The Audit and Governance Committee of Worcestershire Council met on Friday 29 May 2026 to review the external audit plans for the Council and the Pension Fund, and to receive an update on progress. The committee was also scheduled to discuss the council's exceptional financial support, its own self-assessment, an update on the Economic Crime and Corporate Transparency Act 2023 action plan, and a performance and risk management update.

External Audit Plans and Progress Update

The committee was scheduled to consider the external audit plans for both Worcestershire County Council and the Worcestershire Pension Fund for the year ending 31 March 2026. These plans, prepared by Grant Thornton, outline the scope and timing of the statutory audits. The report pack indicated that Grant Thornton is the appointed external auditor for Worcestershire County Council under a contract awarded by Public Sector Audit Appointments (PSAA). The audit plans detail the significant risks identified, including management override of controls, the valuation of land and buildings (specifically the Energy from Waste Plant), and the valuation of the Defined Benefit Pension Liability/Asset for the council. For the Pension Fund, significant risks identified included management override of controls and the valuation of level 3 investments. The plans also set out the audit approach, materiality levels, and proposed fees for both audits.

Additionally, an update was scheduled on the progress of recommendations from the 2024/25 Interim External Audit Report. This included an action tracker detailing the status of statutory, key, and improvement recommendations made in the previous year.

Exceptional Financial Support and External Assurance Review

A significant item on the agenda was the council's receipt of indicative approval for Exceptional Financial Support (EFS) of up to £59.933 million for 2026/27, alongside council tax flexibility. This support is conditional on the council undergoing an external assurance review commissioned by the Government and led by the Chartered Institute of Public Finance and Accountancy (CIPFA), with delivery support from Peopletoo. The report detailed that EFS permits the temporary capitalisation of certain revenue expenditure and is a short-term stabilisation measure, not a solution for long-term financial sustainability. Without EFS, the council would face the statutory alternative of considering a Section 114 Notice.

The external assurance review was scheduled to assess Worcestershire County Council across four core themes: the quality of financial management and processes; financial sustainability, including risk, capital programme management, debt, and asset management; service delivery, reform, and transformation, with a focus on high-cost demand-led services; and governance, culture, and leadership. The report highlighted that CIPFA's previous national review of councils in receipt of EFS identified common issues such as organisational and structural weaknesses, planning and strategy deficits, capacity and skills gaps, and recurring governance weaknesses.

Audit and Governance Committee Self-Assessment 2025/26

The committee was scheduled to review the results of its own self-assessment for the 2025/26 period. This self-assessment, based on CIPFA guidance, aimed to evaluate the committee's effectiveness and identify areas for improvement. A questionnaire was issued to regularly attending officers and members, with a limited number of returns received. The analysis of these returns indicated potential areas for development, particularly concerning a better understanding of CIPFA's 2022 guidance and the Global Internal Audit Standards. Specific areas identified for improvement included the appointment and knowledge of committee members, and understanding the Global Internal Audit Standards.

Economic Crime and Corporate Transparency Act 2023 Action Plan Update

An update was scheduled on the council's Counter Fraud Action Plan, developed in response to the Economic Crime and Corporate Transparency Act 2023. This Act introduced the offence of failure to prevent fraud, with Home Office guidance outlining six principles for a fraud prevention framework: top-level commitment, risk assessment, proportionate risk-based prevention measures, due diligence, communication (including training), and monitoring and review. The report indicated that the council was in a strong position regarding these legislative changes, with external audit having made one recommendation that had been incorporated into the action plan. The update was to show the progress made in delivering the action plan by the end of March 2026.

Performance and Risk Management Update

The committee was to receive a Q4 summary of the council's corporate performance and current risk status. The performance report indicated a generally stable position, with most indicators on track, though some Red and Amber issues reflected ongoing pressures, particularly in demand-led services. Recovery actions and mitigations were noted as being in place, with progress in strengthening governance through the embedding of the Corporate Performance and Risk Management System. The report detailed changes in Key Performance Indicator (KPI) RAG assessments, highlighting areas of deterioration and those requiring attention, such as Children's Social Care complaints escalation and Adult Social Care financial assessments.

The risk management update indicated that the council's overall risk position remained stable but under pressure, with no unmanaged Red corporate risks. However, there were a small number of Amber risks requiring oversight, particularly concerning financial sustainability, delivery capacity for change, service demand pressures, and the maturity of governance and assurance arrangements. The report noted the addition of three new corporate risks: CQC Registration of Green Hill Lodge, Fuel Shortage due to Iran Conflict, and LGR Business Continuity Preparedness. The Insider Threat corporate risk had been de-escalated to a non-corporate risk due to mitigation measures. The update also covered progress in responding to external audit recommendations on performance and risk management.

Work Programme

Finally, the committee was asked to note its future work programme, which included scheduled updates on accounts progress, the Annual Governance Statement, Internal Audit reports, performance and risk management, income and debt management, and treasury management.