LAMA Autumn Seminar
Š IPA 2010
8th & 9th October , 2010 Listowel Arms Hotel The evolving governance challenges for the Irish Local Government Sector
Dr Philip Byrne Senior Local Government Specialist INSTITUTE OF PUBLIC ADMINISTRATION www.ipa.ie
© IPA 2010
Key message •Good Governance leads to: • good management and performance, • good stewardship of funds, • good public ( stakeholder) engagement and ultimately • good outcomes
Issues to discuss Governance Context and Principles
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Governance obligations On sector Evolving Governance Challenges
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Definition Governance comprises the systems and procedures by which enterprises are directed and managed Good governance should be seen as an aid to performance and effectiveness. It is not there to inhibit enterprise or innovation.
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Governance controversies influence expectations and obligations 1. Poor leadership and decision making processes 2. Inadequate systems and controls, including regulatory oversight 3. Poor standards of conduct 4. Ineffective risk management 5. Poor Accountability arrangements 6. Culture and Behaviour Š IPA 2010
What’s new in Governance? Codes, Guidelines, hard law, soft law Expectations on local authorities, state and publicly funded bodies
Current Hot Topics Rules and Regulations or Principles and Values
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2001 Local Government Act
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S 130: Policy role of elected council It is a function of the elected council of a local authority to determine by resolution the policy of the local authority.
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S 131:Reserved functions “function” does not include a function relating to the employees of a local authority or the direction, supervision, service, remuneration or discipline of such employees
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S139: Direction that works not proceed. Where the elected council or joint body is informed of any works (not being any works which the local authority are required by or under statute or by order of a court to undertake), the elected council, as the case may be, may by resolution, direct that those works shall not proceed Š IPA 2010
S 140: Requirement that a particular thing be done. an elected council may by resolution require any particular act, matter or thing specifically mentioned in the resolution and which the local authority or the manager concerned can lawfully do or effect, to be done or effected in the performance of the executive functions of the local authority. Š IPA 2010
S 146:Suspension and removal of manager the elected council of a county council or city council may by resolution suspend or remove from employment the manager for such county council or city council, as the case may be, for stated misbehaviour or if his or her suspension or removal appears to them to be necessary for the effective performance by the county council or city council, as the case may be, of its functions.
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S 168: Standards of integrity. In carrying out their functions under this or any other enactment, it is the duty of every member and every employee of a local authority and of every member of every committee to maintain proper standards of integrity, conduct and concern for the public interest.
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S 175: Declarable interests (a) any profession, business or occupation in which the person concerned is engaged or employed, whether on his or her own behalf or otherwise, and which relates to dealing in or developing land during the appropriate period; (b) any other remunerated trade, profession, employment, vocation, or other occupation of the person concerned held by that person during the appropriate period
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S 175: Declarable interests (c) any estate or interest the person concerned in land including the case where the person concerned, or any nominee of his or her, is a member of a company or other body which has an estate or interest in land
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As organisations, Local Authorities have particular features 1
Public benefit, public interest body • Legal and other obligations • Local presence / high visibility • Key local service provider • Public interface
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Statutory responsibilities
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Links to central government
4 Other stakeholder relationships © IPA 2010
Corporate Governance UK Audit Commission (2003)
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International Federation of Accountants (2009) Evaluating and improving governance in organisations
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Code of Practice for the Governance of State Bodies Board Process A The Board & Directors B Remuneration
Accountability C Risk Management, Accountability, Audit D Relations with the Oireachtas and the Minister E Specific Procedures Š IPA 2010
Key areas of emphasis in 2009 Code Compliance Statement (Board to formally confirm compliance with up to date requirement of 2009 Code) Legislative Compliance ( Board to ensure all statutory requirements are made known to it) Confidential disclosures (procedures to facilitate “good faith reporting” – Whistle blowing Board Evaluation - to review its effectiveness and to advise Minister on gaps in competencies
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Key areas of emphasis in 2009 Code Cont’d Internal Control Effectiveness- Annual determination of internal controls (financial; operational; compliance and risk mgt) Risk Management: Risk mgt policy and framework approved by board Performance Frameworks – Output statements including performance indicators to be produced (part of TPS) Travel Policy: (Need to achieve VFM – compliance with DOF circulars) © IPA 2010
Key areas of emphasis in 2009 Code Cont’d Procurement : Board approval of a Corporate Procurement Policy Plan to adhere to National and EU rules Reports and Accounts: Significant list of Annual Report disclosures and furnished to Minister Legal Disputes: Where legal disputes with other public agencies, emphasis on mediation and arbitration and also to inform D o Finance Board Member Attendances: Annual report to include info on attendances at Board
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Code of Practice for the Governance of State Bodies 2009 Major items of expenditure - A performance measurement system should be put in place to assess the effectiveness/outcome of such expenditure…. The Department of Finance Value for Money Frameworks should be adhered to in all cases…. © IPA 2010
Good Governance Standard Six Core Principles
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Good governance means focusing on the organisation’s purpose and on outcomes for citizens and service users
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Good governance means performing effectively in clearly defined functions and roles
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Good governance means promoting values for the whole organisation and demonstrating the values of good governance through behaviour
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Good governance means taking informed, transparent decisions and managing risk
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Good governance means developing the capacity and capability of the governing body to be effective
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Good governance means engaging stakeholders and making accountability real Š IPA 2010
Governance Themes 1. Accountability and transparency 2. Control and compliance 3. Risk management 4. Consistency in delivery 5. Ensuring value for money 6. Stakeholder engagement. Š IPA 2010
The effective member
A commitment to the achievement of shared objectives Ensuring compliance with legal and regulatory requirements Accountability - supportive and challenging Contribution- bringing knowledge, skills, experience and networks Values – demonstrating good governance through behaviour Š IPA 2010
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Risk appetite is defined as the amount of risk the local authority is prepared to accept or retain in the pursuit of its core priority objectives.
What is the Risk appetite within your Local Authority and does this have implications for Governance
Evolving Governance Challenges
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Values and behaviours adopted by those in leadership and influential positions
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Strong accountability, responsibility, control and compliance systems in place
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Communicate and demonstrate the performance achievements
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Manage the reputational risk with increasingly challenging public and media
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Appropriate stakeholder engagement to inform the decision-making process
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Efficiency Review and implications Š IPA 2010
Good Governance
Legislation and Codes
A guide on many issues
Good Governance depends on
People and the values they adopt An understanding of roles Focussing on the organisation’s purpose
© IPA 2010
Some questions to reflect upon? Is there clarity among all the stakeholders on the outcomes and deliverables required from the sector?
To what extent do current governance arrangements support or hinder the innovation and risk-taking agenda which is core to the transforming state and public services agenda
How can trust be restored and the damage to the reputation of the sector and public services generally be repaired
Is there a role to better communicate the governance and wider legal and regulatory obligations on the sector Š IPA 2010
Š IPA 2010
LAMA Autumn Seminar 8th & 9th October , 2010 Listowel Arms Hotel The evolving governance challenges for the Irish Local Government Sector
Thank you Dr Philip Byrne Senior Local Government Specialist INSTITUTE OF PUBLIC ADMINISTRATION www.ipa.ie