The Audit Committee of Manchester Council is scheduled to convene on Tuesday, 16 June 2026, to review the council's financial performance and governance. Key discussions are expected to centre on the Treasury Management Outturn Report for 2025-26, the Annual Internal Audit Assurance Opinion and Report for the same period, and the draft Annual Governance Statement for 2025-26. The committee will also consider the Internal Audit Plan for 2026-27 and proposed changes to the council's Accounting Policies for 2025-26.

Treasury Management Outturn Report 2025-26

The committee is scheduled to review the Treasury Management Outturn Report for the financial year 2025-26. This report, prepared by the City Treasurer, is intended to provide an overview of the council's treasury management activities during the year and an update on activity in 2026-27. The report will detail the council's borrowing and investment strategies, its compliance with prudential indicators and treasury limits, and the economic conditions that influenced treasury management decisions. It will also highlight the portfolio position as of 31 March 2026, detailing borrowing and investment figures, and discuss the capital financing budget forecast. The report is expected to cover the council's borrowing activities in 2025-26, including the use of Public Works Loan Board (PWLB) and temporary borrowing, as well as the impact of economic conditions on interest rates. The committee is asked to consider and comment on the information presented in the report.

Annual Internal Audit Assurance Opinion and Report 2025/26

The Assistant Director, Assurance and Risk, will present the annual assurance opinion and report on the council's systems of governance, risk management, and internal control for the year ending March 2026. This report is a key component in informing the council's governance statement. It will provide an overall opinion on the adequacy and effectiveness of the council's framework, summarising the outcomes of internal audit work and other sources of assurance. The report will detail audit opinions issued during the year, categorised by assurance level (substantial, reasonable, limited, or no assurance), and highlight key risks and issues identified across various service areas, including regulatory oversight, core systems of control, and specific directorates such as Adults Services and Children's Services. The report will also outline the progress of the Internal Audit Plan delivery and the status of audit recommendations. The committee is recommended to consider and comment on this report.

Draft Annual Governance Statement 2025/26

The committee will consider the draft Annual Governance Statement (AGS) for 2025-26. This statement is produced annually to review the effectiveness of the council's governance framework and systems of internal control, as required by the Accounts and Audit Regulations 2015. The report outlines the council's adherence to the CIPFA/SOLACE 'Delivering Good Governance in Local Government: Framework', including its Code of Corporate Governance. It details the mechanisms used to assess governance effectiveness, referencing sources of assurance such as the Corporate Management Team's oversight, scrutiny committee reviews, internal and external audit reports, and the Council Risk Register. The statement also identifies key governance challenges for 2026/27 and proposes an action plan to address them. The committee is asked to comment on the draft AGS.

Accounting Policies 2025/26

A report will be presented outlining proposed changes to the council's Accounting Policies for the 2025-26 financial year, in line with updates to the CIPFA Code of Practice on Local Authority Accounting. A significant change relates to the revaluation of the council's assets, moving to a five-year rolling programme for Property, Plant and Equipment (PPE) valuations, supplemented by annual indexation. This change aims to reduce the burden of the valuation process. The report details which asset categories are affected by this change and the implications for depreciation. The committee is recommended to consider the accounting concepts and policies for the 2025-26 annual accounts.

Internal Audit Plan 2026/27

The Assistant Director, Assurance and Risk, will present the proposed Internal Audit Plan for 2026/27. This risk-based plan is designed to support the annual opinion on the effectiveness of the council's governance, risk management, and internal control systems, in line with Global Internal Audit Standards (GIAS) and CIPFA's Code of Practice. The plan outlines proposed audit coverage for the year, with a significant allocation of resources towards counter fraud and irregularity investigations, reflecting an increased focus in this area. The report details the basis for the plan, the context of the council's priorities and risks, and the planned areas of audit work, linking them to Corporate Plan priorities and the Council Risk Register. The committee is requested to review the proposed plan.

External Auditor Update

The committee will receive an update from the council's external auditors, Forvis Mazars LLP. This report will cover the progress of the 2025/26 audit, including the planning phase and the approach to rebuilding assurance following previous disclaimed audit opinions. It will detail the identified risks for the 2025/26 audit, which are expected to be similar to the prior year, including management override of controls and the valuation of pension liabilities and assets. The report will also outline lessons learned from the 2024/25 audit and the planned approach for the 2025/26 audit, which will involve auditing opening balances, reserves, 2025/26 transactions, and group accounts. The auditors will confirm their planned approach to rebuilding assurance, potentially using a proof in total method, and will provide an update on the anticipated audit report pathway over the coming years.

Work Programme and Decisions Monitor

Finally, the committee will review its Work Programme and Decisions Monitor. This report provides an overview of upcoming agenda items for future meetings, including the 2025/26 unaudited annual accounts, revenue and capital budget outturns, and the external audit plan. It also includes a section for items for information and the draft Work Programme for 2026/27, detailing proposed topics, their purpose, and responsible officers. The committee will be invited to discuss this information.