The Governance Standards and Audit Committee of Merton Council met on Thursday 16 July 2026 to review the council's audit plans and reports. The committee was scheduled to discuss the external audit planning report for 2025/26, the internal audit annual report, and the internal audit plan for 2026/27. Additionally, the committee was set to review the annual report of the Governance, Standards and Audit Committee for 2025/26 and the annual governance statement. Finally, nominations for Alderperson status and the committee's work programme were also on the agenda.

2025/26 External Audit Planning Report

The committee was scheduled to review the external audit planning report for the year ending 31 March 2026. This report, prepared by Ernst & Young LLP, outlines the proposed audit approach and scope for the upcoming audit. It details the audit strategy, including the rebuilding assurance phase, which aims to address the backlog in local government audits and support a return to unqualified audit opinions. The report also identifies key audit risks, such as management override of controls and the incorrect valuation of Property, Plant and Equipment, and outlines the auditor's response to these risks. Materiality for the audit has been set at £12.7 million. The report also covers the auditor's responsibilities for value for money assessments, focusing on financial sustainability, governance, and improving economy, efficiency, and effectiveness.

Internal Audit Annual Report

The committee was scheduled to receive the Internal Audit Annual Report for 2025/26. This report summarises the Chief Audit Executive's annual opinion on the adequacy and effectiveness of the council's governance, risk management, and internal control arrangements. The report indicates that while there are generally sound arrangements in place, some areas require targeted improvement, with several reviews identifying Limited Assurance outcomes and overdue actions. The report details the delivery of the Internal Audit Plan, including the assurance levels awarded for various audits, with 64% of completed audits receiving either Reasonable or Substantial Assurance . Key issues identified include weaknesses in grants to voluntary groups, cyber governance, client financial affairs, and the high needs block. The report also details the implementation status of recommendations, with 15 Priority 1 actions remaining outstanding.

Internal Audit Plan 2026/27

The committee was scheduled to review the draft Internal Audit Plan for 2026/27. This plan outlines the proposed audit activities for the upcoming year, developed based on audit knowledge, risk assessment, the Council's Strategic Risk Register, and discussions with Departmental Leadership Teams. The plan aims to focus audit resources on changing risks and priorities to ensure effective assurance arrangements.

Annual Report of the Governance, Standards and Audit Committee 2025/26

The committee was scheduled to review its own Annual Report for 2025/26. This report, prepared by the Chief Audit Executive, summarises the committee's work throughout the year, demonstrating how it has supported good governance and fulfilled its terms of reference. The report concludes that the committee has met its objectives, including providing oversight of risk management, internal control, financial reporting, and anti-fraud arrangements. It also sets out the committee's proposed work plan for 2026/27. The report highlights the committee's engagement with Internal and External Audit and its focus on areas such as value for money in the use of agency staff.

Annual Governance Statement

The committee was scheduled to review the Annual Governance Statement. This statement provides an overview of the council's governance arrangements and assurance regarding their adequacy and effectiveness. It is a key document that supports the council's overall governance framework and is prepared in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) guidance.

Nominations for Alderperson Status

The committee was scheduled to consider nominations for Alderperson status. This honorary title can be conferred upon individuals who have rendered eminent service to the council as past members. The report outlines the criteria and process for awarding this status, including a reduction in the required service length from 15 to 10 cumulative years. The committee was asked to agree that nominations, including a posthumous nomination for the late former Councillor Marsie Skeete, be recommended to Full Council.

Work Programme

The committee was scheduled to review its work programme for the upcoming year. This programme outlines the key topics and reports that the committee intends to address in its future meetings, ensuring continued oversight of governance, standards, audit, assurance, and risk management priorities. The provisional work plan for 2026/27 includes regular updates on external and internal audit progress, financial accounts, fraud, HR matters, and reviews of the risk management strategy.