The Governance, Audit, Risk Management and Standards Committee of Harrow Council met on Tuesday 25 November 2025 to discuss the external audit update, directorate risk registers, complaints handling, treasury management, internal audit progress, and the risk management strategy. Key decisions included noting the external audit findings, approving the updated risk management strategy, and reviewing the mid-year treasury management position.

External Audit Update

The committee received an update on the progress of the audit of the 2024/25 statement of accounts and the value for money audit. The auditors, Forvis Mazars, presented a draft auditor's annual report, highlighting that while much of the commentary was positive, three new significant weaknesses had been identified. These included a deficit in the Dedicated Schools Grant (DSG), governance issues with the schools PFI contract, and concerns regarding the provision of Children's Social Care. A previously identified weakness concerning governance in relation to allegations of fraud and corruption remained outstanding. Management expressed disagreement with the significance of some findings, particularly regarding the PFI contract, arguing that the financial value was not material and risks were being mitigated. The auditors confirmed that the schools PFI contract liability was £13 million, which they considered material to their audit. Discussions also touched upon the ongoing audit fees and the complexity of IFRS 16 implementation.

Directorate Risk Registers

Children's Services Directorate Risk Register: The committee reviewed the Children's Services Directorate's risk register for Quarter 2 of 2025/26. Two risks were rated as RED: statutory non-compliance with complaints procedures and processes, and a significant overspend on the Children's Services Placements budget. The committee noted that the risk concerning an adverse Ofsted inspection rating had been closed, with a focus now shifting to underlying service delivery improvements.

Adults and Public Health Directorate Risk Register: The committee reviewed the Adults and Public Health Directorate's risk register for Quarter 2 of 2025/26. Three risks were rated as RED: issues with the community equipment market, failure to meet the demand for adult social care within budget, and failure to recruit and retain qualified social work staff. The committee was informed that while recruitment efforts were showing progress, budget pressures remained a significant challenge.

LGSCO Annual Report (Complaints)

The committee received the annual report on complaints for 2024/25, which included an update on complaints against members. Nine complaints against members were dealt with, with outcomes ranging from no breach found to complaints being withdrawn or resolved to the satisfaction of the complainant. The report highlighted that the Place Directorate received the highest volume of complaints, particularly concerning waste, recycling, housing, and planning enforcement. The Housing Ombudsman Service received 122 complaints, investigating 15, of which 12 were upheld. The committee also discussed the council's internal complaints process, noting that 90% of complaints were responded to within timescale, and the introduction of a new IT system to better manage corporate complaints.

Treasury Management Mid-Year Report 2025/26

The committee reviewed the mid-year treasury management position for 2025/26. The report indicated that the council had operated within its approved treasury and prudential indicators. The capital programme for 2025/26 had a revised budget of £215 million, with a forecast outturn spend of £143 million, resulting in a slippage of £72 million. The council's borrowing was £412.127 million as of 30 September 2025, a decrease from £412.778 million at 31 March 2025. Investment income had seen a slight decrease due to falling Bank of England base rates, but the council had secured some investments at higher rates. The committee discussed the capital expenditure funding split and the implications of being under-borrowed in the context of budgetary pressures.

Internal Audit & CAFT Progress Report

The committee received a progress report on Internal Audit and the Corporate Anti-Fraud Team (CAFT) for the period ending 30 September 2025. Internal Audit was behind its target for plan completion at 30%, but expected to reach the 90% target by year-end. CAFT was meeting or exceeding most targets, with the exception of recovering social housing units and disrupting fraudulent Right to Buy applications, which was expected to improve. The report detailed significant financial benefits from fraud investigations, including £817,550 in loss avoidance and recovery from tenancy fraud, Right to Buy fraud, and internal fraud. The National Fraud Initiative (NFI) had also resulted in over £393,000 in savings and loss avoidance. Limited assurance reports were issued for Emergency Planning/Business Continuity, Income Collection at Harrow Music Service, Harrow Manor Museum and Harrow Arts Centre, Demand on Homelessness, and Planning Enforcement.

Risk Management Strategy

The committee reviewed the updated Risk Management Strategy for 2025-2029. Key updates include a revised 5x5 risk matrix for evaluating impact and likelihood, the designation of control and risk owners, and mandatory contingency action plans for red-rated risks. The strategy aims to embed risk management more effectively across the council and improve decision-making. The committee was informed that awareness training and communications would commence shortly, with the new matrix to be rolled out from April 2026. The committee was requested to review and note the strategy.