To review and agree the external auditor’s draft annual plan for 2025/26. 

The draft External Audit Plan for 2025/26 sets out how the financial statements for the year ending 31 March 2026 would be audited. It was noted that;

• Materiality thresholds have increased due to the Major Local Audit threshold increasing from £500m to £875m gross expenditure, meaning the council was no longer classified as a major audit.

·       Audit fieldwork was due to begin in June 2026 with a completion targeted before the 29 September 2026 Audit & Governance Committee. Early testing was already underway to ease the year end workload.

·       Four significant risks, consistent with previous years were identified in Management Override of Controls, Valuation of Land & Buildings, Investment Property Valuations and Pension Assets & Liabilities.

·       Two significant weakness in Value for Money (VFM) arrangements remained from the previous year with regards to the Dedicated Schools Grant (DSG) Deficit and Medium-Term Financial Plan (MTFP).

·       No VfM risks were identified in governance or economy, efficiency, effectiveness.

In response to committee questions, it was noted;

1.     There was no change to the current audit approach for pensions, with reliance on pension fund actuary and auditors remaining standard practice.

2.     Materiality was explained as the financial threshold below which errors are not considered significant to the reader of the accounts.

3.     The council holds majority stakes in two companies, 80% in Hoople and 100% in Cyber Quarter both of which are recorded in the councils group accounts. In contrast, Maylord Orchards is treated as a council owned asset, with its income and expenditure reported directly through the council’s normal budget processes and routine financial monitoring.

Resolved that the committee approves the proposed external audit annual plan for 2025/26.