The Audit and Governance Committee of Woking Borough Council met on 18 September 2025 to discuss several key items, including a forensic review of the Housing Revenue Account, an update from external auditors, and the council's statement of accounts. The committee was also scheduled to review its work programme and action tracker, and to note the registration of interests for a member elected in July 2025. The meeting was held at the Council Chamber, Civic Offices, Gloucester Square in Woking.

Housing Revenue Account Forensic Review

The committee was scheduled to consider a report on the Housing Revenue Account (HRA) Forensic Review, which had been received by the Executive at its meeting on 11 September 2025. Representatives from Forvis Mazars, Nigel Layton and Peter Morgan, were expected to be present to discuss the review.

The report concerned historic transactions in the Sheerwater Estate Regeneration Project that were charged to the HRA. The Executive had recommended to the council that:

• £3,841,106 be transferred from the General Fund to the HRA to rectify the Sheerwater Estate Regeneration Project transactions originally charged to the HRA.
• Interest of £649,476 be transferred from the General Fund to ensure the HRA is fully compensated.
• The transfer of the Yellow Phase land remains paused, pending a future report to the Executive.
• The total impact on the General Fund of £4.49 million would be funded by an existing legacy risk reserve, established to manage HRA legacy risks, through existing Capitalisation Directives provisionally approved by the Government.
• The Strategic Director for Finance should make the necessary changes to the relevant budgets and the associated accounting entries.
• Approved Debt Standstill and Cash Sweep arrangements will remain in place to ensure the Council continues to recover surplus cash from ThamesWey Group.

The Audit and Governance Committee was asked to consider the report and provide any comments to the Full Council on the recommendations proposed by the Executive.

The forensic review was initiated due to concerns about the legitimacy of certain transactions, predominantly historical, and focused principally on the Sheerwater Estate Regeneration project. The review was conducted in two phases by Forvis Mazars. Phase One focused on the Sheerwater Estate Regeneration project, while Phase Two incorporated a general review of HRA transactions, including recent and existing processes.

The transactions reviewed related to the Council's Sheerwater Estate Regeneration Project, for which funding was first released in April 2018 to support the creation of 1,142 new properties along with improved infrastructure and the development of leisure and commercial facilities intended to benefit the local area.

Phase One of the forensic review identified four past transactions that required further action, financial remediation, and/or legal advice:

• Discounted Land - Yellow Phase: Errors were identified in the Debt Supportable Workbook, which was used to calculate the debt value for the land and properties that are due to be transferred out of the HRA as part of the Sheerwater Regeneration Project's Yellow Phase.
• Birch and Pines Pub Demolition: The inclusion of the pub expenses totalling £231,924 within the HRA was considered inappropriate, as this expenditure does not benefit Council tenants.
• New Vision Homes Underwrite Agreement: New Vision Homes (NVH) completed planning and design work for the Sheerwater Regeneration project at a cost of £3.8m to the HRA. Following the appointment of ThamesWey to construct the project, the planning and designs were transferred to ThamesWey without payment.
• Purchase of Affordable Homes: To assemble the land for the full regeneration project, the Council acquired 42 properties from Housing Associations. Of these, 11 properties were transferred to ThamesWey at a cost of £3.5 million for their four residential phases.

The council sought legal advice from King's Counsel James Goudie, whose advice broadly agreed with Forvis Mazars' findings and recommendations.

Phase Two of the review covered ThamesWey Energy Limited (TEL) and ThamesWey Solar Limited (TSL) charges to the HRA, the allocation of overheads to the HRA, and a high-level review of the HRA General Ledger. Mazars recommended that the Council undertake a comprehensive review of contractual arrangements with both TEL and TSL.

Update from External Audit (BDO)

Steve Bladen from BDO was scheduled to provide an update on the external audit for the years 2019-20 to 2022-23. The update included the status of the audit for each year and the expected type of opinion. BDO was also expected to provide a commentary on the council's arrangements for securing value for money for 2019/20 – 2022/23.

BDO's report noted that they had completed the work they considered necessary to give their audit opinion on the Council's draft financial statements, and that they were in the process of finalising their final quality reviews, drafting their Audit Report, their Audit Completion Report, and their Auditor's Annual Report.

BDO were also reviewing comments received on the draft by the Council and aimed to finalise their final audit reports over the summer, with a view to being presented to the Committee at its meetings in September or November.

BDO were also close to concluding its response to the objection from a local elector, which had been shared in draft with the objector for comment, and anticipated that this process would be completed over the summer.

Woking Borough Council Statement of Accounts Report 2024-25

Brendan Bradley was scheduled to present the draft statement of accounts for 2024/25. The statement of accounts is meant to enhance the financial accountability of the Council to those external to the Council. The external audit of the Statement of Accounts by the Council's external auditors (Grant Thornton) commenced on 15th September 2025.

The key sections of the accounts are:

• Explanatory Forward setting out the wider context and challenges faced at the Council.
• Independent Auditor's Report to Members of Woking Borough Council the Council's external auditors report is an independent opinion that the financial statement present a true and fair view of the financial position and performance in the financial year.
• Revenue Outturn Statements setting out the actual, budgeted and variances for Revenue (General Fund and Housing Revenue Account), and explanations of variances.
• Statement of Responsibilities summarising the council's responsibilities in terms of its financial affairs.
• Four primary financial statements:
  • Comprehensive Income and Expenditure Account (CIES) showing the accounting cost of providing services in the financial year in accordance with accounting practices.
  • Movement in Reserves Statements (MIRS) showing the starting position, movement and end position in different reserves held by the Council.
  • Balance Sheet showing the value of assets, liabilities and reserves at the financial year end for the Council.
  • Cashflow Statement showing the changes in cash and cash equivalents of the Council during the financial year.
• Notes to the Primary Statements a series of notes expanding on aspects of the above primary statements
• Supplementary statements which include:
  • Housing Revenue Account (HRA) the HRA Income and Expenditure Statement shows the accounting cost of providing housing services in the financial year in accordance with accounting practices.
  • Collection Fund Collection Fund Statement sets out the transactions of the Council in relation to the collection from taxpayers and distribution to Central Government, Surrey County Council and Surrey Police and Crime Commissioner of council tax and non-domestic rates.
  • Group Accounts a set of accounts that consolidates the transactions and balances of the Council's single entity accounts with other entities under the Council's ownership or control i.e. council-owned companies.
• Glossary of Terms setting out list of words used in the statement of accounts document alongside their definitions or explanations.
• Annual Governance Statement providing a overview of how the Council's governance arrangements operate, and assessment of their effectiveness and outlines the actions the Council will take over the next year to continue to strengthen its governance arrangements.

The committee was also scheduled to consider and approve the management responses to Grant Thornton's enquiries, as set out in Appendix 2 of the report.

Work Programme and Action Tracker

Stephen Fitzgerald and Adesuwa Omoregie were scheduled to present the Work Programme and Action Tracker. The work programme lists planned events for the committee, including reports from the Internal Audit service and the external audit function. The action tracker monitors the progress of actions arising from previous meetings.

Registration of Interests for Member Elected in July 2025

Adesuwa Omoregie was scheduled to present a report noting the registration of interests of Councillor Hughes, who was elected in July 2025. Under the Members' Code of Conduct, the newly-elected Member was required to register her interests with the Monitoring Officer within twenty-eight days of the election, and this obligation was complied with.