Memorandum of Understanding on the Governance and Accountability Arrangements of the Northern Ireland Public Services Ombudsman (the Ombudsman)

1. Introduction

1.1 This Memorandum of Understanding (MoU) describes the corporate governance and accountability framework that shall apply between the Northern Ireland Public Services Ombudsman (hereinafter referred to as 'the Ombudsman') and the Audit Committee of the Northern Ireland Assembly, (hereinafter referred to as 'the Assembly Audit Committee'). The latter is a Standing Committee established in accordance with paragraph 10 of Strand One of the Belfast Agreement.

1.2 The Ombudsman is responsible for independently investigating complaints from the public about public services in Northern Ireland. The Ombudsman has also been designated as the Accounting Officer for the office. In her role she seeks to ensure that there is administrative accountability within Northern Ireland public bodies and that individuals have redress for injustice sustained as a result of failings in the public services that they receive. The Ombudsman when investigating complaints of maladministration seeks to promote adherence to the Principles of Good Administration in the delivery of public services. The Ombudsman's purpose is to ensure that every individual in Northern Ireland is served by a fair and efficient public administration that is committed to accountability; openness; and quality of service.

1.3 The Ombudsman is a corporation sole and is independent of the Northern Ireland Executive, and of the government departments and other public service providers that she can investigate. The Ombudsman reports to the Northern Ireland Assembly on the functions of her Office. The Ombudsman and her staff carry out their functions in accordance with the Public Services Ombudsman Act (Northern Ireland) 2016 (hereinafter referred to as 'the 2016 Act').

1.4 The Ombudsman is also the Northern Ireland Local Government Commissioner for Standards (NILGCS) and the Northern Ireland Judicial Appointments Ombudsman (NIJAO). At a future date the Ombudsman will also, subject to an Order of the Assembly for commencement, take on the additional role of Complaints Standards Authority for public services in Northern Ireland.

1.5 The Ombudsman recognises the importance of best practice in carrying out her statutory functions and in retaining good standing with the Assembly, bodies within jurisdiction and other stakeholders. The Ombudsman is committed to adhering to the highest standards of good administration, corporate governance and accountability, underpinned by transparency, and to promoting and securing value for money in her use of public funds.

1.6 As provided for in the 2016 Act (Schedule 1, paragraph 18), the Ombudsman must, for each financial year other than the first, submit to the Assembly Audit Committee an estimate of the use of resources for the succeeding year, and in considering this estimate the Assembly Audit Committee must have regard to the advice of the Department of Finance (DoF). Under Assembly Standing Order No. 58 the Assembly Audit Committee has the power to exercise the functions mentioned in Section 66(1) of the Northern Ireland Act 1998. It therefore agrees the annual estimate of the use of resources of the Ombudsman and lays it before the Assembly. Further details of the Assembly Audit Committee's role are provided at 5.3 below.

1.7 Oversight of the Ombudsman's financial performance and governance is carried out by the Ombudsman's Audit and Risk Committee (see further under Section 3).

1.8 This MoU therefore describes:

the principles and standards the Ombudsman and her Office will apply in carrying out her functions;
the internal governance arrangements of the Office which support the Ombudsman in the delivery of her functions, a process that is kept under review to ensure evolving best practice informs the arrangements; and
the commitments of the Ombudsman and her Office to the Assembly Audit Committee on the actions they will take to uphold transparency and manage their resources effectively, and in doing so to provide assurance to the Assembly and members of the public regarding the arrangements for the governance and accountability of the Ombudsman.

2. How the Ombudsman's Office will function

2.1 In support of the achievement of the Strategic Plan, the Ombudsman and her Office will maintain proportionate systems of governance, risk management, financial and internal controls consistent with best practice, monitor the effective operation of the systems, and report on the systems in the Governance Statement in her Annual Report and Accounts. The Ombudsman will endeavour at all times to conduct business in an economic, efficient and effective manner.

2.2 The Ombudsman's Office is vote funded by the Assembly. The Ombudsman, as Accounting Officer for the Ombudsman's Office, will fulfil the responsibilities assigned to her in Managing Public Money Northern Ireland, published by the DoF. The Accounting Officer is responsible for assuring the Assembly and the public of high standards of probity in the management of public funds.

3. Governance arrangements

Role of the Ombudsman

3.1 As highlighted in her Strategic Plan the purpose of the Ombudsman is "To serve the public and improve public services by educating, independently investigating and holding to account". The powers and duties of the Ombudsman are set out in the 2016 Act, and include the three roles of NIPSO, NILGCS and NIJAO.

Ombudsman's Senior Management Team

3.2 The Senior Management Team (SMT) comprises the Ombudsman (chair), Deputy Ombudsman and the Directors, each of whom leads an investigative or corporate services function. The SMT is responsible for advising the Ombudsman on strategic and operational issues relating to her Office. The Director of Finance and Corporate Services holds the role of Finance Director in the Office.

3.3 The SMT is the principal mechanism for strategic planning and decision-making in the Ombudsman's Office. SMT meets quarterly to a formal pre-set agenda to agree strategic matters and fortnightly to discuss operational issues arising. In addition, special SMT meetings may be convened as required. The SMT's responsibilities encompass the five areas of strategic clarity, commercial sense, talented people, results focus and management information as set out in the DoF's 'Corporate governance in central government departments: Code of good practice NI 2013', 'the 2013 Code'. These responsibilities include:

the development and implementation of strategies and policies;
the annual preparation of the Assembly Estimate;
the budgeting process and annual resource allocations;
the staffing and training requirements of the Office;
risk management arrangements;
the management of communications and stakeholder relationships;
monitoring performance against the corporate plan, business plans, budgets and targets;
directing the Ombudsman's Office's key functions: investigation of complaints of maladministration; alleged breaches of Local Government Ethical Standards and investigation of complaints regarding judicial appointments;
directing the Ombudsman's Office's approach to 'Own Initiative' investigation;
determining the content, format and themes of the annual report;
the delivery of corporate change initiatives against agreed targets, and;
the development and implementation of policies on the health, well being and safety of staff and visitors, on human rights, equality and diversity issues, and information on governance as well as records and information management obligations.

Audit and Risk Committee

3.4 The Ombudsman's Audit and Risk Committee supports the Ombudsman as Accounting Officer in her responsibility for issues of risk, control and governance. The Committee reviews the comprehensiveness of assurances in meeting the Accounting Officer's assurance needs and also the reliability and integrity of such assurances.

3.5 In compliance with best practice (detailed in DAO (DFP) 05/14 - Issue of Audit and Risk Assurance Committee Handbook (NI)) its membership comprises three non- executives. These members are appointed by open competition, based on merit. The appointment panel comprises as a minimum three persons, including the Ombudsman.

3.6 The independent chair and members of the Audit and Risk Committee have been appointed following a public competition.

3.7 The independent chair and each non-executive member is appointed for a three year period, which may be extended for a maximum of a further three years by the Ombudsman.

3.8 The Ombudsman agrees the terms of reference for the Audit and Risk Committee with that Committee. The Committee will scrutinise and advise in the following areas:

the strategic processes for risk, control and governance and the Governance Statement, the integrity of the accounting policies, the annual report and accounts, including the process for review of the accounts prior to submission for audit, levels of error identified, and management's letter of representation to the external auditors;
oversight of strategic financial management and budgeting processes;
disaster recovery contingency, crisis planning and business continuity;
the planned activity of internal audit and the results of both internal and external audit;
the adequacy of management response to the issues identified by audit activity, including external audit's 'Report to those Charged with Governance'; and any Value for Money reports.
assurances relating to the management of risk and corporate governance requirements for the Ombudsman; and
anti-fraud policies, whistle-blowing reporting lines and arrangements for special 'fraud' investigations.

3.10 The Ombudsman appoints an internal auditor by a competitive tender process. Under the Government Resources and Accounts Act (Northern Ireland) 2001 the external auditor is the Comptroller and Auditor General, Northern Ireland Audit Office.

3.11 Internal audit and external audit (the latter by statute) will have free and confidential access to all required performance, financial and governance related information and to the Chair of the Audit & Risk Committee. The Chair of the Audit and Risk Committee will have access to the Assembly Audit Committee.

3.12 The Assembly Audit Committee shall, at its discretion, have the opportunity to meet with the non-executive members of the Audit & Risk Committee.

4. Openness and Transparency

4.1 As a public funded statutory office, the Ombudsman's Office must be open and transparent in its operations and outcomes. The Freedom of Information Act 2000 (FOIA) gives a general right of access to all recorded information held by public authorities, including the Ombudsman's Office. The Ombudsman's Office publication scheme explains what information is proactively made available to the public. The Ombudsman's Office is required, pursuant to section 19 of FOIA, to review and maintain its publication scheme.

4.2 The Ombudsman commits to publish on its website:

minutes of quarterly SMT meetings and Audit and Risk Committee meetings;
information relating to the provision and receipt of gifts, benefits and hospitality by the Ombudsman, non-executive members and senior management of the Ombudsman's Office;
register of interests;travel and subsistence expenditure for the Ombudsman, non- executive members and Senior Management Team; and
total consultancy expenditure (if any) for each financial year;
annual report and accounts;
all public interest and special reports;
all own initiative reports
adjudication reports in respect of the role of Northern Ireland Local Government Commissioner for Standards and
all policies and procedures relating to investigation.

5. Accountability

5.1 The Ombudsman has the legal status of a 'corporation sole'. While the Ombudsman's staff assist in the discharge of her functions, all legal powers, rights and duties are vested in the Ombudsman. The 2016 Act provides that the Ombudsman is accountable to the Assembly and it details procedures for appointment, removal, salary and related matters

5.2 In her role as Accounting Officer for the Ombudsman's Office, the Ombudsman is responsible for preparing the Ombudsman's Office's accounts and providing these to the external auditor (NIAO). The NIAO certifies the accounts of the Ombudsman's Office, which are then laid before the Northern Ireland Assembly by DoF. Additionally, NIAO has the power to carry out economy, efficiency and effectiveness examinations of the use of resources by the Ombudsman (value for money studies). The NIAO provides reports on any value for money studies relating to the Ombudsman's Office to the Assembly Audit Committee.

5.3 In overseeing the Ombudsman's Office the Assembly Audit Committee will:

consider the estimate prepared by the Ombudsman of the use of resources by the Ombudsman's Office for the next financial year. In doing so, it shall have regard to the advice of DoF in accordance with the agreed Annual Estimate protocol;
subject to any modifications agreed between the Committee and the Ombudsman, lay the annual estimate before the Assembly; consider draft NIPSO budget plans in accordance with the agreed Budget Setting protocol, and having regard to the advice of DoF.
in advance of considering annual estimates and budgets, be informed by the objectives outlined in a Strategic Plan, the resources that are required by the Ombudsman's Office to fulfil the Plan and the key performance measures.
examine the Ombudsman's annual report and accounts and consider the NIAO's Report to those Charged with Governance;
consider any NIAO reports on value for money studies on the Ombudsman's Office;
examine the Ombudsman's in-year financial monitoring bids;
have the opportunity to meet with non-executive members of the Ombudsman's Audit & Risk Committee;
examine and report on any other matter relevant to the Ombudsman's Office's performance; and
support the Ombudsman in her role.

5.4 The Ombudsman commits to draw to the attention of the Assembly Audit Committee any particularly serious or significant operational, financial or governance risks or issues as soon as practicable.

5.5 The Ombudsman will appear and give evidence at the hearings of the Assembly Audit Committee on the Budget Plan, Strategic Plan, Estimate and Annual Report and Accounts of the Ombudsman's Office, and on any other matter relevant to its functions that the Committee so requests.

6. Review

6.1 The Ombudsman's Office and the Assembly Audit Committee commit to upholding this MoU and reviewing it annually. Changes to any provision contained therein must have the agreement of both parties.