The Audit and Governance Committee of Wiltshire Council met on Thursday 22 January 2026 to review the council's financial statements and audit reports. Key discussions included the progress on the statement of accounts improvement plan, responses to external auditor questions, and the adoption of accounting policies for the upcoming financial year. The committee also received updates on internal audit activities and management action plans for ICT disaster recovery and damp and mould in general fund assets.

Annual Governance Statement (AGS) 2024/25 Governance Update on Actions

Perry Holmes, Director of Legal and Governance, presented an update on the improvement actions identified in the Annual Governance Statement (AGS) for 2024/25. Two key improvement actions were noted as being behind schedule: the implementation of a council-wide system for publishing officer decisions and the rollout of training on decision-making processes and organisational discipline. Mr Holmes explained that delays were due to the complexities arising from the May 2025 local authority elections, which had increased the workload for the Democratic Services team. Despite these delays, progress had been made, including the establishment of a SharePoint system for recording officer decisions and training sessions for Heads of Service and Members. The committee resolved to note the current status of these actions and expressed that the report provided assurance.

Responses to External Auditor Suggested Questions

Lizzie Watkin, Corporate Director of Resources and S151 Officer, presented the council's responses to questions posed by the external auditor, Grant Thornton, at the previous meeting. These questions covered a range of topics including the Spending Review, Fair Funding Review 2.0, public procurement, and the future of the leisure estate. Ms Watkin confirmed that the council was prepared for changes and had forward plans to manage financial risks. Members sought clarification on whether outsourced services were being reviewed for potential insourcing and how asylum seeker accommodation costs were managed and accurately coded. Ms Watkin assured the committee that contract renewals included reviews of service delivery models and that the Housing, Migration and Resettlement service ensured accurate coding of costs for government reporting. The committee resolved to note the responses and expressed that the report provided assurance.

External Audit Reports: Interim Annual Auditor's Report (AAR) 2024/25

Barrie Morris, Partner and PSA Head of Audit Quality at Grant Thornton, presented the interim Annual Audit Report (AAR) for 2024/25. Mr Morris highlighted that significant weaknesses persisted in financial sustainability and governance, with a statutory recommendation issued regarding the delayed preparation of financial statements. The Dedicated Schools Grant (DSG) deficit had more than doubled to over £60 million, posing a significant risk to the council's financial resilience. In governance, continued delays in publishing draft financial statements led to the escalation of a previous key recommendation to a statutory recommendation. Ashley Chan, part of the VfM team, elaborated on the executive summary, noting that financial sustainability remained rated as 'red' due to the increasing DSG deficit. Members expressed concerns about the scale of the DSG deficit and its potential impact on reserves, particularly if government support was withdrawn. The committee resolved to note the report and expressed that it provided some assurance.

Wiltshire Council Audit Findings Report 2024/25

Beth Bowers, Public Sector Audit Director at Grant Thornton, presented the Audit Findings Report for 2024/25. This report detailed the findings from the audit of the financial statements, noting that it was Grant Thornton's first full audit year with Wiltshire Council. Despite efforts, a disclaimer of opinion would again be issued for 2024/25 due to the late production of accounts and historical audit evidence limitations. However, progress had been made in areas of significant risk, including the transfer to a new financial system, pension liability valuation, and group accounts preparation. Ms. Bowers noted that regaining full audit assurance would be a complex, multi-year process. Lizzie Watkin, Corporate Director of Resources, provided further explanation on the challenges of reconciling management accounts with statutory accounts, particularly concerning reserves balances. The committee resolved to note the report and expressed that it provided some assurance.

Statement of Accounts 2024/25

Lizzie Watkin, Corporate Director of Resources and S151 Officer, presented the Statement of Accounts for 2024/25. She explained the process required to conclude the audit and publish the final accounts, noting that a disclaimed opinion would be issued. The committee was asked to approve the Statement of Accounts, including the Pension Fund accounts, and the letters of representation. They were also asked to ratify minor corrections to the Annual Governance Statement (AGS) and delegate authority to the S151 Officer and the Chair to finalise any outstanding technical requirements to enable publication before the statutory backstop date. The committee resolved to approve the proposals and delegate authority as requested.

Progress Report on Audits and Statement of Accounts 2024/25 and 2025/26

Lizzie Watkin presented a report on the progress of the statement of accounts improvement plan, focusing on ensuring robust preparation for the 2025/26 accounts. An action plan had been developed with clear timelines and responsible officers. Members queried the progress on asset revaluations and school reconciliations, receiving assurances that these were on track. Concerns were raised regarding the timelines for Stone Circle accounts, with officers explaining the council's escalation process. The committee resolved to note the progress made and expressed that the report provided assurance.

Accounting Policies 2025/26

Sarah Higgins, Director of Finance and Procurement (Deputy S151 Officer), presented the proposed accounting policies for the 2025/26 Statement of Accounts. Ms. Higgins highlighted that no material changes were proposed, with the exception of a new requirement to apply indexation to Property, Plant and Equipment (PPE) assets not due for revaluation within the five-year cycle. The committee resolved to approve the proposed accounting policies, delegate authority to the S151 Officer to make necessary amendments, and note the critical judgements made by management.

Internal Audit Update Report

Angie Hooper, Interim Assistant Director at SWAP Internal Audit Services, provided an update on internal audit activities. A reasonable ongoing assurance opinion was reported. Two audits, Damp and Mould – General Fund Assets and ICT Disaster Recovery, received limited assurance. For ICT Disaster Recovery, key issues included a lack of regular testing and the absence of a formal communication plan. The committee noted the audit plan coverage against strategic risks, with one strategic risk, increasing vulnerability to climate impacts, having no audit coverage. Members also noted an increase in overdue audit actions. The committee resolved to note the update and expressed that the report provided assurance.

Management Action Plan - Damp and Mould - General Fund Assets

Nick Darbyshire, Head of Strategic Assets and FM, presented the management action plan following the internal audit review of damp and mould in General Fund housing assets. Mr Darbyshire outlined the progress made on six recommendations, including the adaptation of social housing procedures for General Fund assets, implementation of a single sign-on for the Concerto Asset Management System, and the development of an inspection programme. The committee resolved to note the plan and expressed that it provided assurance.

Management Action Plan - ICT Disaster Recovery

Mark Tucker, Director of Information & Communications Technology (ICT), presented the management action plan for ICT Disaster Recovery. Mr Tucker detailed the progress made on recommendations, including the establishment of a regular testing schedule, development of BIAs and risk assessments, and the creation of a communication plan. Members stressed the importance of disaster recovery and queried the possibility of external expert review. Officers agreed to explore this option, and SWAP confirmed they would conduct a follow-up review. The committee resolved to note the plan, expressed that it provided some assurance, and requested additional external assurance on the action plan.

Forward Work Programme

The committee reviewed the proposed Forward Work Programme for 2026/27. An amendment was proposed to move the external audit plans from the July 2026 meeting to the April 2026 meeting. Discussions also covered the potential rescheduling of the October 2026 meeting to align better with statement of accounts backstop dates, the possibility of inviting Hazlewoods to attend when the Stone Circle biannual governance update was presented, and a training request from members on the Dedicated Schools Grant (DSG). The committee resolved to note the Forward Work Plan with the amendment.

Urgent Items

A member raised a concern regarding the Stone Circle company's 2024/25 accounts, specifically a note about fixed assets being written down after the balance sheet date without detailing the financial impact. The member requested that external auditors and the S151 Officer consider this matter and report back. Officers confirmed that credit loss risk, asset valuation, and impairments were assessed annually, and that the external auditors would review material judgements as part of the 2025/26 Statement of Accounts audit.