PAPER C

 

 

                                                                                                            Purpose : for information

 

Committee :   STANDARDS COMMITTEE

 

Date :              17 JUNE 2003

 

Title :               ETHICAL AUDIT

 

REPORT OF THE MONITORING OFFICER

 

 

PURPOSE

 

To consider how the Committee could undertake an Ethical Audit.

 

BACKGROUND

 

At its meeting on 26 November 2002 the Committee considered how an ethical audit of the Council may be undertaken. The need for an ethical audit is driven by a whole range of issues both nationally and locally (all are set out in my report to the Committee last November). However the key message is that such an audit will help to raise ethical standards throughout the organisation in a clear and transparent why so that the public and partners of the Council can have faith in the significance of ethics in the way that the Council operates.

 

Given the scope of such an audit the Committee previously felt that the methodology I suggested in November needed refining and simplifying certainly at the beginning stage. Initially it was anticipated that this simplification could be undertaken by a small task group of the Committee but I regret that time has simply not allowed me the ability to arrange for this task group to meet.

 

However having looked again at some of the lessons from colleagues on the mainland I attach at Appendix 1 a further revised version of the methodology. This offers a three stage approach – the first a fairly straightforward “desktop” exercise, the second a more detail questionnaire of members, officers and outside organisations and the third a much more in depth research type stage.  Sufficient data should be collected by the first two stages so that the third can be focussed on any particular issues that may arise, rather than simply covering all elements which would take significantly longer.

 

I anticipate that the first stage could be undertaken over the summer, the second during the autumn and winter and then the third being “scoped” and commenced from January 2004 onwards.

 

If the Committee agree to the methodology as set out in the attached I shall speak to the District Audit to explain what we are doing and ensure that they approve our process.

 

RECOMMENDATION

 

That the attached methodology etc for an ethical audit be approved and implemented with a small task group of three members of this Committee and that Stage 1 be completed by 30 September 2003, Stage 2 by 31 December 2003 and Stage 3 commenced in January 2004.

 

Contact Point : Chris Mathews, F 3280

 

 

 

 

                                                                                          JOHN LAWSON

                                                                                         Monitoring Officer

 

Appendix 1

 

ETHICAL GOVERNANCE AUDIT OF THE ISLE OF WIGHT COUNCIL

 
Methodology

 

Introduction

 

Ethical governance is a key part of the whole corporate governance of an authority, where corporate governance is defined as the system by which local authorities direct and control their functions and relate to their communities. This is because decision making in the public sector differs from that in the private sector. A different and higher standard of behaviour is expected from those who deal in public affairs and public money.

 

This was formalised in Part III of the Local Government Act 2000. Part II of the Act, introducing the changes of the new executive structure, is considered to require stronger ethical safeguards than the old committee structure.

 

The Audit Commission is continuing to develop its approach to the inspection of authorities’ corporate governance arrangements, as they impact on service quality and the quest for continual improvement, as part of the Comprehensive Performance Assessment. Standards being a key element of any corporate governance assessment, the ethical governance audit will help in establishing good corporate governance by reviewing and then improving the ethical performance of the Council.

 

It is important that standards within an authority are seen as both an individual and corporate responsibility; that it is of relevance to personal conduct and also to the operation of the authority. In introducing the concept of ethical audits by the Local Government Association and the Improvement and Development Agency (IdeA), the Minister stated that ‘effective local government requires one inescapable requirement: a bond of trust between the people and those in public life who serve them’. The ethical audit, therefore, is a means of demonstrating the importance to the authority and public of that and, where needs be, openly identifying any problems and bringing about solutions.

 

Approach

 

The Audit will endeavour to compare what takes place within the Council against a set of core competencies which are set out in the Ethical Governance Manual written by the IdeA, the Local Government Association and others.  The core competencies are a set of definitions set out under three main headings : Integrity, Accountability and Standards Management. The most important of these in terms of carrying out the audit is integrity, the others following as supplementary investigations through identified factors and further research. 

 

The audit will undertake to address the following questions:

 

Communication                           -      are clear policies on ethical issues known and available?

 

Commitment and Leadership    -      are high ethical standards promulgated by both Members and Officers?

 

Organisation                                -      are there clear lines of accountability and appraisal?

 

Systems                                       -      do procedures help to ensure high ethical standards?

 

Scrutiny                                         -      are there avenues which act as a check on unethical behaviour?

 

Partners and Contractors           -      are they required to subscribe to high ethical standards?

 

Management                                -      does management promote high ethical standards?

 

Training                                        -      does Member and Officer training promote ethical behaviour?

 

Process

 

The audit is proposed to be undertaken in three stages.  Evidence will be collated where appropriate in conjunction with interviews.

 

The first could be a fairly straightforward “desk top” exercise to be undertaken by a small sub Group of this Committee. Attached at Appendix A is a short “checklist” of the things that this exercise should cover. The purpose would be for the sub group to get a “feel” of ethics and probity within the Council.

 

The second stage would be the issue of the short questionnaire as attached at Appendix B to all Members, Directors, Heads of Service and a number of other officers and “partner” bodies would also be asked to consider completing the questionnaire. This exercise would help to identify if there were many significant issues or shortfalls that needed addressing.

 

The third stage would be some detailed research on an interview/research basis attempting to answer in some detail the questionnaire as at Appendix C. This would help to test some of the findings from the second stage and the length and breadth of the detailed questions would be re-considered after stage 2 had been completed relating to relevant aspects. Stage 2 does not need to be completed across the board before parts of Stage 3 can be commenced.

 

This stage will take the form of addressing each competence within the Council by:

 

·        Selective review of the Council’s procedures and paperwork;

·        invitation to comment and possible interview of the Chief Executive Officer, Directors, Group Leaders and any other Member who expresses an interest; and

·        issuing questionnaires, followed up by interviews where appropriate, with Members of Standards Committee themselves, and all other Members of the Council. 

 

References to the public and expectations of the public will be gained from a combination of:

 

·        hearsay from Members and staff raised through the above;

·        reviewing relevant feedback already provided through other consultations;

·        interviews with the independent Members;

·        reviewing records of public complaints and responses associated with these areas; and

·        inviting members of the local media to interview.

 

Stage three would be concluded with identification of recommendations and possible action with a review to monitor progress.

 

The work will be carried out by a small sub Group of the Standards Committee assisted principally by myself and the Democratic Services Manager.

 

For the purposes of validation, a monitoring officer of a neighbouring authority could be invited to take part in the process and/or review the findings.

 

This proposal has been discussed with District Audit and Internal Audit.

 

John Lawson

Monitoring Officer

Appendix A

 

ETHICAL GOVERNANCE AUDIT –  STAGE 1

 

1.         Desk Top Review of Policies (eg what policies and processes do we think we have in place?)

 

Standing Orders                                                                               

Scheme of Delegation      Officers                                                 

                                             Members                                              

Terms of Reference                                                                         

Contracts Standing Orders                                                             

Financial Standing Orders                                                              

Standards Document:

Ţ    National Code of Local Government Conduct – Members    

Ţ    Code of Conduct – Employees                                                

Ţ    Officer / Member Protocol                                                         

Ţ    Code of Practice – Whistleblowing                                          

Ţ    Guidance – for Members on Outside Bodies                         

Ţ    Standards Committee

¨      Terms of Reference                                                             

Ţ    Monitoring Officer Guidance                                                     

Ţ    Conflicts of Interest                                                                     

Ţ    Guidance on Support for Councillors                                       

Ţ    Guidance on Members’ Correspondence                               

Ţ    Dissemination of Local Gov. Ombudsman decisions            

Ţ    Decision making and Legal and Financial advice                 

Ţ    Audit Reports - dissemination                                                  

Ţ    Audit Code of Conduct                                                              

Declarations                                                                                      

Gifts and Hospitality                                                                         

Proper Officer Arrangements                                                          

Recording of decisions                                                                    

Induction –   Officers                                                                         

                     Members                                                                      


Training       Officers                                                                         

                     Members                                                                      

Risk Management Protocol                                                             

Health and Safety Policy                                                                  

IT Security Policy                                                                              

Management Letter                                                                          

Statutory Plans (various)                                                                  

Best Value Performance Plan                                                        

Members Allowance Scheme                                                         

Officer Expense Scheme                                                                

Arrangements for Head of Paid Service                                       

Arrangements for Monitoring Officer                                              

Arrangements for Section 151 Officer                                           

Employment Policies (including local agreements)                      

 

 

2.         Desk Top Review of Communication of Policies (eg how we think we do this)

 

To Officers

To Members

To the public

To others            Government

                            Local Government Associations

                            The Press and Media

                            District Audit

                            Others

 

 

3.         Desk Top Review of Processes (eg How do we think we apply policies and processes?) (Cross Reference to 1 and 2 above)

 

 

Appendix B

ETHICAL GOVERNANCE AUDIT

 

INTRODUCTION

 

In the context of local government, an ethical framework is a set of principles which govern our behaviour.  Values like accountability, openness and observance of the law should determine the way we conduct ourselves in the carrying out of our duties in the public interest.

 

The Local Government Act 2000 provides for a new ethical framework for Members requiring them to observe a Code of Conduct which will be largely set nationally and a disciplinary procedure for dealing with complaints alleging misbehaviour.  The Act also provides for a new Code of Conduct for employees which will automatically be incorporated into contracts of employment.

 

QUESTIONNAIRE

 

This audit has been approved by the Council’s Standards Committee.  Responses from a sample of Members and Officers will assist in assessing any ethical vulnerabilities facing the Council.  The responses will be collated and are non-attributable.  The results will help the Committee in particular in deciding how best to devote resources to training on conduct matters.  Members or Officers who would like to participate in further confidential discussions on the issues raised are asked to complete the statement at the end of the questionnaire.

 

Please tick the answers you feel best reflect your view.

 

 

NO

QUESTIONS

ANSWER

COMMENTS (IF ANY)

 

 

Yes

To a large extent

Not really

Not at all

 

1

Is it important for local government to establish and operate by a set of strong ethical values?

 

 

 

 

 

2

Do you think the public perceive ethical standards within the Council to be good?

 

 

 

 

 

3

Do you believe standards of ethical conduct in this authority are high?

 

 

 

 

 

4

Is there good access to information for:

(a)       Members

(b)       the public?

 

 

 

 

 

5

Are you aware of and have a broad understanding of the following documents?

 

 

 

 

 

 

¨      Standing Orders

 

 

 

 

 

 

¨      Scheme of Delegation

 

 

 

 

 

 

¨      National Code of Local Government Conduct for Members

 

 

 

 

 

 

¨      Officer / Member Protocol

 

 

 

 

 

 

¨      Financial Regulations

 

 

 

 

 

 

¨      Contract Standing Orders

 

 

 

 

 

 

¨      Special Procedures and Protocols

 

 

 

 

 

 

Do you know where you can put your hands on the above documents?

 

 

 

 

 

6

Do you have a reasonable understanding of the role of the following statutory officers?

 

 

 

 

 

¨      Head of Paid Service

 

 

 

 

 

¨      Monitoring Officer

 

 

 

 

 

¨      Chief Finance Officer

 

 

 

 

 

7

Do you have a good understanding of the processes for the conduct of local authority business?

 

 

 

 

 

8

Do you receive clear information about the work of the Council which is relevant to you?

 

 

 

 

 

9

Do you think there is any complacency about standards of conduct?

 

 

 

 

 

(a)       within Members

 

 

 

 

 

(b)       within Officers

 

 

 

 

 

10

Do you think Members see themselves as having a role in ensuring good conduct and high standards on the part of others?

 

 

 

 

 

11

Do you think Officers see themselves as having a role in ensuring good conduct and high standards on the part of others?

 

 

 

 

 

12

Is there an understanding throughout the authority of the new ethical framework proposed in the Local Government Act 2000?

 

 

 

 

 

13

Are Officers clear as to their role and accountabilities?

 

 

 

 

 

14

Are Members clear as to their role and accountabilities?

 

 

 

 

 

15

Do non-executive Members identify strongly with the overview and scrutiny role?

 

 

 

 

 

16

In respect of ethical governance are the Council’s practices and procedures relevant, up-to-date and clear?

 

 

 

 

 

17

Does the Council consistently follow such proper procedures?

 

 

 

 

 

18

Does the Council deal effectively with misconduct?

-         of Members

-         of Officers

 

 

 

 

 

19

Do Members have a  common understanding on how to deal with conflict of interests?

Do Officers have a common understanding on how to deal with conflict of interest?

 

 

 

 

 

20

Do you believe the role of the Standards Committee is widely understood?

 

 

 

 

 

21

Are Standards issues perceived as owned by Members and Officers generally?

 

 

 

 

 

22

Do you know where (or from whom) you can obtain advice and support to help you on Standards issues?

 

 

 

 

 

23

Have you had relevant training on issues relating to standards of conduct?

 

 

 

 

 

24

Are there any questions you would want the Ethical Governance Audit to answer for you?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WHAT PART DO YOU PLAY IN THE BUSINESS OF THE COUNCIL?

 

 

As a Member                   Chair of a Committee / Panel                                        

                                      Vice Chair of a Committee / Panel                                 

                                      Member of the Executive                                              

                                      Other                                                                          

 

As an employee               Strategic Director                                                         

                                      Head of Service                                                            

                                      Other                                                                          

 

Please add your name and signature only if you would like a specific response to any issue that you have raised – or if you would like to!

 

 

Name (in block capitals)

 

Member / Officer

 

 

 

Signed

 

 

 

 

Date

 

 

 

 

THANK YOU FOR COMPLETING THIS QUESTIONNAIRE.  THE STANDARDS COMMITTEE AND I ARE VERY GRATEFUL FOR YOUR CO-OPERATION.

 

Please use the attached addressed envelope to return the questionnaire to:

 

John Lawson

Monitoring Officer

COMPETENCE

DEFINITION

Appendix C
 
questions

METHOD
A. Integrity

 

 

 

 

 

1. Ethical vision

 

Members and staff recognise the importance of ethical standards in local government thus enabling the Authority to construct and develop an ethical culture and values for the Authority.

 

What ethical standards are there?

 

How important are they in what you/people do? 

 

Do Members and officers understand the ethical framework and its role in local governance?

 

Is there an active encouragement and promotion of high standards by senior Members?

 

Is there evidence of inappropriate conduct by Members or senior staff being accepted as an inevitable part of the political nature of local government?

 

E.g.:

 

- Review of documentation;

 

- Interviews;

 

- Invitation; or

 

- Questionnaire

 

 

 

2.Communication

 

Dissemination of relevant information, policies and procedures and guidance on ethical standards to Members, staff, the public, other individuals and organisations with which the Council is involved and encouragement of listening, dialogue and feedback.

 

Are Members and officers aware of key rules and guidance on ethical standards and/or sources of advice?

 

Is there concern by members, officers or the public that ethical standards within the Authority are poor?

 

Is there evidence of discouragement of or resistance to criticism?

 

 

3. Commitment and Leadership

 

 

Recognition by Members and staff of their individual and corporate responsibility to promote and encourage high standards of conduct throughout the Authority.

 

 

Do individual Members and Officers see themselves as having a role in ensuring appropriate conduct and high standards on the part of others?

 

Is there a sense of collective responsibility for maintenance and encouragement of high ethical standards?

 
B. Accountability

 

 

 

 

 

1.Organisational management

 

The Authority has clearly defined and well understood roles and responsibilities for both Members and staff with clear management processes for policy development, implementation and review, decision making, monitoring and reporting.  This will be a mixture of paper based investigation and follow up to questions set out within the integrity section.

 

Are the legal roles and responsibilities of officers clearly set out and are these accepted and understood?

 

Has the monitoring officer sufficient status to ensure legality and probity issues are properly considered?

 

Has the authority adopted a monitoring officer protocol?

 

Is the monitoring officer proactive in his role?

 

 

2.Systems and process operation

 

 

The Authority operates to its defined roles, responsibilities, policies, procedures, protocols and codes. It monitors, reviews and amends these when necessary or when appropriate.  Investigation on this area will again be concerned with paper investigations and follow up to questions in the integrity section.

 

 

Is there in place arrangements for implementing or responding to new legislation, statutory requirements or emerging legal issues that are likely to have significant strategic, policy or budgetary consequences?

 

Are arrangements in place to identify proposals involving transactions that are unusual or of questionable legality and which might have significant consequences?

 

Is there evidence that appropriate action is taken in cases involving the above?

 

Are legal issues adequately addressed in the decision making process?

 

Are legal issues adequately addressed where decision making arrangements are devolved?

 

 

3.Objectivity and scrutiny

 

 

Recognition that situations of ethical ambiguity or conflict will occur and the ability of individuals to deal with these appropriately. 

 

 

Is there a common understanding within the Authority regarding conflicts of interest?

 

Do officers consider a situation objectively and realise how it may be perceived by the public, the media, individuals or organisations?

 

Are Members registering or declaring interests appropriately?

 

Do Members or officers have the requisite skills or inclination to form appropriate judgements on ethical standards issues?

 

C. Standards Management

 

 

 

 

 

1. Integration

 

Making the promotion, maintenance and development of high standards of conduct integral to all the Authority’s operations

 

Are standards issues seen as separate from the mainstream activity of the Authority rather than integral to them?

 

Do Members and staff take it for granted that high standards will be maintained without conscious effort? 

 

 

2. People and Practice Management

 

An expectation that Members and staff operate to the highest of standards of conduct, encouragement to do so, acknowledgement that on occasions some may fail to do so and a willingness to address this

 

Is there a perception that the organisation ignores misconduct and fails to deal with it properly?

 

Is there a reluctance on the part of Members or officers to take action in respect of misconduct because of lack of confidence in the system?

 

Do members and officers know where to obtain advice to support staff in relation to these Standards issues?

 

Do you know the confidential reporting mechanisms?

 

 

3 Training and Development

 

 

Recognition for and commitment to training and development in relation to ethical standards.

 

 

Is there an induction programme for both Members and officers which incorporates ethical standards and seeks to integrate them to all aspects of that induction?

 

Is training compulsory?

 

Does the training tackle difficult issues such as conflicts of interests, handling demands for special treatment, relationships with contractors, lobbying by third parties and does it give participants the skills to deal with these real life situations?

 

Is there a perception that the public service ethos is sufficient to maintain and develop high standards?

 

Is there a willingness on the part of Members or officers to participate in training and development.

 

Is there evidence of a view long service knowledge makes training unnecessary?

 

 

4.Planning and Review

 

 

Recognition of the need for systematic and regular review of the implementation of operation of the ethical framework in the authority and the ability to undertake this and demonstrate continuous improvement.

 

 

Can the Authority demonstrate positive trends and specific progress in the implementation of the ethical framework?

 

Is there a monitoring and review programme in place and operating?

 

Are there planned improvements or targets?