The Audit Committee of Haringey Council met on Thursday, 29 January 2026, to review the council's financial health and audit progress. Key discussions included the 2024/25 Statement of Accounts, which revealed significant financial challenges and a disclaimer of opinion from external auditors KPMG due to an inability to obtain sufficient audit evidence. The committee also received updates on treasury management, internal audit progress, anti-fraud activities, risk management, and the annual governance statement.

2024/25 Statement of Accounts - External Auditors Annual Report

The Audit Committee considered the statutory Annual Report from KPMG, the council's external auditors, for the year ended 31 March 2025. KPMG issued a disclaimer of opinion on the council's financial statements, meaning they were unable to provide an audit opinion due to an inability to obtain sufficient appropriate audit evidence. This was primarily due to the statutory backstop date of 27 February 2026 and ongoing work to rebuild assurance over key balances, particularly reserves. KPMG also identified five significant weaknesses in the council's arrangements for securing economy, efficiency, and effectiveness in its use of resources, relating to financial sustainability and improving economy, efficiency, and effectiveness. The auditors noted that the council's financial position remained challenging, with a significant reliance on Exceptional Financial Support (EFS) and a difficult savings target for 2025/26.

The committee noted that the council's financial performance in 2024/25 resulted in a £37.8 million overspend on its General Fund Budget, which was mitigated by one-off contributions totalling £28 million and £10 million in EFS from the government. The General Fund Reserve balance decreased to £52.2 million as of 31 March 2025. The report highlighted significant overspends in Adult Social Care (£15.8 million) and Housing Demand, including Temporary Accommodation (£9.8 million).

KPMG also identified significant weaknesses in the council's procurement processes, noting a lack of central oversight and valuable monitoring data. While improvements have been made, such as lowering the threshold for central procurement involvement and establishing a Procurement Board, the processes still rely heavily on manual action. The council's commercial property portfolio also presented significant risks due to insufficient record-keeping and a lack of digitisation, leading to potential financial and legal risks.

The committee resolved to note the contents of the draft auditor's annual report and any further oral updates from KPMG, and that management would provide responses to any issues raised by the external auditors in January 2026. They also delegated the approval of the Statement of Accounts 2024/25 to the Chair and the Corporate Director of Finance & Resources.

Financial Assessments Audit – Update & Adult Social Care Income Collection

This report provided an update on progress against recommendations from an Internal Audit Review of Financial Assessments (FA) of Clients, which had concluded with a Limited Assurance opinion. The audit had identified issues including inconsistent identification and follow-up of unpaid invoices, limited reporting of FA performance and debt to senior management, system and data quality limitations, a backlog of clients without completed financial assessments, and weaknesses in documentation and client engagement.

Significant progress has been made in strengthening monitoring and evaluation, with FA metrics now embedded in DASS Assurance Reports and aged debt reporting undertaken routinely. Completed actions include the development of routine reporting on clients receiving care without a completed financial assessment. However, actions related to data cleansing and dashboard enhancements remain in progress. A comprehensive Standard Operating Procedure (SOP) for the end-to-end financial assessment and debt pathway is being finalised, and a Charging Policy refresh is planned for 2026/27.

The report also detailed the current position on Adult Social Care (ASC) income collection and debt. As at the end of December 2025, outstanding debt was £15.5 million, an increase from June 2024, reflecting the completion of financial assessments for previously unassessed clients and complex high-value cases. The number of cases allocated to Legal has increased significantly. Priority actions include the proposed introduction of Variable Direct Debit, bringing debt discussions forward in the care pathway, and establishing Service Level Agreements (SLAs) between ASC, Finance, and Legal teams.

The committee resolved to note the progress made against the Financial Assessment Audit recommendations, the updated position on ASC income collection and debt, and the integration of audit actions within the ASC Improvement Plan and governance arrangements.

Treasury Management Qtr3 Report 2025/26

This report provided an update on the council's treasury management activities and performance for the six months ending 30 September 2025. The meeting heard that all treasury activities were undertaken in line with the approved Treasury Management Strategy. The council's borrowing position on 30 September 2025 was £1,043.8 million, an increase of £62.5 million compared to 31 March 2025. The report detailed movements in PWLB rates and highlighted the council's continued use of short-term borrowing from other local authorities, although this had become more expensive. The council's investment balances ranged between £13.6 million and £98.5 million during the quarter, ending at £40.7 million on 30 September 2025. The report also noted a non-compliance with the operational boundary for PFI and finance leases due to reporting changes from IFRS16, which would be revised for 2026/27.

The committee resolved to note the treasury management activity and performance achieved, and that all activities were undertaken in line with the approved Treasury Management Strategy.

Internal Audit Progress Report

This report detailed the work undertaken by Internal Audit between 1 September and 31 December 2025. Forvis Mazars, the external provider, had completed 332 days of audit work, meeting their planned programme for the period. The report highlighted two areas assigned a Limited level of assurance: Managing Housing Benefit Overpayments and Management and use of Contract Waivers. Both audits raised Priority 1 recommendations due for implementation by the end of January 2026. Fire Risk Assessments and Sickness Absence Management received Adequate assurance. The report also noted that the council was behind on its overall audit plan, with 68% completion by mid-February 2026, but expected most work to be finalised by the end of March 2026.

The committee resolved to note the audit coverage and follow-up work completed.

Anti-Fraud, Bribery and Corruption Progress Report Quarter Three 2025/26

This report provided a third-quarter update on the work of the in-house Audit and Risk team concerning anti-fraud, bribery, and corruption. The team's work plan included proactive projects on Temporary Accommodation, National Fraud Initiative (NFI) data matching, and Hidden Assets in Financial Assessments. Audit work had been undertaken on fraudulent payment of PCNs and procurement, with ongoing analysis of spend data. The report noted that tenancy fraud and right to buy fraud performance had returned to pre-COVID levels. Significant progress was reported on Blue Badge fraud investigations, with a shift towards applying lower-level sanctions on a larger number of cases. The report also detailed ongoing work on National Fraud Initiative data matching, void properties, No Recourse to Public Funds (NRPF) referrals, and internal employee investigations.

The committee resolved to note the activities of the team during quarter three of 2025/26.

Annual Governance Statement 2024/25 Update Report

This report provided an update on the progress made in addressing the significant governance issues identified in the 2024/25 Annual Governance Statement (AGS). Six significant issues had been identified relating to Finance, Commercial Property, Statutory Compliance in Housing, Contracts and Procurement, Information Governance, and Workforce Strategy. The report detailed the actions taken and progress made for each issue, with most actions reported as complete or in progress. The Head of Audit & Risk Management confirmed satisfaction with the progress noted regarding all actions.

The committee resolved to note the progress reported.

Risk Management Updated - Corporate Risk Register

This report presented the updated Corporate Risk Register as at 30 November 2025. The most significant Red risks included reducing reliance on Exceptional Financial Support, the increase in the North London Waste Authority (NLWA) levy, and challenges in building control recruitment. Amber risks highlighted included serious cyber security incidents, safeguarding vulnerable children and adults, election risks, potential health and safety incidents, and the impact of economic factors. The report noted that the risk related to failure to meet Housing standards had been reduced.

The committee resolved to note the Corporate Risk Register as at 30 November 2025.

The meeting also included a report on the Draft Treasury Management Strategy Statement 2026/27, which outlined the council's plans for borrowing and investment, taking into account economic forecasts and the council's challenging financial position, including a potential reliance on Exceptional Financial Support. The committee was asked to consider and comment on the proposed strategy and recommend it to Full Council for approval.

The Audit Committee also noted the Internal Audit Progress Report for the period 1 September to 31 December 2025, which detailed work undertaken by Forvis Mazars and highlighted areas of limited assurance, including Housing Benefit Overpayments and Contract Waivers. The committee approved the updated Annual Internal Audit Strategy and Plan for 2026/27, the Internal Audit Charter, and noted the Internal Audit Protocol and Assurance Risk Map.

Finally, the committee received an update on the Annual Governance Statement 2024/25, noting the progress made in addressing identified governance issues.