The East Sussex Council Audit Committee convened to review financial management, risk, and audit activities. The committee reviewed the external auditor's report on the pension fund, an internal audit progress report, a self-assessment against global internal audit standards, the CIPFA Financial Management Code, and strategic risk monitoring. The committee also endorsed the Audit Committee's annual report and discussed future work programmes.

External Auditor's Report on East Sussex Pension Fund

The Audit Committee reviewed the external auditor's report on the 2024/25 East Sussex Pension Fund accounts. The report, delivered by Grant Thornton (GT), identified a misstatement of £8.2 million relating to the valuation of level 3 investments¹, but the error was not considered material enough to require an adjustment to the accounts. The committee was informed that an unqualified audit opinion was anticipated.

Whilst the report identifies one misstatement that impacts on the Net Assets Statement and the Fund Account, through the valuation of level 3 investments, at £8.2m the error is not material and, does not require an adjustment to the accounts.

External Auditor's Report

The committee was asked to note the draft 2024/25 Audit Findings Report for the East Sussex Pension Fund.

Internal Audit Progress Report

The Audit Committee received an update on internal audit and counter-fraud activities from 1 April 2025 to 30 June 2025. Of the eight audits finalised, three received 'substantial assurance' opinions, three received 'reasonable assurance' opinions, and two received 'partial assurance' opinions, specifically in the areas of Home Care Contract Management and Home to School Transport.

The report noted that 91.6% of high-risk actions due to be implemented within 12 months had been actioned, with one action outstanding regarding a declaration in the staff loan application process. Performance targets were mostly on track, although there was a slight shortfall in audit days delivered due to a team member's maternity leave.

The Audit Committee was asked to note the report and consider any further action required.

Global Internal Audit Standards Self-Assessment

The Audit Committee reviewed the results of the Internal Audit Service's self-assessment against the new Global Internal Audit Standards (GIAS) and the resulting Quality Assurance and Improvement Plan (QAIP). The assessment found high levels of conformance, with identified actions being considered minor. An updated Internal Audit Charter, reflecting the new standards, was presented for approval.

The committee was asked to note the results of the self-assessment and the updated Internal Audit Charter.

CIPFA Financial Management Code

The Audit Committee was provided with an annual overview of compliance with the CIPFA Financial Management Code. The code sets out standards of financial management for local authorities. The report concluded that East Sussex County Council met all six FM Code standards, with good practice identified in compliance with statutory obligations and relevant codes.

The committee was asked to note the annual overview of Financial Management Code compliance.

Strategic Risk Monitoring

The Audit Committee received an update on current strategic risks faced by the council, their status, and risk controls/responses. The Strategic Risk Register was formally reviewed by the Corporate Management Team (CMT) on 27 August 2025.

Several risks had updated risk definitions and controls, including:

• Risk 12 (Cyber Attack)
• Risk 15 (Climate)
• Risk 9 (Workforce)
• Risk 4 (Health)
• Risk 5 (Reconciling Policy, Performance and Resources)
• Risk 20 (Placements for Children and Young People in Our Care)
• Risk 1 (Roads)
• Risk 18 (Data Breach)
• Risk 6 (Local Economic Growth)

The committee was asked to note the process of strategic risk management and the Strategic Risk Register.

Audit Committee Annual Report

The Audit Committee considered a report by the Chief Finance Officer presenting the draft Audit Committee: Annual Report 2024/25 for review and comment.

The committee discussed the challenges of recruiting Independent Co-opted Members to the Audit Committee and resolved to agree and endorse the Audit Committee: Annual Report 2024/25.

Work Programme

The committee considered its current work programme of forthcoming items and resolved to note the programme.