The Joint Audit and Governance Committee is scheduled to discuss internal audit activity, the Strategic Property Investment Fund, risk management and proposed amendments to the council's constitution. The meeting will include reports from Mazars, the Assistant Director Place & Economy, and the Interim-Director for Core Services. Councillors will have the opportunity to ask questions and provide feedback on the presented information.

Risks and Opportunities Update

The committee will be asked to review the latest updates to the councils' corporate risks and opportunities, as detailed in a report by the Interim-Director for Core Services, and its appendices. Councillors will be asked to consider whether they require further information on any of the identified risks and opportunities, and to agree to receive a further progress report in March 2026.

The report pack highlights several key areas of risk and opportunity that are scheduled to be discussed:

• Council Finances: Key areas of financial challenge and risk include housing needs and homelessness, housing benefit subsidy, and planning and building control income.
• Housing Supply: Limited housing supply is identified as a key risk, impacting the council's ability to prevent homelessness and manage budgetary pressures.
• Local Government Reorganisation: With Sussex accepted onto the government's fast track priority programme, this presents both opportunities and risks over the next few years.
• Strategic Property Investment Fund (SPIF): There is a risk that the councils may fail to meet SPIF income targets, affecting overall council funds. This includes risks of non-compliance, tenant failure, and falls in capital value.
• Building Control: Implementation of the new Building Safety Act carries a risk of not being able to fulfil statutory building control duties.
• Climate Emergency: The councils need to mitigate and adapt to climate change, and prepare for more frequent extreme climate events and impacts.
• Bathing Water Quality: There is a risk of not achieving 'Good' bathing water quality, which could cause reputational damage and impact the local economy and tourism.
• Public Toilet Provision: Many of the 33 public toilets across Adur and Worthing are in poor condition, with a significant backlog of capital investment required.

The report pack notes that the inclusion of these issues on the Risks and Opportunities register does not mean that they will occur, but ensures that effective risk and opportunity management arrangements are in place.

Strategic Property Investment Fund In-Year Update

The Joint Audit and Governance Committee will be asked to consider a report by the Assistant Director for Place & Economy providing an in-year update on the performance of the Strategic Property Investment Fund (SPIF) portfolio. The report pack states that the primary objective of the Commercial Property Investment Strategy (CPIS) is to build a balanced portfolio generating consistent revenue for the councils' delivery of services for the benefit of Adur and Worthing.

The report pack highlights a number of issues that are scheduled to be discussed:

• Rent Collection and Tenant Engagement: Officers have focused on rent collection, tenant engagement, implementing rent reviews and securing lease renewals.
• Re-gearing Leases: Efforts have been made to re-gear leases, giving tenants contractual commitments and the councils some certainty into the future.
• Tenant Failures: Owing to worsening trade and overhead pressures, some tenants have ceased trading.
• Disposal of Underperforming Assets: Difficult decisions may be required to dispose of underperforming or riskier assets.
• Energy Efficiency: The portfolios will require ongoing investment to achieve long term returns and meet Minimum Energy Efficiency Regulations (MEES) requirements¹.
• New Acquisitions: While open to new acquisitions, the current focus is on existing SPIF portfolios in Adur and Worthing.

The report pack also provides an overview of the current fund structure, including the weighting of assets between different classes and geographical locations. It notes that both funds are weighted highly towards office investments.

The report pack states that the councils acquired the properties in the SPIFs through a combination of own equity and Public Works Loan Board funds, secured against future revenue. The aim of the portfolio is to generate a surplus over the cost of the debts, and this approach has been successful but requires ongoing management and investment to keep the estate net revenue-generating.

Internal Audit Progress Report

The Joint Audit and Governance Committee will be asked to consider a report by Mazars, providing a snapshot of internal audit activity and an overview of the Internal Audit Plan 2025/26. The report pack also includes an update on outstanding recommendations from previous audits.

The report pack includes a disclaimer, stating that:

This report (Report ) was prepared by Forvis Mazars LLP at the request of the Adur District Council and Worthing Borough Council (the Councils ) and terms for the preparation and scope of the Report have been agreed with them. The matters raised in this Report are only those which came to our attention during our internal audit work.

The report pack states that monthly catch-up meetings have been held with the Assistant Director (Finance) to monitor progress, and that updates on plan progress and outstanding recommendations have been provided to the Corporate Health Boards.

Amendments to the Constitution

The Joint Audit and Governance Committee will be asked to consider a report by the Monitoring Officer on amendments made to Adur District Council's and Worthing Borough Council's Constitutions.

The report pack notes that the Monitoring Officer has the delegated authority to make minor and inconsequential amendments to the Constitution at any time . The report pack lists a number of minor and inconsequential amendments that have been made under this delegated authority, including updates to job titles, amendments to the definition of administrative decisions, and amendments to the procedure for affixing the common seal of the council.

The report pack also notes that there have been requests from various members for amendments that would be more than minor and inconsequential. The Monitoring Officer is seeking authorisation to reconvene the cross party constitutional Member working group to consider these further amendments.