The Governance Standards and Audit Committee of Merton Council met on Wednesday 11 February 2026 to review updates on fraud, internal audit progress, and the council's statement of accounts for 2024/25. The committee also discussed the council's plan for internal audits in the upcoming year and the use of contingent workers.

Fraud Update

The committee was scheduled to receive an update on fraud activity. This included a review of the indicative Fraud Plan for 2026/27 and a report on the fraud activities completed during the 2025/26 financial year. The South West London Fraud Partnership (SWLFP), a shared fraud investigation service with Kingston, Richmond, Sutton, and Wandsworth Councils, was highlighted as a key element in strengthening fraud prevention and investigation capabilities. The report detailed the types of fraud investigated, including tenancy fraud, permit fraud, housing applications, and temporary accommodation misuse. It also outlined the indicative allocation of fraud resources for 2026/27, detailing reactive and proactive work, and key performance targets. The council's commitment to combating fraud and corruption was reiterated, with a focus on robust arrangements, effective resource allocation, and the prevention and detection of fraud through improved information use and technology.

Internal Audit Progress Report

A progress report on internal audit activities was presented, detailing the delivery of the 2025/26 audit plan. The report indicated that 39 audits were planned or carried over from the previous year, with 26 at the final report stage, two at the draft stage, and 13 in progress. The report also provided an analysis of the assurance levels received from completed audits, with 18 receiving Reasonable Assurance and 10 receiving Limited Assurance. A total of 177 recommendations were issued, with a significant proportion categorised as Priority 2. The report also highlighted changes to the Internal Audit Plan for 2025/26, including the addition of audits on Risk Management, Planning Enforcement Notice and Local Land Charges, and Vendor Fraud checks. Advisory reviews and financial systems audits were also detailed, along with the progress of audits within schools. The report noted outstanding Priority 1 audit actions and provided updates on their implementation status.

Internal Audit Plan 2026/27

The committee was asked to review and comment on the draft Internal Audit Plan, Strategy, and Charter for 2026/27. This plan is a risk-based approach designed to provide independent and objective assurance to members and senior management on the council's control environment, risk management, and governance processes. The plan adheres to the Global Internal Audit Standards and includes a range of reviews across various directorates, covering finance, innovation and change, children, lifelong learning and families, adult social care and public health, environment, civic pride and climate, housing and sustainable development. The strategy emphasizes the importance of internal audit in supporting the council's strategic priorities by improving decision-making, governance, and compliance with statutory requirements. The plan also outlines the role of internal audit in anti-fraud and corruption efforts and its advisory capacity to managers.

London Borough of Merton Statement of Accounts 2024/25

The committee was presented with the London Borough of Merton Statement of Accounts for 2024/25. This report detailed the arrangements for signing off the statement, including the timetable for its finalisation. A draft set of accounts had been published on 25 June 2025, with no public objections received. The committee was informed that Ernst & Young (EY), the external auditor, proposed to issue a disclaimed opinion on the 2024/25 accounts by the statutory backstop date of 27 February 2026. This was due to a national backlog in local audits and the need to rebuild assurance over prior years' figures. The committee was asked to formally approve the 2024/25 accounts and agree that the Chairman could sign the Letter of Representation. The report also included an update on the progress of rebuilding assurance, noting that while the level of assurance had increased, sufficient evidence had not yet been obtained over all in-year movements and closing balances.

Contingent Worker - Costing

This report provided an update on the council's use of interims and agency workers, collectively known as contingent workers, from July to December 2025. It also included an update on key people metrics, such as the use of the apprenticeship levy. The report highlighted a downward trend in contingency worker expenditure, falling below £20 million for the first time in five years. However, expenditure increased slightly between July and December 2025, reflecting higher demand in specific service areas like digital and housing due to transformation initiatives and house-building programmes. A breakdown of contingency worker expenditure by directorate and the duration of assignments was provided. The report also detailed ongoing and planned actions to reduce reliance on contingent workers, including tighter controls, enhanced monitoring, and targeted recruitment campaigns. The council's continued increase in apprenticeship levy spend and its sharing of the levy with local businesses were also noted.

Independent Person

This report sought approval for a temporary resolution regarding the role of Independent Person. Katy Willison, the current Independent Person, had served two three-year terms, with her second term ending on 6 February 2026. A recruitment process had identified Faye McGillian as a recommended candidate, but she subsequently resigned due to a conflict of interest. This left the council without an Independent Person from 7 February 2026. To address this, Katy Willison had agreed to serve an additional six months on an interim basis while a new recruitment process was undertaken. The committee was asked to note the circumstances, agree to Katy Willison's interim appointment, and recommend her further six-month term to Full Council for ratification.

Work Programme

The committee was presented with the forward work plan for the Governance Standards and Audit Committee. This outlined the topics scheduled for discussion in upcoming meetings, including the Annual Governance Statement, Internal Audit Annual Report, Risk Register updates, and fraud updates. The work programme also included standing items such as reviews of members' interests, gifts and hospitality, and updates on HR metrics. The committee was invited to add any further items to the work programme.