The Audit Committee met to discuss the external audit plan, treasury management, risk management, and internal audit progress. The committee noted the external audit plan, the treasury management Q2 outturn, the risk management update, and the progress on internal audit and investigations. A significant weakness relating to governance health and safety in housing was identified and will continue to be monitored.

External Audit Plan

Members from Forvis Mazars presented the external audit plan and confirmed that value for money work had been completed and the audit for accounts was in progress. Journal testing has also been completed, subject to review. Initial testing of leases has also been carried out, however an error in calculations had been identified and an updated version was being worked on. The committee were assured that they were on track to complete the audit work by February 2026.

The Dedicated Schools Grant (DSG) deficit for March 2025 was £5.6 million, however the committee were assured that the council has enough funds. A significant weakness was identified last year relating to governance health and safety in housing and this weakness will continue; however, a detailed report on audit will be issued in due course. The committee were also informed that rebuilding work will take place and may happen through chunks of work over the next two to three years, and it was estimated that this work could take between four to five years to complete.

It was clarified that Forvis Mazars have regular catch ups with the finance team from Ealing Council and are happy with the progress being made. The committee were also informed that if the enforcement notice from housing regulators is lifted, the issue can be removed, enabling a clean opinion. Members from Forvis Mazars explained that they are trying to provide assurance internally by Christmas, and will then work out how to roll forward.

The Audit Committee noted the report and appendices for the External Audit Plan.

Risk Management

Mike Pinder, Assistant Director of Audit, and Nicky Fiedler, Strategic Director of Housing and Environment, presented the Risk Report Q2. Mr Pinder confirmed that there were no changes since Quarter 1 due to the publication of the new financial guidance being after the Strategic Leadership Team (SLT) meeting. Cyber risk remains a key area of focus, with the cyber team tracking and monitoring this risk and also confirming that mitigations are in place.

Ms Fiedler informed the committee that risks are managed in line with the corporate guidance. The risks are reviewed at service, departmental and directorate level on a monthly basis, and for higher residual risks, they are escalated to the corporate risk register. Risk identification can come through multiple sources and there has been increasingly more regulators and regulatory requirements. The three line defence model has been implemented as well as a restructure of the entire housing service and realigning services whilst supporting new staff.

The council were issued with a C2 grading, which means there had been some weaknesses within the services but no serious failings. The housing and IT digital programme is being worked on which will integrate 27 IT systems used in housing which will minimise room for errors.

It was clarified that:

• The IT integration programme will take 18 months to complete.
• Gas and electrical compliance now stands at approximately 98%, which is a significant improvement from the previous no assurance period.
• For Rufford Tower, enforcement notice actions are on track for completion by February 2026 and weekly monitoring is underway.
• Monthly newsletters and talk to sessions are recorded and sent around to front line staff members to ensure engagement; however, it was noted that more can be done to promote engagement as well as feedback from tenants and the wider public.
• A lot of work with high risk areas are being assured in the first line of defence.

The Audit committee noted the report and appendices for the Risk Management Item.

Treasury Management

Emma Horner, Assistant Director of Strategic and Corporate Finance presented the Treasury Management Q2 2025-2026 report to the committee. Ms Horner informed the committee that the investment balance as of 30 September 2025 was £381 million, with £251 million invested in the Debt Management Office¹. All activities were compliant with approved limits.

It was clarified that investments with local authorities recommenced in October, and as of today, £84 million is invested with local authorities; full details will be included in the Quarter 3 report.

The Audit Committee noted the Treasury Management Q2 Outturn.

Internal Audit and Investigations

Mike Pinder, Assistant Director of Audit, also presented the LBE Q2 Audit Investigation Report to the committee. Three audit reports had been issued this period, all with positive opinions, and eight recommendations remained in progress. The fraud prevention and detection delivered £790,000 in identified or prevented losses to date, nine properties have been recovered, and five applicants have been taken off the housing waiting list for properties they would not be entitled to.

It was clarified that the ICT Asset Verification is currently in progress, and sufficient work will be completed to support an overall opinion. Some audits may roll over onto the next year as part of a revised and more agile planning model, and investigations are being carried out internally, with referrals to the appropriate services.

The Audit Committee noted the update on progress on IA and INV.