Agenda item

Committee is asked to:

1.    Provide input to and approve the Internal Audit Charter 2026-27

2.    Provide input to and approve the Internal Audit Annual Audit Plan 2026-27

Iona Bond, Deputy Head of Southern Internal Audit Partnership (SIAP) attended the meeting to present the Committee with the report to consider the Internal Audit Charter 2026/27 and the Internal Audit Annual Audit Plan 2026/27.

The Deputy Head of SIAP explained that the Internal Audit Charter was presented annually alongside the Audit Plan and set out the mandate, purpose, roles and responsibilities of internal audit, including those of senior management, the Audit Committee, and the audit provider. Members were reminded that the Charter had been substantially updated in the previous year to reflect the Global Internal Audit Standards, and that no further changes had been made since its approval in September.

It was suggested by Councillor Neall that a clearer distinction or glossary explaining the relationship between the audit mandate, strategy and plan would be helpful. He also sought assurance regarding the independence of internal audit, particularly in the context of reviewing the new risk management and governance arrangements being developed with the support of a governance consultant also engaged by the Council. He enquired how the Committee would be assured if the new framework proved less effective than its predecessor.

In response the Deputy Head of SIAP explained that the new governance assurance framework (risk management) was included in the Audit Plan for Quarter 3 and would be subject to a full internal audit review. This would assess how well the framework was embedded, how it operated in practice, and how assurance mapping had changed. The review would be undertaken independently, and findings would be reported transparently through the audit opinion. Comparison would also be made with the previous framework, which had received a limited assurance opinion.

In response to Councillor Nichols’ query whether SIAP met regularly with the new Chief Executive it was confirmed that while the Deputy Head of SIAP did not meet routinely with the Chief Executive on a one?to?one basis, engagement took place through senior management forums and meetings involving the Chair of the Audit Committee. The Charter provided for direct access to the Chief Executive or Chair of the Committee where required.

There were no further questions on the Internal Audit Charter.

The Deputy Head of SIAP explained that the Plan had been developed in the context of a unique and exceptional year, with the Council approaching vesting day as part of Local Government Reorganisation (LGR). Despite this, the Plan followed a risk?based approach, informed by the risk register, assurance mapping, previous audit coverage, the Improvement and Recovery Plan as well as horizon scanning.

Key points highlighted included:

• The audit year would be nine months, as the annual internal audit conclusion for 2026/27 would need to be reported in March 2027.
• All audits contributing to the annual conclusion were therefore scheduled for Quarters 1 to 3, with Quarter 3 focusing largely on follow?up work where previous audits had resulted in limited assurance.
• Certain high?risk areas, including risk management (governance assurance) and procurement, were scheduled for full re?audit due to their significance and previous limited assurance opinions.
• A contingency allocation had been included to allow flexibility to respond to emerging risks, particularly those arising from LGR.
• Any work undertaken in Quarter 4 would not contribute to the annual conclusion but could provide assurance over key financial controls ahead of vesting day.
• The Plan was recognised as subject to change, with any amendments to be reported to the Committee through progress reports. It was noted that no further adjustments had been made to the plan since the previous progress report.

Committee members expressed a desire for greater visibility of audit scope, particularly in relation to governance?critical audits such as corporate performance management and the governance assurance framework. The Deputy Head of SIAP explained that audit scopes were finalised during detailed planning meetings with senior officers immediately prior to each audit and could not be defined in detail at plan stage. She undertook to explore alternative ways of providing members with greater insight, potentially through additional information in progress reporting or appendices.

Councillor Nichols queried the value of auditing areas where significant improvement activity was already underway, including the Medium term Financial Strategy, savings realisation and homelessness temporary accommodation.

The Deputy Head of SIAP explained that these audits would focus on the frameworks and processes supporting decision?making and assurance, rather than duplicating operational work. In relation to homelessness, she confirmed that audit timing had been deliberately scheduled to allow new arrangements to be sufficiently embedded before review, ensuring the audit added value. The Deputy Chief Executive confirmed that additional resources had been put in place to support homelessness work and that independent audit assurance would be beneficial to stakeholders, including Commissioners.

Councillor Nichols asked about audit coverage of IT risks in the context of LGR. The Deputy Head of SIAP explained that a placeholder had been included in the Plan, with the detail of the scope to be confirmed. Given the dynamic environment and scale of change, a targeted IT audit would be developed following further discussion with senior IT officers to focus on priority risks such as data security, retention and transition arrangements.

Councillor Neall queried whether Quarter 1 was the appropriate timing for the homelessness audit, given ongoing engagement with A2 Dominion and the need to allow sufficient time for improvements to take effect. The Deputy Chief Executive confirmed that while A2 Dominion itself would not be audited, the Council’s arrangements and approach to managing the relationship and improving outcomes would form part of the audit review.

RESOLVED:

1. That the Internal Audit Charter 2026/27 be approved.

2. That the Internal Audit Annual Audit Plan 2026/27 be approved.