estates Team have transferred to TfL under a shared service agreement and the breadth of property management experience within TfL has, with the support of framework suppliers, increased capacity.  A TfL/GLA Steering Group has been established with the Deputy Mayors for Transport and Housing & Residential Development, supported by an Officer Working Group, to oversee TfL's

Page 175

development programme. Regular meetings take place with LFEPA and MOPAC to determine the programme for disposal and agree strategy.  Regular bi-lateral meetings are taking place with Government landowning departments and agencies. A London Estates Board and London Estates Delivery Unit have been established as a forum for NHS estate discussions.  Given the GLA's ambition to support the development of public sector land in London-owned by the GLA Group and in the wider public sector, the scope of this risk has been expanded accordingly (ie. beyond a focus on GLA land only). Old Oak and Park Royal Development Corporation (P8)  The programme of regular liaison meetings chaired by the Chief of Staff and involving the OPDC Chair and senior staff of both organisations have been recalibrated and are working well.  The Mayor recently consented to OPDC accessing £0.8m of contingency funding, set aside in this year's budget, to fund the development of a Business Plan for Old Oak North. This Business Plan will also assess the ability of OPDC to develop a self-funding mechanism within the Old Oak North area. Housing Financial Transactions (P7)  The contract for Northolt Road (London Borough of Harrow Housing Zone) is due to be signed in November 2017, which will commit £185m of the LHZ fund.  The LHZ programme is oversubscribed and a business case has been tabled for review by Government, which would enable the recycling of £150m of the £200m LHZ fund for further commercial loans. Prioritisation and delivery of Mayoral strategies/commitments (P6)  The primary focus at present is progressing the development of the Mayor's statutory strategies and the scope of the risk has been amended to emphasise this aspect.  The Transport, Environment, Housing and Health Inequalities strategies have gone out for consultation – having been approved by the Mayor. As mentioned above, a separate risk has been added to the register to reflect the relatively higher risks associated with the London Plan.  Work is progressing on a refreshed approach to GLA performance management. The Budget and Performance Committee were consulted on the broad approach and its sub-committee will receive dashboards in the new format for two pathfinder areas at its quarter two meeting in December.  Work has begun on the 2018/19 GLA budget setting round. GLA budget setting (C10)  The Mayor's Budget Guidance for 2018/19 was published in June. It proposes the GLA and its functional bodies assume, for their budget planning, that their allocation of discretionary revenue income and Capital Programme control totals for future years will be as set out in the 2017/18 budget – noting the necessity of increasing the police precept if Government policy does not change.  The guidance requests greater detail on the savings and efficiencies and changes to functional body Capital Programmes. It also set out the Mayor's request that the timeliness and quality of quarterly monitoring across the Group be improved to oversee the delivery of agreed budgets and ensure a continued focus on delivering savings and efficiencies. These new arrangements are being bedded in.

Page 176

Workforce (C5)  The scope of this risk has been reviewed and somewhat amended. It has been broadened from its focus on capacity constraints to take into account the GLA’s workforce and its ambition to be an exemplary employee, attracting and retaining the best talent. Brexit (E5)  The scope of this risk has been increased to recognise the potential that EU funding is not replaced at the same level from the UK Shared Prosperity Fund.  The Mayor continues to advocate for the UK’s continued membership of the Single Market, which he believes provides the best chance to protect and enhance London’s strengths.  In March, the Mayor published his response to the Government’s Brexit White Paper, highlighting the importance of transitional/interim arrangements, the need for a flexible post- Brexit immigration system and a guarantee for EU nationals living in the UK.  Over the past six months, the Mayor has continued regular meetings with David Davis MP at which they have discussed his response to the White Paper as well as the Mayor’s concerns about the specific risks faced by the different sectors of London’s economy. Meetings are informed by engagement with businesses and support from the Mayor's Brexit Expert Advisory Panel.  The Mayor also met with EU Commissioners in Brussels, Mayor Hidalgo in Paris, a delegation of EU Ambassadors in London and the Italian Minister for European Affairs to make the case for a mutually beneficial outcome from Brexit. Funding regime and constraints (E2)  At this stage of the budget cycle there is uncertainty about the level of funding the GLA Group will receive in future years; that includes due to the high degree of challenge in forecasting business rates income, principally because of the impact of the 2017 revaluation and of a proposed 100 per cent business rates pilot for London in 2018/19. The impact of business rates appeals and further devolution of business rates are likely to remain ongoing features of the system. GLA Elections 2020 (E6)  The risk of the GLA Elections coinciding with a General Election has decreased significantly - though has not disappeared entirely and will continue to be a risk for London Elects.  The focus of this risk has therefore shifted to deploying an effective count solution in 2020. The GLRO will need to take a decision shortly on whether to pursue an e-count or a manual count and he is consulting with select stakeholders to inform this decision. London Elects is also testing the market and at the time of writing was due shortly to host a supplier day. Issues that arose during the previous GLA Elections on count day and other concerns relating to assurance and transparency will inform any procurement.

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.

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List of appendices to this report: Appendix 1 – The GLA’s corporate risk register Appendix 2 – The GLA’s risk scoring matrix

Local Government (Access to Information) Act 1985 List of Background Papers: GLA Risk Management Framework Contact Officer: Tim Somerville, Senior Governance Manager Telephone: 020 7983 5780 E-mail: [email protected]

Page 178 Appendix 1

Date of last review September 2017 Appendix 1: Corporate risk register for Audit Panel [Click on each heading for pop-up guidance] Date of next review February 2018

Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT PROGRAMME AND DELIVERY RISKS A) Regular meetings between LLDC Chief Executive and Deputy Chief Executive and GLA In place Finance to ensure a balanced LLDC budget B) LLDC budget and long-term financial model developed in line with Mayoral guidance In place as part of the GLA's consolidated budget - and subject to challenge process. Informed by on-going discussions to ensure appropriate alignment, with Mayoral decision required

C) Eight-weekly high-level GLA-LLDC Finance & Policy Liaison meetings to oversee In place LLDC’s long-term financial model and activities, chaired by the Head of Paid Service. Tracking of key LLDC decisions and Mayoral consents London 2012 Legacy - financial consequences affecting the D) Major LLDC decisions (including CED development agreements) subject to close GLA In place The GLA is exposed to financial GLA as major funder and funder of last scrutiny through representation on LLDC's Board (DM for Planning, Regeneration & Skills risk due to: resort has been appointed to the Board) and Committees; and where relevant provisions within - overspends on, or reduced - overspends/financial loss the LLDC Governance Direction 2013, with specific reference to land income from, existing London - pressure on other GLA budgets with transactions/receipts, that ensures Mayoral Consent is required Legacy Development Corporation a negative impact on services and (LLDC) projects; Martin P3 Mayoral priorities 4 4 16 E) LLDC directly owns its programme and project risks and maintains its own risk register, 3 3 9  - the requirement to underwrite Clarke In place - GLA unable to meet the Mayor’s and has processes in place to actively review and reduce risks, overseen by LLDC's Audit risks and provide cashflow obligations under the legal agreement Committee support for the cultural and with DCMS F) Government funding of £151m to support the CED (subject to Business Case) and education district (CED); and/or In place Page 179 Page - negative impact on homes, jobs and - ongoing costs associated with MOU between DCLG and the GLA setting out respective roles in funding and delivering other legacy benefits the London Stadium, managed the project. - reputational damage by E20 Stadium LLP. G) Shared approach to the oversight, assurance and risk management of the CED project, In place involving Government, LLDC, the GLA, and all project partners. Independent assurance reviews in train (six completed to date) and risks and assurance board established

H) Full business case being prepared for the CED project for submission in early 2018 to In place confirm the Government grant contribution. The Mayor will also need to give formal approval (or otherwise) for GLA support for the project. I) Ongoing work to review the London Stadium (including by an independent team, In place looking at past decision making) and ensure its future financial sustainability. Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Existing policy initiatives to improve air quality in those areas of London worst In place B)affected; Supporting including: boroughs Low toEmission fulfil their Zone; statutory Non-Road responsibility Mobile Machinery to prepare Low Local Emission Air Quality Zone In place Management reports. New LAQM approach adopted in May 2016 C) Further £11m over next three years, as part of Mayor's Air Quality Fund, to support In place boroughs to target local pollution hotspots. Builds on £6m already allocated. Includes £5m for Low Emission Neighbourhoods announced in July 2016 Air quality a) Mitigation measures do not D) Awareness raising programme to minimise exposure, including through the media, In place over time significantly reduce supporting airTEXT, promoting air quality within public health system and a new alerts harmful pollutants / minimise system using TfL communications channels and assets introduced in August 2016 exposure and therefore air quality does not improve (or worsens). E) Ongoing lobbying of Government to secure additional powers and resources, including In place - serious health and inequality impacts b) Air quality and EU policy such Fiona vehicle duty devolution and a diesel scrappage scheme. The Mayor is also advocating for - legal proceedings P1 that London is at risk of penalties Fletcher- 4 4 16 a new Clean Air Act to secure legal standards and put in place protections following Brexit 3 3 9 - significant fine and financial loss  arising from EU infraction - reputational damage Smith processes or legal action F) Continue to seek to influence the Government's air quality plan that was prepared In place (including from individuals following the High Court ruling in favour of ClientEarth affected by air pollution). G) Thorough and legally sound consultation and associated processes for air quality In place c) Mayor's air quality programme initiatives, supported by legal advice, to reduce the risk of challenge challenged in court, undermining H) Introducing the T-charge on most polluting vehicles in 2017 Oct 17 and/or delaying it I) i) Bringing forward the central London Ultra Low Emissions Zone and ii) subsequently i) 2019 expanding ULEZ to North/South circular for cars and vans and iii) London-wide for buses, ii) 2021

Page 180 Page coaches and trucks (subject to consultation). iii)2020 J) Reducing emissions from public transport: i) 12 low emission bus zones; ii) accelerating i) from 2017 the transformation of the bus fleet to Euro 6, hybrid, electric and hydrogen vehicles; iii) ii) from 2016 all newly licensed taxis to be zero emission capable from 2018 iii) from 2018

- financial consequences affecting the A) GLA officer and Mayoral adviser represented at Project Progression meetings In place GLA as joint statutory funder Museum of London - pressure on other GLA budgets with B) Project governance arrangements include GLA representatives on oversight board In place Lack of funding or cost over-runs a negative impact on services and for MoL capital expenditure Mayoral priorities requirements for repair of its C) Technical Study to confirm estimated costs In place - funding raising efforts divert existing building or to fund a Martin P9 philanthropic funding from CED 4 4 16 2 3 6  move to a new building at West D) Mayoral approval for capped GLA contribution of £70m towards capital funding project Clarke In place Smithfield places significant package and conditional on City of London Corporation underwriting project cost - MoL does not receive the financial demands on the resources of the resources it requires to maintain its E) Project heads of terms with Museum and City of London Dec 17 GLA as, with the City of London, offer statutory joint funder of MoL. - reputational damage, particularly if F) Legal agreement with City of London Corporation for provision of GLA's funding Mar 18 Smithfield option is not progressed Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Strong GLA representation on the LEAP and GLA retains accountability for Growth In place Deal funding - with investments subject to GLA governance and project gateway processes B) Rigorous approval processes in place for programme schemes/projects and subject to In place GLA decision making processes. GGF and SfLCF are following the same processes as LRF, Regeneration HSF and GPF programme (with the addition of an EOI stage during application process) Not spending regeneration funds and/or ineffective processes for C) Assessment process to select/prioritise SfLCF, GGF, GPF infrastructure, LRF and FE In place allocating and assuring the use Capital spending, involving the LEAP and repayment of regeneration D) ESF co-financed and other European-funded projects are subject to rigorous open, In place funding, and/or a lack of partner competitive and EU compliant project selection and grant award processes - and have buy-in, means the impact of the - delayed decision making and activity, been given a substantial audit assurance rating funding is not maximised and/or and in turn, underspends E) Dedicated staff resource and programme and risk management processes at unit level, In place funding is required to be repaid. - the benefits sought are not realised Fiona included advice for project managers and delivery partners, supported by high-level P2 [Note the main programmes - overspends and/or over-runs Fletcher- 3 4 12 reporting and accountability to the corporate centre 2 3 6  covered by this risk are: Growing - conditions are not met on the Smith F) Delivery partners in receipt of funding required to provide a proportion of the total In place Places Fund (GPF), Mayor's Government element of funding project cost as match funding Regeneration Fund (MRF), High - reputational damage G) All overspends met by delivery partners. Systems have been set such that expenditure In place Street Fund (HSF), London over and above the approved budget is rejected. Further funding not allocated where Regeneration Fund (LRF), Further repayments are overdue. Arrangements to ensure repayment of funds where applicable. Education Capital (FE Capital), Where repayments are overdue, no further funds allocated European funding, Skills for London Capital Fund (SfLCF) and H) Grant Agreements ensure projects, where relevant, are reviewed by the London Review In place

Page 181 Page Good Growth Fund(GGF).] Panel (as part of the Mayor's Design Advocates and the Good Growth by Design programme) at the design to delivery phase I) Grant Agreements for recipients of EU funding ensure delivery partners comply with In place audit requirements during the delivery and document retention phases. A system has been established to ensure electronic transfer of evidence to the GLA and annual checks on delivery partner viability by Companies House A) Strong programme management arrangements to monitor progress and issues at In place scheme, partner, sub-region and directorate level (new system being implemented). Enables mitigating actions to be agreed and implemented swiftly to maintain programme delivery B) Largest ever affordable housing settlement between City Hall and Whitehall with In place/ a) £3.15bn for 90,000 affordable housing starts to 2021. Flexibility on tenure agreed. Ongoing Affordable homes - the genuinely affordable homes that Discussions ongoing on share of additional national funding still underway a) Not achieving the level of Londoners need are not delivered housing starts targeted due to - failure to meet public commitments C) Work underway to take forward contracts for the new AH 2016-21 allocations In place the challenging nature of those on housing delivery announced in July 2017. This includes flexible measures for strategic partners to bring targets, and/or an ability to - reputational damage forward further sites. deliver by the GLA and partners, b) D) Delivery profile agreed and teams working with providers to work towards and if In place P4 David Lunts 4 3 12 2 3 6 and external factors. - reduction in the volume of housing possible, exceed those targets.  b) Housing devolution is delayed - delivery possible E) Streamlined and more certain approach to funding through Homes for Londoners 2016- In place and/or does not result in - unable to deliver housing targets 21 programme to maximise bids and encourage providers to push forward negotiations on planning reforms and greater - the GLA’s powers to direct and bring new sites for development. powers over public land - and forward land for development are F) Work underway to confirm the GLA's new approach to land assembly to increase Ongoing additional funding is insufficient. curtailed supply for development. G) Detailed discussions with Government (led by DCLG but also including HMT) in Ongoing relation to new programmes and funding for London. H) New Supplementary Planning Guidance that should increase the level of affordable In place housing secured through the planning system made public in August I) London Housing Strategy (i) and revised London Plan (ii) to contain policies to support i) March 18 increased levels of affordable housing ii) 2019 Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Retaining and enhancing the existing estate and facility management arrangements In place for the portfolio B) Regular, high level land strategy meetings In place Land assets C) Close working with Finance on maintaining financial control, assisting in maintaining In place a) the asset register and delivering annual revaluation programme The GLA fails to exploit its land D) Estates team have now transferred to TfL under a shared service agreement and the In place assets by: i) not disposing of its depth and breadth of property management experience within TfL has increased the land and/or not doing so in ways capacity to undertake core activities internally, with the support of framework suppliers in that maximise the contribution to - unexpected liabilities and/or higher the unlikely event of the failure of a service provider. delivery of jobs, homes and than necessary costs E) Maintaining close contact with the market to minimise the risk of targets being missed In place economic regeneration ambitions; - loss of revenue due to a downturn in the property market P5 and ii) not managing its assets - an inability to maximise housing, David Lunts 3 3 9 F) An asset strategy setting out the principles underpinning the development and In place 2 3 6  effectively regeneration and other outcomes management of the land and property portfolio, including an action plan for bringing land b) - unable to meet statutory obligations forward for development The GLA is unable to exert - reputational damage G) Close working with the Mayoral family on their land assets to ensure, where possible, In place influence or to help coordinate they are meeting Mayoral objectives wider disposal and development H) Continue to identify brownfield land for development in public ownership and to help In place of public sector land in London, coordinate and accelerate the pace of land released impeding land release and I) Bi-lateral discussions held with various public bodies, including the Ministries of Justice In place delivery of homes/jobs and Defence and the NHS, regarding their disposal programme J) Re-procurement of the London Development Panel to speed up the disposal process Q4 2017/8 and reduce risks associated with contracting with private sector contractors Page 182 Page A) Regular meetings between the GLA and OPDC Chair and senior staff to review budget, In place risk and delivery. Commitment line has been added to monthly budget monitor to give full picture B) OPDC budget being developed in line with Mayoral guidance as part of the GLA's In place consolidated budget. Informed by on-going discussions to ensure appropriate alignment - and subject to Mayoral decision Old Oak & Park Royal C) Development Corporation reserve created to accommodate any additional funding In place Development Corporation requests - overspends/financial loss Fiona Additional requests for funding D) GLA governance team manages governance relationship between the GLA and OPDC - pressure on other GLA budgets with Fletcher- In place to the GLA above and beyond P8 a negative impact on services and Smith / 4 3 12 3 2 6  the agreed OPDC Business Plan E) Major OPDC decisions subject to close GLA scrutiny through observer status on the In place Mayoral priorities Martin puts extra demands on the GLA's OPDC Board and Committees, along with items specifically reserved for Mayoral consent - reputational damage financial resources as major Clarke funder and funder of last resort. F) OPDC directly owns its programme and project risks and maintains its own risk register, In place and has processes in place to actively review and reduce risks. Programme Assurance Office has now been established G) Implementation plan has been agreed to progress the recommendations arising from In place Strategic Review of OPDC H) OPDC business plan, focussed on Old Oak North, being developed to identify Q3 2017/8 opportunities (has now received GLA approval) Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Appropriate level of repayment to DCLG based on the inherent risks of recovery. For In place the London Housing Bank (straightforward projects to financially stronger organisations), this has been agreed at 100%. For the Housing Zones, it has been agreed at 60% across the portfolio allowing variability in individual projects Housing financial transactions As a result of poor programme B) Financial Transactions Steering Group with a remit to ensure the GLA is able to meet In place management and/or financial its commitment to repay Government loan funding, including setting the strategic controls, and/or by taking on - financial, in that if there is a shortfall direction for and monitoring the portfolio of onward loans excessive counterparty risk in funding recovered by the GLA C) Related funding only advanced to credit-worthy organisations who are financially In place and/or unexpected changes in compared to that due to DCLG the David Lunts strong enough to repay the GLA, which ensures that there is high collateral across the the housing market, the GLA difference will need to be found loan portfolio P7 /Martin 4 2 8 2 2 4  receives insufficient income to - reputational as poor programme D) Charge interest on funding. This will provide a buffer to the repayment obligations as In place Clarke meet in full the repayment management could reduce GLA DCLG will not be entitled to any interest responsibilities to DCLG relating influence on future housing E) Appropriate security (including step-in rights) to ensure that if problems occur with a In place to the £400m of Financial programmes provider/project then it is able to recover the funds due Transactions of Housing Zones F) In the event of a shortfall in the funding recovered by GLA and the repayment In place (for (LHZ) and the London Housing obligations to DCLG, then Housing and Land budgets will be used in the first instance to 2020 onwards) Bank. insulate the rest of the GLA from any risk G) The end of year flexibility the GLA has with budgets will allow repayment obligations In place (for to managed flexibly within budgets 2021 onwards) H) The other cash-flow flexibility the GLA has will provide additional protection from In place (for repayment obligations 2022 onwards) A) Budget setting and challenge process that ensures the budget reflects Mayoral In place

Page 183 Page priorities B) City Dashboard to track progress against priorities, bring focus and allow the public to In place hold the Mayor and GLA to account - delays in launching statutory and Prioritisation and delivery of other strategies (including due to pre- C) Mayoral commitments delivery tracking reconfigured following the election and in In place Mayoral election period) operation strategies/commitments - lack of coordination, delay to and/or D) Corporate Investment Board (CIB) reviews spending proposals and other significant In place Planning, prioritisation and challenge of strategies and work plans decisions budget setting processes fail to - work plans undeliverable Jeff Jacobs P6 3 3 9 E) Strategy Steering Group established to ensure alignment of new statutory strategies In place 2 2 4  incorporate adequately Mayoral - failure to deliver outcomes for / CMT with each other and Mayoral priorities. Central coordination role also to support priorities into GLA strategies and Londoners and Mayoral commitments timetabling, consistency and consultation best practice. CIB has oversight role plans and to translate them into - misalignment of resources to robust programmes that deliver priorities and ineffective use of F) All draft strategies subject to Mayoral Decision process, including legal input, prior to Mayoral objectives and targets. resources In place thorough consultation process - reputational damage G) QC advice on limitations imposed by pre-election period in respect of statutory October 17 strategies H) New GLA approach to performance management being developed to ensure clarity of From Q3 focus - on outcomes, strengthen challenge and enhance transparency 2017 Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Meetings and correspondence with Ministers to secure favourable resolution of the In place readiness conditions and funding allocation Devolution of the Adult - fewer Londoners can access training Education Budget (AEB) if funding allocation reduces and there B) Close officer working with government officials on the terms of the deal including In place a) Readiness conditions and other is a need to topslice for administration collaboration with other devolved areas to secure more favourable terms terms of devolution cannot be - missed opportunity to improve agreed with Government and/or outcomes for Londoners C) Internal programme board in place to review the terms and implications of the In place there are information sharing - pressure on GLA budgets if proposed devolution deal, as well as plans for implementing it, including a detailed delays, impeding analysis and administration budget is not devolved Fiona Business Case, Blueprint and Programme Plan P11 preparatory work. - potential financial consequences for Fletcher- 3 3 9 2 2 4  D) Dedicated staff resource and programme management processes at unit level, In place b) Poor project management GLA from the readiness condition of Smith supported by high-level reporting and accountability to the Programme Board and/or decision making means agreeing to 'share financial risk' with responsibilities for adult Government education are devolved without - destabilisation of the provider base if E) The Mayor retains the ability to reject the deal if it presents unacceptable levels of risk In place sufficient funding and/or funding allocation reduces and capacity to deliver those transition is not sufficiently timely responsibilities. - reputational damage F) Subject to approval by the programme board, cross-organisational project teams October established to take forward detailed work on legal, financial, HR and other implications of 2017 the devolution deal A) Close working with government to mitigate impacts of policy/legislative changes In place

London Plan a) Publication of the London Plan Page 184 Page delayed due to: changes or delays B) Engagement across the GLA during the Plan's development, including discussion of In place in Government policy (eg. the trade-offs Housing and Planning Act and changes to the National Planning Policy Framework); conflicting C) Support boroughs in the SHLAA process, maintaining regular contact. Where capacity In place policy priorities; slow decision - reduced ability to deliver against a issues arise, speak to chief planner to emphasise the importance of the task making; and/or the Examination range of Mayoral commitments, Fiona P12 in Public (EiP) takes longer than including on affordable housing and air Fletcher- 3 3 9 2 2 4  New programmed for due to lack of quality D) Dedicated staff resource and programme management processes at unit level, In place Smith Planning Inspectorate resources - reputational damage supported by high-level reporting and accountability to the Programme Board or new processes. - legal challenge b) Post publication legal challenge due to i) the document E) Close engagement with the Planning Inspectorate to ensure it can adequately resource not being within the appropriate the EiP at the planned time, and to ensure the GLA are aware of the time the inspector(s) power; ii) a procedural will need to conduct the EiP requirement has not been complied with. F) Close working with TfL legal team and QC to ensure a) the content of the plan is not In place ultra vires; and b) the production of the plan and the public consultation comply with legal requirements. Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Strengthened governance arrangements put in place by funders (UK Sport, UK In place Athletics and GLA) in February 2016, following IAAF review, including clearer separation between delivery and oversight and strengthening independence of board 2017 IPC and IAAF World Athletics Championships Lack of interest and/or poor planning - London's reputation as a host city for B) Independent Boards for both events, with relevant expertise, to provide oversight of In place result in Championships that do major sporting event is damaged, delivery not meet expectations in terms of impacting negatively on its ability to visitor numbers or experience. In attract future events P10 Jeff Jacobs 3 4 12 1 2 2  turn, for the IPC event this would - significant financial liability as IPC C) GLA has appointed independent co-chair of the Boards and is directly represented by In place negatively impact on the GLA's event underwriter one further non-Executive Director. LLDC also has a non- Executive Director on the finances as underwriter; and for - poor use of GLA resources in respect Boards the IAAF event it would represent of the IAAF event a poor return on the GLA's D) Risk register in place and risk monitored monthly by the Board and its Audit In place investment. Committee.

CROSS-CUTTING PROCESS AND GOVERNANCE RISKS 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 Page 185 Page 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 In place and implemented in collaboration with other agencies. Safety plans and protection measures; including appropriate stewarding/staffing plans, food risk assessment and monitoring of alcohol consumption F) Appropriate levels of insurance, including public liability insurance for all events In place Health & Safety - City Hall - potential or actual injury or loss of G) Scalable security measures and building admissions policy in place at City Hall. In place and Squares life Security Officers trained in conflict management and physical intervention and emergency Breach in processes/ procedures - financial loss / impact on value of Martin procedures. Regular testing of officers' knowledge in place. GLA is a member of the C1 (or procedures not rigorous 3 4 12 3 3 9 asset Clarke Southwark Community Security Zone. First Aid arrangements in place  enough) leading to a health and - break down in public order safety or security incident - reputational damage H) Heritage Wardens - trained in conflict management, physical intervention and first aid - In place (including an act of terrorism). 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 In place and liaise closely with the police J) Regular staff briefings regarding City Hall security arrangements and actions to take in In place extreme emergencies K) Corporate Security Policy that sets out the arrangements that aim to mitigate against In place current and future threats that the Authority may face L) All Building Security Passes replaced with a new, more secure pass and more robust In place pass issue criteria introduced and briefed to Directors and Assistant Directors Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Clear deadlines and well-established processes with FBs, which align to their internal In place approval processes and the Assembly scrutiny process B) Effective working relationships with third parties to obtain a better understanding of In place GLA budget setting likely impacts of funding settlements The unique process for setting C) Monitoring of the exercising of the Mayor's statutory functions and use of Assembly's In place the GLA Group /GLA budgets - - legal challenge powers under the GLA Act involving the Mayor, Assembly - inability to deliver savings and D) Well-established process for Assembly questioning, investigation and scrutiny, In place and functional bodies - creates Martin prioritise resources including Mayor's Question Time, plenary meetings, Budget and Performance Committee, C10 complexity that means statutory Clarke / Ed 3 4 12 2 4 8 - delay to schemes or projects Audit Panel and agreed scrutiny work programme  requirements are not fulfilled, - services negatively impacted Williams E) Clear rationale set out for proposals arising from need for savings In place either by the Mayor or by the - reputational damage Assembly, and budgetary F) Equalities assessment/content enhanced in GLA Budget process/documentation In place priorities are not adequately reflected. G) Quarterly budget monitoring process being reinvigorated with the Mayor and his team In place to ensure Mayoral priorities reflected in functional body budget plans and adequate saving and efficiency proposals in place for publication of Consultation Budget

A) Senior oversight of approach to corporate and information governance and to ensure In place procedures are robust B) Policies and procedures in place to maintain high standards of behaviour and integrity, In place ensure the GLA meets its legal (including equality) obligations, and promote sound use of financial resources C) Well-defined and robust decision-making process - focussed on non-routine expenditure over £10k and all novel, contentious and repercussive decisions - ensuring Page 186 Page Corporate governance related facts, advice and risks are considered and decisions have the appropriate a) Processes and procedures are authorisation insufficiently developed to ensure D) Anti-Fraud Policy, Strategy and Response Plan, Whistleblowing Policy and In place compliance with legal and - legal challenge Jeff Jacobs Confidential Reporting Line regulatory requirements, prevent - Member and officer conduct not to / Martin E) High profile commitment to transparency and regular reporting of payments over In place fraudulent use of GLA resources the standard the public expect Clarke £250, expenses, gifts & hospitality and maintenance of a register of interests for the C4 3 4 12 2 3 6  and maximise effective use of - inefficient use of resources (officers); Mayor, Mayoral Team, Assembly Members and Senior Staff funds - fraud and financial loss Ed Williams F) Risk Management Framework and six-monthly reporting to Audit Panel and the In place b) Amendments to the GLA's - reputational damage (Members) Investment and Performance Board governance framework are poorly G) Strong governance focus in induction arrangements, including a compulsory e-learning In place implemented /communicated and module prove ineffective H) Specialist Teams provide guidance on specific requirements such as contracts and In place procurement (via Transport for London) I) Annual internal and external audits In place J) Insurance procured, with an annual review of insurance cover with broker In place K) Review and adapt as necessary the GLA's corporate governance framework (including By Q4 the Mayoral Scheme of Delegation) to ensure it effectively identifies and manages the 2017/18 risks associated with GLA subsidiary / arms-length entities and organisations established by the GLA Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Quarterly GLA resilience meetings chaired by the Executive Director of Resources In place

B) Business continuity arrangements for all teams. Arrangements to provide back-up In place - denial of access to City Hall (for recovery site in place with TfL and remote working capacity enhanced. Regular testing of example, as a result of fire, flood, the facility in place malicious incident or of failure of C) Planned preventative maintenance of infrastructure; response procedures in place to In place control systems, services or deal with emergency incidents such as fire and bomb threats Business continuity infrastructure) D) Fire and emergency precautions: fire detection/suppression throughout City Hall; fire In place Inadequate business continuity - failure of equipment or services at wardens trained and appointed; evacuation plans; regular fire evacuation drills plans / preventative Trafalgar Square or Parliament Square arrangements contributing to a Martin C2 Garden 2 4 8 E) IT Disaster Recovery arrangements strengthened with regular back-up to TfL data In place 2 3 6  failure of or damage to physical Clarke - service/project delivery delayed or centre and regular testing programme. Remote access capacity enhanced infrastructure and potentially also impeded F) Back-up link to the internet in place In place core systems (including finance - loss or unauthorised access to data systems). G) Ongoing programme to assure and strengthen the GLA’s cyber-security arrangements - inability to account for use of resources H) Service Level Agreement with Transport for London's Financial Services Centre, In place - financial loss and legal challenge monitoring of KPIs under the procurement shared service arrangement, and formal shared - reputational damage services arrangements with LFEPA for payroll I) 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) ED of Resources takes overall responsibility for and receives reports on information In place governance issues

Page 187 Page B) IT security prioritised and annual test by specialists with feedback to allow further In place strengthening of defences C) Dedicated information governance team to promote best practice, advise, and In place coordinate initiatives and responses to cross-cutting FoIA requests - legal breach (FOIA, Environmental D) Network of staff responsible for Mayoral and FoIA correspondence responses In place Information Regulations, DPA) and E) Weekly monitoring of FoIA performance and wider response times for Mayoral In place Information governance possible challenge correspondence and action taken to address problem areas Processes and procedures are - failure to comply with new legislation F) Dedicated intranet page for FoIA with resources and advice; and regular staff In place insufficiently developed and do in May 2018 (General Data Protection communications. Staff induction sessions on FoIA and information security not operate efficiently such that Regulation (GDPR) and UK Data Martin G) Records management policy and retention schedule. Network data capacity routinely In place / C9 the GLA is unable to meet its Protection Bill) 3 3 9 2 2 4 Clarke monitored. Work planned for later in the year to rationalise files stored on the GLA Summer 18  legal obligations and - reduced transparency and network organisational priorities in respect accountability H) Annual review of data protection assets and associated risks In place of managing, holding and - poor customer service releasing information. - increased costs and poorer outcomes I) Enhanced performance reporting and refresher training; high-profile case lists Autumn 2016 for Londoners circulated weekly. - reputational damage J) Use of reserved appendices in reports and decisions guided by legal and governance In place advice to ensure applied so as to comply with law and GLA Openness Statement

K) Action plan to be signed off by CMT (i) and updated data protection policy (ii) to i) Q3 17/18 prepare for introduction of the GDPR in May 2018. To be complemented by staff ii) Q4 17/18 communication programme, training sessions, GLA Group networking meetings and iii) From Q3 regular meetings with GLA data owners (iii) 17/18 Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Expertise available (White Young Green) to provide advice to Managers and GLA staff In place and ensure Health and Safety procedures are rigorous Health & Safety - Land & B) Health and safety due diligence assessment on developers and contractors Property In place - environmental degradation Procedures/processes are not C) Public liability and property insurance In place - actual or potential injury or loss of sufficiently rigorous causing a D) Risk management system in place to manage construction and design, property and In place life C3 Health, Safety and Environmental David Lunts 3 3 9 equipment, environmental and health and safety risks 2 2 4 - financial loss / impact on value of  (HS&E) incident on the GLA's E) Health and safety performance monitoring of Managing Agents and Delivery Partners In place assets Land & Property Portfolio to ensure HS&E compliance - reputational damage (excluding City Hall and Trafalgar F) Risk assessing, and then managing accordingly, every property and asset In place /Parliament Squares). G) Statutory checks to ensure regulatory HS&E Compliance In place H) Event Safety Plan for all events In place A) Sickness and absence monitoring at team and corporate level In place B) Establishment kept under review, particularly during organisational change In place C) Use of secondments, apprentices and temps if necessary (subject to formal approval) In place

D) Formal change management policies and procedures In place Workforce - failure to harness the best talent E) People Performance Management Framework and requirement to carry out In place a) Delays in recruitment, available due to practices and performance reviews vacancies, skills shortages or processes, including those supporting F) Induction programme for new members of staff In place misalignment, and/or a equality and diversity, not meeting the G) Retention plans, including career development and unit development plans In place deterioration in employee standards required of an exemplary Jeff Jacobs C5 relations constrain capacity. employer 2 3 6 H) Organisational structure reflects remit and responsibilities of GLA and Mayoral In place 1 3 3 Page 188 Page / CMT  b) Recruitment, development and - Mayoral and Assembly priorities and priorities retention practices not statutory duties not delivered on time I) People processes/procedures - including Capability Procedure, Disciplinary and In place sufficiently developed such that or to quality standards Grievance Policy and Managing Change Policy - in place and regularly reviewed. Also the GLA is not seen as an - legal challenges arising from training for managers and support from HR&OD exemplary employer. employee relations issues J) Assessment of training needs and training delivery on an ongoing basis In place K) Periodic staff surveys with structured approach to taking action as a result of findings In place

Workforce monitoring and reporting In place L) Regular consultative committee to ensure effective relationship with unions In place M) HR&OD programme of work to support the equalities and inclusion agenda Q4 17/18 A) Processes for appraising and monitoring co-financing organisations and projects, and In place making payments, in accordance with national and European Commission rules ERDF and ESF oversight Inadequate oversight of projects in GLA's regional management - legal challenge role for London 2007-13 and Martin C6 2014-20 European Regional - financial loss 2 2 4 1 2 2  Clarke 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 or repayment of funding. Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT EXTERNALLY ARISING THREATS & OPPORTUNITIES A) LondonIsOpen campaign launched to show that London is united and open for In place business and to the world following the EU referendum a) - reduced investment / fall in business and consumer confidence in the short B) Brexit Response coordination meetings set up by Mayor's Office, external Brexit In place to medium-term, affecting the Brexit Expert Advisory Panel established economy and potentially Mayoral a) Uncertainty about the UK’s funding and programmes (particularly future relationship with the EU regeneration and housing) leads to a range of impacts for C) Mayor, Deputy Mayor, Mayoral Adviser and officials meeting with key London - uncertainty for EU nationals with In place London, particularly economic economic sectors including Financial Services, Professional Services, Culture, Tech, Higher tangible impacts on access to jobs and and for social cohesion. Education to understand further the risks to each sector and support mitigation measures accommodation b) London's unique - emigration of EU nationals and loss circumstances are not taken into of skills Jeff Jacobs D) Political engagement and lobbying with Ministers In place account and this contributes to a - reduced tolerance and social / Fiona E5 post-Brexit relationship between 4 4 16 3 4 12 cohesion Fletcher-  the UK and the EU that does not b) allow London to attract Smith - long-term enervation of London's investment and talent or to trade E) London Strategic Migration Partnership to bring Home Office, community sector, In place economy and loss of jobs and effectively with the EU and businesses and other partners as appropriate together to mitigate risks relating to data; investment beyond. awareness of status & rights; administrative processes to support EU nationals to secure - delay to schemes or projects c) On leaving the EU, European status - services negatively impacted

Page 189 Page funding is not replaced with - reputational damage F) Lobbying to secure a contribution from the Shared Prosperity Fund that at least In place equivalent funds from central c) matches the loss of EU funding government. - fewer and less impactful programmes, reducing and/or harming London social and economic F) Analysis of the impact different Brexit scenarios would have on London's economy, Q4 17/18 development commissioned from external experts. Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Close monitoring of retained business rates collected from boroughs In place B) Mayor's Business Rates Reserve to cover potential shortfall in business rates In place C) Ongoing informal and formal representations, including at a high-level, to In place Government to influence the form of the regimes and deliver proposals for London that include robust governance proposals for a London-wide devolved system Funding regime and constraints D) Ongoing lobbying for a full and sustainable devolution of finance to London, including In place The changes to the local based on the work of the London Finance Commission 2 - reduced funding and/or reduced government finance regime from E) Pilot agreed with Government for GLA to receive devolved TfL capital grant and In place funding stability impairing forward April 2013 (Council Tax benefits Revenue Support Grant through increased share of retained rates from April 2017. planning localisation; Business Rates Exemplar for further devolution - financial commitments cannot be Retention) and April 2017 (GLA Martin F) Savings targets set as part of a well-established budget setting process, including from In place E2 met 3 4 12 2 3 6 share of London business rates to shared services  - existing plans and programmes Clarke increase from 20% to likely 37%) G) Adequate reserves and a contingency fund In place cannot be delivered in full have an adverse impact on the - Mayoral priorities cannot be pursued H) Obtaining a biannual credit rating to promote and underline the GLA's commitment to In place GLA's financial standing and - business as usual suffers sound fiscal management flexibility, including potentially a I) Budget and project spend monitoring, complemented by financial modelling In place downgrade in the GLA's credit J) Formal decision making process and financial regulations providing a control over In place rating spending K) Four year efficiency plans published to fulfil requirements set by Secretary of State for In place GLA Group to receive four-year funding settlements which will provide more certainty over funding in the medium term

Page 190 Page L) Pre-Budget letters to the Chancellor to make London's case for funding In place M) Updated medium-term financial forecast to inform budget setting process In place A) Testing of e-count marketing through Prior Information Notice and supplier day In place GLA Elections 2020 Difficulties in planning for and delivering the 2020 count due to: - uncertainty about the market B) Paper drafted outlining risks/benefits of e-counting versus a manual count and related In place for e-count providers - additional costs engagement with stakeholders seeking their views. Detailed review of responses - delays in the decision-making - system failures/errors following close of consultation and procurement process arising - longer count with lower accuracy and E6 Jeff Jacobs 3 3 9 2 3 6  from uncertainty, impact on more issues C) Building in stricter testing and assurance requirements for any new e-counting solution In place system design and - reputational damage from the outset implementation - legal challenge - manging the level of risk associated with e-counting D) Thorough and well-planned procurement process as basis for selecting and working From Q3 - potentially undertaking a with best-placed provider (assuming e-count) 17/18 manual count for the first time Ref The Risk Inherent risk assessment Reducing the risk [planned - ie. not currently in place - controls shown in yellow] Residual risk assessment # Risk cause and event Risk consequences Risk owner Prob. Impact Overall Control measures (in place and planned) In place? Prob. Impact Overall DoT A) Strong Treasury Management Policy and strategy for investment and borrowing In place Treasury management a) Capital loss, revenue reduction, B) Specialist unit with clear separation of duties, including a dedicated control function lost income and/or increased In place and a dedicated dealing function costs. b) Inability to meet payment C) Robust day-to-day practices and procedures including authorisation processes In place obligations because of one or more of the following: - counterparty risk; - financial loses and exacerbated D) Group investment syndicate pooling the cash balances of MOPAC, GLA, LFEPA, LPFA In place budgetary constraints - market volatility/shocks; Martin and LLDC, protecting earnings through economies of scale in the event of market shocks; E3 - unfavourable interest rate - Mayoral priorities cannot be pursued 2 4 8 plans being finalised with London boroughs to increase stability in balances under 1 4 4  Clarke changes; - reputational damage management and facilitate investment in longer term options - lack of liquidity; - refinancing risk; E) Treasury management advisers to provide independent advice and review In place - operational risk (fraud, ineffective processes, human resources, internal systems F) Business Continuity Plan / Second site arrangements In place failure); and - business continuity and natural G) Compliance with CIPFA Guidance and relevant legislation disaster risks. In place Page 191 Page This page is intentionally left blank

Page 192 Appendix 2

Appendix 2: Risk scoring methodology

4 4 8 12 16

Highly Likely

3 3 6 9 12 Probable

2 2 4 6 8

PROBABILITY Improbable

1 1 2 3 4 Remote

1 2 3 4 Moderate Significant Substantial Catastrophic

IMPACT

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Page 194 Agenda Item 7

Subject: Register of Gifts and Hospitality – Mayor and Assembly Members

Report to: Audit Panel

Report of: Monitoring Officer Date: 17 October 2017

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, Assembly Members and the Mayor and Assembly Members in the period 1 February to 1 September 2017.

2. Recommendation

2.1 That the report be noted.

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 declarations were last reported to the Audit Panel on 28 March 2017, for the period covering 1 September 2016 (10am) until 1 February 2017 (10am), a period of approximately five months.

3.3 Appendix 1 sets out gifts and hospitality declared by the Mayor and Assembly Members for a period of seven 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 September 2017 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

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4. Issues for Consideration

4.1 A number of points arise from the declared items set out in Appendix 1:

 A total of 59 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 seven months compared with 100 in the preceding reporting period, which covered approximately five months.

 22 declarations were made by the Mayor, Sadiq Khan.

 37 declarations were made by Members of the Assembly.

 The schedule of declarations from 10am on 1 February 2017 until 10am on 1 September 2017, is as follows:

22 declarations Mayor of London, Sadiq Khan 1 declaration 8 Members 2 declarations 2 Members 3 declarations 2 Members 4 declarations 2 Members 5 declarations 1 Member 6 declarations 1 Member 0 declarations 8 Members

 In this period, the highest number of declarations registered by any one person was by the Mayor, Sadiq Khan.

 As in 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.

 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.

 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.

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5. Legal Implications

5.1 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 Authority adopted its Policy and Procedure for the Acceptance of Gifts and Hospitality in May 2014.

5.2 The GLA’s Policy and Procedure for the Acceptance of Gifts and Hospitality requires the Mayor and Assembly Members to declare the receipt of any gifts and hospitality with an estimated value of £25 or over.

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 Assembly Members

Local Government (Access to Information) Act 1985 List of Background Papers: None

Contact Officer: Lisa Agyen Telephone: 020 7983 4207 E-mail: [email protected]

Page 197 This page is intentionally left blank

Page 198 Appendix 1

Gifts and Hospitality - Assembly Member 01.02.17 (10am)- 01.09.2017 (10am) Name Date of Detail of Gift/Hospitality Donor/Provider of Gift/Hospitality Gift/ Hospitality Andrew Boff 12-Jul-17 Tesco Pride pack containing bottle of vodka, t-shirt, Tesco Stores Limited packet of skittles and paper flag Caroline 13-Jul-17 London Bus Awards Dinner Transport for London Pidgeon Caroline 13-Mar-17 Book Mytaxi Pidgeon , Taxi vouchers , Biscuits and Mobile power bank Page 199 Page David Kurten 12-Jan-17 London Government dinner - held at Mansion House Lord Mayor of London London Dr Onkar 10-Aug-17 Framed picture of ground breaking ceremony for Berkley Homes Sahota Southall Waterside development Florence 09-Mar-17 Dinner on HMS St Albans The Second Sea Lord, Royal Navy Eshalomi Florence 28-Feb-17 Lunch at Dim T Rob Dale, Connect PA Eshalomi Florence 26-Feb-17 Attendance at the British Kebab Awards Centre for Turkish Studies Eshalomi Florence 18-Oct-16 Olympic Athletes Reception Team GB Eshalomi Gareth Bacon 28-Jul-17 Ticket and associated corporate hospitality for England Directors of Cory Environmental v South Africa Test Match at the Oval Gareth Bacon 13-Jan-17 Drinks party in Chislehurst Pamela Wicks, Chairman of Bromley & Chislehurst (Commons branch) Conservative Association Joanne 23-Mar-17 Atlas Volume 4 by Adnan Oktar Adnan Oktar McCartney

Appendix 1

AM Keith Prince 13-Jul-17 Dinner and awards ceremony TfL Keith Prince 05-May-17 2 tickets to West Ham vs Spurs match London City Airport Keith Prince 29-Mar-17 Lecture & Dinner Institution of Civil Engineers Keith Prince 02-Mar-17 Awards Dinner Transport Times Keith Prince 16-Mar-17 Promotional material MyTaxi Len Duvall 21-Jul-17 A meal and a ticket for the NatWest T20 Blast Cricket London Borough of Newham Leonie 21-Feb-17 Lunch The Home Group Cooper Leonie 22-Mar-17 Lunch First Home London Cooper Leonie 26-Jul-17 Quality of Place Dinner, House of Lords Design South East Cooper

Page 200 Page Leonie 18-May-17 Lunch Terrapin Communications Cooper Leonie 06-Jun-17 Business Partnership Dinner New Wimbledon Theatre Cooper Leonie 19-Jul-17 3x Bottles of Wine Source London Cooper Nicky Gavron 05-Jul-17 Attendance at the NLA annual lunch and drinks New London Architecure reception at the New London Architecture Awards 2017 Ceremony Sadiq Khan 14-Aug-17 3 boxes of mangoes Muhammad Shahbaz Sharif, Chief Minister Punjab Pakistan Sadiq Khan 01-Aug-17 Framed model of MBPJ building, pen and notes holder Datuk Bandar Majlis Bandaraya Petaling Jaya, Mayor and a book of awards and recognitions. Petaling Jaya City Council, Malaysia Sadiq Khan 17-Jul-17 Chicago cubs hooded jacket and cap Rahm Emanuel, Mayor of Chicago Sadiq Khan 16-Jul-17 2 tickets to Wimbledon Men's Final All England Lawn Tennis and Croquet Club (AELTC) Sadiq Khan 14-Jul-17 Tie, Fairtrade chocolate and Nordic honey Mr Lauri Bambus, Ambassador of Estonia Sadiq Khan 10-Jul-17 Framed artwork Mayor of Shanghai Sadiq Khan 04-Jul-17 Personalised Adidas football boots TUFF Football Community (TUFF FC) Sadiq Khan 30-Jun-17 Lego Creator Expert London Bus The LEGO Group, UK London Leicester Square store

Appendix 1

Sadiq Khan 29-Apr-17 2 tickets to Anthony Joshua vs. Wladimir Klitschko The FA Sadiq Khan 20-Apr-17 Dinner Fortnum and Mason Sadiq Khan 03-Apr-17 Ceramic map Mr Won Soon Park, Mayor of Seoul Sadiq Khan 09-Mar-17 Lunch and complimentary merchandise The Lalit Hotel Sadiq Khan 08-Mar-17 Dinner The Outbound Trust Sadiq Khan 03-Mar-17 Book: National Geographic Greatest Landscapes Marc Benioff - Chairman and CEO Salesforce Sadiq Khan 23-Feb-17 Book: Being Mankind Volume 1 Darshan Sanghrajka - Founder and CEO of Super Being Labs Sadiq Khan 22-Feb-17 5 tickets to the BRIT Awards BRIT Awards Ltd Sadiq Khan 16-Feb-17 Hamper Dr Idris Zainuddin, President, Anjuman-e Burhani Sadiq Khan 15-Feb-17 NME Awards NME Sadiq Khan 13-Feb-17 Book: The Children of London Richard Bradbury Sadiq Khan 10-Feb-17 Hamper Mohamed Alabbar

Page 201 Page Sadiq Khan 09-Feb-17 Inaugural Brexit Expert Advisory Panel Lunch Canary Wharf Group Sadiq Khan 02-Feb-17 Book: Calatrava Santiago Calatrava Shaun Bailey 07-Sep-17 Lunch at Hutong, The Shard Tyrone Edward, Ernst & Young Shaun Bailey 22-Jun-17 Dinner at the Tower of London Huw Lewis, Managing Director, Military Preparation College Shaun Bailey 28-Feb-17 Earls Court regeneration parliamentary dinner, House of Gary Yardley, Capital & County Properties Commons Sian Berry 10-Oct-16 Dinner at Harberdashers' Hall Chair of Hampstead Heath Highgate Wood & Queen's Park Committee of the City of London Corporation Tom Copley 28-Jul-17 Lunch Sam Emery, London Communications Agency Tom Copley 08-May-17 Two tickets to 'Consent' National Theatre Tom Copley 21-Mar-17 Participated in telephone interview for Populus about Populus the Crown Estate and made donation to British Humanist Association Tom Copley 26-Feb-17 British Kebab Awards Centre for Turkish Studies Tony Arbour 30-Jun-17 Tickets for Tony Arbour and Mrs Caroline Arbour to the The Lensbury Hotel Lensbury Ball Unmesh 12-Aug-17 VIP Ticket to the IAAF World Athletics Championships IAAF

Appendix 1

Desai 2017 (unused) Unmesh 13-Jul-17 Ticket to dinner with the King and Queen of Spain City of London Corporation Desai Unmesh 11-Jun-17 Two Hockey Tickets (unused) Lee Valley Regional Park Authority Desai

Page 202 Page

Agenda Item 8

Subject: Register of Gifts and Hospitality: Members of Staff – Report of the Monitoring Officer

Report to: Audit Panel

Report of: Monitoring Officer Date: 17 October 2017

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 February (10am) to 1 September 2017 (10am).

2. Recommendation

2.1 That the report be noted.

3. Background

3.1 This report notifies the Panel of gifts and hospitality declared by staff from the period of 10am on 1 February 2017 to 10am on 1 September 2017.

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.

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 declarations were last reported to the Audit Panel on 28 March 2017, for the period from 1 September 2016 (10am) until 1 February 2017 (10am).

City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk

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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 September 2017 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. The register for senior officers and officers appointed by the Mayor (under section 67 of the GLA Act) is publicly available. The register for declarations made by members of staff who are below the level of the Head of Service is maintained by the Monitoring Officer in the same way as it is for senior officers but 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:

 A total of 173 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 seven months). This compares with 135 notifications by members of staff in the preceding reporting period, which covered approximately five months.

 A total of 11 members of staff, directly appointed by the Mayor under section 67(1) of the GLA Act 1999 (as amended), made 80 of the staff declarations. James Murray, Deputy Mayor for Housing and Residential Development, registered the highest number amongst the Mayoral Appointees, with 29 declarations.

 12 members of senior staff appointed by the Head of Paid Service (namely Heads of Unit and above) made 80 of the 173 declarations.

 13 declarations were made by 11 other officers of the GLA.

 The breakdown of the 13 declarations by Directorate is (see overleaf)-

Page 204

Communities and Intelligence - 3

Development, Enterprise and Environment – 1

Housing and Land – 2

Mayor’s Office- 4

External Affairs – 1

Corporate Declaration – 1 (A single declaration was made in the Authority’s register on behalf of GLA for 16,000 general access tickets, 180 VIP guest passes for the World Para Athletics World Championships 2017 and 54 VIP guest passes for the IAAF World Championships 2017).

 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.

 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.

4.2 All declarations recorded in this report have been approved by the relevant Director / senior officer and reviewed by the Monitoring Officer. Just over 50% of declarations were received after 28 days of receipt, this is an upward trend from the previous period. A number of these late declarations were submitted following the 6-monthly declaration reminder, illustrating the value of this exercise. The newly-appointed Monitoring Officer will take steps with the Mayor's Office, senior managers and assistants to reduce the levels of late declarations.

5. Legal Implications

5.1 The Greater London Authority has adopted a 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 The detailed requirements relating to the registration of the receipt of gifts and hospitality by members of staff are set out in the approved policy for the acceptance of gifts and hospitality. This requires that staff must notify the Monitoring Officer on the prescribed form of any gifts or hospitality to the value of £25 or over that they receive. The relevant declaration form in respect of receipt of any gift or hospitality must be signed, and approved by the appropriate senior member of staff.

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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 Government (Access to Information) Act 1985 List of Background Papers: None

Contact Officer: Lisa Agyen Telephone: 020 7983 4207 E-mail: [email protected]

Page 206 Appendix 1

Gifts and Hospitality - Mayoral Appointees 01.02.2017 (10am)- 01.09.2017 (10am) Name Date of Detail of Gift/Hospitality Donor/Provider of Gift/Hospitality Gift/ Hospitality David 28-Jul-17 RideLondon UCI World Tour celebratory event London & Partners Bellamy David 12-Jan-17 Dinner City of London Bellamy David 01-Jun-17 Picture TfL Bellamy David 22-Feb-17 Dinner British Recorded Music Industry Ltd Bellamy Jack Stenner 27-May-17 2 x FA Cup Final Tickets Football Association Jack Stenner 09-Feb-17 Lunch meeting Canary Wharf Group Page 207 Page James Murray 15-Jun-17 Dinner Deloittes James Murray 14-Jun-17 Dinner Estates Gazette James Murray 22-May-17 Dinner Savills James Murray 18-May-17 London Office Markets Dinner Jones Lang LaSalle (JLL) James Murray 16-May-17 Dinner Construction Industry Training Board James Murray 10-May-17 Dinner Dolphin Living James Murray 19-Apr-17 Dinner Pocket Living / Related James Murray 27-Apr-17 Dinner Westminster Property Association James Murray 25-Apr-17 Dinner Business Vantage James Murray 21-Apr-17 Lunch Pascal Levine James Murray 13-Mar-17 Accommodation (13th -16th March 2017) Reed Midem James Murray 13-Mar-17 Airport transfers (outbound) Reed Midem James Murray 17-Mar-17 Airport transfers (inbound) Reed Midem James Murray 13-Mar-17 Delegate registration (13th-17th March 2017) Reed Midem James Murray 13-Mar-17 Reception London First James Murray 15-Mar-17 Lunch London First

Page 1 of 4

Appendix 1

James Murray 14-Mar-17 Dinner Savills James Murray 14-Mar-17 Lunch London First James Murray 13-Mar-17 Dinner London First / JLL James Murray 15-Mar-17 Dinner Countryside Properties James Murray 28-Feb-17 Dinner Design South-East James Murray 31-Jan-17 Dinner Knight Dragon James Murray 07-Feb-17 Accommodation for one night at conference venue Urban Land Institute James Murray 08-Feb-17 Breakfast Urban Land Institute James Murray 08-Feb-17 Lunch Urban Land Institute James Murray 21-Feb-17 Dinner Network Rail James Murray 07-Feb-17 Dinner Urban Land Institute James Murray 08-Mar-17 Dinner Home Builders Federation James Murray 25-Jan-17 Dinner City of London Page 208 Page James Murray 12-Jan-17 Dinner City of London Jules Pipe 04-Jul-17 London Festival of Architecture Patrons Dinner London Festival of Architecture / British Land (sponsors) Jules Pipe 05-Jul-17 NLA Annual Lunch and New London Awards 2017 NLA Jules Pipe 14-Jun-17 Black Tie Dinner Estates Gazette Jules Pipe 17-Mar-17 MIPIM Airport Transfers (inbound) Reed Midem Jules Pipe 15-Mar-17 MIPIM Lunch London First Jules Pipe 15-Mar-17 MIPIM Breakfast London Borough of Lambeth Jules Pipe 15-Mar-17 MIPIM Dinner City of London Jules Pipe 14-Mar-17 MIPIM Dinner Jones Lang LaSalle (JLL) Jules Pipe 14-Mar-17 MIPIM Dinner Westminster Property Association Jules Pipe 14-Mar-17 MIPIM Lunch reception London Chamber of Commerce and Industry Jules Pipe 13-Mar-17 MIPIM Dinner London First / JLL Jules Pipe 13-Mar-17 MIPIM Delegate registration (13th -17th March 2017) Reed Midem Jules Pipe 13-Mar-17 MIPIM Accommodation (13th -16th March 2017) Reed Midem Jules Pipe 13-Mar-17 MIPIM Reception London First Jules Pipe 13-Mar-17 MIPIM Airport transfers (outbound) Reed Midem

Page 2 of 4

Appendix 1

Justine 22-Feb-17 BRIT Awards UK Music Simons, OBE Justine 09-Feb-17 Tanztheater Wuppertal Pina Basch Show Sadlers Wells Simons, OBE Justine 27-Oct-16 City of London Policy Dinner City of London Corporation Simons, OBE Leah 10-Aug-17 Lunch Guy Horner (TBA Plc) Kreitzman Leah 12-Jul-17 Hospitality at F1 Live London Event Velocity Kreitzman Leah 08-Jul-17 2x Tickets to Wimbledon The All England Lawn Tennis Club Kreitzman Leah 07-Jul-17 Attendance / Hospitality at MLB MLB (Major League Baseball) Kreitzman

Page 209 Page Leah 23-Jun-17 Lunch Constantin Cotzais - Bloomberg Kreitzman Leah 27-May-17 FA Cup Final Hospitality Football Association Kreitzman Leah 23-Apr-17 London Marathon Race Day Hospitality London Marathon Events Ltd Kreitzman Leah 09-Mar-17 Women of the World Dinner 2017 Bloomberg Kreitzman Leah 09-Feb-17 Brexit Advisory Panel Inaugural lunch Canary Wharf Group Kreitzman Matthew 16-Jun-17 Turkish Delight presented in a wooden box Mem & Laz Brasserie Ryder Nick Bowes 09-Feb-17 Brexit Advisory Panel Inaugural lunch Canary Wharf Group Patrick 15-May-17 Lunch UK Music Hennessy Rajesh 22-Jun-17 Hotel accommodation 22nd -24th June at Farimont Miramar Hotel Matthew Lehman - General Manager, Agrawal & Bungalows - Santa Monica, Los Angeles Fairmont Miramar Hotel Rajesh 23-Jun-17 Lunch and tour of Warner Bros Studios California Reg Harpur, EVP Ops & Planning - Wanrer Agrawal Bros

Page 3 of 4

Appendix 1

Rajesh 23-Jun-17 Ticket to LA Dodgers Baseball game Shelley Wagner, Director - Advertising and Agrawal Promotions - LA Dodgers Rajesh 20-Jun-17 Book - San Francisco celebration Mayor of San Francisco Agrawal Rajesh 05-Jul-17 Ticket for Wimbledon Tennis Tournament Santander Agrawal Rajesh 17-Mar-17 Dinner at awards ceremony London Asian Business Awards Agrawal Rajesh 14-Mar-17 Dinner City of London Corporation Agrawal Rajesh 24-Apr-17 To attend dinner at the Tower of London with the Chief of the The Asian Media & Marketing Group Agrawal General Staff, General Sir Nicholas Carter. Rajesh 25-Apr-17 1 ticket to attend London Chamber of Commerce & Industry Asian London Chamber of Commerce & Industry Agrawal Business Association dinner as a top table guest Asian Business Association

Page 210 Page Rajesh 12-Jan-17 2 tickets to NBA basketball game National Basketball Association Agrawal Shirley 31-Jul-17 Travel and accommodation - 31st July to 2nd August 2017 C40 Rodrigues Shirley 27-May-17 Two tickets to attend the RHS Chelsea Flower Show Lindsay Ford, Public Affairs Manager of the Rodrigues Royal Horticultural Society Shirley 25-Jan-17 Lunch Briefing Circle Rodrigues Shirley 02-Dec-16 Dinner Bloomberg Philanthropies Rodrigues Shirley 10-Oct-16 Dinner Chatham House Rodrigues

Page 4 of 4

Appendix 2

Gifts and Hospitality - Senior Staff 01.02.2017 (10am)- 01.09.2017 (10am) Name Date of Detail of Gift/Hospitality Donor/Provider of Gift/Hospitality Gift/ Hospitality David Lunts 24-Jan-17 Lunch with Peter Bingle, Terrapin Communications at Kai Restaurant Terrapin Communications David Lunts 31-Jan-17 VIP Dinner with Knight Dragon at Design Museum Knight Dragon David Lunts 01-Feb-17 Dinner with Brendan Sarsfield, Blueprint Café Family Mosaic David Lunts 14-Feb-17 Dinner with Michael and John Polledri and Nigel Fletcher at Magdalen Lee Valley Estates David Lunts 01-Mar-17 Dinner with Keystone Keystone David Lunts 07-Mar-17 Lunch with Tully De'Ath consultants Tully de'Ath David Lunts 08-Mar-17 Lunch with Jon Gooding, Dolphin Living Dolphin Living David Lunts 13-Mar-17 Accommodation at the Majestic, Cannes (3 nights 13th - 16th March) Reed Midem

Page 211 Page David Lunts 13-Mar-17 Delegate Registration (13th - 16th March) Reed Midem David Lunts 13-Mar-17 LCA Dinner London Communications Agency David Lunts 13-Mar-17 London First reception London First David Lunts 14-Mar-17 HTA Lunch HTA Architects David Lunts 14-Mar-17 LB Hounslow Dinner London Borough of Hounslow David Lunts 15-Mar-17 London First Lunch London First David Lunts 15-Mar-17 Rydon Dinner Rydon David Lunts 15-Mar-17 Countryside Properties breakfast Countryside Properties David Lunts 16-Mar-17 London Chamber of Commerce & Industry BtR Lunch (MIPIM London Chamber of Commerce & Industry reception) BtR David Lunts 16-Mar-17 UK PLC Movers & Shakers UK PLC Movers & Shakers David Lunts 03-Apr-17 Dinner at Magdalen British Land David Lunts 04-Apr-17 Dinner at Quo Vadis Pocket Living David Lunts 19-Apr-17 Dinner at Brasserie Zedel Pocket Living / Related David Lunts 25-Apr-17 Dinner at Penthouse Movers and Shakers David Lunts 22-May-17 Dinner at Savills Board Savills David Lunts 28-Jun-17 Royal Albert Wharf Dinner and Debate Bow Arts Trust

Page 1 of 4

Appendix 2

David Lunts 05-Jul-17 NLA Annual Lunch and New London Awards, Guildhall New London Architecture Debbie Jackson 28-Jun-17 London Festival of Architecture Patrons Dinner London Festival of Architecture / British Land (sponsors) Ed Williams 28-Jun-17 London Pensions Fund Authority (LPFA) Pre-Board Dinner LPFA Fiona Fletcher- 13-Mar-17 Reception London First Smith Fiona Fletcher- 13-Mar-17 Dinner London first / JLL Smith Fiona Fletcher- 13-Mar-17 Delegate registration Reed Midem Smith Fiona Fletcher- 13-Mar-17 Airport Transfers (outbound: Nice-Cannes) Reed Midem Smith Fiona Fletcher- 14-Mar-17 Dinner NEWEC Smith Page 212 Page Fiona Fletcher- 14-Mar-17 Lunch Westminster Property Association - Smith Westminster Fiona Fletcher- 14-Mar-17 Lunch Reception LCCI Smith Fiona Fletcher- 15-Mar-17 Dinner London First Smith Fiona Fletcher- 15-Mar-17 Lunch London First Smith Fiona Fletcher- 15-Mar-17 Breakfast Arcadis Smith Fiona Fletcher- 16-Mar-17 Airport Transfers (return: Cannes - Nice) Reed Midem Smith Fiona Fletcher- 05-Jul-17 NLA Annual Lunch and New London Awards, Guildhall New London Architecture Smith Fiona Fletcher- 19-Aug-17 Attendance at the Biggin 100 Festival of Flight (2 tickets) London Biggin Hill Airport Smith Jamie Ratcliff 17-Jan-17 RBS/Lewisham dinner on TA at Childs & Co, 1 Fleet Street, EC4Y 1BD RBS Jamie Ratcliff 25-Jan-17 City of London Committee Dinner at Clothworkers Hall, Dunster Court, City of London Mincing Lane, London EC3R 7AH

Page 2 of 4

Appendix 2

Jamie Ratcliff 06-Mar-17 Dinner at The Gingerman Restaurant Keepmoat Jamie Ratcliff 07-Mar-17 Dinner at 24 St Georges Restaurant Thames Valley Housing Association Jamie Ratcliff 30-Mar-17 Durkan Reception, Covent Garden Durkan Jamie Ratcliff 05-Apr-17 Dinner at Brigade, Tooley Street Peabody Jamie Ratcliff 07-Apr-17 Lunch at Cote, St Katherine's Dock Barratts, Grg Tillotson & Phil Davidson Jamie Ratcliff 03-May-17 The Housing Forum CEO Lunch Forum National House Building Council Jamie Ratcliff 10-May-17 The RESI Awards 2017 Grosvenor House, Park Lane Property Week Jamie Ratcliff 09-Jun-17 Hawksmoor, Covent Garden Daren Nathan Jamie Ratcliff 03-Jul-17 Breakfast at Roast, Borough Market James Bailey, PwC Jamie Ratcliff 24-Jul-17 Breakfast at Roast, Borough Market Alison Murray, Arup Jeff Jacobs 20-Jun-17 England vs Korea The Men's Hockey World League 2017, Lea Valley England Hockey Hockey & Tennis Centre Julia Slay 11-Jun-17 Dinner at a restaurant as part of the Social Integration Learning Funded by Unbound Philanthropy and the

Page 213 Page Exchange Atlantic Philanthropies Julia Slay 12-Jun-17 Dinner at a restaurant as part of the Social Integration Learning Funded by Unbound Philanthropy and the Exchange Atlantic Philanthropies Julia Slay 13-Jun-17 Dinner at a restaurant as part of the Social Integration Learning Funded by Unbound Philanthropy and the Exchange Atlantic Philanthropies Juliemma 22-Apr-17 Tickets to Football game Chelsea Fooball Club McLoughlin Juliemma 21-Jun-17 Lunch at Roast Sir Edward Lister McLoughlin Juliemma 22-Jun-17 Dinner Terrapin Communications McLoughlin Katie Smith 06-Jul-17 Evening reception for Flanders Day, hosted by Embassy of Belgium Embassy of Belgium Mark Kleinman 12-Sep-16 Dinner to discuss UK Industrial Strategy The Royal Society Mark Kleinman 24-Nov-16 Reception to mark retirement of Baroness Jo Valentine London First Mark Kleinman 09-Feb-17 Lunch at the Brexit Expert Advisory Panel Inaugural meeting Canary Wharf Group Mark Kleinman 05-Jun-17 Copy of book 'Climate of Hope'. Attended book launch reception Bloomberg LP Mark Kleinman 24-Aug-17 'London Essays' Summer party Centre for London, and Capital and Counties

Page 3 of 4

Appendix 2

Mark Roberts 07-Jul-17 Gift Box of Guardian Angel series Lucky Cups Central Election Commission Republic of China (Taiwan) Simon Powell 23-Nov-16 RLB Residential Dinner Rider Levitt Bucknall Simon Powell 01-Feb-17 CIH Presidents Dinner Countryside Simon Powell 07-Feb-17 BPF National Residential Dinner Pinsent Mason Simon Powell 23-Feb-17 BLP Build to Rent Dinner Berwin Leighton Paisner Simon Powell 01-Mar-17 Keystone Dinner Keystone Partners Simon Powell 13-Mar-17 London First & JLL Dinner London First & JLL Simon Powell 14-Mar-17 PRP Dinner PRP Simon Powell 14-Mar-17 HTA Lunch HTA Simon Powell 15-Mar-17 London First Lunch London First & SNR Denton Simon Powell 15-Mar-17 Wilmott Dixon Dinner Wilmott Dixon Simon Powell 16-Mar-17 BLP Lunch BLP

Page 214 Page Simon Powell 16-Mar-17 LinkCity dinner LinkCity Simon Powell 29-Mar-17 Secret Cinema tickets Secret Cinema Simon Powell 09-Jun-17 BLP Lunch BLP Simon Powell 20-Jun-17 Dinner at Roast Mount Anvil and Excel

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Agenda Item 9

Subject: Monitoring of Expenses and Taxable Benefits – Mayor, Elected Members and Senior Staff Report to: Audit Panel

Report of: Executive Director of Resources Date: 17 October 2017

This report will be considered in public

1. Summary

1.1 This report sets out the taxable benefits and expenses submitted by the Mayor, London Assembly Members and Senior Staff during the period 1 April 2017 to 31 August 2017.

2. Recommendation

2.1 That the Committee notes the taxable benefits and expenses submitted by the Mayor, London Assembly Members and Senior Staff during the period 1 April 2017 to 31 August 2017.

3. Background

3.1 This report presents the taxable benefits and expenses claimed, processed and approved during the reporting period. 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 cards 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 and the provision of a travel card is a taxable benefit. In the period April 2017 to August 2017, £33,368 has been paid to fifteen Assembly Members for travelcards.

City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4100 minicom: 020 7983 4458 www.london.gov.uk Page 215

Business Expenses

Use of taxi 4.2 During the period April 2017 to August 2017, no taxi costs were incurred by the Mayor and Assembly members; senior staff incurred taxi expenses totalling £221.

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 April 2017 to August 2017, the Mayor and Assembly Members did not incur any business expenses.

4.5 During the period April 2017 to August 2017, Senior staff incurred £5,364 on Foreign Travel, £1,280 on domestic travel (other than taxis) and £1,137 on Other Expenses. Other Expenses includes subsistence, business entertaining, hotel accommodation and miscellaneous expenses.

4.6 The GLA also provides mobile devices for the Mayor, Assembly Members and senior staff for business purposes as appropriate. The costs of these devices, which are paid direct by the GLA, are not included in this report.

4.7 The 2016/17 figures have been updated as follows:

Taxi Other Taxi Foreign Other Expense Domestic Total Invoices Travel Expenses Claims Travel £ £ £ £ £ £

Final spend 770 1,652 5,676 25,027 25,017 58,142

Spend previously reported 770 1,652 5,676 26,190 22,166 56,454

Difference - - - -1,163 2,851 1,688

The reduction in Foreign Travel reflects a refund of travel costs by a host and the additional Other Expenses mostly relate to accommodation costs.

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Statistics

4.8 In 2017/18, for the period April to August 2017, no expenses have been claimed by the Mayor and Assembly Members. Expenses incurred in 2016/17 show a decrease of 26% in comparison with 2015/16.

Mayor and Assembly Members Apr 2017 to Expense Type 2015/16 2016/17 Variance Variance Aug 2017 £ £ £ % £

Taxi costs 80 134 54 67.5% - Other Domestic - - - 100.0% - Travel Foreign Travel 6,322 3,348 -2,974 -47.0% - Other Expenses 468 1,636 1,168 249.6% -

Total 6,870 5,118 -1,752 -25.5% -

4.9 In 2017/18, for the period April to August 2017, expenses totalled £8,001 for senior staff. Expenses incurred in 2016/17 show an increase of 21% in comparison with 2015/16.

Senior Staff Apr 2017 to Expense Type 2015/16 2016/17 Variance Variance Aug 2017 £ £ £ % £

Taxi costs 2,977 2,422 -555 -18.6% 221 Other Domestic 5,253 5,676 423 8.1% 1,279 Travel Foreign Travel 27,290 25,027 -2,263 -8.3% 5,364 Other Expenses 12,591 25,017 12,426 98.7% 1,137

Total 48,111 58,142 10,031 20.8% 8,001

Page 217

Exceptions

4.10 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. Three exceptions have been agreed since last reported.

Total Reason Expense Exception for Claimant Value (£) Value (£) Outside of the Framework approval

No FTA form as Officer was called back from leave due to London Bridge terror attack and GLA Officer £509.46 £509.46 Grenfell Tower fire. One off GLA Officer Itemised bill for dinner not One off £96.54 £39.24 provided GLA Officer Itemised bill for dinner not One off £388.12 £48.95 provided

Carbon Emissions 4.11 The Authority is committed to reducing its carbon footprint. 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 Government guidelines, 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.

6. Financial Implications

Expenses 6.1 For the period 1 April 2017 to 31 August 2017, no business expenses costs were incurred by the Mayor and Assembly Members; senior officers incurred costs totaling £8,001.

6.2 These costs have been met from the relevant budgets.

Page 218

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 Information) Act 1985 List of Background Papers: None

Contact Officer: Tom Middleton, Head of Finance and Governance Telephone: 020 7983 4257 E-mail: [email protected]

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Page 220 APPENDIX 1: MAYOR AND MEMBERS EXPENSES 1 April 2016 to 31 March 2017 1 April 2017 to 31 Aug 2017 Taxi Other Other Taxi Other Taxi Taxi Expense Foreign Other Expense Domestic Foreign Travel Total Domestic Total Invoices Expenses Invoices Claims Travel Expenses Claims Travel Travel

Mayor Khan, Sadiq 134.07 - - 3,347.42 1,636.37 5,117.86 ------

Current Assembly Members

Assembly Member Arbour, Tony ------

Assembly Member Arnold, Jennette ------

Assembly Member Bacon, Gareth ------

Assembly Member Badenoch, Kemi1 ------

Assembly Member Bailey, Shaun ------

Assembly Member Berry, Sian ------Page 221 Page Assembly Member Boff, Andrew ------

Assembly Member Cooper, Leonie ------

Assembly Member Copley, Tom ------

Assembly Member Desai, Unmesh ------

Assembly Member Devenish, Tony ------

Assembly Member Dismore, Andrew ------

Assembly Member Duvall, Len ------

Assembly Member Eshalomi, Florence ------

Assembly Member Gavron, Nicky ------

Assembly Member Hill, Susan 2 ------

Assembly Member Kurten, David ------

Assembly Member McCartney, Joanne ------

Assembly Member O'Connell, Stephen ------

Assembly Member Pidgeon, Caroline ------APPENDIX 1: MAYOR AND MEMBERS EXPENSES 1 April 2016 to 31 March 2017 1 April 2017 to 31 Aug 2017 Taxi Other Other Taxi Other Taxi Taxi Expense Foreign Other Expense Domestic Foreign Travel Total Domestic Total Invoices Expenses Invoices Claims Travel Expenses Claims Travel Travel

Assembly Member Prince, Keith ------

Assembly Member Russell, Caroline ------

Assembly Member Sahota, Onkar ------

Assembly Member Shah, Navin ------

Assembly Member Twycross, Fiona ------

Assembly Member Whittle, Peter ------

Total 134.07 - - 3,347.42 1,636.37 5,117.86 ------

1. Kemi 222 Page Badenoch stepped down as an Assembly Member on 20 June 2017, following her appointment as an MP. 2. Susan Hill replaced Kemi Badenoch as an Assembly Member on 20 June 2017. APPENDIX 2: MAYOR AND MEMBERS TAXABLE BENEFITS 1 April 2016 to 31 March 2017 1 April to 31 Aug 2017

Mobile Taxable benefits Travel Card Newspapers Total Travel Card Total Phone

Mayor Khan, Sadiq ------

Former Mayor Johnson, Boris - - 413.50 413.50 - -

Current Assembly Members -

Assembly Member Arbour, Tony 2,364.00 - - 2,364.00 - -

Assembly Member Arnold, Jennette 2,364.00 - - 2,364.00 - -

Assembly Member Bacon, Gareth 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Badenoch, Kemi1 ------

Assembly Member Bailey, Shaun 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Berry, Sian 1,860.00 - - 1,860.00 1,548.00 1,548.00

Assembly Member Boff, Andrew ------

Assembly Member Cooper, Leonie 1,860.00 - - 1,860.00 1,892.00 1,892.00

Assembly Member Copley, Tom 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Desai, Unmesh 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Devenish, Tony ------

Assembly Member Dismore, Andrew ------

Assembly Member Duvall, Len 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Eshalomi, Florence 1,860.00 - - 1,860.00 1,892.00 1,892.00

Assembly Member Gavron, Nicky ------

Assembly Member Hill, Susan2 ------

Assembly Member Kurten, David 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member McCartney, Joanne 1,860.00 - - 1,860.00 2,408.00 2,408.00

Assembly Member O'Connell, Stephen 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Pidgeon, Caroline 2,167.00 - - 2,167.00 2,408.00 2,408.00

Assembly Member Prince, Keith 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Russell, Caroline 1,860.00 - - 1,860.00 1,548.00 1,548.00

Assembly Member Sahota, Onkar ------

Assembly Member Shah, Navin ------

Assembly Member Twycross, Fiona 2,364.00 - - 2,364.00 2,408.00 2,408.00

Assembly Member Whittle, Peter 2,364.00 - - 2,364.00 - -

Former Assembly Members -

Assembly Member Biggs, John - 73.92 - 73.92 - -

Total 39,835.00 73.92 413.50 40,322.42 - 33,368.00 33,368.00

1. Kemi Badenoch stepped down as an Assembly Member on 20 June 2017, following her appointment as an MP. 2. Susan Hill replaced Kemi Badenoch as an Assembly Member on 20 June 2017.

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Page 224 APPENDIX 3: SENIOR EMPLOYEES EXPENSES 1 April 2016 to 31 March 2017 1 April 2017 to 31 Aug 2017 Taxi Other Taxi Taxi Expense Other Domestic Taxi Other Foreign Travel Other Expenses Total Expense Domestic Foreign Travel Total Invoices Claims Travel Invoices Expenses Claims Travel

Private Office Deputy Mayor for Business Agrawal, Rajesh - - - 3,940.81 498.71 4,439.52 ------

Chief of Staff Bellamy, David ------

Mayoral Director, Policy Bowes, Nick - - 242.00 - 120.83 362.83 ------

Mayoral Director, Communications Hennessy, Patrick - - - 1,911.15 1,522.67 3,433.82 ------

Mayoral Director, External and International Affairs Kreitzman, Leah - - 108.00 3,141.99 2,018.04 5,268.03 ------

Deputy Mayor, Policing and Crime Linden, Sophie ------

Deputy Mayor McCartney, Joanne ------

Deputy Mayor for Housing Murray, James - - 269.85 846.56 3,325.73 4,442.14 ------Page 225 Page Deputy Mayor for Planning, Regeneration & Skills Pipe, Jules - - - 320.00 445.83 765.83 ------

Deputy Mayor Environment and Energy Rodrigues, Shirley - - 41.90 2,489.22 350.58 2,881.70 - 148.70 173.65 - 43.93 366.28

Deputy Mayor for Social Integration, Social Mobility & Community Engagement Ryder, Matthew ------

Deputy Mayor for Transport Shawcross, Val ------

Deputy Mayor for Culture & Creative Industries Simons, Justine - - - 5,357.82 391.63 5,749.45 - - - 2,786.63 - 2,786.63

Mayoral Director, Political and Public Affairs Stenner, Jack - - 142.20 - 569.83 712.03 ------

Head of Government and EU Relations Gibson, Sarah - - 30.25 172.59 556.49 759.33 - - - 261.00 - 261.00

Former Mayor's Private Office

Chief of Staff and Deputy Mayor, Policy and Planning Lister, Edward - - - 241.00 167.22 408.22 ------

Deputy Mayor for Transport Dedring,Isabel ------

Deputy Mayor for Housing, Land and Property Blakeway,Richard - 126.40 - - - 126.40 ------

Deputy Mayor for Education and Culture Mirza, Munira - 47.00 - - 9.00 56.00 ------

Director of Communications & External Affairs Walden, Will - 86.00 88.70 - 134.15 308.85 ------

Environment and Political Advisor Pencharz, Matthew - 173.23 38.07 44.16 470.64 726.10 ------

Senior Advisor for Team London, Volunteering, Charities & Sponsorship Wadley, Veronica ------

Senior Adviser - Mentoring Lewis, Ray ------

Chief Economic Advisor Lyons, Gerard ------

Cycling Commissioner Gilligan, Andrew - - 14.90 - 59.10 74.00 ------

Chair of London Food Boycott, Rosie - 6.50 29.45 - 336.00 371.95 ------

Assembly & Secretariat

Executive Director of Secretariat (to 23/6/2017) Roberts, Mark - - 194.41 - 19.50 213.91 ------

Executive Director of Secretariat (from 26/6/2017) Williams, Edward ------

Head of Scrutiny and Investigation Smith, Katie 109.60 106.03 136.89 - 150.00 502.52 - 5.90 43.15 - 21.20 70.25

Head of Committee and Member Services (from 25/9/2017) Arnold, Rebecca ------APPENDIX 3: SENIOR EMPLOYEES EXPENSES 1 April 2016 to 31 March 2017 1 April 2017 to 31 Aug 2017 Taxi Other Taxi Taxi Expense Other Domestic Taxi Other Foreign Travel Other Expenses Total Expense Domestic Foreign Travel Total Invoices Claims Travel Invoices Expenses Claims Travel

External Affairs

Assistant Director - External Relations Strain, Emma - 94.80 157.70 2,143.65 828.31 3,224.46 - - 41.70 - 167.00 208.70

Commercial Director (left 11/5/2017) Richards, Amelia - 119.02 18.80 - - 137.82 ------

Head of Media Hart, Sam 57.28 - - 214.00 1,359.98 1,631.26 ------

Community & Intelligence -

Head of Paid Service and Executive Director - Communities & Intelligence Jacobs, Jeff 488.11 - - - 139.97 628.08 ------

Assistant Director - Intelligence Collinge, Andrew - 349.03 311.70 822.97 659.06 2,142.76 - 28.12 166.21 850.75 264.99 1,310.07

Assistant Director - Health, Education and Youth Coyle, Amanda ------

Assistant Director - Communities and Social Policy Slay, Julia1 ------

Assistant Director - Team London and Sport (from 3/7/2017) Brown, Laura ------

Head of Education and Youth Boswell, Caroline - - 78.20 - - 78.20 ------

Head of Finance and Governance (from 1 March 2016) Middleton, Tom - - - - 310.00 310.00 ------

Assistant Director for Culture and Creative Industries (from 9/10/2017) Manson, Shonagh ------

Senior Manager for Culture & Creative Industries (to 3/7/2016) Simons, Justine - 370.52 - - 459.01 829.53 ------

Development & Environment

Executive Director of Development, Enterprise and Environment Fletcher-Smith, Fiona 56.44 - 18.30 502.33 2,959.02 3,536.09 - - 60.50 220.00 - 280.50

Assistant Director - Economic and Business Policy Kleinman, Mark ------

Assistant Director - Environment Feehily, Patrick - - 180.50 600.05 225.30 1,005.85 ------

Head 226 Page of Transport Steer, Tim - - 289.30 - - 289.30 - - 187.80 - 20.00 207.80

Assistant Director - Regeneration Debbie Jackson - 12.00 22.00 - 79.80 113.80 ------

Assistant Director - Planning (from 3/4/2017) McLoughlin, Juliemma ------347.48 - 347.48

Resources -

Executive Director - Resources Clarke, Martin - - - - 319.47 319.47 ------

Assistant Director - Group Finance Gallie, David - - 109.00 - 310.00 419.00 ------Head of Financial Services (on secondement to OPDC from 1 April 2016) Wilson, Doug - 44.80 47.20 - 522.45 614.45 ------

Head of Technology Group Munn, David ------Assistant Director - Human Resources & Organisational Development (from 18/9/2017) DeSouza, Charmaine ------Assistant Director - Human Resources & Organisational Development (to 30/6/2017) Carter, Juliette - - - - 9.47 9.47 ------

Head of Facilities Management Grinter, Simon - - - - 65.96 65.96 ------

European Programme Director Conway, Alex - 13.00 1,070.45 548.91 370.14 2,002.50 - - 302.10 734.01 619.69 1,655.80 APPENDIX 3: SENIOR EMPLOYEES EXPENSES 1 April 2016 to 31 March 2017 1 April 2017 to 31 Aug 2017 Taxi Other Taxi Taxi Expense Other Domestic Taxi Other Foreign Travel Other Expenses Total Expense Domestic Foreign Travel Total Invoices Claims Travel Invoices Expenses Claims Travel Housing and Land

Executive Director of Housing and Land Lunts, David - 33.40 591.74 877.11 269.02 1,771.27 - 38.00 72.70 - - 110.70

Assistant Director - Programme Policy and Services Ratcliff, Jamie 58.34 31.53 743.52 - 767.79 1,601.18 - - 164.00 - - 164.00

Assistant Director - Strategic Projects and Property Powell, Simon - - 172.08 852.70 3,260.00 4,284.78 - - - 163.77 - 163.77

Head of Area, North East London Duncan, Fiona - - 380.00 - 541.30 921.30 - - 68.10 - - 68.10

Head of Area, North West London Taylor, Nicholas - 39.23 129.45 - 414.90 583.58 ------

Head of Area, South Owen, Lucy - - 19.60 - - 19.60 ------

Head of Area South Heather, Juman ------

Total 769.77 1,652.49 5,676.17 25,027.02 25,016.90 58,142.35 - 220.72 1,279.91 5,363.64 1,136.81 8,001.08 Page 227 Page N.B. Expenses for Sophie Linden, Deputy Mayor, Policing and Crime, are paid by the Mayor's Office for Policing and Crime 1. Julia Slay - interim cover from 3 July 2017 for Sarah Mulley who is on maternity leave This page is intentionally left blank

Page 228 Agenda Item 10

Subject: Work Programme for the Audit Panel 2017/18 Report to: Audit Panel

Report of: Executive Director of Secretariat Date: 17 October 2017

This report will be considered in public

1. Summary

1.1 The Audit Panel is requested to approve its work programme for 2017/18. The Panel receives an update on its work programme at each meeting.

2. Recommendation

2.1 That the Panel agrees its updated work programme for the remainder of the 2017/18 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 Chartered Institute of Public Finance and Accountancy (CIPFA) guidance recommending the establishment of audit committees. The Audit Panel’s terms of reference, as agreed at the Annual Meeting of the Assembly on 3 May 2017, 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

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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 2017/18 Assembly year.

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Date of meeting Agenda Items

12 December - External Audit Reports 2017 - Annual Management Letter - Internal Audit Reports - Internal audits - Follow-up Audits; - Progress Report - Monitoring of expenses and Taxable Benefits – Mayor, Elected Members and Senior Staff; and - Work Programme for the Audit Panel for 2017/18.

20 March 2017 - External Audit Reports - Audit Plan 2017/18; - Internal Audit Reports - Internal audits - Follow-up Audits - Progress Report - Draft Internal Audit Plan 2017/18; - 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; - Annual Report of the Monitoring Officer regarding the complaints against elected Members; and - Work Programme for the Audit Panel for 2018/19.

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 3 May 2017.

6. Financial Implications

6.1 There are no financial implications for the purposes of this report.

Page 231

List of appendices to this report: None.

Local Government (Access to Information) Act 1985 List of Background Papers: None

Contact Officers: Polly Hanford, Committee Assistant Telephone: 020 7983 5520 E-mail: [email protected]

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