The Audit Committee of Middlesbrough Council met on Thursday 25 June 2026 to review strategic risks, approve a training programme for its members, and receive updates on internal audit and counter fraud activities. Key decisions included the approval of a new training programme for committee members and an agreement to increase investment in the council's internal audit provision.

Management of Strategic Risk 17 - Funding for Key External Projects

The committee received an update on Strategic Risk 17, concerning funding for key external projects led by the Tees Valley Combined Authority (TVCA) and the Mayoral Development Corporation (MDC). While no direct financial risk to the Council had materialised, progress on regeneration projects, including the Gresham development and the Crown site, had been slower than anticipated. Officers are continuing to work with the TVCA and MDC to monitor progress and manage associated risks. The committee noted the latest position and was assured that appropriate arrangements were in place to manage the risk. Minor drafting errors in the published report were also noted and disregarded.

Audit Committee Member Training Programme

The Audit Committee approved a proposed training programme for its members for the 2026/27 financial year. This programme, developed in response to recommendations from a Local Government Association review, aims to enhance members' knowledge and skills in areas such as governance, financial management, audit, risk, and counter fraud. Attendance at identified mandatory training sessions will be required for all committee members and substitute members. A concise overview of the programme will be developed by the end of October 2026 to raise awareness of the committee's role and encourage future interest in membership.

Head of Internal Audit Annual Report 2025/26

The committee noted the Head of Internal Audit's Annual Report for 2025/26, which summarised the internal audit work completed during the year. The Head of Internal Audit provided an overall opinion of reasonable assurance regarding the adequacy and effectiveness of the Council's framework of governance, risk management, and internal control. No significant control weaknesses requiring inclusion in the Council's Annual Governance Statement were identified. The report also detailed internal audit opinions issued, progress in implementing audit actions, and quality assurance arrangements. The committee requested a further report in September 2026 on the Council's payroll reconciliation arrangements and implemented improvements.

Outcome of the Review of Internal Audit

The committee approved a proposal to increase investment in the Council's internal audit provision, subject to resource availability through the Medium-Term Financial Plan. This decision follows a review that identified Middlesbrough's investment in internal audit as significantly lower than comparable unitary authorities. The proposed phased increase in internal audit days, from the current 555 to 1,000 days by 2029/30, aims to strengthen the visibility and impact of the internal audit function, enabling more proactive and consultancy-based work. Veritau will present a revised work programme detailing how these additional audit days will be utilised to a future meeting.

Counter Fraud Annual Report

The committee noted the Counter Fraud Annual Report for 2025/26, which highlighted a successful year for counter fraud activity, with significant savings achieved, primarily through the recovery of unpaid business rates. The report detailed a continued growth in referrals, with 155 received during the year, leading to 27 completed investigations. The council also continued to work closely with Human Resources on whistleblowing matters, receiving four reports during the year.

Work Programme

The committee considered its Work Programme for the upcoming year. It was agreed that additional items arising from Internal Audit reports would be incorporated where appropriate, and that actions from previous meetings would be circulated to members in advance of future meetings. The next Strategic Risk Register deep dive, scheduled for September 2026, will focus on SR-04 – Unlawful Decision by the Council.