The Audit Committee of Hinckley and Bosworth Borough Council met on 4 February 2026 to review the external auditor's draft completion report for the year ended 31 March 2025, alongside internal audit reports and the council's financial statements. The committee noted the significant progress made in addressing audit recommendations and the positive movement in the council's value for money assessment, despite ongoing challenges with the audit backlog.

External Audit Draft Audit Completion Report and Letter of Representation

The committee received an overview of Azets' annual report for the year ended 31 March 2025. This report detailed the external auditor's opinion on the financial statements, including key findings and risk testing, as well as commentary on the council's financial sustainability, governance, and efforts to improve economy, efficiency, and effectiveness. Concerns were raised regarding the capacity of the finance team to adequately respond to external audit processes.

In response to questions, officers confirmed that the capacity issue was being addressed by management. They also clarified that the council's current position regarding its accounts would not impact the Community Governance Review for a new Hinckley Town Council or any subsequent transfer of budgets and services. The external auditor explained that to achieve a clean audit opinion, Hinckley and Bosworth Borough Council (HBBC) would require three consecutive years of clean balance sheets, and that the council's current standing was in line with the auditors' expectations at this stage. Members acknowledged the substantial work undertaken and inquired about the implications of Local Government Reorganisation should HBBC not receive a clean audit by the time the authority ceases to exist. The external auditor stated they had not yet received guidance on this specific scenario.

The committee resolved to note the report and the actions in place to address the recommendations made, as well as the positive movement since the previous report which had identified significant weaknesses in the value for money assessment.

Statement of Accounts and Annual Governance Statement 2024-25

Members were presented with an update on the financial statements for 2024/2025 and the Annual Governance Statement, which were in the final stages of preparation.

The committee resolved to note and approve for publication the Financial Statements and Annual Governance Statement for 2024/2025, subject to the completion of the final external audit process. Additionally, delegated authority was granted to the Chair of the Audit Committee to approve the final 2024/25 Statement of Accounts once the audit was completed.

Forvis Mazars - Draft Internal Audit Annual Report for 2024-25

The committee reviewed the draft annual report from Internal Audit for 2024/25. The report detailed audit findings for each review, along with recommended actions and management responses.

In response to member questions, officers confirmed that the outstanding draft report would be finalised once management responses were completed. The committee resolved to note the report.

Service Level Budget Monitoring 2025/2026 Internal Audit Final Report

Members were presented with the final report on Service Level Budget Monitoring for 2025/2026. This report assessed the effectiveness of the control framework for budget monitoring within HBBC.

In response to questions, officers confirmed that refresher training was being organised, along with training for budget holders on the budget process. The committee resolved to note the report.

Internal Audit Progress Report

The committee received an update on the progress of the 2025/26 internal audit plan. Officers confirmed that the plan would be delivered in line with the established reporting cycles for 2025/26. The report was noted by the committee.

Audit Committee Forward Plan

Members were informed that the Scrutiny Commission was currently working on action planning and best practice guidance to ensure alignment between the work of the Audit Committee and the Scrutiny Commission. It was noted that this work might lead to a new item being proposed for the committee's agenda at an appropriate time. The committee noted the forward plan.