The Governance and Audit Committee of South Holland District Council met on 10 July 2025 to review a range of reports related to the council's financial health, risk management, and governance practices. The committee was scheduled to discuss the annual treasury report, risk management, audit plans, and the annual governance statement.

Treasury Management

The committee was scheduled to review the Annual Treasury Report 2024/25, which provides an overview of the council's treasury activities, investment portfolio, and borrowing strategy. The report, prepared in accordance with the Chartered Institute of Public Finance and Accountancy's (CIPFA's) Code of Practice on Treasury Management, details the council’s:

• economic update for the 2024/25 financial year
• investment portfolio for 2024/25
• borrowing strategy for 2024/25
• debt position
• compliance with treasury and prudential indicators.

The report notes that the General Fund capital expenditure for 2024/25 was £4.830m, with £1.427m unfinanced, increasing the council's Capital Financing Requirement¹ (CFR). Housing Revenue Account (HRA) capital expenditure was £14.816m, fully financed from various sources. At year-end, treasury investment balances were £25.609m, and non-treasury investments were £12.624m. The rate of return on treasury investments averaged 5.41%, while Welland Homes loans achieved 4.32%.

Risk Management

The committee was scheduled to receive an update on risk management with the Q4 Risk Reports for 2024/25. The report includes strategic and operational risk registers for the council, the HRA, and the South and East Lincolnshire Councils Partnership (SELCP). Key strategic risks identified include:

• Economic Growth
• Implementation of the Environment Act 2021
• Waste Collection Round Pressures
• Council Financial Positions
• Local Government Reform (LGR) in Greater Lincolnshire
• Third Party Service Delivery
• Net Zero target
• Civil contingency risks
• Information

The report also includes fraud risks, such as asset misappropriation and procurement fraud.

Audit

The committee was scheduled to discuss the Internal Audit Annual Report and Opinion 2024/25, which provides an assessment of the council's governance, risk management, and control framework. The Head of Internal Audit's opinion is that the frameworks of governance, risk management and management controls provide adequate assurance. The report highlights areas for improvement, such as contract outsourcing and management oversight.

The committee was also scheduled to note the Executive Summary for the KPMG External Audit Plan and Strategy for the year ended 31 March 2025. The plan outlines KPMG's risk assessment and planned audit approach, including significant risks related to the valuation of land and buildings, management override of controls, and valuation of post-retirement benefit obligations.

Financial Statements

The committee was scheduled to review the Unaudited Financial Statements 2024/25, including the Comprehensive Income and Expenditure Statement, Movement in Reserves Statement, and Balance Sheet. The report notes that a new accounting standard, IFRS 16 (Leases), came into effect on 1 April 2024, resulting in an additional £103k of assets and corresponding liabilities on the Balance Sheet. The net worth of the council decreased by £4.800m, mainly due to reductions in asset valuations.

Budget Preparation

The committee was scheduled to receive a briefing on the approach and process for budget preparation for 2026/27, as detailed in the 202627 Budget Process report. The report outlines a system designed to address issues noted in recent years, such as insufficient time for report preparation and consideration. The proposed process includes detailed timetabling, thoroughness, and forward planning to ensure stakeholder engagement and confidence.

Committee Effectiveness

The committee was scheduled to evaluate its own impact and effectiveness using the Governance and Audit Committee Self-Assessment Plan. The self-assessment, based on CIPFA best practice, covers areas such as governance arrangements, risk management, and internal control. The committee was expected to review the self-assessment results and agree on actions for improvement in 2025/26.

Work Programme

The committee was scheduled to review its work programme for the 2025/26 municipal year, as detailed in the Governance and Audit Committee Work Programme report. The work programme includes regular agenda items, such as risk reports, treasury reports, and audit reports, as well as ad hoc issues that may arise. The committee was expected to identify any additional items to be added to the programme. The report also includes a schedule of training undertaken by committee members and suggested future topics for training.