The Audit and Governance Committee for Sutton Council met on 10 July 2025 to review the council's governance, risk management, and audit processes. The committee was scheduled to discuss the annual reports on governance, risk management, human resources, and treasury management, as well as the operation of the code of conduct and member development. They were also scheduled to review the external audit plan and internal audit activity.

Annual Governance Statement

The committee was scheduled to review the council's Annual Governance Statement for 2024/25. The annual governance statement is required to comply with Regulation 6 (3) of the Accounts and Audit Regulations 2015 and the Chartered Institute of Public Finance and Accountancy (CIPFA)/SOLACE standards¹. The annual review assesses whether the council complied with the principles of the CIPFA/SOLACE framework for good governance during 2024/25.

Corporate governance is defined, for the purposes of this report as: 'The framework of accountability to users, stakeholders and the wider community, within which organisations take decisions,and lead and control their functions, to achieve objectives. The quality of corporate governance arrangements is a key determinant of the quality of services provided by organisations'

The report notes that the external auditor KPMG made no recommendations in their review for 2023/24.

Annual Review of Risk Management Strategy and Corporate Risk Register

The committee was scheduled to review the council's risk management strategy and the corporate risk register. The Risk Management Strategy and Guidance was developed to integrate risk management into the day to day activities of officers and the culture of the organisation. The Corporate Risk Register identifies the key risks to the organisation and actions required to mitigate these. The key risks identified in the register are:

• The council requiring exceptional financial support to set a balanced budget in future years
• Failure to reduce carbon emissions in the borough in line with the council's commitments and the impacts of dealing with more extreme weather events
• Housing Revenue Account: Impact of inflation, capping of rent increases, range of investment priorities and pressures
• Risks associated with damp and mould in social housing
• Technology failure, Cyber Security risks leading to data loss or loss of systems for a period of time
• The negative impact of the planned NHS changes on the council's resources and ability to deliver care and support for the local population

HR Update

The committee was scheduled to receive an update on key HR workforce data and the overall direction of travel of the Human Resources and Organisational Development (HR&OD) service. The report sets out the support and development provided to the council's workforce to enable them to deliver the best quality services to residents and also to provide them with an inclusive, productive working environment. The report notes that the council has introduced a recruitment pause from September 2023 in response to budget pressures. Other key points from the report:

• Agency worker usage has increased from 141 agency workers at the end of March 2024 to 196 at the end of March 2025.
• Turnover, at 13%, has decreased by 0.3% this year in comparison to last year.
• The average sickness rate has remained stable in the last year at 3.7% compared to 3.64% in 2023/24.
• The council's apprenticeships continue, with 31 apprenticeships in post (five completed their studies during the year) on 31 March 2025 and eight in schools (one completed their studies during the year).
• A structured work experience programme offered placements for thirty seven Year 10 and 12 students in July 2024, including attendees from Cheam High School, Carew Academy, and a care experienced cohort.
• Two supported Interns completed their placement this year, with all interns moving on to further employment or educational opportunities.
• The Mentoring, Advocacy, and Peer Support (MAPS) recruitment campaign successfully engaged staff through a live-streamed event hosted by the Chief Executive and MAPS team. As a result, 25 staff members signed up to become mentors, for children and young people in Sutton.
• 'Care Experienced' was confirmed by the Strategy and Resources Committee (20 February 2023) as a recognised protected characteristic for Sutton council.
• The Aspiring to Thrive programme will support care leavers with their journey to independence and employment.
• The pulse survey in October 2023 showed an overall picture of an engaged and positive workforce with the highest scores being 8.4 out of 10 felt that Sutton Council is committed to being a diverse and inclusive workplace, whilst 8.5/10 felt that they are treated fairly by their manager and colleagues.
• An improved Health and Safety (H&S) governance structure has been in place for 18 months, to ensure the council continues to meet the legal duty to consult with staff.
• The H&S team continues to provide support to other directorates and occupiers in the operational buildings and to ensure that the relevant procedures are documented and in place, and are understood by building users.
• The H&S team has updated the following policies to reflect the way the Council supports staff and the organisation to work safely and comply with health and safety legislation: Corporate Warning System Policy, Driving Policy, Personal Safety, Asbestos policy, Water Management Plan.

Internal Audit Annual Report

The committee was scheduled to receive the Internal Audit Annual Report 2024/25. The report includes the Head of Internal Audit's opinion on the overall adequacy and effectiveness of the organisation's framework of governance, risk management and internal control. The Head of Internal Audit's opinion was that they were satisfied that sufficient internal audit work has been undertaken to allow them to draw a reasonable conclusion as to the adequacy and effectiveness of the Council's control, risk and governance environment. The report notes that 85% of audits undertaken (where assurance opinions were provided) were given Reasonable or Substantial Assurance. The report also notes that there were 5 limited assurance reviews on Sutton Housing Partnership Aids and Adaptation, Sherwood Park School, Foresters Primary School, appointee and deputyships, and commercial rents.

External Audit Plan

The committee was scheduled to discuss the draft 2024/25 External Audit Plan. KPMG, the council's external auditors, will undertake the statutory audits of the 2024/25 Council and Group accounts, and the 2024/25 Pension Fund accounts. They will also complete a review of the council's arrangements for securing economy, efficiency and effectiveness in use of resources. The audit plan identifies the following significant risks:

• Valuation of land and buildings, including investment property
• Management override of controls
• Valuation of post retirement benefit obligations The audit plan also identifies the adoption of IFRS 16² as an area of focus.

Treasury Management Annual Report

The committee was scheduled to review the Treasury Management Annual Report 2024/25. The report summarises the council's treasury management operations during the financial year 2024/25. The report notes that the council's overall external debt at 31 March 2025 totalled £422.3m of which £312.3m was with the Public Works Loan Board (PWLB), £10m was with individual banks and £100.0m raised from the Bond issue in November 2020. The report also notes that the council's investment policy is governed by Department for Levelling Up, Housing and Communities (DLUHC) investment guidance.

Operation of the Code of Conduct

The committee was scheduled to receive a bi-annual report on the Operation of the Code of Conduct. The Code of Conduct outlines to councillors the standards they are expected to uphold in public life. The report includes a table giving a high level overview of the status of complaints received since the last report.

Member Development Update

The committee was scheduled to receive an update on the Member Development programme. The Member Development Programme is provided to all councillors to develop their skills as elected representatives and improve their knowledge of key subject areas relevant to the council's priorities. The report includes a provisional programme for 2025/26, including sessions on The New National Planning Policy Framework, Community Safety, and Children's Services Update.