The ESPO Finance and Audit Subcommittee met to discuss internal and external audits, financial statements, and risk management. The meeting was scheduled to be held in the Sparkenhoe Committee Room, County Hall, Glenfield. A report pack was provided to the attendees that included the agenda, minutes from the previous meeting, and reports from the Consortium Treasurer and Chief Officer of ESPO.

2024/25 Financial Statements

The subcommittee was scheduled to review the final statement of accounts following an external audit review. The report pack included the 2024/25 financial statements as Appendix A ESPO Statutory Accounts 2024-25. The subcommittee was to consider recommending to the Management Committee the approval of the 2024/25 financial statements and a proposed dividend pool of £5.4 million.

The report pack noted that for 2024/25, the trading surplus previously reported to the Management Committee was £7.4 million, £0.3 million higher than budgeted. The financial statements differ from the management accounts due to statutory adjustments.

The report pack outlined key areas of judgement within the financial statements:

• Value of pension: The closing position as at 31 March 2025 was an asset of £0k, in compliance with Financial Reporting Standard 102¹. Further details are provided in note 17 to the accounts, and the valuation is based on a third-party valuation by the actuaries Hymans Robertson.
• Value of land and buildings: The Grove Park premises were valued at £19.0 million by chartered surveyors. The outstanding loan used to purchase the site now stands at £2.75 million.
• Going Concern: A key assumption is that ESPO will continue trading for the foreseeable future, considered to be at least 12 months from the date of signing the financial statements.

The report pack also included the 2024/25 Annual Governance Statement as Appendix B.

External Audit of the 2024/25 Financial Statements

The subcommittee was scheduled to note the key findings from the external audit of the 2024/25 financial statements.

The report pack noted that ESPO, as a joint committee set up under Section 102 of the 1972 Local Government Act[^3], is not legally required to have an audit. However, there are significant benefits to undertaking one as it gives a level of independent assurance to various stakeholders.

Following a tender exercise at the start of 2025, Williamson Croft was appointed as auditors from March 2025. A copy of the auditor's report was provided as an appendix, and the audit director from Williamson Croft was scheduled to attend the subcommittee meeting.

The report pack stated that Williamson Croft issued an 'unqualified' audit opinion for 2024/25. No material weaknesses in internal control were identified, and no significant governance or compliance concerns were raised.

The Appendix - External Audit Report included an audit findings report from Williamson Croft. The report stated that their work was substantially complete and there were no matters that would require modification of their audit opinion, subject to discussions on going concern at completion.

The audit findings report included a review of the control environment, highlighting potential improvements:

• Physical Documentation around payroll
• Credit note Approvals
• Rebate Testing

The audit findings report also included significant risk responses relating to:

• Revenue recognition
• Management override of controls
• Accrued Expenses
• Related Parties – Transactions with Consortium Members
• Defined Benefit Pensions Scheme
• Stock Valuation

Internal Audit Service

The subcommittee was scheduled to receive two reports from the Consortium Treasurer regarding the Internal Audit Service. The first was a progress report against the 2025-26 Internal Audit Plan, and the second was the Annual Report for 2024-25.

Progress Against the 2025-26 Internal Audit Plan

The purpose of this report was to provide the subcommittee with a summary of work undertaken by Leicestershire County Council's Internal Audit Service (LCCIAS) during the period 29 January to 22 September 2025.

The report pack noted that the Consortium Treasurer is responsible for the proper administration of ESPO's financial affairs and for arranging a continuous internal audit. The audits undertaken are based on the Annual Internal Audit Plan, which was approved by the subcommittee at its meeting on 12 February 2025.

The report pack stated that to date, 2025-26 coverage has not resulted in any high importance recommendations and/or partial assurance reports, and there are no legacy high importance recommendations from previous financial years.

The report pack included a summary of progress as follows:

• 24/25 work completed in 25/26: 5 advisory work items, 3 work items covering two financial years, and 2 final reports with substantial assurance.
• Actual 25/26 Year Progress: 3 draft reports issued, 1 consultancy work concluded, 13 work in progress, and 1 not started.

The report pack included Appendix 1 - Summary progress against 2025-26 audits as at 22 September 2025, which provided more detailed progress against the 2025-26 Plan.

Annual Report 2024-25

The purpose of this report was to provide the subcommittee with an annual report on internal audit work conducted during 2024-25.

The report pack noted that the Consortium Treasurer is responsible for the proper administration of ESPO's financial affairs and has a specific responsibility for arranging a continuous internal audit of those affairs. The Treasurer arranges for Leicestershire County Council's Internal Audit Service (LCCIAS) led by the Head of Internal Audit Service (HoIAS) to provide internal audit for ESPO.

The report pack stated that overall, positive opinions were given in all three components of the 'control environment' i.e. the framework of governance, risk management and control, and an overall substantial assurance rating is given that the control environment remains adequate and effective. The majority of planned work was achieved, and LCCIAS conforms to internal audit standards.

The report pack included the Internal Audit Service Annual Report 2024-25 as an appendix, which contained the following headlines:

• Overall, positive opinions were given in all three components of the 'control environment' i.e. the framework of governance, risk management and control
• An overall substantial assurance rating is given that the control environment remains adequate and effective.
• The majority of planned work was achieved
• LCCIAS conforms to internal audit standards (the PSIAS)
• The HoIAS was not aware of any significant governance issues that should have been reported in the AGS.

The report pack also included Annex 1 - HoIAS annual opinion 2024-25 and Annex 2 - Summary of work supporting the HoIAS opinion 2024-25.

Financial Performance Update - 5 Months to August 2025

The subcommittee was scheduled to receive a financial performance update for the five months leading up to August 2025. Due to the commercially sensitive nature of this report, it was to be discussed with the press and public excluded.

Risk Review

The subcommittee was scheduled to undertake a review of risk. Due to the commercially sensitive nature of this report, it was to be discussed with the press and public excluded.