The Audit Committee of Hinckley and Bosworth Council met on Wednesday 27 May 2026, reviewing internal audit progress, final reports, and the external audit plan. The committee noted the internal audit progress report and discussed the deferral of certain audits due to local government reorganisation and workforce capacity considerations. The use of Artificial Intelligence (AI) in local government was also discussed, with a note that its current use is limited to administrative tasks.

Internal Audit Progress Report

Charles Black, from internal auditors Forvis Mazars, presented the internal audit progress report for May 2026. He noted that the committee was slightly behind schedule, but most audits were at draft report stage and would be finalised before the next meeting. Assurance levels were generally positive, with no fundamental control weaknesses identified. A suggestion was made to arrange a meeting with the internal auditors to discuss the action plan.

Councillor R Webber-Jones inquired about the deferral of certain audits. It was explained that the deferral of the workforce capacity review was due to ongoing local government reorganisation, with the audit to be conducted later to provide a more comprehensive picture. The decision not to proceed with the business continuity audit was because workforce capacity was not considered a priority at that time, but it would be reconsidered in future years.

The committee also discussed the use of Artificial Intelligence (AI) in local government. Charles Black noted that while AI is a new and sensitive area, particularly with public sector data, its use is currently limited to assisting with administrative tasks. He anticipated a rise in AI governance reviews in the coming years.

Council Tax Support and NNDR 2025/26 Internal Audit Final Report

Charles Black presented the final internal audit report on Council Tax Support and NNDR for 2025/26, which received an overall opinion of substantial assurance. Three low-risk recommendations were made, relating to a reconciliation issue that had already been resolved, the absence of a routine review process for discounts and reliefs, and the need to formalise internal processes. Sally O'Hanlon, Head of Revenues and Benefits Partnership, confirmed that the recommendations were not problematic and that work was already underway to address them, particularly in preparation for local government reorganisation. The report was noted.

Internal Audit Partnership Governance 2025/26

Charles Black reported on the internal audit of partnership governance, which resulted in a moderate assurance opinion. Two medium-risk recommendations were raised concerning partnership agreements for the ICT partnership and the revenues and benefits partnership. For the ICT partnership, there was no signed and enforceable agreement in place following the expiry of the previous one. For the revenues and benefits partnership, the agreement was out of date and had not been formally reviewed for several years. Management accepted these recommendations, with actions to be implemented by September. The report was noted.

Internal Audit Strategy Update – Operational Plan 2026/27 and Charter

Charles Black presented the internal audit strategy update, operational plan for 2026/27, and the internal audit charter. The plan, based on a risk-based approach, includes 110 audit days covering key areas such as core systems, operational services, and strategic risks. The charter outlines the role, authority, and independence of internal audit. Councillor R Webber-Jones raised a question about revisiting previous audits with limited assurance, and Andrew McCann explained that follow-up reports would address outstanding recommendations. The committee noted the report.

External Audit Plan 2025/26 Summary

Ashley Wilson, Assistant Director Finance & Audit, provided an overview of the external audit plan for 2025/26, prepared by Azets. He highlighted that due to ongoing build back work related to prior years, a disclaimed opinion was likely for the 2025/26 accounts. Materiality figures were explained, with an overall materiality of £1,090,000. Helen Parks from Azets detailed the audit approach, significant risks, and the IT audit strategy. She confirmed that significant risks included management override of controls, valuation of land and buildings, council dwellings, pension liability, and the implementation of IFRS 16. The committee noted the report.

Annual Governance Statement 2025/26

Ashley Wilson presented the Annual Governance Statement for 2025/26, which included enhanced disclosure requirements from CIPFA. The statement demonstrated a continuous review of internal control effectiveness, risk management, and performance. A governance action plan (G1-G7) was included, outlining actions, lead officers, and timescales. The draft internal audit opinion was moderate, indicating no significant weaknesses requiring disclosure. The committee reviewed the draft Annual Governance Statement.

Fraud Management Strategy & Action Plan

Ashley Wilson presented the Fraud Management Strategy and Action Plan, developed with assistance from Grant Thornton. The strategy aims to safeguard public funds, promote a culture of integrity, and ensure compliance with legislation, including the Economic Crime and Corporate Transparency Act 2023. The council's fraud risk maturity model assessment indicated a target of Level 3 by March 2027 and Level 4 by March 2028. The committee noted the strategy and action plan.

Risk Management Policy

Julie Kenny, Director of Resources, Audit & Monitoring Officer, presented the revised Risk Management Policy. The policy sets out the council's risk appetite, defining a generally lower risk appetite for safeguarding residents and public funds, but accepting higher risks for innovation and service improvement, provided they are managed. The policy outlines the steps of risk management: identification, assessment, management, and review. The committee noted the policy and was asked to endorse it, with ultimate approval by the Executive.

Audit Committee's Self-Assessment Action Plan 2026/27 Update

Ashley Wilson presented the update on the Audit Committee's self-assessment action plan. Significant progress had been made since the initial assessment in September 2024, with average scores increasing and the overall score improving. Key areas for focus included training needs, the relationship between audit and scrutiny, local government reorganisation, and risk management. The committee noted the report and the progress made.

Items to be Referred to Council

The committee noted that its annual report would be referred to the next full council meeting in June.

The meeting concluded at 7:58 pm.