The Audit Committee of Hackney Council met on Wednesday 17 June 2026. The committee considered recommendations related to treasury management, the corporate risk register, the internal audit annual report, and the annual fraud and irregularity report. The committee also considered the external audit plan for 2025/26.

External Audit Plan 2025/26

The Audit Committee considered and noted the contents of the 2025/26 Audit Strategy Memorandums from Forvis Mazars LLP, the Council's external auditor, for both the Council and the Pension Fund. The memorandums outlined the planned audit approach, including identified significant and enhanced risks. For the Council's accounts, significant risks included management override of controls, the valuation of property, plant and equipment, investment properties, and the pensions defined benefit liability. For the Pension Fund, significant risks related to management override of controls and the valuation of level 3 investments. The audit plan also identified new value for money risks in SEND Services and Adult Social Care, and continued follow-up on risks related to reliance on reserves and Housing Health & Safety Standards. Materiality thresholds were set for both the consolidated financial statements and the parent-only financial statements, with specific materiality applied to senior officers' remuneration disclosures. The proposed audit fees for 2025/26 were also noted.

Treasury Management Update Report

The Audit Committee received an update on treasury management activities from April 2026 to May 2026. The report highlighted that UK GDP had increased by 0.6% in Q1 2026, and CPI inflation was 2.8% in April 2026. The Bank of England's Monetary Policy Committee voted to maintain the Bank Rate at 3.75%. The Council had £343 million in external borrowing, comprising £1 million through Hackney Green Investment, £82 million in short-term borrowing, and £260 million from the Public Works Loan Board. Average daily cash balances held were £20 million, a decrease from the previous year. Short-term investments were placed in highly rated UK institutions due to economic volatility. The report also detailed counterparty updates, including the acquisition of Clydesdale Bank plc's banking business by Nationwide Building Society, and an upgrade to Lancashire County Council's credit rating. Credit score analysis indicated a strong counterparty credit quality. The comparison of interest earnings showed a reduction compared to the previous financial year, reflecting lower cash balances and declining interest rates. Investment balances had reduced to £22 million at the end of May 2026, and it was anticipated that investment levels would continue to fluctuate.

Corporate Risk Register

The Audit Committee was updated on the Council's Corporate Risk Register as at June 2026. The report detailed how risks are identified and managed throughout the financial year, with an emphasis on embedding risk management practices. Notable risks included the Council's challenging financial position, with a predicted overspend of £8.3 million for the current financial year even after utilising £17.7 million of reserves. This overspend was attributed to increasing costs in Temporary Accommodation and Adult/Children's Social Care. Cyber security was highlighted as a rising threat, with ongoing efforts to defend against vulnerabilities. Other significant risks discussed included workforce pressures due to budgetary constraints, corporate resilience, the risk of persons suffering significant harm, temporary accommodation pressures, climate change, new legislation, and the Corporate Transformation Programme. The report also detailed control measures in place, such as spend control measures, 'invest to save' programmes, and project and programme management for the transformation programme.

Internal Audit Annual Report 2025/26

The committee received the Internal Audit Annual Report for 2025/26, which detailed the performance of the Internal Audit Service and provided an opinion on the Council's framework of governance, risk management, and internal control. The report indicated that 87% of audits were completed or at draft report stage by 31 May 2026, against a target of 100%. The average time between fieldwork completion and draft report issuance was 10.6 days, against a target of 15 days. Management feedback showed 100% satisfaction with audit services. The report concluded that there is reasonable assurance that the Council's control framework is operating effectively, despite ongoing challenges. Key themes identified included ICT audits, with a return to planned work following disruption from the cyber attack, and key financial systems audits, which generally received 'Significant' or 'Reasonable' assurance. The report also noted that implementation rates for addressing internal audit findings were lower than target, particularly among the TMOs. The committee was asked to approve the updated Internal Audit Charter and Strategy.

Annual Fraud & Irregularity Report 2025/26

The committee was presented with the Annual Fraud and Irregularity Report for 2025/26. The report detailed the work of the Audit Investigation Team (AIT) and the Tenancy Fraud Team (TFT), who received 633 referrals and enquiries during the year. The report highlighted estimated savings of £3,077,941 arising from fraud investigation work, including £1,684,000 from Tenancy Fraud and £1,130,040 from 'No Recourse to Public Funds' cases. The Blue Badge Fraud Team recovered 97 misused parking permits and secured 12 prosecutions. The Migrant Children and Families Team prevented £1,130,040 in annual benefits. The report also detailed the Council's compliance with the Regulation of Investigatory Powers Act (RIPA) and its approach to money laundering and Proceeds of Crime Act (POCA) investigations. Future developments include continued fraud awareness training, proactive fraud plan delivery, and collaboration with partners.

The committee considered recommendations related to the Treasury Management Update Report, Corporate Risk Register, Internal Audit Annual Report 2025/26, and the Annual Fraud & Irregularity Report 2025/26. The External Audit Plan 2025/26 was noted.