The Audit and Governance Committee of Boston Borough Council met on 7 July 2025, receiving reports on capital projects, internal audits, risk management, treasury activities, governance, and financial statements. The committee agreed to review and approve the Annual Governance Statement for 2024/25 and scrutinise the Annual Treasury Report 2024/25.

Boston Town Board Capital Projects

Pranali Parikh, Director of Economic Development, gave a presentation on the Boston Town Board, which was established to oversee the delivery of projects funded by the Towns Fund, which granted the council £21.9 million in August 2021. Ms Parikh assured the committee that there was strong governance and scrutiny of spending on these projects.

The seven projects include:

• Boston Leisure
• Mayflower College campus
• St Botolph's library and lighting project
• Centre for Food and Fresh Produced Logistics, part of the University of Lincoln grant funding project
• Blackfriars Arts Centre refurbishment
• Healing the High Street, which included the refurbishment of Shodfriars and shop frontages in the town centre
• Boston railway station refurbishment

Ms Parikh added that the Leveling Up Fund round two, which related to the Boston road square master plan, which included the public ram works the civic hub, and the Crown House, and the Leveling of Partnership funding, which is another 17 million, about 16.9 million that we received last year were also running.

Councillor Anton Dani sought clarification on discrepancies in the funding totals for the Boston Leisure project. Councillor Stephen Woodliffe asked for an update on the Boston railway station refurbishment.

Internal Audit Annual Report and Opinion 2024/25

Claire Goodenough, Head of Internal Audit, presented the Internal Audit Annual Report and Opinion 2024/25. The report provided an adequate assurance against the ratings for governance, risk and the control environment for the council. The report also included a brief statement on suggested improvements to improve oversight and procedures for outsourced activities.

Councillor Barrie Pierpoint, Chairman of the Committee, raised concerns about the time taken to address identified gaps and weaknesses. Councillor David Middleton questioned the council's decision to give PSPSL the work of sorting out and placing insurance contracts.

Brendan Arnold, Interim Director of Finance (S151 Officer), clarified that the term adequate was a positive opinion and that the council's audit opinions were the envy of many councils. He also noted that the insurance contracts had been subject to a tender process and that the bank reconciliation had been dealt with.

Councillor Adam Cartwright asked for clarification on whether PSPSL had outsourced an insurance contract to an external provider called TRF. Councillor Woodliffe asked what 'adequate' really meant. Councillor James Cantwell said that the limited insurance should not be seen again on the 2526 audit.

Ms Goodenough clarified that adequate meant fit for purpose, satisfactory, and reasonable.

Quarter 4 Risk Report 24/25

Suzanne Rolfe, Group Manager – Insights & Transformation, presented the Quarter 4 Risk Report 24/25. The report provided an update on risks as at the end of March 2025.

Ms Rolfe drew attention to paragraph 1.5, which picked up the training session that was talked about at the last meeting. The training was scheduled for Monday, 15 September, starting at 6pm in the committee room.

Ms Rolfe noted that the depot risk had reduced from high to medium due to a lease agreement being in place. She also noted a new risk around local government reorganisation.

Councillor Cantwell noted that there had been a number of battery storage projects which have come into his ward and that the civil contingency risks needed to be completely reviewed because at the moment there is no requirement for civil contingency planning around those sites. Councillor Mike Gilbert noted that 28 should appear in the risk score matrix in the top right hand corner. Councillor Cartwright asked about BBC 19, the staff retention risk, which had been deleted. Councillor Anton Dani requested that the previous risk level be included in the report. Councillor Woodliffe said there was nothing in the report about AI, or more importantly, general AI and the impact upon the Council going forward.

Annual Treasury Report 2024/25

Sean Howsam, Interim Treasury Manager (PSPSL), presented the Annual Treasury Report 2024/25. The purpose of this report was to provide members with the annual Treasury report for 2024-25 financial year in accordance with the Chartered Institute of Public Finance and Accounts Code of Practice on Treasury Management to ensure that best practice is maintained.

Mr Howsam noted that the actual capital expenditure during the year was $15,257,000, of which $14,853,000 was financed, leaving unfinance capital expenditure of $404,000, which increases the overall Council's underlying need to borrow. He added that the council currently has one million pounds worth of borrowing and that capital financing requirement, borrowing requirement of 18,499,000. So they are considerably under borrowed.

Mr Howsam said that the reserve balances had increased up to just under 54 million pounds, and the main reason for that increase is a result of the capital grants on applied position, because the council received approximately 19 million pounds worth of grants during the year, which haven't been applied to capital expenditure at the moment.

Councillor Middleton asked if there was any possibility that the holdings we have are likely to recover to the value which we purchased them from. Councillor Dani was very pleased to see that we don't have any borrowing.

The committee approved the recommendation that the Audit and Governance Committee scrutinise the Annual Treasury Report 2425 at Appendix 1 and make any comments for consideration by council when they consider this document for approval at their meeting on the 21st of July 2025.

Annual Governance Statement (AGS) 2024/25

Suzanne Rolfe, Group Manager – Insights & Transformation, presented a report to provide assurance on the council's governance framework. This report was an update on last year's and included any changes that have taken place in the last 12 months.

Ms Rolfe drew attention to page 90 of the report pack, which gave a table of the actions that were set out in the previous year that we would do. She noted that the in-year monitoring had been completed, the no assurance order to procurement cards and the limited assurance order to payroll reconciliation have had their follow up audits to confirm that the controls have improved, the alignment of the constitutions is on hold pending LGR, and similarly, the member development groups will remain at individual councils rather than relaunching partnership wide.

Ms Rolfe added that on page 91, we have the two new actions that are identified for the year ahead, one is around budget setting and the medium term financial strategy, which is a later item on the agenda, and then potential plans for remote meetings and proxy voting.

The committee approved the recommendation to review and approve the Annual Governance Statement 2425.

Unaudited Financial Statements 2024/25 including Narrative Report

Ellie Stacey, Deputy Chief Finance Officer (Corporate) PSPSL, presented the unaudited financial statements for 2425. Ms Stacey reported that these were completed in advance of the deadline of the 30th of June 2025. She noted that the AGS Annual Governance Statement was included in the draft financial statements that have been published on the website for the public inspection period.

Ms Stacey said that the main change that members will see from the previous year's financial statements was the new accounting standard IFRS 16 leases, which came into effect on the 1st of April 2024. She added that there is no impact on the taxpayer for any changes as a result of this new accounting standard, it is purely presentational for the purposes of the financial statements.

Ms Start noted that the general fund out-turn table showed a surplus of 1.015 million pounds, and that one of the main contributing factors to that is the overachievement on investment income. She added that the capital financial performance was underspent against the capital programme of just over 5.7 million pounds, and that the earmarked reserves have increased by £3.256 million and that includes the transfer of the surplus against the budget for 24-25.

Councillor Woodliffe asked about the Boston station towns fund figure on page 109. Councillor Cantwell asked if the council has any other interesting companies at all apart from PSPSL. Councillor Cartwright asked about the debt impairment on housing benefit on page 134 and the wording at the bottom of page 104. Councillor Middleton asked about the impact of an asset ceiling is $7.925 million on page 134. Councillor Dani asked about PE21 Rosgard Square on page 109.

Budget Preparation 2026/27 - Approach & Process

Brendan Arnold, Interim Director of Finance (S151 Officer), presented a report to ensure that the Committee receives a thorough briefing on the system that the Council wishes to use in preparation of the 2026/27 Budget, is able to ask questions of the Section 151 Officer and able to gain assurance from the arrangements described.

Mr Arnold said that the key themes that he found related to a lack of time to properly consider the budget risks that were in frame, almost to sense that when the budget settlement arrived in late December, that's really when the starting gun went off of the budget.

Councillor Cartwright asked how the lack of staffing implications had been managed. Councillor Woodliffe said that we did unstable times and we really don't know what's likely to happen financially in the country as a whole. Councillor Dani wanted to know how we can deliver things in the proper way without putting, you know, our departments under pressure. Councillor Pryke said it was a very good piece of work and I wish it well.

Work Programme

The committee noted the work programme. Councillor Pierpoint said he would be very keen for this committee to have a skills matrix, what each member of this committee offers, the A&G committee, and to see whether any shortage of any skills on this committee.

Exclusion of Public and Press

The committee approved the exclusion of the public and press to consider the review of the Council's Property Fund Investments.