The Audit Committee of Hertfordshire Council met on Friday, 5 June 2026, to review draft audit plans, approve accounting policies, and discuss annual assurance and governance statements. Key decisions included the noting of draft audit plans for the County Council and Pension Fund, and the unanimous approval of the 2025/26 Statements of Accounting Policies for both entities. The committee also unanimously approved the Annual Assurance Statement and Internal Audit Report for 2025/26, along with the updated Internal Audit Charter for 2026/27. Finally, the draft Annual Governance Statement for 2025/26 and the updated Code of Corporate Governance for 2026/27 were also approved.

Draft Audit Plans for Hertfordshire County Council and the Pension Fund

The committee received and noted the draft audit plans for the County Council and the Pension Fund for the 2025/26 financial year, presented by Tim Cutler from KPMG. The plans detailed the scope, materiality levels, and audit approach, including the proposed use of AI transaction scoring for the first time in local authority audits. Significant risks identified included the valuation of land and buildings, management override of controls, and the valuation of post-retirement benefit obligations. For the Pension Fund, the significant risk identified was management override of controls, with other areas of focus including the valuation of investments and the actuarial position of the scheme.

Hertfordshire County Council and Pension Fund Statement of Accounting Policies

The committee unanimously approved the 2025/26 Statements of Accounting Policies for both Hertfordshire County Council (HCC) and the Pension Fund. The primary amendment for HCC's policies related to changes in the CIPFA Code concerning the valuation of property, plant, and equipment, introducing a requirement for valuations to be conducted on a five-year rolling basis, supported by indexation in intervening years. The Pension Fund's policies remained unchanged from the previous year.

Hertfordshire County Council – Annual Assurance Statement and Internal Audit Annual Report 2025/26

The committee unanimously approved the Annual Assurance Statement and Internal Audit Annual Report for 2025/26. The report, presented by Darren Williams, Head of Shared Internal Audit Service, concluded that there is reasonable assurance regarding the adequacy and effectiveness of the Council's framework of governance, risk management, and control. The report highlighted that 94% of planned audit days were delivered, 90% of audits reached draft report stage, and client satisfaction was at 91%. While four limited assurance audits were issued, these were deemed specific to the areas audited and did not indicate wider control issues. The report also detailed the progress on implementing audit recommendations, with all high-priority recommendations and most medium-priority ones now complete or fundamentally complete. The committee also approved the Internal Audit Charter for 2026/27.

Annual Governance Statement 2025/26 and Code of Corporate Governance 2026/27

The committee unanimously approved the draft Annual Governance Statement for 2025/26 and the updated Code of Corporate Governance for 2026/27. The Annual Governance Statement concluded that the Council has sound governance arrangements in place. It highlighted the ongoing Local Government Reorganisation (LGR) programme as a significant governance issue, with extensive structures in place to manage this. The report also noted the progress made in addressing the accelerated cause of concern within the fire service, with two out of five recommendations closed. The response to the Local Government and Social Care Ombudsman was also reviewed, showing significant improvement. The statement also identified a need for further work to ensure a clear understanding of the definitions between risk and governance issues among senior leadership. The updated Code of Corporate Governance sets out the Council's standing arrangements for governance.

Future Work Programme

The committee noted the proposed future work programme, which includes a draft statement of accounts, Treasury Management reports, further updates on the audit, and annual reports on whistleblowing, fraud, and internal audits. Risk management, including a revised framework and a report on cyber security, will also be on the agenda for the next meeting.