The Hampshire County Council Audit Committee met on 25 September 2025 to discuss a range of issues, including the use of regulated investigatory powers, the annual governance statement action plan, and the appointment of the county returning officer. The committee also reviewed the unaudited statement of accounts for 2024/25, external audit progress reports for both the council and the pension fund, and the internal audit progress report. Additionally, the committee approved revisions to the Internal Audit Charter 2025-26.

Statement of Accounts 2024/25

The committee approved the unaudited Statement of Accounts for 2024/25 for both Hampshire County Council and the Hampshire Pension Fund. They also gave delegated authority to the Director of Corporate Operations, Andy Lowe, to approve non-material changes to the accounts, in agreement with the external auditor, prior to the final audit opinion and publication of the audited Statement of Accounts. The committee noted that letters of representation would be signed by Councillor Derek Mellor, Chair of the Audit Committee, and Andy Lowe, Director of Corporate Operations, at the audit's conclusion.

The report Statement of Accounts 2024/25 noted that the Accounts and Audit Regulations require the council to prepare and audit its annual Statement of Accounts. The draft Statement of Accounts had been published on 30 June 2025, beginning the period of public inspection.

The Statement of Accounts aims to provide information to:

Understand the overall financial position of the County Council and the outturn position for 2024/25; Have confidence that the public money with which the County Council has been entrusted has been used and accounted for in an appropriate manner; and Be assured that the financial position of the County Council is sound and secure.

The statement was prepared in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) requirements. A significant change for 2024/25 was the introduction of IFRS 16 (leases) from 1 April 2024¹.

The report also noted a number of changes to the accounts that had been discussed with the auditors:

• Adjustments to the collection fund figures
• Officer remuneration
• Pension assets and liabilities
• Cash and cash equivalents
• Leases
• Property, Plant and Equipment
• Depreciation on revalued assets
• Exit packages
• Other non-material changes

External Audit Progress Reports

The committee received progress reports from Ernst and Young (EY), the external auditor, for both Hampshire County Council and the Hampshire Pension Fund.

Hampshire County Council

The External Audit Progress Report noted that the audit was well progressed but remained ongoing, and no material issues had been identified to date. However, the report also noted some challenges in meeting the original timetable, including the requirement to audit group financial statements for the first time, the need to obtain revised IAS19 reporting for pension assets/liabilities, and complexities in selecting samples and obtaining evidence for debtors, creditors, and expenditure testing.

The report also included a summary of the main audit differences identified from completed work to date:

• Council Tax (CT) & NNDR Timing Differences in recording income
• CT and NNDR timing differences impact on Balance Sheet
• Overstatement of Lease Liabilities (LL) and Right Of Use assets (ROU) due to incorrect inclusion of costs in lease calculation
• Overstatement of non-school asset held at depreciated replacement cost

The report noted that EY were on track to complete the audit by the government's intended backstop date of 27 February 2026, and that the Audit Results Report for the 2024/25 Audit was expected to be brought to the January 2026 Committee meeting at the latest.

Hampshire Pension Fund

The Hampshire Pension Fund Audit Progress Report stated that the audit was on track, and listed the following outstanding items:

• Completion of testing of directly held properties
• Completion of journal entry testing selection and testing of investment journals
• Update of going concern procedures as at the date of signing the accounts
• Usual conclusion procedures and quality review checks, including receipt of final accounts and management representation letter

The report also noted a disclosure difference regarding the Fair Value Hierarchy, and that EY were in discussion with management about amending the fair value hierarchy disclosure.

Internal Audit Progress Report

The committee received the Internal Audit Progress Report and approved adjustments to the Internal Audit Plan 2025-26. The report provided a summary of internal audit's ongoing progress, and noted that the Southern Internal Audit Partnership (SIAP) was experiencing a higher than average level of attrition, resulting in vacancies at auditor, senior auditor and audit manager level. The report stated that SIAP had contingency arrangements in place to mitigate such eventualities, and that recruitment across existing vacancies was well progressed.

The report also included a rolling work programme, and an analysis of 'Live Audit Reviews'.

Quality Assurance and Improvement Programme

The committee discussed and noted the Southern Internal Audit Partnership's Quality Assurance & Improvement Programme (QAIP). The QAIP has been produced to evaluate the SIAP's conformance with the Global Internal Audit Standards in the UK Public Sector, achieve established performance measures, and pursue continuous improvement.

The QAIP includes an action plan split into two sections: non-conformance with the Global Internal Audit Standards in the UK Public Sector, and opportunities for improvement. The action plan is a live document that will be continually reviewed and updated.

The report also included the SIAP's performance measures.

Revised 2025/26 Internal Audit Charter

The committee approved revisions to the Internal Audit Charter 2025-26. The revisions included personnel changes within the SIAP's senior management team, and updates to the job title following the appointment of a new proper officer under Section 151² (Director of Corporate Operations). The revisions also updated the roles and responsibilities of the Corporate Management Team and the Audit Committee to reflect the expectations of the Standards and good practice guidance in the governance of internal audit reports during the year.

Appointment of County Returning Officer

The committee considered a report from the Monitoring Officer confirming the appointment of the Chief Executive, Gary Westbrook, as the County Council's Returning Officer, as required by the Representation of the People Act 1983³. The established procedure within the County Council is that the Chief Executive acts as the County Council Returning Officer.

Information Compliance - Use of Regulated Investigatory Powers

The committee received the Quarter 1 update on the County Council's use of regulated investigatory powers. The report Use of Regulated Investigatory Powers stated that in Quarter 1 (April June 2025), the council did not use either directed surveillance or Covert Human Intelligence Source (CHIS), which requires authorisation. Limited surveillance activities have been authorised and judicial approval obtained in Quarter 2 in respect of investigating the sale of vapes to young people, and more detail will be given in the Quarter 2 report.

The report also noted that as part of the monitoring function of the Senior Responsible Officer, an internal exercise was undertaken to obtain assurance that no unauthorised or inappropriate surveillance activities are being undertaken throughout the County Council, beyond Trading Standards. The review confirmed that while several services across the County Council engage in activities such as reviewing CCTV footage, accessing social media accounts, or examining staff email accounts, there is no evidence of systematic or ongoing monitoring of individuals.

Annual Governance Statement Action Plan - Update

The committee considered a report on the actions taken pursuant to the Annual Governance Statement Action Plan for 2025-26. The Annual Governance Statement Action Plan Update contained the actions agreed in the 2024/5 Annual Governance statement and an update for each action.