The Audit & Governance Committee of Boston Borough Council was scheduled to meet on 17 November 2025 to review a range of reports and updates. These included the external audit completion report, the council's financial statements, risk management, treasury management, and governance arrangements. Councillors were also scheduled to discuss the council's counter fraud policy, contract procedure rules, and information governance.

External Audit Completion Report 2024/2025

The committee was scheduled to consider the External Audit Completion Report 2024/2025 (ISA260), a report by KPMG, the external auditors. The report pack included an Executive Summary - ISA260 for the year ended 31 March 2025, which stated that KPMG expected to issue an unmodified opinion¹. The report pack noted that KPMG had refined its significant risk assessment over valuation of land and buildings after receiving the valuation report. For assets subject to the Depreciated Replacement Cost (DRC) valuation², KPMG initially identified significant risk associated with the obsolescence, BCIS Indices³ and Location Factor assumptions used in the valuation. However, as KPMG did not identify any significant changes in the obsolescence and location factor assumption used from the prior year, it reduced the risk associated with these assumptions to elevated, but the significant risk over the BCIS indices remained.

The report pack stated that KPMG's testing over the BCIS assumption was found to be neutral. The results of testing in relation to management override of control was found to be satisfactory, and the significant assumptions used in the calculation for the Council's post-retirement benefit obligations were found to be balanced.

The report pack stated that KPMG had identified three uncorrected audit misstatements, which had been discussed with management, and if they remained uncorrected they would not have an impact on KPMG's audit opinion. Two corrected audit misstatements had been identified, which management had agreed to correct in the financial statements, and two misstatements in respect of disclosures, which management had also agreed to correct.

The report pack stated that KPMG had not identified any significant control deficiencies, but had raised one medium, and three low level recommendations which had been discussed with management and for which a management response had been provided. Two of these recommendations had not been accepted. KPMG had followed up on 10 recommendations raised in the prior year, of which 6 had been fully implemented.

External Auditor's Annual Report 2024/25

The committee was scheduled to consider the Draft Auditors Annual Report from KPMG. The report pack included an Executive Summary for the Draft External Audit Annual Report, which stated that the Auditor's Annual Report remained in draft until KPMG's audit opinion was signed, but KPMG did not anticipate any changes to the document.

The report pack stated that KPMG provided an opinion as to whether the accounts gave a true and fair view of the financial position of the Council and of its income and expenditure during the year, and confirmed whether the accounts had been prepared in line with the CIPFA/LASSAC Code of Practice in Local Authority Accounting ('the Code'). KPMG had nothing to report on this matter.

The report pack stated that KPMG assessed whether the narrative report was consistent with its knowledge of the Council, and had nothing to report on this matter.

The report pack stated that KPMG assessed the arrangements in place for securing economy, efficiency and effectiveness (value for money) in the Council's use of resources and provided a summary of its findings in the commentary in the report. KPMG was required to report if it had identified any significant weaknesses as a result of this work, but had nothing to report on this matter.

Financial Statements 2024/25

The committee was scheduled to consider the Financial Statements 202425. The report sought approval of the audited Financial Statements 2024/25 for publication.

The report pack stated that the unaudited Financial Statements 2024/25 and Annual Governance Statement were considered by the Audit and Governance Committee on 7 July 2025, and at this meeting, the Annual Governance Statement was approved.

The report pack stated that the external audit of the Financial Statements for the year ended 31 March 2025 was now substantially complete, and the Statements were attached at Appendix 1. At the time of writing the report there were some areas of outstanding work, which were detailed in the report from KPMG LLP on the agenda.

The report pack stated that there were two audit differences that had been adjusted:

• A correction to the inflationary increase applied to one asset valuation, resulting in a £1.249m reduction to Property, Plant and Equipment on the Balance Sheet.
• A correction to the land value per acre of a second asset valuation, resulting in a further £1.485m reduction to Property, Plant and Equipment on the Balance Sheet.

The report pack stated that there were three audit differences that remained unadjusted, which were not cumulatively deemed material to the Financial Statements:

• £284k understatement of Property, Plant and Equipment on the Balance Sheet, due to 30 June 2025 BCIS figures being used in the relevant asset valuations, as opposed to 31 March 2025 BCIS figures.
• £248k understatement of Property, Plant and Equipment on the Balance Sheet, due to discrepancies in the floor areas used in the valuations.
• £33.5k overstatement of income as the result of an accounting entry to bring grant related monies carried forward from prior years through the Income and Expenditure Statement into reserves.

The report pack stated that a small number of presentational and disclosure adjustments were made to ensure compliance with the Code of Practice on Local Authority Accounting in the United Kingdom 2024/25, and a number of control deficiencies were identified (4) for which management responses had been provided. Work was already underway on these items to ensure they were implemented by the due dates. Of the 10 control deficiencies identified in 2023/24, 6 of these had been fully implemented, with 4 in progress.

Annual Governance Statement - Action Plan Update

The committee was scheduled to receive an Annual Governance Statement - Action Plan Update. The report pack stated that the Annual Governance Statement is a statutory document, which explains the processes and procedures in place to enable the council to carry out its functions effectively. It is produced following a review of the council's governance arrangements and is published with the Statement of Accounts. It includes an action plan to address and/or monitor any significant matters identified which will enhance governance arrangements and the understanding of those arrangements where there is a significant change.

The report pack set out the following actions:

• Establishing improved governance and processes to support the preparation of the 2026/27 budget and MTFS.
• Monitor the government's plans for remote meetings, proxy voting and standards arrangement and develop policies and procedures as appropriate.

Quarter 2 25/26 Risk Report

The committee was scheduled to receive a Quarter 2 25-26 Risk Report, providing an update on risk as at the end of September 2025. The report pack included a summary of the risks and scores, with full details in Appendix A - BBC Q2 Risk Register, Appendix B - Partnership Q2 Risk Register and Appendix C - Fraud Q2 Risk Register.

The report pack stated that risk training sessions were held with Committee members in September and October, and actions agreed at those sessions included:

• Lead officers will be requested to attend meetings to look at specific risks where they are of particular interest to the Committee; managed via the work programme
• Officers will review mitigations for high risks and report back via quarterly reports
• Risk appetite workshops are planned before the end of the financial year

The report pack stated that in response to recommendations from the recent Internal Audit review of risk management practices, enhancements had been made to the report to improve clarity and focus on key areas of concern:

• Target Status: Each strategic risk now includes an indication of whether it is currently being managed at its target level. This addition supports better prioritisation by highlighting risks that require further mitigation to reach their desired state.
• Mitigation Action Tracking: The summary also incorporates the status of planned mitigation actions, using a RAG (Red, Amber, Green) rating. This provides assurance that actions are progressing as expected and helps identify where further attention may be needed.

2025/26 Mid-Term Treasury Report

The committee was scheduled to receive the 2025-26 Mid-Term Treasury Report, providing an update on Treasury Management performance and activity. The report pack included Appendix 1 - 2025-26 Mid-Term Treasury Report.

The report pack stated that the Chartered Institute of Public Finance and Accountancy (CIPFA) issued the revised Code of Practice for Treasury Management in 2021, and the Code suggests that members should be informed of Treasury Management activities at least quarterly.

The report pack stated that the 2025/26 Mid-Term Treasury Report covered the following areas:

• An economic update for the first half of the 2025/26 financial year;
• The outlook for the remainder of the financial year along with interest rate forecasts;
• A review of the Treasury Management Strategy Statement and Annual Investment Strategy;
• The Council's capital expenditure, as set out in the Capital Strategy, and prudential indicators;
• A review of the Council's investment portfolio for 2025/26;
• A review of the Council's borrowing strategy for 2025/26;
• Debt Rescheduling;
• A review of compliance with Treasury and Prudential Limits for 2025/26.

The report pack stated that in July the Council repaid its £1m State Street loan at a premium £469,215.75 and replaced it with a £1m Public Works Loan Board (PWLB) loan at 4.81%. The overall saving to the Council over the remaining life of the loan will be approximately £662k.

The report pack stated that treasury investments achieved an average rate of 4.949% and property fund investments achieved an estimated average rate of 3.119%. The combined rate achieved on all investments was 4.326%.

Counter Fraud, Bribery and Corruption Policy

The committee was scheduled to consider the Counter Fraud Bribery and Corruption Policy. The report sought approval and adoption of a revised and updated Policy, with the intention being to align this for the Councils within the South & East Lincolnshire Councils Partnership (S&ELCP).

The report pack stated that the proposed Policy, attached at Appendix 1 - Draft Counter Fraud Bribery and Corruption Policy, had been developed using the CIFAS five principles to fight fraud. and CIPFA guidance.

The report pack stated that the document included policy aims, the approach to tackling fraud, bribery and corruption and section on key roles and responsibilities to enable the Policy to be fully implemented and embedded across the Council and Partnership, and also detailed the Council's Fraud Response Plan.

Proposed Amendments to the Council's Contract Procedure Rules

The committee was scheduled to consider Proposed Amendments to the Councils Contract Procedure Rules. The report sought a review of the revised set of Contract Procedure Rules, with any comments then to be considered prior to the final draft revised documents being presented to Council for approval.

The report pack included:

• Appendix 1a - Proposed Contract Procedure Rules Clean Version
• Appendix 1b - Proposed Contract Procedure Rules Tracked Changes
• Appendix 2 - Revised Delegations to Officers
• Appendix 3 - Key Changes

The report pack stated that in accordance with Section 135 of the Local Government Act 1972 every Local Authority must adopt standing orders with respect to the making by them or on their behalf of contracts for the supply of goods or materials or for the execution of works.

The report pack stated that the draft Contract Procedure Rules sought to ensure, as a minimum, the Council meets the basic principles in relation to public procurement, which require all procurement procedures to:

• Ensure all stages of the procurement process are open and clearly documented, allowing stakeholders to understand how decisions are made.
• Ensure fairness and equal treatment in allocating public contracts.
• Be consistent with the highest standards of integrity.
• Achieve best value for public money spent.
• Comply with all legal requirements
• Support the Council's corporate and departmental aims and aligns with the Council's corporate Procurement Strategy and other relevant policies.

The report pack stated that the Council's current Contract Procedure Rules were approved by Council in January 2023, and public procurement legislation has changed since then (with the implementation of the Procurement Act 2023 in February 2025).

The report pack stated that the intention was to seek adoption of the amended CPR and the Delegations to Officers across the three Councils that make up the South & East Lincolnshire Councils Partnership (SELCP) to ensure continued alignment of the Contract Procedure Rules, as they currently are, and the adoption of the proposed Rules ensure the Council has Rules that reflect the current public procurement legislation. The CPRs also set out clarity of the appropriate authority aligned to the value of the contract, and these are reflected in the Delegated Decisions.

The report pack stated that the only amendment to Appendix 2 - Revised Delegations to Officers is aligning values with the proposed CPR thresholds, and the key changes being proposed are explained fully at Appendix 3 - Key Changes of the report.

Information Governance Annual Update 2024/25

The committee was scheduled to receive an Information Governance Annual Update 202425. The report pack stated that the purpose of the report was to provide the Audit and Governance Committee with an update on the Council's activities and compliance in respect of the Data Protection Act 2018, Environmental Information Regulation and Freedom of Information requirements during the period 1st April 2024 to 31st March 2025.

The report pack stated that during the year the Council's Freedom of Information and Environmental Information Regulation Policy had been implemented, and the Council's performance in response to the Freedom of Information Act and Environmental Information Regulation continued to exceed the ICO good target of 95%, with the overall average across the year being 98.3%.

The report pack stated that the total number of requests made between 1st April 2024 and 31st March 2025 was 724, of which 87 were for information covered by the Environmental Information Regulation and 14 requests were either withdrawn, or were requests that were not valid under the Acts. The Council applied redactions and exemptions in accordance with the legislation to 99 requests, and there were 47 requests refused because the information requested was already published or due to publication of the information in the near future. The Council received 3 requests for internal reviews, in all cases the original decision was upheld.

The report pack stated that the Data Protection and Digital Information (No. 2) Bill has now been replaced by a new Act called the Data (Use and Access) Act 2025, and the ICO is considering the preparation of guidance in respect to the application of this Act. The Council's management of data protection security incidents is undertaken by the Data Protection Officer, who records, investigates and where necessary, recommends actions to be taken based on the impact risk level. There has been a total of 53 data incidents reported to the Data Protection Team between 1st April 24 and 31st March 25, and none have resulted in any claim, or harm to an individual. There have been 16 Subject Access Requests (SARs) during the reporting period.

Work Programme

The committee was scheduled to consider its work programme.