The Audit Committee of Wandsworth Council met on Thursday 30 July 2026 to discuss the council's accounts and external audit for the 2025-26 financial year, review the annual governance report, and consider a strategic review of risk management. Key decisions included noting the progress on the 2024-25 and 2025-26 accounts, approving the draft Annual Governance Statement with an amendment, and noting the progress on updating the council's risk management approach.

Update on the Accounts and External Audit 2025-26

The committee received an update on the council's accounts and the ongoing external audit for the 2025-26 financial year. Ernst & Young (EY), the external auditors, presented their audit plan, highlighting that no new areas of risk had been identified compared to the previous year. A significant improvement in the audit timeline was noted, with a target completion date of December 2026, ahead of the statutory deadline of 31 January 2027. This accelerated timeline is crucial for the council to meet future deadlines and move towards an unqualified audit opinion.

The committee discussed the significant increase in audit fees, which EY attributed to national trends and increased audit requirements. Catherine Burstyn, Director of Financial Management, explained that the council opted into a procurement process managed by Public Sector Audit Appointments (PSAA), which appointed EY for a five-year period. Concerns were raised about the lack of choice in auditor selection and the substantial fee increases. EY clarified that the 50% materiality threshold used was a reflection of prior year errors and a disclaimed opinion, and that they would report all uncorrected misstatements over £1.07 million.

The committee also noted the RAG ratings for the previous year's audit, with several areas still requiring improvement. EY and council officers expressed confidence that actions taken would lead to more green ratings in the future. The committee agreed to note the completion of the 2024-25 accounts, the publication of the draft 2025-26 accounts and EY's audit planning report, and the fees update.

Annual Governance Report 2025/26

Andrew Hamilton, Head of the Southwest London Audit Partnership, presented the Annual Governance Report, which included the annual internal audit report and the Chief Audit Executive's opinion on the council's governance, risk management, and internal control arrangements. The overall opinion was that the council has reasonable arrangements in place, though specific control weaknesses and governance issues were identified that require management attention.

Councillor Mrs. Melanie Hampton raised concerns about the deferment of certain audits, such as commercial management of waste and Section 106 agreements, due to service restructures and IT system implementations. It was clarified that these audits were deferred, not cancelled, and would be included in the current year's plan. Councillor Stephen Worrall suggested improvements to the presentation of timelines and Councillor Claire Davies requested more specific reasons for audit deferrals and additions.

A significant discussion took place regarding a paragraph in the draft Annual Governance Statement that referred to the post-May 2026 local elections and interim governance arrangements. Councillor Stephen Worrall proposed removing the paragraph entirely due to its perceived political nature and factual inaccuracies regarding operational mechanisms. After considerable debate, a compromise was reached to retain the first part of the paragraph, which was factually correct, and remove the section referring to July 2026 onwards. The committee agreed to note the council's statutory annual review of its governance arrangements and approve the proposed Annual Governance Statement for 2025-26, with the agreed amendment.

Strategic Review of Risk Management

Kevin Holland, Assistant Director for Fraud, Risk and Insurance, presented the strategic review of risk management. The report detailed a shift from a largely manual, biannual process to a more dynamic, digital, and quarterly risk management framework, incorporating a new digital platform for risk recording and assessment. This aims to increase transparency, improve analysis, and facilitate better oversight and challenge of risks.

Councillor Mrs. Melanie Hampton expressed concerns about the rubbish in, rubbish out potential of digital transformation, questioning how the council would ensure the new platform enhanced, rather than deteriorated, its risk management offering. Mr. Holland explained that the new framework would require directors and service heads to self-moderate risks and that the digital platform would allow for greater analysis and challenge.

Councillor Annamarie Critchard requested that the progress of the new risk management approach be brought back to the next committee meeting for review. Councillor Stephen Worrall raised concerns about the moderate risk appetite for operational innovation, suggesting it should be higher given the need for significant change at pace. The committee discussed the process for setting risk appetite and the potential for it to be averaged across different service areas.

Councillor Davies raised a point about outsourced services and whether the risk management framework adequately considered the input of third-party suppliers. Mr. Holland acknowledged this as a shortfall and something to be developed further. Councillor Critchard questioned the input of members into the corporate risk register and suggested that the paper be forwarded to Cabinet, Shadow Cabinet, and Chairs of Committees for their review. This proposal was debated, with Councillor Baron and Councillor Davies expressing reservations about it being outside the committee's remit. Ultimately, the committee agreed to note and comment on the corporate risk register and the progress on the risk management approach and digital platform. The proposal to share the paper with Cabinet, Shadow Cabinet, and OSC Chairs was carried, with Councillor Baron noting their disagreement on the grounds of remit.

The meeting concluded with thanks to all attendees and officers for their contributions.