The Hackney Council Audit Committee convened to review the council's financial health, risk management strategies, and audit progress, approving the unaudited statement of accounts for 2024-25, and an updated Anti-Fraud and Corruption Policy and Fraud Response Plan. The committee also discussed treasury management, corporate risks, and the progress of both internal and external audits. A decision on the Chief Executive’s Directorate Risk Register was deferred to the next meeting.

Unaudited Statement of Accounts 2024-25

The Audit Committee approved the council’s Unaudited 2024/25 Statement of Accounts, subject to the completion of the external audit. The statement provides a comprehensive overview of the council's financial performance, position, and cash flows for the financial year. It includes the:

• Movement in Reserves Statement
• Comprehensive Income and Expenditure Statement
• Balance Sheet
• Cash Flow Statement
• Housing Revenue Account (HRA) Income and Expenditure Statement
• Collection Fund Revenue Account
• Pension Fund Accounts
• Annual Governance Statement

The Audit Committee also approved, in its own right, the Annual Governance Statement contained within the Statement of Accounts.

The report highlighted that the General Fund's general balance increased by £1m, from £18m to £19m, while the Housing Revenue Account (HRA) general balance remained steady at £15m. However, the report noted a net decrease of £38.6 million in usable reserves from General Fund revenue activities, mainly due to overspending on temporary accommodation and social care services.

The report also noted that the audit of the 2024/25 Statement of Accounts was underway, with a progress update presented later in the meeting.

External Audit Progress Report 2024/25

The Audit Committee considered the External Audit Progress Report 2024/25, which provided an overview of the audit status for the council and Pension Fund financial statements. The audit of the Pension Fund was predominantly complete, and work on the council's accounts was in progress. The auditors expected to substantially complete the council fieldwork by the end of the calendar year.

The auditors had begun their review of the council's Value For Money (VFM) arrangements and identified three risks of significant weaknesses in arrangements:

• Financial Sustainability: An unsustainable and unplanned use of reserves to deliver services.
• Governance (Social Housing): A failure to comply with Health and Safety standards.
• Improving the 3Es (Temporary Accommodation): Inadequate arrangements for making informed financial decisions regarding Temporary Accommodation (TA).

The report noted that the audit fees for 2024/25 currently stood at £569k for the council audit and £84k for the Pension Fund audit, however, the council audit fee was anticipated to increase.

Audit and Anti-Fraud Progress Report to September 2025

The Audit Committee approved the updated Anti-Fraud and Corruption Policy and Fraud Response Plan (Appendix 5 of the reports pack). The committee also considered and noted the progress and performance of the Audit & Anti-Fraud Service to 30 September 2025.

The report highlighted that the Internal Audit function was fully staffed and that 78% of the revised plan assignments were either work in progress, had been completed, or had been scoped/terms of reference agreed. The report also provided a statistical summary of the work undertaken by the Audit Investigation Service for the period April to September 2025, with key financial benefits to arise from selected key areas of enquiry:

• Tenancy Fraud: £910,000
• No Recourse to Public Funds: £585,000
• Blue Badge/Parking: £18,000
• Total: £1,513,000

Finance and Corporate Resources Risk Register

The Audit Committee noted the contents of the report and the attached risk registers and controls in place. The report provided an updated risk summary which was reviewed by the Audit Committee on a regular basis as part of the committee's overview of the council's performance. The report noted that numerous external events and influences were having a considerable impact on the council and this directorate's objectives, notably the fragile economy and accompanying cost of living crisis.

Corporate Risk Update

The Audit Committee considered the Risk Management Scorecard in Appendix 1 of the reports pack. The report provided an updated risk summary which was reviewed by the Audit Committee on a regular basis as part of the committee's overview of the council's performance.

Chief Executive’s Directorate Risk Register

Consideration of the Chief Executive’s Directorate Risk Register was deferred to the next meeting.

Treasury Management Update

The Audit Committee noted the contents of the Treasury Management Update report and the Appendices. The report introduced the treasury management outturn report and the actual prudential indicators for 2024/25, setting out the background for treasury management activity over the previous financial year and confirming compliance with treasury limits and prudential indicators. The report also provided a quarterly update on treasury management activity for the period July 2025 to Sep 2025 of 2025/26.