The Audit Committee of Hart District Council was scheduled to convene on 7 October 2025, to address a range of topics including the external audit results, the statement of accounts, and internal audit progress. Also on the agenda was a consultation on audit fees and the appointment of an independent person to the Audit Committee.

External Audit Results

The committee was scheduled to receive the External Auditors report on the key findings of their audit of the 2024/25 Statement Accounts. A provisional audit results report from Ernst & Young LLP (EY) noted that audit work was substantially complete, but that some areas were pending resolution of audit queries, including council tax and NNDR debtors and creditors. Other completed areas were subject to final review.

The report anticipated that the audit opinion for the council would be qualified. EY's report stated that they had identified an error of £4,800 relating to the prior year which impacted useable reserves and had been corrected by management. They also noted that when extrapolated from the sample across the population, this gave a judgemental difference of £63,000, which remained uncorrected.

The report also noted a number of misstatements that had been corrected by management, including:

• A net decrease of £1,244,000 to Investment Properties primarily attributable to differences between the assumptions applied by management's valuation specialist and those adopted by the auditor's valuation specialist.
• A misstatement in the allocation between gross debtors and overpayments/prepayments balances amounting to £213,000.
• A misstatement in the classification of Interest cost from other services expenses to Interest payments amounting to £134,000.

The report stated that EY had reviewed the Annual Governance Statement and confirmed it was consistent with their audit of the financial statements, and that they had no other matters to report.

Statement of Accounts and Annual Governance Statement

The committee was to consider and approve the Statement of Accounts and Annual Governance Statement for 2024/25. The report pack included a recommendation that the Audit Committee give delegated authority to the Executive Director Corporate in consultation with the Chairman of Audit Committee, to approve any non-material changes to the 2024/25 Statement of Accounts that arise from the final external audit review work, and to approve the Letter of Representation.

The statement of accounts included a narrative report, a statement of responsibilities, core financial statements, notes to the financial statements, additional notes to the accounts, supplementary financial statements, a glossary and the Independent Auditor's Report.

Internal Audit Progress

The Audit Committee was scheduled to review and note the Internal Audit Progress Report for Quarter 2 2025/26. The report provided an overview of internal audit activity and assurance work completed in accordance with the approved audit plan.

The report noted that the Southern Internal Audit Partnership (SIAP) were experiencing a higher than average level of attrition resulting in vacancies at auditor, senior auditor and audit manager level. It was noted that whilst there would be no financial impact to the Police and Crime Commissioner for Sussex and the Chief Constable for Sussex, there may be some minor slippage in delivery of the quarter 2 / 3 plan whilst contingency arrangements are put in place.

The report included a summary of 'live' internal audit reports, including Building Repairs and Maintenance, Procurement, IT Policies and Procedures, Homelessness – Temporary Accommodation, and Development Management.

Internal Audit Strategy 2025-28

The Audit Committee was scheduled to review and note the Internal Audit Strategy 2025-28. The strategy outlined the Southern Internal Audit Partnership's vision to deliver a quality internal audit service to its stakeholders. The three strategic objectives of the strategy are:

• Agile Auditing: Innovate to explore a more agile approach to the audit process, building efficiencies and producing more timely feedback to the organisation.
• Optimisation of Standards: Embrace and prioritise conformance and embedding of the Global Internal Audit Standards in the UK Public Sector and maximising their potential to benefit the organisation and the internal audit function.
• Data Analytics by Default: Further engage with the organisation to enhance and optimise the full potential of data analytics in the internal audit process.

External Quality Assessment

The Audit Committee was to receive an overview of the alternative options considered in commissioning an external assessor to undertake the pending independent assessment of the Southern Internal Audit Partnership against the Global Internal Audit Standards in the UK Public Sector.

The report noted that there are two approaches to meeting the requirement of an External Quality Assessments:

• A Full-scope External Quality Assessment (EQA) involves an independent and qualified Assessment Team.
• A Self-assessment with Independent Validation (SAIV) is where the Southern Internal Audit Partnership performs the self-assessment portion and an external, independent qualified validators review the self-assessment portion and provides their independent validation.

The report recommended that the Southern Internal Audit Partnership conduct their external assessment as a Self-Assessment with Independent Validation (SAIV).

Consultation on 2025/26 Scale of Audit Fees

The committee was scheduled to review the Consultation on 2025/26 Scale of Audit Fees and pass any comments to officers. The consultation document from Public Sector Audit Appointments Ltd (PSAA) stated that the organisation was consulting on the proposed fee scale for 2025/26 audits of opted-in bodies.

The PSAA stated that their 2025/26 fee scale proposals include an average increase of approximately 4% on the 2024/25 scale fees to cover a contractual inflationary (2.8%) increase payable to audit firms for 2025/26 and confirmed changes in ongoing audit work based on information received since they set the 2024/25 scale fees.

Appointment of Independent Person to Audit Committee

The Committee was requested to consider whether to commence the selection process for an independent person on the Audit Committee. The report pack noted that at its meeting on 25th October 2022, the Audit Committee agreed 'for the appointment of Independent Person(s) to be included in the updated Terms of Reference, but no appointment to be made at this time'. It also noted that in light of the observation made in the Corporate Peer Challenge Review report it was appropriate to reconsider this matter.

Audit Work Programme

The committee was to consider the Audit Work Programme.