The Governance & Audit Committee of Swansea Council met on Wednesday 2 September 2026. The meeting approved the minutes from the previous meeting and noted several reports, including the Internal Audit Monitoring Report for Q1 2026/27 and the Finance Directorate Risk Management Arrangements. The committee also received information on the Corporate Fraud Team's response to an Audit Wales report and the Audit Wales Work Programme and Timetable.

Internal Audit Monitoring Report – Q1 2026/27

The committee noted the Internal Audit Monitoring Report for the first quarter of the 2026/27 financial year. Nick Davies, presenting the report, highlighted that 15 audits had been finalised, with 9 receiving a High assurance rating and 4 a Substantial assurance rating. A total of 99 recommendations were made, all of which were accepted by management. The report also indicated that staffing levels within the Internal Audit team had improved, with two new members of staff appointed. Councillor David Roberts requested a breakdown of the status of audits in Appendix 3, which Nick Davies agreed to provide. Concerns were raised about IT-related recommendations that remained unimplemented, with Councillor Jim Davies recommending that the Chief Auditor write to Sarah Lackenby, the IT manager, to ascertain the status of these recommendations.

Finance Directorate Risk Management Arrangements and Key Risks

Simon Arthurs, Interim Head of Finance and Deputy Section 151 Officer, presented the Finance Directorate's Risk Management Arrangements. He outlined the council's corporate risk management approach and highlighted three key strategic risks: the ability to set a medium-term financial plan within resources, the ability to live within that resource once the budget is set, and supply chain volatility. Operational risks were also detailed, covering areas such as revenues and benefits, tax evasion, and internal audit opinions. Councillor David Roberts noted the positive observation regarding continuous improvement within the directorate. Councillor Patience Bentu inquired about the next steps regarding the increased risk scoring for strategic risks, to which Simon Arthurs explained the need for closer monitoring and horizon scanning.

Corporate Fraud Team Response to the Audit Wales Counter Fraud Arrangements Report

Gareth Jones from Audit Wales presented their report on the council's counter-fraud arrangements, noting that while the council has a clear commitment to tackling fraud, there were gaps in its current arrangements. These included issues with fraud risk management, the need to strengthen policies and training, and a balance weighted towards reacting to fraud rather than proactive prevention. Nine recommendations were made, and the council's response, detailed in Appendix 1, was noted. Councillor Johnny Rogers clarified that the report was the council's response to Audit Wales' findings, not solely the counter-fraud team's. An action was agreed for the Chief Auditor, Simon Cockings, to review the council's responses to Audit Wales' recommendations. Councillor David Roberts highlighted the need for development in preventative work and suggested this team could be further developed through training or additional resources.

Audit Wales Report - Funding Councils - How the Welsh Government Funds Councils

Charles Rick Beaver from Audit Wales presented a national study on how the Welsh Government funds councils. The report concluded that the Welsh Government's funding allocation methods do not always help councils achieve value for money, particularly in the longer term. Key findings included the lack of a comprehensive review of the funding formula since 2002, the timing and duration of funding settlements, and the complexity and proportionality of specific grants. All recommendations were made to the Welsh Government, with no recommendations directed at the councils themselves. Ness Young, Director of Corporate Services, endorsed the report, stating it reflected the council's experiences. Councillor Patience Bentu inquired about the Welsh Government's acceptance of the recommendations and any deadlines for their implementation. Charles Rick Beaver explained that the Welsh Government was completing its management response form, which would be included in papers for a Senedd committee meeting on 28 September.

Audit Wales Work Programme and Timetable

Gareth Jones provided an update on Audit Wales' work programme and timetable. He confirmed that the council's draft accounts for 2025/26 had been received and were being audited. He also noted that the council's response to the recruitment and retention report had been received, and the report and response would be tabled at a future meeting. Updates were also provided on the homelessness report and the 2026/27 audit programme, which would focus on community benefits and performance management arrangements. Councillor Mike White raised concerns about the local housing allowance and its impact on homelessness, which Gareth Jones acknowledged as a contributory factor.

Annual Report of School Audits for 2025/26

Nick Davies presented the Annual Report of School Audits for 2025/26. He reported that 25 primary schools were included in a thematic review of procurement and 23 in a review of unofficial funds, both receiving a Substantial assurance rating. Four secondary schools were audited individually, also receiving Substantial assurance. A total of 56 recommendations were made for secondary schools, with procurement and expenditure being the main areas of concern. Councillor Mike White suggested making the audit of unofficial funds a standard agenda item for school governing bodies. Michelle Thomas, from the Education Directorate, explained that while not mandatory, attendance at training was monitored, and bespoke sessions were offered. She also noted that work was underway to improve IT systems to prevent procurement issues from recurring. Councillor Gordon Anderson expressed disappointment regarding ongoing compliance issues with procurement and expenditure, despite additional training.

Statutory Statement of Accounts Recovery Plan

Simon Arthurs, Interim Head of Finance and Deputy Section 151 Officer, presented the Statutory Statement of Accounts Recovery Plan. He highlighted that the council had signed off the draft accounts for 2024/25 on 11 August, which was seven weeks ahead of their recovery plan target of 30 September. This was described as a fantastic achievement involving colleagues across the council. The plan aims to return to statutory deadlines for the production and audit of accounts. Councillor David Roberts inquired about the nature of additional resources being brought in for the capital team, and Simon Arthurs explained these were primarily for monitoring business cases and programmes, allowing existing officers to focus on audit coverage. Discussions also touched on the potential use of technology, including AI, to improve efficiency in preparing accounts.

Governance & Audit Committee - Self-Assessment of Good Practice 2025-2026

Huw Evans, Head of Democratic Services, presented the self-assessment report, noting an overall score of 89.16%. While acknowledging the strong overall performance, he highlighted areas for improvement, particularly in demonstrating the committee's impact and member engagement. He proposed withdrawing the current report and conducting a facilitated session for a new self-assessment, which was supported by several members. Councillor Gordon Anderson expressed concern about the score for Effectiveness of the Committee and suggested that the current 89% was already good. Hugh Evans clarified that the lower score in effectiveness was due to specific questions where members believed certain practices, such as private meetings with auditors, were not occurring, despite evidence to the contrary. The proposal to withdraw the report and conduct a facilitated session was carried.

Successful and Sustainable Swansea Corporate Transformation Plan Annual Report 2025-26

Ness Young, Director of Corporate Services, presented the annual report on the Corporate Transformation Plan. She explained that the plan translates the council's vision into a programme of change, bringing together service reform, organisational development, and investment. While progress has been made, she acknowledged ongoing challenges such as demand pressures, capital delivery issues, and reliance on short-term funding. Councillor David Roberts inquired about the financial benefits and cost benefits that would be realised from the plan, and Ness Young explained that these are articulated in the Medium-Term Financial Plan and budget planning processes.

Audit Wales Recommendations Tracker

Adele Dunstan provided an update on the Audit Wales Recommendations Tracker. She noted that there were some inconsistencies with recommendations being closed while actions were still ongoing and that Adele had agreed to look into these, with a new report to be presented at the next meeting.

Governance & Audit Committee Action Tracker Report

Sophie Palmer presented the Governance & Audit Committee Action Tracker Report. An omission was noted regarding Minute Reference 21, where confirmation of scrutiny having sight of the Building Blocks Capital Planning Council was requested. This would be added to the tracker.

Governance & Audit Committee Work Plan

The Governance & Audit Committee Work Plan to May 2027 was presented for information. It was noted that the work plan is fluid and can be adjusted as needed. The agenda for October was indicated, with flexibility to add or move items.

Exclusion of the Public

The committee approved the exclusion of the public from the remainder of the meeting on the grounds that the matters to be discussed were likely to contain exempt information relating to financial information, legal professional privilege, and personal data.

Internal Audit Section – Fraud Function Annual Report 2025/2026

Jonathon Rogers presented the Fraud Function Annual Report for 2025/26. He reported that the team had realised overpayments and savings totalling £1,252,305.56, an increase from the previous year. Four successful prosecutions were carried out, and £2,594.40 was recovered through proceeds of crime, court costs, and civil penalties. Nine properties were recovered into social housing stock. Councillor Jeff Evans inquired about investing further in the service due to its financial gains, and about the mandatory nature of the online fraud awareness training. Johnny Rogers confirmed the training was discretionary and would require CMT to make it mandatory. Ness Young stated that the training and development team would review whether fraud awareness training should be made mandatory. Councillor Mike White sought clarification on the blue badge investigations, and John clarified the focus was on matching blue badge holders to deceased persons' registers.

Audit Wales Report - Funding Councils - How the Welsh Government Funds Councils

Gareth Jones from Audit Wales presented the report, which highlighted that the Welsh Government's funding allocation methods do not always help councils achieve value for money, particularly over the longer term. Recommendations were made to the Welsh Government regarding improving the settlement process, clarifying grant funding, and providing better support for councils facing financial difficulties. Ness Young endorsed the report, and Councillor David Roberts observed the irony of councils being punished for delays in statement of accounts while funding announcements are often late.

Audit Wales Work Programme and Timetable

Gareth Jones provided an update on Audit Wales' work programme. He confirmed that the council's draft accounts for 2025/26 had been received and were being audited. He also noted that the council's response to the recruitment and retention report had been received, and the report and response would be tabled at a future meeting. Updates were also provided on the homelessness report and the 2026/27 audit programme, which would focus on community benefits and performance management arrangements. Councillor Mike White raised concerns about the local housing allowance and its impact on homelessness, which Gareth Jones acknowledged as a contributory factor.

Annual Report of School Audits for 2025/26

Nick Davies presented the Annual Report of School Audits for 2025/26. He reported that 25 primary schools were included in a thematic review of procurement and 23 in a review of unofficial funds, both receiving a Substantial assurance rating. Four secondary schools were audited individually, also receiving Substantial assurance. A total of 56 recommendations were made for secondary schools, with procurement and expenditure being the main areas of concern. Councillor Mike White suggested making the audit of unofficial funds a standard agenda item for school governing bodies. Michelle Thomas, from the Education Directorate, explained that while not mandatory, attendance at training was monitored, and bespoke sessions were offered. She also noted that work was underway to improve IT systems to prevent procurement issues from recurring. Councillor Gordon Anderson expressed disappointment regarding ongoing compliance issues with procurement and expenditure, despite additional training.

Statutory Statement of Accounts Recovery Plan

Simon Arthurs, Interim Head of Finance and Deputy Section 151 Officer, presented the Statutory Statement of Accounts Recovery Plan. He highlighted that the council had signed off the draft accounts for 2024/25 on 11 August, which was seven weeks ahead of their recovery plan target of 30 September. This was described as a fantastic achievement involving colleagues across the council. The plan aims to return to statutory deadlines for the production and audit of accounts. Councillor David Roberts inquired about the nature of additional resources being brought in for the capital team, and Simon Arthurs explained these were primarily for monitoring business cases and programmes, allowing existing officers to focus on audit coverage. Discussions also touched on the potential use of technology, including AI, to improve efficiency in preparing accounts.

Governance & Audit Committee - Self-Assessment of Good Practice 2025-2026

Huw Evans, Head of Democratic Services, presented the self-assessment report, noting an overall score of 89.16%. While acknowledging the strong overall performance, he highlighted areas for improvement, particularly in demonstrating the committee's impact and member engagement. He proposed withdrawing the current report and conducting a facilitated session for a new self-assessment, which was supported by several members. Councillor Gordon Anderson expressed concern about the score for Effectiveness of the Committee and suggested that the current 89% was already good. Huw Evans clarified that the lower score in effectiveness was due to specific questions where members believed certain practices, such as private meetings with auditors, were not occurring, despite evidence to the contrary. The proposal to withdraw the report and conduct a facilitated session was carried.

Successful and Sustainable Swansea Corporate Transformation Plan Annual Report 2025-26

Ness Young, Director of Corporate Services, presented the annual report on the Corporate Transformation Plan. She explained that the plan translates the council's vision into a programme of change, bringing together service reform, organisational development, and investment. While progress has been made, she acknowledged ongoing challenges such as demand pressures, capital delivery issues, and reliance on short-term funding. Councillor David Roberts inquired about the financial benefits and cost benefits that would be realised from the plan, and Ness Young explained that these are articulated in the Medium-Term Financial Plan and budget planning processes.

Audit Wales Recommendations Tracker

Adele Dunstan provided an update on the Audit Wales Recommendations Tracker. She noted that there were some inconsistencies with recommendations being closed while actions were still ongoing and that Adele had agreed to look into these, with a new report to be presented at the next meeting.

Governance & Audit Committee Action Tracker Report

Sophie Palmer presented the Governance & Audit Committee Action Tracker Report. An omission was noted regarding Minute Reference 21, where confirmation of scrutiny having sight of the Building Blocks Capital Planning Council was requested. This would be added to the tracker.

Governance & Audit Committee Work Plan

The Governance & Audit Committee Work Plan to May 2027 was presented for information. It was noted that the work plan is fluid and can be adjusted as needed. The agenda for October was indicated, with flexibility to add or move items.

Exclusion of the Public

The committee approved the exclusion of the public from the remainder of the meeting on the grounds that the matters to be discussed were likely to contain exempt information relating to financial information, legal professional privilege, and personal data.