Shropshire Council

Risk management and control of resources

5.1 Principles

5.1.1 Sound systems of internal control are essential to the proper economic, efficient and effective use of resources, the achievement of objectives, and the safeguarding of public funds.

5.1.2 Legislation requires that the Council provides for both internal and external audit. External audit provides an independent assessment of the Council’s financial statements and the adequacy of its arrangements for securing value for money. Internal audit objectively examine, evaluate and report on the adequacy of the control environment as a contribution to the proper economic, efficient and effective use of resources for the Council and their external clients.

5.1.3 There is a basic expectation that members and all officers will act with integrity and with due regard to matters of probity and propriety, and comply with all relevant rules, regulations, procedures and codes of conduct, including those in relation to receipt of gifts and hospitality and declaration of conflicts of interest.

5.1.4 The Council will not tolerate fraud or corruption in the administration of its responsibilities, whether perpetrated by members, officers, customers of its services, third party organisations contracting with it, or other agencies or individuals with which it has any business dealings.

5.1.5 Risk management is an integral part of effective management and planning. It is concerned with identifying and managing key obstacles to the achievement of objectives.

Risk Management

5.2 Cabinet is responsible for approving the council’s opportunity risk management strategy and for reviewing the effectiveness of risk management. This includes the adequacy of provisions, reserves and balances.  Cabinet is responsible for ensuring that proper insurance exists where appropriate on the advice of the Head of Finance, Governance and Assurance.

5.3 The Head of Finance, Governance and Assurance is responsible for preparing the Council’s Opportunity Risk Management Strategy and for promoting it throughout the council and for advising Cabinet on proper insurance cover where appropriate.

Internal Control

5.4 Internal control refers to the systems of control devised by management to help ensure the council’s objectives are achieved in a manner that promotes economical, efficient and effective use of resources and that the council’s assets and interests are safeguarded.

5.5 The Section 151 Officer, in conjunction with the Head of Audit, is responsible for advising on effective systems of internal control. These arrangements need to ensure compliance with all applicable statutes and regulations and other relevant statements of best practice.  They should ensure that public funds are properly safeguarded and used economically, efficiently, and in accordance with the statutory and other authorities that govern their use.

5.6 It is the responsibility of directors and managers to establish sound arrangements for planning, appraising, authorising and controlling their operations in order to achieve continuous improvement, economy, efficiency and effectiveness and for achieving their financial performance targets.

Audit Requirements

5.7 The Accounts and Audit Regulations 2015 require every local council to undertake an effective internal audit to evaluate the effectiveness of its risk management, control and governance processes, taking into account public sector internal auditing standards and guidance.

5.8 The Local Government Association (Public Sector Appointments Ltd) is currently responsible for appointing external auditors to each Local Council. The basic duties of the external auditor are governed by the Local Audit and Accountability Act 2014 and the National Audit Office’s Code of Audit Practice.

5.9 The council may, from time to time, be subject to audit, inspection or investigation by external bodies such as HM Revenue and Customs who have statutory rights of access.

Preventing Fraud and Corruption

5.10 The Section 151 Officer is responsible for the development and maintenance of a counter-fraud, bribery and anti-corruption policy.

Assets

5.11 Directors and managers should ensure that records and assets are properly maintained and securely held. They should also ensure that contingency plans for the security of assets and continuity of service in the event of disaster or system failure are in place.

Treasury Management and the Pension Fund

5.12 This Council will create and maintain,

  • A treasury management policy statement, stating the policies, objectives and approach to risk management of its treasury management activities.
  • Suitable treasury management practices (TMPs), setting out the manner in which the organisation will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities.

5.13 The content of the policy statement and TMPs will follow the recommendations contained in Sections 6 and 7 of the CIPFA Code for Treasury Management, subject only to amendment where necessary to reflect the particular circumstances of the Council. Such amendments will not result in the Council materially deviating from the Code’s key principles.

5.14 Full Council will receive reports on treasury management policies, practices and activities, including as a minimum, an annual strategy and plan in advance of the year, a mid-year review and an annual report after its close, in the form prescribed in the TMPs.

5.15 The Full Council is responsible for the implementation and regular monitoring of the treasury management policies and practices. The execution and administration of treasury management decisions is delegated to Section 151 Officer.

5.16 All money in the hands of the council is controlled by the officer designated for the purposes of Section 151 of the Local Government Act 1972 (the Section 151 Officer).

5.17 The Section 151 Officer is responsible for reporting to Cabinet a proposed treasury management strategy for the coming financial year at or before the start of each financial year, mid-year review and an annual review by 30th September of the succeeding financial year.

5.18 The Section 151 Officer is responsible for reporting to Cabinet not less than four times in each financial year on the performance of the treasury management operation.

5.19 The Council acts as Administering Authority for the Shropshire County Pension Fund. The Section 151 Officer is the designated Scheme Administrator for the Fund.

5.20 The Section 151 Officer (Scheme Administrator) is responsible for administering the Shropshire County Pension Fund in accordance with overriding pensions regulations and:

  • Local Government Pension Scheme (Benefits, membership and contributions) Regulations 2007 (as amended).
  • Local Government Pension Scheme (Transitional provisions) Regulations 2008 (as amended).
  • Local Government Pension Scheme (Administration) Regulations 2008 (as amended).
  • Local Government Pension Scheme Regulations 1997.
  • Local Government Pension Scheme (Transitional provision) Regulations 1997 (as amended).
  • Local Government Pension Scheme Regulations 1995 (as amended).
  • Local Government Pension Scheme (Management and Investment of funds) Regulations 2009 (as amended).
  • Local Government Pension Scheme Regulations 2013 (as amended)
  • Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014.
  • Public Service Pensions Act 2014
  • Disclosure Regulations 2013
  • The Pension Regulator Code of Practice 2015.
  • Any other overriding Pensions Legislation.

5.21 The Section 151 Officer (Scheme Administrator) is responsible for producing and maintaining a Governance Compliance Statement, Funding Strategy Statement, Statement of Investment Principles, Communications Policy and Administration Strategy for the Fund.

5.22 The Pensions Committee is responsible for approving matters relating to the Shropshire County Pension Fund and reports into Full Council via the Chair / Vice Chair of the Pensions Committee.

5.23 The Pension Board is responsible for the oversight of these matters and assisting the Administering Authority (Shropshire Council) to secure compliance with requirements imposed in relation to the Local Government Pension Scheme by the Pensions Regulator and to ensure the effective and efficient governance and administration of the Fund.

5.24 The Section 151 Officer is responsible for ensuring employers within the Fund are aware of their responsibility in respect of the local government pension scheme regulations.

Staffing

5.25 The Council is responsible for determining how officer support for non-Cabinet roles within the Council will be organised.

5.26 The Head of Paid Service is responsible for providing overall management to staff. He/she is also responsible for ensuring that there is proper use of the evaluation or other agreed systems for determining the remuneration of a job.

5.27 Directors and managers are responsible for controlling total staff numbers by:

  • Ensuring that an approved post exists and that budget provision has been made to cover the cost of filling the post for the period contemplated before commencing the recruitment process.
  • Advising Cabinet on the budget necessary in any given year to cover estimated staffing levels.
  • Adjusting the staffing numbers to that which can be funded within approved budget provision, varying the provision as necessary within that constraint in order to meet changing operational needs.
  • The proper use of appointment procedures.