The Audit Committee of Hammersmith and Fulham Council met on Thursday 24 September 2026. The meeting focused on the Council's financial statements for 2025/26, including the external auditors' reports, and an update on risk management. The committee also reviewed the Treasury Management Outturn Report for 2025/26.

Statement of Accounts 2025/26

The committee received the London Borough of Hammersmith & Fulham's 2025/26 Statement of Accounts for approval. The external auditors, Grant Thornton UK LLP, provided an Annual Auditors Report (AAR) which gave Amber and Green ratings for key criteria, along with three improvement recommendations. The Audit Findings Report (AFR) indicated that the Council had received an unqualified opinion on its accounts. The committee was asked to note the content of these reports and approve the Annual Governance Statement and the Pension Fund Annual Report.

The auditors' report highlighted that work on the 2025/26 financial year was broadly completed as planned. No audit adjustments impacting the Council's General Fund position were identified, and the auditors were not aware of any issues that would lead to a modified opinion. However, three low-priority recommendations were made concerning housekeeping matters, including journal control environment, asset depreciation, and lease accounting. Management provided responses to these recommendations, indicating plans for improvement.

A key discussion point was the Council's debtors position, with £29 million in council tax debtors and £18 million in non-domestic rates debtors. While the Council prides itself on a collection rate of over 96% for both council tax and business rates, officers acknowledged that there was room for improvement in how council tax was being collected and that this was being addressed. It was clarified that these figures represented accumulated residual debt over a number of years.

The committee also discussed the pension fund accounts, noting that there were no recommendations raised in that report. However, there was some work still to be done regarding the pension fund accounts audit.

Risk Management Update

Jules Binney, from the Council's Audit, Fraud, Risk and Insurance department, presented an update on risk management. The report highlighted changes to the risk management process, with an increased focus on identifying persistent risks – those that will always be present, such as cyber security threats. Four risks had been closed since the previous report.

The committee engaged in a detailed discussion regarding Risk 1, concerning compliance with new procurement legislation (Procurement Act 2023). Councillor Charlotte Moar raised concerns about the risk score of 16, questioning why it was not lower if controls were robust. Officers explained that the score reflected the inherent risk before controls were applied and the complexity of the Council's contract portfolio. They agreed to review the scoring and consider splitting the risk into compliance and challenge elements.

Risk 9, concerning failure of compliance with statutory housing landlord duties, was also discussed. Officers noted that other reports indicated good performance in this area, and the residual risk score was likely the main factor.

Treasury Management Outturn Report 2025/26

Phil Rowe and Sophie Hawkins briefed the committee on the Council's Treasury Management Outturn for 2025/26. During the year, the Council repaid nearly £20 million in loans and borrowed an additional £228 million, primarily for the Housing Revenue Account (HRA) to take advantage of a discount. Despite this borrowing, cash balances only increased by £52 million, as the funds were used to finance the capital programme.

Two prudential indicators were not met: the Capital Financing Requirement (CFR) exceeded the approved limit, and the maturity limit for borrowing under 12 months was also breached. These decisions were described as deliberate strategic choices made to benefit the Medium Term Financial Plan (MTFP). The committee discussed the assumptions underpinning the Treasury budgets, particularly interest receivable and payable, and the potential impact of global events on inflation and interest rates. Officers confirmed that scenario modelling was undertaken and scrutinised weekly.

The committee also noted that the Council had borrowed short-term due to current high interest rates, balancing this against the need to manage refinancing risk and protect the MTFB budget. The average debt interest on the total debt portfolio was approximately 3.7%.

The committee agreed to note the report.

Cyber Security Arrangements

A verbal update was provided on cyber security management, including actions taken in response to a previous cyber incident. This item contained exempt information and required the exclusion of the public and press.

Dates of Future Meetings

The committee noted the dates of future meetings: 30 November 2026 and 15 March 2027.

The meeting concluded with the committee resolving to exclude the public and press to discuss exempt information.