Governance report
Principles of governance
The principles of the governance structure of PSAA are set out in the Articles of Association and the Memorandum of Understanding such that the company:
- has a governance structure which transmits, delegates, implements and enforces decisions appropriately;
- has trustworthy internal controls to safeguard, channel and record resources as intended;
- works cooperatively with partners while supporting the Board’s duty to protect PSAA’s independence;
- operates with propriety and regularity in all its transactions;
- treats its counterparties fairly, honestly and with integrity;
- offers appropriate redress for failure to meet agreed standards; and
- gives timely, transparent and realistic accounts of its business and decisions.
Governance structure
PSAA is a private company established under the Companies Act 2006, without share capital and limited by guarantee. It is a subsidiary of the Improvement and Development Agency (IDeA), which in turn is a subsidiary of the Local Government Association (LGA).
The primary duty of the company is to discharge the statutory objects and powers set out in its Articles of Association in accordance with the Companies Act 2006 and the company’s founding documents. The principal legislation governing the statutory functions of PSAA is the Local Audit and Accountability Act 2014.
The role of the IDeA, as founder of the company, is to support PSAA in discharging its functions and achieving its objectives. The IDeA acknowledges the independence of the company and the responsibility for running the company as that of PSAA and the Board.
PSAA’s governance structure and corporate governance framework are underpinned by the standards promoted by the Committee on Standards in Public Life.
The PSAA Board
The Board as a whole is legally responsible for the management and stewardship of the company in the discharge of its purpose and powers. The Board alone is responsible for agreeing the company’s strategy, and for determining its budget.
The Chairman of the Board is a non-executive director, appointed by the IDeA in February 2015, and subsequently reappointed in 2017 and again in January 2021 for a three-year term. The other four non-executive directors are appointed by the Chairman, with the approval of the IDeA.
The Chairman is the leader of the Board and works closely with Board members, the Chief Executive and PSAA staff. Board members act collectively, and do not have individual executive authority.
Board members attended the following meetings during 2022/23:
| Board members | Position | Board meetings |
| Steve Freer | Chairman | 10/10 |
| Marta Phillips | Non-executive director and Chair of the Audit Committee | 9/10 |
| Keith House | Non-executive director | 10/10 |
| Fraser McKinlay | Non-executive director | 10/10 |
| Mike O’Donnell | Non-executive director | 10/10 |
Further information about the directors is available on our website at: Board members – PSAA.
Audit committee
During the year the audit committee was chaired by Marta Phillips. Membership comprised Fraser McKinlay, Mike O’Donnell, and Alan Edwards, an independent member.
The audit committee is responsible for keeping PSAA’s governance arrangements under review, including the internal control framework and risk management arrangements. The committee is required to oversee production of the annual accounts, consider appointment and reports of the internal and external auditors, and to report annually to the Board on their work and any significant control issues which have emerged.
Procurement committee
In November 2022, PSAA established a procurement committee with responsibility for overseeing procurements where the total order value is expected to be above £20,000 but excluding the main audit services procurement and PSAA’s internal and external auditor appointments.
The procurement committee was chaired by Keith House. Membership comprised Steve Freer and Fraser McKinlay.
Chief Executive
The Board has delegated authority to the Chief Executive for the day-to-day management of PSAA, with responsibility for the overall organisation, management and staffing, and for its procedures including conduct and discipline. The Chief Executive ensures that the Chairman and Board have timely, accurate and clear information to carry out their responsibilities.
The Chief Executive has authority to act in accordance with the arrangements set out in the scheme of delegation in the corporate governance framework. The Chief Executive receives assurance from senior managers on the correct operation of these arrangements, and aspects of the arrangements are subject to review by the internal and external auditors.
Details of PSAA’s executive team are available on the website: Executive team – PSAA.
Corporate governance framework
PSAA’s corporate governance framework is available on our website at: PSAA Corporate Governance Framework.
This sets out the arrangements in place for PSAA to conduct its business. It includes details of which matters are delegated, and which are reserved to the Board, and incorporates the company’s financial policies. The Board and audit committee review the framework annually and also formally review the effectiveness of the Board and audit committee decision making arrangements.
Our internal auditors, TIAA Limited, perform an annual work programme, which covers key systems and aspects of the control framework. The 2022/23 internal audit annual report, presented to the audit committee in April 2023, provided substantial assurance on our income flows, including fee variations.
By order of the Board
Steve Freer
Chairman
25 July 2023