The Audit and Standards Committee of Melton Council met on Tuesday 20 January 2026 to review the Council's financial performance and governance. Key discussions included the external auditor's findings for the 2024-25 financial year, which highlighted a disclaimer of opinion on the financial statements due to issues with opening balances and the inability to obtain sufficient audit evidence. The committee also received updates on internal audit progress, counter-fraud measures, and approved the final Annual Governance Statement for 2024-25.

External Audit Findings Report 2024-25

Grant Thornton, the Council's external auditor, presented their Audit Findings Report for the 2024-25 financial year. A significant finding was the disclaimer of opinion on the financial statements. This was due to limitations imposed by the backstop dates legislation, which aimed to clear a backlog of historic financial statements. As a result, the auditors were unable to obtain sufficient appropriate audit evidence over the Council's opening balances for property, plant and equipment, and reserves. This also led to uncertainty over the closing balances for these items as at 31 March 2025. The auditors noted that while they had completed the majority of the work required, they could not formally conclude the audit and issue an audit certificate until confirmation was received from the National Audit Office regarding the group audit.

Despite the disclaimer of opinion on the financial statements, the auditors were satisfied that the Council had made proper arrangements for securing economy, efficiency, and effectiveness in its use of resources, and no significant weaknesses were identified in these arrangements. The report also detailed several audit adjustments and misclassifications, some of which were material but had been adjusted by the Authority, while others were deemed not material. A number of recommendations were made in the action plan to address identified issues, including improvements to the valuation process for non-current assets and the treatment of prepayments.

Internal Audit Progress Report

The Chief Internal Auditor provided an update on the delivery of the 2025/26 Internal Audit Plan. Progress was reported as being on schedule, with 92% of audit opinions relating to the control environment and compliance being of at least Moderate Assurance. Two audits received opinions of Limited Assurance: one concerning housing allocations and homelessness applications, and another on the Asset Development Programme. Action plans have been agreed for these, with follow-up coverage included in the 2025/26 internal audit plan. The report also highlighted that 80% of agreed management actions due for implementation during 2024/25 had been completed, an improvement on the previous year. A key audit finding related to asset management, where capacity issues in the Corporate Property and Assets Team had led to delays in achieving objectives and updating safety standards and policies. Gaps in documentation for tenanted properties and leased sites were also identified.

Counter Fraud Update and Whistleblowing Policy

The committee received a report on the implications of the Economic Crime and Corporate Transparency Act 2023, which introduced a new offence of failure to prevent fraud. The Council's fraud prevention arrangements were assessed against the six principles of reasonable prevention outlined in the Act. The report also presented an updated Whistleblowing Policy for review and approval. Amendments to the policy included clarifying the definition of a qualifying disclosure, providing a link to prescribed people and bodies for reporting concerns, and updating contact information. The updated policy was approved by the committee.

Statement of Accounts 2024-25

The Statement of Accounts for 2024-25 was presented for approval. The report highlighted that the accounts were prepared in accordance with the Accounts and Audit Regulations 2015 and the Accounts and Audit (Amendment) Regulations 2024. Key considerations included the impact of IFRS 16 Leases, which required the recognition of right-of-use assets and lease liabilities on the balance sheet, and prior period adjustments related to finance leases for refuse vehicles. The report detailed movements in reserves, capital financing, and the Council's cash resources. It also noted an excess of debtors over creditors at 31 March 2025, indicating reduced performance over the previous year. The committee was asked to approve the Statement of Accounts.

Annual Governance Statement 2024/25 - Update

The Monitoring Officer presented the final Annual Governance Statement (AGS) for 2024/25 for approval. Minor amendments had been made following review by the Council's external auditor, primarily for clarity, such as replacing abbreviations with full words and removing outdated references. The AGS confirmed that the Council's governance arrangements were generally sound and effective, with areas for improvement identified and detailed in an action plan. The committee was asked to approve the final version of the AGS for signing by the Cabinet Leader and Chief Executive and subsequent publication.

The meeting also included the confirmation of the minutes from the previous meeting held on 25 November 2025, and a declaration of interests, where no declarations were made. No urgent business was raised.