The Audit and Governance Committee of Newham Council met on Wednesday 11 March 2026 to discuss the council's risk management strategy, counter-fraud progress, and audit results. Key discussions included the quarterly counter fraud progress report, a refreshed risk management strategy and policy for 2026-2027, and the audit results report.

Risk Management Strategy and Policy Refresh

The committee discussed the council's refreshed risk management strategy and policy for 2026-2027, which aims to strengthen the council's strategic risk framework by aligning it with recognised best practices such as ISO 31000 and HM Treasury's Orange Book. A key change is the introduction of the bow tie model for strategic risks, intended to improve clarity around risk drivers, existing controls, and mitigation activities. This visual tool will help senior leadership and members better understand how risks are being managed.

During the discussion, councillors sought clarification on how the bow tie model would benefit residents and how the new strategy would be integrated into existing governance processes. Maria Christofi, Interim Assistant Chief Executive of Change and Improvement and Corporate Director of Resources and Section 951 Officer, explained that the bow tie model provides a visual summary of strategic risks, making them more intuitive and easier to understand at a glance compared to the current text-heavy risk entries. She also confirmed that the strategy is a proposal for incorporation into existing processes and that training will be rolled out to embed the new framework.

Concerns were raised about the practical implementation of risk appetite and whether the new policy was futuristic rather than currently in practice. Officers assured the committee that the framework would provide the ability to implement risk management practices consistently across the organisation. An action was requested for officers to report back to the committee in six months on how senior managers are embedding the new risk management policies into their day-to-day work.

Quarterly Counter Fraud Progress Report

Nick Sharp, Fraud Manager, presented the quarterly fraud report, highlighting that for the fourth consecutive year, the council had exceeded its target for properties recovered, with 59 properties recovered compared to 55 in the previous year. The number of successes in stopping fraudulent Right to Buy applications and housing succession applications were also at their highest in seven years.

Councillors questioned the directorates from which employees dismissed or resigned due to fraud allegations originated, seeking assurance that this did not indicate a wider problem within those directorates. Nick Sharp explained that directorates were not named to protect personal information, but confirmed that if patterns were identified in specific directorates or types of fraud, conversations would be held with the relevant Corporate Director and HR to ensure appropriate counter-fraud measures were in place. He also confirmed that new and different tools are being used to increase the volume and number of fraud detections.

The committee also discussed the £1.6 million added to bills due to the team's work in this area. Clarification was sought on how this figure related to uncollected council tax. It was explained that this figure represents council tax that needs to be collected and is actively pursued from residents. The team's work enables the collection of council tax that was not initially identified as collectible within the original calculations.

Fraud Policy and Money Laundering Policy Suite

The committee reviewed a new suite of anti-fraud and corruption strategies and policies for 2026-2027. These included policies on anti-fraud and corruption, anti-bribery, anti-money laundering, fraud sanction and prosecution, whistleblowing, and the confiscation regime within the Proceeds of Crime Act 2002.

A question was raised about the frequency of policy rework and whether these updates were prompted by specific events or risks. It was explained that bringing these policies and strategies annually is good practice, even if no fundamental changes have occurred, to keep anti-fraud and corruption on the agenda and reinforce the council's zero-tolerance stance. Training will be rolled out to staff and members to raise awareness.

Concerns were raised regarding the robustness of pre-employment and employment checks, particularly concerning the right to work in the UK and the potential for organised crime to infiltrate the organisation. Officers agreed to take this away and speak to the Director of HR to understand current processes and potential enhancements.

Audit Results Report and Annual Audit Report

Meinir Hall, Chief Accountant, and Andrew Ward, Director of Finance Management, presented the final Audit Results Report and Annual Audit Report for 2024/25. The auditors, Ernst & Young LLP (EY), issued a disclaimed audit opinion for 2024/25, continuing a pattern from previous years. This was attributed to delays in providing supporting evidence and the quality of working papers, which constrained the audit within statutory deadlines.

Key control observations included a complex account mapping system with a lack of granular breakdowns and evidence to support transactions, leading to manual adjustments. The Fixed Asset Register is maintained in an Excel spreadsheet, causing limitations and complexity. Issues with bank reconciliations, including unidentified reconciling items dating back to 2019, were also highlighted. The recoverability of loans to subsidiaries was questioned due to a lack of clear audit trails, expected credit loss assessments, and supporting evidence for drawdowns. Furthermore, three councillors and two senior officers failed to submit their declarations of interest.

EY also noted significant weaknesses in the council's arrangements for statutory financial reporting and property compliance management for Housing Revenue Account properties. Recommendations were made to stabilise finance team capacity, provide training to supporting business areas, strengthen oversight of the Housing Improvement Programme, and prioritise the closure of overdue Priority 1 internal audit recommendations.

The committee also discussed the council's financial sustainability, noting a significant budget gap primarily driven by temporary accommodation and social care costs. The council has requested Exceptional Financial Support (EFS) from the government, which has been agreed in principle, allowing the use of capital receipts to fund revenue expenditure. While the council has a strong asset base, this approach is considered unsustainable in the long term.

Quarterly Report of Contract Waivers

The committee discussed the quarterly report of contract waivers for the period 1 October 2025 to 31 December 2025. Two waivers were reported, totalling £0.368 million, for the Resources and Children's and Young People directorates. These were approved in accordance with the council's Scheme of Delegation and Contract Standing Orders.

Year Ahead Forward Plan

The committee discussed the Year Ahead Forward Plan, which outlines upcoming reports and items for discussion in the next municipal year. A new item, Fraud Policy and Money Laundering Policy, was added to the plan for consideration at the March 2026 meeting.

The meeting also included discussions on the Audit and Governance Committee's Terms of Reference, with proposed amendments to strengthen governance, particularly in procurement oversight. The committee agreed to recommend these revised terms of reference to the Council for adoption into the Council's constitution.

The meeting concluded with a private session to discuss exempt items.