To agree the Minutes of the meeting of the Audit Committee held on 18 February 2025, as a correct record

Resolved: That the minutes of the meeting held 18 February 2025 be approved, and signed by the Chairman as a correct record.

Any declarations of interest not already registered.

There were none.

There were none.

There were none.

Members received training on whistleblowing and took the opportunity to ask questions.  Members discussed the Council’s Whistleblowing procedure.

There was also discussion regarding training going forward and Members considered different topics they would like covered in future training.

            Resolved:

a)    That the Member development be noted.

b)   The next member development subject will be the Audit Committee Role and Function.

The Chief Officer for Finance and Trading presented the report which provided progress on the action plan in Grant Thornton’s Audit Findings Report presented at the previous meeting.  The report also aimed to provide clarification on both this council’s position and the national local audit backlog issue.

The committee has received regular updates on the national local audit backlog over the last two years and the government have recently announced a further sixteen commitments following an earlier consultation.

In response to questions officers confirmed that unless the regulations on how to audit opening balances changed, a disclaimed opinion was also expected for the 2024/25 accounts.

The Interim Head of Finance confirmed that the planning stages of the 2024/25 audit were progressing well. A representative from Grant Thornton further confirmed that the process started in the middle of March 2025 and there were no concerns at this stage.

Resolved: That the report be noted.

The Chief Officer for Finance and Trading introduced Parris Williams and Ghufran Ahmed form the Council’s External Auditors, Grant Thornton, to the Committee. Parris took the opportunity to highlight the section on Local Government Reorganisation (LGR) as set out within their audit plan. The plan set out the questions which committees should be asking of itself during this process, including where earmarked reserves were being utilised and were they being used for their intended plans. From an audit perspective, there would be a focus on investment and capital decisions and those being good decisions beyond the life of the council, as well as looking at asset transfers. This advice had been replicated across all the authorities Grant Thornton were working with across Kent. It was also pleasing to see that capacity risk, in terms of LGR had been highlighted in the strategic risk register.

It was further clarified that due to the backstop deadline, the last three years accounts were disclaimed. The schedule to carry out the audit of the 2024/25 accounts was explained with the requirement that the audit is completed and accounts signed off by the backstop date of 27 February 2026.

In response to questions relating to Local Government Reorganisation (LGR), it was clarified officers would need to manage conflicts and there would need to be long term benefits to actions taken. This council has put a budget aside for LGR as had some other Kent councils. Assets and liabilities would need to be merged once LGR takes place therefore they would first need to be reviewed in order to understand what each authority held and to obtain assurance that balances were correct.

IFRS16 on leases was a mandatory standard which was implemented in the CIPFA code of conduct which had to be followed. Local government had deferred the uptake for as long as possible however it was now necessary to implement this.

Resolved: That the appendix be noted.

The Audit Manager presented the report which provided an update from the Internal Audit Partnership and the implementation of actions raised.

Two audits had been completed since the last committee meeting on the 18 February 2025. There were a number of audits underway and two had been completed with substantial assurance. Resourcing issues had affected progress made however external support had been procured to aid completion of the 2024/25 audit plan.

Members discussed the report.

Resolved: That the report be noted.

The Audit Manager introduced the report which explained that under the Accounts & Audit Regulations 2015,  the Council were required to maintain an effective internal audit function. The standards were intended to elevate the quality of internal audit across the public sector. It was required that the Internal Audit Charter, be updated to conform with the new Global Internal Audit Standards as applied to the UK public sector. It was suggested there should be annual review of the Charter to ensure it remained relevant. Additional reviews could take place, if necessary.

In response to questions Officers confirmed the Charter aligned with National Standards. It was also indicated that the Charter should be reviewed periodically with the suggestion of yearly as good practice. She further clarified that it was the Committee’s decision as to how often the Charter was reviewed.

It was suggested that the Charter be reviewed every two years. The Chairman seconded the motion and it was agreed.

Resolved: That the Internal Audit Charter, be approved and reviewed every two years.

The Audit Manager presented the report and appendix  which set out that the Internal Audit Strategy.  In accordance with standards in the public sector, a strategy for the internal audit function that supported the strategic objectives and success of the organisation and aligned with the expectations of the Audit Committee and Strategic Management Team was required.  The Dartford & Sevenoaks Audit Partnership’s strategy provided a plan to achieve long-term objectives to ensure the partnership was able to fulfil its mandate as well as its vision and mission. The strategy should be reviewed annually to ensure it remains relevant to the needs of the Council.

Members appreciated the presentation of the information regarding the Internal Audit Strategy. In response to questions the Audit Manager clarified that the Audit Universe and the coverage provided a framework to support delivery of objectives. There would be links between the Audit Strategy and the Audit Plan.

Resolved: That the Internal Audit Strategy be approved.

The Audit Manager presented the report which provided a framework for Internal Audit activity for the 2025/26 financial year. The plan was risk-based and set out how resources would be deployed throughout the year to enable an annual opinion to be provided on systems of risk management, governance and control.

The main objectives of the Audit Plan were to provide sufficient coverage to enable an overarching opinion at the end of the financial year, to be focused on key risks and provide assurance on the Council’s management of risk, ensure the organisation is adequately equipped to face future challenges and achieve strategic priorities, provide assurance once core systems and key controls, and, to provide advisory services based on management requests. The report also indicated the available resource for the upcoming year and matched this to the audit risk register for the previous four years. The proposed Performance Indicators also remained unchanged from the current year.

In response to questions, it was clarified that Hertfordshire County Council would be providing support for delivery of the 2024/25 Audit plan. Unfortunately, the co-sourced model would not be cost effective long term and it was more beneficial to have an in-house model however one of the mitigating factors was that as it was a County Council providing the service they had experience in local government audit.

Action 1: For the Audit Manager to provide information regarding the Contract held with Hertfordshire County Council.

With regards to the Performance Indicator being 80%, it was explained that the aim was always 100% however the reduced percentage allowed for unforeseen instances of a higher priority which could not be planned for. It was also pressed on services the need for a reasonable timeframe. The Chief Officer for Finance and Trading explained that each deferral had to be approved by senior management and there must be a relevant reason for deferral from the timeframe.

Recommendations from external audit would form part of the research and planning for the corporate governance audits. One of the main objectives would be to examine the SOLACE framework in comparison to the Councils current practices.

Action 2: For the Audit Manager to investigate audit Performance Indicator across Kent.

Audits already mentioned on the audit plan would also cover aspects of financial hardship, capacity and climate change and assurance mapping would be carried out to support opinions.

Resolved: That the Internal Audit Plan for 2025/26, be approved.

The Audit Manager presented the report, which presented the most recent version of the Strategic Risk Register which showed the position for April 2025. She explained this was the first review of the Register in its current format. There had been removal of the adoption of the local plan as the cause for risk had materialised and actions were in place to mitigate this. Local Government Reorganisation was also considered a cause to instigate risk events happening which would impact other risks.

Members discussed the frequency of bringing the Risk Register to the committee.

Resolved: That

a)         The contents of the Strategic Risk Register be considered and noted

b)        The Strategic Risk Register should be brought to each Audit Committee meeting unless the timing between meetings was too short.

The work plan was noted with the following amendments:

Summer 2025:

• Internal Audit Annual report and opinion
• Statement of Accounts 2024/25 Establishment of Member Working Group and Progress Update
• Counter Fraud and Compliance Team Report
• Member Allowance Scheme Monitoring
• Annual Governance Statement 2024/25
• Review of the Effectiveness of the Audit Committee 2024/25
• Member Development

The Chairman expressed her thanks to Mo Chughtai for his term as an Independent Member of the Audit Committee.