Joint Audit, Risk & Assurance Panel-Leicestershire

Police and Crime Commissioner and Chief ConstableAppendix A

TERMSOFREFERENCEFOR JOINTAUDIT,RISKASSURANCE PANEL

POLICECRIME COMMISSIONERANDCHIEFCONSTABLE

1.INTRODUCTION

1.1InlinewiththeprinciplesofgoodgovernanceaslaiddownbytheChartered InstituteofPublicFinanceAccountancy(CIPFA)andtheFinancial ManagementCodeofPracticeforthePoliceServiceofEnglandandWales, this independentJointAudit,RiskAssurancePanel(JARAP)hasbeen established, covering the separate rolesand offices of boththe Police Crime Commissioner(PCC)andthe ChiefConstable.

1.2TheOfficeofPCCandChiefConstableareintrinsicallylinkedbythepriorities ofthe Police & CrimePlan and therefore itisin the bestinterestsofthe public, valuefor moneyandprobitythataJointAudit, RiskAssurancePanel (JARAP)isestablished.

1.3ThepurposeoftheJARAPasanindependentbodyistoseekassuranceover the adequacyof thefollowing:

  • Theriskmanagementandtheinternalcontrolframeworkoperatedbythe PCC and ChiefConstable.
  • Theeffectivenessoftheirrespectivegovernancearrangements.
  • Theappointment,supportandqualityoftheworkofinternalandexternal auditorsastheyprovideassuranceonriskmanagement,internalcontrols and theannualaccountsthroughtheirwork.
  • Financialandnon-financialperformancetotheextentthatitaffectsthe PCC and Chief Constable’s exposure to risk, weakens the control

environmentandunderminestheirabilityto providegood valueformoney.

  • Thefinancialreportingprocess.

1.4TheJARAPisanon-executivePanelandhasnoexecutivepowers,otherthan those specificallydelegated in theseTermsofReference.

1.5TheJARAPwillestablisheffectivecommunicationwiththePCCandChief Constable,theirnominatedrepresentatives,theirrespectiveChiefFinance Officers,MonitoringOfficer,HeadofInternalAudit,theExternalAuditorand other relevantstakeholders,includingthePoliceandCrimePanel,forthe purposeof fulfillingthesetermsof reference. A workingprotocolwillbe established toensurethatthisisachieved byall parties.

2.MEMBERSHIP

2.1TheJARAPwillhaveaChair,avice-chairandthreeothermembers,allof whommustbeindependentofthePCC,theChiefConstableandthePolice and CrimePanel.

2.2MembersoftheJARAPshallberecruitedbytheJARAPChaironapplication and throughopencompetition,inconjunction withthe Police and Crime CommissionerandChiefConstableortheirrepresentatives.Theyshallbe recruitedtoensurethattheJARAPhasall the necessary skillsand experiencetofulfilitstermsofreference,in accordance withthejob descriptionforJARAPmembers.ToensuretheindependenceoftheJARAP, membersshall notbe:

  • A standingorex-PCC orChiefConstable.
  • A memberorex-memberofa Police and CrimePanel.
  • Servingpoliceofficersorhaveservedasapoliceofficerwithinthelast8 years.
  • CurrentlyservingstaffofLeicestershirePoliceorOfficeofthePoliceand Crime Commissioner.
  • Electedor ex-localgovernment councillors or thoseactiveinlocalor nationalpolitics.
  • Currentlyservingofficersofanycounty,city,boroughordistrictcouncils within theforcearea.
  • Individualswhohavesignificantbusinessorpersonaldealingswiththe Office ofthe Police andCrime CommissionerorForce.
  • Individualswhohavecloserelationshipswithanyoftheaboveincluding immediatefamilymembersandassuchmaynothavetherequisitelevel

OfindependencerequiredforJARAPmembership.

  • Individualsremovedfroma trusteeship ofacharity.
  • IndividualsunderadisqualificationorderundertheCompanyDirectors Disqualification Act.
  • Apersonwhohasbeenadjudgedabankrupt,ormadeacompositionor arrangementwith hiscreditors.
  • ConvictedintheUK,ChannelIslandsortheIsleofManofanyoffence andhashadpassedonasentenceofimprisonment(whethersuspended

Ornot)foraperiodofnotlessthanthreemonthswithouttheoptionofa fine,within the lastfive yearspriortotheirappointment.

2.3TheChairoftheJARAPwillbejointlyrecruitedbythePCCandtheChief Constableand will serve foroneterminthisrole asChair.

2.4AllJARAPMemberswillserveforamaximumof2terms,eachtermbeinga maximumof4years.Toensurecontinuity,wherepossible,membersshallbe rotatedonandofftheJARAPinturnratherthanasagroup,thereforethe termofmembershipfortheJARAPwillbedeterminedonrecruitmentofthe member.

2.5The process for appointment of a second term as a JARAP member is as follows:

2.5.1Six months prior to the end of the first term, on behalf of the chair, the CFO will seek an expression of interest from the JARAP member for the second term.

2.5.2Within one month of this letter, the JARAP member must advise the Chair of their intention whether to seek a second term.

2.5.3If the JARAP member seeks a second term, the Chair will, within one month, in writing, recommend the appointment (or otherwise) for a second term to the PCC and CC, outlining their reasons for the recommendation. This could include considerations such as attendance, additional responsibilities undertaken etc.

2.5.4The PCC and CC will consider the recommendation of the Chair, seeking input from their offices as appropriate. If they support the Chair’s recommendation, they will write to the JARAP member with the outcome within one month of the Chair’s recommendation.

2.5.5Any queries with the recommendation will be discussed by the PCC and the CC with the Chair and a majority agreement reached.

2.5.6The Chair, PCC and CC decision is final and there is no appeal mechanism.

2.6Members of the JARAP will be vetted to the Recruitment Vetting (RV) level which is consistent with the vetting levels now used for staff and Non Police Personnel vetting Level 2 (NPPV2).

2.7Vetting arrangements will be undertaken for JARAP members prior to commencement of the role and at the period with a further review at the appointment of the second term on the panel.

2.8Thevice-chairisselectedbyavotebymembersoftheJARAP.Thevice-chairwillserveforonetermonlyinthisrole.Thevice-chairwillactasChairat meetingsintheabsenceoftheChair.IftheChaircannolongercontinuein thisrole,thevice-chairwillactastheChairuntiltheformalappointmentof anewChair.Thevice-chairwillnotautomaticallybecomethenewChair,

Althoughmayapplyforthepost of Chairaspart oftherecruitmentand replacementprocessrunbythe PCC and ChiefConstable.

2.9AllmembersoftheJARAPwillbesubjecttoanindependentannualappraisal,

Theoutcomes willinformthe member development programme. See

Paragraph9.4ofthesetermsofreference.

2.10OnjoiningtheJARAP,eachmembermustattendaninductiontrainingcourse tohelpthemunderstandtherolesofthePCCandtheChiefConstable,the Police andCrimePanelandtheorganisationspertainingtothePCCand ChiefConstable.Furthertrainingonspecificrelevanttopicswillbeprovided as necessary,accordingtothemembers’ownrelevantexperienceand emerging businessneedsoftheJARAP.MembersoftheJARAPwillbe expectedto attendallsuchtrainingandtodeveloptheirskillsaspartofa memberdevelopmentprogramme.Trainingneedswillbeconsideredduring theannual appraisal process and a training& developmentprogramme established bothfortheJARAP and itsindividualmembersasappropriate.

2.11InaccordancewiththeJARAPmember’scodeofconduct,eachmemberwillbe requiredtorecordanyconflictsofinterestintheregisterofpecuniaryand non- pecuniaryinterests.Inaddition,JARAPmemberswillberequiredtodisclose anysuchinterestsatthecommencementofanymeetingwherethereisaneedtodosoduetothenatureoftheJARAPagenda,orimmediatelyifthey arise unexpectedly in discussion.

3.RIGHTS

3.1OnlymembersoftheJARAP have the rightto vote onmatters.

3.2ThemembersoftheJARAPwillbe remunerated andreimbursedforall expensesincurredinthefulfilmentoftheirJARAPduties,rolesand responsibilitiesinaccordancewiththescheduleofallowancesandexpenses

Agreed bythePCC and ChiefConstable.

4.SUPPORT

4.1TheChair,inconjunctionwiththePCCandChiefConstablehasparticular responsibilityforensuringthattheworkof theJARAPisappropriately resourced,includingappropriatesecretariatsupportandanyotherspecialist supportnecessarytoensureitsmembersareeffectiveintheir role.The JARAPChairhasadutytoreportanyshortfallinthelevelofsupporttothe PCCandChiefConstableinthefirstinstanceandinapublicreportifthisis notremedied.

4.2Theallocationof secretariatsupporttotheJARAPanditsfundingwillbe agreedbetweenthePCCandChiefConstable.Thiswillincludeensuringthat bestpracticeascontainedinrelevantgoodgovernancecodesandprotocols areupheldsothattheJARAPiseffectiveandthemembers’independenceis maintained.

4.3TheJARAPmaywithreasonablejustificationandwithjointapprovalbythe respectiveChiefFinanceOfficersofthePCCandChiefConstableprocure specialistad-hocadvicee.g.legal,toobtainadditionalskills,knowledgeand experienceattheexpenseofthePCCandChiefConstabletosupportthe JARAPintheachievementofitstermsofreference.Thiswillconsidered

AppropriatewherespecialistadviceisnotavailablewithintheexistingJARAP supportarrangementsoritisnotconsideredappropriateto usethissupport.

5.FREQUENCYAND NOTICEOFMEETINGS

5.1TheJARAPwillmeetapproximately fivetimesayear.Thecalendarofmeetingsshall beagreedatthestartofeachyear.Scrutinyandpre-approvalofthestatementofaccountsofthePCCandChief Constable will take place either at a JARAP meeting or by the Statement of Accounts being shared with members before submission to external audit.

5.2Furthermeetingsoutside ofthenormalcycleoftheJARAPcanbeconvenedat therequestoftheJARAPChairoranyofitsmembers,subjecttoagreement bythe Chair.

5.3ThePCCandorCCmayasktheJARAPtoconvenefurthermeetingsto discuss particularissueson which theywanttheJARAP’sadvice.

5.4Meetingscanberequestedbytheexternalorinternalauditorswherethisis considered necessaryand on agreementoftheJARAP Chair.

5.5Unlessotherwiseagreed,formalnoticeofeachmeetingconfirmingthevenue, time anddatetogetherwiththeagendaofitemstobediscussed,willbe forwardedtoeachmemberoftheJARAP,any otherpersonrequired toattend andallotherappropriatepersonsdeterminedbytheChair,nolaterthanfive working daysbeforethedate ofthemeeting.

5.6Anymeetingsheldoutsidethenormalcycleofmeetingsshouldbeconvenedwithaminimumnoticeoffiveworkingdays.Extraordinaryorurgentmeetings maybe heldwithlessnoticebutshouldbeforexceptionalmattersonly, subjecttotheChair’sagreementandquorumrequirements.Inthiscasethe agendaand any supportingpaperswillbesentto theJARAPmembersandto other attendees at thesametime as the meeting notice is sent out, recognisingthatifthe matterissourgentthattheremayonlybeanoral report.Ifthisisthecasethenthiswill be identifiedonthe agenda.

5.7The agreement of the Chair is required to cancel, postpone or amend meeting arrangements with a minimum notice of five working days. If the Chair is unavailable, agreement of the vice-chair will be required.

5.8If meetings are cancelled, it is anticipated that updates to members on non-standing reports will still be circulated unless otherwise agreed with the Chair.

6.ATTENDANCEAT MEETINGS

6.1MembersoftheJARAPareexpectedtoattendallmeetings.Iftwoormore meetingsaremissedinayear,thiswillbediscussedaspartoftheannual appraisal,see9.3.Regularnon-attendanceofJARAPmemberswillleadto theirremovalas amemberofthe JARAP onagreementbythe Chair.

6.2The PCC and ChiefConstable,will attend all meetingsofthe JARAP,orensure thattheyaresuitablyandappropriatelyrepresented,thereforeensuringthat thepurposeoftheJARAPisnotcompromisedandthatthe membersare able toappropriatelyfulfiltheirresponsibilities.Inaddition,thePoliceReformand SocialResponsibilityAct2011,Section114oftheLocalGovernmentFinance Act1988andtheAuditandAccountsRegulations2011assignanumberof statutoryresponsibilitiestoeachoftheChiefFinanceOfficersofthePCCand ChiefConstable.Giventhenatureoftheseresponsibilitiesitisexpectedthat boththe ChiefFinanceOfficersofthePCCandtheChiefConstablewill attendall meetingsoftheJARAP,orwherethisisnotpossiblethentheir nominatedrepresentatives.

6.3TheHeadofInternalAuditandrepresentativesoftheexternalauditorwillbe invitedtoattendmeetingsonaregularbasis.TheJARAPshouldmeetwith the HeadofInternalAuditandrepresentatives of the external auditor separatelyand privately atleastoncea year.

6.4AminimumofthreemembersoftheJARAPmustbepresentfor themeetingto be deemedquorate, oneofwhommustbe eitherthe Chairorvice-chair.

6.5JARAPmeetingswillbeheldinpublicwiththemattersdiscussedbeingplaced inthepublicdomain.Whereitemsareconsideredcommerciallysensitiveor containissueswhicharedeemedconfidentialorrelatetoamemberofstaff the JARAPmaysitprivately,thatis,excluding membersofthepublicorpress, and will record theirreasonsforthisdecision inthe publicdomain.

6.6TheJARAPmayholdprivateinformalmeetingse.g.forbriefingandtraining purposeswithoutanynon-memberspresent iftheysodecide. Formal decisionscannotbetaken at suchmeetings.

6.7Expenses for the JARAP will be reimbursed on the basis of receipts and in line with the prevailing policies, rates and allowances of the Force and OPCC.

7.ACCESS

7.1TheChiefFinanceOfficers,theMonitoringOfficer,HeadofInternalAuditand the representativeofexternalauditorofthePCCandChiefConstablewill have free andconfidentialaccesstotheChairoftheJARAP.

8.MINUTES OFMEETINGS

8.1ThesecretaryoftheJARAPwillrecordthenamesofthosepresentatthe meeting,writeminutes,includingthekeypointsanddecisionsofallJARAP meetings,alongwithanyactionsstemmingfromdiscussionthatneedtobe takenbeforethenextmeeting.Theminutesofthepreviousmeetingmustbeapproved bytheJARAPandsignedbythechairasatruerecordateach meeting.

8.2ThesecretaryoftheJARAPwillestablish,atthebeginningofeachmeeting, the existenceofanyconflictsofinterestandminutethemaccordingly,see also paragraph2.11ofthese termsofreference.

8.3TheunsignedandunapprovedminutesofthemostrecentJARAPmeetingwill becirculatedpromptlyandnolaterthantenworkingdaysafterthemeetingto allmembersoftheJARAP,tothePCCandtheChiefConstablealongwith their nominatedrepresentativeattheJARAP,theChiefFinanceOfficersof thePCCandChiefConstableandtotheinternalandexternalauditors,once they have been approved by the Chair or deputy Chair in the Chair’s absence.

8.4Theminutesofthe JARAP will be placed in the publicdomain assoon asthese havebeenapprovedandsignedbytheChair,withexclusiontoanymatter deemed privateandconfidential,asperparagraph6.5ofthesetermsof reference.

9.REPORTING

9.1ToensurerelevantandtimelyreportingthroughouttheyeartotheJARAPa reportingtimetablewillbepreparedbythePCCandChiefConstableand

AgreedwiththeJARAP.ThiswillbedesignedtoenabletheJARAPto fulfilits responsibilities and receive the assurances itwillseek. The annual plan or timetable will be reviewed regularly by the Chair, the Finance Director and the Chief Finance Officer.

9.2TheChairoftheJARAPwillprovidethePCCandChiefConstablewithan AnnualReportinthenameoftheJARAP,timedtosupportfinalisationofthe accountsand theAnnualGovernanceStatement, summarisingits conclusionsfromtheworkithasdoneduringtheyearanddrawingattentionto anysignificantoremerging issues asappropriate.Thisreportwill be placed inthe publicdomainfollowing itsdiscussionwiththePCCandChiefConstablealongwiththeirresponsestotheChair’sAnnualReport.TheChair willberesponsiblefordealingwithanypublicormediaquestionsrelatingto thatreport.

9.3TheJARAP will,havingregardto bestgovernance practice,reviewthese terms ofreference annuallyand makeanychangesdeemed necessary in consultation with thePCC and ChiefConstable.

9.4TheJARAPwillannuallyreviewitsownperformancetoensureitisfulfillingits terms ofreferenceandoperatingeffectively.Indoingsoitwillmakeany recommendationsforchangetothePCCandChiefConstable.Thisannual

Reviewofperformancewillincludeanindividualappraisalofallmembersof theJARAP,includingtheChair.TheperformancereviewoftheJARAPand itsmemberswill becommissioned andundertaken independently.

10.RESPONSIBILITIES

10.1RiskManagement, Governance andinternalcontrolresponsibilities

TheJARAP will seekassurance inconnectionwith thefollowing:

10.1.1Theestablishmentandmaintenanceofaneffectivesystemofrisk management,integratedgovernanceandinternalcontrol,acrossthewholeofthe PCC and ChiefConstableactivities thatsupportsthe achievementoftheobjectivesof the Police and Crimeplan,ensuring probity,valueformoneyandgoodgovernance.

10.1.2Thetimelyimplementationofanyactionsnecessarytoensure compliancewithallinternalstandardsandbestpractice,bothfinancialandnon- financialoperatedbythePCC and ChiefConstable.

10.1.3Theadequacyofrelevantdisclosurestatements,inparticulartheAnnual GovernanceStatement,togetherwithanyaccompanyingHeadofInternalAudit report,externalauditopinion,riskregisterorotherappropriateindependent assurances,priortoendorsementbythePCCand/ortheChiefConstable.Subject tothistheJARAPwillrecommendforadoptiontheAnnualGovernanceStatements forthePCC and ChiefConstable.

10.1.4Theadequacyofarrangementsforensuringcompliancewithrelevant regulatory,legalandcodeofconductrequirementsandfraudandcorruptionasset outinSecretaryofStateDirectivesandotherrelevantbodiesorprofessional standards.

10.1.5NotwithstandingthespecificresponsibilitiesoftheJARAPinconnection withbothinternalandexternalaudit,considertheadequacyofresponsebythePCC and/ortheChief Constabletorecommendationscontainedwithinanyexternal inspection reportthathasbeenreceivedforthepurposes ofassurance.

10.2Internalauditresponsibilities

ItisanticipatedthatthePCC and ChiefConstable will engagethesame internal auditors.Therole oftheJARAP in relationto internal auditwill include advising the PCC and ChiefConstable onthefollowing:

10.2.1Considerandmakerecommendationsontheprovision ofinternal auditors, includingappointment,assessmentofperformance and dismissal.

10.2.2Approvingbutnotdirectingonthe internal auditstrategyand annualinternal auditplan,ensuring thatthis:

  • isconsistentwith professionalstandards;
  • meetstheauditneedsofPCC andChiefConstable;and
  • providesthe JARAP with adequatecoverageforthe purpose ofobtaining

Appropriatelevelsofassurance overtheadequacyoftheriskmanagement,governance and internal controlenvironmentofboththe PCC and ChiefConstable.

10.2.3ConsidertheHeadofInternalAudit’sannualreportandopinion,anda summaryofauditactivity(actualandproposed)andthelevelofassuranceit givesovertheriskmanagement,internalcontrolsandgovernance arrangementsofthe PCC and ChiefConstable.

10.2.4Considerthefindingsofinternalauditreports(ortheirsummaries),the assuranceprovidedandtheadequacyoftheresponsebythePCCand/orChief Constable.

10.2.5Commissioningadditionalworkfromthe internal auditor,havingregardto anyactual orpotentialconflictsofinterest.

10.2.6Ensuring co-ordination between theinternal andexternal auditors to optimise auditresources.

10.2.7Annuallyreviewthe effectiveness ofinternalaudit.

10.2.8WheretheJARAPconsidersthereisevidenceofultravirestransactions, evidenceofimproperacts,orifthereareotherimportantmattersthattheJARAP wishestoraise,theChairoftheJARAPmustinitially takeadvice fromtheMonitoring OfficerbeforeraisingthematterwiththePCCandChiefConstable.Where appropriatetheJARAPmaythenseekindependentlegaladvice.Exceptionally,the mattermayneedtobereferreddirectlytotheexternalauditor,HMICand/orthe Home Officee.g.fraud suspicion directly involving thePCC orChiefConstable.

10.3Externalauditresponsibilities

Itisanticipatedthat thePCC and ChiefConstable will engagethesameexternal auditors.Therole oftheJARAP in relationto external auditwill include advising the PCC and ChiefConstable onthefollowing:

10.3.1Considerandmakerecommendationsontheprovisionofexternalauditors, includingappointment anddismissalinconjunction withthe Public Sector Audit Appointments Ltd PSAAwhoarecurrentlyresponsiblefortheappointmentofexternal auditorsin Englandto bodies subjectto auditunderthe Local Audit and Accountability 2014.

10.3.2Review,adviseonandendorsetheexternalauditstrategyandannualaudit plan,ensuringthatthisisconsistentwithprofessionalstandardsandthe External AuditCode ofAuditPractice.

10.3.3Considertheexternalauditor’sannualletter,relevantreportsandthe reporttothosechargedwithgovernance.

10.3.4Considerspecificreportsas agreed with theexternal auditor.

10.3.5Commissioningwork from theexternalauditor, having regardtoany actual orpotential conflictsofinterest.

10.3.6Consider majorfindingsof external audit work and the adequacyof response ofthePCC and / orChiefConstable

10.3.7Ensuring co-ordination between the internaland externalauditors to optimise auditresources.

10.3.8Annuallyreviewthe effectiveness ofexternal audit.

10.4AnnualAccountsofthe PCC and ChiefConstable

The JARAP will:

10.4.1Review,scrutiniseandrecommendforsignaturetheannualstatementof accountspriortotheirexternalaudit.Specifically,itwillseekassuranceswhether appropriateaccountingpolicieshavebeenfollowedandwhetherthereareany concernsarisingfromthefinancialstatements.

10.4.2Considertheexternalauditor’sreporttothosechargedwithgovernance on issuesarisingfromthe auditofaccounts.

11.INFORMATION REQUIREMENT

11.1Foreachmeeting theJARAP will normallybe providedwiththefollowing:

  • A report summarising any significant changes to the PCC and Chief Constable riskand controlsprofile andanyactionplanned in response.
  • Areportonanygovernancemattersarisingoranotethatnogovernance mattershavearisensincethelastmeetingandanyactionplannedinresponse.
  • A progressreportfromthe head ofinternal auditsummarising:
  • Workperformedandacomparisonwith workplanned
  • Key issuesemergingfrom internal auditwork
  • Managementresponse to auditrecommendations
  • Changestothe periodicplan
  • Anyresourcingissuesaffecting thedeliveryofinternal auditobjectives
  • Aprogressreportfromtheexternalauditrepresentativesummarising
  • Workdoneand emergingfindings.
  • A summary report of actions being tracked and progress made in connectionwiththeirimplementationonsignificantrisk,governanceand
  • Internalcontrolsmatters.Therebyprovidingforanon-goingprocessof
  • Follow-up.
  • Fraud and Corruption will be included as a standing agenda item

11.2A protocol between the JARAP and the Ethics Committee is being developed and annual meetings will take place between the Ethics Chair and the lead member for the JARAP to share forward plans and update on key areas of work to minimise duplication and maximise assurances.

11.3A lead member has been appointed to consider collaboration developments in more depth and they, together with information from the Chair in respect of regional meetings will update the JARAP on regional and collaboration arrangements as deemed appropriate.

Updated May 2016