The Audit Committee of Erewash Borough Council was scheduled to meet on 16 September 2025 to discuss external and internal audit progress, risk management, and counter fraud measures. The committee was also expected to review the minutes from their previous meeting.

Counter Fraud Policy

The committee was scheduled to consider an updated Counter Fraud Policy and refer it to the council for approval. According to the Counter Fraud Policy Cover Report, the policy forms part of a suite of documents that are part of effective corporate governance arrangements, sitting alongside the Confidential Reporting Policy, codes of conduct for both members and employees, and the anti-money laundering procedure.

The draft Counter Fraud Policy included:

• Refreshed definitions of fraud.
• Inclusion of the Economic Crime and Corporate Transparency Act 2023.
• Additional paragraphs covering approval processes and system design.
• A new section covering the role of the Revenues and Benefits Service in relation to its work on behalf of the Department of Work and Pensions for Housing Benefits and Council Tax support, and its administration and recovery of Council Tax and Business Rates.
• A table explaining roles and responsibilities for the management of fraud.

The report pack noted that work was ongoing to develop mandatory fraud awareness training for all employees, utilising the council's e-learning provider. It was intended to promote the newly approved policy and launch the mandatory training in November to coincide with International Fraud Awareness Week (9-15 November 2025).

The Economic Crime and Corporate Transparency Act 2023 came into effect on 1 September 2025. The Act applies to large, incorporated bodies across all sectors and makes it easier to hold organisations to account for fraud committed by employees, or other associated persons, which may benefit the organisation.

Risk Management Strategy

The Audit Committee was scheduled to consider the updated Risk Management Strategy (RMS) 2025-2028 and recommend it to the council for formal approval. According to the Risk Management Strategy Cover Report, the RMS sets out a framework for how the council manages risks associated with the delivery of its services, including risk objectives and tools and techniques to be applied in day-to-day activities and decision making. The 2025 version supersedes the 2018 Risk Management Strategy.

The key updates in the new RMS included:

• The inclusion of a Risk Appetite Statement, which sets out how the council may be prepared to accept, tolerate or be exposed to risk in some decision making, but in matters of legal and regulatory duties, welfare and safeguarding, it will always seek to reduce risk as far as possible.
• Providing improved clarity between Strategic Risks and Operational and Regulatory Risks.
• A roles and responsibilities table showing how risk management must be owned and managed at all levels within the council.
• Updates to the risk management process.
• Inclusion of the Annual Assurance Declaration, a new sign off introduced in 2025, which requires all Heads of Service to certify that they are identifying and managing risk within their areas of responsibility.
• A new section on risk management oversight covering the Assurance Framework, Annual Governance Statement and the role of the Audit Committee.

The Risk Management Strategy 2025 document is made up of six key sections:

• Risk management policy statement
• Risk appetite statement
• Risk management approach
• Our risk management process
• How we embed risk management
• Risk management oversight

Strategic Risk Register

The committee was scheduled to note the content of the attached Strategic Risk Register. According to the Strategic Risk Register Cover Report, the council recognises that it is exposed to a wide variety of risks and has a responsibility to manage those risks and opportunities effectively and in an integrated manner in order to achieve its corporate and service objectives.

The Strategic Risk Register attached to the report is the result of a review of the council's high-level risks performed during July/August 2025 and contains 9 live risks. Each risk has been considered in its inherent state (no control or mitigations) and its residual state (with controls and mitigations), utilising a standard 5x5 impact and likelihood risk management approach.

Key points to highlight to the Audit Committee were:

• Risk 4 Delivery of Town Deal projects: the residual risk has been increased to reflect increased significant over-budget forecasts of the High Street project. The extent of financial risk exposure is dependent upon efficiency savings vs risk allocation of the High Street project. The controls and actions to continue to manage and mitigate the risk are set out in more detail in the risk table.
• No overall change to the risk profiles of the other strategic risks. Controls and action updates have been documented.

External Audit Progress Report

The Audit Committee was scheduled to receive an update on the external audit position on the audit of the statement of accounts for 2024/25. The External Audit Progress Report from Forvis Mazars LLP provided an update on the latest external audit position, the latest backstop arrangements, and the latest value for money arrangements.

The backstop date for the 2024/25 financial year is 27 February 2026.

The report noted that under normal circumstances, auditors would usually rely on assurance obtained in the prior period to be satisfied that the opening balances in the current year are free from material error. However, following the completion of audit procedures on in-year transactions, the auditor would usually be able to form an opinion on the current year's financial statements. When a disclaimer of opinion has been issued in the prior periods, no such assurance can be taken and the auditor must design alternative audit procedures to be able to form a position on the current year's financial statements.

The audit team determined that the proof in total approach is appropriate for Erewash Borough Council. The next stage is for them to undertake their detailed risk assessment to determine exactly what audit procedures are required.

Forvis Mazars anticipated issuing a disclaimed audit opinion on the Council's 2024/25 financial statements, but expected to complete the proof in total procedures required to rebuild assurance from previous years during the 2025/26 audit, which would allow them to perform a full audit and issue an unmodified opinion in 2026/27.

The NAO's revised Code of Audit Practice from 2024/25 requires auditors to issue their Auditor's Annual Report, which includes commentary on the council's Value for Money arrangements, by 30 November each year. At the time of writing the report, Forvis Mazars had started their initial risk assessment, and management had completed their self assessment, and they had not identified any risks of significant weaknesses in the council's arrangements.

Internal Audit Progress Report

The Audit Committee was scheduled to receive an update on Internal Audit activities since the last meeting in July 2025.

The Internal Audit Progress Report noted that progress had been made in relation to a number of audits. The objectives, findings and status of the recommendations for the completed reviews are set out in Appendix 1.

The following table details the audits completed since the last meeting:

Five audits were in various stages of progress, with the expectation that at least 3 would be completed for reporting in time for the December meeting.

During the period since the last Audit Committee report:

• No new actions have been added to the tracker (the latest reports will be added to our September tracker)
• 12 actions have been closed or completed.
• 0 are currently reported as overdue by > 1 month, but 9 actions are running with agreed extended dates for target completion.

The report also noted that in July 2025, the council arranged for a qualified external body to perform a HGV 'O'Licence Compliance Health Check Audit and achieved 94.44% compliance, meaning standards met, minor actions required .