The Governance Committee of the Isles of Scilly Council met on Wednesday, 10 June 2026, to consider the draft Annual Governance Statement for 2025-26 and the Internal Audit Progress Report for the same period, along with the proposed audit plan for the following year.

Draft Annual Governance Statement 2025-26

The committee was scheduled to consider the draft Annual Governance Statement (AGS) for 2025-26. This statement is a requirement under the Accounts and Audit Regulations 2015 and aligns with the CIPFA/SOLACE Framework: Delivering Good Governance in Local Government. The AGS aims to ensure that resources are directed according to agreed policies and priorities, that decision-making is sound and inclusive, and that there is clear accountability for resource use to achieve desired outcomes for service users and communities.

The report outlined that the Council's Code of Governance has been drafted to align with the seven core principles of the CIPFA/SOLACE Framework:

• Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law.
• Ensuring openness and comprehensive stakeholder engagement.
• Defining outcomes in terms of sustainable economic, social, and environmental benefits.
• Determining the interventions necessary to optimise the achievement of intended outcomes.
• Developing the Council's capacity, including the capability of its leadership and individuals within it.
• Managing risks and performance through robust internal control and strong public financial management.
• Implementing good practices in transparency, reporting, and audit to deliver effective accountability.

The report indicated that a significant governance issue identified during 2024-25 was the Reviewing and Updating Policies and Procedures. While some action had been taken, further work was required during 2026-27, which was also noted as an improvement recommendation in the Council's External Audit Report. The committee was asked to recommend the draft AGS for approval as a draft, to be published for public inspection alongside the Council's Statement of Accounts. Following public inspection and external audit, it would return to Full Council for final approval.

Internal Audit Progress Report 2025/26 and Proposed Plan for 2026/27

The committee was also scheduled to review the Internal Audit Progress Report for 2025/26, which included the Annual Report, and to consider the proposed Internal Audit Plan for 2026/27. The Internal Audit Annual Report provided an overall opinion of reasonable assurance on the adequacy and effectiveness of the Council's arrangements in respect of internal control. This opinion was based on work performed during the year and professional knowledge of the organisational control, governance, and risk management environment.

Specific audits completed during 2025/26 included reviews of the Cultural Centre and Museum Project, Cyber Security, Risk Management, and Budget Management. The Budget Management review resulted in a Limited assurance opinion, highlighting weaknesses in oversight and accountability for budget management across Adult and Children's services due to the absence of permanent senior management. The report noted that the recent appointment of a new Strategic Director and two new Heads of Service should help stabilise management in 2026/27.

The proposed Internal Audit Plan for 2026/27 included reviews of the Cultural Centre, Financial Control (Debt Management), Cyber Security, the Health and Care Integrated Project, Sickness and Absence, and Risk Management. The plan also included provision for following up on agreed management actions. The report indicated that the expenditure for internal audit services was contained within the approved budget for 2025/26, with the same core budget allocation proposed for 2026/27.