The Audit and Governance Committee of North Northamptonshire Council met on 18 August 2025, and endorsed the Annual Governance Statement, and noted the Internal Audit Progress Report and the risk management update.

Annual Governance Statement

The committee endorsed the Annual Governance Statement 2024/25, which is a statutory requirement and a review of the council's activities to ensure it is carrying out its functions effectively. The statement will be signed by the Leader of the Council, Councillor Martin Griffiths, and the Chief Executive, Adele Wylie, and will form part of the published statement of accounts for 2024-25.

The Annual Governance Statement 2024-25 provides a review of the council's activities, ensuring it carries out its functions effectively, and states that its overall assessment is a balanced reflection of the governance environment within the council for 2024-25. It says that the council is responsible for ensuring its business is conducted in accordance with the law and proper standards, and that public money is safeguarded, properly accounted for, and used economically, efficiently, and effectively.

The statement also says that the council has a duty under the Local Government Act 1999 to secure continuous improvement in the way its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.

The council's code sets out seven key principles:

• Behaving with integrity, demonstrating strong commitment to ethical values and respecting the rule of law
• Ensuring openness and comprehensive stakeholder engagement
• Defining outcomes in terms of sustainable economic, social and environmental benefits
• Determining the interventions necessary to optimise the achievement of the intended outcomes
• Developing the entity's capacity, including the capability of its leadership and the individuals within it
• Managing risks and performance through robust internal controls and strong public financial management
• Implementing good practices in transparency, reporting and audit to deliver effective accountability

The statement identifies significant governance issues facing the council, including social care provision in children's and adult services, and non-compliance issues around procurement of contracts, particularly consultancy and agency staff. It notes that the council's financial position has become more challenging due to significant overspends in key demand-led service areas. In 2024/25, these services overspent by £20.2 million, leading the council to approve an additional £51.8 million to meet this demand when setting its budget for 2025/26.

The statement highlights key risks and issues, including:

• New public procurement regulations
• Delivery and profiling of capital programme
• Use of agency staff/consultants
• Internal audit recommendations
• Corporate Risk Register
• Statement of accounts
• Partnership and shared service governance
• Management of housing stock
• IT security

Risk Register

The committee noted the risk management update. The Strategic Risk Register details the strategic risks faced by the council in relation to achieving its corporate priorities, and also notes the current mitigation action being taken to control these risks and reflects the current, residual risk score.

The content of the Strategic Risk Register entries has been reviewed and updated by the Corporate Leadership Team (CLT), and the amendments made to the risk entries since the last report to the Audit and Governance Committee are summarised in Table 1 of the Risk Register Covering Report.

Three risks (Public Health Recommissioning of Children's and Sexual Health Contracts delayed, Pay and grading resources and expertise, and Cost/Service Need being in excess of budget and activity anticipated due to Cost of Living impact) have been removed from the register.

Risk 10, Procurement - Key suppliers of goods and services (including hosted / shared services) fail to deliver services to the required standards and capacity - thereby, impacting on the Council's ability to operate effectively in delivery/provision of services, has had its residual risk score increased from 6 to 12, reflecting the change in legislation, with the introduction of the Procurement Act 2023 in February 2025, and the associated increase in requirements on procurement activity.

The detail relating to Risk 3 has been redacted due to the sensitive nature of the risk.

Internal Audit Progress Report

The committee noted the Internal Audit Progress Report.

Rachel Ashley-Caunt, Chief Internal Auditor, provided a progress update on the work of the Internal Audit team and the key findings from audits completed to date. Since the last meeting of the committee, seven audit reports have been finalised, and the key findings arising from those audits are summarised in Appendix 1 of the IA Progress Report.

Key findings of the audit reports include:

• Safeguarding in transitions: Testing indicated that officers were compliant with following safeguarding procedures, but there were some gaps in recording information regarding the decision-making process in safeguarding enquiries.
• Landlord health and safety: The Council's regime for ensuring gas safety of all properties was confirmed as operating effectively, but errors were noted in relation to reported compliance on electrician installation condition reports (EICR) for properties in Kettering.
• Treasury management: Sound arrangements are in place to support treasury activity.
• Housing benefit and Council Tax Support: The Council has robust systems and processes in place to administer benefits, but performance was significantly over target for processing new claims, and the expectation around the level of quality checks completed has not been met during 2024/25.
• Accounts payable: Robust arrangements are in place to support accounts payable activity, but a review found three officers had authorised files but were not included in the list of approved officers.
• Resettlement scheme: The Council had discharged its responsibilities as defined by funding bodies, but there was a difference of £73k between the level of unused funding reported in the Council's latest return to the funding body and the value recorded on ERP Gold.
• Bank reconciliations: Embedded processes were found to support the completion and oversight of monthly reconciliations for corporate bank accounts, but the review found inadequate arrangements in place supporting legacy bank account reconciliations.

As of 31 July 2025, there were 71 recommendations overdue for implementation.