The Corporate Governance Committee convened to discuss several key reports, including the external audit progress, treasury management, risk management, insurance services, and internal audit work related to the East Midlands Shared Service. The committee approved the status of corporate and strategic risks and noted the remaining reports.

External Audit of the 2024/25 Statement of Accounts

The committee reviewed the progress of the external audit for the 2024/25 financial statements of both the County Council and the Pension Fund. Grant Thornton LLP, the external auditor, is responsible for auditing the council's financial statements and providing an opinion. The draft financial statements were published by the statutory deadline of 30 June 2025.

The audit of the Pension Fund was substantially complete, with no material issues identified and an unmodified audit opinion anticipated, pending final procedures and confirmations. The audit of the County Council's financial statements was in progress, with audit fieldwork and substantive testing underway, and no issues reported at this stage. The final audit opinion is expected by 31 December 2025.

The auditor is also required to report on the value for money (VfM) arrangements of the council, covering financial sustainability, governance, and improving economy, efficiency, and effectiveness. The final report is scheduled for the November 2025 committee meeting.

The committee was also provided with sector updates, including lessons from the 2023/24 auditors' annual reports, financial instruments in local government accounts, the local authority backstop¹, reorganisation updates, local government financial sustainability, the spending review, fair funding review 2.0, public procurement, and keeping fit for the future.

The committee noted the progress of the external audit of the financial statements.

Quarterly Treasury Management Report

The committee reviewed the actions taken regarding treasury management for the quarter ending 30 June 2025. The report included an economic background, detailing inflation, GDP, and Bank of England interest rate changes.

Investments in private debt and bank risk-sharing funds were outlined, showing capital levels, net asset value (NAV), and internal rate of return (IRR) for each fund. The council received distributions from Partners MAC IV (2017), MAC VI, Christofferson Robb and Company's (CRC) Capital Relief Fund 5 (CRF 5) and Partners MAC VII funds during the quarter.

Short-term investments were also summarised, with movements and key performance indicators (KPIs) such as the Annual Percentage Rate (APR) of the portfolio and the Weighted Average Maturity (WAM). The total balance available for short-term investment increased by £12.5m during the quarter.

The report noted that the total portfolio weighted APR decreased from 4.86% to 4.43% due to reductions in market rates, and there were no loans that breached the authorised lending list during the quarter.

The committee noted the contents of the report.

Risk Management Update

The committee reviewed the Corporate Risk Register (CRR) and emerging risks. A new risk was added regarding the East Midlands Gateway 2 (EMG2) Segro Development Consent Order (DCO) application, which, if approved without mitigating infrastructure, could significantly impact council services and stifle growth in the International Gateway. A risk concerning business intelligence was removed due to the successful migration of all data to a new physical server.

Emerging risks discussed included the Worker Protection Act² and local government reorganisation. The Worker Protection Act introduces a proactive duty for employers to take reasonable steps to prevent sexual harassment, and non-compliance could result in legal action and increased compensation claims. The council is working on policy, procedure, and a corporate risk assessment to address this.

Regarding local government reorganisation, the committee was updated on the government's policy and the local response, with a final proposal for a unitary structure required by 28 November 2025.

The committee approved the status of the corporate and strategic risks facing the County Council and noted the emerging risks.

Insurance Service – Annual Report 2024-25

The committee received the annual report on the work conducted by the Insurance Service, which arranges insurance cover and handles claims for the council, ESPO, and the East Midlands Freeport. The report detailed the insurance programme's re-procurement and annual renewals process, with contracts awarded to Maven Public Sector and Travelers Insurance Company Ltd.

The report also covered Municipal Mutual Insurance Ltd (MMI), the council's former insurer, which ceased writing insurance business in 1992 and is subject to a Scheme of Arrangement. The council is self-insured to the extent of 25% of any future claim payments due to MMI's financial difficulties.

Claims handling processes were outlined, with the Insurance Service employing experienced claims negotiators who handle liability claims against the council. The greatest numbers of claims arise from activities connected to highways maintenance, and the council needs to maintain its scheduled inspection regime to defend against claims.

The committee noted the Insurance Service annual report for 2024-25.

East Midlands Shared Service - Internal Audit Work Undertaken by Nottingham City Council

The committee reviewed the internal audit work undertaken by Nottingham City Council Internal Audit (NCCIA) for the East Midlands Shared Service (EMSS). NCCIA is the designated internal audit provider for EMSS, which processes HR, payroll, and finance transactions for Leicestershire County Council and Nottingham City Council.

The report provided details of the planned internal audit work at EMSS by NCCIA for the year 2025-26 and progress to date. The 2025-26 plan was approved by the Joint Committee on 11 September 2025.

The committee noted the contents of the report.