The Audit and Standards Committee of Northumberland County Council met to review treasury management, internal audit reports, standards, and external audit reports. The committee was also scheduled to discuss the strategic audit plan and review its monitoring report and action log for the 2025-26 council year.

External Audit Reports

The committee was scheduled to review the Audit Completion Report for the year ended 31 March 2025. The purpose of this report, prepared by Forvis Mazars LLP, was to summarise the audit findings and conclusions.

The committee was also scheduled to discuss the draft Auditor's Annual Report (AAR), also prepared by Forvis Mazars LLP, which summarises the work undertaken as the auditor for Northumberland County Council for the year ended 31 March 2025.

Standards Update

The committee was scheduled to receive an update on standards matters within the council. This included a recommendation to the council to appoint Mr Simon Walker as Independent Person for a period of four years, which would be reviewable after two years by the Director of Law and Corporate Governance. Mr Walker's application form was included in the report pack as a confidential item.

The update also included statistical information on complaints and the results of the government consultation on changes to the standards framework. The consultation, which closed on 26 February 2025, covered topics such as:

• mandatory minimum Codes of Conduct for all local authorities
• formal Standards Committees
• power of suspension for councillors and mayors
• new disqualification category for gross misconduct
• a national appeals body

The findings of the consultation were published on 11 November 2025 and presented to parliament. According to the report pack, the government intends to legislate for whole-system reform, including a mandatory National Code of Conduct for all councils, formal Standards Committees, a right of review for both complainant and councillor before appeal, new sanctions, a disqualification rule, and a national appeals body. A link to the government response, Strengthening the Standards and Conduct Framework for Local Authorities in England, was included in the report pack.

Treasury Management Mid-Year Report

The committee was scheduled to receive the Treasury Management Mid-Year Report 2025-26 from Councillor Nick Oliver, Cabinet Member for Finance and Value for Money, which provided a review of the activities of the Treasury Management function for the period 1 April to 30 September 2025, and performance against the Treasury Management Strategy Statement (TMSS) 2025-26.

The report noted that all treasury activities met the Treasury indicators set out in the TMSS, and borrowing was within the borrowing limits set by the council. It also noted that all treasury activities had been conducted within the parameters of the TMSS 2025-26, alongside best practice suggested by the CIPFA Treasury Management Code and Central Government.

The report stated that cash balances had increased in the first half of 2025-26, and that interest rates remained high due to inflation. As a result, a decision was taken to minimise external borrowing and instead, wherever possible, increase the reliance on internal borrowing. The council had borrowed an additional £52.500 million in the first half of 2025-26 and the maturities in the first half of 2025-26 were £58.528 million resulting in a net decrease in borrowing of £6.028 million.

The report also included a forecast that there would be an overall saving of around £5.500 million compared to the original interest payable budget for 2025-26 of £36.511 million.

The report recommended that members receive the report and note the performance of the Treasury Management function from 1 April to 30 September 2025.

Strategic Audit Plan 2025/26 - Interim Monitoring Statement

The committee was scheduled to receive a report from the Head of Internal Audit and Risk Management providing an interim monitoring statement in respect of the Strategic Audit Plan for 2025/26.

The report noted that, within the 2025/26 Strategic Audit Plan, 74 assignments were originally programmed. Of these assignments, 38 (51%) had commenced, with 10 of these assignments having been completed and a further 8 assignments substantially complete. Work had also been undertaken on finalising 28 assignments that had commenced prior to 2025/26. Of these assignments, 18 were complete at the end of Quarter 2, with draft reports issued in relation to a further 7 audits, 2 of the remaining audits were substantially complete, with work underway in relation to the final piece of work.

The report also noted that, in addition to completing prior year work and undertaking 2025/26 planned activity, work had also been completed in relation to a further 11 assignments which were not originally included within the 2025/26 Strategic Audit Plan, including support to services, People and Culture, and the Corporate Fraud Team where employment matters or potential fraud and theft were suspected.

The report recommended that the Audit and Standards Committee note and consider the progress set out in the mid-year Interim Monitoring Statement and approve the updated 2025/26 Strategic Audit Plan, attached as Appendix 1 for Strategic Audit Plan 202526 - Interim Monitoring Statement.

Key Outcomes from Internal Audit Reports

The committee was scheduled to receive a report from the Head of Internal Audit and Risk Management, advising of key outcomes from Internal Audit reports issued between May and October 2025.

The report summarised the outcomes from Internal Audit reports which had been finalised, in consultation with management, and issued in the period from May to October 2025. Information was provided on the level of assurance for each audit, the number of recommendations made, areas of good practice identified, and main findings. The progress made / action taken by management in respect of key issues identified from each audit was also included.

The report included details of 13 audit assignments. One of the audit assignments received a 'substantial assurance' opinion, seven received a 'reasonable assurance' opinion and five received a 'limited assurance' opinion. There were 13 'high priority' recommendations, 56 'medium priority' recommendations, and 23 'low priority' recommendations made, but no 'critical priority' recommendations.

The report recommended that the Audit and Standards Committee consider the key findings from, good practice identified in, and management action taken in response to the Internal Audit reports issued in this period, summarised in Appendix 1 for Key Outcomes from Internal Audit Reports.

Monitoring Report / Action Log

The committee was asked to review and note its monitoring report/action log for the 2025/26 council year, as detailed in Audit Committee Monitoring Report Action List 25 26.