Audit Committee minutes

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The Committee noted the results of the Internal Audit Service's self-assessment against the new Global Internal Audit Standards and approved the updated Internal Audit Charter. p5

The Committee approved the 2024/25 Annual Governance Statement for publication. p8p9

The Committee approved the results of a self-assessment against the new CIPFA Code of Practice for the Governance of Internal Audit in UK Local Government and the related action plan. p10

The Committee noted a report on treasury management activity for the first quarter of 2025/26. p11p12

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• p59. Global Internal Audit Standards (GIAS) Self-Assessment and Quality Assurance and Improvement Plan (QAIP) The Chief Internal Auditor presented a report to set out the results of the Internal Audit Service self-assessment against the new Global Internal Audit Standards along with details of actions arising, as set out within the ongoing Quality Assurance and Improvement Plan. The update provides assurance regarding compliance with the new Global Internal Audit Standards and the Chief Internal Auditor confirmed that most actions in the plan have either been completed or are underway, with only a few yet to begin. The new standards are similar to the previous Public Sector Internal Audit Standards, under which the team received the highest possible rating during an external assessment. The few remaining actions do not indicate non-compliance but rather minor areas that need addressing and, overall, the service remains fully up to standard. RESOLVED (unanimously): (i) Notes the results of the self-assessment against the new GIAS and the resulting Quality Assurance and Improvement Programme (QAIP); (ii) Approves the updated Internal Audit Charter. Reasons: i) To comply with the requirements set out in Global Internal Audit Standards. ii) To support the committee’s responsibilities for assessing the effectiveness of the internal control environment and the effectiveness of the internal audit service.
• p811. Annual Governance Statement 2024/25 The Chief Legal Officer and Monitoring Officer presented a report to approve the 2024/25 Annual Governance Statement and associated action plan. The newly formatted 2024/25 Annual Governance Statement (AGS) aims to be clearer, more accessible, and provide meaningful assurance on governance. The AGS is a statutory requirement and demonstrates compliance with the CIPFA/SOLACE framework, Delivering Good Governance in Local Government. This year’s AGS is based on internal and external audit findings, and an action plan is in place to address the identified key governance weaknesses. A formal assurance process will be introduced for service areas to evaluate and report on governance improvements ahead of the next AGS. The Chief Legal Officer informed the Audit Committee that she was confident that the proposed actions will strengthen governance, accountability, and transparency in the authority, and gave special thanks to the Senior Democratic Services Officer and Internal Audit team for their contributions in updating the AGS format. Councillor Kean asked whether regular financial updates on the Hastings Housing Company are now being provided to Cabinet. The Chief Finance Officer replied that decisions about the future of Hastings Housing Company are still pending. Once a decision is made, regular financial reporting to Cabinet will begin depending on the agreed approach. Councillor Kean raised the issue of senior officer appraisals and asked if they had yet taken place. The Chief Finance Officer acknowledged that external auditors raised concerns, and that the appraisal process is still evolving. The Chief Finance Officer acknowledged that his appraisal hadn’t yet taken place, but the AGS confirms that the Council has put in place appraisal and performance guidance in accordance with the Joint Negotiating Council (JNC) for Chief Executive’s and Local Government Association best practice.
• p9A date for a performance review meeting between the Chief Executive and Leader of the Council is being agreed. RESOLVED (unanimously): To approve the 2024/25 Annual Governance Statement for publication. Reasons: To meet the Council’s legal requirement to produce an annual statement and seek continuous improvement in the council’s governance and assurance framework.
• p1012. CIPFA Code of Practice for the Governance of Internal Audit in UK Local Government The Chief Finance Officer presented a report to update the Audit Committee on the new Code of Practice for the Governance of Internal Audit in UK Local Government and to report on the results of the self-assessment exercise, including any actions arising. The Internal Audit team is committed to adhering to the new standards, and the Chief Finance Officer expressed confidence in their capability, acknowledging the success of the arrangements with Orbis and the quality of their work. The Chief Internal Auditor said he was pleased that the Council has embraced all the recommendations and changes, which have helped deliver a high-quality service. He highlighted three key actions arising from the report. First, the Council will need to explain how it complies with the new code in its Annual Governance Statement for 2025/26. The other two actions relate to the Audit Committee itself, which will need to produce its own annual report on effectiveness and assess the effectiveness of the internal audit service. RESOLVED (unanimously): To approve the following: ( i ) The results of the self-assessment against the new Code; (ii) The action plan in response to this. Reasons: i ) To comply with the requirements set out in Code of Practice. ii) To support the committee’s responsibilities for assessing the effectiveness of the internal control environment and the effectiveness of the internal audit service.
• p1113. Treasury Management Update - 2025/26 Quarter 1 The Chief Finance Officer presented a report to update councillors on treasury management activity for quarter 1. The Council’s approach to treasury management follows best practice, with a consistent risk appetite based on advice from treasury management advisers. Although interest rates have changed since older loans were taken out, the strategy remains sound and the report itself provides assurance that the Council is complying with the Treasury Management Code. The data in the report will feed into upcoming strategic documents, including the Capital Management Strategy and Treasury Management Strategy, which are part of the budget process and will guide future investment and capital planning for the Council. Councillor Foster asked about the Council’s current position on borrowing, recalling that borrowing was deferred in the past due to high interest rates. Councillor Foster noted that while lower rates may reduce returns on investments, they could make borrowing more attractive and asked what the current stance is regarding borrowing. The Chief Finance Officer replied that high interest rates have helped boost returns on investments, but they've made long-term borrowing less attractive. Based on advice from the treasury advisers, the Council has avoided new borrowing for now, instead managing cash flow carefully and using available funds where possible. If rates continue to fall, borrowing may be reconsidered, but for now, the strategy remains cautious, especially with local government reorganisation in mind. Regarding local government reorganisation Councillor Horn asked what information sharing is happening across councils with regards to future borrowing and investment. The Chief Finance Officer replied that finance officers have been meeting regularly to ensure alignment across councils ahead of local government reorganisation (LGR).
• p12Each council has different financial positions, so discussions have focused on high-level comparisons like budget gaps, debt, and capital programmes. While detailed planning depends on how councils may be merged or split, officers are committed to sharing information and maintaining transparency. Any major financial decisions, like large-scale borrowing, would be flagged and discussed across councils. Going forward, all financial reports will consider LGR implications. RESOLVED (unanimously): Note the report, the treasury activity and recommend approval of any changes to the prudential indicators. Reasons: To ensure that Members are fully aware of the activities undertaken in the last quarter, that Codes of Practice have been complied with and that the Council's strategy is effective and doesn’t currently need revising. Under the Code adopted the Full Council are required to consider the report and any recommendations made. There will be further reports forthcoming on Treasury Management for 2025/26 including the Mid-year Review, Quarter 3 Treasury Management Update Report and Outturn Report. (The Chair declared the meeting closed at 7.21pm)