The Audit, Governance and Standards Committee met to discuss the audit plans for the council and pension fund accounts, the annual internal audit report, the annual treasury management report, and the member code of conduct complaints annual report. The committee noted the external auditors' plans for the 2024/25 statement of accounts and pension fund accounts, the annual internal audit report, and the treasury management annual report. The committee also received information on the member code of conduct complaints.

2024/25 Audit Plan

The committee noted the external auditor's plans for the audit of the 2024/25 statement of accounts and the pension fund accounts. Joe from KPMG, the council's external auditor, presented the draft audit plans for both the council's accounts and the pension fund accounts. The audit plan identifies significant risks, details audit materiality, timelines, fees, and key personnel.

For the council accounts, KPMG has identified the following significant risks:

• Management override of controls
• Valuation of land and buildings
• Valuation of the pension fund obligation
• Transition to IFRS 16¹

For the pension fund accounts, the significant risk identified is management override of controls, with an elevated risk around the valuation of Level 3 assets².

Councillor Lynn Henderson, Chair of the Audit, Governance & Standards Committee, noted that the council seemed to be getting more up-to-date with its accounts, and asked how the council had resolved the valuation of assets, which had been an issue in the past. It was clarified that the council had not had any issues with the valuation of assets, and that all accounts had been signed off and audited.

Annual Internal Audit Report

The committee noted the Annual Internal Audit Report and the Chief Audit Executive's annual opinion on the council's governance, risk management, control and governance processes. Andrew Hamilton, Head of the Shared Audits Partnership and the Chief Audit Executive for Kingston, presented the report, which reviewed the work completed for the 24-25 audit plan and included the Chief Audit Executive's annual opinion.

Hamilton stated his overall opinion was that there are reasonable arrangements in place for risk management, internal control and governance. He based his opinion on the audit work completed during the year and other forms of assurance, such as performance indicators, external reviews, and quality assessments.

Key points from the report:

• 23 audits were completed, 88% of the plan.
• Four audits received a substantial opinion, nine a reasonable opinion, seven a limited opinion, and three were advisory.
• The number of reports given a limited opinion has increased from previous years, but Hamilton stated he was not significantly concerned about that.
• 126 recommendations were made, 24 were priority one, and all were agreed by management.
• One priority one recommendation had passed its due date and had not been implemented.

Julian Adams, Independent Member, asked about the impact of the new global internal audit standards. Hamilton responded that they would not have a significant change, particularly in terms of the actual audit work that is completed. He said that the new standards have added some robustness, particularly around governance of internal audit.

Adams also asked if there was a cycle by which every aspect of the council's operation would be reviewed. Hamilton responded that there was a cycle for the key financial systems, but that the council did not have the resource to be able to look at every function that the council runs over a reasonable period.

Councillor Mark Beynon, Chair of Planning Committee, asked for more information on the issues around temporary housing and homelessness, which had received a limited assurance opinion. It was stated that the major issues were about the programme planning, but that since the date of the audit, they had improved that significantly.

Annual Treasury Management Report

The committee noted the Treasury Management Annual Report for 2024/25 and the council's performance within the Prudential Indicator Limits. Sue Cuerden, Executive Director of Corporate Services (S151 Officer), presented the report, which summarised the council's treasury management operations during the financial year 2024/25.

Cuerden noted that Link Group, the council's treasury management advisor, are now part of MUFG, and that the council will be going out to tender for treasury management services in the next couple of months.

Key points from the report:

• The council's overall level of debt at the 31st of March 2025 was just over £327 million.
• The bulk of the borrowing comes from the Public Loans Work Board³, at £262 million.
• The council has £39 million borrowed from individual banks, and an interest-free loan from the GLA⁴ predominantly in relation to Cambridge Road Estate.
• The council paid an average rate of 3.66% over the year.
• The amount of interest that the council paid last year on its debts was £10.4 million.
• The council has about £62.9 million in available funds to invest.
• The average rate of return for the year was 5.16%, and the council generated just under £4 million of income from its investments.

Councillor Rowena Bass asked about the capital financing requirement, and whether it was an estimate of the maximum amount the council could borrow, or a realistic thing of how much the council thought it needed to borrow. Cuerden responded that it was the amount of debt that the council could potentially borrow, and that the council was currently well below that level.

Bass also asked about the council's exposure to LOBO loans⁵, and whether these were particularly risky. Cuerden responded that the council had about £39 million in LOBO loans, and that they had not been approached by any of the current owners of those loans to suggest that they wished to look at changing the underlying interest rate.

Member Code of Conduct Complaints Annual Report

The committee received the Member Code of Conduct Complaints Annual Report for 2024/25. Michelle Beaumont, Head of Democratic Services and Elections, presented the report, which summarised the complaints received under the Members' Code of Conduct during 2024 to 2025.

Key points from the report:

• There were a total of five complaints received during the 2024/2025 municipal year.
• Four complaints were made by members of the public, and one by an officer.
• Two complaints related to unacceptable conduct at council/committee, two related to bullying and/or intimidation, and one related to other matters.
• Four complaints were rejected at the preliminary stage, and one required formal investigation.

Bass asked how many of the complaints ended up in the Standards Committee. Beaumont responded that none of the complaints had been referred to the Standards Committee.

Adams asked if there was double counting in the types of complaint, and whether an incident could fall under one or two of the headings. Beaumont responded that she would bring that back to her colleague.

Beynon asked what constituted an official complaint from members of the public. Beaumont responded that the council's website has a clear link to a complaints form, which has a clear link to the members' code of conduct, which defines what constitutes a complaint and what circumstances one is likely to be investigated.

Other Business

Councillor Henderson noted that Lauren McCall was leaving the council and thanked her for her service as monitoring officer.