The Audit Committee of Derbyshire County Council was scheduled to convene on 15 July 2025, to discuss a range of topics including performance monitoring, governance, audit reports, and counter-fraud strategies. The meeting was also scheduled to include a review of the council's financial performance and risk management.

Performance and Budget Monitoring

The committee was scheduled to review the Performance and Budget Monitoring Outturn 2024-25 as at Quarter 4. The report included updates on the Council Plan performance, the revenue budget position, and savings plans. The report noted that 9 of the 33 strategic objectives in the Council Plan had been completed, 14 showed good progress, and 10 required review. Key achievements included:

• Awarding 19,990 Crisis Payments via the Derbyshire Discretionary Fund.
• Supporting people with learning disabilities to move to community settings.
• Providing homes for over 1,000 children in care.
• Supporting people to live independently, with over 23,500 people supported in 2024-25.
• Completing over 9,700 Health and Wellbeing MOTs.
• Supporting entrepreneurs through the Business Start Up support scheme.
• Implementing the £47m Bus Service Improvement Plan.
• Working with the East Midlands Combined County Authority (EMCCA) to maximise benefits of the devolution deal.
• Delivering a £120m highways investment programme.
• Achieving better than national performance in GCSE results.
• Achieving a good or better rating from Ofsted for all children's homes.
• Achieving a Good rating from the Care Quality Commission.
• Achieving over £29.5m in budget savings.

Challenges included strategic objectives requiring review within Children's Services, the delivery of the Children's Services Financial Strategy, supporting independent living, and delivering an effective Highways Service.

The council had a net underspend of £0.582m against the approved Revenue Budget for 2024-25. This was due to savings from holding vacancies, additional income, and savings in corporate budgets. These were offset by overspends in Adult's and Children's Social Care services.

The report also detailed requests to carry forward commitments of £3.319m into 2025-26, including:

• £0.606m for Home to School Transport to fund additional staff.
• £1.433m for the Depot programme due to delays in determining detailed requirements.
• £0.399m for EMCCA expansion and transition to enable bid development.
• £0.250m for Highways severe weather to support future requirements.
• £0.027m for Asbestos Residual Removal to complete planned work.
• £0.253m for County Hall Winter Gardens for additional structural works.
• £0.350m for Ilkeston Library External Maintenance, with works scheduled for April 2025.

Savings delivery was at 93% of the £31.940m target, with £2.254m not delivered but replaced with other savings.

The Dedicated Schools Grant (DSG) had an accumulated overspend of £16.945m at the end of 2023-24, with a further in-year deficit of £27.292m at the year-end, resulting in an overall cumulative deficit of £44.737m. This was due to expenditure pressures on the High Needs Block, with a significant in-year deficit of £31.130m.

The Council's General Reserve was £38.831m after transfers from Earmarked Reserves and the in-year underspend.

Outstanding debt as at 31 March 2025 was £45.449m, with £1.313m of debt written off in the 12 months up to that date.

Annual Governance Statement

The committee was scheduled to consider and approve the Annual Governance Statement 202425 for inclusion in the Council's Statutory Accounts. The statement describes the council's corporate governance arrangements, including systems, processes and values. The Council's Governance Group reviewed the statement and associated action plan. The process included:

• Reviewing governance arrangements against the CIPFA/Solace framework¹.
• Assessing effectiveness against the Local Code of Corporate Governance.
• Obtaining assurance from each Executive Director.
• Considering external assessments.
• Monitoring progress against recommendations in the 2023/24 statement.

The proposed statement included an updated action plan for implementation in 2025/26.

Local Code of Corporate Governance

The committee was scheduled to approve the Updated Local Code of Corporate Governance, which describes the governance and accountability arrangements in place at the council. The code is based on seven core principles from CIPFA/SOLACE best practice guidance¹:

• Integrity and ethical values
• Openness and stakeholder engagement
• Defining outcomes
• Determining interventions
• Developing capacity
• Managing risks and performance
• Transparency and accountability

Internal Audit

The committee was scheduled to receive the Internal Audit Progress Report 15 July 2025, informing members of the progress against the approved Internal Audit Plan for 2024-25 as at 30 June 2025. The report noted that some work from the 2023-24 plan was completed in 2024-25, and that audit staff routinely follow up on agreed recommendations. Since the last progress report in March 2025, 16 final reports had been issued, with 3 draft reports awaiting management comment. The committee was also scheduled to review the Internal Audit Annual Report 202425, which provides a summary of the work undertaken by Internal Audit during 2024-25 and the results of that work. The report includes the Internal Audit Annual Opinion, which evaluates the adequacy and effectiveness of the council's risk management, control, and governance processes. The report noted that the opinion for 2024/25 was one of limited assurance, reflecting the requirement to improve due to the significant risks being faced by the organisation to achieve its objectives.

Counter Fraud Strategy

The committee was scheduled to review and approve the Counter Fraud Strategy for 2025-26, which details the council's zero tolerance to fraud and corruption, key fraud risks, and counter fraud controls. The strategy is refreshed annually and includes the Fraud Response Plan, which details how allegations of fraud will be investigated. The 2025-26 refresh reflects current and emerging fraud risks, including the impact of the Economic Crime and Corporate Transparency Act 2023. The proposed investigation approach has been updated to reflect a new joined up approach, with Internal Audit working together with Legal and HR colleagues.

Regulation of Investigatory Powers Act (RIPA)

The committee was scheduled to receive an RIPA Update on the use of the Council's statutory powers provided for under the Regulation of Investigatory Powers Act 2000 as amended by the Investigatory Powers Act 2016. The report covers the period from 1 January 2025 to 30 June 2025 and sets out details of applications made. One application had been made in this period in respect of access to Communications Data, relating to an investigation within Trading Standards. No applications had been received in relation to directed surveillance, and no requests for access to internal emails, Teams chat and internet activity were received to support internal investigations. The Council's RIPA policy was being updated to reflect the release of updated Codes of Practice, and training and awareness activity will be programmed following the approval of the updated RIPA Policy.

External Audit

The committee was scheduled to consider the Draft Audit Strategy Memorandum 2024-25 from Forvis Mazars, the external auditor for the Derbyshire Pension Fund. The report summarises the audit approach, including significant audit risks and areas of key judgement, and provides details of the audit team.

The audit scope includes forming and expressing an opinion on whether the financial statements are prepared in accordance with the Code of Practice on Local Authority Accounting, and obtaining an understanding of internal control relevant to the audit. The audit approach is risk-based, with procedures focused on areas with a higher risk of material misstatement.

The report identifies the following significant risks:

• Management override of controls
• Valuation of investments within level 3 of the fair value hierarchy

The proposed fee for the audit was £120,698.