Annual Assurance Statements: Your frequently asked questions

We answer your questions about preparing your Annual Assurance Statements.

Updated

01 April 2019

Landlord self-assurance is at the heart of our approach to regulation. An important element of this is landlords making an Annual Assurance Statement. This is a new requirement, and we want to support landlords as they prepare their first Annual Assurance Statement.

We are happy to answer questions that you may have as you prepare your Annual Assurance Statement. You can ask us questions about Annual Assurance Statements by contacting us.

Below we've published the most frequently asked questions and our answers. We will update these as landlords contact us with their questions.

Q: When you talk about assurance, what does this mean and why is it important?

A: Assurance is an important function of governance in any organisation. This is about those responsible for the governing the organisation obtaining accurate and current information about the efficiency and effectiveness of its operations and the status of its compliance with regulatory and statutory obligations. Those responsible for governing the organisation should then provide appropriate assurance to relevant stakeholders.

In social housing, those responsible for governing landlords are board and committee members in RSLs and councillors in local authorities. Relevant stakeholders include tenants, members of the RSL, lenders and funders and SHR.

Q: What is the purpose of the Annual Assurance Statement?

A: This is a way for boards and committees to declare that they are assured their organisation complies with regulatory requirements and standards or to disclose areas where they need to improve.

We believe that this will help RSL governing bodies and local authority committees to ask questions, consider whether they have seen enough evidence, and support self-assessment. So, first and foremost, the Annual Assurance Statements are to help governing body and committee members get the assurance they need.

The Statements are then a way to give that assurance to others, including the landlord’s tenants.
We know that many landlords already have arrangements which give them assurance that they are meeting their responsibilities to tenants, people who are homeless and other service users. So the Statement would be about summing this up in a straightforward, transparent way.

Q: When do we need to submit our Annual Assurance Statement?

A: You can submit your Annual Assurance Statement any time from the beginning of April to the end of October.

Q: How do we submit the Annual Assurance Statement?

A: You should submit your Annual Assurance Statement through the Landlord Portal. You can find instructions on how to do this on the Portal.

Q: Is there a form or template we need to use for the Annual Assurance Statement?

A: No.

Q: What should the Annual Assurance Statement look like?

A: You can decide what your Annual Assurance Statement looks like. It does not need to be a large document, and indeed you should try to keep it as short and succinct as possible. It should state whether you comply or not with relevant regulatory requirements on the date you sign the Statement. Our guidance on Annual Assurance Statements includes examples of wording you might choose to use in your Statement.

Q: What should the Annual Assurance Statement cover?

A: Your statement should confirm your level of compliance with all of the relevant requirements set out at chapter 3 of the Framework, including:

  • all relevant standards and outcomes in the Scottish Social Housing Charter
  • all relevant legislative duties
  • the Standards of Governance and Financial Management (RSLs only)

Your statement should:

  • set out any areas of material non-compliance, and describe briefly how you are planning to improve in those areas and the
  • timeframe for improvement
  • confirm that you have seen and considered appropriate evidence to support the level of assurance you have
  • confirm the date of the meeting of your governing body or committee at which you considered and agreed the Statement

Q: Who should sign the Annual Assurance Statement?

A: The Statement should be made and submitted by your governing body, or by the relevant committee which has been delegated authority to complete the Statement by your council. The chair or convenor of the board or committee should sign the statement on behalf of the board or committee.

Q: Is it acceptable for boards and committees to sign the Annual Assurance Statement with a proviso or qualification, such as " to the best of our knowledge and understanding"?

A: You can decide the form and content of your Annual Assurance Statement, ensuring that it is consistent with our guidance. Clearly it will not be possible for your board and committee members to have absolute knowledge of all aspects of your compliance with every regulatory requirement and standard. The important thing is that your board or committee has had enough assurance to give the members confidence to sign the Annual Assurance Statement. This should mean that you have seen enough evidence about your organisation’s level of compliance, including independent assurance where appropriate.

Q: Should our auditors sign off on, or approve, our Annual Assurance Statement?

A: No, that is not necessary as the Annual Assurance Statement is the board or committee’s statement on its assurance. You will want to think about how you involve your auditors – both internal and external – in getting the level of assurance that you need to make the Annual Assurance Statement.

Q: Do we need to get sign off from our tenants for the Annual Assurance Statement?

A: No. It is your board or committee’s responsibility to make the Annual Assurance Statement. You should consider how you get tenants’ views on your organisation’s performance, as part of your board or committee’s monitoring of performance. Your board or committee can then consider tenant feedback as part of its work to make the Annual Assurance Statement.

Q: Should we send you the evidence we used to decide our level of compliance?

A: No, unless we ask you to give us it. You should keep a record of the evidence you have used, and how you got the assurance you needed.

Q: We are a subsidiary of another RSL, so should we submit an Annual Assurance Statement?

A: No. Your parent RSL in the group should submit one Statement on behalf of the whole group. Your parent RSL should make clear which RSLs the Statement covers.

You, or your parent RSL, may decide that there is value in each part of the group making an Annual Assurance Statement, but the group should submit one Statement to us.

Q: How do we get the right level of assurance to let us make the Annual Assurance Statement?

A: You will want to get enough information on each of the regulatory requirements and standards to help you reach an objective and evidence-based judgement on whether your organisation complies or needs to improve. So, you will want to think about the type of information you get and the source of that information.

“Mapping” assurance can be a helpful way to better understand what assurance you currently get, when and how you get it and where there might be gaps in your assurance. This is an approach that sets out the compliance requirements against the different sources of assurance. You can also add an indicator of the strength of the assurances you currently get and when you last reviewed the area or activity, including when you last had assurance form an independent source. This can give you a good picture of the coverage and effectiveness of your framework of assurance.

The important thing is that your board or committee has had enough assurance to give the members confidence to sign the Annual Assurance Statement. This should mean that you have seen enough evidence about your organisation’s level of compliance, including independent assurance where appropriate.

Q: What are the sources of assurance?

A: This will depend on the aspect of the requirements and standards you are looking at. Typically, sources of assurance will include:

  • reports and updates from your management team
  • feedback from tenants and other customers
  • benchmarking with other landlords
  • assurance from your internal audit function
  • assurance, reports and analysis from others, including your external auditors and other specialists you might bring in to help you

Much of the assurance you will need is likely to come from your current systems and performance monitoring frameworks.
For example, you may consider that the regular performance reports to your board or committee on your repairs service give you enough information and evidence to be confident that you comply with the requirements around repairs. Or, you may decide that you want your internal audit function to review this area to give you additional assurance.

Q: Do we need to get assurance from an independent source for every requirement and standard?

A: No. You will want to consider which aspects of the regulatory requirements and standards you want or need additional assurance on, over and above that which you get from within your organisation.

Q: Should we disclose in the Annual Assurance Statement every area we think we need to get better at?

A: It is for you to decide what you should disclose. Where you identify areas for improvement, you should agree appropriate actions, but you don’t necessarily need to disclose them all in your Annual Assurance Statement. The key question is whether these issues are of such materiality and significance that they mean you cannot say confidently that your organisation is complying with a particular requirement. If the answer to this is yes, you should disclose the issue in your Annual Assurance Statement.

Q: How do we judge what is materiality or significant?

A: You will need to weigh up the evidence and seriousness of the issue and reach a judgement on whether it is material and should be disclosed. In doing that you should look at whether the issue could:

  • seriously affect the interests and safety of your tenants, people who are homeless or other service users
  • threaten the stability, efficient running or viability of service delivery arrangements
  • bring the landlord into disrepute, or raise public or stakeholder concern about your organisation or the social housing sector
  • in the case of RSLs, put at risk the good governance and financial health of the organisation

Other things you will want to think about to help you make this judgement might include:

  • the scale of the issue
  • the view of your internal or external auditor
  • the context for your organisation

This does means that it is not possible to set out definitive positions on whether a specific instance of non-compliance is material; it is a matter of judgement. An example may help to illustrate material non-compliance.

All RSLs are required to conduct an annual appraisal of each governing body member. Landlord A has two members who have not had an appraisal in the last 12 months, because they were both on sick leave when the other appraisals were done, but it plans to do these when they return from sick leave. Technically landlord A does not comply, but this is not material, and so it chooses not to disclose this in its Annual Assurance Statement.

Landlord B has not appraised the performance of more than half its board members for the last three years. It recognises that it has a problem in its process and it plans to fix this. Given the scale of this, and the risk it presents to effective governance, it decides that this is material non-compliance and discloses it in its Annual Assurance Statement along with the steps it is taking to resolve the problem.

Q: How often do we need to get assurance?

A: That will depend on the issue you are looking at. You will want to think about how often you get information about each of the regulatory requirements and standards. You may decide that you will have a different frequency for each of these. For example, you may want to get more regular information and assurance on the performance of your repairs service than you would for the effectiveness of your arrangements and policy for whistleblowing. Assurance mapping can help you to identify the sources of assurance and how often these are, or should be, provided to your governing body or committee.

Q: Should we share the Annual Assurance Statement with tenants?

A: Yes. You should make it available to tenants and other service users.

Q: How will you use our Annual Assurance Statement?

A: We will use your Statement to help us come to our overall regulatory view of your organisation. This will be an important part of the information that we use when we are assessing risk and deciding how we should engage with your organisation. We will publish each landlord’s submitted Annual Assurance Statement on our website.

We will provide you with feedback on your 2019 Annual Assurance Statement.

Q: What will you do if we disclose an area where we believe we do not comply?

A: Firstly, we will assess the significance of the area of non-compliance and how you are responding to it. Where you have told us about an area of non-compliance, and we are assured that you have effective plans and the capacity and willingness to improve or resolve the issue, it will be for you to take forward the improvement. We may ask you to keep us updated.

We will not engage with you unless the issue presents such a significant risk to the interests of tenants and service users that we need to monitor it closely, or take action, to ensure it is resolved successfully. We will contact you if we require any further information or assurance.

Q: What if we don’t disclose something as we don’t think it is material, and you subsequently take a different view of the materiality of the issue?

A: That could happen, as this is a matter of judgement. We may reach a different view about whether an issue is material. In these circumstances, we would engage with you to understand how you arrived at the view that the issue was not material. We will also seek assurance that you are taking effective action to resolve the issue within an appropriate timeframe.

Q: What if our level of assurance changes or we find an area we don’t comply with after we have submitted our Annual Assurance Statement, do we need to do a new Statement?

A: No. You should notify us about any change in the level of assurance that you have made in your Annual Assurance Statement, but you do not need to amend the Statement until the next one is due. You can see more information on notifying us in our guidance on Notifiable Events.

Such a change could be a positive development, such as you having completed planned improvement work. Or it could be that you have found a new area of material non-compliance.

Q: You said you won't start asessing compliance with the regulatory requirement on equalities and human rights until 2021.  Should we wait until 2021 to assess our compliance with the requirement on equalities and human rights?

A: No, your Annual Assurance Statement should confirm your level of compliance with all of the regulatory requirements and standards, including the requirement on equalities and human rights.  The requirements for equalities and human rights are and include statutory duties for landlords and it is important that you consider  the level of assurance you already have around this and that are taking appropriate action to manage risks.  Although we won't be assessing compliance with this requirement until April 2021 to allow time for the development of a guidance frameowrk around equalities and human rights in social housing, you should still consider whether you comply with the requirement, not least to help prepare for 2021.