Agenda and draft minutes
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Contact: Democratic Services
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Apologies To receive any apologies for absence. The quorum for the Audit and Governance Committee is 3 members.
Additional documents: Minutes: There were no apologies for absence.
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Substitute Members To note details of any substitution arrangements in place for the meeting. Additional documents: Minutes: There were no substitute members.
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Declarations of Interest To receive any declarations of interest from Members relating to items to be considered at the meeting. Additional documents: Minutes: No declarations were made.
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To confirm the minutes of the meeting of the Committee held on 30 September 2025. Additional documents: Minutes: The Committee noted the minutes of 30 September 2025. No issues were raised, and upon being proposed and seconded, the Committee agreed to approve the minutes.
RESOLVED: The minutes of the Audit and Governance Committee on 30 September 2025 were APPROVED (2 votes for, 1 abstention.) |
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Public Questions To deal with questions from the public within the open forum question and answer session of fifteen minutes in total. Questions or supplementary questions from each member of the public should be no longer than one minute each and relate issues under the Committee’s remit. Additional documents: Minutes: There were no public questions.
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Member Questions To deal with written questions by Members, relating to issues under the Committee’s remit, with the maximum length of oral supplementary questions at Committee being no longer than one minute. Responses to any supplementary questions will be dealt with in writing following the meeting. Additional documents: Minutes: There were no member questions.
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Treasury Management Mid-Year Report Purpose To receive and discuss details of the Council's Treasury Management performance for the period 01 April to 30 September 2025 and Quarter 2 Treasury Management Prudential Indicators
Recommendation That the Audit and Governance Committee resolve to:
2. Recommend to Council for approval. Additional documents: Minutes: The Chair invited the Deputy Chief Executive Officer to introduce the item. The Deputy CEO noted that the report author was present at the Committee and apologised for the atypical formatting of the report, explaining that this was produced as part of the Council’s required information provision to the Chartered Institute of Public Finance and Accountancy (CIPFA) rather than in line with the Finance team’s usual reports for the Committee. The Deputy CEO explained that the Council had benefited from improved returns on investment in 2025 as well as two additional factors – a higher balance for investing via taxation and limited spending, and limited shifting of interest rates from the Bank of England, both of which contributed positively to the Council’s financial position. The officer also noted the only ongoing borrowing being a ‘climate bond’ from circa 2022, which was being actively repaid and was utilised on projects including solar panel installation and electric vehicle charging points within the District. The Council had not undertaken any borrowing during the 2024-2025 period and did not intend to for the remainder of the year. The Deputy CEO noted that Section 5 referenced externally-managed funds (“pooled funds”, a Cash Plus fund and a Real Estate Investment Trust (REIT)) – and explained that there was some concern regarding the statutory override that existed on the accounting for pooled funds which was due to expire on 31 March 2025, but this had been extended through to 2029. The officer also noted that this would not cover any pooled fund investments made after 1 April 2024 but this caveat did not apply to any of the Council’s current investments, having all been made prior to that date. The Deputy CEO then requested questions or comments from Committee members. The Committee noted some errors in grammar – page 25 misspelled “diversified”, and Annex A, part 1.3, had a percentage value missing. The report author officer confirmed that these would be corrected. The Committee queried Table 5, showing the initial value versus current value for all pooled funds. The Committee asked how they should consider an investment that had reduced in overall value despite continuing to provide a dividend to the Council. The Deputy CEO explained that while the total value had decreased, the period from which the investments were initially taken out meant that they had provided, over time, a greater income than their change in value. The officer continued to explain that the pooled funds were also partially selected to diversify the Council’s portfolio in light of limited returns on cash balances, and that the intent of these investments was to hold them long-term, anticipating certain holdings may increase or decrease in value, but that the overall portfolio was expected to, supported by opinions from Arlingclose, stay in the black. Past performance of certain funds did not, in this case, necessarily indicate future performance. The Chair queried how difficult it would be to withdraw Council funds from these investments if it were considered appropriate to ... view the full minutes text for item 47. |
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External Auditors Annual Report 2025/26 Additional documents:
Minutes: Alex Walling, an Auditor from Bishop Fleming, attended the Committee to introduce and discuss the report and explained that this item was one of the reports required to be provided to the Council as part of the National Audit Office (NAO) Code of Audit Practice. The report remained in draft format for the Committee due to the timings set by the NAO. Principally the report covered the findings of the accounts audit, as well as Value-For-Money (VFM) commentary under three key areas; financial sustainability, governance, and the three ‘E’s of Economy, Efficiency and Effectiveness, chosen due to ongoing concerns on these areas across the wider public sector. The Auditor noted that staff losses had limited the pace of completion for these reports and that the full accounts audit would be presented at the next Committee in January, before the statutory backstop date, but no significant concerns had been identified yet.
The Auditor explained that Page 13 included a traffic light system, noting that on ‘governance’ one significant issue had been identified, with a recommendation having been issued to the Council to address this. Two additional recommendations from previous reviews remained partially but not fully implemented. The report itself covered the 2024/25 financial year only, and any actions from after 1 April 2025 would be included in the following year’s report. The main concern identified by Bishop Fleming concerned the Council’s procurement process as highlighted by the recent Counter-Fraud Enforcement Unit investigation. The Auditor explained that although no funds were lost, the concern arose over senior individuals being involved in the process, potentially indicating issues with internal culture or processes. The Auditor approved of the Council’s action plan in response to these concerns and would review the progress of officers and members in the following year.
The Committee queried the subject of witnesses, and whether the Auditor would need to see evidence from the Council over the next financial year to ensure all concerns had been addressed. The Auditor responded that they had found the Council’s current action plan acceptable, and would be revisiting it in future to check whether all points had been implemented to satisfaction. On the suggestion of witnesses, evidence, and reviewing internal audit activities, the Auditor clarified that auditors were not investigators in that sense and added that this situation and its fallout in fact suggested that the whistleblowing process worked.
The Committee asked if the Council should anticipate further issues regarding procurement. The Deputy CEO answered that he was confident that the Council’s response to this issue had so far been robust, citing the introduction of a dedicated procurement board, officer and member training, and procurement toolkits, all to ensure a similar case would not reoccur, as well as noting that the report highlighted where controls where circumvented and how, and that the action plan now existed to address these weaknesses.
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Corporate Risk Register Purpose The report sets out the current Strategic Risk Register for the Council.
Recommendation That the Audit and Governance Committee: 1. Note the Strategic Risk Register and mitigation measures. 2. Endorse the proposal for the strategic risk register to be included in the work programme for the committee with a quarterly review frequency Additional documents: Minutes: The Deputy Chief Executive Officer introduced the item and noted that at the 27 May 2025 Committee meeting a commitment was made to bring before the Committee a draft risk strategy, of which the Corporate Risk Register was one part. The Deputy CEO explained that the Council’s risk appetite was ‘cautious’, meaning there was a preference for the delivery of safe options with a medium degree of risk versus reward. The Annex included a five-by-five scoring matrix on Page 40: - Red = significant risk requiring mitigation. - Amber = emerging or developing risk. - Green = tolerable/managed risk with known mitigation. Red risks included Cybersecurity and Health and Safety; Amber risks included financial mitigation and potential civil emergencies. The Corporate Leadership Team (CLT: Chief Executive, Deputy CEO and Section 151 Officer, Monitoring Officer, Director of Communities & Place) had reviewed the risk register and made the decision to rebuild it from the ground up due their feeling that it did not accurately represent the Council’s strategic risks or their mitigation efforts. The new register had removed risks that no longer applied to the Council (for example, issues with Publica) and instead focused on direct impacts such as legal concerns and reputational damage. The Deputy CEO then invited questions from Committee members. The Chair observed that this risk register did not include mention of procurement processes and the potential for individuals to circumvent established rules, as the Committee had previously discussed. The Deputy CEO clarified that the register had not included anything related to procurement by default, that the officer felt it would have been inappropriate to add it after the fact, and that this would likely have been listed as an ‘Amber’ concern due to the fact that mitigation was now in place. the CLT would amend the register to include this by the next update in April 2026. The Chair agreed with this suggestion and noted that the Leader of the Council, present as an observer, also agreed. The Committee queried what measures were in place to mitigate the potential scenario of a failure by one of the Council’s contracted partners, considering it a significant risk due to reputational damage and the financial value of certain contracts. The Committee noted that the Council was partially reliant on Dun and Bradstreet (D&B) alerts, which are after-the-fact, and asked if there were more proactive measures also in place. The Deputy CEO assured the Committee that robust, ongoing monitoring was in place for all suppliers, including for example Freedom Leisure and Publica, for any services they provide. D&B alerts were used as an additional indicator for monitoring, not in place of internal controls. The Committee asked when the last test of the identified top risks such as Cyber and Health and Safety was conducted. The Deputy CEO suggested that the Head of ICT would say that in terms of defending the Council from digital threats, internal systems were tested every day, and that while the officer could confirm that there ... view the full minutes text for item 49. |
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Audit and Governance Committee Work Plan For the Committee to review and note its work plan. Additional documents: Minutes: The Chair introduced the work plan and noted each report due for upcoming Committee dates, before advising that this was still ongoing work. The Deputy CEO also confirmed that this was the case but noted that all relevant items were anticipated to be completed by the dates listed in this report for inclusion at the relevant committees, and that officers had not anticipated issues but if any were encountered there may be a need for a delegated decision to meet statutory deadlines. RESOLVED: The Committee noted the Work Plan. |