[p] Paper attached

GREATER MANCHESTER JOINT AUDIT PANEL (POLICE AND CRIME)

10:45 a.m. – 12:30 p.m., Tuesday 18 June 2019

Room F12, Friends’ Meeting House, Mount Street, M2 5NS

PART A

10:45 – 10:50 1. Welcome and Apologies for Absence Chair

10:50 – 10:55 2. Urgent Business (if any) at the discretion of the Chair Chair

10:55 – 11:00 3. Declarations of Interest All

11:00 – 11:05 4. Approval of previous minutes and actions [p] [1 - 6] Chair

11:05 – 11:15 5. Terms of Reference [p] [8 - 9] Chair

11:15 – 12:00 6. Chief Constable’s Draft Statement of Accounts 2018/19 [p] [11 - 75]

Including Draft Annual Governance Statement

GMP

12:00 – 12:10 7. Progress against the Internal Audit Plan 2018/20

New Reporting Format [p] [77 - 90 ]

Report of the Treasurer to GMCA and the Head of Audit and Assurance

Sarah Horseman

12:10 – 12:20 8. Internal Audit Charter Refresh 2019/20 [p] [92 - 104]

Report of the Treasurer to GMCA and the Head of Audit and Assurance

Sarah Horseman

12:20 – 12:30 9. Internal Audit Annual Report 2018/19 [p] [106 - 132]

Report of the Head of Audit and Risk Management

Tom Powell

Future meeting dates

Tue 30 July 2019 (The Boardroom, Churchgate House, 09:00)

Wed 9 October 2019 (GMP Force Headquarters, 09:30)

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GMCA Joint Audit Panel 4th

April 2019

JOINT AUDIT PANEL

Date: 4th April 2019

Time: 11:40 – 13:00

Venue: Room 422, Fourth Floor, Greater Manchester Police Headquarters, Northampton Road, Manchester, M40 5BP

Attendees Peter Morris (Chair)

Ian Cayton (Panel) John Starkey (Panel) Foluke Fajumi (Panel)

ACO Lynne Potts (GMP) Janet Moores (GMP – Delegate for Finance)

Sara Ashworth (GMP - Planning & Policy Development Manager) Candice Simms (GMP – Minutes)

Cath Folan (GMCA - Audit Manager (Police and Crime) Tom Powell (GMCA – Head of Audit)

Chris Whittingham (Mazars – Senior Manager)

Apologies Richard Paver (GMCA – Treasurer) Cath Millington (Panel)

M010/JAP Welcome & Apologies for Absence

Apologies were noted from the treasurer Richard Paver and panel member Cath Millington. The attendees

from GMP, the GMCA, and the Panel introduced themselves.

M011/JAP Urgent Business (if any) at the discretion of the Chair

None raised.

M012/JAP Declarations of Interest

None raised.

M013/JAP Approval of previous minutes

The panel noted the importance of the risk register and risk management report, as the topic has been

raised significantly and requires addressing.

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GMCA Joint Audit Panel 4th

April 2019

M014/JAP Terms of Reference

The Chair noted how the terms of reference for the Joint Audit Panel would be tested as the meetings

progressed. The Chair outlined the benefit of having terms of reference, and that training sessions held prior

to the meeting will provide context in terms of the role that is undertaken by the Joint Audit Panel.

M015/JAP Risk Management

GMP provided the framework for the refreshed risk management process. GMP provided detailed

background to the panel regarding the necessity of the risk management report, noting that the report

follows on from the Risk Management internal audit report and enterprise risk management training, where it was evident GMP needed to re-examine their risk management process. GMP noted the current risk

management policy and procedure fell fairly well into the Chartered Institute of Public Finance and

Accountancy (CIPFA) Good Governance Guidelines and the principles for managing risk. However, it was

recognised that the Force would benefit through having more formalised processes to demonstrate

compliance and increase assurance with regards to risk management.

GMP advised the scope of risk management has been revised to include all branches to ensure that risk management is integrated on a Force-wide basis. All branches are now required to report their risks

quarterly to be considered by Chief Officers at GMP’s Executive Committee (ExecCo), in addition to

preparing and signing risk assurance statements. GMP noted that risk toolkits have been provided to the branches, and the Risk Management Policy and Procedure is being updated to reflect and define the risk

management arrangements. GMP concluded there will be enhancements to the Strategic Risk Register as a

result of the improvements made to the risk management process.

GMP noted that the 2018 – 2020 Audit Plan will revisit the risk management area with management to

assess the report on the current arrangements and the associated levels of independent assurance.

The panel noted the report and gave credit to GMP for the considerable amount of work undertaken

regarding risk management. The panel agreed that an audit should take place in the near future to test the

refreshed process and allow for a report to come back to the Joint Audit Panel.

The Chair revisited the query regarding an electronic library for viewing a suite of GMP documents. GMP advised this was unachievable due to computer security restraints. All members agreed a link for public

documents could be placed on the public GMCA website. Private documents, such as the Strategic Risk Register, will continue to be provided on paper. The Chair noted that this would be revisited to ensure an

effective approach is being considered.

ACTION – GMP to update the Strategic Risk Register. To be brought to the July 2019 meeting.

ACTION – Cath Folan to add links to the public documents on the GMCA website.

M016/JAP HMICFRS Integrated PEEL Assessment 2018 Greater Manchester Police

GMP advised the draft HMICFRS Integrated PEEL report cannot be shared with the panel as the report is currently under embargo, with various areas of the report being challenged. GMP noted that the grading is

similar to the 2017/18 inspection. An overview was provided to the panel on issues such as training for

frontline officers and neighbourhood policing functionality, and how GMP are targeting those issues with the Target Operating Model (TOM) and Change Programmes. GMP noted the importance of the Panel

understanding the Target Operating Model, as this will be further reiterated with the Mayor and Deputy

Mayor. GMP advised that part of the budget settlement and precept monies agreed for the current year will allow for recruitment of an additional 170 neighbourhood officers. GMP noted the delays in the integrated

Operational Policing System (iOPS) and how they were affecting GMP’s ability to progress in areas involving technology, such as training and appraisal systems. GMP assured the panel that there is recognition in the

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GMCA Joint Audit Panel 4th

April 2019

body of the report regarding the substantial amount of work GMP are doing, although this will not form part

of the overall grading until GMP have achieved results.

M017/JAP Progress against Internal Audit Plan 2018/20

The Internal Audit Manager provided a summary on the progress of the delivery of the internal audit plan. Six internal audit reports have been completed since the December Joint Audit Panel, as referred to in

Appendix A. The Internal Audit Manager noted that the work in progress detailed in Appendix C will come to

future meetings when the reports have been issued.

The Panel queried when Risk Management and Procurement will be revisited, as minutes from the December Joint Audit Panel confirmed both were subject to additional consultation. Internal Audit Manager

confirmed both feature in the 2018/20 Audit Plan and the scopes for the audits will be determined nearer to

the time. The Internal Audit Manager highlighted that the proposals for risk management brought to the

Joint Audit Panel today should address the issues raised in the original draft audit report.

ACTION – Cath Folan to update Audit Plan 2018/20 to include a further independent review of the Force’s

Risk Management Arrangements.

M018/JAP Post implementation reviews

The Internal Audit Manager gave an overview of the Seized Cash and Proceeds of Crime post implementation

review, confirming satisfaction regarding action taken following the original report.

At the request of the Chair, members were provided with figures on the the average value of seized cash and

the number of investigations relating to Seized Cash and Proceeds of Crime. The Internal Audit Manager also

noted that in 2018/19 the volume of money returned to victims of crime was up by 200%.

The Panel queried where the unallocated balance from Seized Cash and Proceeds of Crime is held. GMP advised the balance forms part of the daily fund management undertaken by GMCA and any surplus money

is invested in the interim.

M019/JAP Internal audit action tracker

The Internal Audit Manager provided a summary of the internal audit action tracker and highlighted that the

update in relation to the actions arising form the review of Prosecution - File Quality and Timeliness, informed that an extensive business case to develop and make significant change within the Criminal Justice

Units takes the Force beyond the original actions. In view of this the Internal Audit Manager recommended

that the Prosecution File Quality and Timeliness actions are removed from the tracker and proposed that this

area is revisited in 2020/21 when the changes have been made.

The Panel queried how internal audit will keep track of this if the actions realting to the Prosecution - File

Quality and Timeliness are removed from the tracker. The Internal Audit Manager advised it would be kept

in their records and it will be considered for the 2020/21 Audit Plan.

The Panel queried the partial action update on Digital Evidence, where it was concluded that this action

should be closed by April 2019.

The Chair questioned the frequency of bringing the internal audit action tracker to the Joint Audit Panel. The

Internal Audit Manager proposed every six months due to the yearly meeting cycles and practicality. This

raised concerns for the Panel as this could be viewed as too relaxed and suggested there needs to be a balance. The Panel noted the internal audit action tracker does not need to be brought back to the meeting

inclusive of all internal audit actions, only those overdue/outstanding.

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GMCA Joint Audit Panel 4th

April 2019

ACTION – Cath Folan to revamp the internal audit action tracker to reflect actions overdue. To be brought to

the July 2019 meeting.

M020/JAP External Audit

Audit Strategy Memorandum 2018/19

Mazars (external Auditors) gave a summary of the Audit Strategy Memorandum 2018/19, noting completion of their interim work (refer page 6 of report) which has not identified any issues or concerns. Mazars

highlighted the significance of the payroll testing, with no issues reported to the Joint Audit Panel. Mazars

outlined the significant risks and key judgement areas identified within the report, and how they will address them. It was also noted that Mazars are seeking guidance from pension experts to assist with the heightened

risk of material misstatement.

Mazars advised on GMP’s 2018/19 Value for Money risks. GMP raised concern over the report, noting that it

is important to consider both GMCA and the Deputy Mayor when establishing financial sustainability as a Value for Money risk. GMP noted that the report caveats GMP decision making with added complexity,

whereby some areas are not Chief Constable decisions; they fall under the Deputy Mayor. It was concluded that more investigative work needs to be carried out by Mazars to develop a holistic view of the Value for

Money risks and planned responses.

It was agreed that the Panel will need to see the financial budget report.

ACTION - Mazars to liaise with GMP Finance staff and report back to the Joint Audit Panel.

M021/JAP Any Other Business

GMP highlighted an issue regarding Health and Safety. This relates to the underreporting of accidents. GMP

are concerned there could be implications with not reporting this earlier. ACO Potts has asked Internal Audit

to look at this.

ACTION – Internal Audit to schedule some time to look specifically at the reporting arrangement for accident

reporting.

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Joint Audit PanelAction and Decision Log

ID Agenda Ref. Date Owner Update Open/ Closed

A001/JAP M005/JAP 12/12/2018 GMPAction ‐ To map the areas in which HMICFRS have or plan to inspect the force on against the areas in Appendix B of this report. To be brought to the April 2019 meeting.

Closed

A002/JAP M006/JAP 12/12/2018 Tom Powell

June 2019: There are six audits in the audit plan which are undertaken by an outsourced specialist.They are all IT based audit reviews and they are provided by Salford City Council Internal Audit Team.The audits which are in the agreed 2018‐20 Audit Plan are:• Mobile Working• Software Asset Management• Service Management Platform – Service Desk• Cyber Security• CARE family by Disclosure in Criminal Records• Service Integration and Management

Action ‐ To look into what audits are undertaken through outsourced specialists. For example, IT systems testing.

Closed

A003/JAP M015/JAP 04/04/2019 GMP Action ‐ To update the Strategic Risk Register. To be brought to the July 2019 meeting.  Open

A004/JAP M015/JAP 04/04/2019 Cath Folan

June 2019: GMP are currently creating a GMCA page which will be introduced on GMP's public facing website. A link will be shared with all members once this has been created, before the end of the month. Circulation of private documentation to members will be carried out by the Governance unit at GMP.

May 2019: GMCA are unable to add links to public documents in the way proposed – this will clog up the website. The approach adopted for GMCA Audit Committee and other Committees is that the person in the Governance Team that supports the respective Committee will circulate requested documents or links to documents to Members via email.

Action ‐ To add links to the public documents on the GMCA website.

Closed

A005/JAP M017/JAP 04/04/2019 Cath Folan

May 2019: This has been actioned and is formally reported in the Audit Plan Progress Report ‐ 18th June 2019

Action ‐ To update Audit Plan 2018/20 to include a further independent review of the Force’s Risk Management Arrangements. 

Closed

A006/JAP M019/JAP 04/04/2019 Cath Folan Action ‐ To revamp the internal audit action tracker to reflect actions overdue. To be brought to the July 2019 meeting. Open

A007/JAP M020/JAP 04/04/2019 Mazars

May 2019:Mazars note the complexity of decision making linked to financial sustainability and that will be considered whenthe VFM assessment is completed and reported to the Joint Audit Panel at the July meeting.

Action ‐ To liaise with GMP Finance staff and report back to the Joint Audit Panel.

Closed

A008/JAP M021/JAP 04/04/2019 Internal Audit

May 2019: This has been actioned and is formally reported in the Audit Plan Progress Report ‐ 18th June 2019

Action ‐ To schedule some time in to look specifically at the reporting arrangement for accident reporting.Closed

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GREATER MANCHESTER JOINT AUDIT PANEL (POLICE AND CRIME)

TERMS OF REFERENCE

PURPOSE

To provide independent assurance on the adequacy of the risk management framework, the internal control environment and the integrity of the financial reporting and annual governance processes in operation within the Chief Constable’s Corporation Sole and the functions of the GMCA responsible for administering the Police Fund (income, expenditure, assets, liabilities).

(NB. for the purposes of this document the term “authority” means the Chief Constable’s Corporation Sole and the functions of GMCA responsible for administering the Police Fund).

CORE FUNCTIONS

To ensure that assurance statements, including the Annual GovernanceStatement, properly reflect the risk environment and any actions required toimprove it, and demonstrate how governance supports the achievements ofthe Chief Constable’s objectives;

To oversee the independence, objectivity, performance and professionalismof the internal audit function;

To support the effectiveness of the internal audit process;

To promote the effective use of internal audit within the assuranceframework;

To consider the effectiveness of the authority’s risk managementarrangements and the control environment;

To review the risk profile of the organisation and assurances that action isbeing taken on risk-related issues, including partnerships with otherorganisations;

To monitor the effectiveness of the control environment, includingarrangements for ensuring value for money and for managing the authority’sexposure to the risks of fraud and corruption;

To receive the reports and recommendations of external audit and inspectionagencies and consider their implications for governance, risk management orcontrol;

To support effective relationships between external audit and internal audit,inspection agencies and other relevant bodies, and encourage the activepromotion of the value of the audit process;

To review the financial statements, external auditor’s opinion and report tothe authority, and monitor management action in response to the issuesraised by external audit.

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REQUIREMENTS

The Panel will:

Act as the principal non-executive, advisory function supporting thosecharged with governance;

Be independent of the executive or operational responsibilities of theMayor and Chief Constable;

Have clear rights of access to other committees;

Report to the GMCA Audit Committee on Police Fund activity andassurance;

Be properly accountable to the Chief Constables’ Executive and GMCAAudit Committee (in relation to the Police Fund);

Meet at least five times a year, and have a clear policy on those items tobe considered in private and those to be considered in public;

Be able to meet privately and separately with the external auditor andwith the head of internal audit (outside of formal, public meetings);

Include, as regular attendees, the chief financial officer(s) or appropriatesenior and qualified substitute, the Chief Constable, the Chief Executiveto GMCA, the head of internal audit and the appointed external auditor;

Have the right to call, as required, any other GMP police officers/staff,GMCA officers, including the Mayor/Deputy Mayor;

Report regularly on their work, and at least annually report anassessment of their performance.

MEMBERSHIP

The Panel will comprise a maximum of five members including the Chair who are independent of the Chief Constable and the Mayor. The meeting will only be quorate if at least three members are in attendance.

Initial term of office to be 3 years with up to a further 3 years on renewal.

Chair to be agreed by the Chief Constable/Mayor after considering applications for those interested.

SKILLS

To aid the Committee in delivering its purpose all Members will be required to undergo appropriate training which will be funded by the authority.

REVIEW

The Committee will review its terms of reference annually.

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CHIEF CONSTABLE OF GREATER MANCHESTER POLICE

STATEMENT OF ACCOUNTS 2018/19

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CONTENTS

PAGE

REGULATION AND INTRODUCTION

Independent Auditor’s Report (to be inserted on completion of audit report) 3

Narrative Report 4

Statement of Responsibilities for the Statement of Accounts 12

CHIEF CONSTABLE’S STATEMENT OF ACCOUNTS

Comprehensive Income and Expenditure Statement 13

Movement in Reserves Statement 14

Balance Sheet 16

Cash Flow Statement 17

Notes to the Accounts:

- Accounting Policies 18

- Accounting Standards, Not Adopted 23

- Critical Judgements in Applying Accounting Policies 23

- Assumptions Made About the Future and Other Major Sources of Estimation Uncertainty 24

- Material Items of Income and Expense 24

- Events After the Reporting Period 24

- Expenditure and Funding Analysis 25

- Note to the Expenditure and Funding Analysis 26

- Adjustments Between Accounting Basis and Funding Basis Under Regulations 27

- Expenditure and Income Analysed by Nature 28

- Creditors 29

- Unusable Reserves 29

- Officers’ Remuneration 31

- External Audit Costs 34

- Related Parties 34

- Charges to the Chief Constable for Assets Consumed in the Year 35

- Regional Collaboration Arrangements 36

- Defined Benefit Pension Schemes 37

- Contingent Liabilities 48

Police Pension Fund Account 49

Notes to the Police Pension Fund Account and Net Assets Statement 50

Glossary 51

ANNUAL GOVERNANCE STATEMENT

Annual Governance Statement 54

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[BLANK SECTION] [AUDIT REPORT TO BE INSERTED]

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NARRATIVE REPORT

1. Introduction by the Chief Constable

Organisational Overview and the External Environment

Policing is now more complex than ever before with officers dealing with everything from serious crime and terrorism, through to burglary and antisocial behaviour. It is clear that crime levels are increasing and demand on policing continues to rise as a result of tackling complex issues such as modern slavery, domestic violence, child sexual exploitation, serious sexual offences and cyber-crime. Safeguarding vulnerable people and communities remains essential but it means that the neighbourhood policing model proven to help keep our communities safe is increasingly overstretched. In the last year GMP has dealt with 66,000 domestic abuse incidents, 18,600 incidents involving people with mental health conditions and 234 modern slavery crimes.

Greater Manchester Police (GMP) receives the second highest number of 999 calls (3,000 per day) relative to population, of all police forces in England and Wales and dealt with the highest number of priority incidents relative to population. The latest Home Office statistics show that, in the 12 months to the end of June 2018, GMP recorded 343,089 crimes. This is an increase of 16% on the 12 months previous. This increase is due in part to changes in crime recording and changes in Home Office counting rules as well as changes in crime and steps to increase confidence in reporting crime.

Keeping Greater Manchester safe isn’t just down to GMP; the public have to play their part in supporting policing by working with us. GMP has been listening to people across the city region as part of work to better understand and manage people’s expectations of policing. Through the principles laid out in the Citizens’ Contract, the police and public can help each other to ensure the best use of police resources, working together to protect the most vulnerable and build safer, and more resilient communities.

There is no doubt the cuts faced during austerity have seen the number of Police Officers has reduced by 2000 since 2010. This is why we are looking to transform policing and find new ways of working to improve its capabilities in protecting victims and tackling crimes, so that, despite the challenges, we can still provide the best possible service to people across Greater Manchester. Together with dealing with calls for service and crime, GMP is increasing the diversity of its workforce to better reflect the communities it serves.

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2. The Elected Mayor of Greater Manchester

The Elected Mayor is responsible for the formal oversight of Greater Manchester Police (GMP), including provision of all funding, budget-setting, performance scrutiny and strategic policy development. The Mayor is also responsible for holding the Chief Constable to account for ensuring GMP is run efficiently and effectively. Operational decision-making on day-to-day policing matters and the employment of police staff remains the responsibility of the Chief Constable.

Under the legislative framework and local arrangements, GMCA owns all the assets utilized by GMP and the functions and decisions relating to such properties, rights and liabilities are exercised and made by the Elected Mayor. Any receipts arising from such properties, rights and liabilities are to be paid into the Mayoral Police Fund held by the Elected Mayor by virtue of section 21 of the Police Reform and Social Responsibility Act 2011. The movement on the Mayoral Police Fund is disclosed in the notes to the Statement of Accounts of the Greater Manchester Combined Authority.

3. The Chief Constable

The Chief Constable was established as a Corporation Sole under the Police Reform and Social Responsibility Act 2011 (PRSRA). The Chief Constable is a separate legal entity, distinct from the Greater Manchester Combined Authority and has operational independence. Each has specific roles and responsibilities under the PRSRA.

The primary function of the Chief Constable is the exercise of operational policing duties under the Police Act 1996. He holds office under the Crown but is appointed by the Elected Mayor for Greater Manchester and is accountable to the Elected Mayor for the delivery of an efficient and effective police force in Greater Manchester.

Under the legislative framework and local arrangements, the Elected Mayor is the recipient of funding relating to policing and crime reduction and allocates budget to Greater Manchester Police from the Mayoral Police Fund. As the Elected Mayor is not a Corporation Sole, the Greater Manchester Combined Authority (GMCA) has overall responsibility for entering into contracts and establishing the contractual framework under which the Chief Constable’s officers and staff operate. In turn, the Chief Constable fulfils his statutory responsibilities for delivering an efficient and effective police force within an annual budget which is set by the Mayor in consultation with the Chief Constable.

The Chief Constable ultimately has a statutory responsibility for maintaining the Queen’s peace and, to do this, has direction and control over police officers and police staff employees. It is recognised that in exercising day to day direction and control, the Chief Constable will undertake activities, incur expenditure and generate income to allow the police service to operate effectively.

As a separate legal entity, the Chief Constable is required to prepare a set of statutory accounts which recognise all the financial transactions incurred during 2018/19 for policing Greater Manchester. GMCA, as the statutory body for the Elected Mayor who has ultimate control over the Chief Constables’ resources, has to prepare consolidated group accounts.

Expenditure in respect of operational policing, police officer and police staff employee costs is shown in the Chief Constable’s Statement of Accounts, whilst the funding sources (i.e. Central Government Police Grant) are shown in the consolidated group accounts of the GMCA.

It is appropriate that a distinction is made between the financial impact of the day to day direction and control exercised by the Chief Constable and the overall strategic control of the Elected Mayor.

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4. The Statement of Accounts

The Statement of Accounts sets out the overall financial position of the Chief Constable of Greater Manchester Police for the year ended 31 March 2019.

The accounts are published in accordance with the Accounts and Audit Regulations 2015, the Code of Practice on Local Authority Accounting 2018/19 and the Service Reporting Code of Practice (SeRCOP) 2018/19 and have been prepared on a going concern basis.

The Statement of Accounts comprises core and supplementary statements, together with disclosure notes. The format and content of the financial statements is prescribed by the CIPFA Code of Practice on Local Authority Accounting in the United Kingdom 2018/19, which is underpinned by International Financial Reporting Standards.

The Financial Statements comprise:

Comprehensive Income and Expenditure Statement – This statement shows the accountingcost in the year of providing services under IFRS. The Deficit on the Provision of Services is£154.025m.

Movement in Reserves Statement – This statement shows the movement in the year on thedifferent reserves held by the Chief Constable

Balance Sheet – The Balance Sheet shows that the Chief Constable has recognised netliabilities of £8.146bn at the end of the year, including a pension liability of £8.141bn.

Cash Flow Statement – This statement balances to zero as all cash transactions are held andmanaged by the Greater Manchester Combined Authority on behalf of the Elected Mayor

In addition to the Financial Statements, the Statement of Accounts also includes:

Statement of Responsibilities for the Statement of Accounts – This statement sets out thedifferent responsibilities that the Chief Constable and his Chief Finance Officer have for thecontent, production and approval of the accounts

Expenditure and Funding Analysis – This analysis shows how annual expenditure is usedand funded from available resources by the Chief Constable in comparison with thoseresources consumed in accordance with generally accepted accounting practices

Accounting Policies – Accounting policies are the specific principles, bases, conventions,rules and practices applied by the Chief Constable in preparing and presenting his financialstatements. The Chief Constable and the Greater Manchester Combined Authority have thesame accounting policies

Notes to the Financial Statements – These notes include further information and additionalmaterial items of interest to assist the readers understanding of the Financial Statements

Police Pension Fund Account – The Police Pension Scheme is unfunded and holds noassets. The purpose of this account is to demonstrate the cash-based transactions taking placeover the year and to identify the arrangements needed to balance the account.

Glossary of Financial Terms – The nature of the Statement of Accounts means that technicalfinancial terms are unavoidable. The glossary is intended to simplify and explain such words

Annual Governance Statement – This statement explains how the Chief Constable hascomplied with his Code of Corporate Governance. Preparation and publication of the AnnualGovernance Statement fulfils his requirement to conduct a review at least once in eachfinancial year of the effectiveness of his system of internal control and to include a statementreporting on the review within his Statement of Accounts.

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5. Financial Review of 2018/19

The budget for 2018/19 was set by the Mayor. The budget is set in the context of the 4 year Strategic Financial Outlook (SFO), following consultation with the Chief Constable.

The 2018/19 budget can be found on the website of the Greater Manchester Combined Authority.

Impact of the Current Economic Climate

The Government announced their settlement for policing on 31 January 2018 which included the following statements:

The police grant for 2018/19 would remain the same as the grant received in the 2017/18financial year, there would be no additional funding to support increasing costs and demandson police services

Mayors and Police and Crime Commissioners would be allowed to increase the police preceptby £12

Although it was clear that the Government accepted the need to invest more resources into policing services additional funding was not provided and this burden has been placed on local tax payer as the Mayor has increased the police precept by £12

There are a number of uncertainties which impact on the ability to plan for the medium term. These include the review of the police funding formula and the delay in the £1bn project to transition from Airwave radio to the new Emergency Services Network (ESN).

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Performance Against Revenue Budget

The Force seeks to demonstrate good financial management at a time of significant organisational transformation in response to both changing and exceptional operational demands. Through the financial forecasting process the Force has been able to make informed and timely decisions to ensure that value for money is achieved and operational risk is mitigated.

The 2018/19 revenue outturn position below shows the financial impact of savings and growth which were planned for and agreed by the Chief Constable and the Mayor in the 2018/19 budget and reflects how budgets are managed within the Chief Constable’s accounts. Income and specific grants managed by the Chief Constable on behalf of the Mayor are included in the table. Examples of grants are those that relate to police pensions and the PFI buildings and examples of income are collaborations with other police forces and charges for policing the airport and football matches. Other funding sources (i.e. Central Government Police Grant) are shown in the consolidated accounts of the Greater Manchester Combined Authority.

The table below shows the final outturn position for 2018/19 compared with the original budget. Figures in brackets in the variance column represent an overspend against the original expenditure budget.

Budget Actual Variance

£000 £000 £000

Police Officer Pay 330,002 331,415 (1,413)

Police Officer Related 4,178 4,713 (534)

Staff Pay 129,179 132,530 (3,351)

Police Staff Related 1,865 1,743 122

PCSO Pay 21,661 21,260 400

PCSO Related 8 9 (1)

Police Officer Overtime 13,644 16,021 (2,378)

Police Staff Overtime 1,692 2,357 (665)

PCSO Overtime 33 64 (31)

TOTAL EMPLOYEE RELATED 502,261 510,113 (7,851)

Pensions 125,621 128,599 (2,978)

Premises Related 31,281 31,565 (285)

Supplies and Services 48,855 43,904 4,951

Agency Payments 10,994 10,977 17

Transport Related 6,294 5,019 1,275

Capital Financing 0 2,331 (2,331)

Transfer to/from Reserves (583) (3,949) 3,366

Specific Grants (167,667) (170,829) 3,163

Income & Sponsorship (33,707) (34,380) 673

OTHER EXPENDITURE 21,089 13,237 7,851

TOTAL EXPENDITURE 523,350 523,350 0

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The main reasons for the variances are:

The overspend of £1.4m on Police Officer Pay is due to:

£0.9m overspend due to starting the year with 27 more officers than budgeted for.

£0.7m overspend due to 48 fewer officers leaving the Force than budgeted for.

The overspend of £3.4m on Staff Pay is due to:

£1.9m overspend on agency staff largely within Serious Crime, Public Protection andInformation Services.

£1.3m due to 49 fewer staff leaving the Force than budgeted for.

The overspend of £2.4m on Police Officer Overtime is due to increased demand and resource

management overtime. This includes the overtime worked for the visit of the President of the

United States and the extended tour of duty for the world cup and increased summer demand.

The underspend of £7.9m on Other Expenditure includes:

£2.4m underspend on support and maintenance costs mainly relating to delays in the DataCentre and iOPS projects.

£3.0m underspend on provisions set aside for uninsured liability claims and £1.3m underspendon provisions set aside for uninsured vehicle claims. These are made in line with therecommendations by actuarial advisors.

Capital

In addition to revenue expenditure, money is spent on assets such as buildings, computers and vehicles. The Capital Programme is managed by the Force but all assets are owned by the Greater Manchester Combined Authority.

The table below shows the net capital position by branch against the approved 2018/19 Capital Programme.

Branch Budget Actual Variance

£000 £000 £000

IS Transformation Programme 17,514 9,755 7,759

Target Operating Model 9,368 1,017 8,351

Business Support Services – Fleet 4,271 3,411 860

Business Support Services – Estates 1,704 1,451 253

Information Services 1,168 1,160 8

North West Counter Terrorism Unit 887 846 41

Public Protection Division 582 344 238

Strategic Change 550 246 304

Specialist Operations 388 401 (13)

Serious Crime Division 170 53 117

Other Branches 291 293 (2)

Total 36,893 18,977 17,916

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At the end of the financial year, the Capital Budget is showing a full year underspend of £17.9m on an approved programme of £36.9m.

The main reasons for the underspend are within the Transformation programme, and include the delays in the Forensic Services relocation and the Centralisation of Specialist Operations programme. Additionally, within IS Transformation Programme, the IOPS and Data Centre projects have slipped.

The table below shows the how the Capital Programme was funded.

£000

Capital expenditure 18,977

Funded by:

Borrowing 6,818

Capital Grants 3,432

Capital Receipts 378

Use of Reserves 2,219

Revenue Contribution to Capital 6,130

Total Funding 18,977

Strategy and Resource Allocation

The table below shows the number of officers and employees and the full time equivalent (FTE) number as at 31 March:

Police Officers PCSOs Police Staff Total

No FTE No FTE No FTE No FTE

31 March 2019 6,524 6,285.06 631 620.39 4,007 3,715.09 11,162 10,620.54

31 March 2018 6,445 6,205.97 658 645.63 3,721 3,429.08 10,824 10,280.68

The table below shows the gender and ethnicity of officers and employees as at 31 March 2019:

Police Officers PCSOs Police Staff Total

No % No % No % No %

Gender:

Male 4,487 68.78% 375 59.43% 1,517 37.86% 6,379 57.15%

Female 2,037 31.22% 256 40.57% 2,490 62.14% 4,783 42.85%

Ethnicity:

White 6,054 92.80% 560 88.75% 3,761 93.86% 10,375 92.95%

BAME 470 7.20% 71 11.25% 246 6.14% 787 7.05%

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Further information

Further information about the accounts is available from:

The Chief Finance Officer Greater Manchester Police Force Headquarters Central Park Northampton Road Manchester M40 5BP

Telephone No: 0161 793 3337 E-mail: enquiries@greatermanchester-ca.gov.uk

In addition, members of the public have a statutory right to inspect the accounts before the audit commences. The availability of the accounts for inspection is advertised on the Chief Constable’s website.

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STATEMENT OF RESPONSIBILITIES FOR THE STATEMENT OF ACCOUNTS

The Chief Constable’s Responsibilities

The Chief Constable is required to:

Make arrangements for the proper administration of the financial affairs of the GreaterManchester Police and to ensure that one of his officers has the responsibility for theadministration of those affairs. That officer is the Chief Constable’s Chief Finance Officer.

Manage the affairs of Greater Manchester Police to ensure economic, efficient and effectiveuse of resources and safeguard the assets of Greater Manchester Police.

Approve the Statement of Accounts.

Approval of the Statement of Accounts

In accordance with the Accounts and Audit Regulations 2015, I approve the Statement of Accounts.

Ian Hopkins, Chief Constable of Greater Manchester Police 31 May 2019

The Chief Finance Officer’s Responsibilities

The Chief Constable’s Chief Finance Officer is responsible for the preparation of the Chief Constable’s Statement of Accounts in accordance with proper practices as set out in the CIPFA/LASAAC Code of Practice on Local Authority Accounting in the United Kingdom (the Code).

In preparing this Statement of Accounts, the Chief Finance Officer has:

Selected suitable accounting policies and then applied them consistently.

Made judgements and estimates that were reasonable and prudent.

Complied with the local authority Code.

The Chief Finance Officer has also:

Kept proper accounting records which were up to date.

Taken reasonable steps for the prevention and detection of fraud and other irregularities.

Certification of Accounts

I certify that this Statement of Accounts gives a true and fair view of the financial position of the Chief Constable of Greater Manchester Police at 31 March 2019, and of the income and expenditure for the year ended 31 March 2019.

Lynne Potts, Chief Finance Officer 31 May 2019

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THE CHIEF CONSTABLE’S FINANCIAL STATEMENTS

COMPREHENSIVE INCOME AND EXPENDITURE STATEMENT

The Comprehensive Income and Expenditure Statement shows the accounting cost in the year of providing services in accordance with generally accepted accounting practices.

8 May 2017 to 31 March 2018 1 April 2018 to 31 March 2019

Gross Expenditure

Gross Income

Net Expenditure

Gross Expenditure

Gross Income

Net Expenditure

£000 £000 £000 £000 £000 £000

505,591 0 505,591 Policing services 574,434 0 574,434

505,591 0 505,591 Cost of services 574,434 0 574,434

0 (536,445) (536,445) Funding set aside by Elected Mayor to fund policing services

0 (616,902) (616,902)

505,591 (536,445) (30,854) Net cost of services 574,434 (616,902) (42,468)

204,616 0 204,616 Pension interest cost 217,676 0 217,676

0 (18,187) (18,187) Expected return on pension assets

0 (21,183) (21,183)

204,616 (18,187) 186,429 Financing and investment income and expenditure

217,676 (21,183) 196,493

710,207 (554,632) 155,575 (Surplus) or Deficit on Provision of Services

792,110 (638,085) 154,025

(3,491) Remeasurement of pension assets / liabilities

274,131

152,084 Total Comprehensive Income and Expenditure

428,156

Lynne Potts, Chief Finance Officer 31 May 2019

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MOVEMENT IN RESERVES STATEMENT

The Movement in Reserves Statement shows the movement from the start of the year to the end on the different reserves held by the Chief Constable, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other ‘unusable reserves’. The Accumulated Absences Account relates to the value of unused annual or flexi leave at the end of the financial year. The Surplus / Deficit on the Provision of Services line shows the true economic cost of providing Policing services, more details of which are shown in the Comprehensive Income and Expenditure Statement. These are different from the statutory amounts required to be charged to the General Fund Balance for precept setting. The Net Increase / Decrease before Transfer to / from Earmarked Reserves line shows the statutory General Fund Balance before any discretionary transfers to or from earmarked reserves undertaken by the Chief Constable.

General Fund

Balance

Total Usable Reserves

Accumulated Absences

Account Pension Reserve

Total Unusable Reserves

Total Reserves

£000 £000 £000 £000 £000 £000

Balance at 31 March 2018 0 0 (4,738) (7,712,875) (7,717,613) (7,717,613)

Surplus / (deficit) on provision of services (accounting basis)

(154,025) (154,025) 0 0 0 (154,025)

Other Comprehensive Income and Expenditure

0 0 0 (274,131) (274,131) (274,131)

Total Comprehensive Income and Expenditure

(154,025) (154,025) 0 (274,131) (274,131) (428,156)

Adjustments between accounting basis and funding basis under regulations (note 1)

154,025 154,025 (112) (153,913) (154,025) 0

Net Increase / (Decrease) before Transfer to / (from) Earmarked Reserves

0 0 (112) (428,044) (428,156) (428,156)

Transfer to / from Earmarked Reserves

0 0 0 0 0 0

Increase / (Decrease) in Year

0 0 (112) (428,044) (428,156) (428,156)

Balance at 31 March 2019 0 0 (4,850) (8,140,919) (8,145,769) (8,145,769)

Lynne Potts, Chief Finance Officer 31 May 2019

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2017/18 COMPARATIVE MOVEMENT IN RESERVES STATEMENT

General Fund

Balance

Total Usable Reserves

Accumulated Absences

Account Pension Reserve

Total Unusable Reserves

Total Reserves

£000 £000 £000 £000 £000 £000

Balance at 8 May 2017 0 0 (4,722) (7,560,807) (7,565,529) (7,565,529)

Surplus / (deficit) on provision of services (accounting basis)

(155,575) (155,575) 0 0 0 (155,575)

Other Comprehensive Income and Expenditure

0 0 0 3,491 3,491 3,491

Total Comprehensive Income and Expenditure

(155,575) (155,575) 0 3,491 3,491 (152,084)

Adjustments between accounting basis and funding basis under regulations (note 1)

155,575 155,575 (16) (155,559) (155,575) 0

Net Increase / (Decrease) before Transfer to / (from) Earmarked Reserves

0 0 (16) (152,068) (152,084) (152,084)

Transfer to / from Earmarked Reserves

0 0 0 0 0 0

Increase / (Decrease) in Year

0 0 (16) (152,068) (152,084) (152,084)

Balance at 31 March 2018 0 0 (4,738) (7,712,875) (7,717,613) (7,717,613)

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BALANCE SHEET

The Balance Sheet shows the value as at the Balance Sheet date of the assets and liabilities recognised by the Chief Constable. The net assets of the Chief Constable (assets less liabilities) are matched by the reserves held by the Chief Constable. Reserves are reported in two categories – usable reserves and unusable reserves. The Chief Constable holds no usable reserves.Unusable reserves are not able to be used to provide services and consist of the Accumulated Absences Account and the Pension Reserve.

Under the legislative framework, the Elected Mayor is responsible for the Mayoral Police Fund and holds all assets, liabilities and usable reserves relating to policing services. These are included in the Balance Sheet of the Greater Manchester Combined Authority.

31 March 2018 Notes

31 March 2019

£000 £000

(4,738) Short-term Creditors 11 (4,850)

(4,738) Current Liabilities (4,850)

(7,712,875) Pension Liabilities 11 (8,140,919)

(7,712,875) Long Term Liabilities (8,140,919)

(7,717,613) Net Assets (8,145,769)

(7,717,613) Unusable Reserves 12 (8,145,769)

(7,717,613) Total Reserves (8,145,769)

Lynne Potts, Chief Finance Officer 31 May 2019

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CASH FLOW STATEMENT

The Cash Flow Statement shows non cash movements in pension interest costs and expected return on pension assets.

Under the legislative framework, all cash transactions are held and managed by the Greater Manchester Combined Authority. These are included in the Cash Flow Statement of the Greater Manchester Combined Authority.

8 May 2017

to 31 March

2018

1 April 2018

to 31 March

2019

£000 £000

155,575 Net (surplus) or deficit on the provision of services 154,025

(155,575) Adjustments to net surplus or deficit on the provision of services for non-cash movements (154,025)

0 Net increase or decrease in cash and cash equivalents 0

0 Cash and cash equivalents at the beginning of the reporting period 0

0 Cash and cash equivalents at the end of the reporting period 0

Lynne Potts, Chief Finance Officer 31 May 2019

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NOTES TO THE ACCOUNTS

1. ACCOUNTING POLICIES

A. General Principles

The Statement of Accounts summarises the Chief Constable’s transactions for the 2018/19 financial year and the position at the year-end of 31 March 2019. The Chief Constable is required to prepare an annual Statement of Accounts by the Accounts and Audit Regulations 2015, which require the Statement of Accounts to be prepared in accordance with proper accounting practices.

These practices primarily comprise the Code of Practice on Local Authority Accounting in the United Kingdom 2018/19, supported by International Financial Reporting Standards (IFRS).

The accounting convention adopted in the Statement of Accounts is principally historical cost, modified by the revaluation of certain categories of non-current assets and financial instruments.

B. Accounting Concepts

Going concern

The accounts have been prepared on a going concern basis, which assumes that the Chief Constable will continue to operate and provide services in the foreseeable future.

On 8 May 2017 the role of the Police and Crime Commissioner was transferred to the Greater Manchester Combined Authority, as a function to be exercised by the Elected Mayor of Greater Manchester. The Elected Mayor has a statutory duty and electoral mandate to maintain the police force and ensure that it is efficient and effective. The Chief Constable has remained a corporation sole and this transfer does not affect the going concern status of the Chief Constable.

Qualitative characteristics

The usefulness of financial statements is enhanced if they are comparable between similar organisations and between financial years. The Code of Practice promotes comparability by designating the form and content of the financial statements which includes a comparison with the previous financial period.

The 2017/18 comparative information covers an adjusted financial year from 8 May 2017 to 31 March 2018, as set out in Article 9 of The Greater Manchester Combined Authority (Transfer of Police and Crime Commissioner Functions to the Mayor) Order 2017. These accounts, therefore, do not comply with the requirements of the Code of Practice in relation to the provision of comparative information. However, the Code of Practice acknowledges the primacy of legislative requirements which is that where an accounting treatment is required by law, then it must be applied, even if it contradicts any accounting concept or qualitative characteristic.

C. Accruals of Income and Expenditure

Activity is accounted for in the year that it takes place, not simply when cash payments are made or received. In particular:

Revenue from contracts with service recipients, whether for services or the provision of goods,is recognised when the goods or services are transferred to the service recipient in accordancewith the performance obligations in the contract.

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Supplies are recorded as expenditure when they are consumed – where there is a gapbetween the date supplies are received and their consumption, they are carried as inventorieson the Balance Sheet.

Expenses in relation to services received (including services provided by employees) arerecorded as expenditure when the services are received rather than when payments are made.

Where revenue and expenditure have been recognised but cash has not been received orpaid, a debtor or creditor for the relevant amount is recorded in the Balance Sheet. Wheredebts may not be settled, the balance of debtors is written down and a charge made to revenuefor the income that might not be collected.

D. Prior Period Adjustments, Changes in Accounting Policies and Estimates and Errors.

Prior period adjustments may arise as a result of a change in accounting policies or to correct a material error. Changes in accounting estimates are accounted for prospectively, in other words, in the current and future years affected by the change and do not give rise to a prior period adjustment.

Changes in accounting policies are only made when required by proper accounting practices or the change provides more reliable or relevant information about the effect of transactions, other events and conditions on the Chief Constable’s financial position or financial performance. Where a change is made, it is applied retrospectively (unless stated otherwise) by adjusting opening balances and comparative amounts for the prior period as if the new policy had always been applied.

Material errors discovered in prior period figures are corrected retrospectively by amending opening balances and comparative amounts for the prior period.

E. Employee Benefits

Benefits Payable during Employment

Short-term employee benefits are those due to be settled wholly within 12 months of the year-end. They include such benefits as wages and salaries, paid annual leave and paid sick leave, bonuses and non-monetary benefits (e.g. cars) for current employees and are recognised as an expense for services in the year in which employees render service to the Chief Constable. An accrual is made for the cost of holiday entitlements (or any form of leave, e.g. time off in lieu) earned by employees but not taken before the year-end which employees can carry forward into the next financial year. The accrual is made at the wage and salary rates applicable in the following accounting year, being the period in which the employee takes the benefit. The accrual is charged to Surplus or Deficit on the Provision of Services, but then reversed out through the Movement in Reserves Statement so that holiday entitlements are charged to revenue in the financial year in which the holiday absence occurs.

Termination Benefits

Termination benefits are amounts payable as a result of a decision by the Chief Constable to terminate an employee’s employment before the normal retirement date or an employee’s decision to accept voluntary redundancy in exchange for those benefits and are charged on an accruals basis to the Comprehensive Income and Expenditure Statement at the earlier of when the Chief Constable can no longer withdraw the offer of those benefits or when the Chief Constable recognises costs for a restructuring.

Where termination benefits involve the enhancement of pensions, statutory provisions require the General Fund Balance to be charged with the amount payable by the Chief Constable to the pension fund or pensioner in the year, not the amount calculated according to the relevant

Page 29 of 133

accounting standards. In the Movement in Reserves Statement, appropriations are required to and from the Pensions Reserve to remove the notional debits and credits for pension enhancement termination benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year-end.

Post-employment Benefits

Police officers and police staff employees are members of two separate pension schemes:

The Police Pension Scheme, administered XPS Administration on behalf of the ChiefConstable

The Local Government Pensions Scheme, administered by Tameside Metropolitan BoroughCouncil.

Both schemes provide defined benefits to members (retirement lump sums and pensions) earned whilst a police officer or a police staff employee of the Chief Constable.

The Police Pension Scheme

The Police Pension Scheme is an unfunded defined benefit career average salary scheme for police officers. There are no investment assets built up to meet the pension liabilities and cash has to be generated from employee and employer contributions to meet actual pension payments as they eventually fall due.

Both the Chief Constable and police officers pay pension contributions based on a percentage of pensionable pay into the Pension Fund Account. Pension payments are paid out of the Pension Fund Account.

The amounts that must be paid into and out of the Pension Fund Account are specified by regulation. Any surplus or deficit on the Pension Fund Account must be transferred to or from the Greater Manchester Combined Authority, and ultimately repaid to or from the Home Office.

Injury awards are not part of the Police Pensions Scheme and are charged directly to the Comprehensive Income and Expenditure Statement. However, liabilities in respect of injury awards are disclosed in the Statement of Accounts as part of the Chief Constable’s overall liability.

The Local Government Pension Scheme

The Local Government Pension Scheme is accounted for as a defined benefits scheme:

The liabilities of the Greater Manchester Pension Fund attributable to the Chief Constable areincluded in the Balance Sheet on an actuarial basis using the projected unit method – i.e. anassessment of the future payments that will be made in relation to retirement benefits earned todate by employees, based on assumptions about mortality rates, employee turnover rates, etc.,and projected earnings for current employees.

Liabilities are discounted to their value at current prices, using a discount rate of the yieldavailable on long dated, high quality corporate bonds (as measured by the yield on iBoxxSterling Corporate Index, AA over 15 years) at the valuation date.

The assets of the Greater Manchester Pension Fund attributable to the Chief Constable areincluded in the Balance Sheet at their fair value: Quoted securities – current bid price Unquoted securities – professional estimate Unitised securities – current bid price Property – market value

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The change in the net pensions liability is analysed into the following components:

Current service cost – the increase in liabilities as a result of years of service earned this year –allocated in the Comprehensive Income and Expenditure Statement to the services for whichthe employees worked

Past service cost – the increase in liabilities as a result of a scheme amendment or curtailmentwhose effect relates to years of service earned in earlier years – debited to the Surplus orDeficit on the Provision of Services in the Comprehensive Income and Expenditure Statement

Interest cost – the increase in the net present value of liabilities during the year as they moveone year closer to being paid – debited to the Financing and Investment Income andExpenditure in the Comprehensive Income and Expenditure Statement

Expected return on plan assets – the annual investment return on the fund assets attributableto the Chief Constable, based on an average of the expected long-term return – credited to theFinancing and Investment Income and Expenditure in the Comprehensive Income andExpenditure Statement

Gains or losses on settlements and curtailments – the result of actions to relieve the ChiefConstable of liabilities or events that reduce the expected future service or accrual of benefitsof employees – debited or credited to the Surplus or Deficit on the Provision of Services in theComprehensive Income and Expenditure Statement as part of non-distributed costs

Remeasurements – changes in the net pension’s liability that arise because events have notcoincided with assumptions made at the last actuarial valuation or because the actuaries haveupdated their assumptions – debited to the Pensions Reserve as Other ComprehensiveIncome and Expenditure

Contributions paid to the Greater Manchester Pension Fund – cash paid as employer’scontributions to the pension fund in settlement of liabilities; not accounted for as an expense

In relation to retirement benefits, statutory provisions require the General Fund Balance to be charged with the amount payable by the Chief Constable to the pension fund or directly to pensioners in the year, not the amount calculated according to the relevant accounting standards. In the Movement in Reserves Statement, this means that there are transfers to and from the Pensions Reserve to remove the notional debits and credits for retirement benefits and replace them with debits for the cash paid to the pension fund and pensioners and any such amounts payable but unpaid at the year-end. The negative balance that arises on the Pensions Reserve thereby measures the beneficial impact to the General Fund of being required to account for retirement benefits on the basis of cash flows rather than as benefits are earned by employees.

Discretionary Benefits

The Chief Constable also has restricted powers to make discretionary awards of retirement benefits in the event of early retirements. Any liabilities estimated to arise as a result of an award to any officer or police staff employee are accrued in the year of the decision to make the award and accounted for using the same policies as are applied to the Local Government Pension Scheme.

F. Events After the Reporting Period

Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the end of the reporting period and the date when the Statement of Accounts is authorised for issue. Two types of events can be identified:

Those that provide evidence of conditions that existed at the end of the reporting period – theStatement of Accounts is adjusted to reflect such events

Those that are indicative of conditions that arose after the reporting period – the Statement ofAccounts is not adjusted to reflect such events, but where a category of events would have amaterial effect, disclosure is made in the notes of the nature of the events and their estimatedfinancial effect

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Events taking place after the date of authorisation for issue are not reflected in the Statement of Accounts.

G. Government Grants and Contributions

All Government grants are received by the Elected Mayor and are accounted for in the Statement of Accounts of the Greater Manchester Combined Authority.

All third party funding is received by the Elected Mayor and is accounted for in the Statement of Accounts of the Greater Manchester Combined Authority.

Funding is transferred from the Elected Mayor to the Chief Constable to cover liabilities as and when they arise.

H. Overheads and Support Services

The costs of overheads and support services are charged to service segments in accordance with the Chief Constable’s arrangements for accountability and financial performance.

I. Property, Plant and Equipment

All assets used by the Chief Constable are owned by the Greater Manchester Combined Authority and are accounted for in the Statement of Accounts of the Greater Manchester Combined Authority.

J. Contingent Liabilities

A contingent liability arises where an event has taken place that gives the Chief Constable a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within his control. Contingent liabilities also arise in circumstances where a provision would otherwise be made, but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.

Contingent liabilities are not recognised in the Balance Sheet but disclosed in a note to the accounts.

K. Reserves

Earmarked reserves and the General Fund Balance are held by the Elected Mayor within the Mayoral Police Fund and are accounted for in the Statement of Accounts of the Greater Manchester Combined Authority.

L. VAT

VAT payable is included as an expense only to the extent that it is not recoverable from Her Majesty’s Revenue and Customs. VAT receivable is excluded from income.

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3. ACCOUNTING STANDARDS, NOT ADOPTED

The Code of Practice requires the Chief Constable to disclose information relating to the expected impact of an accounting change that will be required by a new standard that has been issued but not yet adopted.

The following standards introduced by the 2018/19 Code, which will be required from 1 April 2019 are not considered to have a significant impact on the Statement of Accounts:

Amendments to IAS 40 Investment Property: Transfers of Investment Property

Annual Improvements to IFRS Standards 2014-2016 Cycle

IFRIC 22 Foreign Currency Transactions and Advance Consideration

IFRIC 23 Uncertainty over Income Tax Treatments

Amendments to IFRS 9 Financial Instruments: Prepayment Features with NegativeCompensation.

4. CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES

In applying the accounting policies set out in Note 1, the Chief Constable has had to make certain judgements about complex transactions or those involving uncertainty about future events.

The critical judgements made in the Statement of Accounts are:

The 2017/18 Statement of Accounts covered the period from 8 May 2017 to 31 March 2018, aperiod of 10 months and 24 days. As such, this is not comparable with the 2018/19 Statementof Accounts, which covers the year ended 31 March 2019.

Transfer of functions - The functions of the Police and Crime Commissioner (PCC) in GreaterManchester were transferred by Parliamentary Order to the Greater Manchester CombinedAuthority with effect from 8 May 2017. The PCC functions are to be exercised by the ElectedMayor. The transfer of the PCC functions means that the legal entity known as the Police andCommissioner ceased to exist as of 8 May 2017 and all staff, properties, rights and liabilitiestransferred to the Greater Manchester Combined Authority.

In order to apply the group accounting requirements, the relationship between the ElectedMayor and Chief Constable has been assessed. The Greater Manchester Combined Authority,under sole instruction from the Elected Mayor, is responsible for the finances of the MayoralPolice Fund including assets, liabilities and reserves. In compliance with legislation the ChiefConstable’s accounts are consolidated into the group accounts of the Greater ManchesterCombined Authority.

All contracts with Greater Manchester Police are held in the name of the Greater ManchesterCombined Authority. The Greater Manchester Combined Authority pays for all expenditureincluding salaries of police officers, PCSOs and police staff. There is no transfer of cashbetween the Elected Mayor and the Chief Constable; and the Chief Constable does not have abank account into which monies can be paid or withdrawn.

Costs are recognised in the Chief Constable’s Statement of Accounts to reflect the resourcesconsumed and generated in the direction and control of day to day policing at the request ofthe Chief Constable.

Costs of pension arrangements require estimates assessed by independent qualified actuariesregarding future cash flows that will arise under the scheme liabilities. The financialassumptions underlying the valuation used for IAS19 reporting as advised by the actuaries arelargely prescribed at any point and reflect market expectations at the reporting date.Assumptions are also made around the life expectancy of the UK population. In respect ofpolice staff pension costs, actuarial valuations have been provided to enable the accountingentries for the Chief Constable in 2018/19 and are reflected in the financial statements

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5. ASSUMPTIONS MADE ABOUT THE FUTURE AND OTHER MAJOR SOURCES OFESTIMATION UNCERTAINTY

The Statement of Accounts contains estimated figures that are based on assumptions made by the Chief Constable about the future or that are otherwise uncertain. Estimates are made taking into account historical experience, current trends and other relevant factors. However, because balances cannot be determined with certainty, actual results could be materially different from the assumptions and estimates.

The items in the Chief Constable’s Balance Sheet at 31 March 2019 for which there is a significant risk of material adjustment in the forthcoming year are as follows:

Pension Liabilities

Estimation of the net liability to pay pensions depends on a number of complex judgments related to the discount rate used, the rate at which salaries are projected to increase, changes in retirement ages, mortality rates and expected returns on pension fund assets. A firm of consulting actuaries is engaged to provide expert advice about the assumptions to be applied.

The effects on the net pension liability of changes in individual assumptions are shown in note 18.

6. MATERIAL ITEMS OF INCOME AND EXPENSE

Police Pension Scheme

The large negative IAS19 pension reserve is mainly due to the Police Pension Scheme being an unfunded scheme (i.e. with no fund assets to offset future liabilities when existing police officers have retired). The difference between pension fund contributions and payments is met by top-up grant from the Home Office. Therefore, the statutory arrangements for funding the pension liability mean that the Chief Constable’s financial position remains healthy.

7. EVENTS AFTER THE REPORTING PERIOD

The Statement of Accounts was authorised for issue by the Chief Finance Officer to the Chief Constable on 31 May 2019. Events taking place after this date are not reflected in the financial statement or notes.

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8. EXPENDITURE AND FUNDING ANALYSIS

The Expenditure and Funding Analysis shows how annual expenditure is used and funded from resources by the Chief Constable in comparison with those resources consumed or earned by the Chief Constable in accordance with generally accepted accounting practices. Income and expenditure accounted for under generally accepted accounting practices is presented more fully in the Comprehensive Income and Expenditure Statement.

8 May 2017 to 31 March 2018 1 April 2018 to 31 March 2019

Net Expenditure Chargeable

to the General

Fund

Adjustments (see note

below)

Net Expenditure

in the Comprehensi

ve Income and

Expenditure Statement

Net Expenditure Chargeable

to the General

Fund

Adjustments (see note

below)

Net Expenditure

in the Comprehensi

ve Income and

Expenditure Statement

£000 £000 £000 £000 £000 £000

536,445 (30,854) 505,591 Cost of policing services 616,891 (42,468) 574,423

(536,445) 0 (536,445) Funding set aside by the Elected Mayor to fund policing services

(616,891) 0 (616,891)

0 186,429 186,429 Other income and expenditure

0 196,493 196,493

0 155,575 155,575 (Surplus) or Deficit on Provision of Services

0 154,025 154,025

0 Opening General Fund Balance

0

0 Surplus or (Deficit) on General Fund Balance in Year

0

0 Closing General Fund Balance at 31 March

0

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NOTE TO THE EXPENDITURE AND FUNDING ANALYSIS

1 April 2018 to 31 March 2019

Net Expenditure Chargeable

to the General

Fund

Adjustments for Capital Purposes

Net Change for Pensions Adjustments

Other Differences

Total Adjustment

s

Net Expenditure

in the Comprehensi

ve Income and

Expenditure Statement

£000 £000 £000 £000 £000 £000

Cost of policing services 616,891 0 (42,580) 112 (42,468) 574,423

Funding set aside by the Elected Mayor to fund policing services

(616,891) 0 0 0 0 (616,891)

Other income and expenditure from the Expenditure and Funding Analysis

0 0 196,493 0 196,493 196,493

Difference between General Fund surplus or deficit and Comprehensive Income and Expenditure Statement Surplus or Deficit on the Provision of Services

0 0 153,913 112 154,025 154,025

8 May 2017 to 31 March 2018

Net Expenditure Chargeable

to the General

Fund

Adjustments for Capital Purposes

Net Change for Pensions Adjustments

Other Differences

Total Adjustment

s

Net Expenditure

in the Comprehensi

ve Income and

Expenditure Statement

£000 £000 £000 £000 £000 £000

Cost of policing services 536,445 0 (30,870) 16 (30,854) 505,591

Funding set aside by the Elected Mayor to fund policing services

(536,445) 0 0 0 0 (536,445)

Other income and expenditure from the Expenditure and Funding Analysis

0 0 186,429 0 186,429 186,429

Difference between General Fund surplus or deficit and Comprehensive Income and Expenditure Statement Surplus or Deficit on the Provision of Services

0 0 155,559 16 155,575 155,575

Page 36 of 133

9. ADJUSTMENTS BETWEEN ACCOUNTING BASIS AND FUNDING BASIS UNDERREGULATIONS

This note details the adjustments that are made to the total comprehensive income and expenditure recognised by the Chief Constable in the year in accordance with proper accounting practice to arrive at the resources that are specified by statutory provisions as being available to the Chief Constable to meet future capital and revenue expenditure.

The following table sets the reserves that the adjustments are made against.

8 May 2017

to 31 March

2018

1 April 2018

to 31 March

2019

£000 £000

Adjustments primarily involving the Pension Reserve:

360,779 Reversal of items relating to retirement benefits debited or credited to the Comprehensive Income and Expenditure Statement

386,656

(205,220) Employer’s pension contributions and direct payments to pensioners payable in the year (232,743)

Adjustments primarily involving the Accumulated Absences Account:

16 Amount by which officer remuneration charged to the Comprehensive Income and Expenditure Statement on an accrual basis is different from remuneration chargeable in the year in accordance with statutory requirements

112

155,575 Total Adjustments 154,025

Page 37 of 133

10. EXPENDITURE AND INCOME ANALYSYED BY NATURE

The Chief Constable’s expenditure and income is analysed as follows:

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

£000 £000

Expenditure

Employee costs 510,243 460,808

Premises costs 16,930 16,028

Transport costs 5,019 2,861

Supplies and services 43,915 31,035

Partnership costs 13,557 16,158

Employee benefit costs (31,130) (20,760)

Depreciation, amortisation and impairment 18,498 15,917

Intercompany adjustments (2,598) (16,457)

Pension interest costs 217,676 204,616

Total expenditure 792,110 710,206

Income

Income (34,391) (34,023)

Funding from the Elected Mayor (582,511) (502,421)

Expected return on pension assets (21,183) (18,187)

Total Income (638,085) (554,631)

Surplus or Deficit on the Provision of Services 154,025 155,575

Page 38 of 133

11. CREDITORS

The table below shows the amounts owed by the Chief Constable, but not yet paid.

31 March 2019

31 March 2018

£000 £000

Police officers and police staff untaken leave 4,850 4,738

Pension liabilities 8,140,919 7,712,875

Total Creditors 8,145,769 7,717,613

12. UNUSABLE RESERVES

The table below shows the reserves that cannot be utilised to provide services.

31 March 2019

31 March 2018

£000 £000

Accumulated Absence Account (4,850) (4,738)

Pensions Reserve (8,140,919) (7,712,875)

Total Unusable Reserves (8,145,769) (7,717,613)

Accumulated Absences Account

The Accumulated Absences Account absorbs the differences that would otherwise arise on the General Fund Balance from accruing for compensated absences earned but not taken in the year, e.g. annual leave entitlement carried forward at 31 March. Statutory arrangements require that the impact on the General Fund Balance is neutralised by transfers to or from the account.

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

£000 £000

Opening Accumulated Absences Account Balance (4,738) (4,722)

Settlement or cancellation of accrual made at the end of the preceding year 4,738 4,722

Amount by which officer remuneration charged to the Comprehensive Income and Expenditure Statement on an accruals basis is different from remuneration chargeable in the year in accordance with statutory requirements

(4,850) (4,738)

Closing Accumulated Absences Account Balance at 31 March (4,850) (4,738)

Page 39 of 133

Pensions Reserve

The Pensions Reserve absorbs the timing differences arising from different arrangements for accounting for post-employment benefits and funding benefits in accordance with statutory provisions. The Chief Constable accounts for post-employment benefits in the Comprehensive Income and Expenditure Statement as the benefits are earned by employees accruing years of service, updating the liabilities recognised to reflect inflation, changing assumptions and investment returns on any resources set aside to meet the costs. However, statutory arrangements require benefits earned to be financed as the Chief Constable makes employer’s contributions to pension funds or eventually pays any pensions for which he is directly responsible. The debit balance on the Pensions Reserve therefore shows a substantial shortfall in the benefits earned by past and current employees and the resources the Chief Constable has set aside to meet them. The statutory arrangements will ensure that funding will have been set aside by the time the benefits come to be paid.

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

£000 £000

Opening Pensions Reserve Balance (7,712,875) (7,560,807)

Remeasurements of the net defined benefit liability / (asset) (274,131) 3,491

Reversal of items relating to retirement benefits debited or credited to the Surplus or Deficit on the Provision of Services in the Comprehensive Income and Expenditure Statement

(386,656) (360,779)

Employer’s pensions contributions and direct payments to pensioners payable in the year

232,743 205,220

Closing Pensions Reserve Balance at 31 March (8,140,919) (7,712,875)

Page 40 of 133

13. OFFICERS’ REMUNERATION

Officers’ Remuneration above £50,000

The table below shows the number of all Police Officers and Police Staff who have received more than £50,000 in remuneration during the year. This amount excludes any payments in relation to employee pensions.

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

Remuneration band Number of employees

Number of employees

£50,000 - £54,999 525 720

£55,000 - £59,999 294 335

£60,000 - £64,999 64 107

£65,000 - £69,999 28 36

£70,000 - £74,999 13 18

£75,000 - £79,999 12 13

£80,000 - £84,999 14 16

£85,000 - £89,999 13 9

£90,000 - £94,999 3 2

£95,000 - £99,999 2 2

£100,000 - £104,999 0 1

£105,000 - £109,999 2 2

£110,000 - £114,999 1 2

£115,000 - £119,999 1 2

£120,000 - £124,999 0 0

£125,000 - £129,999 0 1

£130,000 - £144,999 0 0

£145,000 - £149,999 0 1

£150,000 - £154,999 1 0

£155,000 - £194,999 0 0

£195,000 - £199,999 0 1

£200,000 - £204,999 1 0

Total 974 1,268

The Manchester Arena attack on the 22 May 2017 led to a substantial increase in overtime payments during 2017/18, due to officers and staff working additional hours to deal with the incident.

Page 41 of 133

Senior Officers’ Remuneration

The table below shows the remuneration paid to defined senior and statutory officers whose annualised salary is equal to or more than, £50,000 for the year ended 31 March 2019.

Post Title Note Salary Expenses Other

Pension Contributio

ns Total

£000 £000 £000 £000 £000

Chief Constable Ian Hopkins

203 0 1 35 239

Deputy Chief Constable Ian Pilling

150 0 0 36 186

Assistant Chief Constable a 86 0 5 15 106

Assistant Chief Constable b 77 0 0 18 95

Assistant Chief Constable c 86 0 6 21 113

Assistant Chief Constable 115 1 4 27 147

Assistant Chief Constable 106 0 25 131

Assistant Chief Constable d 93 2 3 21 119

Assistant Chief Constable e 98 2 6 23 129

Assistant Chief Constable f 90 1 2 22 115

Assistant Chief Constable g 50 1 0 12 63

Assistant Chief Constable 100 1 8 21 130

16 x Chief Superintendents h 1,296 30 0 263 1,589

Assistant Chief Officer Resources 113 0 14 21 148

Head of Information Services 86 2 0 16 104

Head of Legal Advisory 64 2 0 12 78

Head of Legal Services 86 2 0 16 104

Head of Business Support Services 82 2 0 15 99

Head of External Relations and Performance

92 0 0 17 109

Head of Finance 74 1 0 14 89

Interim Head of Finance and Strategic Resourcing

74 0 0 14 88

Head of Corporate Communications 74 0 0 14 88

Interim Head of HR 68 0 0 12 80

20 x Chief Superintendents From

To 29 88

0 4

0 0

0 21

35 113

Note a: Assistant Chief Constable retired October 2018 Note b: Assistant Chief Constable left November 2018 Note b: Assistant Chief Constable left December 2018 Note d: Assistant Chief Constable to July 2018 (Chief Superintendent from August 2018) Note e: Assistant Chief Constable from July 2018 (Chief Superintendent until June 2018) Note f: Assistant Chief Constable from January 2019 (Chief Superintendent until December 2018) Note g: Assistant Chief Constable appointed October 2018 Note h: Chief Superintendent posts have not been individually included due to numbers.

Total costs are included within the table with salaries ranging from £29,000 to £88,000. Note i: In 2018/19, HMRC reclassified emergency vehicles as a “use of assets”’ rather than as a company car, which

means no taxable benefit arises for Police Officers.

Page 42 of 133

2017/18 Comparative Senior Officers’ Remuneration

Post Title Note Salary Expenses Other

Pension Contributio

ns Total

£000 £000 £000 £000 £000

Chief Constable Ian Hopkins

200 0 5 46 251

Deputy Chief Constable Ian Pilling

148 0 9 35 192

Assistant Chief Constable a 104 0 5 11 120

Assistant Chief Constable 114 0 2 27 143

Assistant Chief Constable 109 0 7 26 142

Assistant Chief Constable b 15 0 1 4 20

Assistant Chief Constable c 117 0 8 28 153

Assistant Chief Constable 112 1 6 26 145

Assistant Chief Constable d 89 2 2 21 114

Assistant Chief Constable e 101 2 7 21 131

Assistant Chief Constable f 96 0 1 21 118

20 x Chief Superintendents g 1,392 36 4 304 1,736

Assistant Chief Officer Resources 110 0 16 21 147

Assistant Head of Change and Transformation

66 0 0 12 78

Head of Information Services 83 2 0 15 100

Head of Legal Advisory h 76 2 0 14 92

Head of Legal Services i 84 2 0 16 102

Head of Business Support Services 79 2 0 15 96

Head of External Relations and Performance

J 99 0 0 17 116

Head of Finance 74 1 0 14 89

Interim Head of Finance and Strategic Resourcing

72 0 0 14 86

Head of Corporate Communications 72 1 0 14 87

Interim Head of HR 62 1 0 11 74

Interim Director / Programme SRO k 8 0 0 0 8

20 x Chief Superintendents From

To 2

92 0 3

0 4

0 21

2 113

Note a: Assistant Chief Constable retired February 2018 Note b: Assistant Chief Constable left May 2017 Note c: Assistant Chief Constable on secondment Note d: Assistant Chief Constable from December 2017 (Chief Superintendent until December 2017) Note e: Assistant Chief Constable from May 2017 (on secondment to another police force in April 2017) Note f: Assistant Chief Constable from July 2017 (Chief Superintendent until July 2017) Note g: Chief Superintendent posts have not been individually included due to numbers.

Total costs are included within the table with salaries ranging from £2,000 to £92,000. Note h: Head of Legal Services until November 2017 Note i: Acting Head of Legal Services until November 2017 Note j: Head of External Relations and Performance, London weighting removed from this postholder Note k: Interim Director / Programme SRO (temporary consultant covering long term sickness) left May 2017

Page 43 of 133

Exit Costs and Termination Benefits

The Chief Constable terminated 10 employee contracts in 2018/19, incurring liabilities of £327,000 (14 in 2017/18 costing £461,000). These amounts have arisen as a result of strategic change and improvement programmes and relate to redundancy pay, pay in lieu of notice and pension strain costs. The total cost per band and the total cost of the compulsory and other redundancies are set out in the table below.

Number of compulsory

redundancies Number of other

departures agreed

Total number of exit packages by cost

band

Total cost of exit packages in each

band

2018/19 2017/18 2018/19 2017/18 2018/19 2017/18 2018/19 2017/18

£0 - £20,000 1 3 2 3 3 6 £34,000 £85,000

£20,001 - £40,000 1 1 2 4 3 5 £88,000 £142,000

£40,001 - £60,000 1 0 2 0 3 0 £140,000 £0

£60,001 - £80,000 0 0 1 1 1 1 £65,000 £66,000

£80,001 - £100,000 0 1 0 1 0 2 £0 £168,000

£100,001 - £150,000 0 0 0 0 0 0 £0 £0

Total 3 5 7 9 10 14 £327,000 £461,000

14. EXTERNAL AUDIT COSTS

The Chief Constable has incurred the following costs in relation to the audit of the Statement of Accounts. The external auditor for the Chief Constable Greater Manchester Combined Authority is Mazars LLP (Grant Thornton UK LLP for the previous financial period).

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

£000 000

Fees payable with for external audit services carried out by the appointed auditor for the relevant financial period

42 65

15. RELATED PARTIES

The Chief Constable is required to disclose material transactions with related parties – bodies or individuals that have the potential to control or influence the Force or to be controlled or influenced by the Force. Disclosure of these transactions allows readers to assess the extent to which the Chief Constable might have been constrained in his ability to operate independently or might have secured the ability to limit another party’s ability to bargain freely with the Force. In this context related parties include:

The Elected Mayor for Greater Manchester

Greater Manchester Combined Authority

Central Government

Key management personnel including senior managers

Close family member of key management personnel

Other public bodies

Entities controlled or significantly influenced by the Chief Constable

Page 44 of 133

The Elected Mayor for Greater Manchester

The functions of the Greater Manchester Police and Crime Commissioner (PCC) were transferred by Parliamentary Order to the Elected Mayor of Greater Manchester with effect from 8 May 2017. Under Section 3 of the Order “the mayor is to be treated, in relation to the mayor’s PCC functions, as a police and crime commissioner for the purposes of all police and crime commissioner enactments, wherever passed or made, subject to schedule 1 of the Order”.

The Elected Mayor had direct control over the finances of the Greater Manchester Combined Authority and is responsible for issuing the Police and Crime Plan. The Chief Constable retains operational independence and operates within the budget set by the Elected Mayor to deliver the aims and objectives set out in the Police and Crime Plan.

Greater Manchester Combined Authority

Under the legislative framework and local arrangements, Greater Manchester Combined Authority, under sole instruction from the Elected Mayor, is responsible for the finances of the Mayoral Police Fund including assets, liabilities and reserves. The Authority has responsibility for entering into contracts and establishing the contractual framework under which the Chief Constable’s officers and staff operate. The Authority receives all income and funding and makes all the payments for the policing activity from the Mayoral Police Fund.

Central Government

Central government has significant influence over the general operations of the Chief Constable. It is responsible for providing the statutory framework within which the Chief Constable operates, provides the majority of funding in the form of grants to the Elected Mayor and prescribes the terms of many of the transactions with other parties.

Officers and Employees

Senior officers and staff were asked to declare any direct financial relationship through outside bodies or companies with the Chief Constable. No material transactions have been reported in respect of the 2018/19 financial year.

Local Government Pension Scheme (LGPS) Pension Fund Administrator

The Chief Constable’s transactions with the Local Government Pension Scheme (administered by the Greater Manchester Pension Fund) are shown in the pension related disclosure note.

16. CHARGE TO THE CHIEF CONSTABLE FOR ASSETS CONSUMED IN THE YEAR

The Elected Mayor charges the Chief Constable for operational assets consumed in the year. This charge is made at a fair value. The annual depreciation charge, impairments and revaluations chargeable to the Comprehensive Income and Expenditure Statement of the Greater Manchester Combined Authority are considered to be reasonable proxy for fair value.

Page 45 of 133

17. REGIONAL COLLABORATION ARRANGEMENTS

The Chief Constable works in collaboration with other police forces in order to increase business resilience, efficiency and flexibility to make budget savings. Collaboration between police forces is not new and has generally been defined as “all activity where two or more parties work together to achieve a common goal, which includes inter-force activity and collaboration with the public and private sectors, including outsourcing and business partnering.”

Service level agreements exist to define the role of each of the bodies involved. In all of these agreements each party is responsible for their own liabilities and these cannot be passed or transferred to the other parties involved. They operate as joint operations in accordance with International Accounting Standard 31 – Interest in Joint Ventures.

Joint operations are arrangements where the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities relating to the arrangement. The activities undertaken by the Elected Mayor and/or the Chief Constable in conjunction with other joint operators involve the use of the assets and resources of those joint operators. In relation to its interest in a joint operation, the Elected Mayor and/or the Chief Constable as a joint operator recognises, if material:

Its assets, includes its share of any asset held jointly

Its liabilities, including its share of any liabilities incurred jointly

Its revenue from the sale of its share of the output arising from the joint operation

Its share of the revenue from the sale of the output by the joint operations

Its expenses, including its share of any expenses incurred jointly

The CIPFA Code of Practice 2016/17 introduced new requirements for the classification of collaborative arrangements based on International Financial Reporting Standards. Areas where the Chief Constable works with other entities need to be analysed on the basis of control, influence, governance arrangements, materiality and the rights to share in assets/liabilities. The results of this analysis drive the accounting arrangements required.

The following table shows collaborations that the Chief Constable is involved in of, which are classified as Joint Operations under the Code. The lead police force provides the general management of the operation and each collaborating police force makes a contribution

Collaboration Lead Force

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

£000 £000

TITAN

Partners are Greater Manchester, Cheshire, Merseyside, Lancashire, Cumbria and North Wales. Staff are drawn from these forces with net costs apportioned between partners based on government grant allocations.

Merseyside 6,775 6,225

UNDERWATER SEARCH

Partners are Greater Manchester, Cheshire, Merseyside, Lancashire, Cumbria and North Wales. Net costs are apportioned between partners based on government grant allocations.

Cheshire 342 345

NORTH WEST MOTORWAY POLICE GROUP

Partners are Greater Manchester, Cheshire, Merseyside and Lancashire. Costs are apportioned based on a Service Level Agreement.

Cheshire 304 308

Page 46 of 133

18. DEFINED BENEFIT PENSION SCHEMES

Participation in Pension Schemes

As part of the terms and conditions of employment of his officers and employees, the Chief Constable makes contributions towards the cost of post-employment benefits. Although these benefits will not actually be payable until the officers and employees retire, the Chief Constable has a commitment to make the payments (for those benefits) and to disclose them at the time that officers and employees earn their future entitlement.

The Chief Constable participates in two pension schemes providing post-employment benefits:

All police officers, unless they have opted out, are members of the Police Pension Scheme. This is an unfunded defined benefit career average salary scheme, meaning that there are no investment assets built up to meet these pensions liabilities, and cash has to be generated to meet actual pensions payments as they eventually fall due. The scheme can be split into four components, Old, Injury, New 2006 and New 2015 (see note F of the accounting policies on page 46). The scheme is contracted out of the State Second Pension scheme. The Police Pension Fund Account is disclosed after the notes to the Accounts.

All police staff employees, unless they have opted out, are members of the Greater Manchester Pension Fund. This is a funded defined benefit career average salary scheme, meaning that the Chief Constable and employees pay contributions into a fund, calculated at a level intended to balance the pension liabilities with investment assets.

The Greater Manchester Pension Fund is operated under the regulatory framework for the Local Government Pension Scheme and the governance of the scheme is the responsibility of the pensions committee of Tameside Metropolitan Borough Council. Policy is determined in accordance with the Pensions Fund Regulations. The investment managers of the fund are appointed by the committee and consist of the Director of Finance and Resources of Tameside Metropolitan Borough Council and Hymans Robertson LLP.

The principal risks to the Chief Constable of the scheme are the longevity assumptions, statutory changes to the scheme, structural changes to the scheme (i.e. large-scale withdrawals from the scheme), changes to inflation, bond yields and the performance of the equity investments held by the scheme. These are mitigated to a certain extent by the statutory requirements to charge to the General Fund the amounts required by statute as described in the accounting policies note.

Discretionary Post-retirement Benefits Discretionary post-retirement benefits on early retirement are an unfunded defined benefit arrangement, under which liabilities are recognised when awards are made. There are no plan assets built up to meet these pension liabilities.

Transactions Relating to Post-employment Benefits

The cost of retirement benefits in the reported cost of services is recognised when they are earned by officers and employees, rather than when the benefits are eventually paid as pensions. However, the charge that the Greater Manchester Combined Authority is required to make against the council tax precept is based on the cash payable in the year, so the real cost of post-employment / retirement benefits is reversed out of the General Fund via the Movement in Reserves Statement. The following transactions have been made in the Comprehensive Income and Expenditure Statement and the General Fund Balance via the Movement in Reserves Statement during the year.

Page 47 of 133

Transactions Relating to Post-employment Benefits Included in Financial Statements

1 April 2018 to 31 March 2019

LGPS

Old Police

Pension Scheme

Injury Police

Pension Scheme

2006 Police

Pension Scheme

2015 Police

Pension Scheme Total

£000 £000 £000 £000 £000 £000

Comprehensive Income and Expenditure Statement (CIES)

Cost of Services comprising:

- Current service cost 36,786 48,540 5,190 1,770 97,530 189,816

- Past service costs 347 0 0 0 0 347

- (Gain) / loss from settlements 0 0 0 0 0 0

Total Cost of Services 37,133 48,540 5,190 1,770 97,530 190,163

Financing and Investment Income and Expenditure

Interest income of plan assets (21,183) 0 0 0 0 (21,183)

Interest cost on defined benefit obligation

27,796 171,140 4,280 7,260 7,200 217,676

Net interest expense 6,613 171,140 4,280 7,260 7,200 196,493

Total Post-employment Benefits charged to the Surplus of Deficit on the Provision of Services

43,746 219,680 9,470 9,030 104,730 386,656

Other Post-employment Benefits charged to the CIES

Remeasurement of the net defined benefit liability comprising:

- Return on plan assets (excluding the amount included in the net interest expense)

37,152 0 0 0 0 37,152

- Actuarial gains and losses arising on changes in demographic assumptions

0 0 0 0 0 0

- Actuarial gains and losses arising on changes in financial assumptions

(102,104) (192,500) (3,300) (15,280) (17,600) (330,784)

- Other experience (159) 23,280 (1,930) 5,830 (7,520) 19,501

Total Post-employment Benefits charged to the CIES

(21,365) 50,460 4,240 (420) 79,610 112,525

Movement in Reserves Statement

- Reversal of net charges made to the Surplus or Deficit on the Provision of Services for post-employment benefits in accordance with the Code of Practice

(43,746) (219,680) (9,470) (9,030) (104,730) (386,656)

Actual amount charged against the General Fund Balance for pensions in the year:

Employers’ contributions payable to scheme

18,693 14,382 0 651 39,196 72,923

Retirement benefits payable to pensioners

420 0 0 0 0 420

Page 48 of 133

2017/18 Comparative Transactions Relating to Post-employment Benefits Included in Financial Statements

8 May 2017 to 31 March 2018

LGPS

Old Police

Pension Scheme

Injury Police

Pension Scheme

2006 Police

Pension Scheme

2015 Police

Pension Scheme Total

£000 £000 £000 £000 £000 £000

Comprehensive Income and Expenditure Statement (CIES)

Cost of Services comprising:

- Current service cost 34,615 51,810 2,110 1,570 78,950 169,055

- Past service costs 525 4,720 50 0 0 5,295

- (Gain) / loss from settlements 0 0 0 0 0 0

Total Cost of Services 35,140 56,530 2,160 1,570 78,950 174,350

Financing and Investment Income and Expenditure

Interest income of plan assets (18,187) 0 0 0 0 (18,187)

Interest cost on defined benefit obligation

23,766 165,090 4,250 6,570 4,940 204,616

Net interest expense 5,579 165,090 4,250 6,570 4,940 186,429

Total Post-employment Benefits charged to the Surplus of Deficit on the Provision of Services

40,719 221,620 6,410 8,140 83,890 360,779

Other Post-employment Benefits charged to the CIES

Remeasurement of the net defined benefit liability comprising:

- Return on plan assets (excluding the amount included in the net interest expense)

8,043 0 0 0 0 8,043

- Actuarial gains and losses arising on changes in demographic assumptions

0 221,740 4,760 9,220 15,690 251,410

- Actuarial gains and losses arising on changes in financial assumptions

0 (213,330) (1,360) (21,060) (5,480) (241,230)

- Other experience (52) (17,400) 1,960 950 (190) (14,732)

Total Post-employment Benefits charged to the CIES

48,710 212,630 11,770 (2,750) 93,910 364,270

Movement in Reserves Statement

- Reversal of net charges made to the Surplus or Deficit on the Provision of Services for post-employment benefits in accordance with the Code of Practice

(40,719) (221,620) (6,410) (8,140) (83,890) (360,779)

Actual amount charged against the General Fund Balance for pensions in the year:

Employers’ contributions payable to scheme

17,590 16,199 0 600 31,199 65,588

Retirement benefits payable to pensioners

380 0 0 0 0 380

Page 49 of 133

Pensions Assets and Liabilities Recognised in the Balance Sheet

The amount included in the Balance Sheet arising from the Chief Constable’s obligation in respect of his defined benefit plans are:

31 March 2019 31 March 2018

LGPS

Police Pension Scheme Total LGPS

Police Pension Scheme Total

£000 £000 £000 £000 £000 £000

Present value of the defined benefit obligation

(1,173,805) (7,815,040) (8,988,845) (1,016,809) (7,476,740) (8,493,549)

Fair value of plan assets 847,926 0 847,926 780,674 0 780,674

Sub-total (325,879) (7,815,040) (8,140,919) (236,135) (7,476,740) (7,712,875)

Other movements in the liability

0 0 0 0 0 0

Net liability arising from defined benefit obligation

(325,879) (7,815,040) (8,140,919) (236,135) (7,476,740) (7,712,875)

Reconciliation of Movements in the Fair Value of the Scheme (Plan) Assets:

LGPS

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

£000 £000

Opening fair value of scheme assets 780,674 744,501

Interest income 21,183 18,187

Remeasurement gain / (loss)

- The return of plan assets, excluding the amount included in the net interest expense 37,152 8,043

Contributions from employer 18,693 17,590

Contributions from employees into the scheme 6,758 6,014

Benefits paid (16,534) (13,661)

Contribution in respect of unfunded benefits 420 380

Unfunded benefits paid (420) (380)

Closing fair value of scheme assets 847,926 780,674

Page 50 of 133

Reconciliation of Present Value of Scheme Liabilities

LGPS

Old Police

Pension Scheme

Injury Police

Pension Scheme

2006 Police

Pension Scheme

2015 Police

Pension Scheme Total

£000 £000 £000 £000 £000 £000

Opening balance at 1 April 1,016,809 6,789,300 168,960 283,880 234,600 8,493,549

Current service cost 36,786 40,020 5,190 1,420 76,130 159,546

Interest cost 27,796 171,140 4,280 7,260 7,200 217,676

Contributions from scheme participants 6,758 8,520 0 350 21,400 37,028

Remeasurement (gains) and losses:

- Actuarial gains / losses arising from changes in demographic assumptions

0 0 0 0 0 0

- Actuarial gains / losses arising from changes in financial assumptions

102,104 192,500 3,300 15,280 17,600 330,784

- Other experience 159 (23,280) 1,930 (5,830) 7,520 (19,501)

Past service cost 347 0 0 0 0 347

Benefits paid (16,534) (205,620) (7,150) (220) (1,720) (231,244)

Transfers in 0 210 0 340 530 1,080

Unfunded benefits paid (420) 0 0 0 0 (420)

Closing balance at 31 March 1,173,805 6,972,790 176,510 302,480 363,260 8,988,845

2017/18 Comparative Information Reconciliation of Present Value of Scheme Liabilities

LGPS

Old Police

Pension Scheme

Injury Police

Pension Scheme

2006 Police

Pension Scheme

2015 Police

Pension Scheme Total

£000 £000 £000 £000 £000 £000

Opening balance at 8 May 965,878 6,739,670 173,990 264,970 160,800 8,305,308

Current service cost 34,615 42,230 2,110 1,260 61,810 142,025

Interest cost 23,766 165,090 4,250 6,570 4,940 204,616

Contributions from scheme participants 6,014 9,580 0 310 17,140 33,044

Remeasurement (gains) and losses:

- Actuarial gains / losses arising from changes in demographic assumptions

0 (221,740) (4,760) (9,220) (15,690) (251,410)

- Actuarial gains / losses arising from changes in financial assumptions

0 213,330 1,360 21,060 5,480 241,230

- Other experience 52 17,400 (1,960) (950) 190 14,732

Past service cost 525 4,720 50 0 0 5,295

Benefits paid (13,661) (181,030) (6,080) (31) (53) (200,855)

Transfers in 0 50 0 19 46 115

Unfunded benefits paid (380) 0 0 0 0 (380)

Closing balance at 31 March 1,016,809 6,789,300 168,960 283,988 234,663 8,493,720

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Local Government Pension Scheme assets comprise:

31 March 2019

Quoted prices in

active markets

Quoted prices not

in active markets Total

Percentage of total assets

£000 £000 £000 %

Cash and cash equivalents 21,179 0 21,179 2%

Equity instruments by industry type:

Consumer 46,834 0 46,834 6%

Manufacturing 49,001 0 49,001 6%

Energy and utilities 47,650 0 47,650 6%

Financial institutions 67,105 0 67,105 8%

Health and care 25,039 0 25,039 3%

Information technology 15,138 0 15,138 2%

Other 9,291 0 9,921 1%

Sub-total equity 260,057 0 260,057 32%

Bonds by sector:

Corporate bonds (investment grade) 31,716 0 31,716 4%

UK Government bonds 5,584 0 5,584 1%

Other 21,506 0 21,506 3%

Sub-total bonds 58,806 0 58,806 8%

Property:

UK 0 40,274 40,274 5%

Sub-total Property 0 40,274 40,274 5%

Private equity:

All 0 39,711 39,711 5%

Sub-total private equity 0 39,711 39,711 5%

Other investment funds:

Equities 191,682 0 191,682 23%

Bonds 105,474 0 105,474 12%

Infrastructure 0 40,651 40,651 5%

Other 16,523 73,139 89,662 11%

Sub-total other investment funds 313,680 113,790 427,470 51%

Derivatives:

Other 430 0 430 0%

Sub-total derivatives 430 0 430 0%

Total assets 654,151 193,775 847,926 100%

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2017/18 Comparative Information Local Government Pension Scheme assets comprise

31 March 2018

Quoted prices in

active markets

Quoted prices not

in active markets Total

Percentage of total assets

£000 £000 £000 %

Cash and cash equivalents 28,554 0 28,554 4%

Equity instruments by industry type:

Consumer 44,546 0 44,546 6%

Manufacturing 53,439 0 53,439 7%

Energy and utilities 42,315 0 42,315 5%

Financial institutions 64,297 0 64,297 8%

Health and care 19,953 0 19,953 3%

Information technology 12,513 0 12,513 2%

Other 7,636 0 7,636 1%

Sub-total equity 244,699 0 244,699 32%

Bonds by sector:

Corporate bonds (investment grade) 28,938 0 28,938 4%

UK Government bonds 6,765 0 6,765 1%

Other 21,724 0 21,724 3%

Sub-total bonds 57,427 0 57,427 8%

Property:

UK 0 26,728 26,728 3%

Sub-total Property 0 26,728 26,728 3%

Private equity:

All 0 26,124 26,124 3%

Sub-total private equity 0 26,124 26,124 3%

Other investment funds:

Equities 211,244 0 211,244 27%

Bonds 101,223 0 101,223 13%

Infrastructure 0 20,213 20,213 3%

Other 20,558 43,903 64,461 8%

Sub-total other investment funds 333,026 64,116 397,141 51%

Derivatives:

Other 0 0 0 0%

Sub-total derivatives 0 0 0 0%

Total assets 663,706 116,968 780,674 100%

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Basis for Estimating Assets and Liabilities

Liabilities have been assessed on an actuarial basis using the projected unit credit method, an estimate of the pensions that will be payable in future years dependent on assumptions about mortality rates, salary levels, etc.

The Local Government Pension Scheme liabilities have been assessed by Hymans Robertson, an independent firm of actuaries. Estimates have been made based on the latest full valuation of the scheme as at 31 March 2016. The Police Pension Scheme liabilities have been assessed by the Government Actuary’s Department. Estimates have been made based on the latest full valuation of the scheme as at 31 March 2012.

The significant assumptions used by the actuaries have been:

Local Government Pension Scheme

Police Pension Scheme

31 March 2019

31 March 2018

31 March 2019

31 March 2018

Mortality assumptions:

Longevity at 65 for current pensioners:

- Men 21.5 21.5 22.7 22.6

- Women 24.1 24.1 24.3 24.2

Longevity at 65 for current pensioners:

- Men 23.7 23.7 24.6 24.5

- Women 26.2 26.2 26.2 26.1

Inflation assumptions:

Rate of inflation 3.40% 3.40% 2.35% 2.30%

Rate of increase in salaries 2.60% 2.50% 4.35% 4.30%

Rate of increase in pensions 2.50% 2.40% 2.35% 2.30%

Rate for discounting scheme liabilities 2.40% 2.70% 2.45% 2.55%

The estimation of the defined benefit obligations is sensitive to the actuarial assumptions set out in the table above. The sensitivity analyses below have been determined based on reasonably possible changes of the assumptions occurring at the end of the reporting period and assumes for each change that the assumption analysed changes while all the other assumptions remain constant. The assumptions in longevity, for example, assume that life expectancy increases or decreases for men and women. In practice, this is unlikely to occur, and changes in some of the assumptions may be interrelated.

The estimations in the sensitivity analysis have followed the accounting policies for the schemes, i.e. on an actuarial basis using the projected unit credit method. The methods and types of assumptions used in preparing the sensitivity analysis below did not change from those used in the previous period.

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Sensitivity Analysis

Increase to Employer Liability

% £000

Local Government Pension Scheme:

Longevity increase in 1 year 3% to

5% 35,216 to

58,693

0.5% increase in rate of increase in salaries 2% 26,139

0.5% increase in rate of increase in pensions 10% 117,386

0.5% decrease in rate for discounting scheme liabilities 12% 146,254

Old Police Pension Scheme:

Longevity increase in 1 year 2.5% 179,000

0.5% increase in rate of increase in salaries 1.0% 70,000

0.5% increase in rate of increase in pensions 8.0% 565,000

0.5% decrease in rate for discounting scheme liabilities -10.0% (691,000)

2006 Police Pension Scheme:

Longevity increase in 1 year 2.5% 8,000

0.5% increase in rate of increase in salaries 8.5% 26,000

0.5% increase in rate of increase in pensions 10.0% 30,000

0.5% decrease in rate for discounting scheme liabilities -18.0% (54,000)

2015 Police Pension Scheme:

Longevity increase in 1 year 2.5% 9,000

0.5% increase in rate of increase in salaries 0.0% 0

0.5% increase in rate of increase in pensions 18.5% 67,000

0.5% decrease in rate for discounting scheme liabilities -17.0% (62,000)

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Impact on the Chief Constable’s Cash Flows

Local Government Pension Scheme

One of the key objectives of the scheme is to deliver a low, stable employer contribution rate whilst maintaining the solvency of the scheme. Funding levels are monitored and contribution rates set following triennial valuations. The 31st March 2016 valuation disclosed that the fund was in deficit and that the fund’s assets were equal to 93% of the value of its liabilities. Contribution rates have been set to cover the cost of the future benefits earned by employees and to make good the deficit over a period of time. The effective date of the next triennial valuation is 31st March 2019 and this is required to be completed by 31st March 2020.

The total contribution expected to be made to the Local Government Pension Scheme by the Chief Constable in the year to 31st March 2020 is £18.693m.

Police Pension Scheme

At the request of the Home Office the Government Actuary’s Department carried out an actuarial valuation of the police pension scheme as at 31st March 2012. The valuation was undertaken in accordance with the Public Service Pensions (Valuations and Employer Cost Cap) Directions 2014. The valuation results specify the rate of employer contributions payable for the four year period from 1st April 2015. The employer contribution rate is expected to be reassessed at the next actuarial valuation to be carried out as at 31st March 2016, with the next revision to the employer contribution rate expected to take effect from 1st April 2019.

The total contribution expected to be made to the Police Pension Scheme by the Chief Constable in the year to 31st March 2020 is £70.126m.

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Analysis of Present Value of Scheme Liabilities by Members

The weighted average duration of the defined benefit obligation for scheme members are:

31 March 2019 31 March 2018

Liability

Weighted Average Duration Liability

Weighted Average Duration

% £000 Years % £000 Years

Local Government Pension Scheme:

Active members 61.66% 719,331 24.9 59.00% 592,046 24.9

Deferred members 18.28% 213,268 25.1 19.00% 187,627 25.1

Pensioner members 20.06% 233,979 12.0 22.00% 229,985 12.0

Total 100.00% 1,166,578 20.8 100.00% 1,009,658 20.7

Old Police Pension Scheme:

Active members 45.75% 3,189,930 47.52% 3,226,300

Deferred members 3.93% 273,820 4.01% 272,560

Pensioner members 50.32% 3,509,040 48.46% 3,290,350

Total 100.00% 6,972,790 21 100.00% 6,789,300 20

Injury Police Pension Scheme:

Active members 21.73% 38,350 22.05% 37,250

Deferred members 0.00% 0 0.00% 0

Pensioner members 78.27% 138,160 77.95% 131,710

Total 100.00% 176,510 n/a 100.00% 168,960 n/a

2006 Police Pension Scheme:

Active members 93.27% 282,120 93.23% 264,660

Deferred members 6.21% 18,780 6.07% 17,220

Pensioner members 0.52% 1,580 0.70% 2,000

Total 100.00% 302,480 40 100.00% 283,880 33

2015 Police Pension Scheme:

Active members 99.86% 362,740 99.80% 234,120

Deferred members 0.14% 520 0.20% 480

Pensioner members 0.00% 0 0.00% 0

Total 100.00 363,260 38 100.00% 234,600 32

Readers of the accounts should be aware that the figures in the Statement of Accounts have been prepared for the purposes of IAS19 only and have no validity in other circumstances. In particular, they are not relevant for calculations undertaken for funding purposes, for accounting under international accounting standards and for other statutory purposes under UK pensions’ legislation.

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19. CONTINGENT LIABILITIES

Police Pensions

The Chief Constable, along with other Chief Constables and the Home Office, currently has 1,329 claims lodged against them with the Central London Employment Tribunal. The claims are in respect of alleged unlawful discrimination arising from the Transitional Provisions in the Police Pension Regulations 2015.

Claims of unlawful discrimination have also been made in relation to the changes to the Judiciary and Firefighters Pension regulations and in December 2018 the Court of Appeal (McCloud / Sargeant) ruled that the ‘transitional protection’ offered to some members as part of the reform to public sector pensions amounts to unlawful discrimination. The Government is seeking permission to appeal this decision. It is envisaged that if this is unsuccessful, the Court will require steps to be taken to compensate employees who were transferred to the new schemes potentially including Police Pension Scheme members. This would to lead to an increase in Police Pension Scheme liabilities and our actuaries (the Government Actuary Department) using specific assumptions have estimated the potential increase in scheme liabilities as a result of the judgment to be approximately 5.4% of national pension scheme liabilities as at March 2018. This estimate is based on one potential remedy and depending on the outcome of the appeal, the remedy calculation and its applicability to the Police Pension Scheme will need to be revisited in the light of further direction from the courts.

The impact of an increase in scheme liabilities arising from McCloud / Sargeant judgment will be measured through the pension valuation process, which determines employer and employee contribution rates. The next Police Pension valuation is due to take place in 2020 with implementation of the results planned for 2023/24 and forces will need to plan for the impact of this on employer contribution rates alongside other changes identified through the valuation process.

The impact of an increase in annual pension payments arising from McCloud / Sargeant is determined through The Police Pension Fund Regulations 2007. These require a police authority to maintain a police pension fund into which officer and employer contributions are paid and out of which pension payments to retired officers are made. If the police pension fund does not have enough funds to meet the cost of pensions in year the amount required to meet the deficit is then paid by the Secretary of State to the police authority in the form of a central government top-up grant.

Unpaid Overtime

Following successful claims in Allard v Devon and Cornwall Police for unpaid overtime following recalls to duty, in excess of 1500 claims have been made nationally. Further unpaid overtime claims from police officers in specific roles are still being investigated at a national level.

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THE POLICE PENSION FUND ACCOUNT

The Police Pension Scheme is an unfunded pension scheme. Both employer and employee pension contributions are based on a percentage of pay, which is paid into the Pension Fund. The amounts that must be paid into and out of the Pension Fund are specified by the Police Pension Fund Regulations 2007 and do not include injury awards.

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

£000 £000

Opening balance 0 0

Contributions receivable

- Contributions at 21.3% of pensionable pay from employer (47,700) (42,271)

- Early Retirements (3,417) (3,084)

- Other (contributions from the Territorial Army) 0 (6)

Officers’ contributions (30,246) (27,054)

Transfers in

- Transfers in from other Police and Crime Commissioners and other schemes (1,094) (844)

Benefits payable

- Pensions 163,764 139,803

- Commutations and lump sum retirement benefits 41,567 40,522

Payments to and on account of leavers

- Individual transfers out to other Police and Crime Commissioners and other schemes

442 360

- Refunds of contributions 123 39

- Other (tax and interest) 204 249

Net amount payable for the year 123,643 107,714

Additional 2.9% funding payable by the Police and Crime Commissioner to meet the deficit for the year

(6,495) (5,755)

Additional contribution from the Police and Crime Commissioner (117,148) (101,959)

Closing balance at 31 March 0 0

Net asset statement

31 March 2019

31 March 2018

£000 £000

Unpaid pensions due 0 0

Amount owing to General Fund Balance 0 0

Net Assets 0 0

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Contribution rates

1 April 2018

to 31 March

2019

8 May 2017

to 31 March

2018

Employer 24.20% 24.20%

Employee:

- Old Scheme 14.25% to 15.05% 14.25% to 15.05%

- 2006 Scheme 11.00% to 12.75% 11.00% to 12.75%

- 2015 Scheme 12.44% to 13.78% 12.44% to 13.78%

Notes to the Police Pension Fund Account and Net Assets Statement

1. The Fund was established under the Police Pension Fund Regulations 2007 (SI 2007 no.1932) and is administered and managed by the Chief Constable.

2. The Police Pension Scheme is an unfunded, defined benefit scheme. There are no investmentassets. The fund is balanced to nil each year by a transfer from Greater Manchester CombinedAuthority, which is reclaimed from Central Government.

3. The Fund receives contributions from the Chief Constable as the employer and from schememembers based on a percentage of pensionable pay set nationally by the Home Office andsubject to triennial revaluation by the Government Actuary’s Department. (See the contributionrates table above). At the last revaluation the employer’s contribution was reduced by 2.9%from 24.2% to 21.3%. However, the effective rate remains at 24.2% as the saving has beenrecovered by central government.

4. Benefits payable to scheme members are made from the Fund with the exception of injuryawards, which are payable by the Chief Constable. Administrative costs are met by the ChiefConstable. Inward transfer values are paid into the Fund and outward transfer values are paidfrom the Fund.

5. The fund is balanced to zero each year. If income to the fund exceeds expenditure then theexcess is paid to Greater Manchester Combined Authority. If expenditure exceeds incomethen Greater Manchester Combined Authority must fund the deficit. Greater ManchesterCombined Authority pays any excess income to the Home Office and receives the PolicePension Fund top up grant from the Home Office to fund any deficit.

6. The contributions receivable from Greater Manchester Combined Authority shown in theaccount are debited to the Comprehensive Income and Expenditure Statement. The additionalcontribution from Greater Manchester Combined Authority is debited in its accounts togetherwith a matching grant from the Home Office.

7. The amount of Home Office grant outstanding at 31st March 2019 has been accrued and isincluded in the group Balance Sheet of the Greater Manchester Combined Authority.

8. The Fund’s financial statements do not take into account liabilities to pay pensions after 31March 2019. Liabilities to pay future payments are included in the IAS19 charges and notes tothe Chief Constable's Financial Statements.

9. The Fund’s Accounting Policies are set out in Note 1 to the Chief Constable's FinancialStatement

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GLOSSARY

Accounting Policies Within the range of possible methods of accounting, a statement of the actual methods chosen locally and used to prepare these accounts.

Accruals The method of including amounts in accounts to cover income or expenditure attributable to an accounting period but for which payment has not been received or made by the end of the accounting period. This is based on the concept that income and expenditure are recognised as they are earned or incurred, not as money is received or paid.

Actuarial Remeasurements Actuaries assess financial and non-financial information provided by The Chief Constable to project levels of future pension fund requirements. Changes in actuarial deficits or surpluses can arise, leading to a loss or gain because:- events have not coincided with the actuarial assumptions made for the last valuation the actuarial assumptions have changed

Adjustment between accounting basis and funding basis These are adjustments that are made to the total comprehensive income and expenditure recognised by The Chief Constable in the year in accordance with proper accounting practice to the resources that are specified by statutory provisions as being available to The Chief Constable to meet future capital and revenue expenditure.

Balances The reserves of the Greater Manchester Police, both revenue and capital, which represent the accumulated surplus of income over expenditure on any of the funds

Balance sheet A statement of the recorded assets, liabilities and other balances at the end of an accounting period.

Cash Flow Movement in money received and paid by Greater Manchester Police in the accounting period.

CIPFA (The Chartered Institute of Public Finance and Accountancy) CIPFA is the leading professional accountancy body for public services.

Comprehensive Income and Expenditure Statement This statement details income and expenditure relating to policing services.

Contingent Liabilities Potential liabilities at the balance sheet date which depend on the occurrence or non-occurrence of one or more uncertain future events. The liabilities should be included in the balance sheet where it is probable that a loss will be incurred, which can be estimated reasonably accurately at the time the accounts are prepared. Otherwise, where the contingencies are likely to be material, the fact that they exist are disclosed as a note to the accounts.

Creditors Amounts owed by the Chief Constable where payment has not been made by the balance sheet date.

Current Assets An asset where the value changes, because the volume held varies from day to day, for example, stock. It is reasonable to expect that these assets will either be consumed or realised during the next accounting period.

Current Liabilities An amount which will become payable or could be called in within the next accounting period.

Current Service Cost The increase in the present value of a defined benefit pension scheme’s liabilities, expected to arise from employee service in the current financial year. It is the ultimate pension benefits “earned” by employees in the current year’s employment which will eventually entitle them to receive pension benefits when they arise.

Curtailment For a defined benefit pension scheme, an event that reduces the expected years of future service of present employees or reduces the accrual of defined benefits for a number of employees, for some or all of their future service.

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Debtors Amounts due to Greater Manchester Police that relate to the accounting period and have not been received by the balance sheet date.

Defined Benefit Scheme This is a pension or other retirement benefit scheme other than a defined contribution scheme. Usually, the scheme rules define the benefits independently of the contributions payable and the benefits are not directly related to the investment of the scheme. The scheme may be funded or unfunded (including notionally funded).

Earmarked Reserves These reserves represent the monies set aside that can only be used for a specific usage or purpose.

Exceptional Items Material items deriving from events or transactions that fall within the ordinary activities of The Chief Constable, but which need to be separately disclosed by virtue of their size and/ or incidence to give a fair presentation of the accounts.

Expenditure Costs incurred by the Chief Constable for goods received, services rendered or other value consumed during the accounting period, irrespective of whether or not any movement of cash has taken place.

External Audit The independent examination of the activities and accounts of local authorities, to ensure the accounts have been prepared in accordance with legislative requirements and proper practices and to ensure The Chief Constable has made proper arrangements to secure value for money in his use of resources.

GMCA (Greater Manchester Combined Authority) The GMCA assumed its powers on 1st April 2011 and took over functions which were previously the responsibility of the Greater Manchester Integrated Transport Authority (GMITA).

Income Amounts due to the Elected Mayor for Greater Manchester in respect of services performed, or grants receivable, during the accounting period, irrespective of whether or not any movement of cash has taken place.

International Accounting Standard 19 (IAS 19) IAS 19 sets out the treatment of pensions and other forms of retirement benefits in an organisation’s statutory accounts.

International Financial Reporting Standards (IFRS) A set of international financial accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are issued by the International Accounting Standards Board to make international comparisons as easy as possible.

Inventories Raw materials and consumable items which have been procured in the name of the Elected Mayor for Greater Manchester to use on a continuing basis and have not been used by the end of the accounting period.

Liabilities Amounts due to individuals or organisations, which will have to be paid at some time in the future.

Material The concept that any omission from or inaccuracy in the statements of account should not be large enough to affect the understanding of those statements by a reader.

Movement in Reserves Statement The movement in the year on the different reserves held by The Chief Constable, analysed into ‘usable reserves’ (i.e. those that can be applied to fund expenditure or reduce local taxation) and other reserves.

Payments in Advance Amounts actually paid in an accounting period prior to the period in which they are due

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Pension Strain Pension strain arises when an employee retires early without actuarial reduction of pension.

Post Balance Sheet Event Events both favourable and unfavourable which occur between the balance sheet date and the date on which the financial statements are approved

Prior Year Adjustments Material adjustments to the accounts of earlier years arising from changes in accounting policies or from the correction of fundamental errors. They do not include normal recurring corrections or adjustments of accounting estimates made in prior years.

Provisions Amounts set aside in the accounts for liabilities or losses which are certain or very likely to occur, but where there is uncertainty as to the amounts involved or the dates on which they will arise.

Receipts in Advance Amounts actually received in an accounting period prior to the period in which they are due.

Reporting Standards The Code of Practice prescribes the accounting treatment and disclosures for all normal transactions of a Local Commissioner (For GMP, this is the Mayor). It is based on International Financial Reporting Standards (IFRS), International Standards (IAS) and International Financial Reporting Interpretations Committee (IFRIC) plus UK Generally Accepted Accounting Practice (GAAP) and Financial Reporting Standards (FRS).

Reserves Amounts set aside in the accounts to meet expenditure which the Mayor may decide to incur in future periods, but not allocated to specific liabilities which are certain or very likely to occur. Earmarked reserves are allocated to a specific purpose or area of spending.

Revenue Contributions The method of financing capital expenditure directly from revenue.

Revenue Expenditure Day to day expenses, mainly salaries and wages, and general running costs.

Service Reporting Code of Practice (SeRCOP) Prepared and published by CIPFA, the Service Reporting Code of Practice (SeRCOP) replaced the previous Best Value Accounting Code of Practice (BVACOP). It is reviewed annually to ensure that it develops in line with the needs of modern Local Government, Transparency, Best Value and public services reform. SeRCOP establishes proper practices with regard to consistent financial reporting for services and in England and Wales. It is given legislative backing by regulations which identify the accounting practices it propounds as proper practices under the Local Government Act 200

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CHIEF CONSTABLE OF GREATER MANCHESTER POLICE ANNUAL GOVERNANCE STATEMENT 2018/19

1. Scope of Responsibilities

1.1 The Chief Constable holds office under the Crown, and is appointed by the Mayor. The Chief Constable is accountable in law for the exercise of police powers and to the Mayor, during his term of office, for the delivery of efficient and effective policing, management of resources and expenditure by Greater Manchester Police (GMP). He is accountable for the functions of officers and staff under his or her employment, direction and control, and is held to account for specific matters set out in the Police and Social Responsibility Act 2011.

1.2 This statement has been prepared for the 2018-2019 financial year. The Elected Mayor of Greater Manchester has responsibility for the totality of policing in Greater Manchester and is held to account by the Greater Manchester Police and Crime Panel, which consists of representatives from each district with crime and anti-social behaviour responsibilities. On 6 May 2017 the Mayor appointed a Deputy Mayor for Policing, Crime, Criminal Justice and Fire, to whom he has devolved certain responsibilities in respect of the police, with the exception of the duty to set a budget, the duty to prepare a Police and Crime Plan, and the appointment and removal of a Chief Constable. The purpose of the statement is to outline current governance arrangements, to report on their effectiveness during the year, and to outline future actions planned to further enhance the arrangements.

1.3 Ian Hopkins has held the office of Chief Constable since 30 October 2015. The responsibilities and duties of a Chief Constable as a corporation sole are in accordance with the Police Reform and Social Responsibility Act 2011.

1.4 While the Chief Constable discharges his responsibilities in such a way as to assist the Mayor with his functions, he remains at all times operationally independent in the service of the public.

1.5 In discharging their overall responsibilities, the Mayor and Chief Constable are responsible for maintaining appropriate risk management processes, governance arrangements and ensuring there is a reliable system of internal control which supports those functions.

1.6 The Assistant Chief Officer (Resources) is the Chief Constable’s professionally qualified Chief Finance Officer (CFO), as required by the Police Reform and Social Responsibility Act 2011. The role of the Chief Constable’s CFO is carried out in accordance with the CIPFA Statement on the Role of the Chief Finance Officer of the Chief Constable (July 2012).

1.7 Production of an Annual Governance Statement by the Chief Constable is a requirement under the Accounts and Audit Regulations 2015 and ensures that a reliable system of internal controls can be demonstrated. The statement helps the Mayor to hold the Chief Constable to account. The statement forms part of the statutory accounts and provides assurance about GMP’s governance arrangements, approaches and controls.

1.8 A Statement of Assurance supports this Annual Governance Statement and has been signed by the Chief Constable and the CFO (see Appendix 1).

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2. The Governance Framework

2.1 This Annual Governance Statement has been prepared for the 2018-19 financial year and is intended to state the governance arrangements of GMP, to report on the effectiveness of such arrangements, and to highlight key areas to be developed during the coming year (2019/20).

2.2 The governance framework comprises the systems, processes, culture and values by which the Chief Constable directs and controls the conduct of business and the activities through which the organisations account to and engage with the community in relation to policing and crime. It enables the Chief Constable to monitor the achievements of their strategic objectives and to consider whether those objectives have led to the delivery of appropriate, cost-effective services, including achieving value for money.

2.3 GMP’s principal governance meetings and decision making structure are, in summary:

The Executive Committee (ExecCo) is the Chief Constable’s executive board. It is the senior decision-making board in GMP and is responsible for ensuring the Chief Constable’s responsibilities for the governance of the Force, responsibilities to the Mayor and other responsibilities under legislation are effectively discharged. The members of ExecCo are the Chief Constable (Chair), Deputy Chief Constable, Assistant Chief Constables, the Assistance Chief Officer (ACO) (Resources) or any officer acting as CFO in the absence of the ACO (Resources). The Chief Constable and his CFO discharge their statutory responsibilities in consultation with the board.

An Investment Committee, Revenue Review Group, Capital Review Group, Resources Board, Finance Governance Group, Human Resources (HR) Governance Group and Procurement Governance Group manage key financial, HR and procurement decisions. These bodies have decision-making and/or monitoring functions and representatives in accordance with the approved scheme of consent. They are chaired by the Assistant Chief Officer (Resources), or a person delegated under the Chief Constable’s Scheme of Delegation, with sub-groups and processes in place to support them.

GMP has an extensive Transformation and Change portfolio. The portfolio is managed and monitored by a Change Committee meeting chaired by the Chief Constable. There are subsidiary Programme and Project Boards to monitor and manage the progress of individual change programmes. The commissioning of new change projects and alignment of proposed change with GMP’s strategies and operating model is overseen by a Strategic Design Authority (SDA) meeting. A Business and Technical Advisory Group (BTAG) makes recommendations to these Boards and other meetings in respect of technical, financial and other implications of proposed change.

A Greater Manchester Joint Audit Panel and joint internal audit arrangements support the Chief Constable and the Mayor.

2.4 As a member of the ExecCo and other decision-making committees, the Chief Constable’s CFO is actively involved in, and able to bring influence to bear on, all strategic corporate decisions of GMP. The CFO leads the promotion and delivery of good financial management so that public money is safeguarded at all times and used appropriately, economically, efficiently and effectively. The CFO ensures the finance function is resourced to be fit for purpose and the management accounting systems, functions and internal controls are in place to ensure finances are kept under review on a regular basis.

2.5 A Scheme of Consent provides authority, within delegated limits, for the Chief Constable to enter into contracts and make financial decisions on behalf of the Mayor. Authority to make decisions is further delegated to committees or posts within the Chief Constable’s delegations. The Chief Constable’s CFO holds responsibilities for good financial management and decision making as set out in paragraphs 1.6 and 2.4 above.

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3. Internal Financial Controls

3.1 Internal financial control systems are in place to minimise the risk of loss and unlawful expenditure and to help deliver value for money.

3.2 The Chief Constable’s financial management framework, in conjunction with that of the Mayor, is consistent with statutory, national and/or professional best practice and its key elements are set out below:

Financial Regulations are a documented set of procedures to secure the proper administration of the Chief Constable’s financial affairs. They are designed to ensure financial controls are conducted in a way which complies with statutory provision and reflects best professional practice.

Contract Standing Orders are a documented set of procedures relating to procurement, tenders and contracts to be followed in respect of contracts for the supply of goods and services.

The Chief Constable’s Scheme of Financial Delegation is a document from the Chief Constable assigning authority and responsibility to officers and staff to carry out specific activities or functions.

The Chief Constable's Financial Instructions provide detailed guidance on the operation of specific financial processes controlled by GMP.

4. Good Governance in the Police Service

4.1 In 2016 CIPFA, in association with the National Police Chiefs’ Council (NPCC) and other bodies, issued best practice guidance on Delivering Good Governance in the Police Service. It sets out seven principles of good governance which are illustrated below.

Principles A and B permeate implementation of principles C to G. The diagram also illustrates that good governance is dynamic, and that an entity as a whole should be committed to improving on a

continuing basis through a process of evaluation and review.

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5. Implementing the Principles of Good Governance

Principle A Behaving with integrity, demonstrating strong commitment

to ethical values, and respecting the rule of law

5.1 The Chief Constable and Chief Officers individually and collectively apply the Principles of Public Life (The Nolan Principles) in the discharge of their functions and seek to ensure their application by officers and staff across the Force as a whole.

5.2 The National Code of Ethics, as developed by the College of Policing, is a golden thread throughout training, in particular around decision making and the use of the National Decision Model. GMP’s Organisational Learning and Workforce Development (OLWD) Branch are working closely with the Professional Standards Branch (PSB) to ensure that training to student officers includes standards of professional behaviour, as well as the more widely understood policing principles.

5.3 Furthermore, the Force continues to utilise the College of Policing’s Competency and Values Framework, against which performance is assessed at promotion processes. The Competency and Values Framework also remains integral to the Personal Development Review (PDR) process for all officers and staff.

5.4 The Independent Ethics Committee continues to consider ethical issues within the policing context, providing advice and challenge to GMP around ethical issues. The Independent Ethics Committee has revised the work plan for 2018/19 to cover, amongst other themes, use of spit hoods, stop and search, human tissue retention and a communications strategy. GMP has recently become a member of the newly established Northern Region Ethics Group, which feeds into the UK Police Ethics Governance Group.

5.5 All police officers and staff under the employment, direction and control of the Chief Constable are subject to policies and procedures covering discipline, grievance, standards of conduct and professional behaviour. GMP’s PSB, under the direction of the Deputy Chief Constable, provides clear guidance on what GMP expects from all staff and, in particular, those in a leadership position.

5.6 GMP has adopted a number of policies to maintain professional standards and these policies are up-to-date and working effectively. They include:

Gifts Hospitality and Discount Policy.

Lawful Business Monitoring (3ami Monitoring and Auditing System Policy) which assists with intelligence gathering and ensuring the right level of authority is applied to intrusive examination of GMP systems.

The Notifiable Associations Policy which allows officers and staff to declare associations where they suspect the associate is connected to criminality.

Business Interests’ Policy.

5.7 GMP has an established Reporting Concerns Policy and arrangements for confidential integrity reporting (formerly whistleblowing) are in place. The policy sets out clear standards of professional behaviour expected of police officers and staff, together with the duty of the Force to ensure that reported concerns about improper or illegal behaviour are properly considered and responded to. GMP’s complaints processes and the operations of the PSB are regularly reported to the Deputy Mayor, enabling oversight and scrutiny of GMP’s complaints process and to ensure issues of conduct are dealt with appropriately.

5.8 The Chief Constable and the Deputy Mayor’s Office have also agreed an Anti-Fraud and Corruption Policy, in conjunction with staff associations and unions, the Independent Office

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for Police Conduct (IOPC) and Crimestoppers. GMP also participates in the National Fraud Initiative.

5.9 The Force has an established Organisational Learning Board (OLB) which gathers learning from different sources including complaints and misconduct investigations both within the Force and nationally. Learning from Employment Tribunals is being monitored by the board.

5.10 GMP’s Human Resources policies include provision for staff to appeal against a range of management decisions. These include appeals against decisions about grievances, discipline, flexible working, career breaks, officer postings, ill-health retirement, police staff early and flexible retirements, police staff redundancy, unsatisfactory performance, and attendance.

5.11 Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services (HMICFRS) conducted an inspection of GMP’s complaints handling and disciplinary arrangements, and other matters of organisational justice and procedural justice during the year. HMICFRS found GMP understood the importance of treating people fairly, behaving ethically and lawfully. HMICFRS also set out some areas for improvement which are being addressed. HMICFR’s findings are published in their report on GMP’s Legitimacy, as part of the Police Effectiveness, Efficiency and Legitimacy (PEEL) inspection programme of GMP.

Principle B Ensuring openness and comprehensive stakeholder engagement

5.12 The Chief Constable has specific responsibilities for ensuring GMP engages with local people, under the terms of the Police Reform and Social Responsibility Act 2011. In summary, the Chief Constable must ensure GMP obtains the views of people in each neighbourhood; that information is provided to people about policing in their neighbourhood; and that there are regular meetings with local people in each neighbourhood.

5.13 GMP measures levels of customer satisfaction with a random selection of around 8000 victims of burglary, vehicle and violent crime. GMP also surveys victims of hate crime (450) and anti-social behaviour (ASB) (600). GMP takes service recovery action with people who report their experience of GMP’s services as being unsatisfactory. GMP also provides feedback to its branches and districts about survey results to help inform service improvement and acknowledges the good work of officers and staff who have been praised by respondents. GMP has recently invested in the commissioning of a new user friendly live dashboard and quarterly reporting mechanism, allowing GMP to be more visual and active with its performance data. GMP is introducing a new domestic abuse survey, accompanied by new focus groups, reports and videos to better develop the service provided.

5.14 GMP has a refreshed Equality, Diversity and Human Rights Strategy for 2018-21 and delivery plan which embeds the Force’s equality objectives that focus on activity aligned to ‘Serving our Communities’, ‘Our People’ and ‘Organisational Processes’. This document sets out how the Chief Constable meets the requirements of the Public Sector Equality Duty and how GMP will deliver policing services, and manage the organisation, in ways that respect equality, diversity, and human rights. The Force has established governance arrangements to oversee and drive improvement in these respects, through a Confidence and Equality Board which is chaired by an Assistant Chief Constable for the service delivery activity and an Assistant Chief Officer for those focusing on our workforce.

5.15 GMP is developing a new Force Engagement Strategy which aims to provide a strategic approach to enable and encourage the active participation of citizens and communities in policing. Through the Citizens in Policing Programme, GMP provides opportunities for members of the public to become Special Constables, Police Support Volunteers, Volunteer

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Police Cadet Leaders, or Police Cadets. This is integral to engagement and supports GMP in making communities safer, improving links in the community and reducing demand on policing.

5.16 GMP is committed to engagement and two-way communication with the people and communities it serves, based on principles of openness and transparency. This focuses on keeping people informed, promoting security, listening to people and making improvements, and encouraging citizen involvement in policing. Examples include consultation on GMP’s first Citizen Contract which engaged over 2,500 people in an online survey and included more than 40 meetings taking place across Greater Manchester and also consultation on the Police and Crime Plan. A wide range of channels are used for these purposes, including digital channels, such as:

Neighbourhood meetings.

Local independent advisory groups.

Social media at neighbourhood level – Twitter and Facebook.

Social media at a corporate level – Twitter, Facebook, Flickr, YouTube, Instagram, Pinterest, and additional platforms are used as required for example, Kik, Periscope, and Storify.

Regular social media and web based chats to make the public aware of significant police operations and the reasons for them, as well as other policing matters of importance to the public.

Other online developments include the new GMP website, which allows the public to access information and online services. The “Your area” service provides an opportunity for the public to have their say on what policing issues matter to them.

Media liaison takes place to support policing priorities and includes regular opportunities to directly question the Chief Constable including through Radio Manchester phone-ins.

The Force continues to work with documentary makers to provide behind-the-scenes insight into areas of policing, operations, and campaigns.

5.17 The Force has a Transparency Scheme which means that it routinely publishes information in accordance with the Information Commissioner’s Publication Scheme for the police service.

Principle C Defining outcomes in terms of sustainable

economic, social, and environmental benefits

5.18 The Mayor is required to publish a Police and Crime Plan, which sets out his local policing priorities in the form of police and crime priorities, and specifies the resources the Mayor will provide to the Chief Constable. The Police and Crime Plan is produced in consultation with GMP taking into consideration any objectives set by the Government, including the Strategic Policing Requirement, and the views of the public and partners. The new Police and Crime Plan, ‘Standing Together’ was launched in March 2018 covering the period to 2021.

5.19 The priorities for GMP in the Police and Crime Plan for 2018-2021 are to:

Keeping people safe - Protecting and caring for people who live, work, socialise and travel in Greater Manchester. Protecting those who are vulnerable and those who are victims of crime or at risk of being victimised. Building resilience, feelings of safety and confidence in policing and community safety.

Reducing harm and offending - Preventing anti-social and criminal behaviour including the most serious offending by solving problems, intervening early and rehabilitating offenders to build confidence in criminal justice.

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Strengthening communities and places - Helping to build resilient and resourceful communities including online communities and protecting the places where people live, work, socialise or travel. Supporting the delivery of the Information Technology (IT) systems, buildings, roads, street lighting and other public assets needed to solve problems in a 21st century society.

5.20 The budget for GMP, as set by the Mayor, reflects the above and outlines the vision for neighbourhood based policing which works in partnership with other agencies to improve access to services for the communities across Greater Manchester that are in greatest need.

5.21 The Chief Constable and ExecCo have determined a Target Operating Model (TOM) for the future delivery of policing services. It sets out a vision, operating model, and key principles to guide the transformation and development of GMP over the period to 2022 to ensure GMP has the capacity and capabilities required to meet future policing demand. The TOM has mapped National Transformation programmes to maximise funding opportunities and sustainability of policing services, with recent work developing the environmental benefits and contribution to the Greater Manchester wide plan.

Principle D Defining the interventions necessary to optimise

the achievement of the intended outcomes

5.22 The purpose of Greater Manchester Police (GMP) is to protect society and help keep people safe. This statement of purpose was adopted by the Chief Constable following consultation.

5.23 GMP's TOM Change Portfolio has five programmes, all of which support the delivery of the TOM. The Force is supported in designing and delivering change through the recruitment of benefits realisation roles to ensure outcomes associated with the change are optimised, tracked and reported.

5.24 A number of operational structural changes have been designed within GMP's portfolio of transformation and change, and are currently in delivery and implementation. The Investigation and Safeguarding Review (ISR) and operation ERGO ensure changes to District and place based resources are better aligned to service demand and provide effective leadership. GMP's portfolio of transformation and change is currently supporting delivery of the Force’s work to replace its core (IT) systems.

5.25 GMP have been actively contributing to a programme of public service reform in Greater Manchester in partnership with the Greater Manchester Combined Authority (GMCA) and other partners, to make best use of joint resources and to deliver better outcomes for citizens and service users. The GMCA approach is set out in Greater Manchester’s Growth and Reform Plan, which underpins the overarching Greater Manchester Strategy. GMP’s TOM transformation programmes are aligned with the principles of public service reform.

Principle E Developing the entity’s capacity, including the capability

of its leadership and the individuals within it

5.26 The purpose of Greater Manchester Police (GMP) is to protect society and help keep people

5.27 The common purpose of the Chief Constable, the Mayor, and their respective roles, is defined by legislation, in particular the Police Reform and Social Responsibility Act 2011. This, amongst other things, requires the Chief Constable to have regard to the Mayor’s

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Police and Crime Plan as well as the Policing Protocol 2011, which sets out the respective roles of the Chief Constable and Mayor in relation to each other.

5.28 The principle of good governance is also underpinned by:

The accountability of the Chief Constable to the Deputy Mayor for the performance of the Force and progress in meeting GMP’s contributions to the objectives and commitments made by the Mayor and Deputy Mayor in the Police and Crime Plan, Standing Together.

Statements setting out the portfolio held by each Chief Officer of GMP;

The appointment by the Chief Constable of a professionally qualified CFO;

A Scheme of Governance and Scheme of Consent set by the Commissioner, which sets out decisions that may be made by statutory officers within GMP and the Greater Manchester Combined Authority (GMCA), respectively. The Scheme of Consent provides authority for the Chief Constable, or others holding delegations from the Chief Constable, to make financial, HR, and certain other decisions on behalf of the Mayor, subject to limits defined in the scheme;

Contractual Standing Orders and Financial Instructions.

5.29 The Chief Constable’s Order (CCO) is the principal means by which GMP publishes Force policy and has the status of a lawful order. Items published in the Order are effective from the publication date, or from a date specified in the item. Police officers are expected to read each weekly issue of the CCO to keep abreast of current policy/legislation, to keep themselves aware of any items relevant to their duties and to ensure they are acting lawfully at all times. Police staff are also encouraged to read the Orders and managers of police staff are expected to advise their teams of anything relevant within the Order that is applicable to them.

5.30 The Chief Constable has a statutory duty under the Police Reform and Social Responsibility Act 2011 to keep opportunities for collaboration with other bodies (whether other Chief Constables or non-police bodies) under review. The Mayor has a parallel responsibility under the 2011 Act. The Chief Constable has entered into a number of collaborative and partnership developments, where the collaboration is in the interests of the efficiency or effectiveness of GMP and others. In particular there are collaborative arrangements with other police forces in the north-west, with the Greater Manchester Combined Authority (GMCA), Manchester City Council and with Trafford Borough Council from spring 2017. Each of these collaborations has joint governance arrangements in place.

5.31 The Chief Constable also has a statutory duty to co-operate with other bodies, such as local authorities and criminal justice agencies, under the Crime and Disorder Act 1998 and other legislation. The Chief Constable and the Force participates in a number of statutory and voluntary partnership arrangements, at Greater Manchester, district and neighbourhood levels, to reduce crime, promote effective criminal justice arrangements and make best use of joint partnership arrangements.

5.32 GMP has completed a number of reviews of its current operating arrangements during the year and developed more effective arrangements, making better use of public money. There is work ongoing within GMP's change and transformation portfolio enabling the Force to focus on the development of GMP's people strategy, including personal development at all levels and leadership support. The Force has begun a command and control review, which will provide greater ownership in responsibilities for incoming demand and release capacity of front line supervisors.

5.33 As GMP implements changes to processes and infrastructure, it is accompanied by consultation with staff and with the public or other organisations, as appropriate, and by staff training and communications.

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5.34 The Force undertakes regular Staff Engagement Surveys and widely publicises the work it has undertaken and delivered in response to the issues raised through the survey, thereby demonstrating to its people how their voice has been valued. The survey also helped GMP articulate the leadership behaviours valued by the workforce and which will enable the Force to deliver its future operating model. The results of the 2018 survey show improvements in all areas of perceptions to differing levels since 2016.

5.35 GMP's Wellbeing Board, chaired by an Assistant Chief Officer, continues to oversee the wellbeing work of the Force. A force wellbeing ambition has been agreed together with four priority areas. A communications strategy is being developed to ensure the wider workforce are aware of what is available.

5.36 Leadership training has continued to develop across all ranks from sergeants to superintendents. The Leadership Development Programme for superintendents is now inclusive of a one week technical skills course, together with four Continuous Professional Development (CPD) days per annum. This has enabled the leadership development to get up front for officers applying for promotion to superintendent.

5.37 GMP has worked with other organisations in the criminal justice system and with local authorities to determine how public money can be better used across organisations to deliver efficiencies and improved outcomes for the public. In particular, a joint Transforming Justice Programme aims to reduce cost, enable justice (including community and restorative justice) to better serve the victims of crime, and reduce reoffending. Joint work with local authorities and other agencies also aims to reduce the demands placed on public services by troubled families and secure better prospects for these families and their children. Joint work with other law enforcement agencies, as well as local authorities and others, is also helping safeguard vulnerable people and helping the fight against organised crime. Integrated place-based working between the Force and other local agencies will continue to be rolled out further across Greater Manchester in the year ahead, together with the development of borough-based Public Service Hubs.

5.38 HMICFRS undertook an inspection of GMP’s efficiency and legitimacy in 2018 and observed that GMP collaborates with other forces and agencies to improve its services and is good at treating the public and its workforce fairly. HMICFRS also continues to regard GMP’s effectiveness in tackling serious and organised crime as outstanding and that GMP has the capacity and capability to meet the strategic policing requirement in respect of armed policing. HMICFRS assessed, however, that a number of other aspects of GMP’s effectiveness requires improvement. HMICFRS has made recommendations and identified areas for improvement and these are being addressed by the Force.

Principle F Managing risks and performance through robust internal

control and strong public financial management

5.39 The purpose of Greater Manchester Police (GMP) is to protect society and help keep people

5.40 The Chief Constable has established a decision-making structure, summarised in 2.3 above, for making key financial and corporate decisions. It is underpinned by arrangements which require the identification and management of risks, and the submission of business cases, for all significant decisions, under which all procurement decisions and expenditure are subject to scrutiny by groups or boards established for the purpose. Their decisions and reports are reported for scrutiny and decision by, as appropriate, GMP’s Investment Committee, Resources Board, Change Committee, the Executive Committee and the Deputy Mayor.

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5.41 Agendas and minutes from the Executive Committee are published on the GMP internet for the information of the public, subject to confidentiality tests.

5.42 Major spending and other key decisions are referred by GMP to the Deputy Mayor for decision in accordance with the terms of the Scheme of Consent.

5.43 The Chief Constable has delegated responsibility for the overall maintenance of effective risk management arrangements to the Deputy Chief Constable who is the Senior Information Risk Owner.

5.44 Risk is managed within GMP through various means (including the maintenance of risk registers or threat assessments with corresponding mitigation) by parts of the Force that manage key internal controls. An example of such controls are assessments that capture threats to business continuity; threats such as penetration of GMP’s computer systems; and financial, insurance and health and safety risks. GMP have a risk management policy and procedure, which is currently being updated to reflect the new work-in-progress extension to risk management procedures.

5.45 Risk and threat is routinely considered by senior leadership teams. Any risks that cannot be managed locally as part of business-as-usual activities, due to interdependencies for example, are brought to the attention of Chief Officers and if appropriate, escalated for consideration at the Executive Committee (Exec Co) meetings. The Exec Co considers a Strategic Risk Register periodically during the year. The assessment and control of risk is also supported by the GMCA Internal Audit service which serves the Chief Constable and GMCA.

5.46 The Information Services Branch and the Information Security function continue to manage information security requirements through many administrative, technical and physical controls. They are required to submit annual submissions to external bodies, including the National Police Information Risk Management Team (NPIRMT) and the Government Digital Services (GDS), for explicit approval to connect to national systems. This mechanism also provides internal assurance of risk management.

5.47 The performance of the Force is monitored and managed by an Operational Committee which meets monthly and is chaired by the Deputy Chief Constable. This Committee was established during 2017/18 and provides scrutiny of Force performance and of progress against strategic priorities determined by a Force Control Strategy. As part of the control strategy there is daily and weekly governance to ensure any immediate threats are actioned promptly, whilst also working towards the bigger strategy. In addition, aspects of performance are monitored and managed by Monthly Force Performance and Vulnerability performance meetings, each chaired by an Assistant Chief Constable. Other performance management arrangements, specific to the portfolios held by each Chief Officer, are also in place within their individual management arrangements.

5.48 GMP’s work is periodically inspected by Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services (HMICFRS), whose purpose is to monitor and report on police forces and policing activity with the aim of encouraging improvement and providing public transparency. HMICFRS’s reports on GMP in 2018 can be found on their website. The Chief Constable is accountable to the Deputy Mayor for GMP’s response and actions in respect of the findings and recommendations of HMICFRS reports. The Mayor and Deputy Mayor have a statutory responsibility to publish a response to every HMICFRS report about GMP and policing nationally and they are published on the GMCA website.

5.49 The Chief Constable is held to account by the Deputy Mayor at monthly Executive Meetings. The general arrangements, through which the Chief Constable is held to account, are set out in the Police and Crime Plan - ‘Standing Together’.

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Principle G Implementing good practices in transparency, reporting,

and audit to deliver effective accountability

5.50 GMP conducts formal business at a number of meetings and, in the interests of openness and transparency, board papers are made publicly available where possible subject to confidentiality tests.

5.51 The Force maintains a single Transparency Scheme that complies with the Freedom of Information Act and the Information Commissioner’s Public Scheme for Police which is derived from the Act, alongside the requirements from the Equality Act 2010, the Police Reform and Social Responsibility Act 2011, the Protection of Freedoms Act 2012 and associated secondary legislation and good practice guidance. The scheme ensures that GMP satisfies the transparency requirements of these Acts and enhances public scrutiny by making a wide range of information publicly available.

5.52 The Chief Constable’s financial reporting, and audit arrangements are described earlier in this Statement.

6. Review of Effectiveness

6.1 Greater Manchester Police continually reviews the effectiveness of its system of internal controls. Actions were identified for development in last year’s Annual Governance Statement and progress was made against these over the course of the year. It is summarised in the table below:

Governance Area Action for 2019/20

Governance GMP’s governance arrangements continue to be refreshed andreviewed as part of the work to deliver the Target Operating Model.Please see below for Actions for 19/20.

Risk Management GMP continues to strengthen its risk management and hasprovided tailored inputs to Chief Officers and other senior membersof the organisation. The Force has also delivered training inputs tomembers of the Greater Manchester Joint Audit Panel on its riskmanagement procedure.

6.2 There is more to be done in the year ahead to further develop the effectiveness of GMP’s governance. These areas for development will form the basis for a governance action plan over the coming year. They are summarised in the table below:

Governance Area Action for 2019/20

Governance and accountability

The Force will continue to review its governance arrangements in2019/20. The principle aims are to increase efficiency and capacityof the Force through a redesigned meeting schedule with cleargovernance and to improve effectiveness through consistency andconnectivity of decision making whilst operating with integrity and inaccordance with the Code of Ethics.

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APPENDIX 1 - CHIEF CONSTABLE ASSURANCE STATEMENT

GMP is responsible for ensuring that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded, properly accounted for, and used economically, efficiently and effectively. In discharging this overall responsibility, GMP is responsible for putting in place proper arrangements for the governance of its affairs, facilitating the effective exercise of its functions, which includes arrangements for the management of risk.

The GMP Annual Governance Statement is designed to manage rather than eliminate the risk of failure to achieve these objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.

We propose over the coming year to take steps to address the governance actions as outlined above to ensure governance arrangements within the Force continue to be enhanced. We are satisfied that these steps will address the need for improvements that were identified in our review of effectiveness and will monitor their implementation and operation as part of our next annual review.

Ian Hopkins, Chief Constable of Greater Manchester Police 31 May 2019

Lynne Potts, Chief Finance Officer 31 May 2019

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Report of the Treasurer and Head of Audit and Assurance to

the Greater Manchester Combined Authority to the Joint Audit

Panel

18th June 2019

Progress against Internal Audit Plan 2018/20

Overview:

The purpose of this progress report is to inform Members of the Joint Audit Panel of the

progress to date of the delivery of the Internal Audit Plan. We are also proposing it is

used as a mechanism to approve and provide a record of changes to the internal audit

plan.

This report is formatted differently to those previously received, we would welcome your

feedback on the format and content to ensure it meets your requirements going

forwards.

Detail:

Head of Audit and Assurance

A new Head of Audit and Assurance for GMCA was appointed and came into post on

29 April 2019. This is a joint appointment between GMCA and TfGM.

The Head of Audit and Assurance will be, as a matter of priority, establishing a

permanent audit team within GMCA with capacity to deliver all of the approved audits

within the GMCA and GMP internal audit plans.

In respect of the delivery of the GMP internal audit plan, an experienced team of

internal auditors are in place and will continue to deliver the internal audit work in

respect of Mayoral police and crime functions and GMP.

During the forthcoming year, the Head of Audit and Assurance will work with the Deputy

Mayor (Police and Crime) and the Chief Constable to review the current internal audit

plan

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alongside current risks and priorities to ensure the planned audits remain the most

appropriate. Any changes will be proposed for approval.

The Head of Audit and Assurance will also review the internal audit methodology,

process and reporting formats with a view to standardising these across GMCA, GMP

and TfGM. Feedback will be sought from stakeholders in relation to any proposed

changes. The first such changes that will be observed by the Joint Audit Panel are the

format of this progress report and the internal audit charter (which is being submitted as

a separate item).

As the elapsed time since the last Audit Panel has been short there has been limited

opportunity to deliver significant audit work. Therefore, in order to illustrate how the

content of these progress reports will be presented going forwards, some of the sections

of this report contain template information. This is indicated by light grey text. The

purpose of this is to gather the Panel’s feedback on the proposed format.

2018/20 Internal Audit Plan

The Internal Audit plan for 2018/20 was approved by the GM Mayor (in respect of police

and crime functions), the Chief Constable and the Joint Audit Panel on 12th December

2018.

No reports have been issued since the previous Joint Audit Panel in April 2019.

[xxx] reports have been issued since the last meeting of the Joint Audit Panel held on

[date] as noted below:

Report title – Assurance rating

Report title – Assurance rating

Details of the number and priority of agreed actions in respect of these audits are

attached in Appendix A.

A summary of any high or critical findings is also provided in Appendix A.

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Internal Audit Work In Progress

We are currently undertaking work in the following areas:

Planning and Scoping:

Specially Trained Officers

Cyber Security

Police and Crime Commissioning Framework

Fieldwork:

Provision of Training – ‘newly promoted’ or ‘acting up’

Specialist Equipment (Serious Crime Division)

Custody – Health and Welfare of Detainees

Compliance with Disclosure Responsibilities

Software Asset Management

Service Management Platform - Service Desk

Reporting:

Force Assurance Arrangements for compliance with the Protection of Freedoms

Act (2012)

Use of Agency Staff and Overtime (Serious Crime Division and Specialist

Operations)

GMSS (Greater Manchester Shared Service) Payroll

Details of our progress in respect of the 2018/20 Audit Plan is shown in Appendix B.

Changes to the Internal Audit Plan

The internal audit plan is regularly reviewed and can be amended to reflect changing

risks and/or objectives. In line with the Internal Audit Charter, significant changes to the

plan must be approved by the Joint Audit Panel.

There is one change requiring Joint Audit Panel approval at this time. This is:

Inclusion of a review of health and safety reporting, including RIDDOR reporting –

Q4 2019/20. This has been requested by management in order to assess

arrangements in place to manage the RIDDOR reporting process.

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Appendix C of this report provides a record of changes to the approved plan along with

the date they were approved by the Panel.

Internal Audit Key Performance Indicators

As one mechanism to report the effectiveness of the internal audit function we will report

to the Joint Audit Panel at least annually our performance against a number of Key

Performance Indicators (KPIs).

The Head of Audit and Assurance would like to propose the following KPIs which

represent common practice as observed in other internal audit functions. They are not

significantly different to those already agreed but expand and clarify them. Appendix D

will be used to report the detailed results and trends in performance.

KPI Description Target

1 Completion of audits

Audit fieldwork completed in line with timescales in Terms of Reference

90%

2 Issue of Draft Report

Closing meeting scheduled and draft report prepared within 2 weeks of fieldwork completion

90%

3 Management comments

Management comments received within 2 weeks of draft report issue

90%

4 Final report Final report issued within 2 weeks of management comments being received

90%

5 Utilisation rate Individual and average team utilisation rate (time spent on audit work)

80%

6 Action implementation rate

Implementation of audit recommendations – as opposed to the number of overdue actions.

TBC

7 Audit days Deliver audits within the allocated number of days.

90%

8 Customer satisfaction

Ensure customer satisfaction is at a high level for each audit completed

85%

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Risk:

Risk Mitigation

Individual reports have identified risks

associated with the area’s reviewed

Management has agreed to take

appropriate action to address the issues

identified and mitigate the associated risk.

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Recommendations:

Members are asked to review and scrutinise the contents of this report.

Members are asked to approve the changes to the audit plan as detailed in Appendix

C of this report.

Members are asked to approve the proposed Key Performance Indicators for Internal

Audit

Members are also asked for feedback on the new format of this progress report.

Attachments:

Appendix A – Summary of internal audit reports 2019/20

Appendix B – 2018/20 Internal Audit Plan Progress Report

Appendix C - Changes to the Internal Audit Plan

Appendix D – Key Performance Indicators

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APPENDIX A

2019/20 Summary of Internal Audit Reports

The table below provides a cumulative summary of the internal audit work completed in 2019/20. This will inform the annual Internal Audit opinion for the

year 2019/20.

[For the purpose of this illustrative report, the data in the table below is that presented in the last progress report]

Audit Assurance Level

Audit Actions Summary of Critical / High findings

Critical High Medium Efficiency

Force Travel Desk High - - - 1 N/A

Mobile Working Satisfactory - - 4 1 N/A

Uniform and Equipment Satisfactory - 1 5 2 The Uniform and Equipment ‘Entitlement List’ does not correspond with the items in the inventory. This could result in confusion when ordering items, that is, obsolete items being ordered or delays in processing orders.

Action Target Implementation Date: 31st May 2019

Health and Safety Satisfactory - - 7 4 N/A

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APPENDIX B

2018/20 Internal Audit Plan Progress Report

The table below shows progress made in delivery of the 2018/20 Internal Audit Plan.

Key: Not Yet started Scheduled In progress Complete

Assurance Theme Auditable Area Timing Scoping Fieldwork Draft Report

Final Report

Joint Audit Panel

Comments

Governance Police Complaints Watching brief

Governance and Decision Making

Organisational Learning

Workforce and People

Health and Safety Report Issued on 25.03.19

Provision of Training

Provision of Training – ‘newly promoted’ or ‘acting up’

Q1

Specially Trained Officers Q1

Restricted Duties

Assets and equipment

Uniform and Equipment – issue, returns, monitoring and reporting

Report Issued on 21.03.19

Management of Specialist Equipment within Serious Crime Division

Q1

Equipment – fit For purpose

Firearms – security, issue and

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APPENDIX B

Assurance Theme Auditable Area Timing Scoping Fieldwork Draft Report

Final Report

Joint Audit Panel

Comments

return to Force Armoury

Firearms – physical control and storage of firearms held across the Force e.g. in Forensics and Property Stores

Firearms Licencing

Procurement and Contracts

Firearms Procurement

Contract Management and Monitoring

Information, Data Governance and Security

IS Incidents and Breaches

IS Sharing of Information

IS Requests for Information

Mobile Digital Devices

Force Assurance Arrangements for compliance with the Protection of Freedoms Act (Biometrics)

Q1

Human Tissue Act

General Data Protection Regulations

Change and Payroll HR Shared Service

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APPENDIX B

Assurance Theme Auditable Area Timing Scoping Fieldwork Draft Report

Final Report

Joint Audit Panel

Comments

Transformation Firearms Regional Training Collaboration

Change Management Process

Forensic Digital Investigations

Finance GMP Travel Desk (VFM) Report Issued 08.03.19

CTPNW Travel Desk (VFM) Report Issued 08.03.19

Payroll Q4 2018/19

Use of Agency Staff and Overtime (Serious Crime Division and Specialist Operations Branch)

Q3/4 2018/19

Events Planning – Cost Recovery

Q1

Custody and Criminal Justice

Health and Welfare of Detainees in Custody and on Release

Q1/2

Disclosure - Compliance Q1

PACE (Police and Criminal Evidence) Beds/Secure Beds for Juveniles

Performance Crime Recording

ICT and Information Mobile Working

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APPENDIX B

Assurance Theme Auditable Area Timing Scoping Fieldwork Draft Report

Final Report

Joint Audit Panel

Comments

Systems Software Asset Management Q4 2018/19

Service Management Platform – Service Desk

Q4 2018/19

Cyber Security Q1

CARE family by Disclosure in Criminal Records

Service Integration and Management

ICT (Information and Communications Technology) Systems Health Checks

Follow up audits Seized Cash and Proceeds of Crime

Report Issued 28.01.19

Police and Crime Commissioning Framework

Q1

Mail and Mailboxes

Police and Crime Functions

Audit Needs Assessment and Audits

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APPENDIX C

Changes to the Internal Audit Plan

The internal audit plan is designed to be flexible and can be amended to address changes in the risks and/or strategic objectives. Similarly management and

the board may request additional audit work be performed to address particular issues. In line with Public Sector Internal Audit Standards (PSIAS) the Joint

Audit Panel should approve any significant changes to the plan. This Section records any changes to the current internal audit plan since it was approved on

12th December 2018.

Assurance Theme Auditable Area Change requested Rationale Impact on Audit days

Approved by Joint Audit Panel

Governance Risk Management Joint Audit Panel Assurance on new arrangements +20 April 2019

Procurement Procurement Joint Audit Panel Assurance on current arrangements +25 April 2019

Workforce and People

RIDDOR Reporting Force – ACO Potts Assurance on new system +10 To be approved June 2019

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APPENDIX D

Key Performance Indicators

The table below shows the proposed Key Performance Indicators for Internal Audit and how they could be reported on an ongoing basis.

Name Description Target Actual Q1

Previous Actual YTD

Trend Commentary

1 Completion of audits

Audit fieldwork completed in line with timescales agreed in Terms of Reference

90% This KPI clarifies that timing of audit work should be completed in line with the timescales agreed with the audit sponsor(s) in the Terms of Reference.

2 Issue of Draft Report

Draft reports issued within 14 days of closing meeting*

90% In order to ensure timely reporting, all draft reports should be issued within 14 days of the closing meeting.

3 Management comments

Management comments received within 2 weeks of draft report issue*

90% There should also be a responsibility on SPOCs to provide comments to internal audit reports. We will monitor the return of management comments and work with the functions/departments to improve the process where necessary.

4 Final report Final report issued within 2 weeks of management comments*

90% In order to ensure timely finalisation of reports, the internal audit team should turn around final reports within 14 days of receiving all management comments.

5 Utilisation rate Individual and average team utilisation rate (time spent on audit work).

80% ‘Chargeable’ time vs available time to ensure productivity of internal audit team.

6 Overdue actions Implementation of agreed TBC Target TBC pending analysis of current

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APPENDIX D

actions. and target implementation rates. Management has some responsibility for this so will need to determine an appropriate KPI that is within the control of internal audit.

7 Audit days Deliver audits within the allocated number of days.

90% To monitor chargeable time taken to deliver audit work.

8 Customer satisfaction

Ensure customer satisfaction is at a high level for each audit completed

85% As described, we will gather customer satisfaction data and action any areas for improvement.

* With the exception of amendments to timetables to account for holidays etc that are agreed in advance. In such situations, revised reporting schedules will be agreed and adhered to

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Report of the Treasurer and Head of Audit and Assurance to

the Greater Manchester Combined Authority to the Joint Audit

Panel

18th June 2019

Internal Audit Charter Refresh

Overview:

The purpose of this report is to request Members approve the attached version of the

Internal Audit Charter.

Detail:

The internal audit charter is a document required by Public Sector Internal Audit Standards

(PSIAS). The charter establishes the internal audit activity’s position within the organisation,

including the nature of the Head of Audit and Assurance’s functional reporting

relationship with the board; authorises access to records, personnel and physical

properties relevant to the performance of engagements; and defines the scope of

internal audit activities.

The charter must be periodically reviewed and final approval resides with the “board”,

which, in the context of Mayoral police and crime functions and Greater Manchester

Police, is the GM Mayor/Deputy Mayor, Chief Constable and Joint Audit Panel.

In line with the Joint Audit Panel Annual Workplan, the charter has been reviewed and

refreshed and is presented here for approval.

A summary of the changes included are:

- Since her arrival in April 2019, the Head of Audit and Assurance is working towards

standardising the internal audit methdodology and processes across the GM

Combined Authority and TfGM. This includes standardising the format and content

of the internal audit charters for the respective organisations.

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- Clarification of some of the specific requirements of the Head of Audit and

Assurance after a review of the constitution documents and Mayor’s Police and

Crime Financial Regulations (section 10).

- Additional sections have been added in relation to:

o consultancy services – PSIAS require the charter to define the nature of any

consulting services undertaken by Internal Audit. This is now included in

section 13;

o fraud – PSIAS requirements state that the charter must define the role of

internal audit in any fraud-related work. This is included in section 14;

- Additional sections have been added in relation to Reporting (section 16) and

other sources of assurance (section 17) to clearly articulate what the Joint Audit

Panel can expect from Internal Audit in relation to reports and to give an overview

of how other sources of assurance will be taken into consideration during the

internal audit planning process.

Recommendations:

Members are asked to review and approve the internal audit charter.

Attachments:

Appendix A Greater Manchester Police and GMCA Police and Crime Mayoral Function

Internal Audit Charter 2019/20

Tracking:

Date Issued To By Status

07 June 2019 Joint Audit Panel Richard Paver,

Treasurer to the

GMCA

For Review and

Approval

20th May 2019 Richard Paver,

Treasurer to the

GMCA

Sarah Horseman,

Head of Audit and

Assurance (GMCA)

For Review

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Greater Manchester Police and GMCA Police and Crime

Mayoral Functions

Internal Audit Charter 2019/20

1 Introduction

1.1 This charter establishes the framework within which the Internal Audit

Service operates to best serve the independent assurance

requirements of the GMP Chief Constable and the GM Mayor (in

respect of the police and crime functions) and to meet its professional

obligations under applicable professional standards.

1.2 The charter defines the mission, purpose, authority and principle

responsibilities of the Internal Audit function. It establishes Internal Audit

Service’s position within GMCA and GMP; authorises access to records,

personnel and physical properties relevant to the performance of audit

engagements; and defines the scope of internal audit activities.

1.3 The charter will be subject to periodic review by the Head of Internal

Audit and presented to the Chief Constable, Deputy GM Mayor (Police

and Crime) and Joint Audit Panel for approval.

2 Mission Statement

2.1 Internal audit aims to enhance and protect organisational value by

providing risk-based and objective assurance, advice and insight.

3 Purpose

3.1 The Internal Audit Service provides independent assurance to the GM

Mayor, (through the Deputy Mayor (Police and Crime functions)) and

the Chief Constable on the effectiveness of the governance, risk

management and internal control arrangements in place within GMP

and the GMCA (in respect of Mayoral police and crime functions).

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4 Definitions

Internal Auditing: “Internal auditing is an independent,

objective assurance and consulting

activity designed to add value and

improve an organisation’s operations. It

helps an organisation accomplish its

objectives by bringing a systematic,

disciplined approach to evaluate and

improve the effectiveness of risk

management, control and governance

processes.” – Public Sector Internal Audit

Standards 2017.

Board Joint Audit Panel; Deputy Mayor (Police

and Crime) and Chief Constable.

Senior management Deputy Mayor’s Executive Team; Chief

Constable’s Command Team

Head of Internal Audit Head of Audit and Assurance

Responsible Financial Officer GMCA Treasurer (GMCA) / Assistant Chief

Officer (GMP)

Internal Audit Service GMCA Audit and Assurance Team

5 Statutory requirements

5.1 Internal Audit is a statutory service in the context of the Accounts and

Audit Regulations 2015, which state “A relevant authority must

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 or guidance”.

5.2 As per The Mayor’s PCC Financial Regulations, Section 6.3.2 Internal

Audit requirements state that “The Financial Management Code of

Practice recommends that the Mayor (insofar as in relation to the

Mayor’s PCC functions) and Chief Constable have a shared Internal

Audit Service. This takes the form of a GMCA shared Internal Audit

Service. In addition to fulfilling the relevant Accounts and Audit

Regulations requirements Internal Audit should:

Satisfy the Mayor and the Chief Constable that effective control

systems are in place; and

Satisfy the External Auditor that financial systems and internal

controls are effective and the Police Fund is managed so as to

secure value for money”.

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6 Professional Standards

6.1 The Internal Audit Service adheres to the Public Sector Internal Audit

Standards (PSIAS), published by the Chartered Institute of Public

Finance and Accountancy (CIPFA), which is the relevant standard

setter for internal audit in local government in the United Kingdom.

6.2 The PSIAS encompass the mandatory elements of the Institute of

Internal Auditors (IIA) International Professional Practices Framework

(IPPF) as follows:

Definition of Internal Auditing;

Code of Ethics; and

International Standards for the Professional Practice of Internal

Auditing (including interpretations and glossary).

6.3 And also requires that internal auditors who work in the public sector

must also have regard to the Committee on Standards of Public Life

Seven Principles of Public Life.

Access and Authority

6.4 The Head of Internal Audit has access to all management including the

Treasurer, Monitoring Officer, Chief Executive and Director of Police

and Crime (GMCA) and the Chief Constable, Deputy Chief Constable

and Assistant Chief Officer (GMP).

6.5 The Head of Internal Audit has regular access to the chair of the Joint

Audit Panel and reports to their meetings as set out in the Panel’s terms

of reference.

6.6 The Internal Audit Service has the right of unrestricted and direct

access to GMP and GMCA records (however held), assets, premises

and officers. In entering into partnership arrangements with external

organisations GMP and GMCA ensures that the same rights of audit

access apply to partners' records, assets, premises and officers. The

Internal Audit Service has the authority to obtain all such information

and explanations as it considers necessary to fulfil its responsibilities.

6.7 Internal auditors respect the value and ownership of information they

receive and the reports they produce, and do not disclose information

without appropriate authority unless there is a legal or professional

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obligation to do so. They are prudent in the use and protection of

information acquired in the course of their duties and shall not use

information for any personal gain or in any manner that would be

contrary to the law or detrimental to the GMP or GMCA (in respect of

police and crime functions) legitimate and ethical objectives.

7 Independence and Objectivity

7.1 The PSIAS define independence as “freedom from conditions that

threaten the ability of the Internal Audit Service to carry out its

responsibilities in an unbiased manner”. To assist the Internal Audit

Service to carry out the role and constructively challenge senior

management the Head of Internal Audit holds a sufficiently senior

position.

7.2 The Internal Audit Service remains independent of other functions of

GMP and GMCA, and with the exception of its support to

management in relation to counter fraud and risk management work,

no member of the Internal Audit Service has any executive or

operational responsibilities. Auditors are expected to deploy impartial

and objective professional judgement in all their work, whether on

audit work or investigations.

7.3 The Internal Audit Service’s work programme and priorities are

determined in consultation with management and the Board, and is

approved by the GM Mayor (in respect of the police and crime

functions), the Chief Constable and the Joint Audit Panel. The Head of

Internal Audit has direct access to and freedom to report in his/her own

name and without fear or favour. He/she has opportunity to meet with

the Chair of the Joint Audit Panel at any time.

7.4 The independence of the Head of Internal Audit is further safeguarded

by ensuring that their remuneration and performance assessment are

not inappropriately influenced by those subject to audit.

7.5 All auditors make an annual declaration of their interests and update

this during the year as necessary, and where any auditor has a real or

perceived conflict of interest this is managed to maintain the

operational independence of the service as a whole. If independence

or objectivity are impaired in fact or appearance, then the nature of

the impairment is disclosed as appropriate. The Head of Internal Audit

makes an annual declaration that the internal audit function is

operationally independent.

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8 Internal Audit Responsibilities

8.1 The Internal Audit Service is responsible for:

Preparing, in consultation with the Treasurer to the GMCA and the

Chief Finance Officer to the Chief Constable, an Internal Audit Plan

relating to the Force for approval by the GM Mayor, the Chief

Constable and the Joint Audit Panel.

Delivering an annual Internal Audit Report that can be used to

inform the governance statements. The annual internal audit

opinion must conclude on the overall adequacy and effectiveness

of the organisation’s framework of governance, risk management

and control. It must incorporate an opinion, a summary of the work

that supports that opinion and conform with the CIPFA Code of

Practice for Internal Audit and the Public Sector Internal Audit

Standards;

Ensuring that the Internal Audit Service co-ordinates its activities

with the External Auditors and other review bodies within the Force;

Providing reports to the Joint Audit Panel on the outcome of any

work in relation to completed investigations and recommendations

of the Independent Police Complaints Commission; and

A review of tax risk management as part of the annual assessment

of the Force’s control environment by Internal Audit.

9 Head of Internal Audit

9.1 In addition to ensuring the responsibilities of the Internal Audit Service

are met. Per the GMCA constitution and related financial regulations,

the Head of Internal Audit also has responsibility for:

Scrutiny of the Gifts and Hospitality Register in conjunction with the

Monitoring Officer. (Section B – Gifts and Hospitality Guidance for

Members, Section 7.1)

Receipt of whistleblowing concerns related to the GMCA functions,

including Greater Manchester Fire and Rescue Service. (Section G

– Complaints and Whistleblowing, Section 2.6)

Receipt of Whistleblowing concerns related to GMP (Section G –

Complaints and Whistleblowing, Section 2.8)

Ensuring the external auditors receive copies of all Internal Audit

reports as they are issued (Mayor’s PCC Financial Regulations,

Section 6.33)

10 Reporting Lines

10.1 The Head of Internal Audit reports the performance and outcomes of

audit work to management and the board and reports organisationally

to the GMCA Treasurer.

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11 Scope of work

11.1 Internal audit work should provide the Board with an objective

evaluation of, and opinions on, the effectiveness of the arrangements

in place for risk management, governance and internal control.

11.2 The internal audit plan will be risk-based, prepared in consultation with

senior management and be presented to the Deputy Mayor (on behalf

of the GM Mayor in relation to police and crime functions), the Chief

Constable and the Joint Audit Panel for Approval.

11.3 Based on the risk-based internal audit plan, the scope of internal

audit’s work may include:

Examining and evaluating the adequacy of the system of internal

control;

Reviewing the procedures in place for ensuring that projects are

properly managed and that decision making processes are robust;

Reviewing the integrity and reliability of financial and operating

information and the means to identify, measure, classify and report

such information;

Reviewing the extent to which assets and interests are accounted

for and safeguarding against loss of all kinds arising from fraud or

other offences. Where appropriate verifying the existence of assets;

Appraising the economy, efficiency and effectiveness with which

resources are employed;

Reviewing operations, projects or programmes to ascertain whether

results are consistent with established objectives and whether the

operations, projects or programmes are being carried out as

planned; and

Reviewing the extent to which risks are assessed and appropriately

mitigated and managed.

12 Consultancy services

12.1 The Internal Audit Service provides independent and objective advice

to help management improve their risk management, governance and

internal control arrangements. This is primarily achieved by the planned

programme of assurance assignments. Consultancy work driven by risk

based planning may typically be on those areas of the organisation’s

business where risk and control are not in existence or not well

established. This could relate to new systems or areas undergoing

significant change where there is no system of risk management or

control framework to assure. Consultancy work adds to internal audits

knowledge base and can contribute to the overall internal audit

opinion and/or assurance rating.

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12.2 In relation to consultancy services, the Head of Internal Audit must:

consider the effect on the opinion work before accepting

consultancy services over and above any already agreed as part of

the internal audit plan. Approval will be sought from the Joint Audit

Panel for any significant additional consultancy services not already

included in the audit plan if it is deemed that taking on the work

could impact the delivery of the agreed plan or annual opinion;

decline the consulting engagement or obtain competent advice

and assistance if the internal auditors lack the knowledge, skills, or

other competencies needed to perform all or part of the

engagement; and

consider if consultancy work contributes to the overall annual

opinion.

12.3 The standard of work that is delivered in consultancy services will be the

same as that in assurance work. The mandatory requirements of the

PSIAS relate to standard of performance in both assurance and

consultancy activities.

13 Fraud and corruption

13.1 The responsibility for the prevention and detection of fraud and

corruption lies with management. Audit procedures alone cannot

guarantee that fraud or corruption will be detected. The Internal Audit

Service will however be alert in all of their work to risks and exposures

that could allow fraud or corruption.

13.2 The Independent Police Ethics Panel are responsible for reviewing the

Whistleblowing Policies and approving any necessary changes.

13.3 As per its Terms of Reference, the Joint Audit Panel is responsible for

review of the adequacy of the Mayor’s and Chief Constable’s

arrangements for its employees and its contractors to raise concerns, in

confidence about possible wrongdoing in financial reporting or other

matters.

13.4 The Internal Audit Service will assist in the investigation of allegations of

fraud and corruption as required and will provide the Joint Audit Panel

with periodic reports on the outcome of whistleblowing referrals

received through the GMCA whistleblowing arrangements.

14 Resourcing

14.1 GMP and the GMCA have taken the strategic decision to provide its

internal audit service largely in-house and is committed to providing a

service that meets the best quality standards. However the Head of

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Internal Audit and GMP / GMCA (in respect of Mayoral police and

crime functions) will obtain additional support where specialist

knowledge is required in order to meet the requirement that

assignments are performed with proficiency and due professional care,

it. All such work remains under the direction and authority of the Head

of Internal Audit

14.2 The GMCA Treasurer and Deputy Chief Constable ensures that internal

audit resources are sufficient to meet its responsibilities and achieve its

objectives. If the Head of Internal Audit or the Joint Audit Panel

considers that the level of audit resources in any way limits the scope of

internal audit, or prejudices the ability of the Internal Audit Service to

deliver a service consistent with its statutory and related requirements,

they will advise the Chief Constable and Deputy GM Mayor

accordingly.

14.3 The GMCA performance and development process is applicable to all

staff within the Internal Audit Service, which supports continuous staff

performance appraisal and development.

15 Reporting

15.1 The Head of Internal Audit will issue to the Joint Audit Panel:

An annual Internal Audit Plan – This will be a risk-based plan

prepared in conjunction with management that will take into

consideration:

Strategic risks

Key operational risks

Previous audit opinions

Other sources of assurance

Internal audit resources

For each meeting of the Joint Audit Panel, reports on progress of the

Internal Audit work, encompassing:

Progress on delivery of the agreed Internal Audit Plan

Progress on the implementation of internal audit

recommendations

Progress on the delivery of any additional consulting services not

included in the Internal Audit Plan

Proposed changes to the internal audit plan for approval by the

Joint Audit Panel

Counter fraud and investigation activity

An annual report which will include:

A summary of the work undertaken in the period,

The Head of Internal Audit’s opinion;

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A statement of conformity with PSIAS; and

The results of the quality assurance and improvement

programme (QAIP).

15.2 All audit engagements will be the subject of formal internal audit

reports. Copies of all final reports will be copied to:

Audit Sponsor;

Deputy Mayor (Police and Crime);

Director of Police, Crime, Criminal Justice & Fire;

Chief Constable, Deputy Chief Constable and Assistant Chief

Officer; and

External Auditor

Executive Summaries of each report will be provided to Panel

members

16 Other sources of assurance

16.1 Internal audit is one source of assurance but there are also other

sources of assurance that are either routinely provided or are provided

on an ad-hoc basis due to specific circumstances. The “Lines of

Defence” model helps understand where and how assurance is

achieved. An illustration of the lines of defence model is included

below:

16.2 The lines of defence can be explained as follows:

First line – the way risks are managed on a day to day basis.

Assurance comes from those directly responsible for the

systems, processes and controls in place across all activities.

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Second line – the way the organisation oversees the control

framework so that it operates effectively. It is separate from

those people who undertake those responsibilities on a day to

day basis, as part of their normal duties but is not

independent of the management chain. Examples include

risk and compliance functions.

Third line – This relates to independent, objective assurance

obtained through internal audit which through an approved

programme of work is able to provide reasonable (not

absolute) assurance on the effectiveness of governance, risk

management and internal control arrangements.

Fourth line – This relates to other external sources of assurance

that are independent and removed from the chain of

command. Examples include Her Majesty’s Inspectorate of

Constabulary and Fire & Rescue Services (HMICFRS), external

audit and other external sources of assurance.

16.3 The Head of Internal Audit will work with management to understand

sources of assurance across all lines of defence in order to ensure that

an effective, integrated assurance framework is established. This will

assist in the efficient and effective deployment of internal audit

resource and reduce duplication of assurance provision.

17 Quality assurance and improvement

17.1 The Head of Internal Audit operates a quality assurance and

improvement programme that both monitors the on-going

performance of internal audit activity and periodically assesses the

Internal Audit Service's compliance with PSIAS. This includes both

internal and external assessments.

17.2 The results of the quality assurance and improvement programme

including any areas of non-conformance with PSIAS are reported

annually to the Deputy Chief Constable and Deputy GM Mayor (police

and crime) and the Police and Crime Audit Panel.

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Report of the Head of Audit and Risk Management to the

Greater Manchester Combined Authority to the Joint Audit

Panel

18th June 2019

GM Police and Crime Annual Internal Audit Report 2018/19

Overview:

The purpose of this report is to inform Members of Internal Audit activity during the

financial year 2018/19.

The role of Internal Audit is to provide assurance on the adequacy of the systems of

internal control.

Management is responsible for establishing and maintaining appropriate risk

management processes, control systems, accounting records and governance

arrangements, i.e. the control environment. Internal audit plays a vital part in advising the

organisation that these arrangements are in place and operating properly.

Internal audit is required by professional standards to deliver an annual internal audit

opinion and report to those charged with governance timed to support the Annual

Governance Statement. The annual internal audit opinion must conclude on the overall

adequacy and effectiveness of the organisation’s framework of governance, risk

management and control.

The audit opinion is given by the previous Head of Internal Audit and Risk Management

who undertook this role during the period that the opinion relates to, 1st April 2018 to 31st

March 2019.

A new Head of Audit and Assurance came into post on 29th April 2019 and as part of the

handover process has provided input to the Internal Audit - Key Objectives and

Development Plans for 2019/20 detailed in Section C of the report.

Detail:

This report sets out the work that has been undertaken by the audit team and gives an

overall opinion based on that work.

The basis of this work was included on the audit plan for the financial year 2018/20 which

was reported to and considered by the Joint Audit Panel at its meeting held on 12th

December 2018.

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This report is intended to provide the Panel with:

An opinion on the overall adequacy and effectiveness of the GM Mayor’s PCC

functions (except in so far as these are covered by arrangements considered within

the broader GMCA) and GMP’s internal control environment

A summary of the audit work from which the opinion is derived

Details of any issues particularly relevant to the preparation of the Force Annual

Governance Statement and the GM Mayor’s PCC functions reported in the wider

GMCA Annual Governance Statement

A comparison of the audit work actually undertaken with the work planned, including

a summary of internal audit performance and quality assurance

In providing this information Internal Audit meets the annual reporting requirements

detailed in the Public Sector Internal Audit Standards.

Key Messages

On the basis of the systems reviewed and reported on by Internal Audit during 2018/19

and other sources of information available to Internal Audit, it is felt that the overall

financial, operational, and strategic control environment of the Force and the GM

Mayor’s PCC functions (with the above exceptions) are of a good standard.

At the beginning of 2018/19 the Internal Audit team planned to achieve 550 ‘chargeable

days’. Due to a delay in agreeing the audit plan a total of 452 were delivered.

Management have agreed to take action to correct all of the areas for development

identified during the course of our audit reviews.

Feedback from the Quality Assurance Questionnaires returned by clients in 2018/19 shows

that 67% considered the service to be good and 33% considered the service to be

excellent.

There are no issues which have been highlighted during the year which have particular

relevance to the preparation of the GMP Annual Governance Statement or the GM

Mayor’s Police and Crime functions captured in the wider GMCA Annual Governance

Statement.

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Risk:

Risk Mitigation

Non compliance with the Public Sector

Internal Audit Standards

Provision of Internal Audit function which

complies with the Public Sector Internal

Audit Standards

Recommendations:

Members are asked to note the contents of the report.

Attachments:

Appendix 1 – Annual Internal Audit Report 2018/19.

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GM POLICE AND CRIME INTERNAL AUDIT ANNUAL REPORT

2018/19

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Report Content

Section A – Background

1. Introduction

2. The Role of Internal Audit

3. The Objectives and Scope of Internal Audit

4. Summary of our Audit Methodology

Section B – Audit Opinion

5. Internal Audit’s Opinion on the Effectiveness of Internal Control

6. The Process of Arriving at the Opinion

7. Summary of the Internal Audit work used to inform the Opinion on Effectiveness of Internal control

8. Issues Particularly Relevant to the Preparation of the Annual Governance Statements.

Section C – Internal Audit Performance

9. Key Performance Information

10. Quality Assurance

11. Compliance with the Public Sector Internal Audit Standards

12. Key Achievements during 2018/19

13. Development Plans for 2019/20

Appendices

A. Internal Audit Charter

B. Levels of Assurance

C. Audit Plan 2018/19

D. Audit Plan Days v Actual Days

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1. Section A – Background

2. Introduction

This report contains the Head of Audit and Risk Management’s annual opinion on the effectiveness of systems of governance, risk management and internal control for Greater Manchester Police Force and the GM Mayor’s Police and Crime Commissioner (PCC) functions. It also summarises the activities and performance of the Internal Audit Team during the period 1st April 2018 to 31st March 2019.

Under the Police Reform and Social Responsibility Act 2011, both the Greater Manchester Police (GMP) and GM Mayor’s PCC functions have audited body status and therefore, a statutory responsibility to maintain an effective system of internal control.

The Head of Audit is required to give an opinion for both the Force and the GM Mayors PCC functions at least annually and this is based on an assessment of the systems of governance, including risk management and the adequacy of the internal control framework.

This report is intended to provide:

An opinion on the overall adequacy and effectiveness of the systems of governance,risk management and internal control for GMP and the GM Mayor’s PCC functions.

A summary of the audit work and other sources of assurance from which the opinion isderived.

Details of any issues particularly relevant to the preparation the GMP Force AnnualGovernance Statement and of the GM Mayor’s PCC functions reported in the widerGMCA Annual Governance Statement

A comparison of the audit work actually undertaken with the work planned, including asummary of internal audit performance and quality assurance

In providing this information Internal Audit meets the annual reporting requirements detailed in the Public Sector Internal Audit Standards (PSIAS) 2450, highlighting any matters that are of concern or that require further consideration or additional assurance activity.

3. The Role of Internal Audit

Internal Audit is a statutory service in the context of the Accounts and Audit Regulations (England) 2015, which state that:

‘a relevant authority must 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 or guidance.’

The Public Sector Internal Audit Standards apply to all internal audit service providers. The Standards give the following definition of internal audit:

“Internal Audit is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.”

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We have conducted our work in accordance with the Public Sector Internal Audit Standards.

4. The Objectives and Scope of Internal Audit

The objectives and scope of Internal Audit are set out in the Internal Audit Charter. In accordance with the PSIAS, the Internal Audit Charter was updated and approved by the Joint Audit Panel on 12th December 2018. Internal Audit work in 2018/19 was performed in accordance with the Charter. The Charter defines the scope, roles and responsibilities of the internal audit function and is attached in Appendix A. This will be reviewed and refreshed during 2019/20.

The emphasis placed on Internal Audit’s role in reviewing areas both financial and non-financial represents the best practice in accordance with the Public Sector Internal Audit Standards.

The inclusion of non-financial processes, in addition to our traditional review of financial systems, enables Internal Audit to give an opinion on the adequacy of all systems of internal control.

5. Summary of our Audit Methodology

The approach to audit planning for 2018-2020 has been based largely, but not exclusively, on the following:

Review of the Police and Crime Plan, GMP Strategic Risk Register, GMCA CorporateRisk Register and other key documents.

Engagement with the GMP Deputy Chief Constable; Assistant Chief Constables; andthe Assistant Chief Officer and her Heads of Service

Engagement with the Deputy Mayor Police and Crime

Engagement with the Director Police, Crime, Criminal Justice and Fire and the (then)Director of Finance (Police and Crime) GMCA

Assessment of the outcomes from audit work in 2017/18 and earlier years.

Consideration of alternative means of assurance.

The audit plan is flexible and responsive to changes in the risk profile and regular meetings are held with key stakeholders to ensure that current issues are picked up at an early stage and, the audit resource is utilised to best effect and will add value. This flexibility has assisted Internal Audit in meeting new challenges and the needs of our stakeholders.

The plan for 2018-2020 was set for a two year period but will be reviewed on an ongoing basis to ensure it remains relevant. This will include regular reporting to the Joint Audit Panel who will be asked to approve any significant changes to the approved plan.

Internal Audit generally adopts a risk-based approach to audit assignments, and it is this approach that forms the basis of most of the reviews undertaken by the Team. It has also been appropriate to utilise other techniques such as systems based audits, compliance based audits, analytical reviews, health checks and flowcharting which are recognised as industry standard methodologies.

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Section B – Audit Opinion

6. Internal Audit’s Opinion on the Effectiveness of Internal Control

On the basis of the systems reviewed and reported on by Internal Audit during 2018/19, and other sources of information available to Internal Audit, it is felt that the overall financial, operational and strategic control environments of the Force and the GM Mayor’s PCC functions are of a good standard.

7. The Process of Arriving at the Opinion

The overall opinion on the internal control environment is based on Internal Audit’s assessment of the Force and the GM Mayor’s PCC functions key management arrangements and internal controls. This is the framework of internal controls required to provide management with confidence that the main processes put in place to achieve business objectives are:

Adequate and effective for their purpose

Free from material business risk, both financial and non-financial.

In providing our opinion, it should be noted that assurance can never be absolute and therefore, only reasonable assurance can be provided that there are no major weaknesses within these processes. In addition, whilst our opinion is largely based on objective criteria, there will always be an element of subjectivity in the final analysis.

Our opinion on the internal control environment of the Force and the GM Mayor’s PCC functions has been formulated by giving careful consideration to:

The findings of all audits undertaken during 2018/19

Any post implementation review (PIR) work undertaken during 2018/19

The effects of any significant changes in the Force’s and the GM Mayor’s PCC functions objectives or key systems

Matters arising from previous reports to the Joint Audit Panel

Any limitations which may have been placed on the scope of Internal Audit

Matters raised, and relevant reports prepared by other external bodies such as HMICFRS and the External Auditor

8. Summary of the Internal Audit Work Used to Inform the Opinion on the Effectiveness of Internal Control

Each Internal Audit report includes an assurance level in respect of the adequacy and effectiveness of the system of internal controls within the area reviewed. These assurance levels can be found in Appendix B.

A review of the assurance levels given during 2018/19 shows that 75% of audits fell into the good or high category and 25% fell into the limited assurance category.

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There has been an overall increase in the level of assurance given in 2018/19 compared to 2017/18 when 57% of the audits, fell into the good or high category and 43% fell into the limited category.

The reviews that fell into the limited category are shown below:

Out of Court Disposals: Whilst our review found there was an established process in place for independent review of OoCD, there were a number of areas where the existing governance arrangements over the Out of Court Scrutiny Panels could be strengthened. A total of thirteen actions were agreed with management with clear ownership and timescales for progression. Updates via the Action Tracker process have declared that action has been taken for twelve of these. Progress in respect of the remaining action will be monitored via the Action Tracker process.

Use of Agency Staff and Overtime (Serious Crime Division and Specialist Operations Branch): Processes are in place for planning and allocating resources and it was noted that there had been recent changes introduced in an effort to reduce overtime requirements. We identified a gap in reporting, detailed reporting on overtime was not being provided to staff with management or supervisory responsibilities. There were issues with the recruitment of agency workers, where budgetary approvals are granted for fixed periods of time that are less than operationally required. This creates retention issues, which may adversely impact on major investigations. In addition, business cases associated with recruitment of agency workers also lacked detail to enable independent review. We also believe that cost savings could be achieved by moving agency workers recruited to cover medium-longer term gaps over to GMP fixed term contracts. We are currently in discussion with the Force to agree the action required to address the issues identified. Given the limited assurance opinion this will be closely followed up via the Action Tracker process

Payroll: The processes in place are, in the main, effective in assuring that the monthly payroll is processed accurately and on a timely basis; however there are issues in relation to variations to pay, providing information on a timely basis and checks of individual payments, which have resulted in us providing a limited assurance level overall. We are currently in discussion with the Force to agree the action required to address the issues identified. Given the limited assurance opinion this will be closely followed up under our post implementation review arrangements.

Overall Assurance Levels 2018/19

High 25%

Limited

25%

Good 50%

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Follow Up Work

In place of making formal recommendations, internal audit discuss risk issues identified during reviews with senior managers and agree an appropriate action. This encourages a greater level of ownership and engagement with the risk management process.

Internal Audit maintains an Action Tracker process. This process is informed by updates provided by the Force on the progress that has been made on the implementation of the agreed actions in the various audit assignments undertaken by Internal Audit.

Updates on the progress of the implementation of agreed actions are reported to the Joint Audit Panel. During 2018/19 we have continued to work closely with the Force to improve the promptness of implementing the high priority actions.

Risk Management

PCC Functions

During 2017/18, the PCC functions transferred to the elected Mayor of Greater Manchester. As a result, the risk management of these functions is now incorporated in the wider GMCA Risk Management Framework and Corporate Risk Register.

As governance and oversight of the risk management function rests with the GMCA, assurance is delivered in the GMCA Annual Assurance Opinion and Outturn report and presented to the GMCA Audit Committee. This report for 2018/19 noted positive progress in the development of corporate risk management arrangements and from engagement with this group the Head of Audit is confident that relevant, key PCC risks are considered as part of this process.

Police and Crime risks and key actions being taken in mitigation are also a focus of meetings attended by the Deputy Mayor (on behalf of the GM Mayor) and Chief Constable. These arrangements provide a further level of assurance over the arrangements in place to identify, evaluate and respond to key risks.

GMP

The Chief Constable has delegated responsibility for the overall maintenance of effective risk management arrangements to the Deputy Chief Constable who is also the Senior Information Risk Owner.

In September 2018, 15 staff members with roles in risk management received enterprise risk management training, this was followed by a half day workshop for Chief Officers in October 2018.

Following the training, a self-assessment of GMP’s Risk Management processes was undertaken. The self-assessment results suggested that GMP’s current Risk Management Policy and Procedure complied fairly well with many of the elements of the good governance principles for managing risks. However, it was recognised that the Force could benefit from having a number of more formalised processes to demonstrate compliance and increase assurance in relation to organisational level risk.

A series of proposals to enhance existing risk management processes were generated and these were approved by the then Chief Officers Group Board in January 2019. In summary:

Extending the scope of corporate risk management to include all branches, in order

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that risk management is integrated on a force-wide basis and a central view of all risk faced by the Force is available.

More formal documentation of the controls in place around corporate risks through the introduction of assurance statements for Branch heads and Chief Officers to sign to evidence the governance structures in place.

Updating of the Risk Management Policy/Procedure to more clearly define the Force’s risk management arrangements.

Enhanced internal communications around strategic risk.

Provision of support to Branches through the creation of a risk toolkit.

Enhancements to the structure of the Strategic Risk Register

Work has commenced in 2018/19 to implement these changes and this will continue in 2019/20. The actions being taken were reported in summary by the Force to the Joint Audit Panel in December 2018.

Internal Audit will carry out a further review of Risk Management within GMP during 2019/20 to provide independent assurance on the robustness of these new arrangements.

As the risk management framework within the Force improves further and the risk management processes reach a level of maturity then the outputs of these will become embedded in the Internal Audit planning process.

Core Financial Systems

Full financial system reviews are usually undertaken on a three yearly cycle. Reviews of, Treasury Management, Accounts Payable, Accounts Receivable and the Bank Reconciliation Process were carried out in 2015/16.

A review of Charging for Events and Police Pensions Governance were concluded in 2016/17.

A review of Payroll has been carried out in 2018/19 which has provided a limited level of assurance.

A strategy for Core Financial System Assurance work will be agreed with the Force and the GMCA during 2019/20.

Review of IT/IS Risks

During the course of the financial year the Specialist Computer Audit Team has undertaken reviews of Mobile Working and Software Asset Management which both provided a satisfactory level of assurance and the Service Desk which provided a high level of assurance.

Non-Financial Systems/Review of Systems of Internal Control

The responsibility for maintaining and reviewing the system of internal control rests with both the Force and the GM Mayor’s PCC functions, operating within the GMCA.

In practice, the assurance is taken from the work of Internal Audit and all the other inspection/performance monitoring functions undertaken within the Force and the GM

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Mayor’s PCC functions considered as part of the police and crime audit plan; and to some extent from core governance and systems audit work undertaken as part of the GMCA Internal Audit plan. For example, work on core financial systems and ICT for the GMCA covers all functions of the GMCA and the GM Mayor and as such incorporates potential risks to the GM Mayor’s PCC functions. There are no particular risks arising from the GMCA audit work in 2018/19 as reported to the GMCA Audit Committee in April 2019 that present a significant risk to the effective operation of the GM Mayor’s PCC functions.

As part of this process a programme of reviews of non-financial/operational systems that operate across the various Branches/Departments of the Force has been prepared. During the course of the financial year Members of the Joint Audit Panel have been provided with a summary of the reports arising from the work undertaken in each audit assignment.

Progress as at March 2019 is shown on the Audit plan attached at Appendix C.

Anti–Fraud and Anti-Corruption Controls

The Anti-Fraud & Corruption Strategy has previously been revised in line with best practice, relevant changes in legislation and to make the document simpler and more “user friendly”.

The Strategy and Policies were reviewed and refreshed during 2017/18; when the function of the office of the Police and Crime Commissioner integrated within the wider remit of the Mayor’s office.

The Strategy and Policies are due to be reviewed and refreshed in 2019/20.

9. Issues Particularly Relevant to the Preparation of the Force Annual GovernanceStatement and the Mayor’s PCC Functions incorporated in the wider GMCAAnnual Governance Statement

There are no issues which have been highlighted during the year which have particular relevance to the preparation of the Force Annual Governance Statement or the GM Mayor’s PCC functions which are incorporated in the wider GMCA Annual Governance Statement.

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Section C – Internal Audit Performance

10. Key Performance Information

Performance indicators have been established that demonstrate Internal Audit’s efficiency and effectiveness:

Achievement of annual audit plan

At the beginning of 2018/19, the Internal Audit Team planned to achieve 550 ‘chargeable days’. Due to a delay in agreeing the audit plan a total of 452 were actually delivered.

A breakdown of the individual elements of the plan and the actual days delivered is shown in Appendix D.

Outstanding work on the 2018/19 Audit Plan has been discussed with management as part of the planning process for 2019/20 and where assurance work is still required this has been included in the internal audit plan for 2019/20.

Percentage of agreed actions

Management have agreed to take action to correct all of the areas for development identified during the course of our audit reviews.

11. Quality Assurance

Internal Audit’s aim is to provide a service that not only meets the GM Mayor’s PCC functions and the Force needs, but also to maintain consistently high standards. This is achieved through the following internal processes:

The Audit Plan is submitted to the Deputy Mayor, Chief Constable and the Joint Audit Panel for consideration and approval

90%

100%

0% 20% 40% 60% 80% 100%

Achieved in

2018/19

Target for

2018/19

452

550

0 250 500 750 1000

Achieved in

2018/10

Target for

208/19

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Regular reviews of progress towards delivering the Plan are reported through the yearvia the Joint Audit Panel; the minutes of which are considered at the Deputy Mayor’sExecutive meeting on a regular basis.

A tailored audit approach, using a defined methodology and audit manual are used inundertaking audit assignments

The use of suitably qualified and experienced auditors

Supervision of each audit assignment

The use of Quality Assurance Questionnaires following the audit assignment, toascertain clients’ feedback and degree of satisfaction with the service in respect ofconsultation/approach, management of the audit and the audit report

Self-assessment against the Public Sector Internal Audit Standards

Continuous Improvement Plan

The Quality Assurance Questionnaires ask clients ten questions and for eight out of the ten questions they are asked to give a rating between 1 (unacceptable) and 5 (excellent). The questions cover three stages of the audit work, planning, fieldwork and reporting.

It is pleasing to report that the questionnaires returned by clients in 2018/19 continue to be positive, the majority provided high scores, indicating a high level of satisfaction with the service received for all three stages. The table below shows that 67% considered the service to be good and 33% considered the service to be excellent.

Quality Control Questionnaire Ratings – 2018/19

A number of positive comments and compliments about the service have also been received including:

Felt that GMP got ‘joint’ say in what the TOR should be

Easy report to read with realistic areas for improvement

We got an excellent product to work forwards in re-shaping. The report will be akey aspect of the workshop we are due to hold

It would be useful for an audit to be done to see if we are where we need to be andalso if the changes we have made have fully addressed the findings of this audit

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The auditor always remained independent, but supportive at the same time

The auditor was extremely helpful and professional

12. Compliance with Public Sector Internal Audit Standards

The Chartered Institute of Public Finance and Accountancy (CIPFA) adopted a common set of Public Internal Audit Standards (PSIAS) from 2013 (updated in 2017). These standards, which are based on the mandatory elements of the Institute of Internal Auditors (IIA) International Professional Practices Framework (IPPF) are intended to promote further improvement in the professionalism, quality, consistency and effectiveness of Internal Audit across the public sector. The objectives of the PSIAS are to:

define the nature of Internal Auditing within the UK public sector;

set basic principles for carrying out Internal Audit in the UK public sector;

establish a framework for providing Internal Audit services, which add value to the organisation, leading to improved organisational processes and operations;

establish the basis for the evaluation of Internal Audit performance and to drive improvement planning.

In accordance with the Standards there is a requirement to undertake periodic self assessments, or assessments by other independent persons within the organisation with sufficient knowledge of Internal Audit practices and the efficiency and effectiveness of the internal audit activity.

A checklist has been developed to satisfy the requirements set out in the Public Sector Internal Audit Standards and the Local Government Application Note to provide comprehensive coverage of both documents.

A self-assessment was undertaken during 2018/19 which includes the following areas:-

Purpose, Authority and Responsibility

Independence and Objectivity

Proficiency and Due Professional Care

Quality Assurance and Improvement Programme

Managing the Internal Audit Activity

Nature of the Work

Engagement Planning

Performing the Engagement

Communicating Results

Monitoring Progress

Communicating and Accepting Risks The latest self-assessment is positive and reflects 96% compliance with the Standards. There are a small number of areas to address and develop further in 2019/20. These are summarised below:

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Compliance Area Action required in 2019/20

Proficiency and Due Professional Care

The Chief Executive or equivalent to, undertakes, countersigns, contributes feedback to or reviews the performance appraisal of the Head of Audit and feedback is also sought from the Chair of the Joint Audit Panel.

Internal Audit Job Descriptions require review and updating. This will be carried out in tandem with the structure review process due to take place in 2019/20.

Internal Audit Staff Appraisals need to be undertaken in 2019/20.

The process for continuous professional development needs to be formalised. A learning and development plan informed by quality assurance processes, staff 1-2-1’s and appraisals needs to produced, and implemented.

Managing the Internal Audit Activity

Internal Audit Strategy and the Internal Audit Manual require review and update.

13. Key Achievements during 2018/19

Despite factors already reported, 82% of the Planned Audit Days for 2018/19 were delivered. In addition:

A new Joint Audit Panel was set up and Independent Members successfully appointed

Support has been given to Panel Members in the form of Member induction and,training and development sessions, to enable them to fulfil their role on the Panel

Support and advice has been given to the Governance Team at GMP to facilitate thesmooth transition of the Panel Administration from GMCA to GMP

13. Key Objectives and Development Plans for 2019/20

Internal Audit will continue to be an independent source of assurance to the Chief Constable and the Mayor and provide professional advice and assistance. Key objectives for the coming year include:

Helping to embed effective management of key strategic risks to the delivery of thePolice and Crime Plan – Standing Together

Assessing and advising on the impact of changes introduced under the changeprogramme on the internal control environment

Continuing to work with senior management to secure an effective governance andinternal control framework in support of policing priorities and objectives

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As part of our target to aim for continuous improvement within the Internal Audit Service, we have a number of key developments planned for 2019/20:

Improve stakeholder relations via regular consultation process

To further develop our Quality Assurance processes and look at new/additional/alternative ways to obtain client feedback on the degree of satisfaction on the service provided

Under a new shared Head of Audit and Assurance, embrace and implement improvements identified through collaboration arrangements and develop a common audit approach

Review of internal audit methodology, processes and reporting formats to ensure they are contemporary, agile, relevant and aligned to PSIAS

Delivering a responsive work programme that meets the needs of key stakeholders and maintaining professional standards in all areas of work

Work with stakeholders to develop an integrated assurance mapping framework to identify and take reliance from other sources of assurance. This will enable internal audit resources to be efficiently deployed.

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APPENDIX A – INTERNAL AUDIT CHARTER 2018

1 Introduction

1.1 This charter establishes the framework within which the Internal Audit Service operates to best serve the independent assurance requirements of the GMP Chief Constable and the GM Mayor (in respect of police and crime functions) and to meet its professional obligations under applicable professional standards.

1.2 The charter defines the purpose, authority and responsibility of internal audit activity, establishes the Internal Audit Service's position within the organisation; authorises access to records, personnel and physical properties relevant to the performance of engagements; and defines the scope of internal audit activities.

1.3 It will be subject to periodic review by the Head of Audit and Risk Management (as the Chief Audit Executive) and presented to the Chief Constable, Deputy GM Mayor (Police and Crime) and Joint Audit Panel for approval.

1.4 Where the Internal Audit Service provides the internal audit function for other organisations external to GMP or the Deputy GM Mayor (Police and Crime) the purpose, authority and responsibility of internal audit activity for those organisations is set out in separate charters for those organisations.

2 Relevant regulations and interpretation

2.1 The requirement for an internal audit function in local government is set out in the Accounts and Audit Regulations 2015 ('the Regulations').

"Internal audit: A relevant authority must 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 or guidance. "Regulation 5. (1)Accounts and Audit Regulations 2015.

2.2 The Chartered Institute of Public Finance and Accountancy (CIPFA) is the relevant standard setter for internal audit in local government in the United Kingdom. CIPFA has published Public Sector Internal Audit Standards ('PSIAS'), which encompass the Mission of Internal Audit and the mandatory elements of the Global Institute of Internal Auditors' International Professional Practices Framework (the Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the Standards and the Definition of Internal Auditing).These documents are therefore mandatory for internal audit in local government in the United Kingdom, and they are supplemented within PSIAS by additional public sector interpretation and guidance. CIPFA has also published a Local Government Advisory Note setting out sector-specific requirements for local government within the United Kingdom.

2.3 The Internal Audit Service operates in accordance with this mandatory definition, code, standards and advice.

2.4 Section 151 of the Local Government Act 1972 states that every local authority in England and Wales should "make arrangements for the proper administration of their financial affairs and shall secure that one of their officers has responsibility for the administration of those affairs". In its Statement on the Role of the Chief Financial Officer in Local Government CIPFA has defined ‘proper administration’ as including compliance with the statutory requirements for accounting and internal audit. It also requires the

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director of financial resources to ensure an effective internal audit function is resourced and maintained.

3 Definitions

3.1 Both the Global Institute of Internal Auditors and PSIAS set out the following definition of internal auditing:

"An independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes."

Global Institute of Internal Auditors, and

Public Sector Internal Audit Standards, 2017

3.2 The Global Institute of Internal Auditors and PSIAS also refer to the 'board' and 'senior management' and PSIAS recognise that these terms need to be interpreted in the context of GMP and GMCA’s own governance arrangements.

3.3 PSIAS define the board as:

"The highest level of governing body charged with the responsibility to direct and/ or oversee the activities and management of the organisation. […] ‘Board’ may refer to an audit committee to which the governing body has delegated certain functions."

Public Sector Internal Audit Standards, 2017

3.4 Within Greater Manchester Police and the Office of the GM Mayor the board is defined as the Joint Audit Panel and senior management is defined as the Deputy Mayor (Police and Crime) and Chief Constable’s Command Team.

4 Responsibilities

4.1 The Regulations set out that GMP and the GMCA (in respect of Mayoral police and crime functions) must ensure that it has a sound system of internal control which facilitates the effective exercise of its functions and the achievement of its aims and objectives; ensures that the financial and operational management of the authority is effective; and includes effective arrangements for the management of risk. The scope of internal audit’s work includes:

Systems, processes, policies, plans and procedures;

Use and safeguarding of resources and assets, including data;

Governance and risk management processes;

Commissioning and procurement;

Projects and programmes; and

Counter Fraud, including investigation of allegations of fraud and corruption.

4.2 It is the role of the Internal Audit Service to provide independent assurance that these risk management, control and governance processes are adequately designed and

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effectively operated. PSIAS make clear that the provision of this assurance is internal audit's primary role and that this requires the Head of Audit and Risk Management to provide an annual opinion based on an objective assessment of the framework of governance, risk management and control.

4.3 This assessment will be supported by the identification, analysis, evaluation and documentation of sufficient information on each individual audit assignment, and the completion of sufficient assignments to support an overall opinion for the organisation as a whole. The scope of internal audit's work therefore encompasses all of GMP and GMCA (Police and Crime) functions and services and all of its activities.

4.4 The requirement to be independent and objective means that the Internal Audit Service cannot assume management responsibility for risk management, control or governance processes. However the Internal Audit Service may support management by providing consultancy services. These are advisory in nature and are generally performed at the specific request of the organisation, with the aim of improving governance, risk management and control. They will also contribute to the overall assurance opinion.

4.5 Accountability for responses to Internal Audit advice and recommendations for action lies with senior management who either accept and implement advice or accept the risks associated with not taking action. Audit advice, including where the Internal Audit Service has been consulted about significant changes to internal control systems, is given without prejudice to the right of the Internal Audit Service to review and recommend further action on the relevant policies, procedures, controls and operations at a later date.

4.6 The Head of Audit and Risk Management will provide an annual report incorporating an overall opinion, a summary of the work that supports that opinion, and a statement of conformity with PSIAS and the results of the quality assurance and improvement programme (“QAIP”).

4.7 A note of the responsibilities of ‘management’ and ‘the Board’ in relation to the internal audit function are set out in the appendix to this charter. The Internal Audit Service's responsibilities are set out in PSIAS, and these are supported by detailed operational policies and procedures that are regularly reviewed and updated as necessary.

5 Independence and objectivity

5.1 The PSIAS define independence as “freedom from conditions that threaten the ability of the Internal Audit Service to carry out its responsibilities in an unbiased manner”. To assist Internal Audit to carry out the role and constructively challenge senior managers of the GMP and the GMCA (in respect of Mayoral police and crime functions), the Head of Audit and Risk Management holds a sufficiently senior position.

5.2 The Internal Audit Service remains independent of other functions of GMP and GMCA (in respect of Mayoral police and crime functions), and with the exception of its support to management in relation to counter fraud and risk management work, no member of the Internal Audit Service has any executive or operational responsibilities. Auditors are expected to deploy impartial and objective professional judgement in all their work, whether on audit work or investigations.

5.3 The Internal Audit Service’s work programme and priorities are determined in consultation with ‘management’ and ‘the Board’, but remain a decision for the Head of Audit and Risk Management. The Head of Audit and Risk Management has direct access to and freedom to report in his own name and without fear or favour. He has opportunity to meet with the Chair of the Audit Committee at any time.

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5.4 The independence of the Head of Audit and Risk Management is further safeguarded by ensuring that his remuneration and performance assessment are not inappropriately influenced by those subject to audit.

5.5 All auditors make an annual declaration of their interests and update this during the year as necessary, and where any auditor has a real or perceived conflict of interest this is managed to maintain the operational independence of the service as a whole. If independence or objectivity are impaired in fact or appearance, then the nature of the impairment is disclosed as appropriate. The Head of Audit and Risk Management makes an annual declaration that the internal audit function is operationally independent.

6 Reporting lines and relationships

6.1 The Head of Audit and Risk Management reports the performance and outcomes of audit work to ‘management’ and ‘the board’ and reports organisationally to the GMCA Treasurer and Deputy Chief Constable.

6.2 The Head of Audit and Risk Management has access to all ‘management’ including the Monitoring Officer, Chief Executive, GMCA Treasurer and Director of Police and Crime (GMCA) and the Assistant Chief Officer, Deputy Chief Constable and Chief Constable (GMP).

6.3 The Head of Audit and Risk Management has regular access to the chair of the Police and Crime Audit Panel and reports to their meetings as set out in the Panel terms of reference.

6.4 The Chief Constable and Deputy GM Mayor (police and crime) and the Police and Crime Audit Panel are responsible for approving the annual audit plan.

6.5 The Head of Audit and Risk Management, the Internal Audit Service as a whole, GMP and the GMCA adhere to the requirements of CIPFA's Statement on the Role of the Head of Internal Audit.

6.6 The Internal Audit Service and the external auditor liaise on the planning and outcomes of respective audit work to share assurance opinions and avoid the duplication of work.

7 Access to information

7.1 The Internal Audit Service has the right of unrestricted and direct access to GMP and GMCA Police and Crime records (however held), assets, premises and officers. In entering into partnership arrangements with external organisations GMP and GMCA ensures that the same rights of audit access apply to partners' records, assets, premises and officers. The Internal Audit Service has the authority to obtain all such information and explanations as it considers necessary to fulfil its responsibilities.

7.2 Internal auditors respect the value and ownership of information they receive and the reports they produce, and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so. They are prudent in the use and protection of information acquired in the course of their duties and shall not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the GMP or GMCA (in respect of police and crime functions) legitimate and ethical objectives.

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8 Internal audit resources

8.1 GMP and the GMCA have taken the strategic decision to provide its internal audit service largely in-house and is committed to providing a service that meets the best quality standards. However the Head of Audit and Risk Management and GMP / GMCA (in respect of Mayoral police and crime functions) has decided that, to meet the requirement that assignments are performed with proficiency and due professional care, it will obtain additional support where specialist knowledge is required. All such work remains under the direction and authority of the Head of Audit and Risk Management

8.2 The GMCA Treasurer and Deputy Chief Constable ensures that internal audit resources are sufficient to meet its responsibilities and achieve its objectives. If the Head of Audit and Risk Management or the Police and Crime Audit Panel considers that the level of audit resources in any way limits the scope of internal audit, or prejudices the ability of the Internal Audit Service to deliver a service consistent with its statutory and related requirements, they will advise the Chef Constable and Deputy GM Mayor accordingly.

8.3 Nonetheless, the Internal Audit Service has finite resources and its workforce is therefore deployed to meet an annual audit plan that pays regard to the relative risks accepted, and levels of assurance required, by GMP and the Deputy GM Mayor (police and crime).

8.4 The GMCA performance and development process is applicable to all staff within the Internal Audit Service, which supports continuous staff performance appraisal and development.

9 Quality assurance and improvement

9.1 The Head of Audit and Risk Management operates a quality assurance and improvement programme that both monitors the on-going performance of internal audit activity and periodically assesses the Internal Audit Service's compliance with PSIAS. This includes both internal and external assessments.

9.2 The results of the quality assurance and improvement programme including any areas of non-conformance with PSIAS are reported annually to the Deputy Chief Constable and Deputy GM Mayor (police and crime), the Police and Crime Audit Panel and the GMCA Treasurer.

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Appendix B – Levels of Assurance

Assurance Description

High A high level of assurance can be given on the adequacy and operating effectiveness of controls in place at the time of our audit.

The key controls examined have been adequately designed and are operating effectively to deliver the objectives of the area under review.

Good A good level of assurance can be given on the adequacy and operating effectiveness of the controls in place at the time of our audit.

There are some weaknesses in the design and/or operation of controls which could impair the achievement of the objectives of the area under review. However, either the impact of these would be manageable or the associated events would be unlikely to occur.

Limited A limited level of assurance can be given on the adequacy and operating effectiveness of the controls in place at the time of our audit.

There are weaknesses in the design and/or operation of controls which could have a significant impact on the achievement of the objectives of the area under review. However, the weaknesses are not expected to have a significant impact on the achievement of the organisation’s objectives.

No No assurance can be given on the adequacy and effectiveness of the controls in place at the time of our audit.

There are weaknesses in the design and/or operation of controls which in aggregate, have had a significant impact on the achievement of the objectives of the area under review and may put at risk the achievement of the organisation’s objectives.

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APPENDIX C – INTERNAL AUDIT PLAN 2018/20

Assurance Theme

Auditable Area Updated Position Report Issued

2017/18 Plan

Non Financial Systems

Short Term Sickness AbsenceManagement

Out of Court Disposals

Report Issued

Report Issued

Oct 18

Sept 18

2018/20 Plan

Governance Police Complaints

Governance and Decision Making

Organisational Learning

Watching Brief

Workforce and People

Health and Safety

Provision of Training

Provision of Training – ‘newlypromoted’ or ‘acting up’

Specially Trained Officers

Restricted Duties

Report Issued Mar 19

Assets and Equipment

Uniform and Equipment – Issue,returns, monitoring and reporting

Management of SpecialistEquipment within the Serious CrimeDivision

Equipment – fit for purpose

Firearms – security, issue andreturn to Force Armoury

Firearms – physical control andstorage of firearms held across theForce e.g. in Forensics and inProperty Stores.

Firearms Licensing

Report Issued

Planning Stage

Mar 19

Procurement and Contracts

Firearms Procurement

Contract Management andMonitoring

Information, Data

IS incidents and Breaches

IS Sharing of Information

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Assurance Theme

Auditable Area Updated Position Report Issued

Governance and Security

IS Requests for Information

Mobile Digital Devices

Force Assurance Arrangements forcompliance with the Protection ofFreedoms Act (Biometrics)

Human Tissue Act

General Data ProtectionRegulations

Draft Report

Change and Transformation

Payroll HR Shared Service

Firearms Regional TrainingCollaboration

Change Management Process

Forensic Digital Investigations

Finance GMP Travel Desk (VFM)

CTPNW Travel Desk (VFM)

Payroll

Use of Agency Staff and Overtime(Serious Crime Division andSpecialist Operations Branch)

Events Planning – Cost Recovery

Report Issued

Report Issued

Audit Testing

Drafting Report

Mar 19

Mar 19

Custody and Criminal Justice

Health and Welfare of Detainees inCustody and on Release

Disclosure – Compliance

PACE (Police and CriminalEvidence) Beds/Secure Beds forJuveniles

Planning Stage

Planning Stage

Performance Crime Recording

ICT and Information Systems

Mobile Working

Software Asset Management

Service Management Platform

Cyber Security

CARE family by Disclosure inCriminal Records

Service Integration Management

ICT (Information andCommunications Technology)

Report Issued

Audit Testing

Audit Testing

Planning Stage

Mar 19

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Assurance Theme

Auditable Area Updated Position Report Issued

Systems Health Checks

Follow Up Audits

Seized Cash and Proceeds ofCrime

Police and Crime CommissioningFramework

Mail and Mailboxes

Report Issued Jan 19

Police and Crime Functions

Audit Needs Assessment and Audit

Audit Management

Attendance/preparation for JointAudit Panel includingInduction/Training and Development

Audit Planning, Management andReporting

Advice, Guidance and Support

Liaison with other review bodies

Relationship Management

Business as Usual

Business as Usual

Business as Usual

Business as Usual

Business as Usual

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APPENDIX D – AUDIT PLAN DAYS v ACTUAL DAYS

ASSURANCE THEME Audit Days Allocated

Audit Days Delivered

Corporate Governance 15 7

Financial Systems 95 104

Review of IT/IS Risks 40 35

Non-Financial Systems/Systems of Internal Control 295 215

Anti-Fraud & Corruption Controls 0 10

Post Implementation Reviews/Action Tracking 25 21

Police and Crime (GMCA) 25 0

Audit Management 55 60

Total 550 452

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