This meeting was a regular meeting of the Audit Committee, and its stated purpose was to provide an independent and high-level focus on the arrangements for governance, risk, accounting, and control at the council. The reports pack for the meeting contains the following reports which were scheduled to be considered by the attendees. We do not know what was actually discussed in the meeting.

Asset Compliance & Improvement Board Update

This report was the second report to the Audit Committee on the council’s progress towards meeting the Consumer Standards that were introduced by the Regulator for Social Housing in April 2024. These standards set out how social housing providers should manage their properties and tenants.

It followed an external audit commissioned by the council into its readiness for the regulatory changes. That audit found that:

The areas of focus for the referral were not being able to demonstrate the condition of our stock in relation to Decent Homes, our data not being held in a central location or in some cases being held by an external provider and not being able to demonstrate that we were fully compliant with some areas of safety, such as electrical certificates.

The audit led to the council referring itself to the regulator.

The report included the council’s latest Improvement Plan for addressing these findings. The plan, dated 21 November 2024, is extensive, with 37 actions identified across the following areas:

• Stock Quality
• Health & Safety
• Repairs, Maintenance and Planned Improvements
• Transparency
• Neighbourhood and Community
• Tenant Satisfaction Measures and Complaints Handling
• Antisocial Behaviour
• Repairs
• Time to Repair
• Listens to and acts on tenant views
• Positive Neighbourhood Contribution

Each action in the plan has an owner and a target completion date. The target completion dates range from 30 April 2024 to 30 January 2025. Many of the actions had been completed by the time of the meeting.

The report also included an update on the council’s progress with implementing a new system for managing, monitoring and reporting housing compliance, called True Compliance, and the results of a full stock condition survey of its homes. The stock condition survey was still underway at the time of the meeting.

There is also a report on the council’s compliance with various housing regulations. This included a plan to bring the council to 100% compliance on the ‘Big 6 areas of Health & Safety’. The Big 6 areas include:

• Gas
• Electrical
• Asbestos
• Fire
• Legionella
• Lifts

The only outstanding area at the time of the report was electrical safety, which was due to be completed by the end of December 2024.

Membership of the Audit Committee

This report concerns the membership of the Audit Committee itself, in particular the potential appointment of independent members to the committee. An independent member is a non-councillor with particular expertise relevant to the work of the committee.

The report pack contains correspondence from Grant Thornton, the council’s external auditors, recommending the appointment of independent members. The report states that the recommendation:

covered two aspects;

a. whether cabinet members should be members of the Committee b. to consider the appointment of an independent member

The report goes on to say that “[w]hilst Grant Thorntons comment is welcomed, it is not proposed to change the membership of the committee at this time”, though it does include a proposal to appoint up to two independent members. The report proposes that these appointments take place in two stages, with the first recruitment process taking place shortly after the meeting, and the second after either 18 months or the publication of any statutory guidance on the matter.

The report then outlines the proposed recruitment process for independent members. It states that “[t]he selection process will involve the shortlisting of applicants and an interview by a panel comprising the Chair, Vice-Chair and an Opposition Member, and chief financial officer”.

Corporate Health and Safety Update

This report is an update on progress with the “reset” of corporate health and safety compliance at Ashford Council. It follows a previous report on the topic presented at the meeting of the Audit Committee held on 1 October 2024.

The report states that the council will achieve this reset by following the principles of the Health and Safety Executive’s (HSE) guide “Managing for health and safety (HSG65)” (2013). The guide, known as the ‘Orange Book’, promotes a four-step process for managing health and safety, known as ‘PLAN – DO – CHECK – ACT’.

The report includes a table summarising the council’s progress against the four steps of the process, broken down into multiple actions.

It also mentions that the council has commissioned an external consultant to support its health and safety efforts. The consultant has already provided one training session to the council’s Corporate Management Team, and was scheduled to provide a second session on 8 January 2025.

Internal Audit & Assurance Progress Report

This report is an update on the work completed by internal audit at Ashford Council during 2024/25. It includes a summary of progress towards delivering the internal audit plan for the first half of the year, and updates on the following:

• Completed 2023/24 audits which will be used to inform the 2024/25 Audit Opinion
• Resource changes within the Mid Kent Audit Partnership (MKAP) team
• Planned vs. actual audit days
• The results of the follow up of agreed management actions

The report notes that MKAP, which provides internal audit services to Ashford, Maidstone, Swale and Tunbridge Wells Borough Councils, is currently experiencing some staffing shortages. It states that MKAP is using external contractors to support delivery of the 2024/25 audit plan, and that two new recruits will be starting in December 2024 and February 2025. The report goes on to say that “[d]espite all the change we continue to make progress through the Audit Plan although overall delivery of the plan will be impacted” but confirms “that the interventions made will enable sufficient work to be completed to deliver the annual audit opinion for 2024/25”.

The report includes a table showing the current and expected progress for the audits included in the 2024/25 audit plan, and then goes on to summarise the number of audit days spent on each area of the plan in the first half of the year. The table shows that just 81 of the planned 300 days for ‘Risk Based Audits’ had been spent in the first half of the year, which the report says is due to the number of vacant posts at the beginning of the year.

The report also provides a summary of the follow-up of agreed management actions. The summary shows that all of the overdue actions from 2022/23 and 2023/24 had been completed. However, there are 23 actions from 2024/25 that are either ‘not due’ or ‘in progress’, which the report says have “been raised with the Management Team who are addressing the concerns we have raised regarding implementation of the overdue work”.

The report includes appendices providing summary information about the completed audits from 2023/24 and 2024/25. The summaries include the purpose of each audit, the key findings and the recommendations for improvement. The appendices also provide a list of the outstanding actions from each audit.

Statement of Accounts 2022/23, Appointed Auditor’s Conclusion of the audit for 2022/23, and Draft Audit Opinion for 2022/23, and Letter of Representation 2022/23

This report pack concerns the council’s Statement of Accounts for 2022/23, which is the annual report on the council’s financial performance. It includes the following documents:

• The Statement of Accounts itself
• A letter from Grant Thornton, the council’s external auditors, containing their conclusion on the audit of the Statement of Accounts
• A draft Audit Opinion for 2022/23
• A draft letter of representation for 2022/23

The letter from Grant Thornton explains that the audit of the 2022/23 accounts will not be completed by the statutory deadline of 13 December 2024, and that they will therefore be issuing a ‘disclaimer of opinion’ on the accounts. The letter says that this is due to the late commencement of the audit, which was delayed because the audit of the 2021/22 accounts was still ongoing, and that it will enable the council to meet the statutory backstop date. The backstop date is a deadline set by the government for local authorities to publish their audited accounts, introduced in an attempt to clear the backlog of late audits.

The letter also includes a summary of the key financial reporting and audit issues identified during the audit of the 2022/23 accounts, and a section on the council’s ‘going concern’ status. Going concern is an accounting term that refers to a company’s ability to continue operating for the foreseeable future. The letter explains that, as the auditors will not be forming an opinion on the accounts, they are unable to draw a conclusion on the council’s going concern status.

The letter also includes a list of the non-audit work that Grant Thornton have undertaken for the council in relation to the 2022/23 accounts, and the fees that they have charged for this work.

The draft Audit Opinion for 2022/23 states that the auditors are unable to express an opinion on the council’s accounts, due to the limited scope of their work. The draft opinion explains that this is because the audit was not completed by the statutory deadline.

The draft letter of representation is a letter from the council to Grant Thornton, confirming that the council has fulfilled its responsibilities in relation to the preparation of the Statement of Accounts. The letter includes a number of specific representations about the accounts, such as the completeness of the accounting records and the reasonableness of the accounting estimates used.

The report pack also includes a report summarising the changes made to the 2022/23 accounts, which the report states are “[d]ue to changes in the 2021/22, and 2023/24 accounts”. These changes include amendments to the values of property, plant and equipment, long-term investments, debtors and creditors, grants received in advance, and the pension liability. The report notes that these adjustments have been made by management, and that the auditors have not carried out any work to verify them.

External Audit Progress Report

This document provides an update on Grant Thornton’s audit of the 2023/24 Statement of Accounts at Ashford Borough Council.

It confirms that the auditors “have not identified any issues that would require further modification of the audit report on the Council’s financial statements”, and that they are “on track to substantially complete the work by the end of December 2024”.

However, the report also notes that:

we have encountered delays in obtaining supporting documentation for certain sections and we have now been getting the supporting evidence back and our testing is underway.

It concludes by confirming that “[t]he Final Audit Plan has been forwarded to management and is listed as an agenda item for this audit committee meeting.”