The Governance and Audit Committee of Cardiff Council met on Tuesday, 21 October 2025, to review and approve the audited statements of accounts for the council, the Cardiff Harbour Authority, and the Cardiff and Vale of Glamorgan Pension Fund for the financial year 2024/25. The committee received and discussed feedback from Audit Wales regarding these accounts, with a particular focus on the core council accounts, the harbour authority, and the pension fund.

Statement of Accounts 2024/25

The committee considered the audited statements of accounts for Cardiff Council, the Cardiff Harbour Authority, and the Cardiff and Vale of Glamorgan Pension Fund for the 2024/25 financial year. Audit Wales presented their findings, which included proposed unqualified audit opinions for all three entities.

For the Cardiff Council accounts, the audit was substantially complete, with only the review of assurances from the auditors of Cardiff Bus outstanding. Audit Wales noted that the audit had gone well, with risks related to pension surplus treatment and asset revaluations being addressed. There were no uncorrected misstatements. A key outstanding matter was the completion of the audit of Cardiff Bus, a wholly-owned subsidiary, which was expected to be finalised with assurances received that week. Audit Wales highlighted the need for the council to prepare for potentially earlier closure deadlines in the coming years. The proposed audit opinion for the council's core accounts was unqualified.

Regarding the Cardiff Harbour Authority, the audit was complete, with all testing finalised. An unqualified audit opinion was proposed. A single corrected misstatement was reported, relating to an adjustment to the revaluation reserve.

For the Cardiff and Vale of Glamorgan Pension Fund, the audit was also complete, subject to final checks. An unqualified audit opinion was proposed, and Audit Wales reported no corrected or uncorrected misstatements, with any hindrances being trivial.

During the discussion on the council's accounts, Councillor Kate Carr raised questions about the committee's role in ensuring continued vigilance regarding the council's borrowing levels, particularly in times of volatility, and how the committee contributes to assuring future risks are considered. Councillor Chris Burns responded that borrowing is managed within prudential indicators and the CIPFA code, with Treasury Management being a key agenda item for the committee and full council. He also highlighted the opportunities presented by the capital programme.

Councillor Mary McGarry inquired about the number of corrected misstatements related to asset revaluations. Julie Rees from Audit Wales confirmed that asset valuation was a risk identified in the audit plan and that sufficient testing had been conducted, with the three revaluation adjustments being non-material.

David Price raised concerns about the statement in the accounts regarding equal pay claims, noting that it was not currently possible to determine the validity, strength, or value of these claims. He questioned whether this statement was valid and asked officers about financial contingencies and the process for assessing and reporting liabilities. Chris Lee, Corporate Director Resources and Section 151 Officer, explained that the equal pay claims represented a contingent liability, not a provision, and that the process was in its early stages with legal advisors. He confirmed that no financial contingencies had been set aside, but that the council had engaged with Audit Wales on the accounting treatment. Julie Rees confirmed that Audit Wales had reviewed the contingent liabilities and agreed with the accounting treatment. Mr. Price further enquired about the process for assessing liabilities and reporting them to the committee, which Mr. Lee stated he would bring back to the committee in the future.

Councillor Rodney Berman raised concerns about the wording in the audit report regarding potential cuts in schools' delegated budgets, arguing that actual cuts were already being made. Ian Allwood, Head of Finance, acknowledged the point and stated that the report outlined the risks being monitored, but that the wording would be reflected upon.

Dr. Janet Wademan expressed increased assurance after the discussions. She raised concerns about the delay in circulating accounts to Audit Wales and how this would be managed with more severe deadlines next year. Ian Allwood explained that the team, while experienced, had seen staff move into different roles due to capacity challenges, making it a learning experience. He stated that the decision to delay was made to ensure the draft accounts were in better shape and that Audit Wales had been informed. He added that additional resources were being drafted in for the following year. Dr. Wademan also asked about the percentage of leases omitted and whether this triggered further investigation, and about the granularity of post-learning events. Julie Rees clarified that while she did not know the exact percentage of omitted leases, the balance was immaterial, and that a fair amount of work had been done on completeness. She also confirmed that the audit team was satisfied with the inclusion of balances for the Cardiff and Vale of Glamorgan Pension Fund.

Councillor Peter Bradbury enquired about the budget negotiations for the Cardiff Harbour Authority, noting that it was funded by Welsh Government but managed by the council. Ian Allwood stated that there was no news to report, suggesting ongoing negotiations were going well, and that nothing in the accounts indicated any problematic issues.

The committee noted the audited statements of accounts and the Audit of Accounts Reports (ISA 260) for all three entities. It was confirmed that these would be considered by full Council on Thursday, 23 October 2025.

Annual Governance Statement 2024/25

The committee also reviewed the Draft Annual Governance Statement 2024/25. The Head of Finance presented the report, outlining that four key action points from the previous year's action plan had been closed. Three new actions were identified for the forthcoming year, focusing on strengthening assurance in control and compliance environments, and reinforcing key messages within new directorates. The committee noted that new guidance from CIPFA and SOLACE on the annual review of governance would be incorporated into the council's code of governance in the future. A member suggested including the new Counter-Fraud Oversight Group and the improved Equality Impact Assessment process in the statement, which the Head of Finance agreed to reflect upon. The committee resolved to note the report.

Other Matters

The committee also noted the Audit Wales Work Programme and Timetable Update, the Risk Management Annual Report 2024/25, the Treasury Management Annual Report, and outstanding actions. The date of the next meeting was confirmed as 25 November 2025.

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