The Audit Committee of Hackney Council met on Tuesday 24 February 2026 to review the External Audit Completion Report for 2024/25 and to approve the minutes of the previous meeting. The committee approved the recommendations within the External Audit Completion Report, which included authorising the Group Director of Finance and Corporate Resources to approve the final Statement of Accounts for 2024/25, pending the completion of outstanding work by the external auditor.

External Audit Completion Report 2024/25

The Audit Committee reviewed the External Audit Completion Report for the 2024/25 financial year. The external auditors, Forvis Mazars LLP, indicated that the audits of the financial statements for both the Council and the Pension Fund were substantially complete and that they anticipated issuing unqualified opinions, provided outstanding matters were resolved satisfactorily.

The report highlighted two significant weaknesses in the Council's Value for Money arrangements for the 2024/25 financial year:

• Financial Sustainability: The Council has an unsustainable reliance on usable reserves and one-off resources to bridge budget gaps and meet undelivered savings targets. Usable reserves fell from £154.1 million to £111.66 million, with the Council determining it has sufficient reserves only until March 2027 before exhaustion. The auditors recommended reducing reliance on reserves and identifying transformation opportunities. The Council acknowledged this concern and stated it is committed to setting a budget for 2026/27 without using reserves, and is developing a Medium-Term Financial Plan (MTFP) to stabilise reserve levels.
• Governance (Social Housing): The Council failed to comply with Health and Safety standards in Social Housing, following a self-referral to the Regulator of Social Housing. Recommendations included implementing regulator recommendations and restoring property data following a cyber-attack. The Council confirmed it is taking immediate action to address these findings through an updated Housing Improvement Plan, which is monitored by the Housing Ombudsman Service (HOS).

The auditors also noted minor other observations regarding a CedAR e5 system glitch affecting journal identification and a need for improved documentation regarding the Council's revenue capitalisation. The Council accepted that documentation for certain Housing Revenue Account (HRA) works did not sufficiently detail the decision-making process for capitalisation and will ensure capital business cases are explicitly referenced in all capitalisation journals.

The report detailed several adjusted and unadjusted misstatements identified during the audit, primarily relating to the valuation of Property, Plant and Equipment (PPE) and IFRS 16 Leases implementation. The auditors noted that the Council had adjusted five misstatements and chosen not to adjust six. Significant adjustments were made concerning the valuation of PPE, including errors in indexation and the application of VAT to fees. The implementation of IFRS 16 also led to adjustments, particularly concerning the valuation of right-of-use assets from peppercorn leases.

The audit fees for 2024/25 were noted as £569,000 for the Council audit and £84,000 for the Pension Fund audit, with the Council audit fee anticipated to increase due to the complexity of valuations, value for money risks, and IFRS 16 implementation.

The Audit Committee resolved to note the contents of the report and authorised the Group Director of Finance and Corporate Resources to approve the final Statement of Accounts for 2024/25, contingent upon the completion of outstanding work by the external auditor.

Minutes of the Previous Meeting

The Audit Committee agreed that the minutes of the previous meeting held on 13 January 2026 were a true and accurate record of proceedings.

Any Other Business that the Chair Considers Urgent

There was no urgent business for consideration at the meeting.