The Governance and Audit Committee of Cardiff Council convened on Tuesday 22 September 2026, addressing a comprehensive agenda that included updates on external assurance, directorate control environments, financial performance, internal audit findings, and Audit Wales reports. Key decisions made during the meeting involved noting the progress on external recommendations, approving the audited statement of accounts, and reviewing the council's risk management and treasury management activities for the past financial year.

Recommendation Tracker - Reports of External Review Bodies

The committee received an update on the progress of implementing recommendations from external review bodies, including those from Audit Wales, Estyn, the Public Services Ombudsman for Wales, and His Majesty's Inspectorate for Probation. Gareth Newell, Director of Strategy, Partnerships, and Transformation, presented the report, highlighting that there were 14 open recommendations, with none outstanding from before the 2024/25 financial year. This represents a significant improvement since the tracker's introduction, with only 11% of recommendations from the previous five years remaining open, down from 47%. Councillor Rodney Berman raised concerns about the lack of clarity on who made certain recommendations and the potential democratic implications of planning committee decisions being delegated to officers. Gareth Newell assured that the source of recommendations is available on a dashboard, and that the planning service review recommendations are being considered in the context of ongoing reviews of planning committee procedures.

Frontline Services Directorate Control Environment Update

Graham Harris, Director of Frontline Services, presented the first control environment report for the newly formed directorate. He provided reasonable to good assurance that appropriate control arrangements are in place and operating effectively, with a strong governance framework, largely completed audit recommendations, and positive external assurance outcomes. Key escalated directorate risks include the financial impact of the UK Emissions Trading Scheme on residual waste treatment costs and the management of ash dieback. Councillor Rodney Berman raised concerns about omissions in the report, specifically the failure to meet the Welsh Government's recycling target and systemic failings in the allotment service flagged in an Apti review. Graham Harris responded that a path to 70% plan is in train to address recycling targets and that improvements are being made to the allotments service, including additional staffing and a new digital platform. Councillor Peter Bradbury challenged Councillor Berman's assertion that these issues were not mentioned in the report, stating that they were indeed referenced in internal audit reports.

Response to Internal Audit Reports: Schools Requiring Major Improvement

Mel Godfrey, Director of Education and Lifelong Learning, provided an update on the response to three internal audit reports concerning Mary Immaculate High School, Ysgol Gymraeg Nant Caerau, and Cantonian High School, all of which required major improvement. While acknowledging disappointment with the audit outcomes, Mel Godfrey emphasised that immediate soundness and safety were not threatened and that the issues were at a local school context level, not indicative of a systemic failure. She detailed the extensive circumstances at Ysgol Nant Caerau, including the tragic passing of the headteacher, and the significant changes at Cantonian High School, including a new headteacher and a move to a new building. Mary Immaculate High School, while having disappointing audit outcomes, had sound financial records, safeguarding, health and safety, IT, and payroll in order. Each school is to maintain a consolidated improvement plan, with regular monitoring and dialogue. Councillor Chris Burns sought assurance that this was not indicative of a more endemic situation across schools, to which Mel Godfrey responded that the CRSA exercise and the new school improvement team are strengthening governance.

Financial Update including Resilience Issues

Ian Orwood, Deputy Section 151 Officer, presented a briefing on the budget updates and the Oracle Fusion programme. He highlighted a projected budget gap of over £163 million for the medium-term financial plan from 2027 to 2028, even with a modelled council tax increase of 4.95%. Key pressures identified include employee-related price increases and demographic pressures, particularly in social care and education placements. Ian Orwood also provided an update on the Oracle Fusion programme, noting that the project has moved from green to amber status due to two specific issues: the volume of design decisions to be made by October and the validation of source system extraction for data migration.

Counter-Fraud Annual Report 2025/26

Chris Pyke, Audit Manager, presented the Counter-Fraud Annual Report for 2025/26. He outlined the council's activities in discharging its responsibility to protect public funds through proper administration and control. The report detailed arrangements for strategic oversight, campaigns, resources, collaborative activities, and overall impact. Chris Pyke confirmed that directorate risk assessments are integrated into corporate procedures, with all financial impropriety losses needing to be reported to him. He also noted an upcoming external audit study from Audit Wales on counter-fraud arrangements.

Audited Statement of Accounts, Audit of Accounts Reports (ISA 260) and Annual Governance Statement for Financial Year 2025/26

Anil Hirani, Operational Manager Corporate and Treasury, and Sally Ormiston, Group Accountant, presented the draft audited statement of accounts, along with the Annual Governance Statement and external auditors' reports. Julie Rees from Audit Wales provided an overview of their findings. The audit of the Council and Harbour Authority accounts was substantially complete, with an unqualified audit opinion proposed. Key findings included technical adjustments related to group consolidation of the heat network and the application of indexation to asset valuations. There were no uncorrected misstatements or significant issues to report. David Price raised questions regarding the justification and quantification of earmarked reserves, which Anil Hirani addressed by linking them to financial resilience and demand pressures. Dr Janet Wademan inquired about the implications of the new Chief Executive's previous role as Section 151 Officer, and Ian Allwood clarified the interim arrangements. The committee noted the reports and made formal recommendations as set out in paragraph 10 of the report.

Housing Adaptations

Louise Bassett, Assistant Director for Adult Services, presented the management response to an Audit Wales report on housing adaptations. Alison Reece from Audit Wales highlighted strengths in the Council's integrated and prevention-focused approach, good use of data, and improved timeliness in delivering adaptations. Areas for improvement included assessing if adaptations meet individual intended outcomes, a limited number of inspections, high-level information on the Council's website, and limited forecasting of demand for children and young people. Louise Bassett confirmed that actions are underway to address these recommendations, including updating website information, developing a transition dashboard for children's data, strengthening quality assurance through final inspections, and improving the recording of service user outcomes.

Recruitment and Retention Review

Matt Bouchette from Audit Wales presented the findings of a thematic review on recruitment and retention challenges across Welsh councils, with specific findings for Cardiff Council. He noted that while the Council broadly understands its challenges and employs various approaches, there are gaps in monitoring progress and assessing the value for money of these initiatives. Rachel Davis, Chief HR Officer, responded positively, acknowledging the balanced report and outlining plans to improve data analysis and forecasting through the Oracle HR payroll system implementation. She also detailed actions to assess the value for money of recruitment and retention approaches by the end of March, focusing on advertising spend, selection methods, and market supplements.

Audit Wales Work Programme and Timetable Update

Julie Rees from Audit Wales provided a brief overview of the Audit Wales work programme. Chris Burns inquired about the timeline for a Welsh Government review of corporate joint committees, which Julie Rees stated was on hold. David Price asked about the utility of a national review into the Learning and Skills measure, which Julie Rees agreed to take away for consideration.

Annual Risk Management Report 2025/26 and Q1 Update 2026/27

Jasmine Capel, Interim Head of Insurance and Risk, presented the Annual Risk Management Report and the Quarter 1 update. The annual report highlighted positive developments in financial management, information governance, and cyber security, while acknowledging significant challenges in financial pressures, service demands, housing, education, and climate change impacts. The overall conclusion was positive, noting a proactive approach to risk management. Jasmine Capel confirmed that risk maturity models have not been used recently but are being considered for future policy development. Ian Orwood added that the UK risk register is being mapped to ensure comprehensive coverage.

Treasury Management Annual Report

Anil Hirani, Operational Manager Corporate and Treasury, presented the Treasury Management Annual Report for 2025/26. He highlighted that the Council operated within its approved treasury limits and prudential indicators, with investments totalling £67.9 million and external borrowing at £1.148 billion. Interest receivable from investments was £4.8 million. David Price inquired about the processes and criteria for evaluating loan repayments versus retention, and Anil Hirani explained the lender's notice process and the decision to repay LOBO loans based on unfavourable rates. Dr Janet Wademan asked about the granularity of counterparty limit monitoring, which Anil Hirani confirmed was reviewed daily.

Outstanding Actions and Correspondence

Chris Pyke, Audit Manager, confirmed that there were no outstanding actions from previous Governance and Audit Committee meetings. The Chair noted that two letters had been received since the papers were published: one confidential letter to a Cabinet Member concerning governance and internal control matters, which would be discussed at a future meeting, and a direct letter to the Chair from Councillor Peter Wong regarding the billing process for allotments. Chris Pyke provided a verbal update on the allotment billing issue, stating that it appeared to be a one-off situation related to an automated dormancy period for debtor accounts, which had been addressed with manual intervention and would be resolved with the upcoming Oracle system implementation.

Work Programme Update

The committee noted the work programme update, with an additional item to be added regarding a deeper dive into the Oracle Fusion programme in November.

The meeting concluded with thanks to all officers and contributors for their time and effort.