The Audit Committee of Somerset Council convened on Monday, 29 September 2025, to address a range of critical issues, including the progress of audit recommendations, financial sustainability, risk management, and health and safety culture. The agenda included updates on the 2025-26 internal audit plan, a review of strategic and operational risks, and the approval of the Pension Fund Accounts for 2024/25. The meeting also provided an opportunity for public questions.

Public Question Time

The Chair, Councillor Mike Hewitson, was scheduled to address any items on which members of the public had requested to speak. Several questions were submitted by members of the public, including:

• David Orr asked about public reporting of procurement waivers and breaches, the reassignment of the Monitoring Officer role, the use of purchase orders, the IT system, contract management training, the transformation programme, service baselines, and the Revenues and Benefits NEC IT system.
• Brenda Orr asked about the Life Factory project in Glastonbury, the options appraisal, payments to local contractors, updates to the Audit Committee, potential clawback of funding, a criminal investigation, the involvement of Grant Thornton, and the Beckery Construction Company.
• Andrew Lee asked about the external auditors' ability to sign off on the council accounts for 2024/25 without a going concern qualification, given the lack of progress on savings plans and the use of purchase orders.

Somerset Pension Fund Audit Findings Report for 2024-25

The Audit Committee was scheduled to review the Somerset Pension Fund Audit Findings Report for 2024-25, presented by Grant Thornton, summarising the findings from the audit of the Pension Fund financial statements.

The report stated that Grant Thornton anticipated issuing an unqualified audit opinion, subject to the completion of outstanding work. The report noted that the Pension Fund must make an 'in principle' decision as to what provider they will be transferring to, by the end of September 2025, following the decision to reduce the number of Local Government Pension Scheme asset pools and the determination that Brunel Pension Partnership, was unable to meet the newly set minimum pooling standards and must therefore be dissolved. The report also noted that management had been requested to include a narrative disclosure within the contingent liability note of the financial statements regarding a High Court legal ruling in June 2023 (Virgin Media Limited v NTL Pension Trustees II Limited), upheld by the Court of Appeal in June 2024, which determined that certain pension scheme rule amendments were invalid if they lacked the required actuarial confirmation.

The report detailed the auditors' approach to, and findings from, their assessment of the valuation of level 3 investments¹ and level 2 investments, and the actuarial present value of promised retirement benefits.

The report included a summary of IT General Control ratings for the council's IT systems, including MS Dynamics 365, Altair, and ICON.

The report also detailed the scale fees set by PSAA for the council audit and the pension fund.

Strategic Risks and High Scoring Tactical and Operational Risks Q1

The Audit Committee was scheduled to receive an update on the council's strategic risk profile, as detailed in Appendix A - Q1 Strategic Risks. The report noted that eight strategic risk scores remained the same compared to May 2025, with two risks reducing – contract management and compliance and fraud. One new strategic risk was proposed – the escalation in High Needs budget pressures and the resulting cumulative deficit.

The report also provided an overview of the council's high scoring (16+) tactical and operational risks, organised by Executive Directorate, as summarised in Appendix B - Summary of High Scoring Tactical Operational Risks 110825.

The report included details of the following risks:

• Adults & Housing Services: General housing, failure to deliver statutory safeguarding adults' activity, and multi-agency working to protect people experiencing domestic abuse, as detailed in Appendix C - Adults Housing Services High Scoring Tactical Operational Risks.
• Children, Families & Education: Placement sufficiency for children's homes, children not being in school, frontline social care services, increased remedy payments via LGSCO, and staffing resources, as detailed in Appendix D - Children Families Education High Scoring Tactical Operational Risks.
• Communities, Place & Economy: North Hill Minehead, unsafe car parks, inclusion of Energy from Waste in Emissions Trading Scheme from 2028, the delivery of the Council's regeneration programme, Housing Landlord Service Business Continuity, unauthorised encampments, traffic control, disposal of non-operational assets, and the Planning Service, as detailed in Appendix E - Communities Place Economy High Scoring Tactical Operational Risks.
• Finance & Procurement: Staff reduction and reduced collection rates, as detailed in Appendix F - Finance and Procurement High Scoring Tactical Operational Risks.
• Resources, Strategy & Performance: Inability to report key service information due to data platform failure and increased demand for off-site storage, as detailed in Item 8b Appendix B - Summary of High Scoring Tactical Operational Risks 110825.

Health and Safety Culture Update

The Audit Committee was scheduled to receive an update on actions implemented in response to the SWAP Health and Safety Culture Advisory Report published on 12 January 2024. The Health and Safety Update Report noted that oversight structures had been strengthened, a formal strategy was in development, and targeted performance reporting had been introduced. The majority of the council's 39 policies had been reviewed, with ongoing updates and consultations scheduled. Compliance with mandatory health and safety training was being monitored within the agreed governance framework. A new service structure was launched in April 2025, with recruitment underway to address remaining vacancies.

The report also referred to the council's strategic risk register, noting that the SWAP culture review had been instrumental in focusing attention on key actions and facilitating improved health and safety management arrangements across Somerset Council, and that the strategic risk level had been lowered from its initial score of 16 (high) to 15 (medium).

The report included the Health and Safety Governance Structure and the Health and Safety Service Structure.

Internal Audit Progress Report 2025-26

The Audit Committee was scheduled to receive a progress report on the 2025-26 Internal Audit Plan. The SWAP Internal Audit Progress Report Sept 2025-26 included the outcomes of completed internal audit work, with summary information provided where there was limited or no assurance over the governance, or risk management, or control arrangements of those activities reviewed.

The report noted that 13 planned reviews, grants and support activities had been completed, 6 reviews were at the draft/review stage, and 30 reviews were in fieldwork/in progress/scoping. It also noted that there had been 6 additions to the plan, excluding investigations, and 1 removal.

The report included a summary of recommendations tracking, noting that 85 recommendations had been completed during 2025/26, and that there were 24 Priority 1 Audit Actions Open, and 66 Priority 2 Audit Actions overdue.

The report also included a summary of high scoring tactical and operational risks.

Audit Committee Workplan 2025-26

The Audit Committee was scheduled to consider its workplan for the remainder of the financial year. The proposed workplan included items such as progress against the recommendations of the Auditor's Annual Report 2023-24, the Income Code of Practice Review, the DSG Update, the Audit Committee Annual Report 2024/25, Breaches and Waivers Updates, Treasury Management Updates, Strategic Risks and High Scoring Tactical and Operational Risks, the Internal Audit Plan Progress Report 2025-26, the Internal Audit Health and Safety Governance Report, the IT Audit Report Update 2025-26, the Somerset Council Audit Findings Report 2024-25, the External Auditors Interim Annual Report 2024/25, MTFP Reports, Accounting Policies, the Statement of Accounts 2024-25, the Internal Audit Plan & Charter 2026-27, the External Audit Progress Report and Sector Update, and the Anti-Fraud and Corruption Strategy & Policy 2026-27. The proposed workplan is detailed in Appendix 1 - Audit Committee Workplan September 2025.