The Audit Committee of Hackney Council is scheduled to convene on Thursday, 29 October 2026. The meeting's agenda includes a review of the unaudited statement of accounts for the 2025/26 financial year, an update on the external audit progress, and a discussion on the Chief Executive's risk register.

Unaudited Statement of Accounts 2025/26

The committee will review the unaudited Statement of Accounts for the financial year 2025/26. This document details the Council's financial performance, including the Comprehensive Income and Expenditure Statement, Balance Sheet, and Cash Flow Statement. It also includes the Housing Revenue Account, Collection Fund, and Pension Fund accounts. The report highlights that the Council reported a budgetary overspend of £2.8 million for 2025/26, primarily due to escalating costs and service demand within Hackney Education and Adult Social Care. This shortfall was addressed by utilising one-off reserves, a strategy noted as not being sustainable long-term. The report also details the Council's capital expenditure for 2025/26, which was £294 million against a planned budget of £493.6 million, with variances attributed to factors such as cost optimisation, construction material availability, and supply chain issues.

External Audit Update

Forvis Mazars, the Council's external auditors, will provide an update on the progress of the 2025/26 audit. The report indicates that fieldwork for the Council's audit is expected to be completed by the end of November 2026, with the Pension Fund audit fieldwork anticipated to conclude by mid-November 2026. To date, no misstatements have been identified that would necessitate a modification of the audit opinion. The update notes some internal control deficiencies, including a legacy system issue that overwrote user IDs and an instance of authorisation control circumvention. Testing is ongoing for various accounts, including valuations, pensions, PFI, leases, and debtors. A control deficiency was also noted for the Pension Fund, where two fund managers managing £18 million of investments could not provide controls assurance reports. The auditors have also begun their review of the Council's Value for Money arrangements.

Chief Executive's Directorate Risk Register

The committee will receive an update on the key risks facing the Chief Executive's Directorate. This includes risks related to Legal, Democratic and Electoral Services, Policy and Strategic Delivery, Corporate Transformation, Communications and Engagement, Human Resources and Organisational Development, and Culture, Libraries and Heritage. Key risks highlighted include ensuring lawful and transparent decision-making, managing the impact of economic uncertainty on residents and businesses, the capacity to deliver the transformation programme, reaching a diverse range of residents in consultation activities, and maintaining an engaged and representative workforce. The report notes that the Council's financial position and the ongoing cost of living crisis continue to impact the directorate. Specific controls and actions being taken to mitigate these risks are detailed, such as the adoption of a new Legal Case Management System and the establishment of a Poverty Reduction Oversight group.

Corporate Risk Update

This report provides a scorecard of the Council's Corporate Risks, as ratified by the Corporate Leadership Team. The update highlights 9 red risks and 7 amber risks, with the Council's Financial Position and the Economy identified as a significant concern due to intensifying pressures. The report notes that while the recent Local Government Finance settlement has provided some clarity, the economy's fragility continues to strain resources. The Corporate Transformation Programme is highlighted as a key control measure. Risks related to unregistered schools and settings, pressures on temporary accommodation, and housing property repairs remain significant. The report also mentions the de-escalation of risks related to SEND funding from the Corporate register, as central government will assume funding from 2028.

Corporate Risk Strategy and Policy

The committee will be informed about the recently revised and reviewed Corporate Risk Management Policy and Strategy. The Policy outlines the framework for managing risk within the Council, while the Strategy details the Council's approach, techniques, and techniques for managing risks. Changes have been made to reflect internal and external developments, with the Strategy acting as a guide for tackling risk throughout the Council. The documents are reviewed biennially by the Corporate Risk Team and ratified by senior management and the Chief Executive. The Council's intranet provides further information on risk processes. The last review of these documents by the Audit Committee was in October 2024.

Treasury Management Update

The committee will receive an update on treasury management activities for the financial year 2025/26 and a quarterly update for July to September 2026. The report for 2025/26 indicates that the Council's Capital Financing Requirement (CFR) was £797.8 million. The Council's external borrowing totalled £355 million, comprising £1 million from the Hackney Green Investment initiative, £97 million in short-term borrowing, and £254 million from the Public Works Loan Board. Investment balances reduced from £44 million to £23 million at the end of the financial year, with an investment return of 3.81%. The report confirms compliance with Prudential Indicators for 2025/26. The quarterly update for July to September 2026 notes that UK GDP grew by 0.5% in Q2 2026, while inflation remained at 3.1%. The Bank of England maintained its Bank Rate at 3.75%. The Council's external borrowing stands at £352 million, and average interest received for the period was £108k. Counterparty credit quality remains strong, with the Council's treasury adviser maintaining a cautious approach to investment counterparties.

Audit and Anti-Fraud Progress Report

This report details the performance of the Audit & Anti-Fraud Service for the period April to September 2026. It covers work undertaken, progress with implementing audit recommendations, and current developments. The Internal Audit Team is fully staffed and focusing resources on areas supporting the Corporate Head of Audit, Anti-Fraud & Risk Management's annual assurance statement. The report indicates that 40% of the 2026/27 audit plan assignments are completed or in progress. Assurance levels from completed audits show a majority providing 'Significant' or 'Reasonable' assurance. The Anti-Fraud Service has received 199 referrals, with key financial benefits estimated from investigations in tenancy fraud (£756,000), migrant children and families (£322,868), and National Fraud Initiative matches. The report also notes that no applications have been made under the Regulation of Investigatory Powers Act (RIPA) in the current financial year.