The Audit & Governance Committee of Oxfordshire County Council was scheduled to meet on 17 September 2025 to discuss several key items, including treasury management performance, internal audit progress, and the annual report from the Monitoring Officer. Councillors were also expected to consider updates to the council's financial regulations and its policy on the Regulation of Investigatory Powers Act 2000 (RIPA). Additionally, the committee was to review the terms of reference for the Audit Working Group and make appointments to outside bodies.

Financial Management, Controls and Governance

The committee was scheduled to review a report assessing the council's financial management, controls and governance. The report noted that since 2020/21, the government has provided Exceptional Financial Support (EFS) to councils needing financial assistance.

The report stated that councils have sought EFS for various reasons, but in most cases, multiple issues have combined, impacting financial resilience. These include:

• Persistent pressures in adult and children's social care
• Low level of reserves
• Costs relating to homelessness
• Special Educational Needs and Disabilities (SEND) deficits impacting on cash balances
• Debt costs
• Transformation delays
• Legacy issues
• Accounting corrections

The report stated that while Oxfordshire County Council needs to continue to take action to manage demand and costs, the year-end position for both 2023/24 and 2024/25 and the assessment against the Financial Management Code for 2024/25, demonstrates strong financial control and resilience. However, there are significant risks around the growing deficit against High Needs Dedicated Schools Grant funding as well as the potential impact of funding reform from 2026/27.

The report noted that the level of reserves is fundamental to financial sustainability, so while the council is not currently in the same position as the councils that have sought EFS, the report sets out an assessment of the current position and the controls in place to help mitigate risks.

Treasury Management Performance

The committee was expected to discuss the council's treasury management activity at the end of the first quarter of 2025/26. According to the Treasury Management Quarter 1 Performance Report 2025/26, treasury management includes:

The management of the organisation's borrowing, investments and cash flows, including its banking, money market and capital market transactions, the effective control of the risks associated with those activities, and the pursuit of optimum performance consistent with those risks.

As of 30 June 2025, the council's outstanding debt totalled £270 million, and the average interest rate paid on long-term debt during the quarter was 4.41%. No external borrowing was raised during the quarter, while £2 million of maturing Public Works Loan Board (PWLB) debt was repaid. The council's forecast debt financing position for 2025/26 is detailed in Annex 1 of the report.

The Treasury Management Strategy for 2025/26, agreed in February 2025, assumed an average base rate of 4.00%. The average daily balance of temporary surplus cash invested in-house was expected to be £303 million in 2025/26, with an average in-house return on new and existing deposits of 3.25%.

During the three months to 30 June 2025, the council achieved an average in-house return of 4.74% on average cash balances of £420.335 million, producing gross interest receivable of £4.964 million. In relation to external funds, the return for the three months was £0.670 million, bringing total investment income to £5.634 million. This compares to budgeted investment income of £3.191 million, giving a net overachievement of £3.443 million.

At 30 June 2025, the council's investment portfolio totalled £518.048 million. This comprised £365.500 million of fixed-term deposits, £52.833 million at short-term notice in money market funds, and £99.715 million in pooled funds with a variable net asset value. An analysis of the investment portfolio at 30 June 2025, is provided in Annex 4 of the report.

Internal Audit Progress

The committee was scheduled to receive an update on the Internal Audit Service, including resources, completed and planned audits. According to the Internal Audit 2025/26 Progress Report, the report includes executive summaries from individual internal audit reports finalised since the last report to the June 2025 committee. The report stated that since the last update, there have been no red reports issued.

The 2025/26 Internal Audit Plan, agreed at the June 2025 Audit & Governance Committee, is attached as Appendix 1 to the report. The report stated that the plan shows current progress with each audit and any amendments made to the plan, and that the plan and plan progress are reviewed regularly with senior management. For 2025/26 there has been one amendment to the plan, with the addition of an audit of Employee Relations at the request of the Director of HR and Cultural Change.

The report stated that there have been five audits concluded since the last update in June 2025, summaries of findings and current status of management actions are detailed in Appendix 2. The completed audits are as follows:

Monitoring Officer's Annual Report

The committee was scheduled to review and endorse the Monitoring Officer's annual report for 2024-25. The Monitoring Officer Annual Report 2024-25 provides a comprehensive overview of democratic and ethical governance activities during the municipal year 2024-25 (from 1 April 2024 to 31 March 2025). The report is aligned with the functions of the Audit and Governance Committee, which is responsible for ensuring high standards of conduct among councillors and co-opted members.

The Committee's key responsibilities include:

• Promoting high standards of conduct by councillors and co-opted members.
• Granting general and individual dispensations to councillors and co-opted members from requirements related to interests as set out in the code of conduct. Individual dispensations under Section 33 of the Localism Act 2011 and the Members' Code of Conduct are delegated to the Monitoring Officer.
• Reviewing the arrangements for dealing with complaints against Members and advising the Council on the adoption or revision of these arrangements, as well as the Members' Code of Conduct.

The report stated that throughout the year, the Committee has diligently worked to uphold its responsibilities, ensuring that ethical standards are maintained and that any complaints or allegations of misconduct are addressed promptly and fairly. The report highlights the Committee's activities, achievements, and the progress made in fostering a culture of transparency, accountability, and integrity within the Council.

RIPA Policy

The committee was expected to consider the council's policy on the Regulation of Investigatory Powers Act 2000 (RIPA). The RIPA Policy and Annex sets out the legal framework under which public bodies may lawfully undertake covert surveillance. Compliance with the Act and supporting Codes of Practice provides protection to the Council in the event that an individual challenges the actions of the Council on the basis that those actions were an infringement of the individual's human rights. It also reduces the likelihood that any evidence obtained through covert surveillance and used in legal proceedings is ruled inadmissible.

Codes of Practice under the Act require that elected members review the Authority's use of activities within the scope of the Act periodically and review the Authority's Policy annually. The report provides a summary of the covert activities undertaken by the council between April 2024 and March 2025 for review by the Committee.

The Council's Policy for Compliance with the Investigation of Regulatory Powers Act 2000 ('the policy') is updated annually and received a significant refresh in 2023. This included incorporating feedback from the Investigatory Powers Commissioner's Office (IPCO). Officers were not recommending any changes to the policy this year.

Financial Regulations Update

The committee was scheduled to discuss updates to Section 5 of the Financial Regulations related to capital expenditure. The Financial Regulations Update report noted that in April 2025, the council agreed to increase the threshold for a Key Decision for capital expenditure to £2.0 million.

To align with this change, it was proposed to increase the threshold for Cabinet approval for new inclusions and variations to capital schemes from £1.0 million to £2.0 million. The Strategic Capital and Commercial Board would approve any expenditure above £0.5 million up to £2.0 million.

Audit Working Group Terms of Reference

The committee was expected to review and agree to updated terms of reference for the Audit Working Group (AWG). The AWG acts as an informal working group of the Audit & Governance Committee, reviewing in detail matters of governance, risk and control, and supports the Audit & Governance Committee in discharging its responsibilities.

The previous terms of reference for the Audit Working Group included that the co-opted independent member of the Audit & Governance Committee act as the chair of the Audit Working Group. This arrangement had been in place since the inception of the Audit Working Group. The Audit Working Group Terms of Reference have been updated to reflect the change of Chair to the Audit Working Group.

Appointments to Outside Bodies

The committee was scheduled to make appointments of council representatives to the following outside bodies:

• Oxfordshire Buildings Trust Ltd (2 positions)
• South East Reserve Forces' and Cadets' Association

Audit & Governance Committee Work Programme

The committee was expected to note the updated work programme for 2025-26. The Audit Governance Work Programme lists the topics scheduled for discussion at future meetings.