The Audit Committee of Hackney Council is scheduled to meet on Wednesday 17 June 2026. The meeting's agenda includes a review of the external audit plan for 2025/26, an update on treasury management activities, and a discussion of the corporate risk register. Additionally, the committee will receive the internal audit annual report and the annual fraud and irregularity report for 2025/26.

External Audit Plan 2025/26

The committee is scheduled to consider the External Audit Plan for 2025/26, prepared by Forvis Mazars LLP, the Council's external auditors. This plan outlines the auditors' approach to auditing Hackney Council's accounts and its Pension Fund for the financial year ending 31 March 2026. It details the engagement responsibilities, audit scope, timeline, materiality thresholds, significant identified risks, approach to Value for Money (VFM) assessments, audit fees, and confirmation of auditor independence.

The report highlights several significant risks identified by the auditors, including management override of controls, the valuation of property, plant and equipment, investment properties, and the pension defined benefit liability. For the Pension Fund, risks include management override of controls and the valuation of level 3 investments. The plan also details new Value for Money risks concerning SEND Services and Adult Social Care, alongside follow-up areas on reliance on reserves and Housing Health & Safety Standards.

The proposed audit fees for 2025/26 are estimated at £585,000 for the main Council audit, with additional fees for Value for Money work. The fee for the Pension Fund audit is proposed at £80,000.

Treasury Management Update Report

A report is scheduled to be presented to the committee providing an update on treasury management activities from April 2026 to May 2026. This report aims to keep the committee informed about the Council's investment and borrowing arrangements, aligning with the Chartered Institute of Public Finance Accountants (CIPFA) Code of Practice on Treasury Management.

The report notes that UK GDP is estimated to have increased by 0.6% in Q1 2026, with CPI at 2.8% in April 2026. The UK unemployment rate for January to March 2026 was 5.0%. The Bank of England's Monetary Policy Committee voted to maintain the Bank Rate at 3.75%.

The Council currently has £343 million in external borrowing, including £1 million through Hackney Green Investment, £82 million in short-term borrowing, and £260 million from the Public Works Loan Board. Average daily cash balances held during the reported period were £20 million, a decrease from £41 million in the same period last financial year. Investments have been placed in highly rated UK institutions due to the volatility of creditworthy counterparties. The report also provides an update on counterparty credit ratings and a credit score analysis, showing a Value Weighted Average Credit Risk Score of A+ as of 31 May 2026.

Corporate Risk Register

The committee is scheduled to review the Council's Corporate Risk Register as at June 2026. This report updates members on the current risks facing the Council, how these risks are identified and managed throughout the financial year, and the Council's approach to embedding risk management. The report highlights that the current Council risk profile was reviewed and ratified by the Corporate Leadership Team (CLT) in May 2026.

Notable risks included on the register are:

• The Council's Financial Position: An overarching risk concerning the current economic situation, with a predicted overspend of £8.3 million for the current financial year even after utilising £17.7 million of reserves. This is fuelled by increasing costs in Temporary Accommodation and Adult/Children's Social Care.
• Cyber Security: Cyber threats continue to rise, with the Council implementing various measures to protect its systems and data. Efforts are ongoing to defend against new vulnerabilities, including the implementation of technology, organisational, and resilience measures. The report also alludes to Artificial Intelligence (AI) as both an opportunity for efficiency and a potential risk that needs careful management.
• Workforce: Budgetary pressures are impacting staffing levels and leading to restructures, which could affect efficiency and resource availability. Results from the (Pulse) staff survey have been shared to provide insight into the workforce.
• Corporate Resilience: This risk, an iteration of previous Business Continuity concerns within ICT, emphasises the importance of the Council being prepared to respond to change and disruptions to ensure effective service delivery.
• Person suffers significant harm: Initially related to child welfare, this risk has been broadened to encompass all persons at risk in the Borough, including Council staff, and the safeguarding steps being taken by directorates.
• Temporary Accommodation: This risk has escalated due to increased demand and budget pressures, exacerbated by the Homelessness Reduction Act. While there has been a slight improvement in figures due to budget growth and the work of the TA supply transformation board, it remains a significant concern.
• Climate Change: This risk remains integral to the Council's objectives, with the Climate Action Plan (CAP) bringing targets into focus and raising questions about resource availability.
• New Legislation: This ongoing risk includes commentary on recent Supreme Court judgments and uncertainties regarding equalities legislation.
• Corporate Transformation Programme: This risk, escalated in January, reflects the importance of completing this work, with its score rising due to the challenge of achieving savings.

Internal Audit Annual Report 2025/26

The committee is scheduled to receive the Internal Audit Annual Report for 2025/26. This report details the performance of Internal Audit during the year, the areas of work undertaken, and provides an opinion on the soundness of the Council's control environment. It also includes an updated Internal Audit Charter and Strategy for approval.

The report indicates that 87% of audits were completed at the draft or final report stage by 31 May 2026, with draft reports issued within an average of 10.6 days of completing fieldwork. The report notes a slight decline in the percentage of audits receiving 'Significant' and 'Reasonable' assurance ratings compared to the previous year, with 80% of audits rated as 'Significant' or 'Reasonable'. However, the overall assurance level remains reasonable, indicating that the Council's control framework is adequate despite ongoing challenges.

Key themes identified include ICT audits, which are proceeding as planned after previous disruptions, and key financial systems, where audits assist external auditors and provide confidence in financial controls. The report also highlights that the implementation rate for agreed audit recommendations is lower than targeted, with particular concerns noted among the TMOs.

Annual Fraud & Irregularity Report 2025/26

The committee will also review the Annual Fraud and Irregularity Report for 2025/26. This report provides a status update and analysis of reported fraud and irregularity within Hackney. It details the tangible financial outcomes from fraud investigation work carried out in 2025/26, with an estimated saving of £3,077,941.

The report breaks down investigations by area, including Tenancy Fraud (£1,684,000 estimated saving), No Recourse to Public Funds (£1,130,040), Blue Badge (£24,260), Proceeds of Crime Act (£143,000), and NFI (excluding tenancy) (£96,641). It also details the number of referrals received by the Audit Investigation Team (AIT) and Tenancy Fraud Team (TFT), and the outcomes of these investigations, such as dismissals, prosecutions, and the recovery of properties.

The report highlights the work of the Migrant Children and Families Team (MCFT) in preventing false claims for public funds, and the Tenancy Fraud Team's collaboration with Registered Providers to tackle tenancy fraud. It also provides an update on the National Fraud Initiative (NFI) data matching exercise and the Council's use of Regulation of Investigatory Powers Act (RIPA) powers.

Audit Committee Work Programme

Finally, the committee will review its work programme for future meetings, including scheduled agenda items for 29 October 2026 and 26 January 2027. These future agendas include items such as external audit updates, finance updates, treasury management reports, directorate risk registers, and the annual fraud and irregularity report.