The Audit Committee of Tower Hamlets Council met on Thursday, 29 January 2026, to review progress on the mobilisation of an action plan in response to external recommendations, discuss internal audit and anti-fraud reports, and examine the corporate risk register. Key decisions included noting the progress on the action plan, approving the internal audit and anti-fraud progress report, and agreeing to further scrutiny of specific risks within the corporate risk register and the Children's Services Directorate.

Progress Update on Mobilisation of Action Plan in Response to External Recommendations

The committee received an update on the mobilisation of an action plan designed to address external recommendations. The plan is structured around four workstreams: Financial Management Accountability, Audit Investigations Assurance, Procurement and Contract Management, and BVI Core Services Capacity. Progress has been made across these workstreams, with some areas, such as procurement, showing significant advancement. The council has invested approximately £4.5 million over the next three years to support the implementation of these actions. The target date for the implementation of these actions is 30 June 2026, although it was noted that embedding these changes will take time, with auditors expecting to see substantial assurance within two years.

Concerns were raised regarding the presentation of the council's response to external recommendations, with one councillor suggesting that the narrative in some reports misrepresented the auditors' findings. The committee was urged to focus on the effectiveness of the plan itself and to ensure that reports provide clear indicators of progress and assurance. The council acknowledged the need for more information on timeliness, achievements, and impediments.

Internal Audit and Anti-Fraud Progress Report

David Dobbs, Head of Internal Audit, Anti-Fraud and Risk, presented the progress report for Internal Audit activity during 2025-26. The report detailed progress against the Internal Audit Plan, including assurance opinions for completed audits. Four audits received Limited Assurance opinions: Staff Recruitment and Pre-recruitment checks, PCN Income Debt Recovery and Write-offs, Transport Fleet Management, and IR35 and Off Payroll Engagement. The report also highlighted that the follow-up of management actions had led to some slippage in the delivery of planned audit engagements, necessitating a reprioritisation and rationalisation of the Audit Plan.

The committee was recommended to note the progress report and the assurance opinions. An action was suggested to provide an exception report in future detailing reasons for delays in management responses to internal audit reports.

Risk Management Corporate Risk Register & Deep Dive

The committee reviewed the latest Corporate Risk Register and conducted a deep dive into the risks within the Children's Services Directorate. David Dobbs, Head of Internal Audit, Anti-Fraud and Risk, explained that while the Risk Management team coordinates risk management, the identification, assessment, and mitigation of individual risks remain the responsibility of management and risk owners.

The Corporate Risk Register currently lists 13 risks, with a decline from the previous period. A risk concerning historical errors in Pension Scheme member data was relegated from corporate to directorate level due to implemented mitigating controls. The report detailed the risk management arrangements in Children's Services, noting positive engagement and traction, with a solid foundation supported by regular reviews. A key area for improvement identified was the identification of risks below the directorate level to ensure sufficient risks are considered for escalation. Future deep dives into other directorates were outlined, including Health and Adult Social Care, Communities, Housing & Regeneration, and Resources.

The committee was recommended to note the Corporate Risks and Children's Services Directorate Risks, and where applicable, request risk owners to provide detailed updates on risk treatment and mitigation.

Treasury Management Strategy, MRP Policy Statement and Annual Investment Strategy 2026/27

This item was to follow and was not discussed in detail in the provided transcript.

Treasury Management Mid-Year Review 2025/26

Paul Audu, Interim Head of Pensions and Treasury, presented the Treasury Management Mid-Year Review. The discussion highlighted the scale of the capital programme, estimated at £319-320 million for the current year. Concerns were raised about the lack of historical achievement data, slippage, and over-programming within the capital strategy. The treasury management approach was described as primarily focused on financing the capital strategy, with a need to link more closely to the capital strategy itself to understand the necessity of these investments.

The committee was informed that the asset management plan, which informs the capital strategy, was being finalized. Consideration was also being given to a longer-term 10-year plan instead of the four-year Medium Term Financial Strategy (MTFS). Guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) on prudential indicators and working with treasury advisors was mentioned as a basis for determining the best strategy based on deliverability. The council's view was to accelerate the delivery of homes and improvements to current stock, leading to the observed change in strategy.

The committee also discussed specific metrics within the treasury management review, including the authorized limit for borrowing, net loan requirements, and liability benchmarks.

Audit Committee Work Plan

The Chair, Barry Quirk, Independent Chair, asked members to note the workplan for 2025-26 and invited suggestions.

Any Other Business

There was no other business considered urgent by the Chair.

Exclusion of Press and Public

The committee recommended the exclusion of the press and public for the consideration of Section Two business, which contained exempt information.

Fraud Investigations Update

This item was part of the exempt section of the meeting.

The meeting concluded at 9:06 p.m.