The Audit Committee of Manchester Council is scheduled to convene on Tuesday, 28 July 2026, with a key focus on reviewing the draft annual accounts for the 2025/26 financial year. Attendees will also consider the external auditors' audit strategy memorandum, outlining their planned approach for the upcoming audit.

2025/26 Annual Accounts Draft

A significant portion of the meeting is dedicated to the draft annual accounts for the 2025/26 financial year. The report from the City Treasurer and Interim Deputy Chief Executive and Deputy City Treasurer will be presented, providing attendees with the unaudited statement of accounts for their review. This document, which is extensive, details the Council's financial performance and position for the year, including comprehensive income and expenditure, balance sheet, movement in reserves, and cash flow statements. It also includes detailed notes on accounting policies, critical judgements, and key sources of estimation uncertainty. The report outlines the Council's financial strategy, funding, and spending for 2025/26, highlighting an overspend of £4.2 million against the net revenue budget, which is to be funded from the General Fund reserve. The capital programme outturn for 2025/26 is also detailed, showing an underspend of £145.2 million against a budget of £466.1 million, with explanations provided for the variances. The Housing Revenue Account (HRA) reports an overspend of £8.757 million, necessitating a significant drawdown from reserves. The report also includes the Dedicated Schools Grant (DSG) outturn, revealing an overspend of £29.1 million, contributing to a cumulative deficit of £59.2 million.

External Audit - Audit Strategy Memorandum

The Council's external auditors, Forvis Mazars LLP, will present their Audit Strategy Memorandum for the year ending 31 March 2026. This document outlines the planned scope and approach of the audit, including the identification of significant and enhanced audit risks. It details the audit team, the planned timeline for fieldwork, and the approach to rebuilding assurance following previous disclaimed opinions. The memorandum also addresses materiality levels for both the consolidated and parent-only financial statements, and discusses the firm's independence considerations. Key audit risks identified include management override of controls, the valuation of property, plant, and equipment, and the valuation of investment properties. The strategy also highlights the complexities of preparing group financial statements and the accounting for Private Finance Initiatives (PFIs) under IFRS 16. The auditors will be seeking the committee's views on any other identified risks, communications with regulators, and areas requiring particular attention.

Work Programme and Decisions Monitor

The committee will also review its Work Programme and Decisions Monitor. This agenda item allows members to discuss and agree any necessary changes to the committee's future work programme, ensuring it remains aligned with the Council's priorities and addresses key governance and financial matters. The report indicates that there are no active decisions to report from previous meetings, and the work programme for 2026/27 is being reviewed, with some meetings scheduled for removal or discussion regarding their content.