The Governance Committee of the Isles of Scilly Council met on Wednesday 10 June 2026. The meeting was scheduled to consider the draft Annual Governance Statement for 2025-26 and the Internal Audit Progress Report for 2025/26, along with the proposed plan for 2026/27.

Draft Annual Governance Statement 2025-26

The committee was scheduled to consider the draft Annual Governance Statement (AGS) for 2025-26. This statement is a requirement under the Accounts and Audit Regulations 2015 and aligns with the CIPFA/SOLACE Framework: Delivering Good Governance in Local Government. The AGS aims to ensure that resources are directed in accordance with agreed policies and priorities, that decision-making is sound and inclusive, and that there is clear accountability for the use of resources to achieve desired outcomes for service users and communities.

The report pack indicated that the committee would be asked to recommend the Council's Code of Governance for approval by Full Council. It was also proposed that the draft AGS be approved for publication for a period of public inspection, before being brought back to Full Council in its final, externally audited form. The report highlighted that a significant governance issue identified during 2024-25, Reviewing and Updating Policies and Procedures, required further action in 2026-27 and was also noted as an improvement recommendation in the Council's External Audit Report.

The Code of Governance, which forms part of the AGS, is structured around seven core principles:

• Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law.
• Ensuring openness and comprehensive stakeholder engagement.
• Defining outcomes in terms of sustainable economic, social, and environmental benefits.
• Determining the interventions necessary to optimise the achievement of intended outcomes.
• Developing the Council's capacity, including the capability of its leadership and individuals within it.
• Managing risks and performance through robust internal control and strong public financial management.
• Implementing good practices in transparency, reporting, and audit to deliver effective accountability.

The report detailed how the Council has addressed these principles, noting that work was ongoing to update the Council's Corporate Plan and that the Council had published a Medium Term Financial Plan. It also highlighted that the Council's External Auditors had made improvement recommendations regarding the establishment of a structured policy management framework and strengthening oversight of internal audit actions.

Internal Audit Progress Report 2025/26 and Proposed Plan for 2026/27

The committee was scheduled to receive an update on the Internal Audit Progress Report for 2025/26, which included the Annual Report, and to consider the proposed Internal Audit Plan for 2026/27. The Internal Audit Annual Report provided an opinion on the adequacy and effectiveness of the Council's arrangements in respect of internal control.

For the 2025/26 period, the overall opinion provided was one of reasonable assurance, indicating that there is a generally sound system of governance, risk management, and control in place, although some issues, non-compliance, or scope for improvement were identified. Specific audits covered areas such as the Cultural Centre and Museum Project, Cyber Security, Risk Management, and Budget Management. The audit of Budget Management resulted in a Limited assurance opinion, citing weaknesses in oversight and accountability for budget management across Adult and Children's services due to the absence of permanent senior management.

The proposed Internal Audit Plan for 2026/27 included reviews of the Cultural Centre, Financial Control – Debt Management, Cyber Security, the Health and Care Integrated Project, Sickness and Absence, and Risk Management. The plan also included provision for following up on agreed management actions. A key recommendation from the external audit, to include a summary of outstanding internal audit recommendations in progress reports, was noted as being implemented during 2026/27. The report also confirmed that the Council's internal audit services operated within the approved budget.