ethical governance in england and role of audit commission
DESCRIPTION
Ethical governance in England and role of Audit Commission. Alison Kelly, Senior Manager, Governance and Counter Fraud Practice. Introduction …. Audit Commission – what we are and what we do Context for our work – CSPL/SBE Our methodologies and tools Our impact. Audit Commission. - PowerPoint PPT PresentationTRANSCRIPT
Audit Commission
Presentation
Ethical governance in England and role of Audit Commission
Alison Kelly, Senior Manager, Governance and Counter Fraud Practice
Audit Commission
Presentation
Introduction …
• Audit Commission – what we are and what we do
• Context for our work – CSPL/SBE
• Our methodologies and tools
• Our impact
Audit Commission
Presentation
Audit Commission
• Established by Parliament 1983• Independent body responsible for ensuring
that public money spent economically, efficiently and effectively to achieve high-quality local services for the public
• Work covers local government, health, housing, community safety and fire and rescue services
Audit Commission
Presentation
Audit Commission
£180+bn
PROBITY
PROBITYAUDITAUDIT REGULARITY
REGULARITY
AUDITAUDIT
VALUEVALUEFOR MONEYFOR MONEY
AUDITAUDIT
TOWN HALL
INSPECTIONINSPECTION
RESEARCHRESEARCH/STUDIES/STUDIESIMPROVEMENTIMPROVEMENT
Audit Commission
Presentation
Our mission …
• … to be a driving force in the improvement of public services
• We promote good practice and help those responsible for public services to achieve better outcomes for citizens, with a focus on those people who need public services most
Audit Commission
Presentation
Strategic objectives
To raise standards of
Financialmanagement and
financial reporting.
To challengepublic bodies to deliver better value
for money.
To stimulateSignificant
improvement in the quality of
data and the useof information
by decisionmakers.
To encourage Continual
Improvement in publicservices so they
meet the changing needs of diverse communities and provide fair access
for all.
Strategic objectives
Strategic plan – ‘We will make
available a range of tools , information
and expertise, including self-
assessment tools, to help local bodies
achieve high standards of
governance and proper conduct.’
To promote high standards of governance and accountability.
Audit Commission
Presentation
Promoting governance and accountability
• Steering group established to focus and develop our approach to governance and counter fraud across Audit Commission
• Governance and Counter Fraud Practice established• Knowledge Network includes staff across England
sharing knowledge, information and good practice• Training sessions• Extensive Intranet site – including notable practice• Publications • Methodologies and governance tools
Audit Commission
Presentation
Definition of governance changed with new focus
• Originally about financial management and internal controls
• Now about making a difference• Impact on trust and confidence in public bodies• Focus on behaviour, values, culture and
understanding
Audit Commission
Presentation
Definition of governance
Ensuring the organisation (or partnership) is doing the right things, in the right way, for the right people, in an open, honest, inclusive and timely manner
Audit Commission
Presentation
What is good governance?Both
– the means and the ends– brains and the central nervous system of
organisation• Arrangements alone do not bring about good
governance• Must have appropriate culture, understanding
and behaviours.
Everyone in organisation has role to play– providing vision and leadership and – good quality services
Audit Commission
Presentation
Context – 1980s and 1990s
• Widespread concern about standards in public life• Widespread perception that standards in public life
declined• Allegations that
– MPs accepted cash for asking questions in Parliament– appointment to public bodies made on basis of politics or
personal connections rather than merit– local government being run by politicians for own benefit
Audit Commission
Presentation
Committee on Standards in Public Life
Established by Prime Minister October 1994 to:• examine current concerns about standards of conduct
of all holders of public office, including arrangements relating to financial and commercial activities
• make recommendations as to any changes in present arrangements which might be required to ensure the highest standards of propriety in public life.
Not charged with examining individual issues of misconduct
Audit Commission
Presentation
Findings of CSPL
• Couldn’t say conclusively that standards of behaviour in public life declined
• Conduct in public life more rigorously scrutinised than in past• Standards which the public demands remain high• Great majority of people in public life meet high standards
• Weaknesses in procedures for maintaining and enforcing those standards
• As a result people in public life are not always as clear about boundaries of acceptable conduct
• Principal reason for public disquiet
Audit Commission
Presentation
Recommendations - 1st CSPL reportPrinciples of public life• General principles of conduct which underpin public life need to
be restatedCodes of Conduct• All public bodies should draw up Codes of Conduct incorporating
these principles. Independent Scrutiny• Internal systems for maintaining standards should be supported
by independent scrutiny. Education• More needs to be done to promote and reinforce standards of
conduct in public bodies, in particular through guidance and training, including induction training.
Audit Commission
Presentation
Seven Principles of Public Life
• Selflessness
• Integrity
• Objectivity
• Accountability
• Openness
• Honesty
• Leadership
Audit Commission
Presentation
Seven Principles of Public LifeSelflessness• Holders of public office should take decisions solely in terms of the public
interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.
Integrity• Holders of public office should not place themselves under any financial
or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.
Objectivity• In carrying out public business, including making public appointments,
awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Accountability• Holders of public office are accountable for their decisions and actions to
the public and must submit themselves to whatever scrutiny is appropriate to their office.
Audit Commission
Presentation
Seven Principles of Public Life cont.Openness• Holders of public office should be as open as possible about all
the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Honesty• Holders of public office have a duty to declare any private
interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
Leadership• Holders of public office should promote and support these
principles by leadership and example.
Audit Commission
Presentation
Recommendations – 3rd report 1998
• Local Government Act, 2000 Part III• Every local authority ethical framework based on
seven principles of public life – lead responsibility for own standards– adopt statutory code of conduct for councillors
that sets out rules governing the behaviour of its Councillors
– set up standards committee• Established Standards Board for England (SBE)
Audit Commission
Presentation
Local Government Act, 2000 Part III- impact
• Initially too focused on compliance• Not enough of focus on
understanding, behaviours and culture
• Difficult issues exported by councils to Standards Board for England
• One councillor a week disbarred
Audit Commission
Presentation
Audit Commission focuses on improvement – not on compliance
• Little focus on small print of legislation and compliance
• Main focus on understanding, behaviour, culture and values
Audit Commission
Presentation
Getting the Balance Right 10th Report - 2005
R31: All local authorities should consider using the Audit Commission/Standards Board Ethical Governance Audit tool and facilitated workshop to self-assess their arrangements for ensuring ethical standards
R35: The boards of all public bodies should commit themselves to the adoption and use of the Audit Commission’s self assessment tool, Changing Organisational Culture Audit, which is especially designed to help embed a good conduct culture
Audit Commission
Presentation
How do we support improvement?
Audit toolsGood Governance Standard Assesses and develops governance of an organisation or partnership using a survey,
diagnostic and workshops. Based on the Good Governance Standard for Public Services is aligned with CIPFA’s Annual Governance Statement for local government.
Changing Organisational Cultures Raises fraud awareness within an organisation through a survey and workshops.
Your Business @ Risk Reviews an organisation’s exposure to IT risk through a survey for all staff.
Ethical Governance Diagnostic Assesses and develops ethical governance arrangements in organisation covered by the
Local government Act 2000 through survey, review and workshops.
Under development: Managing the risk of fraud; Risk management; and Equalities, diversity and human rights.
Audit Commission
Presentation
Concept of tools
• Self assessment by leadership and staff of the organisation
• Organisation works with Audit Commission to agree how well organisation doing
• Extensive feedback from staff or other stakeholders reality check for leadership
• Together with organisation agree next steps• Often most impact when return to check on progress!
Audit Commission
Presentation
“We are particularly impressed with the innovative experience based learning
techniques pioneered by the Audit Commission which help organisations reach
their own determination of their strengths and weaknesses and allow the solutions
to come from within rather than imposed from outside. The tools (Changing
Organisational Cultures and Ethical Governance Diagnostic) have the added
benefit of allowing benchmarking against similar organisations and, if widely used,
will provide useful aggregate data on ethical culture across the public sector”.
10th report of the Committee on Standards in Public Life
“… a source of pride for the commission”.James Strachan, former Chairman,
Audit Commission,
“We are pleased to be associated with this important
diagnostic. It is helping to drive up standards across
local government. It tackles some extremely sensitive
issues that get right to the heart of good governance.
We know that many councils have already benefited
from this work and we hope that others will take up the
opportunity”
David Prince,
Chief Executive, Standards Board for England
Audit Commission
Presentation
Use of Resources – methodology• Annual assessment of local authorities, fire and rescue
authorities, police authorities and primary care trusts (health)
• Considers how well organisations managing and using resources to deliver value for money and better sustainable outcomes for local people
• Three themes – strategic financial management– strategic commissioning and good governance – management of natural resources, assets and people.
Audit Commission
Presentation
Use of ResourcesAssessment by auditors
• Scored judgement based on evidence• Able to compare scores and judgements between
organisations• Sense of competition driving up standards across
country• Leadership don’t like public humiliation.
Audit Commission
Presentation
Use of ResourcesGoverning the business
Overall issue …
How well does the organisation govern itself and commission services that provide value for money and deliver better outcomes for local people?
Audit Commission
Presentation
Use of ResourcesKey lines of enquiry
1. Does the organisation commission and procure quality services and supplies, tailored to local needs, to deliver sustainable outcomes and value for money?
2. Does the organisation produce relevant and reliable data and information to support decision making and manage performance?
Audit Commission
Presentation
Use of ResourcesKey lines of enquiry
3. Does the organisation promote and demonstrate the principles and values of good governance?
4. Does the organisation manage its risks and maintain a sound system of internal control?
Audit Commission
Presentation
Use of Resources driving improvement
• Overall councils are improving governance arrangements
• Percentage scored 3s and 4s (highest scores)– 2006 - 55 per cent– 2007 - 60 per cent,
• 5 per cent higher in 2007 than in 2006
Audit Commission
Presentation
Our governance tools driving improvement
• Used ethical governance diagnostic in over 100 local authorities
• 4,600 councillors and officers completed survey
Audit Commission
Presentation
Our governance tools driving improvement
• Standards Board for England referring more challenging local authorities to us
• SBE considers undertaking our diagnostic important lever for improvement
Audit Commission
Presentation
Our governance tools driving improvement
• Recently revisited problematic council • In two years survey scores markedly improved • In 2006 only 52 per cent of elected members
considered elected leader of council was proactively promoting importance of the ethical agenda. 63 per cent members considered chief executive proactive
• By 2008 figures increased to 82 and 83 per cent respectively
Audit Commission
Presentation
Our impact
• considered by stakeholders to be thought leader in field of governance and counter fraud
• recognised as expert partner by CIPFA, Standards Board for England, IDeA, Committee on Standards in Public Life and other stakeholders, such as UK national audit offices
• key stakeholder National Fraud Strategic Authority (NFSA). Audit Commission plays key role in making the UK hostile environment for fraudsters, including money laundering
• considered by local public bodies to make impartial judgements and provide impartial advice on effectiveness of their governance
• evidence that governance improving
Audit Commission
Presentation
In conclusion …
• Focus on working with organisations to drive improvement
• Focus on culture. values and understanding relevant to whole public organisation
• Focus on compliance and penalties can bring game playing and ridicule rather than improvement
• Public doesn’t understand niceties of statutory codes• Public understand the principles of public life• Next steps to help government to reach this level of
understanding!
Audit Commission
Presentation
Questions, open forum and discussion