The Audit and Risk Committee of Islington Council met on Tuesday 22 September 2026 to review the council's financial performance, risk management, and fraud prevention activities. The meeting's agenda included discussions on the external audit's value for money risk assessment, the annual fraud report, the Regulation of Investigatory Powers Act (RIPA) annual report, and the General Fund Reserves Policy.

External Audit – Value for Money Risk Assessment

The committee was scheduled to consider the external auditor's Value for Money Risk Assessment report for the 2025/26 financial year. This assessment evaluates whether the council has appropriate arrangements in place to ensure value for money across three domains: financial sustainability, governance, and improving economy, efficiency, and effectiveness (IEEE). The report indicated no significant risks identified in financial sustainability. However, it highlighted two significant risks within governance, specifically concerning procurement and contract management within the Housing Directorate, and governance and assurance arrangements within the same directorate. A further significant risk was identified in the IEEE domain, relating to consumer regulation downgrades and housing compliance risks. The external auditor, KPMG LLP, planned to conduct further work on these identified risks and report their conclusions in their year-end annual report in January 2027. The report also detailed the planned audit fees for the council and the Pension Fund for the 2025/26 external audit.

Annual Fraud Report 2025-26

The committee was to receive an update on the counter-fraud activities undertaken by the council's Corporate Anti-Fraud Team (CAFT), Housing Investigations Team (HIT), and Parking Fraud Investigations Team (FIT) during the 2025-26 financial year. CAFT received 129 referrals, leading to 35 investigations, with 12 remaining open. The report detailed savings and overpayments identified by CAFT, amounting to £324,773.53. The Parking Fraud Investigation Team reported on various activities, including issuing Penalty Charge Notices (PCNs) and prosecuting offenders, with borough-wide PCNs issued totalling 1,272 and revenue of £70,345.00. The Housing Investigations Team recovered 90 properties subject to tenancy fraud, preventing fraudulent Right to Buys and withdrawing housing applications, with unlawful profits recovered totalling £260,000. The report also touched upon the new offence of failure to prevent fraud introduced by the Economic Crime and Corporate Transparency Act 2023.

RIPA Annual Report 2025-26

The committee was scheduled to review the council's use of covert investigatory powers under the Regulation of Investigatory Powers Act 2000 (RIPA). The report indicated that the council had not authorised the use of any directed surveillance or covert human intelligence sources (CHIS) during the financial year 2025/26, and such activity had not been used since 2019/20. The report noted that the Department for Work and Pensions and the police have powers to undertake their own surveillance for benefit fraud and criminal activity. The council's RIPA policy was under review, with further training planned following any policy changes.

General Fund Reserves Policy

The committee was asked to note the council's General Fund Reserves Policy. This policy outlines the purpose and categorisation of reserves, emphasizing that reserves are intended for one-off use and should not fund recurrent expenditure or structural budget gaps. The report indicated that the council's General Fund budget risk reserves remained above the minimum level of 25% of Core Spending Power (CSP), with an estimated headroom of approximately £10.8m at the end of 2025/26. The report highlighted the importance of maintaining and increasing reserves as part of the council's medium-term financial strategy, particularly given the ongoing Fair Funding review and uncertainty over future local government funding. The policy details various types of reserves, including Budget Risk, Specific Risk, Planned Spend, and Ringfenced reserves, and provides an analysis of reserve levels against CSP and benchmarking data from other Inner London boroughs. The report also included illustrative examples of potential financial risks that could impact reserves.