The Audit Committee of Hertfordshire Council met on Friday 27 March 2026 to discuss a range of critical governance, risk, and audit matters. Key decisions included the reappointment of the independent audit committee member, Richard Harbord, for a further two years, and the approval of the proposed Anti-Fraud Plan for 2026-27. The committee also received updates on the delivery of the 2025/26 Anti-Fraud Plan, the proposed Internal Audit Plan for 2026/27, and the SIAS Internal Audit Progress Report. A significant portion of the meeting was dedicated to a risk focus report on Local Government Reorganisation (LGR) in Hertfordshire, highlighting the substantial risks and ongoing mitigation efforts.

Re-appointment of Independent Audit Committee Member

The committee agreed to re-appoint Richard Harbord as the Independent Audit Committee Member for a further two years, extending his original four-year term. This decision was made in recognition of his valuable contributions in areas such as financial reporting, external audit, and risk management, which have reinforced the committee's independence and provided continuity. The report noted that recruiting a new member for a two-year period would be inefficient given current pressures, and any new appointee would require significant time to become effective.

Report of the HCC Audit Committee for 2025-2026

The committee reviewed and approved the draft Report of the HCC Audit Committee for the period 1 April 2025 to 31 March 2026, prior to its submission to County Council. The report detailed the committee's activities and effectiveness in overseeing financial reporting, internal and external audit, anti-fraud measures, risk management, corporate governance, and treasury management. It highlighted the committee's commitment to maintaining good governance and robust assurance throughout a challenging year, including regular communication with officers and auditors, and a focus on risk-based reporting.

Risk Focus Report: Local Government Reorganisation in Hertfordshire

A significant portion of the meeting was dedicated to discussing the corporate risk CORP0004, relating to Local Government Reorganisation (LGR) and devolution in Hertfordshire. This risk is currently rated as Red/Severe with a score of 20, reflecting a high likelihood and very high impact. The report detailed the government's plans for LGR in two-tier areas, with Hertfordshire councils having jointly submitted proposals for two, three, or four unitary authorities. A government consultation on these proposals was underway, with a decision from the Secretary of State anticipated in the summer.

The committee noted the control measures being undertaken to mitigate this risk, including lobbying efforts, continued dialogue with affected councils, clarification of government instructions, and robust stakeholder and staff communications. A new programme structure has been established to manage the transition, co-chaired by the Chief Executives of Hertfordshire County Council and Watford Borough Council, with Anna Morrison acting as interim Programme Director. The report also highlighted the county's ambition to secure a Mayoral Strategic Authority (MSA) for Hertfordshire, with a formal expression of interest submitted.

Risk Management Update

The committee received an update on Hertfordshire County Council's corporate risks, noting an increase in the number of corporate risks from 11 to 14 since the December 2025 report. Key changes included the split of the Workforce risk into Internal Workforce (CORP0001) and External Workforce / Market Capacity (CORP0013), and the IT Resilience risk into Cyber (CORP0011) and Organisational Resilience & Business Continuity (CORP0014). A new risk, ICB Changes (CORP0015), was added, reflecting uncertainties arising from changes in Integrated Care Board structures. The SEND Sustainability risk (CORP0008) was noted as having reduced to its target score. Three risks remained above their target score: Climate Change (CORP0005), Large-Scale Development in Hertfordshire (CORP0007), and ICB Changes (CORP0015). A revised Risk Management Policy and Strategy was presented for consideration.

Proposed Anti-Fraud Plan 2026-27

The committee was asked to review and approve the proposed Anti-Fraud Plan for 2026-27. The plan, developed in partnership with the Hertfordshire Shared Anti-Fraud Service (SAFS), outlines measures to prevent, deter, investigate, and pursue fraud and corruption. It aligns with the Fighting Fraud and Corruption Locally Strategy and incorporates the 'pillars' of Protect, Govern, Acknowledge, Prevent, and Pursue. The plan details SAFS resources, budget, and staffing, and outlines workplans and projects across various service areas, including Adult Care, Children's Services, Revenue Protection, and Blue Badge misuse. Key performance indicators (KPIs) and standards of service were also presented.

Delivery of the 2025/26 Anti-Fraud Plan

A progress report on the delivery of the 2025/26 Anti-Fraud Plan was presented, covering activity up to December 2025. The report highlighted the Council's robust approach to protecting public funds, including proactive and reactive measures, use of technology, and adherence to best practices. Prevention activities included policy reviews, fraud alerts, training sessions, and executive reports identifying system weaknesses. Reactive work showed 318 allegations received, with 38 cases under investigation and an estimated £1.3m in losses recorded. Proactive work included the National Fraud Initiative, the Herts FraudHub, and the Council Tax Review framework, which collectively identified significant savings and potential frauds. SAFS received several awards for its work.

Hertfordshire County Council – Internal Audit Plan 2026/27

The committee was presented with the proposed Internal Audit Plan for 2026/27, which includes 1219 days of coverage, unchanged from the previous year. The plan is designed to be dynamic and responsive to changing risks and priorities. It includes 20 days allocated to provide assurance on the Council's preparations and risk management for Local Government Reorganisation (LGR). The plan also covers cross-cutting audits on Artificial Intelligence, Agency Staffing, Staff Annual Performance Management, and Gifts and Hospitality/Conflicts of Interest. The Schools Audit Plan continues to focus on financial value, cyber security, and procurement. The report also detailed the SIAS Internal Audit Strategy and Service Plan for 2026/27.

SIAS Internal Audit Progress Report

This report provided an update on the delivery of the Council's Internal Audit Plan for 2025/26 as of 6 March 2026. As of this date, 85% of planned audit days had been delivered, and 72% of projects were completed to draft report stage. The report detailed the outcomes of ten assurance projects, including two rated as Limited Assurance for Section 17 Payments and the Care Leavers Service. Three new high priority recommendations were made in the Care Leavers Service audit. The report also outlined the implementation status of outstanding high and medium priority recommendations, with 67% of high priority recommendations implemented and 44% of medium priority recommendations implemented. Performance against key indicators was also presented, showing slight behind-profile delivery in planned days and projects to draft report stage, attributed to factors including client requests, staff capacity, and LGR pressures. A briefing paper on Domain III of the Global Internal Audit Standards was also included.