The Audit & Governance Committee of Croydon Council met to discuss a range of issues, including an update on the 2024-25 annual accounts, treasury management activities, and corporate risk management. The committee was also scheduled to review the Annual Governance Statement Action Plan and consider whistleblowing referrals. Also on the agenda was the recruitment of a new independent non-voting member to the committee.

2024-25 Annual Accounts - External Audit Progress Update

The committee was scheduled to receive the third audit progress report for the year ended 31 March 2025, from Grant Thornton UK LLP, the council's external auditors. The report included a list of matters the external auditors wished to highlight, including:

• points regarding the appropriateness of evidence supporting individual samples selected for testing
• limited supporting audit evidence for exit packages
• a difference identified within one bank reconciliation
• income samples identifying amounts not accrued in 2023/24 and included in 2024/25
• amendments to initial details and disclosures regarding IFRS 16¹
• amendments to the figure provided as part of financial instruments, for long-term debtors
• an issue with SEND expenditure relating to the 2024/25 financial year that was incorrectly recorded in 2025/26

It was noted that the government set a backstop date of 27 February 2026, for the finalisation of the 2024-25 annual accounts.

Informing the Risk Assessment Questionnaire

The committee was scheduled to consider and approve the responses to a series of questions from Grant Thornton LLP, designed to inform the audit risk assessment for 2024-25. Some of the key areas of discussion were expected to include:

• Going concern and exceptional financial support: The report noted that the Chartered Institute of Public Finance and Accountancy (CIPFA)'s code of practice requires the council to prepare its accounts on a going concern basis, but that the council's recent medium-term financial strategy made clear that the use of exceptional financial support is not sustainable.
• IFRS 16 – lease accounting: The report noted that work had commenced to account for leases under IFRS 16, and that the council needed to amend the accounting for a number of material leases in its 2024-25 accounts, recognising a 'right of use' asset and a 'lease liability'.

Mid-Year Treasury Management Report 2025/26

The committee was scheduled to review the council's treasury management activities for the first six months of the 2025/26 financial year. The report was prepared in accordance with CIPFA's codes of practice and reviewed compliance with the Treasury Management Strategy Statement and Annual Investment Strategy, treasury borrowing and investment activity, and compliance with treasury and prudential limits. The report included an economic update from MUFG Corporate Markets, the council's treasury advisors, which noted that the first half of 2025/26 saw a pick-up in GDP, a fall in average earnings growth, and CPI inflation at 3.8%. The Bank of England cut interest rates from 4.50% to 4.00%, and the 10-year gilt yield fluctuated between 4.4% and 4.8%. The report also included a forecast that short, medium, and long-dated interest rates would fall over the next few years, although there were upside risks in respect of inflation and a tight labour market.

AGS Action Plan Update

The committee was scheduled to receive an update on the progress made with the Annual Governance Review and Statement (AGS) Action Plan. The 2024/25 AGS acknowledged challenges with the council's financial sustainability, service performance and compliance with systems of internal controls, and the action plan was developed to address these gaps in governance. The key highlights of the update included:

• Most of the financial saving and related programmes in the Stabilisation Plan were on track or completed, but several were in the red and targets were unlikely to be achieved by year end.
• The Future Croydon Transformation Plan 2024-29 was underway, with key achievements including the Adults Living Independently programme, the Payments Project, the AI Assistant, and Oracle Improvements.
• Directorates were working to action all outstanding internal audits agreed actions from the current and previous years.
• The council's constitution had been updated, and further reviews and updates were ongoing through the Council's Constitutional Working Group.
• Progress was being made against the Information Governance Improvement Plan.

Quarterly Whistleblowing Update

The committee was scheduled to receive an update on whistleblowing referrals received for the period January 2025 to October 2025. For this period, there were three whistleblowing referrals, two of which were investigated and no issues of concern were found. One investigation was ongoing.

Recruitment and Appointment of Independent Non-Voting Member

Following the resignation of David Clarke, the current independent member, the committee was scheduled to discuss the process for the recruitment and appointment of a new independent non-voting member for the Audit and Governance Committee. The proposed process involved advertising the role, shortlisting applications, and holding interviews with suitable candidates. The committee was also scheduled to consider a draft advert for the role.

Corporate Risk Management

The committee was scheduled to review details of all of the open Part A risks, as well as Part B risks, which contain exempt information. The report included a dashboard summary of the complete corporate risk register, aligned to the five strategic outcomes of the Mayor's Business Plan 2022-2026². The report also summarised the results of risk management benchmarking with other local authorities, which confirmed that Croydon's approach was generally in line with others. The committee was expected to agree which risk(s) would be the subject of a risk 'deep dive' at a subsequent meeting.