The meeting focused on the performance and future plans of Wolverhampton's internal audit team, the financial sustainability of the council, and the audit fees for the upcoming year.

Internal Audit Performance

Robin, an external assessor, reported that Wolverhampton's internal audit team ranks in the top quartile, usually reserved for larger or private sector teams. This high ranking is attributed to an established internal audit team and effective communication with clients. A survey commissioned by Robin had a 92% response rate, indicating high engagement and value placed on internal audit by the council and other clients. However, Robin highlighted areas for development, particularly in preparation for new global internal audit standards coming into force in 2025. These areas include better alignment with clients' risk management frameworks and clearer communication of management objectives.

Financial Sustainability

David presented the annual governance statement, emphasizing the council's good governance practices and financial management. He highlighted the importance of internal audit in proactively identifying issues and the council's transparency in performance reporting. The council's financial sustainability remains a significant concern, with projected deficits rising to £32.6 million by 2026-27. The council plans to address these challenges through early decision-making and regular updates to the medium-term financial strategy (MTFS).

Audit Fees

Andrew Smith from Grant Thornton presented the audit plan for 2023-24, noting a significant increase in audit fees to approximately £580,000. This increase is attributed to the growing complexity of audits and the need for more rigorous work to meet regulatory standards. The council expressed concerns about the rising costs and emphasized the importance of transparency and accountability in managing these fees.

Other Discussions

• West Midlands Pension Fund: Concerns were raised about delays in pension payments, and it was agreed that regular updates would be provided to the Audit and Risk Committee.
• Terms of Reference: The committee reviewed and noted the terms of reference, confirming that they remain fit for purpose.

The meeting concluded with a focus on maintaining transparency, accountability, and proactive management of financial and audit-related challenges.