The Audit Committee of Hillingdon Council met on Tuesday 10 February 2026 to discuss a range of critical financial and governance matters. Key decisions included noting the progress on the audit of the 2024/25 Accounts and the work being undertaken to cover previous years' External Audit recommendations, and approving the Draft Audit Committee Annual Report for 2024/25.

The committee received updates on the Governance Review Improvement Plan (GRIP) and the Finance Modernisation Programme (FMP), both of which are strategic initiatives aimed at strengthening the Council's financial management and governance. Risk management and strategic risk reports were also considered, with the committee noting the reports and the level of assurance received. The Internal Audit Progress Report indicated that 64% of management actions due to have been implemented were verified or complete, with 18 overdue. The Counter Fraud Progress Report for 2025/26 Quarter 3 highlighted significant savings of approximately £3.5 million, exceeding the year-to-date target. The committee also noted the dates for future Audit Committee meetings and made suggestions for future agenda items.

2024/25 Statement of Accounts & External Audit Reports

The committee received a comprehensive update on the audit of the 2024/25 Statement of Accounts. Ernst & Young (EY), the external auditors, reported that while audit testing had been underway for several weeks, they had not yet obtained sufficient evidence to provide reasonable assurance over all in-year movements and closing balances. This was attributed to delays in the publication of the draft accounts and capacity considerations within both the Council's finance team and the audit team. Consequently, EY anticipated issuing a disclaimed audit opinion for the Council's 2024/25 audit, a situation consistent with the previous year's disclaimer.

EY identified four matters to report by exception regarding the Council's value for money arrangements, citing significant weaknesses in:

• Financial sustainability: The Council's financial position was described as critical, with concerns raised about the reliability of the 2025/26 budget and the Council's ability to comply with its statutory duty to set a balanced budget. The Council has applied for Exceptional Financial Support (EFS) from the Ministry of Housing, Communities and Local Government (MHCLG) due to depleted reserves and forecast overspends.
• Quality of Council information: Issues with the implementation of Oracle Fusion and Oracle EPM were noted, leading to inaccurate user lists, incomplete data, and a reliance on manual interventions by the finance team. This has impacted budget holders' confidence in managing their budgets.
• Capacity of the Council's finance team: Significant turnover in senior finance roles and the ongoing demands of the Oracle implementation have strained the finance team's capacity, impacting financial management and governance.
• Implementation of Oracle Fusion and Oracle EPM: Gaps were identified in the Council's arrangements for system implementation, including a lack of clear 'go-live' criteria, insufficient user acceptance testing, and inadequate monitoring of privileged user access.

EY also highlighted that they had not been able to complete all planned audit procedures, including those related to the valuation of land and buildings, due to the agreed limitation of scope. This, combined with the prior year's disclaimed opinion, meant that EY could not conclude on the accuracy of all 2024/25 financial statements.

The committee noted the progress on the audit of the 2024/25 Accounts and the work being undertaken to cover previous years' External Audit recommendations.

Update on the GRIP

An update was provided on the Governance Review Improvement Plan (GRIP), a strategic programme launched in March 2025 to address key governance weaknesses. The GRIP is structured around three workstreams: Financial Governance, Directorate Governance, and Constitutional/Democratic Governance.

• Financial Governance: This workstream is being delivered in conjunction with the Finance Modernisation Programme (FMP). Progress includes the implementation of additional spend control measures, ongoing assessment of savings delivery, and discussions with MHCLG regarding Exceptional Financial Support (EFS). The FMP has concluded its first phase and is moving into its second phase, focusing on budget monitoring through Oracle, modernising the finance function, and developing a finance skills and competency framework.
• Directorate Governance: Progress includes the rollout of a new standardised meetings structure and agenda template for Corporate Management Team (CMT) and Senior Management Team (SMT) meetings. A Corporate Governance Group (CGG) has been established to oversee corporate governance and monitor the GRIP's progress.
• Constitutional Governance: An external review of key elements of the Council's Constitution has been completed, and a report with suggested improvements has been received. Any proposed constitutional changes will be brought to the Council for decision.

The committee noted the update to the GRIP and sought clarifications and assurances.

Update on the FMP

An update was provided on the Finance Modernisation Programme (FMP), which aims to strengthen the Council's financial capacity and capability. Phase one of the FMP has concluded, with phase two now underway. Key activities include improving Oracle EPM monitoring templates, developing an interface between the HR system and Oracle for daily establishment data transfer, and reviewing contract management processes. The programme also includes a focus on developing a finance skills and competency framework and enhancing financial reporting capabilities to provide timely and insightful financial information.

The committee noted the update to the FMP and sought clarifications and assurances.

Risk Management & Strategic Risk Reports

The committee considered the risk management and strategic risk reports. It was noted that the timing of these reports had been changed to provide more up-to-date information. The data for the current report was taken from 03 November. Members commended officers for their report.

Further information was requested on the EDUSEN0006 risk, relating to school safeguarding, which officers would provide outside of the meeting.

Regarding the HLBC0006 risk, members noted that the deficit on the general fund had increased by £5.8 million in month 6, and that the potential need for Exceptional Financial Support (EFS) could approach £80 million. The Chair acknowledged that the risk had been highlighted but did not expect officers to respond at that moment. Councillors asked why the risk rating for HLBC0006 had changed from A1 to C1. Officers explained that there were two different risks: the strategic, cross-cutting risk (owned by the Corporate Management Team and currently rated C1), and a separate short-term operational financial risk rated A1. The strategic risk rating reflected the wider work being undertaken to address the Council's financial position, including actions related to EFS. Officers confirmed that significant work was ongoing to resolve the situation, including discussions with the MHCLG. Officers would provide a written response.

The committee resolved to note the reports and the level of assurance received.

Internal Audit Progress Report

Officers introduced the Internal Audit Progress Report. Members queried how vacancies within the Green Spaces service had led to internal control issues, asking which controls were affected and what level of debt was at risk. Officers advised that the Green Spaces audit had identified significant organisational changes at senior management level, including a new Director for Environment and new Heads of Service. These changes had resulted in delays to processes such as budget setting and the savings programme, which had been left to more junior and operational staff during the transition. This was a known area of risk and was targeted for review by Internal Audit. A clear action plan had been agreed with the service, and monthly monitoring meetings were now in place with Internal Audit attendance to ensure actions are implemented and risks addressed.

Members asked whether the draft directorate business and financial plans would be shared with the Committee. Officers confirmed that draft plans were not shared, though the finalised version would be presented at the next meeting.

The committee resolved to note the IA Progress since the last Committee meeting.

Internal Audit Charter

Members were reminded that this report had been considered at the previous Audit Committee, at which it had been decided that Members wished to make amendments. Amendments had now been made, and the report was brought back to the Committee for approval. Members approved the report. The committee resolved to approve the Draft Audit Committee Annual Report for 2024/25 before the report is presented to Council.

Counter Fraud Progress Report

Members commended officers for their work. The committee resolved to note the Counter Fraud Progress Report for 2025/26 Quarter 2.

Counter Fraud Operational Workplan

Members considered the Counter Fraud Operational Workplan. The committee resolved to note the plan.

Work Programme

Members considered the work programme. The committee resolved to note the dates for Audit Committee meetings.

The meeting, which commenced at 5.10 pm, closed at 6.55 pm.