The Audit Committee of Derbyshire County Council met on Tuesday 15 September 2026 to review a range of financial and governance matters. The meeting's agenda included a deep dive into climate change risks affecting council services, the draft statement of accounts for the year ended 2025/26, and the annual governance statement. Attendees were also scheduled to discuss the assessment of the Council's going concern status, the effectiveness of internal controls, and the local code of corporate governance.

Corporate Risk Register 2026-27 Quarter 1

The committee was scheduled to review the Corporate Risk Register for the first quarter of 2026-27. This register details the most significant risks facing the Council, both strategically and operationally. The report provided an overview of these risks, with more detailed information available for each risk. The register is kept under continuous review by the Corporate Management Team and the Director of Finance, who acts as the Chief Risk Officer. Departmental risk registers, which outline principal risks affecting service delivery, are also reviewed by the Audit Committee annually. The report highlighted that risk severity is assessed based on current exposure, considering existing controls and their effectiveness, while the target score represents the level of risk the Council is willing to accept.

Climate Change Risks to Council Services

A significant portion of the meeting was dedicated to a 'deep dive' into the effectiveness of risk management concerning the strategic risk of Failure to adapt to extreme, adverse, and more variable weather. This topic aimed to provide the committee with information on the Council's arrangements for identifying, assessing, managing, and monitoring climate-related risks. The report detailed how the Council had responded to Defra's invitation to produce a voluntary climate change risk assessment report, using the Local Partnerships' Climate Adaptation Toolkit for Local Authorities. This assessment covered the Council's organisation, service areas, assets, and people. The report noted that while the Council had a good understanding of the most relevant risks, additional expertise, advice, funding, and resources were needed to develop a full action plan. The Council's Environmental Sustainability Strategy, approved by Cabinet in July 2026, includes a theme on Preparing for more adverse and extreme weather, outlining actions to address risks on the corporate risk register.

Draft Statement of Accounts Year Ended 2025/26

The committee was scheduled to note the pre-audit Statement of Accounts for the year ended 2025/26. The report indicated that the unaudited accounts were published on 14 August 2026, with the public inspection period commencing on 17 August 2026 and concluding on 28 September 2026. No queries or objections had been received to date. The core financial statements included the Comprehensive Income and Expenditure Statement, Balance Sheet, Cash Flow Statement, and Movement in Reserves Statement. The report also noted that the Council's external audit by Forvis Mazars was due to commence the week of 21 September 2026, with the aim of completing the audit by the backstop date of 31 January 2027. The post-audit Statement of Accounts would be presented to the Audit Committee for approval after the external auditor's report.

Annual Governance Statement 2025/26

The committee was to review the Annual Governance Statement for 2025/26. This statement explains how the Council demonstrates compliance with the CIPFA/SOLACE Framework Delivering Good Governance in Local Government. The preparation process involved reviewing governance arrangements, assessing their effectiveness against the Local Code of Corporate Governance, obtaining assurance matrices from Executive Directors, considering external assessments, and monitoring progress on the 2024/25 AGS Action Plan. The statement highlighted that while governance frameworks were largely in place and operating, improvements were needed to strengthen consistency, visibility, and assurance, particularly in areas relying on informal knowledge or legacy arrangements. Key changes in 2025-26 included updates to the Constitution to reflect new Cabinet portfolios and committee structures, and amendments to Council Procedure Rules. The report also noted the Internal Audit Annual Opinion for 2025/26 concluded a Limited level of assurance, reflecting continued significant control issues in higher-risk areas, although progress had been made in implementing audit recommendations.

Assessment of Going Concern

The Director of Finance, as Section 151 Officer, was scheduled to present their assessment of the Council's status as a 'going concern' for the purpose of preparing the Statement of Accounts for 2025-26. This assessment assumes that the Council's functions and services will continue in operational existence for the foreseeable future. The report was to consider the Council's current and projected financial position, governance arrangements, and the applicable regulatory and control environment. It noted that while the Council's balance sheet remained robust, factors such as increasing demand and costs in social care, inflationary pressures, and the ongoing process of Local Government Reorganisation presented challenges. The report aimed to conclude that the Council remains a going concern and that its Statement of Accounts for 2025-26 were appropriately prepared on this basis.

Review of the Effectiveness of the System of Internal Control

The committee was to consider information providing assurance on the effectiveness of the Council's system of internal control. This included reviewing the Council's Constitution, committee structure, scheme of delegation, and policies. The Annual Governance Statement, internal and external audit reports, and the Strategic Risk Register were to be considered as evidence. The report highlighted that while the Council's corporate governance framework was generally fit for purpose, areas for improvement had been identified, and an action plan was in place to address these. The Internal Audit Annual Opinion for 2025/26 concluded a Limited level of assurance, indicating ongoing weaknesses in governance, risk management, and control, but also noted progress in addressing specific issues.

Local Code of Corporate Governance

The committee was asked to approve the local code of corporate governance. This document outlines the governance and accountability arrangements within which the Council operates, based on the seven core principles of the CIPFA/SOLACE Delivering Good Governance in Local Government Framework. These principles cover ethical values, openness, stakeholder engagement, defining outcomes, determining interventions, developing capacity, managing risks, and transparency in reporting and audit.

CIPFA Financial Management Code

An update was provided on the Council's compliance with the CIPFA Financial Management Code. The report indicated that the Council remained substantially compliant, with some areas for improvement identified. A self-assessment of compliance was presented, highlighting strengths in organisational leadership, accountability, and financial resilience, while noting opportunities for improvement in areas such as management information, workforce resilience, and integrated financial and performance reporting.

Performance Monitoring and Budget Monitoring/Forecast Outturn 2026-27 - Quarter 1

The committee received an update on the Council Plan performance and the Revenue Budget outturn position for 2026-27 as at Quarter 1. The report indicated a forecast net underspend of £1.183m against a Revenue Budget of £820.425m, with savings delivery generally on track. However, some portfolios, including Adult Care, Children's Services, Safeguarding and Education, and Highways, were forecasting overspends. The report detailed the reasons for these variances and outlined mitigating actions being developed. It also provided an update on the Dedicated Schools Grant (DSG), noting a significant accumulated overspend of £93.390m at 31 March 2026, with ongoing pressures on the High Needs Budget. The report also detailed the proposed use of Flexible Capital Receipts (FCR) to fund Local Government Reorganisation (LGR) preparation costs.

Internal Audit Plan 2026-27 Mid-Year Update

The committee was presented with a mid-year review of the Internal Audit Plan for 2026-27. This update reflected changes in the Council's risk environment, organisational priorities, and available audit resources, including two vacant posts impacting capacity. The revised programme included additional coverage for areas such as Disposal of Assets, Fleet Management, Dedicated Schools Grant (Part 2), Taxi Usage, Policy Compliance, and the CM2000 Digital System. The report noted that the plan remained flexible to respond to emerging risks and assurance requirements, particularly in light of Local Government Reorganisation.

Internal Audit Progress Report

This report provided an update on the delivery of the 2026-27 Internal Audit Plan, service performance, planning, resourcing, and counter fraud activity. It highlighted that 7 out of 30 approved audit areas were completed, with 16 in progress and 7 yet to start. Two Limited Assurance final reports were issued for Hire Vehicles and The Coppice Primary School and Nursery. Substantial Assurance was provided for Priority 1 Digital Systems: Procurement and Project Governance, and the Public Health Ring Fenced Grant. The report also detailed counter fraud and investigation activity, including a refreshed Counter Fraud Strategy and the initial work on the National Fraud Initiative 2026-27 exercise.

Derbyshire Pension Fund Audit Completion Report 2025-26 External Auditor

The committee was scheduled to receive the Derbyshire Pension Fund Audit Completion Report for 2025-26 from the external auditor, Forvis Mazars. This report would typically provide an overview of the audit work undertaken, significant findings, and the auditor's opinion on the financial statements of the Pension Fund.

Exclusion of the Public

The agenda indicated that the committee would move to exclude the public for specific items of business due to the potential disclosure of exempt information. This was to allow for the discussion of sensitive matters, including the Internal Audit 'No & Limited Assurance Report' and the Digital Risk Register.