The Audit & Governance Committee of Tees Valley Combined Authority met on Tuesday 8 September 2026 to discuss a range of financial and governance matters. Key decisions included the recommendation to Cabinet for approval of the Annual Governance Statements for 2023-2024 and 2024-2025, and the consideration and noting of the draft Single Entity and Group Financial Statements for 2023-2024 and 2024-2025. The committee also received updates on the external audit status, risk management, internal audit plans, and governance appointments.

Annual Governance Statements 2023-2024 and 2024-2025

The committee received a report presenting the refreshed Annual Governance Statements (AGS) for the financial years 2023-2024 and 2024-2025. These statements are a requirement under the Accounts and Audit Regulations 2015 and are prepared in accordance with the CIPFA/SOLACE Framework. The AGS documents acknowledge the Authority's responsibility for ensuring proper governance arrangements are in place and outline actions taken or proposed to implement governance improvements. The committee was asked to provide comments, which would be shared with the Cabinet, and recommended the approval of both statements to the TVCA Cabinet. Andrew Perriman, Director of Legal and Governance and Monitoring Officer, presented the report. The committee expressed satisfaction with the progress made and agreed to recommend the AGS for approval to the Cabinet.

Single Entity & Group Financial Statements 2023-2024 and 2024-2025

Alan Layton, Interim Group Director of Finance & Resources, presented the restated draft single entity and group Statements of Accounts for the financial years 2023-2024 and 2024-2025. These restated accounts were necessary due to changes in accounting arrangements for key transactions, particularly relating to the SeAH Wind lease, which impacted asset valuations and the Comprehensive Income and Expenditure Accounts. These changes resulted in a material reduction in the Authority's usable reserves. Chris Hull, who heads up financial accounting, was available to answer detailed questions. The committee was asked to consider and note these draft accounts at this stage, with the final audited accounts to be presented for formal approval once the audit is concluded, hopefully by the January committee meeting. A significant point of discussion was the scale of the revaluation related to the SeAH Wind lease, with questions raised about how such a large amount was allowed to go through and its impact on reserves. Mr. Layton assured the committee that going forward, expert accounting advice would be sought at the time of entering into new transactions to avoid surprises. The committee agreed to note the statements at this stage.

External Audit Status and Risk Assessment Report

Alan Layton, Interim Director of Finance & Resources, presented an update on the status of the external audit. Ernst & Young (EY) had previously noted that they had not yet received the accounts to audit. However, since that update, all outstanding accounts had been published. EY can comment on their own letters, and the recommendation was to bring back a report to the next audit committee with a timetable and action plan to give confidence in achieving the statutory deadline for the six and seven year accounts. Councillor Peter Grogan highlighted concerns about the repeated delays in receiving statements and the lack of progress, expressing a need for reassurance that headway would be made. Alan Layton acknowledged the concerns and stated that substantially, the restated accounts for three, four, five and six had now been published, which was a significant hurdle. He added that improved working papers and expert advice had been taken to support the accounts. Claire Mellons, from EY, provided further detail on the audit work, noting that while the financial statements work was disclaimed and delayed, they were well-progressed with their value for money report. She explained the impact on the 26 audit, stating it was not feasible to start another year's audit until the 23/24 and 24/25 audits were closed down. EY confirmed they would work with management to hit the January target, but acknowledged some risk to that timeline. The committee requested reassurance on the resource and capability to deliver by the end of January, and EY confirmed they had a team ready to work on the audit once the necessary information was provided. The committee resolved to note the content of the external auditors report and risk assessment, and that officers would bring back a timeline or timetable for future sign-off of the accounts.

Risk Management Update

Sarah Brackenborough, Director of Operations, presented the standard update to the Committee on the Strategic Risk Register and ongoing work on strengthening the risk management framework. A key point raised was the addition of devolution and the English Devolution Community Empowerment Act as a separate item to the Strategic Risk Register due to its significance as both a risk and an opportunity. Councillor Peter Grogan noted that every risk on the register showed no movement and highlighted the significant gap between the current score and the target score for economic outcomes. He requested clearer evidence of the steps being taken to bridge this gap. Angela Hart, Head of Performance, Risk and Assurance, explained that movement is often seen at the directorate level, and for strategic risks, evidence of major change is needed. She agreed to introduce horizon planning to show the trajectory of likelihoods. Councillor Walker asked how much part of something like this played in getting out of the Best Value Note, and David Robinson advised that it was not a specific flagged area under the Best Value Notice, but that risk management was woven into everything they were doing to strengthen across the board. The committee resolved to note the continued authority's risk management framework and the strategic risk register, and that comments would be brought back for further review.

Internal Audit Plan 2026/2027 and Audit Strategy 2026-2029

Sarah Brackenborough introduced Addy from TIAA, the internal auditor. It was reminded that the committee had previously agreed to sign off the internal audit plan for 2026/27 by correspondence, which had been completed. The plan was brought back for ratification, and work was already underway. Addy explained that the annual plan for 2026/27 had been informed by a risk assessment across the sector and an updated audit risk assessment to focus on key audit risks relevant to TVCA. The plan covers 86 days of work, including follow-ups on previous recommendations. Councillor Grogan raised concerns about cybersecurity being mentioned as a major emerging risk but not having a dedicated audit. Sarah Brackenborough explained that cybersecurity would likely feature in year two of the three-year plan, but assured the committee that the authority was not ignoring the issue and had recently received a report with recommendations for increased security. Councillor Grogan also enquired about the use of TIAA for additional commissioned services, such as cyber risk investigations or whistleblower matters. Adi confirmed that additional services were not used, but that whistleblowing and fraud had been factored into last year's audit plan. Angela Hart added that audits from two years ago were considered when factoring into future years. The committee resolved to ratify the internal audit strategy and annual plan for 2026/27 and to note the plans and reports presented.

Internal Audit Actions Update Report

Sarah Brackenborough, Director of Operations, presented the report on internal audit actions. She stated that the authority had a number of backward-looking open audit actions from previous years that they were working hard to close off. Progress had been made since the last meeting in June, with all intended actions completed and remaining actions largely on track. Angela Hart provided further detail on one action where the date had been moved back slightly, relating to the 'sitfa' self-assessment and the need to bring in the charter and mandate. Councillor Porter enquired about the status of an action from 2023-24, relating to grants management. Angela Hart explained this related to assurance processes and the new single assurance framework, which was scheduled to be adopted by Cabinet on 25 September. Councillor Grogan sought clarification on the numbers of actions, suggesting a possible typo. Sarah Brackenborough agreed to check the numbers and provide clarification by correspondence. The committee resolved to note the contents of the report and that the two outstanding items would be updated at the next meeting.

Governance & Appointments

Andrew Perriman, Director of Legal and Governance, presented the report seeking an appointment to the Hartlepool Development Corporation Audit & Governance Committee. This appointment had been deferred from a previous meeting due to concerns about best practice regarding potential conflicts of interest. It was noted that appointments were still under review by the Mayor. Councillor Harrison expressed concern about the continued deferral, highlighting the impact on quorum. It was agreed that the matter would be taken away to look into the possibility of appointing Councillor Martin Dunbar as a substitute for this committee, and a recommendation would be brought back to the next ANG committee for ratification.

Code of Conduct Complaints Procedure

Andrew Perriman presented the report for consideration and recommendation to Cabinet for adoption. The report proposed adopting the LGA model code of conduct and approving the accompanying complaints procedure. Councillor Grogan raised a point about the accountability of independent members, suggesting a 'fit and proper person' test. Andrew Perriman clarified that co-opted members are subject to the same scrutiny as elected members. The committee discussed the possibility of applying standard DBS checks to committee members, and Andrew Perriman agreed to take this offline to investigate. Councillor Harrison supported the idea of DBS checks for transparency and assurance. Councillor Gordon also raised points about DBS checks and the differing accountability of elected versus independent members. Andrew Perriman explained that the government was looking at the standards regime in its entirety and that he was bound by legislation and good practice. He reiterated that he would take the DBS issue offline to explore its implementation. The committee resolved to note and approve the recommendations as outlined in the report.

Customer Feedback and Complaints Policy

Andrew Perriman presented the revised Customer Feedback and Complaints Policy, seeking the committee's endorsement. Councillor Innes asked for quarterly comparisons to understand how improvements were being made. Andrew Perriman confirmed that previous quarters' reports had shown a decrease in FOI requests, which was positive. Councillor Gordon enquired about a specific complaint mentioned in paragraph nine of the report, but Andrew Perriman stated he did not have details but could look into it. The committee resolved to note the contents of the report.

Refreshed Constitution

Andrew Perriman updated the committee on the review of the Constitution. He proposed workshops to go through the significant changes with committee members before it was presented to Cabinet. Elaine Braham, Governance Officer, was tasked with arranging dates for these sessions, with a preference for evening or hybrid meetings. The committee agreed to this approach.

Information Governance Update

Andrew Perriman provided an update on information governance documentation. He highlighted the high number of Freedom of Information requests received in the quarter (172 questions) and the impact this had on teams. He discussed the potential use of artificial intelligence to support FOI processing. Councillor O'Flock enquired about an increase in AI-generated FOI requests and complaints, which Andrew Perriman confirmed. Councillor Innes requested quarterly comparisons to understand the impact of implemented changes. Councillor Gordon asked for details regarding a specific complaint mentioned in paragraph nine, but Andrew Perriman did not have the details. The committee resolved to note the contents of the report.

Work Programme

The committee noted the work programme for the 2026/2027 municipal year.

Terms of Reference

The committee noted the terms of reference for the committee. The Chair requested that dates for the proposed workshops on the Constitution be circulated.

The meeting concluded with thanks to all involved.