The Accounts and Audit Committee of Trafford Council met on Thursday, 24 September 2026, to review the council's financial performance and audit progress. Key discussions included the 2025/26 Treasury Management Annual Performance Report, which showed a favourable outturn, and the 2026/27 Budget Monitoring report, which indicated a projected revenue overspend. The committee also received updates on the external auditor's progress, internal audit activities, and the council's work programme for the upcoming year.

External Auditor Progress Report

The council's external auditor, FORVIS MAZARS, provided an update on their progress. They confirmed the completion of the 2024/25 audit certificate, which was issued on 8 July 2026. For the 2025/26 audit, the auditor is focusing on completing a risk assessment to rebuild assurance, a process that is expected to take more than one financial year due to its complexity. The auditor also reported no new risks of significant weaknesses in the council's Value for Money arrangements, with a draft Auditor's Annual Report planned for presentation at the next committee meeting.

Treasury Management Report Update

The Treasury Management Annual Performance Report for 2025/26 was presented, detailing the council's borrowing and investment activities. The report indicated that all legislative and regulatory requirements were met, with no prudential indicators breached. Total loan debt increased to £413.5m, while the average interest rate payable rose to 3.68%. Investment income was higher than budgeted, yielding £2.2m. The function reported a favourable outturn of £0.895m, largely due to higher-than-expected returns on short-term investments and a delayed uptake of external borrowing. A contribution of £2.45m was made to the Interest Rate Smoothing Reserve. A specific point of discussion was the Church Commissioners Local Authority Investments, where a £5m investment is currently protected from valuation losses until March 2029.

Budget Monitoring 2026/27 (Period 4)

The report on the 2026/27 Budget Monitoring for Period 4 (April to July 2026) projected a net revenue overspend of £2.78m. This adverse movement of £805k since Period 2 was primarily attributed to demand-led services, particularly Children's placements (£2.47m overspend) and Adults' packages of care (£1.73m overspend). Mitigation activities are underway, and contingency budgets totalling £1.5m are available. The report also detailed the Capital Programme, which has increased to £156.08m, and the Dedicated Schools Grant (DSG) position, which forecasts a significant overspend of £17.08m, leading to an accumulated deficit of £20.27m.

Internal Audit Update - Q1

The Audit and Assurance Service reported on its work for April to June 2026. Six internal audit reports were produced during this period, with two final reports providing Substantial and Reasonable levels of assurance, respectively. Recommendations were made in these reports to enhance existing processes, particularly in Treasury Management and IT Asset Management. Two draft reports were also shared, one of which, concerning Egerton High School, concluded with a Low Level of Assurance requiring significant improvements. The service also provided support on risk management, the Annual Governance Statement, and preparations for the National Fraud Initiative.

Accounts and Audit Committee – Work Programme 2026/27

The committee reviewed its work programme for the 2026/27 municipal year. This flexible document outlines the planned agenda items for each meeting, ensuring the committee addresses its responsibilities and key priorities. The programme includes regular updates on internal and external audit progress, risk management, governance, anti-fraud arrangements, and financial management, with specific reports scheduled for each meeting throughout the year.

Counter Fraud Team Update

The Counter Fraud Team's 2025/26 Annual Report was presented, outlining the team's fraud prevention and detection activities and plans for 2026/27. The report detailed investigations into Council Tax Support, discounts, exemptions, and non-domestic rates, resulting in the identification of irregularities and increased liability for the authority. Case studies highlighted successful interventions, including the recovery of overpaid Council Tax Support and the correction of Non-Domestic Rates liability. The team also reported on internal staffing investigations and fraud awareness training sessions. The total value of fraud or irregularity identified in 2025/26 was £373,715.

External Auditor Progress Report

The external auditor's progress report confirmed the completion of the 2024/25 audit certificate. For the 2025/26 audit, work has commenced on a risk assessment to rebuild assurance, which is a critical step in identifying risks and designing appropriate audit procedures. The auditor noted that rebuilding assurance is likely to take more than one financial year. The report also stated that no new risks of significant weaknesses in the Council's Value for Money arrangements had been identified. A draft Auditor's Annual Report is planned for presentation at the next committee meeting.

National Publications and Technical Updates

The committee received a summary of recent national publications and technical updates relevant to local government audit and finance. These included insights from the National Audit Office (NAO) on financial management, technology suppliers, resource allocation, and artificial intelligence, as well as risk reports from FORVIS MAZARS concerning local government risks, public sector focus, and resilience.

FRC Audit Quality Feedback

The committee was provided with feedback from the Financial Reporting Council's (FRC) Annual Review of Audit Quality 2026 concerning FORVIS MAZARS LLP. The FRC noted improvements in the firm's audit engagement inspection results over the last two years and acknowledged progress in their system of quality management. While there was a year-on-year fall in inspection results, the FRC did not consider this indicative of an overall decline in audit quality. FORVIS MAZARS confirmed their ongoing commitment to delivering high-quality audits.