The Audit Committee of Cornwall Council met on Friday 25 September 2026 to review the council's risk management, internal audit progress, and external audit updates. Key discussions included the council's strategic risks, the effectiveness of its counter-fraud measures, and the progress of the internal audit plan. The committee also received an update on the external audit of Cornwall Council and the Cornwall Pension Fund.

Risk Update Report

The Audit Committee received assurance that arrangements are in place to manage the council's strategic risks and assess fraud risks. The Counter Fraud Risk Assessment, a comprehensive document identifying and evaluating the council's principal fraud risks, was reviewed. This assessment is updated regularly to reflect emerging threats, legislative changes, and intelligence from national networks. The committee was informed that areas identified as needing third-line assurance, such as procurement and housing allocations, are scheduled into the Annual Audit Plan.

The council has identified eight strategic risks that impact its priorities and business plan delivery. These risks are owned at a Strategic Director level and reviewed quarterly. The report highlighted that the risk score for Climate Change and Ecological Breakdown increased from 16 to 20 (very high), primarily due to financial constraints and limited delivery capacity in implementing climate and energy action plans. The Financial and Economic Sustainability risk also increased from 20 to 25, reflecting a forecasted overspend of £17.008 million and £9.915 million in red-rated financial risks. Saving delivery is currently forecast at 83.7% of the approved Medium Term Financial Plan target.

A workshop is planned for October 2026 with the Council Director's Team to refresh the strategic risks in light of global risk intelligence and the council's priorities. The council's risk appetite has also been defined, aligning with HM Treasury's Orange Book and risk categories.

Audit Update and Sector Briefing

The committee reviewed the External Auditor's Update and Sector Briefing for Cornwall Council. Grant Thornton, the external auditor, provided an update on the progress of the 2025/26 financial statements audit for both Cornwall Council and the Cornwall Pension Fund. Significant risks identified in the audit plan included management override of control, valuation of land and buildings, pension liability, group consolidation, and fraud in revenue recognition.

The auditors noted that work on the valuation of Level 3 investments for the Pension Fund was well-progressed, with additional work required due to changes in pooling arrangements. The audit findings report for the Pension Fund was scheduled to be presented to the Pensions Committee on 29 October 2026 and then to the Audit Committee on 27 November 2026.

The sector updates highlighted key issues facing local government, including challenges in Adult Social Care and Children's Social Care. For Adult Social Care, the Care Quality Commission (CQC) reported that while most local authorities are rated 'good', they are often at the lower end of the scoring threshold. Key themes for improvement include prevention, safeguarding, transitions from children's to adult's services, unpaid carers, equity in experience and outcomes, co-production, and commissioning. In Children's Social Care, the reliance on unregistered children's homes due to supply and demand pressures was a significant concern, with Ofsted research highlighting workforce capacity, housing affordability, and a lack of foster carers as contributing factors.

Internal Audit Plan Refresh & Progress Report

The committee received an update on the delivery of the 2026/27 internal audit programme and the performance of the Internal Audit and Counter Fraud Teams. The delivery of the audit plan was rated as 'Amber' due to a net deficit in resources, primarily from a failure to appoint a Senior Auditor. Mitigating actions, including outsourcing, are in place to address this. The report also noted that 98% of Agreed Management Actions (AMAs) were implemented on time, exceeding the target of 90%.

Key changes to the audit plan included the addition of audits for CFRS Performance Management, Emergency Management, Payment Card Industry (PCI) Compliance, and several grant compliance reviews. Audits removed included HR Establishment Control and Strategic Risk Assurance, with the latter being revisited in Q1 of 2027/28.

The Counter Fraud Team's performance report showed that as of August 2026, 133 investigations were undertaken, identifying 16 cases of fraud or irregularity totalling £21,633. Data matching exercises identified recoverable overpayments of £36,024 and notional savings of £10,676. The team exceeded its target for responding to requests from the Department for Work and Pensions (DWP) Single Fraud Investigation Service (SFIS), with current performance at 98.5%.

Any Other Business that the Chairman Considers to be of Urgency

The committee noted that a briefing would be arranged before the November Audit Committee meeting on the implications of the Commercial Strategy to the Audit Committee's role and governance. The Chairman also indicated that they would discuss attendance at meetings with Senior Officers.