The Audit Committee of Crawley Borough Council met on 2 September 2025 to discuss the audit planning report for the year ending 31 March 2025, the internal audit annual conclusion for 2024/25, and the internal audit strategy for 2025-28. Also on the agenda were the revised internal audit charter for 2025/26, an update on counter-fraud measures, and a risk management update. The committee was also scheduled to review the progress of internal audits and an external quality assessment.

Audit Planning Report

The committee was scheduled to consider the audit planning report for the year ending 31 March 2025, submitted by Ernst & Young (EY). The report was intended to provide the committee with a basis to review the proposed audit approach and scope for the 2024/25 audit, in accordance with the Local Audit and Accountability Act 2014 and the National Audit Office's 2024 Code of Audit Practice¹.

The report summarised EY's evaluation of key issues driving the development of an effective audit, aligning the audit approach and scope accordingly. The report also addressed the broader impact of government proposals aimed at establishing a sustainable local audit system.

The report noted that EY had disclaimed its audit opinion on the council's 2023/24 financial statements, and that as a result, EY did not have assurance over the opening balances for 2024/25. EY stated that it expected to issue another disclaimed audit opinion in 2024/25.

The report identified several significant audit risks:

• Misstatements due to fraud or error (management override)
• Risk of fraud in revenue and expenditure recognition, through inappropriate capitalisation of revenue expenditure
• Valuation of property, plant and equipment (PPE) using Existing Use Value (EUV) and Investment Property (IP) at Fair Value (FV) method
• Accounting for Pension Fund Asset
• Valuation of Housing Revenue Account (HRA) properties

The report also identified other areas of audit focus, including the valuation of land and buildings in PPE under Depreciated Replacement Cost (DRC), and IFRS 16 disclosures².

The report included a proposed audit timetable, and detailed the communications that EY must provide to the audit committee.

Internal Audit Matters

A number of reports from the Southern Internal Audit Partnership (SIAP) were scheduled to be discussed.

Internal Audit Annual Conclusion

The committee was to consider the Internal Audit Annual Conclusion 2024-2025, which summarises internal audit's opinion on the council's framework of governance, risk and control. The report stated that internal audit was compliant with the Public Sector Internal Audit Standards during 2024/25, and that the internal audit plan for 2024/25 had been delivered. The report concluded that the council's framework of governance, risk management and management control were considered to be 'Reasonable'.

The report highlighted areas where the control framework was less effective, including:

• Cleaning and Clearance
• Commercial Properties
• Parking and Enforcement
• Regulatory Compliance (Council Housing Stock) – Water Safety Checks (Legionella)

Internal Audit Charter

The committee was asked to provide input into the revised Internal Audit Charter for 2025/26, and to approve the revised charter. The charter is a formal document that includes the internal audit function's mandate, organisational position, reporting relationships, scope of work, types of service, and other specifications.

The revised charter reflected personnel changes within SIAP's senior management team, and updated the roles and responsibilities of senior management and the audit committee.

Internal Audit Strategy

The committee was scheduled to note the Internal Audit Strategy 2025-28, which aims to support the achievement of the council's corporate priorities and align with the expectations of its key stakeholders. The strategy outlines SIAP's vision, strategic objectives, and supporting initiatives.

The three strategic objectives are:

• Agile Auditing: Innovate to explore a more agile approach to the audit process.
• Optimisation of Standards: Embrace and prioritise conformance and embedding of the Global Internal Audit Standards in the UK Public Sector.
• Data Analytics by Default: Further engage with the organisation to enhance and optimise the full potential of data analytics in the internal audit process.

Internal Audit Progress

The committee was to receive and note the Internal Audit Progress Report for July 2025, and to approve adjustments to the Internal Audit Plan 2025-26. The report summarises the activities of internal audit, provides an update on progress against the annual audit plan, and details internal audit performance measures.

The report noted that SIAP was experiencing a higher than average level of attrition, resulting in vacancies at auditor, senior auditor and audit manager level.

The report detailed adjustments to the 2025-26 internal audit plan, including the addition of an audit of IT – High Privilege Access Management (Finance & Revs and Bens).

The report included an analysis of 'Live Audit Reviews', and detailed overdue 'High Priority' management actions.

External Quality Assessment

The committee was scheduled to receive an overview of the alternative options considered in commissioning an external assessor to undertake the pending independent assessment of SIAP against the Global Internal Audit Standards in the UK Public Sector.

The report noted that there are two approaches to meeting the requirement of an External Quality Assessments:

• A Full-scope External Quality Assessment (EQA)
• A Self-assessment with Independent Validation (SAIV)

The report recommended that SIAP conduct their external assessment as a Self-Assessment with Independent Validation (SAIV).

Update on Counter-Fraud

The committee was to note a report describing the activity of the Corporate Fraud & Investigation Team for the period 1 March 2025 to 20 August 2025. The report included information on housing fraud, and council tax and business rates.

The report highlighted a significant case in which the team prevented a right to buy application at the old rate of £102,400, recovered a property into Crawley's housing stock, and cancelled a single person discount. The total savings on this case were £130,212.15.

Risk Management Update

The committee was asked to review the action taken by the Corporate Management Team and staff to mitigate Strategic Risks, and to review the Strategic Risk Register.

The report provided updates on several strategic risks, including:

• Maintaining a balanced budget
• Homelessness
• Migration / Asylum pressures
• Climate Emergency
• Water Neutrality
• Disaster Recovery and Business Continuity – Data Breaches or Network Compromise (Hack)
• Local Government Reorganisation
• Stock condition and repairs demand