The Combined Fire Authority for County Durham and Darlington Audit and Finance Committee were scheduled to meet to discuss the audit completion certificate, a progress report from auditors Mazars, and the revenue and capital outturn for the previous financial year. Also on the agenda was the Annual Governance Statement, the Annual Internal Audit Opinion and Report, and the Fraud and Corruption Annual Report. The committee was also scheduled to discuss the forecast outturn for 2025/26, short-term investments and long-term borrowing, and the corporate risk register.

Corporate Risk Register

The committee was scheduled to review the Corporate Risk Register as of 31 August 2025. The register summarised high-level risks facing the County Durham and Darlington Fire and Rescue Service. The report pack included the following risks:

• A heightened terrorist threat in County Durham and Darlington increasing the risk to CDDFRS staff and communities.
• Failure to respond effectively and provide services due to industrial action.
• Failure to achieve savings via the service transformation options outlined in the Community Risk Management Plan (CRMP) consultation leading to a greater budget deficit.
• The actual position relating to pay awards, inflation and grant cuts etc, turns out to be different to the assumptions underpinning the Medium-Term Financial Plan (MTFP) leading to a greater budget deficit.
• Insufficient government funding to meet capital programme requirements which could impact on the revenue budget leading to an increased MTFP deficit.
• Changes to public sector pension schemes could lead to higher employer and employee contributions; increased turnover of staff; difficulty in recruiting and retaining high calibre staff and a reduction in staff morale and productivity.

For each risk, the register detailed the original risk, the gross risk score, and the residual risk score after taking mitigating actions.

Forecast of Outturn

The committee was scheduled to discuss the forecast revenue and capital outturn position based upon expenditure and income to 30 June 2025. The report pack stated that the forecast revenue outturn position to 31 March 2026 was an underspend of £0.129M (0.35%). The report pack also stated that the capital budget for 2025/26 was £8.231M, and based on current information, the forecast outturn position was an underspend of £1.500M (18.22%). The report pack detailed the following variances:

• Salaries & Wages - Forecast Outturn £642,000 (2.16%) Overspent
• Ill Health Charges – Forecast Outturn £132,000 (19.85%) Overspent
• Premises – Forecast Outturn £0.265M (7.41%) Overspent
• Capital Financing – Forecast Outturn £202,000 (9.06%) Underspent
• Contingencies – Forecast Outturn £966,000 (75.00%) Underspent
• New Service Headquarters - Due to a change to the estimated start date on site, expenditure on the project is estimated to be £1.500M below budget in 2025/26.

The report pack also included a table setting out the Authority's reserves position.

Annual Internal Audit Opinion and Report

The committee was scheduled to consider the Annual Internal Audit Report for 2024/25. The report stated that Internal Audit was able to provide a Moderate overall assurance opinion on the adequacy and effectiveness of internal control operating across the Authority in 2024/25. The report pack stated that the moderate opinion provides assurance that there is a sound system of control in place however there are some weaknesses and evidence of ineffective controls. The report also summarised the audit work carried out, and detailed the audit quality assurance framework.

Annual Governance Statement

The committee was scheduled to approve the Annual Governance Statement (AGS) for 2024/25. The AGS sets out the Authority's approach to corporate governance and identifies the key governance risks that have been identified throughout the year. The AGS reflects the requirements of the Delivering Good Governance in Local Government Framework (2016). The report pack included the Corporate Governance Action Plan 2024/25, which detailed the following findings:

• Public Sector Spending - The impact of spending reductions in the public sector is a key governance issue for the Fire Authority.
• Assumptions Underpinning the Medium-Term Financial Plan - The assumptions made in the medium-term financial plan are subject to change from economic circumstances and public finances in general.
• Impact of Changes to the Firefighters Pension Scheme - The service will closely monitor the impact of changes to the Firefighters Pension Scheme in terms of cost, business continuity, resilience, and local industrial relations.
• Collaboration - Collaboration will continue to be addressed pro-actively in terms of collaborating with other Fire and Rescue Services, the Police, Northeast Ambulance Service and other organisations.
• Fire Service Inspectorate (HMICFRS) - The Service should look to increase its learning capacity further to receiving the outcomes of its inspection and through engagement with Durham Constabulary
• HMICFRS Spotlight Report – Values and Culture in Fire and Rescue services - The Service should monitor progress towards addressing the actions outlined in the Spotlight Report.

Fraud and Corruption Annual Report

The committee was scheduled to be advised on the results of work being undertaken within the Authority in seeking to identify, control and prevent fraud and corruption. The report pack stated that the Authority has in place a framework of written procedures and controls to help ensure the highest standards of conduct are practised. The report pack also detailed the Authority's responsibilities in relation to fraud and corruption, and the work of Internal Audit in this area. The report pack stated that Internal Audit supports management pro-actively in the prevention and identification of potential irregularity through membership of the National Anti-Fraud Network (NAFN) and directly through participation within the National Fraud Initiative (NFI). The report pack also included a fraud and corruption survey, which was used as a reference point against which fraud can be analysed and categorised.

Short-Term Investments and Long-Term Borrowing

The committee was scheduled to receive an update on the performance of the Authority's short-term investments and long-term loans for the period ended 30 June 2025. The report pack stated that interest of £113,461.84 had been earned up to 30 June 2025, which is above the budgeted amount of £100,000.00 for the year to date. The short-term investments balance of £9,907,000.00 at 30 June 2025 was made up as follows:

The outstanding principal balance of £4,816,577.57 relating to long-term loans at 30 June 2025 was made up as follows:

Other Matters

The report pack also included the minutes from the previous meeting held on 10 April 2025.