The Audit and Governance Committee of North Northamptonshire Council met on Monday 15 June 2026 to review the external auditors' annual report and the internal audit service's annual report and progress updates. The committee received and noted the External Audit Plan for 2025/26, and also noted the Annual Internal Audit Report and Opinion for 2025/26, along with the Internal Audit progress report.

External Auditors Annual Report

The committee received and noted the External Audit Plan for 2025/26, as presented by Mark Stocks, External Auditor from Grant Thornton. This plan outlines the scope and timing of the statutory audit for the financial year ending 31 March 2026. Key risks identified for the audit include management override of controls, valuation of land and buildings, council dwellings, investment properties, pension fund gross liability, capital grants received in advance, cash and cash equivalents, and the implementation of IFRS16. The plan also details the approach to materiality, with planning materiality set at £16.3m. Significant weaknesses in Value for Money arrangements were identified concerning financial sustainability, particularly in developing savings plans to bridge medium-term budget gaps and managing the Dedicated Schools Grant deficit. Governance risks were also highlighted, relating to statutory reporting and the capacity and resilience of the finance team. The proposed audit fee for 2025/26 is £822,940.

Internal Audit Report and Opinion 2025/26

Rachel Ashley-Caunt, Chief Internal Auditor, presented the Annual Internal Audit Report and Opinion for 2025/26. The report concluded that Moderate Assurance can be given over the adequacy and effectiveness of the Council's control environment for 2025/26. This opinion is based on the work undertaken throughout the year, with 97% of opinions on control environment and compliance being at least Moderate Assurance. However, Limited Assurance was given for compliance with 'fit and proper person' checks for taxi licence holders, specifically concerning the evidencing of right to work checks and the consistent application of Disclosure and Barring Service (DBS) re-checks. Limited Assurance was also issued for the administration of DBS checks for home to school transport providers. The report noted that 71% of agreed management actions from audit recommendations were completed during the year. Key risks highlighted included significant financial pressures, particularly concerning Children's Services and the Dedicated Schools Grant deficit, and the Council's first Social Housing Regulator inspection resulted in a C2 grading. Limitations to the opinion were noted regarding IT systems hosted under lead authority arrangements and the absence of the Northamptonshire Children's Trust's annual report.

Internal Audit Progress Report

The committee also received an update on the progress of the Internal Audit team's work. Since the last meeting, six audit reports had been finalised. Key findings from these audits included:

• Housing complaints: While the Council's policies align with the Housing Ombudsman's Complaint Handling Code, some non-compliance was identified within Tenancy Services, highlighting the need for strengthened oversight. The formal approval of the annual self-assessment against the Complaint Handling Code was not clearly documented.
• Approved Mental Health Professionals (AMHP): Good practice was noted in referral allocation and timely completion of assessments. However, weaknesses were identified in procedural inconsistencies, a lack of defined targets for assessment completion, and insufficient management oversight of open referrals.
• Procurement compliance: A generally sound and improving framework of procurement controls was noted, with higher value procurements demonstrating strong compliance. However, opportunities for improvement were identified in lower value, service-led procurements, particularly concerning the consistent application of VAT inclusive contract valuation and documentation standards.
• Taxi licensing – fit and proper person checks: While DBS, medical, DVLA, and NR3 checks were consistently performed, there were issues with evidencing right to work checks and delays in suspending licences when DBS registration was not maintained. Inconsistent application of penalty points was also noted.
• Home to school transport (safeguarding checks): Good practice was observed in the policy framework and operator audits. However, weaknesses were found in driver training expectations, administration of DBS checks, and the centralisation of records for school inspection outcomes.
• Local taxation: Processes for allocating income and refund processes were found to be good. However, weaknesses were identified in the recovery of older debts and inconsistencies in cash balancing processes between business rates and council tax. Approval limits for refunds were also not defined in the Constitution.

The report also detailed the progress of the 2026/27 audit plan and provided an overview of the implementation of recommended actions, noting that 63 recommendations were overdue for implementation as of 30 May 2026.