The Audit Committee of Devon County Council is scheduled to meet on Thursday, 18 June 2026. The meeting's agenda includes a review of the external audit plans for both Devon County Council and the Devon Pension Fund for the 2025/26 financial year. Additionally, the committee will consider the Annual Internal Audit Report for 2025/26 and the Annual Governance Statement.

Devon County Council External Audit Plan 2025/26

The Audit Committee is scheduled to review the external audit plan for Devon County Council for the year ending 31 March 2026. This plan, presented by Grant Thornton UK LLP, outlines the significant audit risks, the materiality threshold for the audit, and the planned timeline. It also details the proposed fee for the audit, which is set by Public Sector Audit Appointments Ltd. The report highlights key risks such as management override of controls, the implementation of a new financial system (Unit 4), and the valuation of land, buildings, and pension liabilities. Grant Thornton will be in attendance to answer any questions from committee members.

Devon Pension Fund External Audit Plan 2025/26

Similarly, the committee will consider the external audit plan for the Devon Pension Fund for the year ending 31 March 2026. This plan, also from Grant Thornton UK LLP, details the significant audit risks, materiality, and timeline for the pension fund's audit. Key risks identified include management override of controls, the valuation of level 3 investments, and the new system implementation. The report also outlines the proposed audit fee for the fund.

Annual Internal Audit Report 2025/26

The Head of Devon Assurance Partnership, Tony Rose, will present the Annual Internal Audit Report for 2025/26. This report provides an opinion on the Council's internal control framework, highlighting progress against the internal audit plan for the year. The overall assurance opinion for the Council is expected to be Reasonable Assurance, with Limited Assurance for Children's Services. The report details the outcomes of the work completed, including improvements in areas such as SEND, recruitment and retention, and controls around payroll and accounts payable. The report also covers the integration of audit, risk, and counter-fraud activities.

Annual Governance Statement

The committee is asked to approve the draft Annual Governance Statement for 2025/26. This statement, prepared by the Director of Finance and Public Value and the Director of Legal and Democratic Services, is a statutory requirement under the Accounts and Audit (England) Regulations 2015. It reviews the effectiveness of the Council's governance arrangements, including its risk management, control, and financial sustainability processes. The statement highlights key challenges such as the Dedicated Schools Grant deficit, SEND reform, and the ongoing Local Government Reorganisation. Action plans for addressing identified issues are included in the appendices.

Internal Audit Plan Update 2026/27

An update to the Internal Audit Plan for 2026/27 will be presented, reflecting adjustments to accommodate increased resource allocation towards Local Government Reorganisation (LGR). The Devon Assurance Partnership (DAP) has revised its approach to focus on LGR-related risks while ensuring sufficient coverage of other key council issues and maintaining the ability to provide the annual assurance opinion. This includes a revised approach to tracking management actions from internal audits, moving from full follow-up reviews to periodic action-tracking.

2026/27 Devon County Council County Fund Balance and Earmarked Reserves Strategy

The committee will review the 2026/27 County Fund Balance and Earmarked Reserves Strategy, which was approved by Cabinet and County Council in February 2026. This strategy is part of the Medium Term Financial Plan and aims to improve financial resilience by increasing reserves. It addresses the external auditors' recommendation to protect and increase reserves, outlining plans for prudent management, limiting the use of reserves, and utilising Flexible Use of Capital Receipts. The strategy details projected balances for general and special purpose reserves, including specific reserves for budget management, business rates risk, climate change, emergencies, and SEND.

Exemption from Tender Overview (January to March 2026)

A report will be presented detailing exemptions from the standard tender process granted between January and March 2026, along with an annual overview for the 2025-26 financial year. The report shows that £1,515,311 was spent across 35 instances of direct contract awards during this period. The Climate Change, Environment and Transport directorate accounted for the largest portion of these exemptions, totalling £793,911 across 14 instances, often related to urgent repairs, climate response, and externally funded projects. Other directorates with exemptions include Public Health, Communities and Prosperity, Children and Young People's Futures, Performance and Partnerships, Corporate Services, and Integrated Adult Social Care. A significant portion of the value (£241,775 across 4 instances) relates to the appointment of specialist interim staff recruited outside of the usual agency contract.

Quarter 4 Strategic Performance Report

The Director of Performance and Partnerships will present the Quarter 4 Strategic Performance Report. This report details the development and ongoing implementation of the Council's Strategic Performance Scorecard, aligned with the Strategic Plan 2025–2029. The scorecard uses a Red, Amber, Green (RAG) rating system to indicate progress against 35 lead indicators across the Council's six strategic priorities. The report outlines the RAG rating methodology and future development plans, including a Corporate Delivery Plan for 2026/27 that will balance ongoing priorities with preparations for Local Government Reorganisation.

Risk Management Audit Update Report for 2026/27

The Head of Devon Assurance Partnership will provide an update on risk management for 2026/27. The report will review the Council's current risk position, including notable changes and high-risk areas such as successful cyber attacks (both internal and partner/supplier related), and the unsuccessful delivery of SEND responsibilities. It will also highlight progress made in enhancing risk management arrangements, including the implementation of a new Risk Management Framework and system, and the ongoing work related to Local Government Reorganisation.

Audit Committee Charter Compliance Plan

The committee will consider the Audit Committee Charter Compliance Plan. This plan outlines the actions required to ensure compliance with the Global Internal Audit Standards (GIAS), which include defining the purpose, authority, and responsibilities of the internal audit function. The plan details how the committee will engage with the Head of DAP, ensure appropriate resourcing, and review the internal audit charter annually. It also covers the committee's role in approving the risk-based internal audit plan and reviewing the Head of DAP's performance.

Senior Finance Officer Role – Settling-In Update

A verbal update is scheduled to be received from the Director of Finance and Public Value regarding the settling-in of the Senior Finance Officer role.

Future Meetings

Dates for future Audit Committee meetings are scheduled for 30 September 2026 and 14 December 2026, with a further meeting planned for 25 February 2027.

Exclusion of the Press and Public

Part II of the meeting will involve the exclusion of the press and public for Item 20, Unit 4 Finance System – Assurance Update, due to the likely disclosure of exempt information relating to financial or business affairs.