The Audit and Standards Committee of Staffordshire Council met on Tuesday 09 December 2025 to review the Health and Safety and Wellbeing Annual Performance Report for 2024-25, discuss the Internal Audit Plan for 2025-26, and consider proposed additions to the council's scheme of delegation. Key decisions included the approval of the 2024/25 Annual Governance Statement and the 2024/25 Statement of Accounts.

Health and Safety and Wellbeing Annual Performance Report 2024-25

Becky Lee, Director of Finance and Resources, presented the Health and Safety and Wellbeing Annual Performance Report for 2024-25. The report highlighted several successes, including the provision of extensive support to household waste recycling centres and children's residential services, and the launch of a new healthcare cash plan through the Vivout platform, offering employees access to discounts and well-being initiatives, including 24/7 GP consultations and private prescription delivery.

Significant improvements were made to asbestos management guidance, informed by learning from the Health and Safety Executive's (HSE) inspections of schools. A new digitalised risk assessment module was launched across the organisation, and a working group was established to manage occupational road risks. The council's well-being offer was enhanced, covering physical, mental, financial, and social well-being, with the Vivout platform remaining popular. Financial well-being products, including the Money Insights platform and salary advance scheme, also saw high uptake.

The report detailed a pilot scheme called Safe and Well within health and care, which aimed to reduce short-term absence through early referrals. This pilot resulted in a 16% reduction in overall absence and a 46% reduction in psychological absence within the health and care directorate, leading to savings of £181,000. This pilot has since been extended across the entire organisation.

The council also launched a workstation assessment module, with 80% of employees completing their assessments online. A tree management strategy was introduced, supported by instructional videos for premise managers. The construction design and management approach with highways teams was revised to be more robust. Health and safety training was provided to meet statutory obligations, with 99% of participants feeling the skills would help them in their job roles.

Despite these initiatives, overall absence increased to 11.83 days per employee by March 2025, with psychological absence and musculoskeletal conditions showing slight increases. However, the council's physiotherapy service and Think Well counselling service received high net promoter scores.

The report also noted an increase in accidents and unviolent incidents, particularly within children's residential services and household waste recycling centres, which were attributed to challenging behaviours and public actions respectively. Reportable incidents to the HSE decreased slightly. An incident involving asbestos at a household waste recycling centre resulted in a £4,180 fine.

Looking ahead to 2025-26, key actions include improving digital health and safety solutions, revising terrorism guidance, embedding changes to asbestos management, and extending the Safe and Well project. The council will also review and relaunch stress management and driving for work arrangements, and prepare for Local Digital Regulation (LDR).

Councillor Honfrey raised concerns about the significant increase in violence and aggression at schools, particularly at one special school. Officers explained that the school was over capacity, making behaviour management difficult, and that additional mobile classrooms and an expansion project were underway. Councillor Clissey inquired about the impact of the Safe and Well pilot on long-term absence and the cost-effectiveness of the occupational health service. It was clarified that the occupational health service is a traded service that offsets its costs. Councillor Pert commented on the report's timeliness and suggested including more context on the workforce demographics and directorate-specific differences.

Internal Audit Plan 2025-26 Progress Report

The Committee received a progress report on the 2025-26 Internal Audit Plan. The report detailed the work undertaken since the previous committee meeting, including progress on key financial audits, support for transformational projects, and counter-fraud activities. Five additional audit tasks were requested, leading to the cancellation of six others to balance resources. The report highlighted that auditors were in post, but two departures were anticipated in early 2026.

Performance measures indicated that 53% of the audit plan had commenced, with systems assurance work at 53% and compliance work at 51%. Strategic and anti-fraud culture activities included regular communications to schools, promotion of sound financial controls, and a corporate fraud survey. Proactive fraud activities involved continuous controls monitoring and National Fraud Initiative data matching. Reactive fraud activities included 21 referrals to date.

External client work generated approximately £250,000 in income. Progress on implementing audit recommendations showed that no high-priority recommendations were overdue, with nine medium and 38 low-priority recommendations outstanding. Councillor Pert commended the progress in reducing outstanding issues and inquired about the cost-effectiveness of external work. Councillor Pendleton asked about resource planning for upcoming staff departures, and Councillor Wallens questioned completion dates for ongoing fraud investigations and assurance against ongoing losses.

Proposed Addition to the Scheme of Delegation: Confidentiality Agreements and Non-Disclosure Agreements

Paula Dalton, Legal Services Manager and Deputy Monitoring Officer, presented a proposal to add a delegation to the Senior Leadership Team (SLT) for authorising the entry into non-disclosure agreements (NDAs) or confidentiality agreements, following advice from the county solicitor. This delegation would apply to bands A to C for senior leadership team members. The proposal aimed to formalise a process that had previously relied on generic approvals.

Councillor Pert raised concerns about safeguards, transparency, and reporting arrangements to ensure NDAs were used appropriately and did not undermine FOI or ERR duties. Ms. Dalton confirmed that all agreements would be recorded, and a paper trail would demonstrate proper authorisation. She also clarified that the council would aim to use its own NDA template and that the proposal did not apply to employment contracts. Councillor Wallens asked about the volume of NDAs processed annually and whether delegation risked reducing member oversight. Ms. Dalton stated that NDAs were rare and that the proposed delegation would not alter what decisions were considered key or require councillor involvement.

Proposed Addition to the Scheme of Delegation: Appointment of Board Members of Nexus Care Latko

Kate, presenting on behalf of the legal services department, outlined a proposed addition to the scheme of delegation regarding the appointment of board members to Nexus Care Latko. This was an outstanding recommendation from an audit and a review of Nexus's governance. The proposed change would align the council's constitution with the amended shareholder agreement of Nexus, which had already been approved by cabinet and the Nexus board. This would remove ambiguity regarding the authority to appoint or remove directors.

A member questioned the safeguards and transparency measures to ensure appointments were based on merit and maintained public trust. It was explained that the constitutional change and shareholder agreement incorporated visibility regarding board appointments, and a skills audit and checklist had been developed. A further question was raised about annual performance appraisals for board members, to which it was responded that board member appointments operate under the Companies Act, with separate duties and obligations. Nexus is obligated to provide bi-annual performance reports to Cabinet. The committee was asked to support the proposed measures and endorse the addition to the scheme of delegation for referral to full council.

Draft Annual Governance Statement 2024/25

The Committee received a report on the Annual Governance Statement (AGS) for 2024/25. The statement assessed the council's governance framework, highlighting improvements made and areas for future focus. The report noted that internal and external audit work provided key assurance, and the council's financial resilience was strong, with an underspend of £5.3 million in 2024/25. No statutory officers had needed to exercise their official powers. The report detailed reviews of the Constitution, the ongoing governance health check, Overview and Scrutiny Committee arrangements, the Code of Corporate Governance, information governance, and civil contingencies. The health and wellbeing performance report, risk management policies, and whistleblowing arrangements were also discussed.

Areas for improvement were identified in the review of complaints and the Standards Matters annual report. Performance management arrangements were being strengthened, and work was ongoing to address weaknesses identified in an Ofsted inspection. Adult services were rated as 'good' in a CQC inspection. Improvements to governance included training and the 'KLOE process' for early issue identification. The committee requested written assurances from statutory officers regarding undisclosed legal, regulatory, financial, cyber, or safeguarding compliance failures. Members raised concerns about the use of AI in schools and late Ombudsman inquiries, with officers assuring that council data remained secure and that improvements to Ombudsman response methodology were underway. The committee resolved to approve the AGS for 2024/2025.

Training on Statement of Accounts

The Chief Accountant provided a presentation offering training on the upcoming agenda item concerning the Draft Statement of Accounts for 2024/25. The session outlined the purpose, format, and compliance requirements for preparing statements of accounts, which are a backward-looking summary of income, expenditure, assets, and liabilities. The presentation detailed the accruals concept, key deadlines, and the role of external auditors, KPMG. Significant features for the year were discussed, including the comprehensive income and expenditure statement, balance sheet, and pension fund accounts. The presenter confirmed that the accounts were prepared on a going concern basis. Members requested further training sessions and clearer explanations of acronyms.

Draft Statement of Accounts 2024/25

The Committee received the 2024/25 Statement of Accounts. The External Auditor introduced the accounts, seeking approval for them and two management representation letters. Questions were raised regarding the dedicated schools grant, the net cost of services, the use of contingencies, surplus assets, and property, plant, and equipment. The Director of Finance clarified treasury management strategies and the rationale for contingency budgets. Members expressed appreciation for the detailed report and discussed improvements in capital project expenditure profiling and reserve management. The upcoming end of a PFI contract for two schools was also noted. The committee resolved to approve the 2024/25 Statement of Accounts, the management representation letters, and to delegate authority to the Director of Finance and Resources to make final amendments.

Report to those charged with Governance (ISA 260) 2024/25 - Staffordshire County Council

The External Auditor, KPMG, presented the ISA 260 report for Staffordshire County Council. The report detailed the progress and findings of the audit on the council's accounts, including the circumstances surrounding a disclaimer opinion carried forward from the previous year. Improvements were noted in coverage and assurances over the financial statements, although challenges remained with journal entries and transaction listings. The report summarised principal findings, outstanding issues, control deficiencies, and misstatements. A performance improvement observation was raised regarding Education, Health and Care Plan completion rates. Members queried a right-of-use asset misclassification and the frequency of land and building valuations. Management agreed to update the report to include management responses and due dates for all flagged risks. The committee resolved to note the report.

Report to those charged with Governance (ISA 260) 2024/25 - Staffordshire Pension Fund

The Committee considered the ISA 260 report from KPMG regarding the governance of the Staffordshire Pension Fund. The report outlined audit risks, including management override of controls and the valuation of directly held property and other investments. The auditor described the work undertaken in response to these risks, noting that a single misstatement of £19.4 million due to a timing difference was identified and corrected. No new control deficiencies were identified. The committee resolved to note the report.

Auditor's Annual Report for Staffordshire County Council

KPMG presented the Auditor's Annual Report for Staffordshire County Council for the year ending 31 March 2025. The report provided a high-level summary of the financial statements audit and commentary on value for money across financial sustainability, governance, and operational efficiency. A performance improvement observation was issued regarding governance and the SEND position, but no significant weaknesses were identified. The committee resolved to note the report.

Forward Plan for the Audit and Standards Committee

The Committee received the Forward Plan for upcoming agenda items. The Chairperson requested that officers and KPMG identify the top three cross-cutting governance or control risks for 2024-2026, including risk owners and milestones for assurance. It was agreed that these could be incorporated into the forward plan. The committee resolved to note the Forward Plan.

Exclusion of the Public

The committee resolved to exclude the public from the meeting for subsequent items, which involved the likely disclosure of exempt information.