The Audit and Governance Committee of Worcestershire Council met on Monday 28 September 2026 to review the council's financial statements, external audit reports, and internal audit progress. The committee was scheduled to discuss the update on the annual statutory financial statements for the year ended 31 March 2026, including the external audit findings. They were also set to consider the 2025/26 External Auditors' Interim Annual Report, the Worcestershire County Council External Assurance Review, and the Audit and Governance Committee's own self-assessment for 2026/27. Additionally, the committee was to receive updates on internal audit progress, counter fraud activity, performance and risk management, and treasury management. Finally, plans for future committee training and the work programme were to be discussed.

Update on Annual Statutory Financial Statements for the Year Ended 31 March 2026, Including External Audit

The committee was scheduled to receive an update on the annual statutory financial statements for the year ending 31 March 2026, including the findings of the external audit. The Chief Finance Officer recommended that the committee note the draft Audit Findings Reports and draft Audit Opinions for Worcestershire County Council and the Worcestershire Pension Fund. The committee was also asked to consider whether it wished to receive further reports on the findings, and whether any issues arising from the reports should be drawn to the attention of the Council. Authorisation was sought for the Chair, in consultation with the Vice-Chair and Chief Financial Officer, to approve the Final Accounts Pack, subject to the conclusion of the external audit. If this was not possible, a special meeting would be convened to sign off the Statement of Accounts. The Chief Financial Officer was also to be authorised to sign the Letters of Representation on behalf of the County Council.

2025/26 External Auditors' Interim Annual Report for the Year Ended 31 March 2026

The committee was scheduled to review the 2025/26 Interim External Auditors' Annual Report. Grant Thornton, the council's external auditor, is responsible for producing this report, which consolidates all aspects of external inspection work, including the audit of the accounts. A key element of this report is the conclusion on whether the council has proper arrangements in place to ensure economy, efficiency, and effectiveness in its use of resources, often referred to as the 'Value for Money' (VfM) conclusion. The report indicated an overall picture of improvement, but highlighted ongoing concerns regarding the council's financial sustainability. The report also detailed recommendations, categorised as Statutory, Key, or Improvement, with a Statutory Recommendation retained regarding the Dedicated Schools Grant (DSG) deficit.

Worcestershire County Council External Assurance Review

This item was scheduled to present the findings of an external assurance review commissioned by the Ministry of Housing, Communities and Local Government (MHCLG). This review was a condition for the council's request for Exceptional Financial Support (EFS) for 2025/26 and 2026/27. The review, conducted by the Chartered Institute of Public Finance and Accountancy (CIPFA), assessed the council's financial position and governance arrangements. The report contained recommendations that the council was expected to address to support its improvement and future financial sustainability. The Chief Executive and Chief Financial Officer were required to report on progress with these recommendations to the MHCLG by the end of September. The review covered four key themes: Quality of financial management and financial processes; Financial sustainability and risk; Service reform, delivery and transformation; and Governance, culture and leadership.

Audit and Governance Committee Self-Assessment 2026/27

The committee was scheduled to undertake its annual self-assessment, following CIPFA guidance which recommends such reviews to ensure effectiveness and good governance. A questionnaire had been issued to committee members, and the results were to be analysed to identify areas for improvement. The report indicated that the results highlighted certain areas requiring potential improvement, with a focus on those scoring lower in the CIPFA assessment. The committee was asked to consider the approach to training it wished to adopt based on these results and authorise the Chief Financial Officer, in consultation with the Chair and Vice-Chair, to arrange a training programme.

Internal Audit Progress Report 2026/27

The committee was to receive an update on the progress of the Internal Audit Service for 2026/27. The report aimed to provide assurance regarding the effectiveness of the council's risk management, governance, and internal control processes. The overall opinion on the council's corporate governance picture was noted as improving, with an 'acceptable' assurance level. The report detailed the work completed, including finalised reviews and any adjustments to the original audit plan. It also highlighted any emerging risks that might impact the plan later in the financial year. The Chief Internal Auditor was to confirm the maintenance of Internal Audit's independence and ethical principles.

Counter Fraud Progress Report

This report was scheduled to update the committee on counter fraud activity undertaken since the establishment of a dedicated corporate resource. It aimed to provide assurance on the effectiveness of the council's counter fraud arrangements and highlight emerging fraud risks. The report was expected to detail fraud referrals received, investigation outcomes, and savings identified. It would also cover participation in the National Fraud Initiative data matching exercise, the council's principal fraud risks, and preventative measures such as policies, training, and awareness campaigns. Whistleblowing concerns received during the period were also to be reported.

Performance and Risk Management Update

The committee was to receive a summary of the council's Q1 corporate performance and the latest corporate risk status. This included key changes, areas of progress, and those requiring attention, along with controls for significant risks. The report was to detail performance against Key Performance Indicators (KPIs), highlighting any changes in RAG (Red, Amber, Green) ratings and the reasons behind them. The corporate risk register was to be reviewed, noting any new or closed corporate risks. The report was also to summarise ongoing developments in performance and risk management, including efforts to strengthen reporting, governance, capability, consistency, benchmarking, and data quality.

Treasury Management Update Quarter 1 2026-27

This report was to provide an update on the council's treasury management activities for the first quarter of the 2026-27 financial year. It was scheduled to cover the economic background, a review of the council's investment portfolio, its borrowing strategy, and compliance with Treasury and Prudential Limits. The report was expected to outline the average level of funds available for investment, the performance of the investment portfolio against its benchmark, and the gross income generated. Details of new loans taken and debt matured were to be provided, along with the total debt outstanding and the forecast for the end of the financial year. Compliance with borrowing limits and the relationship between the Capital Financing Requirement (CFR), approved limits, operational boundary, and external borrowing were to be illustrated.

Audit and Governance Committee Training

The committee was asked to consider the approach to training it wished to adopt for its members. The report noted that previous training sessions, initially held in person before committee meetings and later moved online, had experienced poor attendance. Given this, the committee was to discuss and decide on a preferred training approach, authorising the Chief Financial Officer, in consultation with the Chair and Vice-Chair, to arrange a suitable programme.

Work Programme

The committee was scheduled to review its future work programme for upcoming meetings, including dates for December 2026, March 2027, and July 2027. Members were invited to consider whether there were any additional matters they wished to be incorporated into the programme. Topics scheduled for future discussion included oversight of savings plans, internal audit and counter fraud plans, directorate debt positions, treasury management updates, and the statutory accounts.