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Audit and Risk Committee - Thursday, 25th June, 2026 7.00 pm
June 25, 2026 at 7:00 pm Audit and Risk Committee View on council websiteSummary
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The Audit and Risk Committee of Lewisham Council met on Thursday, 25 June 2026, to review external and internal audit updates, risk management, and fraud prevention measures. Key decisions included approving the internal audit plan with an amendment regarding AI usage, endorsing the approach for the external quality assessment of the internal audit function, and noting the corporate risk register, with requests for further detailed reports on cybersecurity, IT partnership risk, housing management software implementation, risk-scoring methodology, and climate resilience.
External Audit Update
Terence Madgett, Chief Accountant, presented an update on the external audit, noting that the draft 2025/26 Statement of Accounts was published on 15 June 2026, ahead of the statutory deadline. The public inspection period would run until 5 August 2026. KPMG's audit plan for both the main accounts and the London Borough of Lewisham Pension Fund accounts was also presented. Most prior year recommendations from external audits have been closed, with ongoing work focused on improvements to the income management system. Councillor El Fry raised a question about the cancellation of the March meeting, but it was confirmed that no assurance work was lost. Councillor James Rathbone inquired about the timeline for software modifications to the income management system, with an aim for completion by the end of 2026. Councillor Tanya Dunne asked about the closure of the Housing Ombudsman Special Investigation recommendation, and it was explained that while the risk was flagged and mitigation put in place, not all work was completed, but sufficient visibility existed through other forums. The committee resolved to note the contents of the report.
KPMG External Audit Plan - Main Accounts and Pension Fund Accounts
Fleur Nieboer and Mohini Katoch from KPMG presented the external audit plans for the main accounts and the Pension Fund accounts. They outlined the materiality levels for their work, with materiality for the consolidated financial statements set at £29.2 million. Significant risks identified for the main accounts included the valuation of council dwellings, management override of controls, and the valuation of post-retirement benefit obligations. For the Pension Fund, the primary significant risk identified was management override of controls. The committee resolved to note the contents of these reports.
KPMG Draft Value for Money Risk Assessment
KPMG presented their draft value for money risk assessment. They reviewed the Council's arrangements for financial sustainability, governance, and improving economy, efficiency, and effectiveness. The assessment indicated that at this stage, the Council has appropriate arrangements in place, and no significant risks were identified. The committee resolved to note the contents of the report.
Anti-Fraud and Corruption Annual Report
Carol Owen, Anti-Fraud and Corruption Team Manager, presented the annual report for 2025/26. The report highlighted a decrease in staff fraud cases compared to the previous year, with a focus on a more proactive and preventive model, partly due to the new failure to prevent fraud
legislation. A notable case involved an employee of SLAM defrauding the Council of nearly £85,000, resulting in a suspended sentence. The report also detailed pre-employment checks, housing investigations, and fraud risk assessments. Councillor El Fry asked about changes to the oversight of prepayment cards following a previous fraud incident. It was explained that while the administration of these cards is managed by finance, and a business case is required for their use, strengthened checks and balances are in place, and the contract is due for reprocurement. The committee resolved to note the contents of the report.
Annual Internal Audit Report
Richard Benjamin, Head of Assurance, presented the annual internal audit report and opinion for 2025/26. The overall opinion on the Council's framework of governance, risk management, and internal control was Satisfactory,
indicating that controls are generally effective but with available improvements. The report detailed the work supporting this opinion, including reliance on external assurance providers. A key finding was that while control frameworks are sound, improvements are needed in their application, particularly regarding record-keeping, training compliance, and data quality governance. The committee resolved to note the Head of Internal Audit's annual opinion and the work informing it, along with additional recommendations for future reports, including more detailed summaries of limited and no assurance audits and officer attendance where required.
Internal Audit Plan
David Austin presented the proposed Internal Audit Plan for 2026/27. The plan is risk-based and aligned with the Council's corporate strategy. A significant discussion took place regarding the proposed use of Artificial Intelligence (AI) in 90% of audits. Councillor Claire Wills raised concerns about the target being set without sufficient evidence of its value and the potential for bias and inaccuracies. It was agreed that the strategy would be amended to include strengthened safeguards and oversight regarding AI, with any use based on a skeptical critique of quantitative evidence.
Councillor Gavin Moore raised a point for future planning regarding internal audit looking into issues surrounding streets, fly-tipping, and litter. The committee resolved to approve the internal audit plan, with the amendment regarding AI.
Internal Audit External Quality Assessment
Richard Benjamin outlined the requirements for an External Quality Assessment (EQA) for the Internal Audit service, which must be completed at least every five years. The last EQA was in 2022, meaning the next must be completed by April 2027. Two options were presented: a full assessment or a validation of a self-assessment. The proposal was to proceed with a validated self-assessment due to cost and development advantages. Councillor James Rathbone inquired about the previous EQA approach, and it was confirmed that a similar self-assessment route was followed. The committee resolved to endorse and approve the proposed approach for the External Quality Assessment.
Corporate Risk Register
Colin Burns and Kelly Thompson presented the quarterly update on the Corporate Risk Register. There are currently 16 risks on the register, with nine rated as Very High
or High.
The highest risk remains a Significant Cyber Security Breach
(LBL009). Since the last presentation, three risks had increased in score, and two had been removed, with one risk decreased. Notable changes included an increase in the likelihood score for Significant disruption to IT partner
(LBL023) due to Southwark's notice to leave the partnership, and an increase in the impact score for Cost of living impact on residents
(LBL013). The risk of Inability to set a balanced budget
(LBL010) saw a decrease in likelihood. The committee requested further detailed reports on cybersecurity, business continuity, IT partnership risk, housing management software implementation, risk-scoring methodology, and climate resilience/Helios exercise outcomes. The committee resolved to note the contents of the report and approved the requests for further detailed reports.
Delegated decisions linked to this meeting
Decision summaries below are AI-generated from the council’s published record. Check the council source or the full decision page before relying on them.
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Annual Internal Audit Report
Recommendations ApprovedThe Audit and Risk Committee of Lewisham Council decided to approve recommendations from the Annual Internal Audit Report on 25/06/2026. Summaries of outstanding audits, including major repairs and parking enforcement, will be reported to the next meeting. Limited and no assurance audits will be reported in more detail in future reports, with relevant officers attending committee meetings as required.
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External Audit Update
Recommendations ApprovedThe Audit and Risk Committee of Lewisham Council decided to approve recommendations on 25/06/2026. The committee noted the contents of the External Audit Update report. This included updates on the draft 2025/26 Statement of Accounts, the 2025/26 External Audit, and progress on 2024/25 External Audit recommendations.
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KPMG External Audit Plan - Main Accounts
Recommendations ApprovedThe Audit and Risk Committee of Lewisham Council noted the report outlining KPMG's risk assessment and planned audit approach on 25/06/2026. The committee approved recommendations related to the external audit plan. The plan includes specific procedures to assess the valuation of council dwellings, management override of controls, and the valuation of post-retirement benefit obligations.
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Internal Audit Plan
For DeterminationThe Audit and Risk Committee approved the internal audit plan on 25/06/2026. The audit strategy will be amended to include strengthened safeguards and oversight in relation to the use of AI.
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Corporate Risk Register
For DeterminationThe Audit and Risk Committee of Lewisham Council noted the Corporate Risk Register on 25 June 2026. The committee requested further detailed reports on cyber security, IT partnership risk, housing management software implementation, risk-scoring methodology, and climate resilience outcomes.
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Internal Audit External Quality Assessment
For DeterminationThe Audit and Risk Committee of Lewisham Council approved the approach for the Internal Audit External Quality Assessment on 25 June 2026. This approval endorses the plan for a self-assessment validation by an independent assessor. The committee will receive the EQA outcomes and a draft action plan in March or June 2027.
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Confirmation of start time for Committee
For DeterminationThe Audit and Risk Committee decided the meeting start time.
The Audit and Risk Committee resolved to agree the start time of 7.30pm for its meetings for the remainder of the municipal year on 25/06/2026.
The agreed start time will be used for scheduled meetings, subject to changes by the Proper Officer in consultation with the Chair. -
Anti Fraud and Corruption Annual Report
For DeterminationThe Audit and Risk Committee of Lewisham Council noted the anti-fraud and corruption annual report on 25 June 2026. The report detailed a reduction in employee fraud cases, the implementation of a Fraud Risk Assessment process, and the launch of a Fraud Awareness eLearning module.
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KPMG Draft Value for Money Risk Assessment
Recommendations ApprovedThe Lewisham Council Audit and Risk Committee noted the draft value for money risk assessments report on 25/06/2026. No significant risks were identified in the domains of financial sustainability, governance, or improving economy, efficiency, and effectiveness.
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Minutes
For DeterminationThe Audit and Risk Committee confirmed and signed the minutes of its meeting on 11 December 2025. The committee reviewed the Risk Management in Housing report, receiving updates on stock condition surveys, housing function rebuilding, fire risk actions, data accuracy for the new Housing Management System, culture risk, and resident concerns. They also received an update on the External Audit, noting the Statement of Accounts had been signed and published. An Internal Audit Progress Report was presented, detailing audits completed, progress against the audit plan, and self-assessment against new internal audit standards.
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Declarations of Interest
For DeterminationThe Audit and Risk Committee decided no declarations of interest were made on 25/06/2026.
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Apologies for Absence
For DeterminationThe Audit and Risk Committee received apologies for absence from Richard Benjamin on 25/06/2026.
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KPMG External Audit Plan - Pension Fund Accounts
For DeterminationThe Audit and Risk Committee of Lewisham Council noted the report outlining the risk assessment and planned audit plan for the London Borough of Lewisham Pension Fund Accounts by KPMG on 25 June 2026. The report details the planned audit scope, significant risks, and the audit approach for the year ending 31 March 2026. The audit plan includes using IT Audit, Data & Analytics specialists, and Actuarial Specialists.
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