The Audit and Governance Committee of Plymouth City Council met on 16 September 2025 to consider reports on external audit, risk management, internal audit progress, and other governance matters. The committee was also scheduled to discuss the Armada Way Independent Learning Review, and a new engagement and consultation framework.

External Audit and Management Response

The committee was scheduled to receive an update on the external audit report, and to review the management response to actions recommended by external auditors. A report in the Public reports pack Tuesday 16-Sep-2025 14.00 Audit and Governance Committee noted that external auditors report findings and make recommendations each year following their audit of the council's financial statements. The report also noted that external auditors consider the council's arrangements for securing value for money, and provide commentary in an annual audit report. The report stated that 22 out of 23 external audit recommendations arising from the audit of the council's 2020/21 accounts, and all recommendations arising from the audit of the 2019/20 accounts, have been implemented and closed as complete. The report also stated that further work relating to the final outstanding recommendation (concerning working papers and audit trails for asset accounting) was ongoing, with further training for capital project managers planned during 2025. The report stated that 8 of 15 external audit recommendations arising from the more recent audit of the council's 2023/24 statement of accounts have been closed, with implementation of the remaining 7 recommendations underway. The report also stated that the most recent annual audit report (for the financial year 2023/24) contained 3 key recommendations and 5 improvement recommendations, and that many of these recommendations relate to annual processes and are longer term in nature.

CIPFA Financial Management Code Assessment

The committee was scheduled to receive the findings of an independent internal audit assessment of Plymouth City Council's compliance with the CIPFA* Financial Management Code (FM Code) for 2025. The CIPFA Financial Management Code Assessment 2025 v2 report stated that the FM Code sets out principles and standards of good financial management to support financial sustainability and effective governance in local authorities. The report stated that the independent assessment undertaken by Devon Assurance Partnership provided reasonable assurance on the council's compliance with the FM Code. The report also stated that four key standards required attention to strengthen financial resilience, stakeholder engagement, and value-for-money decision-making:

• Financial Resilience Assessment (FM Standard F)
• Medium-Term Financial Planning (FM Standard I)
• Stakeholder Engagement (FM Standard L)
• Option Appraisal Methodology (FM Standard M)

Internal Audit Progress

The committee was scheduled to receive an update on internal audit activity. The AG Committee Internal Audit Progress Report 160925 v2 stated that, as of 30 June 2025, 38% of the 2025/26 Internal Audit Plan has either been completed or is currently in progress. The report also stated that of the audits finalised to date, 64% have resulted in a Reasonable Assurance or Certified opinion, reflecting generally sound governance and control frameworks across the council. The report noted that key areas reviewed in the 2025/26 Plan so far include cyber risk governance, school transport and purchasing card compliance. The report stated that several audits identified opportunities for improvement, particularly in cyber security governance, and joint-funded care arrangements, which received Limited Assurance ratings.

Risk Management

The committee was scheduled to receive an update on the council's strategic risk register. The AG - RISK Committee Report 2025.09 stated that the strategic risk profile has remained reasonably stable between Q4 of 2024/25 and Q1 of 2024/25, with 17 strategic risks held on the register (one less than Q4). The report also stated that the most concerning risks were those with 'Management effort required' and 'Management effort worthwhile' status, particularly in the areas of social care sustainability, cyber-security, and organisational financial management. The report noted that the strategic risk previously covering 'Social Care Sustainability' has been divided into two distinct risks: one focused on Adult Social Care and another on Children's Social Care. The report also noted that the two strategic risks listed below have been reclassified as operational risks:

• Concession bus fares reimbursement, and
• Emergency Response Centre (ERC) back-up power.

IFRS16 Leases

The committee was scheduled to receive a report providing a summary of the key changes and implications of implementing International Financial Reporting Standard 16 Leases (IFRS 16 Leases). The IFRS16 Update Report September 2025 stated that the introduction of IFRS 16 aims to enhance transparency and comparability in financial reporting by bringing leases onto the Balance Sheet. The report also stated that, as per Note 32 in the council's 2024-25 accounts, the accounting change required new accounting treatment for approximately 100 assets, of which 59 are property or land, 8 are vehicles and 32 equipment, and that the council also has 2 Private Finance Initiatives (PFI), one for the Energy from Waste Plant (EfW) and a separate one for schools.

Armada Way Independent Learning Review

The committee was scheduled to discuss the establishment of a sub-committee to monitor the progress of the Armada Way Independent Learning Review Action Plan. The Armada Way ILR sub-committee 02 09 2025 report stated that the committee had previously delegated the authority to approve the Terms of Reference, membership and arrangements to the Chair and Vice Chair of Audit and Governance Committee, but that subsequent legal advice has been obtained which now requires this matter to be brought back to the Committee. The report set out three options for the establishment of the sub-committee:

• An informal working group
• An advisory committee
• A formal sub-committee of Audit and Governance Committee with co-opted members

New Engagement and Consultation Framework

The committee was scheduled to endorse a new Engagement and Consultation Framework. The Engagement A and G report cover sheet DRAFT stated that the new framework includes:

• A public-facing Engagement and Consultation Charter
• A staff toolkit and training programme
• An internal corporate engagement calendar and new public online hub
• Internal quarterly engagement reporting to improve information sharing
• A revitalised Community of Practice and Engagement Champions network