The Governance and Audit Committee of Cardiff Council met on Tuesday 27 January 2026 to review the control environment of the People and Communities Directorate, receive financial updates, and discuss performance reports. Key decisions included noting the mid-year report on council complaints and the mid-year assessment of performance, alongside approving updates to the internal audit strategy and charter.

People and Communities Directorate Control Environment Update

Sarah McGill, Corporate Director of People and Communities, presented an update on the directorate's control environment. She highlighted that while there are four outstanding internal audit actions, they are all within their agreed timelines. The report noted progress in corporate safeguarding, with opportunities for improvement identified, particularly concerning home-to-school transport and safeguarding within the supply chain. The risk register showed no risks escalated to Senior Management Team (SMT) in Quarter 2, but significant risks were identified within the directorate's registers, including those related to the Housing Revenue Account business plan. McGill expressed satisfaction with the levels of assurance, noting a reduction from strong to mixed in programme and project management due to new governance arrangements for joint work with the health board. The Panel Performance Assessment found robust performance management frameworks in place, commending the council's corporate approach and clarity of purpose. Discussions also touched upon simplifying partnership arrangements to reduce duplication between the public service board and regional partnership board.

Financial Update and Resilience Issues

Chris Lee, Corporate Director of Resources, provided a financial update, noting that the initial Welsh Government settlement for 2026/27 was 2.34%, which was later increased to 4.2% following additional investment. This uplift equated to approximately £15 million for Cardiff. Despite total pressures of over £50 million, the budget gap had been reduced to just under £9 million, partly due to £14 million in efficiency savings. A three-and-a-half-week consultation period had been launched, focusing on re-examining investment priorities rather than service cuts. Lee also provided an update on the Enterprise Resource Planning (ERP) replacement programme, stating that procurement evaluation was underway, with a full business case expected by March 19th. He also highlighted the need to integrate interlinking systems, such as housing repairs and adult social care finance, into the overall ERP programme.

Council Complaints - Mid-Year Report

Isabelle Bignall, Chief Digital Officer, presented the mid-year report on council complaints. The report indicated that the HALO system is fully embedded, and the focus has shifted to performance monitoring and organisational learning. An internal audit rated the complaints framework as effective with opportunities for improvement, confirming compliance and sound governance. However, quality assurance activities like dip sampling had been limited due to resource constraints, and operational inconsistencies and delays were noted due to misrouted complaints. The report showed 2,158 complaints recorded in the first six months of 2025-26, with a response rate of 71.4% within 20 working days, a slight increase from the previous year. Key themes included customer experience, with recurring frustration over a lack of responses, and the highest complaint volumes in Street Scene and Housing. Public Interest Reports from the Ombudsman concerning Housing Repairs and Assisted Lifts were highlighted as areas of ongoing risk. Enhanced internal escalation arrangements have been introduced, with high-risk escalations now copied to the Chief Executive.

Mid-Year Assessment of Performance 2025/26

Gareth Newell, Head of Performance and Partnerships, presented the mid-year assessment of performance. The report covers the Council's seven Well-being Objectives and highlights four areas of strategic challenge: delivering the change programme, ensuring service and financial resilience, improving performance in key services, and workforce challenges. Key areas of progress included a positive Panel Performance Assessment, sustained improvement in education outcomes, and effective delivery of the Children's Services Strategy. However, rising costs of external residential placements for children remain a financial pressure. The report also noted progress in housing delivery, with 166 new homes completed in the first six months of 2025/26, and the financial close on the new Multi-Purpose Indoor Arena. Areas of strategic challenge include the need to deliver the change programme, ensure financial resilience amidst a projected £127 million budget gap over the medium term, continue improving performance in key services like education and children's services, and address workforce challenges.

Recommendation Tracker - Reports of External Review Bodies

Gareth Newell also presented the recommendation tracker for reports from external review bodies. As of January 2026, there were 22 open recommendations out of a total of 171, with a 15% open rate. All recommendations from before 2022/23 have been closed. The report highlighted two Public Interest Reports from the Public Services Ombudsman for Wales concerning Housing Repairs and Assisted Lifts. David Price raised a concern about whether remedial actions from the Housing Repairs report were truly embedded and suggested considering external assurance. Gareth Newell agreed to take this back for consideration.

Mid-year Annual Governance Statement Update

Ian Allwood presented updates on the Annual Governance Statement and the Code of Governance. He highlighted proposed minor changes to the Audit Charter and Strategy, and noted that the five-case business model is embedded within the organisation, though not explicitly mentioned in the charter. The committee was asked to review and comment on the proposed updated Code of Corporate Governance and recommend its approval by full council.

Internal Audit and Investigation Team - Progress Update

Chris Pyke, Audit Manager, presented the progress update for the Internal Audit and Investigation Teams for Quarter 3 2025/26. He noted that the team is operating under the Global Internal Audit Standards (GIAS) and that recruitment is underway for additional auditors to support the ERP system implementation. The report indicated good delivery of the Audit Plan, with an intention to deliver 70% of the plan by year-end. However, four draft reports had been issued with insufficient with major improvement needed opinions, and one unsatisfactory report concerning the Pupil Referral Unit – Y Deryn Family of Schools had been finalised. Councillor Cowan proposed writing to the unsatisfactory and insufficient audit areas to understand the reasons for the findings and to request action plans. Chris Pyke noted that the unsatisfactory audit was director-led and that follow-up audits are scheduled. David Price raised concerns about four schools with suboptimal outcomes, questioning whether the issues related to governance or internal controls, and whether the schools had unified governing bodies. Chris Pyke clarified that governance issues were present in these schools and that the Education Directorate is establishing a SharePoint area for key information.

Draft Internal Audit Strategy, Charter, Methodologies & Summary Audit Plan 2026/27

Chris Pyke also presented the draft Internal Audit Strategy, Charter, Methodologies, and Summary Audit Plan for 2026/27. He noted that the documents had been updated to reflect the new audit standards and that only minor changes were proposed. The committee was asked to review and comment on these draft documents, with formal approval of the Charter and Audit Plan expected in March. The draft Audit Plan is based on a team of 9.46 operational auditors, with an increase in available days due to recruitment and the assignment of resources to the ERP system implementation. The planning approach is risk-based and follows a three lines model of defence.

Governance and Audit Committee Action Plan and Recommendations

Chris Pyke provided an update on the Governance and Audit Committee's Action Plan and Recommendations. All outstanding actions were noted as up-to-date. A specific action regarding the cost of the Real Living Wage increase was noted as not yet finalised.

Correspondence and Work Programme Update

Chris Pyke confirmed that there were no significant changes to the committee's work programme. Correspondence from other committees was noted for information. A response from the Chair of the respective scrutiny committee regarding the Responsive Repairs Service was expected.

The meeting concluded with thanks to all involved for their work in preparing and presenting the reports.