Highways Agency Annual Report and Accounts 2011-2012

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Governance statement: SECTION 6 gaps identified. In their opinion other than the fraud which occurred in the supply chain and was discussed under the Fraud Sub-Committee heading, there are no significant weaknesses that fall within the scope of issues that should be reported in the Governance Statement. During the year the Agency continued to comply with the Cabinet Office guidance on information risk management. My Senior Information Risk Officer’s (SIRO) assessment of information risk performance is that the Agency’s information assets held on the Agency’s business and operational IT infrastructure are being managed effectively and appropriate risk controls are in place. All existing staff including executive and nonexecutive Board members are required to sign up to an Acceptable Use Policy before gaining access to our business IT and have been trained in data handling. All new staff are required to complete this training and pass a test demonstrating their understanding in their first week of employment. We continue to pursue a policy of continuous improvement in our controls and have no personal data related incidents to report. We are trialling end port control software which once rolled out, will ensure that no unauthorised devices will be able to work on our business IT systems. This will ensure more proactive control of what goes onto our network and support data loss prevention and improve our system security in terms of virus attack. There have been a small number of cases of non compliance with processes which have resulted in disciplinary action but no data loss. The Information Commissioner’s Office, (ICO), the independent body responsible for the regulation of the Data Protection Act 1998, recently undertook a follow up to their data protection audit of the Agency last year. ICO has noted the following improvements: • The Highways Agency has developed an Information Asset Management System. Eventually, all Information Asset Owners (IAO) and Information Asset Administrators (IAA) will have access to this system and will be able to update the risks associated with their assets. • The Highways Agency has utilised The National School of Government’s (NSG) online DP training. NSG has now closed so the Highways Agency has rolled out an action plan to ensure all staff receive alternative refresher training and new starters are appropriately trained. • A new email policy has been introduced which emphasises that emails required as corporate records must be saved in SHARE (a document and records management system) and declared as records. • The Highways Agency has established a Security and Business Continuity Forum. This is chaired by the SIRO and members include the IT Security Officer and the IT Contracts Manager. The Forum will produce a coordinated risk register and issues can be reported directly to the Board via the SIRO. • Data Protection Management Information, including Subject Access Request statistics, will be included with the Divisional Scorecard during this financial year. We have maintained an open and close working relationship with the Major Projects Authority (MPA). Its confidence in our approach to Gateway Reviews and Government Major Projects Portfolio (GMPP) scrutiny appears to be strong and has resulted in the delegation of increased levels of responsibility to our Centre of Excellence. We now have the authority to manage high risk Gateway Reviews, in addition to the medium and low risk that we were already delegated. We are in discussion with the MPA regarding our two entries on the GMPP; the M25 design, build, finance and operate contract (DBFO) and the Managed Motorways programme. We are currently negotiating an early removal of the M25 DBFO from the portfolio, reflecting the good delivery confidence levels that have been observed from Gateway reviews. Our Performance Audit Framework (PAF) is an assurance and process improvement function within the Network Delivery and Development Directorate that has replaced Integrated Audit & Assurance. PAF is independent of business activities and the team combines technical specialists with experienced auditors and Highways Agency Annual Report and Accounts 2011-12
SECTION 6: Governance statement forensic accountants, delivering to an agreed methodology, offering a consistent and informed challenge to the way business is conducted within the supply chain community. Results from PAF work have identified a number of areas for improvement, which are monitored by our area teams to ensure agreed action is taken. During the year it was decided that the responsibility for providing the delivery of the PAF service will be transferred to our internal audit team at the start of the new financial year. Other explicit reviews/assurance mechanisms • Stewardship Reports - twice a year, Agency Board Directors provide Stewardship Reports that take account of assurances from Divisional Directors and others who report on the full range of delegations, policies and procedures laid down by the Agency. Directors report on: - Compliance within their division. - The adequacy of the arrangements within their division. - What remedial action is being taken where assurance cannot be provided. The Agency has benefited this year through the application of more stringent evidence requirements, the review of directorate responses by relevant internal process owners, and the implementation of action plans to address deficiencies in compliance. In the April 2012 year-end stewardship report, the bulk of assurance ratings are the same as reported in 2011. Of those which have changed, there are approximately equal numbers displaying either improved levels of assurance, or lower ratings. The lower ratings may be explained in part due to ratings being tied more rigorously to the defined evidence requirements. During the year the process owners recommended a target assurance level for each process, and at year-end approximately half the reported ratings achieved these targets. There are a small number of processes where the target is being exceeded, with the remainder falling short to some degree. Where the latter is the case we are working to improve compliance levels. • Managing the risk of financial loss – In October 2010, following a cross-Government Financial Systems Risk Review, the Treasury introduced new guidance and tools to support a review of organisations/processes which have an associated risk of financial loss. A ‘financial loss’ in the context of this work is defined as a loss of monetary assets in relation to deliberate or accidental errors during the processing of financial transactions. In line with other Government Departments the Agency completed a review of all relevant processes by 31 March 2012 to ensure that risk controls have been assessed. The majority of financial processes were found to have the necessary levels of control in place. However, weaknesses were found to arise when processes are not managed from an end to end viewpoint. A key recommendation of the project is to strengthen the role of the process owner to include responsibilities for managing risks of financial loss. Several processes were found to have control levels lower than required. These included the VAT, third party funded projects and national vehicle recovery scheme processes. Action plans have been put in place to address areas of weaknesses and progress against these actions will be monitored and reported throughout the year. • Controls around the Agency’s Shared Services arrangement – The Agency is party to a group arrangement with the DfT’s Shared Service Centre for the provision of payroll and human resource services, which is led through the Single Client Function within the DfT. The Agency monitors the performance of Shared Services through the Single Client Function and the Single Client Board of which the agency Chief Executive is a member. A service level agreement is in place and is subject to periodic review to help improve the governance arrangements between the Agency and Shared Services. The Agency receives a quarterly management assurance report that is based primarily on Shared Services management‘s risk and control monitoring activities and reporting processes. This assurance also draws upon Highways Agency Annual Report and Accounts 2011-12
Page 1 and 2: Safe roads, reliable journeys, info
Page 3 and 4: © Crown Copyright 2012 You may re-
Page 5 and 6: SECTION 1: Highlights Highlights
Page 7 and 8: M6 Managed Motorway Highways Agency
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Highways Agency Annual Report and Accounts 2011-2012

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