The Audit Committee of Hammersmith and Fulham Council met on Monday 27 October 2025 to review the Council's financial performance and governance arrangements for the 2024/25 financial year. Key discussions included the approval of the Statement of Accounts, the Annual Audit Report on Value for Money, and updates on Treasury Management and Risk Management.

Statement of Accounts 2024/25 Approved

The Committee approved the London Borough of Hammersmith & Fulham's 2024/25 Statement of Accounts, including the Pension Fund Accounts and the Annual Governance Statement. The external auditor, Grant Thornton UK LLP, noted that while some technical adjustments were made regarding borrowing and debtor classifications, these did not impact the Council's overall General Fund position. Grant Thornton expressed confidence that their audit work was substantially complete and did not anticipate any issues that would lead to a modified audit opinion. The report highlighted two medium-priority and five low-priority recommendations for management. The Pension Fund Accounts were also presented, with the auditor noting an understatement of investment balances due to timing differences, which was deemed immaterial.

Annual Audit Report (Value for Money) 2024/25

Grant Thornton UK LLP presented their Annual Audit Report on the Council's Value for Money (VfM) arrangements for 2024/25. The Council was assessed as 'Green' for Financial Sustainability, indicating no significant weaknesses. However, 'Amber' ratings were given for Financial Sustainability (HRA), Governance, and Improving Economy, Efficiency, and Effectiveness (both overall and for the HRA), suggesting areas for improvement. The report noted that the Council has made sufficient progress in addressing prior year recommendations regarding HRA financial sustainability and Housing Service standards, leading to a downgrade of a key recommendation to an improvement recommendation. An improvement recommendation was also made regarding the need to build resilience into the Council's cash position. The report highlighted that the Council's external audit opinion on the financial statements is expected to be unmodified.

Treasury Management Outturn Report 2024/25

The report detailed the Council's Treasury Management Outturn for 2024/25, confirming operation within approved Treasury Limits and Prudential Indicators. The Council's total borrowing increased from £269m to £288m, with an average interest rate of 3.75%. Cash balances decreased to £44.2m, with funds kept liquid in Money Market Funds. The report noted a slight increase in the average interest rate paid on borrowing from 3.72% to 3.75%, attributed to the overall market conditions. The Council also issued green investment tranches, raising £1.5m for local climate projects.

Risk Management Update

The report provided an update on risk management across the Council, noting that the Corporate Risk Register was reviewed by the Strategic Leadership Team (SLT) and presented to the Audit Committee. Changes were made to the register to improve clarity and focus on current assurance and planned mitigations. Key risks highlighted included the potential impact of Fair Funding Reforms on the Council's finances and the Council's response to the failure of a national provider of community equipment services. The report indicated that the Council's risk management arrangements are robust, with a low appetite for risk but a willingness to take carefully considered risks to innovate service delivery. The Council's approach to risk management is supported by a refreshed Risk Management Strategy for 2025-2028 and a Risk Management Toolkit.

Internal Audit Progress Report (April to August 2025)

The Internal Audit service reported on its progress against the 2025/26 Audit Plan up to the end of August 2025. Two audits were finalised, both receiving positive assurance opinions: Registrar Service (Substantial Assurance) and Housing Health & Safety Electrical (Satisfactory Assurance). Two further audits, concerning St Paul's CofE Primary and St Mary's RC Primary, were issued in draft, awaiting management responses. Follow-up reviews indicated that 90% of high and medium priority recommendations from previous audits had been implemented. The report also noted that the Internal Audit Plan is flexible, allowing for adaptation to emerging risks and challenges.

Other findings

Grant Thornton UK LLP, the external auditor, presented their Audit Findings Report, highlighting that the audit work was substantially complete with an anticipated unmodified opinion on the financial statements. They noted two adjusted misstatements related to borrowing and debtor classifications, and several minor disclosure changes. The auditor also raised four improvement recommendations, primarily concerning the HRA's financial sustainability, liquidity position, and the timeliness of treasury management reporting. The auditor confirmed that no significant weaknesses were identified in the Council's Value for Money arrangements, although areas for improvement were noted in financial sustainability (HRA), governance, and improving economy, efficiency, and effectiveness. The auditor also confirmed their independence and that no additional statutory powers or duties were exercised.

The Audit Committee also received an update on the Pension Fund's financial performance and governance, noting a strong funding position and continued progress on pooling investments. The report highlighted the Fund's commitment to responsible investment and stewardship principles.

The meeting concluded with the noting of future meeting dates and the potential exclusion of the public and press for specific agenda items if required.