The Standards and Audit Committee convened to discuss internal and external audit progress, risk management, and corporate governance. The committee approved the Annual Governance Statement for 2024/25 and referred the Standards and Audit Committee Annual Report 2024/25 to the council for approval. Members also reviewed the Internal Audit Consortium Annual Report 2024/25, accepting its findings regarding the council's governance, risk management, and control arrangements.

Risk Management Annual Review

The committee reviewed the Risk Management Annual Review 2024_25, which provided an overview of strategic risks faced by Chesterfield Borough Council and risk management activities undertaken in the financial year 2024-25. The report highlighted the council's Risk Management Strategy (RMS) 2023-2027, which was approved by the full council on 15 May 2023. The strategy aims to support the achievement of the council's vision and priorities, provide a consistent approach to managing risk, and protect the council and its communities from known and anticipated risks.

The Corporate Risk Management Group (CRMG) met quarterly to review the council's risk management position, providing updates to portfolio holders and the Corporate Leadership Team. The terms of reference for the CRMG were reviewed, with a formal review of the group's effectiveness planned for 2025-26.

The Strategic Risk Register (SRR) documents strategic risks related to the council's vision, priorities, and purpose. The CRMG reviewed and updated the SRR throughout 2024-25, using information from directorate risk registers, internal and external audit reports, the Annual Governance Statement, and horizon scanning. Good progress was reported in controlling and mitigating strategic risks, with six risks improving, five remaining unchanged, and three becoming more challenging to control.

A new cloud-based risk management system was introduced to capture directorate risk register information, enhancing collaboration, efficiency, and oversight. The CRMG will review all directorate risk registers at least once during the 2025/26 financial year.

The report also detailed financial implications, noting that the council maintains a £5,000 balance on the Risk Management Reserve for priority risk management activities. Zurich no longer holds £2,500 in reserves for the council, but the council received the same value in a deduction from annual insurance premiums.

External Audit Progress

James Collins of Forvis Mazars, the council's external auditors, presented a report on the progression of the external audit for the year ending 31 March 2025. The report addressed the impact of disclaimed audit opinions on the council's 2022/23 and 2023/24 financial statements and the steps being taken to rebuild assurance.

In June 2025, the National Audit Office (NAO) issued guidance to auditors on special considerations for rebuilding assurance, outlined in Local Audit Reset and Recovery Implementation Guidance (LARRIG) 06. This guidance emphasises the timely delivery of audited financial statements as a collective enterprise, requiring effective governance, internal controls, and accurate financial reporting.

Due to the disclaimed opinions in prior periods, auditors cannot rely on prior-year assurances and must design alternative audit procedures. The guidance requires auditors to consider the facts and circumstances impacting the financial statements and to apply professional judgement in determining the appropriate level of audit work.

Forvis Mazars will conduct a comprehensive risk assessment, considering the council's system of internal control and a detailed assessment of potential risks for each account balance. The auditors determined that a historic testing approach is appropriate for Chesterfield Borough Council, dependent on the development and agreement of testing required to rebuild by testing historic balances and whether this can be completed in time for local government reorganisation.

A disclaimed audit opinion will be issued on the council's 2024/25 financial statements. The historic testing procedures required to rebuild assurance from previous years are anticipated to be completed during the 2024/25, 2025/26, and 2026/27 audits, potentially allowing for a full audit and an unmodified opinion in 2027/28.

PSAA¹ have yet to determine the impact of the auditor's procedures for rebuilding assurance on the scale audit fee for 2024/25 and beyond.

Internal Audit Progress Update

The committee received an Internal Audit Progress Report September 2025 for members' information regarding the 2025/26 Internal Audit Plan. The report included a summary of reports issued since the last committee meeting, with 3 reports receiving Substantial assurance and 2 receiving reasonable assurance.

The assurance levels are awarded based on the controls in place and the system's ability to meet its objectives and manage risk. The definitions are:

• Substantial Assurance: A sound system of controls is in place, designed to achieve the system objectives. Controls are being consistently applied and risks well managed.
• Reasonable Assurance: The majority of controls are in place and operating effectively, although some control improvements are required. The system should achieve its objectives. Risks are generally well managed.
• Limited Assurance: Certain important controls are either not in place or not operating effectively. There is a risk that the system may not achieve its objectives. Some key risks were not well managed.
• Inadequate Assurance: There are fundamental control weaknesses, leaving the system/service open to material errors or abuse and exposes the Council to significant risk. There is little assurance of achieving the desired objectives.

The report noted that no fraud had been detected.

Appendix 2 Progress on the 2025.26 Internal Audit Plan detailed the 2025/26 audit plan, highlighting completed and in-progress audits. Vacant Senior Auditor and full-time Auditor posts have been filled, and an Interim Auditor has been appointed through an agency for 6 months.

Appendix 1 Reports issued 25.26 IA Plan included a summary of Internal Audit Reports Issued June - August 2025.

Review of Code of Corporate Governance & the Annual Governance Statement 24-25

The Head of the Internal Audit Consortium presented a report on the review of compliance with the Code of Corporate Governance requirements during the year 2024/25 and the Annual Governance Statement for 2024/25. The report noted that it is good practice for Cabinet and the Standards and Audit Committee to monitor compliance with the Code of Corporate Governance, supporting the maintenance of sound risk management, governance, and control arrangements within the council.

The council's Code of Corporate Governance reflects the latest CIPFA² / SOLACE³ guidance delivering good governance in Local Government Framework 2016 Edition . The Annual Review of the Local Code of Corporate Governance for 2024/25 included how Chesterfield Borough Council complies with the principles shown at paragraph 4.4 of the officer's report.

The Annual Governance Statement 2024/25 indicates that many of the processes and procedures in place at Chesterfield Borough Council are compliant with good practice; however, there are some governance issues and future challenges detailed in the statement. Cabinet had considered these documents at its meeting on 17th June 2025 but had made no comments for this committee's attention.

The committee resolved to:

• Approve the Annual Governance Statement 2024/25 and for it to be signed by the Leader and Chief Executive.
• Undertake a review of the Code of Corporate Governance in 12 months' time.
• Ensure that progress on the significant issues and future challenges identified in the Annual Governance Statement is monitored by the Corporate Leadership Team.

Standards & Audit Committee Annual Report 24-25

The Head of the Internal Audit Consortium presented the Annual Report of the Standards and Audit Committee 2024/25, which sets out the work undertaken by the committee in 2024/25. The report provides assurance to the council that the committee is meeting its terms of reference, thereby providing assurance on the council's governance, risk, and internal control arrangements.

The work of the Standards and Audit Committee helps to ensure that processes and controls are operating effectively, contributing to ensuring that value for money is obtained. The committee will continue to support the council in the year ahead by supporting the work of internal and external audit, the Service Director – Finance, and the Monitoring Officer.

The committee resolved to refer the Standards and Audit Committee Annual Report to the council for approval.

Internal Audit Consortium Annual Report 24-25

The Head of the Internal Audit Consortium submitted a report detailing a summary of the internal audit work undertaken during 2024/25 and the annual internal audit opinion on the council's governance, risk, and control arrangements. The report noted that 81% of the plan has been completed, with plans in place for the completion of the remaining areas as part of the 2025/26 Internal Audit Plan.

The report assessed that reasonable assurance can be provided on the overall adequacy and effectiveness of the council's framework for governance, risk management, and control for the year ended 2024/25. Sufficient work has been completed and assurances ascertained to be able to provide an unlimited opinion on the systems of governance, risk management, and control in place. This year, 24 reports have been issued (9 substantial, 9 reasonable, and 6 limited). Managers have either already implemented or are in the process of implementing the audit recommendations made. Overall, 76% of the areas audited received Substantial or Reasonable Assurance, demonstrating that, in the main, there are effective systems of governance, risk management, and control in place.

The report confirmed that the internal audit activity is organisationally independent. Internal audit reports directly to the Service Manager – Finance but has direct and unrestricted access to the Corporate Leadership Team and the Standards and Audit Committee. The Head of Internal Audit regularly attends CLT meetings and attends every Standards and Audit Committee meeting.

Based on the information provided in the report on the completion of the 2024/25 internal audit plan, it was considered that the requirements of the Internal Audit Charter were met during the year.

The committee accepted the report.