The Tower Hamlets Council Audit Committee convened on 24 April 2025, to discuss several key issues, including the 2023/24 External Auditors Annual Report, the Corporate Code of Governance update, the Internal Audit Annual Plan, and the Risk Management Report. The committee approved the action plan for statutory recommendation 3, and noted progress on other statutory recommendations.

Here's a breakdown of the significant topics discussed:

2023/2024 External Auditors Annual Report & Management Responses

The committee reviewed the 2023/2024 External Auditors Annual Report & Management Responses from Ernst & Young (EY), which summarised the financial statement audit and value for money conclusions. The report highlighted significant weaknesses, including internal control, BVI findings, procurement and contract management, and statutory financial reporting. EY issued three statutory recommendations related to statutory financial reporting, risk and assurance, and procurement.

The committee reviewed management's responses to the weaknesses identified by EY, and noted progress against the action plan for statutory recommendation 1, detailed in Appendix 2 - Stat Rec 1 Financial Reporting. They also noted progress toward developing an action plan for statutory recommendation 2, detailed in Appendix 3 - Stat Rec 2 Internal Audit. The committee approved the action plan for statutory recommendation 3, detailed in Appendix 4 - Stat Rec 3 Procurement.

Corporate Code of Governance Update

Robin Beattie, Director of Strategy, Transformation, and Improvement, presented the Corporate Code of Governance Report, and invited comments on the revised Code of Corporate Governance. The code sets out the council’s governance framework, aligning with guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE). The Audit Committee is responsible for reviewing the code annually. Councillor Marc Francis expressed concerns that the word failing was not used in the report, despite the statutory intervention from central government.

Internal Audit: Annual Plan and Audit Charter 2025-26

David Dobbs, Head of Internal Audit, Fraud & Risk, presented the Internal Audit Plan 2025-26 and Appendix. 2 for Internal Audit Plan 2025-26 for review and agreement. The plan supports the council in achieving its strategic goals and addresses the Best Value Inspection and statutory recommendations from the external auditor. The committee agreed to the internal audit and anti-fraud plan, and the updated internal audit charter.

Councillor Asma Islam asked how external audits from bodies like Ofsted¹ and the Care Quality Commission (CQC)² are considered when scheduling internal audits. Mr Dobbs explained that external audit and inspection programmes are considered, and internal audit work is adjusted to support and complement them.

Internal Audit and Anti-Fraud 2025-26 Progress Update

David Dobbs presented the Internal audit update report, providing an overview of internal audit activity for 2024-25, including delivery against the Internal Audit Plan. The report highlighted significant issues and concerns since the last update in December 2024. The committee was asked to note the report, including details of assurance opinions for audits carried out as part of the 2024-25 Audit Plan, detailed in Appendix. 1 for Internal audit update report.

Councillor Mufeedah Bustin asked about the deferred audit of public health grants, and Mr Dobbs explained that it was deferred due to a lack of readiness, but is on the plan for the current year.

Steve Reddy, Corporate Director, Children's Services, explained that a revised final report on the SEND improvement plan audit was completed for November, and that follow-up audit work had been carried out. He said that he had personally taken over chairing the SEND improvement board and changed the agenda, membership, and documentation presented to the board.

Risk Management Report 2025-26 – Progress Update & Directorate Risk Register

David Joyce presented the Covering Report - Risk Mgt Update Apr 2025, including the Corporate Risk Register, and the Housing & Regeneration Directorate Risk Register as a deep dive . The summary Corporate Risk Register is attached at Appendix A - Risk Update Apr 2025 and the detailed Corporate Risk Register is included at Appendix B - Corporate Risk Register - April 2025. Appendix C - Housing and Regeneration Detailed Directorate Risk Register - 04.04.2025 is the Directorate’s current risk register, and Appendix D -Heatmap - Housing and Regeneration Directorate Risk Register - 04.04.2025 is the Directorate Heat Map.

The committee noted that a risk around economic factors had increased due to global tariffs, investor sentiment, contractor insolvency and reduced investment values.

Councillor Francis commented that the actions listed in the report were not enough at this point, and raised concerns about the housing options service.

Audit Committee Work Plan

The committee noted the work plan.

Exclusion of Press and Public

The committee voted to exclude the press and public from the remainder of the meeting to discuss restricted items.