The Audit and Standards Committee of Melton Borough Council met on Tuesday 28 July 2026 to discuss the council's annual procurement exemptions, internal audit reports, and the strategy for regaining audit assurance. Key decisions included the approval of a two-year extension for the provision of internal audit services and a proposal to defer the Annual Governance Statement to allow for amendments.

Annual Report on Procurement Exemptions 2025/26

The committee reviewed the annual report on procurement exemptions for the financial year 2025/26. This report, which satisfies an external audit recommendation, details procurements that did not go through a competitive procedure. Dawn Garton, Director for Corporate Services, presented the report, highlighting that the exemptions applied were for relatively low-value items with genuine reasons. Councillor Councillor Leigh Higgins questioned an exemption for the Country Park Bridge reinstatement, valued at just under £57,000, which was approved before 31 March. Councillor Simon Orson, who was leader of the council at the time, confirmed that the cabinet had been briefed and explained that the delay was due to obtaining permission from the Environment Agency, as the bridge was in a watercourse. He also emphasised the desire to ensure the bridge was future-proof and to place orders with local companies where possible. The committee noted the report.

Internal Audit Annual Report and Fraud Log 2025/26

Rachel Ashley-Caunt, Chief Internal Auditor, presented the Internal Audit Annual Report and Opinion for 2025/26. She stated that the overall assurance opinion for the year was Moderate Assurance, consistent with previous years. The report detailed the basis for this opinion, drawing on the work of internal audit throughout the year. Councillor James Mason inquired about the shift in assurance opinions, noting a decrease in Substantial and Limited assurances compared to the previous year, leading to a more bunched distribution. Ms Ashley-Caunt explained that this was not a direct comparison, as different areas were audited each year, and that no limited assurance reports were issued this year, which was a positive development. Councillor Helen Cliff sought clarification on the term independent assurance in relation to the Annual Governance Statement. Ms Ashley-Caunt explained that the internal audit opinion was intended to inform the committee's review of the council's controls as part of the Annual Governance Statement process. The committee noted the report.

Draft Annual Governance Statement 2025/26

Clive Tobin, Assistant Director for Governance and Democracy (Monitoring Officer), presented the draft Annual Governance Statement (AGS) for 2025/26. He explained that the AGS is a statutory requirement and provides assurance over the council's governance, risk, and control framework. Councillor Leigh Higgins expressed concern that the draft AGS did not include a statement regarding the planning service, despite ongoing issues and an improvement plan. She argued that this omission represented a risk, particularly concerning the effective use of resources and potential for non-determination of applications, leading to appeals. She stated she could not vote for the AGS in its current form. Mr Tobin acknowledged the concerns, explaining that the planning service's issues were considered to be in hand with an action plan in place, and therefore not seen as a risk requiring inclusion in the statement. Councillor Orson raised concerns about the AGS covering a period up to 2029, given the ongoing Local Government Reorganisation (LGR). He questioned whether the council's plans should reflect the potential dissolution of the authority. Mr Tobin explained that the Code of Corporate Governance review was in line with guidance for a three-year period and that it would be remiss not to have a plan in place in case of unforeseen delays to LGR. Councillor James Mason reiterated concerns about asset management, describing it as a golden thread running through previous reports with no apparent progress. He stated he could not support the AGS without reassurance on this matter. Following extensive discussion, Councillor Leigh Higgins proposed deferring the paper to allow for amendments, specifically to include comments on the planning directorate's governance and asset management. This was seconded by Councillor Ornard. The committee agreed to defer the paper subject to these amendments.

Internal Audit Progress Report

Rachel Ashley-Caunt, Chief Internal Auditor, provided an update on the delivery of the Internal Audit Plan for 2026/27. She reported that seven audit reports had been finalised since the last committee meeting, all receiving an assurance opinion of at least Moderate Assurance. These included audits on anti-social behaviour, landlord health and safety, the asset development programme, key financial controls, procurement compliance, private sector housing, and disaster recovery. Ms Ashley-Caunt detailed the findings of each audit, noting areas for improvement and the assurance opinions given. She also highlighted that 28 agreed management actions were overdue for implementation, with 27 of these being over three months overdue. A specific High priority action related to asset management remained overdue. Councillor Simon Orson inquired about the implications of LGR on the audit plan, and Ms Ashley-Caunt confirmed that LGR would be factored into the scoping of future audits. The committee noted the report.

Provision of Internal Audit Services

Dawn Garton, Director for Corporate Services, presented a proposal to extend the current delegation agreement for the provision of internal audit services with North Northamptonshire Council for a further two years, until 31 March 2029. Ms Garton highlighted that the service was high-performing, provided good value for money, and offered resilience and access to specialist services. Councillor James Mason commented on the irony of Northamptonshire Council undertaking this work during a period of reorganisation, hoping lessons would be learned. The committee approved the proposal in principle and recommended it to the Council.

Regaining Assurance Strategy

Helen Lillington, External Auditor from Grant Thornton UK LLP, presented the Regaining Assurance Strategy for Melton Borough Council. She explained that the council had received disclaimed audit opinions for several years, and this strategy outlined the plan to rebuild audit assurance. Grant Thornton had provisionally assessed Melton Borough Council as Category C under the MHCLG capacity assessment framework, meaning that while an ISA-compliant approach was possible within the build-back period, there were significant operational difficulties. Ms Lillington highlighted technical challenges related to the complexity of reserves, particularly property, plant and equipment, and pensions. She also noted the recent loss of key finance staff, which could create gaps in supporting information and corporate knowledge for historic transactions. The strategy aims for an unmodified audit opinion by 2027/28, with phased build-back of assurance over opening balances, reserves, property, and pensions. The committee noted the report.