Councillor Paul Gray, Chairman of the Governance Committee, led a meeting where the committee reviewed the council's financial performance, risk management, and audit activities. Key items included the approval of the Internal Audit Strategy 2025-28, consideration of the Annual Treasury Management Outturn Report 2024/25, and a discussion on the Local Government and Social Care Ombudsman's Annual Review Letter. The committee also examined management responses to outstanding internal audit actions and the progress of the Internal Audit Plan.

Internal Audit Strategy 2025-28

The committee was asked to consider the Internal Audit Strategy 2025-28, as outlined in the Internal Audit Strategy 25-28 Report. This strategy is a requirement of the Global Internal Audit Standards in the UK Public Sector¹ and includes a vision, strategic objectives, and supporting initiatives for the internal audit function. The aim is to guide the internal audit function towards fulfilling its mandate.

The Southern Internal Audit Partnership (SIAP) conducted a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to identify potential areas for development. A survey was distributed to governance committee members and senior officers to gather their views on seven potential objectives. The top three objectives, as detailed in Internal Audit Strategy Appendix A, form the basis of the strategy:

• Agile Auditing: Innovate to explore a more agile approach to the audit process, building efficiencies and producing more timely feedback to the organisation.
• Optimisation of Standards: Embrace and prioritise conformance and embedding of the Global Internal Audit Standards in the UK Public Sector and maximising their potential to benefit the organisation and the internal audit function.
• Data Analytics by Default: Further engage with the organisation to enhance and optimise the full potential of data analytics in the internal audit process.

The committee was asked to note the strategy, with ongoing updates on the achievement and delivery of objectives to be provided in regular progress reports.

Annual Treasury Management Outturn Report 2024/25

The committee was asked to accept the Annual Treasury Management Outturn Report 2024/25, detailed in the Treasury Mgmt Outrun Report, and consider the council's performance against approved Prudential and Treasury Indicators.

The report covered the council's borrowing, investments, and cash flows, as well as money market and capital market activities for the period ending 31 March 2025. The council operates a balanced budget, and treasury management ensures cash flow is adequately planned, with surplus monies invested in low-risk counterparties.

Key points from the report included:

• Net investments of £36.8 million as of 31 March 2025.
• Borrowing of £2.829 million, a decrease of £0.113 million from the previous year.
• Investment performance and compliance with treasury management limits.

The report highlighted one instance of non-compliance with counterparty limits for individual counterparties, which was previously reported in the 2024/25 Mid-Year Treasury Management Report. Measures have been implemented to mitigate this issue, including opening treasury bank accounts with other banking institutions and investing in Money Market Funds².

Ombudsman Annual Review Letter

The committee received and noted the Local Government and Social Care Ombudsman's (LGSCO) Annual Review Letter, as detailed in the Ombudsman Annual Review Letter Report. The letter provides a summary of statistics on complaints made to the LGSCO about the council for the year ending 31 March 2025.

The Annual Review letter confirmed that the Ombudsman undertook two detailed investigations into complaints against the council during the period, both of which were upheld.

The two complaints investigated were:

• Homelessness (2 April 2024): The council was found to be at fault for a delay in accepting the main housing duty and in offering temporary accommodation to Mrs. X. The council was required to pay Mrs. X £250 and provide training to housing officers to ensure that decisions regarding suitability of accommodation are properly documented.
• Housing benefit and council tax benefit (4 April 2024): The council was found to be at fault for delaying in dealing with Miss B's review request against large overpayments of housing benefit and council tax support. The council agreed to increase its payment to Miss B to £500.

The report noted that the council does not receive significant criticism from the Ombudsman, and that the council treats every complaint received as an opportunity to identify learning outcomes and improve service provision.

Management Response to Outstanding Internal Audit Actions

The committee reviewed the Management Response Report to outstanding Internal Audit actions. The Internal Audit Progress Report presented to the Governance Committee in June identified a number of outstanding management actions. Members of the Executive Leadership Team provided an update on the progress of dealing with these actions, particularly in key high-risk service areas.

Internal Audit Progress Report 2025-26

The committee considered the Internal Audit Progress Report 2025-26, as detailed in the Internal Audit Progress Report. The report provided an overview of internal audit activity and assurance work completed in accordance with the approved audit plan. As of the date of the report, there were six audits in progress. The report also included a summary of the council's progress with implementing management actions agreed following audit reviews.

External Quality Assessment 2025

The committee considered the arrangements for the external assessment of the Southern Internal Audit Partnership (SIAP) against the Global Internal Audit Standards in the UK Public Sector, as proposed in the External Quality Assessment 25 Report. The report provided an overview of the alternative options considered in commissioning an external assessor to undertake the independent assessment. It was proposed that the SIAP conduct their external assessment as a Self-Assessment with Independent Validation (SAIV).