The Audit Committee of Spelthorne Borough Council is scheduled to meet on 25 September 2025 to discuss internal and external audit matters, governance arrangements, and risk management. The committee will review the Annual Governance Statement, consider a Value for Money report from BDO, and discuss the Internal Audit Strategy. Members will also note the arrangements for an external quality assessment of the Southern Internal Audit Partnership.

Here's a closer look at the key items on the agenda:

Annual Internal Audit Report and Conclusion 2024-25

The committee will be asked to consider the Annual Internal Audit Conclusion 2024-25. According to the report pack, the Annual Internal Audit Conclusion provides the Chief Internal Auditor's opinion on the effectiveness of the framework of governance, risk and control, summarising audit work from which that opinion is derived for the year 2024-25.

The Audit Committee's attention is drawn to the following points:

o Internal audit was compliant with the Public Sector Internal Audit Standards during 2024-25; o The revised internal audit plan for 2024-25 has been substantially delivered to draft report; however not all have been finalised; and o The Council's framework of governance, risk management and management control are considered to be 'Limited'.

The report also notes that the council received a Best Value Inspection letter from government and directions were made under section 15(5) and (6) of the Local Government Act 1999 in respect to the intervention at Spelthorne Borough Council.

The Annual Internal Audit Conclusion 2024-25 includes summaries of assurance reviews that were completed in 2024-25, including:

• Procurement
• Tree Maintenance
• SDS Commercial Waste
• Accounts Receivable & Debt Management
• Building Control
• Equality, Diversity & Inclusivity

Annual Governance Statement

The committee will be asked to review and approve the draft Annual Governance Statement (AGS). The AGS provides an overview of how the council's governance arrangements operated during the financial year 2024-25, and assesses their effectiveness. It identifies areas of weakness and outlines actions to strengthen governance arrangements in the coming year. The AGS describes how the council complied with the seven core principles within its code of corporate governance.

The report pack highlights that the council has been subject to a Best Value Inspection¹ and that the recommendations in the Best Value Inspection report are reflected in the AGS as actions for improvement for 2025-26.

Value for Money Reports - BDO

The committee will consider the Value for Money report from BDO, the council's previous external auditor. The Spelthorne BC - AAL and AAR 2018-23 FINAL 170925 covers the combined Annual Audit Letters for the years ended 31 March 2019 and 31 March 2020, and the Auditor's Annual Reports for the years ended 31 March 2021, 31 March 2022 and 31 March 2023.

The report states that BDO issued a disclaimer of opinion on the financial statements for the years ended 31 March 2019, 31 March 2020, 31 March 2021, 31 March 2022 and 31 March 2023. BDO were unable to conclude that, in all significant respects, the council had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resource for the years ended 31 March 2019, 31 March 2020, 31 March 2021, 31 March 2022 and 31 March 2023.

The report identifies a number of significant weaknesses, including:

• Medium Term Financial Sustainability
• Managing and utilising assets effectively
• Quality and robustness of information used for decision making
• Governance of Knowle Green Estates Ltd

External Audit Quality Assessment

The committee will note arrangements for the pending external assessment of the Southern Internal Audit Partnership (SIAP) against the Global Internal Audit Standards in the UK Public Sector. The External Quality Assessment Report states that the standards require the Chief Internal Auditor to develop a plan for an external quality assessment, to be performed at least once every five years by a qualified, independent assessor or assessment team.

The report pack includes Appendix A SIAP - Quality Assurance Improvement Programme - GIAS UK Public Sector, which outlines the programme that has been produced to evaluate the Southern Internal Audit Partnership's conformance with the Global Internal Audit Standards in the UK Public Sector, achieve established performance measures, and pursue continuous improvement.

Internal Audit Strategy

The committee will be asked to note the Internal Audit Strategy 2025-28. According to the Internal Audit Strategy 25-28 Report, the Global Internal Audit Standards in the UK Public Sector requires the internal audit function to develop and maintain an internal audit strategy, which must include a vision, strategic objectives, and supporting initiatives.

The report pack includes Appendix A - Internal Audit Strategy 2025-28, which states the vision of the Southern Internal Audit Partnership:

A collaborative Partnership delivering an innovative, customer focused, and value adding audit and advisory service aligned to organisational objectives and improved outcomes.

The strategy will be realised through delivery of key objectives that will help shape service provision and futureproof the Southern Internal Audit Partnership through continued learning & development. The report also includes Appendix B - Feedback Prioritisation of Objectives, which summarises the feedback from Audit Committee members and senior officers across the wider Partnership.

Internal Audit Progress Report

The committee will be asked to note the Internal Audit Progress Report – August 2025 and approve the adjustments to the internal audit plan 2025-26. The Internal Audit Progress Report August 2025 - Cover Paper provides an overview of internal audit activity against assurance work completed in accordance with the approved audit plan for 2025-26, and provides an overview of the outstanding management actions.

Appendix A - Internal Audit Progress Report August 25-26 notes that progress against the plan for the year to date has been slower than anticipated due to conflicting priorities of officers at the Council, the ongoing need to fulfil the 2024-25 audit plan, and a stretch on resourcing within the partnership.

Public Questions

The Public Questions document contains questions submitted by Kath Sanders, regarding the draft statement of accounts for 2024/25, the corporate risk to the Council, and whether the Changes in risk scores and other key updates in the covering report for September's update properly highlight the main areas of concern.

Other Business

The agenda also includes the following items:

• Committee Forward Plan
• Value for Money - Grant Thornton (report to follow)
• Audit Committee Governance Arrangements (verbal update)
• Corporate Risk Management (Corporate Risk Register) (verbal update)
• Argus Software Discussion