The Audit & Governance Committee of Croydon Council is scheduled to convene on Thursday, 17 September 2026. The meeting's agenda includes a review of the audit risk assessment for 2025-26, updates on external audits, and the interim auditor's annual report for the year ending 31 March 2026. Additionally, the committee will consider the annual report from the Head of Internal Audit and discuss the Whistleblowing Policy and Procedure.

Informing the Audit Risk Assessment 2025-26

The committee is scheduled to consider the responses prepared by management regarding the audit risk assessment for the 2025-26 financial year. This assessment is a crucial step for the Council's external auditor, Grant Thornton UK LLP, in identifying and evaluating the risks associated with auditing Croydon Council's accounts. The report pack details the approach taken to complete these responses, which involved collaboration across various departments including Legal Services, Insurance and Risk, Internal Audit, and Finance. The agenda item includes a recommendation for the committee to consider whether the provided responses are consistent with their understanding and to make any additional comments they deem necessary before approving them.

2025-26 External Audit Progress Update

A progress update on the external audit of the 2025-26 accounts will be presented by Grant Thornton UK LLP. This report outlines the progress made across key areas of the audit, including a review of significant risks identified in the audit plan, transaction sampling, and work undertaken across various financial statement areas. The report notes that while improvements have been made in responding to audit requirements, there are still areas needing attention, such as the completeness of lease disclosures under IFRS 16 and the ongoing process of rebuilding assurance over financial statements, which is expected to continue over the next few years. The report also includes sector updates relevant to the committee, such as findings from the Care Quality Commission's assessment of adult social care services and consultations on revised statutory guidance for the Best Value Duty.

Interim Auditor's Annual Report for Year Ending 31 March 2026

The committee is scheduled to consider the Interim Auditor's Annual Report for the year ending 31 March 2026, prepared by Grant Thornton UK LLP. This report provides commentary on the Council's arrangements for securing economy, efficiency, and effectiveness in its use of resources, assessed under three criteria: financial sustainability, governance, and improving economy, efficiency, and effectiveness. The report indicates a continued Red rating for financial sustainability, citing significant weaknesses in cost and debt reduction, and a substantial Dedicated Schools Grant (DSG) deficit. A statutory recommendation from the previous year is retained, and a new key recommendation is raised concerning the management of the residual DSG deficit. The governance arrangements are rated Amber, with no significant weaknesses identified, although a new improvement recommendation has been made regarding rebuilding assurance over financial statements. The Improving economy, efficiency and effectiveness criterion is also rated Amber, with two prior improvement recommendations retained.

Annual Head of Internal Audit Report & Internal Audit Update Report

The committee will receive the Annual Head of Internal Audit Report for 2025/26, which provides an overall conclusion on the effectiveness of the Council's framework for governance, risk management, and control. The report concludes that the framework generally accords with proper practice, with effective risk management arrangements and a generally sound system of control for core systems. However, it highlights continuing key issues in areas such as contract management, information governance, temporary accommodation, and HMRC compliance in schools. The report also details the work completed by Internal Audit during 2026/27, noting that while no new key issues have been identified, the existing ones require ongoing attention and action plans. The committee will also consider the results of the Head of Internal Audit's self-assessment against professional standards and benchmarking data from the London Audit Group.

Whistleblowing Policy And Procedure And Disclosures Update

The committee is asked to consider proposed amendments to the Council's Whistleblowing Policy and Procedure. These amendments aim to improve clarity, ensure legal compliance, and align reporting arrangements with the Council's Constitution. The report also provides an update on whistleblowing referrals received between October 2025 and July 2026, noting a significant increase in referrals and ongoing investigations. The disclosures primarily relate to safeguarding concerns, financial irregularities, governance matters, and recruitment practices. While most investigations have not identified systemic wrongdoing, some have led to practice improvement recommendations. The report acknowledges delays in progressing some investigations due to complexity, overlap with other investigations, workload, and staff leave, and outlines measures being taken to improve timeliness, including active monitoring of cases and support from the Shared Fraud Service.

Annual Governance Statement 2025/26 And Action Plan

The committee is recommended to consider and approve the Council's Annual Governance Statement (AGS) for 2025/26, along with the Governance Improvement Plan, the Local Code of Corporate Governance, and the Governance Framework. The AGS review concludes that the Council's corporate governance framework remains substantially compliant with good governance principles and continues to operate effectively. However, it also identifies significant governance weaknesses requiring further improvement in areas such as financial sustainability, SEND financial governance, the transformation programme, workforce capacity, information governance, complaints management, and external auditor recommendations. A Governance Improvement Action Plan has been developed to address these areas during 2026/27.

Committee Annual Report 2024/25 & 2025/26

The committee is scheduled to receive its Annual Reports for the 2024-2025 and 2025-2026 municipal years. These reports summarise the committee's work, findings, and recommendations concerning the Council's governance, risk management, internal control frameworks, financial reporting, and audit functions. The committee is asked to agree that these annual reports be presented at the next meeting of Full Council on 21 October 2026. The 2024-2025 report is being presented alongside the 2025-2026 report due to unforeseen circumstances preventing its earlier submission.