The Audit and Governance Committee met on 4 June 2025, to discuss treasury management, audit plans, financial regulations, internal and counter-fraud reports, and committee effectiveness. The committee approved the Treasury Management Outturn Report, the External Audit Plan, the Internal Audit Annual Report and Opinion, and the Audit and Governance Committee Annual Report, while deferring approval of the Surrey Pension Fund External Audit Plan pending clarification of scale fees. The committee also noted proposed changes to the council’s financial regulations, and commended them to the council for approval.

Treasury Management Outturn Report

The committee approved the Treasury Management Outturn Report for 2024/25, which summarises the council's treasury management activities and ensures compliance with the Chartered Institute of Public Finance and Accountancy (CIPFA)'s code of practice¹. The report highlighted an increase in gross borrowing of £312 million during the year, with a strategy of internal and short-term borrowing to fund new capital expenditure.

Councillor Stephen McCormick raised concerns about the £8.8 million overspend on interest repayments and the increase in short-term borrowing.

Andy Brown, Deputy Chief Executive and Executive Director - Resources, explained that the council is holding on to short-term borrowing due to interest rate forecasts suggesting rates will decrease. He also announced a member development session on 23 June about debt and reserves.

External Audit Plan

The committee approved the External Audit Plan for 2024/25, which provides oversight of the plan for the external audit of the 2024/25 Statement of Accounts. The plan outlines the audit approach, scope, key responsibilities, and identified fraud and significant risks.

Councillor Stephen McCormick asked how risks are added to the external audit plan and whether there is any engagement with members. Hassan from Ernst & Young (EY) explained that the audit plan is an opportunity for members to inform them of any issues they feel should be reflected in the plans.

David Lewis, Cabinet Member for Finance and Resources, asked about the valuation of investment properties and why it was highlighted as a new risk.

Surrey Pension Fund External Audit Plan

The committee did not approve the Surrey Pension Fund External Audit Plan for 2024/25, pending clarification of scale fees. The plan provides oversight of the external audit of the 2024/25 Surrey Pension Fund statement of accounts.

Councillor Stephen McCormick questioned why the committee was being asked to approve the plan with TBC figures and requested clarification on the difference between noting and approving the plan.

It was also raised that the plan should be presented to the pension fund committee and board before coming to this committee for approval.

Financial Regulations Update

The committee noted the proposed changes to the council’s financial regulations and commended them to the council for approval and inclusion in the constitution. The report summarised updates to the council’s financial regulations for consideration ahead of approval by the council.

Councillor Stephen McCormick raised concerns about the recommendation being to note the changes rather than approve them and questioned who had been involved in putting the changes together. He also highlighted a specific change, FRR 6.7, which removes quarterly monitoring information to select committees.

Internal Audit Annual Report and Opinion

The committee noted the Internal Audit Annual Report and Opinion for 2024/25, which provides an opinion on the adequacy of Surrey County Council's control environment. The report covered audit work completed from 1 April 2024 to 31 March 2025, and a separate report on counter-fraud work was also presented.

Councillor Stephen McCormick raised questions about section 106 payments and the single view of a child lift follow-up.

Counter Fraud Annual Report

The committee noted the Counter Fraud Annual Report for 2024/25, which covered counter-fraud work completed in the year from 1 April 2024 to 31 March 2025. The report detailed investigations, outcomes, and proactive fraud prevention activities.

Councillor Stephen McCormick asked about council tax single person allowance and empty property activity.

Audit and Governance Committee - Annual Report

The committee reviewed and commented on its annual report for 2024/25, commending it to July's council meeting. The annual report provides assurance to those charged with governance and how the committee demonstrates impact.

Audit and Governance Committee - Effectiveness Review

The committee reviewed progress against previously agreed actions related to the effectiveness self-assessment and highlighted further areas for development. The committee also reviewed its terms of reference.