The Audit and Governance Committee of North Northamptonshire Council is scheduled to review the outcomes of both internal and external audits for the 2025/26 financial year. The committee will also receive an update on the progress of internal audit work.

External Audit Plan 2025/26

The committee is scheduled to receive and note the External Audit Plan for 2025/26, as outlined in the report by Mark Stocks, External Auditor from Grant Thornton. This plan details the scope and timing of the statutory audit of North Northamptonshire Council's financial statements for the year ending 31 March 2026. It also identifies key audit risks, including management override of controls, the valuation of land and buildings, council dwellings, investment properties, and the pension fund gross liability. The plan also addresses risks related to capital grants received in advance, cash and cash equivalents, and the implementation of IFRS16.

The external audit approach will consider the Council's arrangements for securing economy, efficiency, and effectiveness in its use of resources, with identified risks including the delivery of savings to bridge medium-term budget gaps, the Dedicated Schools Grant deficit, and capacity within the finance team. The proposed audit fee for the Council is £822,940.

The report also details the backstop dates introduced by the Accounts and Audit (Amendment) Regulations 2024, which set deadlines for the publication of audited financial statements. For the year ending 31 March 2026, this deadline is 31 January 2027. The external auditors are working towards an internal deadline of 30 November 2026 for the 2025/26 audit.

Annual Internal Audit Report and Opinion 2025/26

Rachel Ashley-Caunt, Chief Internal Auditor, will present the Annual Internal Audit Report and Opinion for 2025/26. This report provides an overview of internal audit activity and findings for the year, forming a key source of independent assurance for the committee and informing the Council's Annual Governance Statement.

The Chief Internal Auditor's opinion is that Moderate Assurance can be given over the adequacy and effectiveness of the Council's control environment for 2025/26. This opinion is based on the work undertaken, including reviews of financial systems and controls, risk management processes, and internal controls. The report notes that 97% of opinions given in relation to the control environment and compliance were of at least Moderate Assurance. However, Limited Assurance was given for compliance with controls related to 'fit and proper person' checks for taxi licence holders and for the administration of Disclosure and Barring Service (DBS) checks for home to school transport providers.

The report highlights key risks faced by the Council, including financial pressures related to Children's services and the Dedicated Schools Grant (DSG) deficit. It also notes improvements in procurement controls and the Council's response to inspections by the Social Housing Regulator and the Care Quality Commission (CQC). The report also details the progress made in implementing agreed management actions, with 71% of actions due for implementation having been completed during the year.

Internal Audit Progress Report June 2026

This report provides a progress update on the work of the Internal Audit team and key findings from audits completed since the last committee meeting. Rachel Ashley-Caunt, Chief Internal Auditor, will present the report, which includes finalised reports for six audit assignments.

Key findings from these audits include:

• Housing complaints: While the Council has a formalised approach to housing complaints that aligns with the Housing Ombudsman's Complaint Handling Code, some non-compliance was identified within Tenancy Services, highlighting the need for strengthened oversight. The formal approval of the annual self-assessment against the Complaint Handling Code has not been clearly documented, and the role of the Audit and Governance Committee requires further clarification. Assurance opinions given were: Control Environment - Good (Green), Compliance - Moderate (Amber), Organisational Impact - Low (Green).
• Approved Mental Health Professionals (AMHP): Effective processes were found for referral allocation, with no backlog in current cases. However, weaknesses were identified in procedures, performance measures focused on inputs rather than timely completion, and a lack of management oversight regarding open referrals and assessments. Assurance opinions given were: Control Environment - Moderate (Amber), Compliance - Good (Green), Organisational Impact - Medium (Amber).
• Procurement compliance: A generally sound and improving framework of procurement controls is in place. Higher value procurements demonstrated strong compliance. However, opportunities for improvement were identified in lower value, service-led procurements, relating to VAT inclusive contract valuation, Climate Change Impact Assessments, due diligence checks, and documentation standards. Assurance opinions given were: Control Environment - Good (Green), Compliance - Moderate (Amber), Organisational Impact - Medium (Amber).
• Taxi licensing – fit and proper person checks: 100% of drivers tested had undergone DBS checks, medical fitness checks, DVLA checks, and checks against the National Register of Taxi Licence Refusals and Revocations (NR3). However, issues were noted regarding the availability of right to work evidence and the timeliness of DBS re-checks. The application of penalty points also requires review. Assurance opinions given were: Control Environment - Moderate (Amber), Compliance - Limited (Red), Organisational Impact - Medium (Amber).
• Home to school transport (safeguarding checks): A framework of policies and guidance is in place, and effective processes support annual audits of operators. However, the Council has not defined expectations around driver training, and weaknesses were found in the administration of DBS checks, with errors in record-keeping and accuracy concerns. Centralised records for actions taken following school inspections are not held. Assurance opinions given were: Control Environment - Limited (Red), Compliance - Moderate (Amber), Organisational Impact - Medium (Amber).
• Local taxation: Processes are in place to ensure all business rates and council tax income is allocated correctly. However, testing of debt recovery arrangements found no recent recovery action on older debts, and inconsistencies were noted in cash balancing processes between business rates and council tax. Approval limits for refunds on local taxation are not defined in the Constitution. Assurance opinions given were: Control Environment - Good (Green), Compliance - Moderate (Amber), Organisational Impact - Medium (Amber).

The report also provides an overview of the implementation of agreed management actions, noting that 21 open actions have been implemented since the last meeting, with 63 recommendations overdue for implementation as at 30th May 2026.

The committee will also receive a copy of the Internal Audit plan for 2026/27, detailing the status of each assignment.