Agenda and minutes

Apologies for absence were received from Independent Member Steven Ross.

Members are invited to declare at this stage of the meeting, the nature and existence of any relevant disclosable pecuniary or personal interests in the items on this agenda and to specify the item(s) to which they relate.

David Ewart (Chair) declared a personal interest as a member of CIPFA.

To hear any deputations received from members of the public in accordance with Standing Order 67.

There were no deputations considered at the meeting.

4.1     To approve the minutes of the previous meeting held on Tuesday 25 March 2025 as a correct record.

(Agenda republished to include the attached minutes on 12 June 2025)

4.2     To note the updated Action Log from previous meetings of the Audit & Standards Advisory Committee.

RESOLVED that the minutes of the previous meetings held on Tuesday 25 March 2025 be approved as a correct record, subject to the following amendment:

Min 12: Strategic Risk Review – 3^rd bullet point page 18 of agenda pack final sentence being amended to read:

“In noting the Committee’s focus around the management of risk at a strategic level across the Council and ability to commission deep dives around specific risks (if required), members were advised that each Council department would also be responsible for maintaining a departmental risk register to ensure that all operational risks were being effectively managed and to ensure that, where required, these were subject to regular and ongoing review to ensure risks could be escalated to the Strategic Risk Report via the Corporate Management Team (CMT) where appropriate.”

Members noted the updates provided in relation to the Action Log of issues identified at previous meetings with specific updates provided in response to the following matters:

(a)  Strategic Risk Report (25 March 25) – members were advised that the next meeting between the Committee Chair, Vice Chair and Scrutiny Chair’s had been arranged for June and would include a review of the Strategic Risk Heat map and approach towards monitoring risk.

(b)  Evaluating the effectiveness of the Audit & Standards Advisory Committee 2024-25 (25 March 25) – the outcome of the self-assessment questionnaire would be presented to the Committee in July 2025 for further review.

In considering the Action Log, members identified a need to ensure that the content was subject to ongoing review in order to update progress and (where available) include due dates for actions.  In response, the Chair advised he would be willing to undertake a more detailed review of the log with the Vice-Chair and officers in order to ensure the actions listed remained relevant and were as clear as possible in term of their allocation and progress.

To consider any matters arising from the minutes of the previous meeting.

None.

The purpose of the report is to notify the Audit & Standards Advisory Committee of the circumstance surrounding the necessity to self-refer to the Regulator of Social Housing for breaches in compliance with building safety, potentially breaching the Quality and Safety Standard.

The Chair welcomed Thomas Cattermole (Corporate Director Residents and Housing Services) and Spencer Randolph (Director Housing Services) who he advised had been invited to update the Committee on the circumstance surrounding the Council’s self-referral to the Regulator of Social Housing for potential breaches in compliance relating to the Quality and Safety Standard and on the measures being taken in response in order to develop a Performance Improvement Plan.

In introducing the report, members were advised of the background to the self-referral as a result of it having been identified that the True Compliance software utilised by the council had been updated incorrectly.  This included up to 12,500 fire actions having been identified as wrongly updated to indicate that works had been completed, but which were missing the required supporting evidence. In addition, the council had been unable to reconcile performance data on asbestos management, water safety and detectors for smoke and carbon monoxide.  Having identified the issue, advice had immediately been sought on appropriate corrective steps from a building safety specialist who dealt with the management and recovery of regulatory breaches and, in line with the requirements of the Social Housing (Regulations) Act 2023 around transparency, the advice had been to self-refer to the Regulator of Social Housing.  Having made the referral, further details had been sought by the Regulator on performance data relating to building safety and stock condition, which the council had been unable to provide in a comprehensive manner. Whilst the council reported it held stock data on 95% of its homes it had subsequently been identified that it did not hold recorded survey information on over 50% of these properties.

As a result of the issues highlighted the Regulator had therefore issued a regulatory judgement with the Council graded C3 (Serious failings identified, and significant improvements needed).

In response to the position identified and judgement issued the council had initated a number of actions, which the Committee were advised had included:

• appointing advisors that specialised in building safety and assisting landlords in meeting the requirements and outcomes set out in the Social Housing (Regulations) Act 2023, in particular The Quality and Safety Standard.  The specialist advisors were now in the process of undertaking an initial assessment of the council’s compliance arrangements, in preparation for an audit to confirm the true position on the ‘Big 8’ areas of compliance – Fire Safety, Gas Safety, Electrical Safety, Water Safety, Asbestos Management, Mechanical and Engineering (Lifts), damp and mould & Smoke and Carbon Monoxide (CO) detectors.  Members were advised that the audit would comprise the first part of three pieces of work required to return the council to a position of compliance.

• The second piece of work would consist of a Root Cause Analysis (RCA) of the working practices and arrangements that had resulted in the breaches.

• The third piece of work, which was due to commence shortly and run alongside the audit and the RCA, was the development of a Compliance Recovery Programme with each element of activity identified  ...  view the full minutes text for item 6.

The purpose of this report is to update the Audit and Standards Advisory Committee on gifts and hospitality registered by Members during Q1 2025-26 and on member training.

(Please note the agenda was republished to include the Appendix B from the attached report on 12 June 2025)

Bianca Robertson (Principal Lawyer, Constitution Governance and Finance) introduced a report from the Corporate Director Finance and Resources updating the Audit and Standards Advisory Committee on gifts and hospitality registered by Members and a recent standards decision involving King's Lynn and West Norfolk Borough.

In reviewing the content of the report, the following key issues were highlighted:

• During the first quarter of 2025-26 there had been five councillors who had declared gifts and hospitality as detailed in Appendix A of the report.  Since the report had been published members were advised that an additional declaration had been made by Councillor Kelcher.
• Updating the Committee on changes to the Members Code of Conduct members were advised of the change made in response to the recommendation included within the External Auditors 2023-24 Value for Money (VFM) report concerning the registration of gifts and hospitality to include more information for “exceptional items” to ensure transparency.  Having reviewed the Code and following discussion at the Constitutional Working Group (CWG) it had been agreed to amend the gifts and hospitality provisions of the Code to require members accepting any gift or hospitality valued as £500 or more to provide reasons to the Monitoring Officer as to why they consider it appropriate to accept the gift or hospitality.  This agreement had been approved at the Annual Council Meeting in May 2025 with a copy of the amendment to the Members Code of Conduct set out within Appendix B of the report.

Having considered the update, as set out within the report without further comment the Chair thanked Bianca Robertson for the update provided and it was RESOLVED to note the contents of the report including the change to the provisions of the Members Code of Conduct concerning gifts and hospitality (G&H).

This report summarises the activity of Internal Audit for the financial year 2024-25, including an update on work completed since the previous updated provided in December 2024.

The report also provides the annual audit opinion, provided by the Deputy Director Organisational Assurance and Resilience (Head of Internal Audit), on the adequacy and effectiveness of the Council’s framework for governance, risk management and control, which is used to support the Council’s Annual Governance Statement.

Darren Armstrong (Deputy Director Organisational Assurance and Resilience) introduced a report from the Corporate Director Finance & Resources which outlined the activity undertaken by Internal Audit during 2024-25 (and work undertaken since the previous update in December 2024) and included the Annual Audit opinion provided by the Deputy Director Organisational Assurance and Resilience (as Head of Internal Audit) on the adequacy and effectiveness of the Council’s framework for governance, risk management and internal control used to support the Annual Governance Statement.

In considering the Internal Audit Annual Report (as detailed within Appendix 1 of the report) the Committee noted the following key points:

• There had been no actual or perceived threats to the independence and objectivity of the Internal Audit function in relation to the work carried out to deliver the 2024-25 internal audit plan. The Head of Internal Audit and all internal auditors had continued to receive unrestricted access to senior management, officers and all information and records necessary to undertake their work.  This was supported by the internal audit function having also received an External Quality Assessment (EQA) during 2022-23, which identified no concerns regarding to the independence or objectivity of the function.

• The summary relating to delivery of the internal audit plan during 2024-25 contained within section 4 of the Annual Report attached as Appendix A to the report. This had included the conclusion and issuing of 51 separate audit reports which was felt to represent a notable achievement given that the team had operated at approximately 75% capacity for most of the year with the team praised for their dedication and hard work.  In terms of outcome, this activity had led to a total of 122 findings being raised, comprising 39 classified as high risk, 56 medium risk, and 21 low risk and with all recommendations being accepted by management.
• Section 5a within the Audit Plan detailed the core assurance work undertaken during 2024-25 focussed around the Council’s sore systems and controls based on a rolling three-year cyclical plan.  This had included the completion of 13 core assurance audits (representing 100% of the planned work for 2024-25). These audits had generated 52 findings, with 14 classified as high risk, 24 as medium risk, and 14 as low risk. The outcomes had included nine opinions of moderate assurance and four opinions of limited assurance with all recommendations having been accepted by management.  Section 5b of the Annual Report provided a summary of the outcomes from each core assurance audit, while section 5c provided a headline summary of the key findings.

• Under the agile risk focussed element of the Internal Audit Plan, the team had adopted a more fluid, flexible, and adaptive approach to providing assurance on emerging risks and issues.  As part of the agile risk-based work undertaken during 2024-25 10 audits had been completed, with 6 providing moderate assurance and 4 providing limited assurance opinions.  This work had generated 50 findings, comprising 17 classified as high risk, 26 as medium risk, and 7 low risk findings.  Section  ...  view the full minutes text for item 8.

The report sets out a summary of the counter fraud activity undertaken in 2024-25 and fulfils the requirements of the Local Government Transparency Code 2015, which requires local authorities to publish details of their counter-fraud activity.

Darren Armstrong, Deputy Director Organisational Assurance & Resilience, introduced a report from the Corporate Director Finance & Resources presenting the Council’s Annual Counter Fraud Report for 2024-25, which summarised the counter fraud activity undertaken across multiple fraud types (including internal fraud, housing tenancy fraud, external fraud and proactive work) and had been designed to support the Committee in obtaining assurance on the robustness of the Council’s counter fraud arrangements.  The report also fulfilled the requirements of the Local Government Transparency Code 2015, which required local authorities to publish details of their counter-fraud activity.

In considering the report the following key issues were noted:

·       The high priority identified in terms of counter fraud activity given the inherent and significant level of risk posed by fraud to the Council, with the Council having established a well developed approach towards tackling fraud and corruption based on a combination of reactive and proactive prevention and detection activities in line with best practice.

·       The Annual Counter Fraud Plan had been designed to ensure that resources were being effectively targeted and deployed to prevent and detect fraud, underpinned by the Council’s Anti-Fraud and Bribery & Whistleblowing policies.  A summary of all reactive and proactive counter fraud activity undertaken in 2024-25 had been detailed within the Annual Counter Fraud Report attached as Appendix 1 to the report.

• The outline of the Counter Fraud Plan, which had been included as Appendix 2 of the report, which summarised how resources would be deployed and targeted to achieve the aims and objectives within the Council’s anti-fraud policies developed based on previous outcomes, stakeholder engagement, known and emerging risks.  Members were advised this also included the Fraud Awareness Plan which summarised the activities being undertaken to raise awareness of fraud risks and help ensure that the Council’s assets were adequately protected.

The Chair then invited the Committee to raise questions on the report, with the responses summarised as follows:

·       Noting the continued level of referrals relating to Blue Badge Fraud, the Committee sought further details on the lobbying being undertaken in support of the introduction of a virtual blue badge scheme which it was felt would make the badges less vulnerable to theft and fraudulent use.  In response, members were reminded that the counter fraud activity was focussed on the misuse of blue badges rather than administration of the system which would be a matter for the Healthy Streets and Parking Team to pursue.  Whilst aware of work being undertaken in terms of the implementation of a virtual scheme it was noted that any more detailed update would need to be sought from the Healthy Streets and Parking Team.

As no further comments were raised the Chair thanked Darren Armstrong and his team for their hard work in relation to the ongoing delivery of Brent’s Counter Fraud Activity and it was RESOLVED to note the report.

To receive the annual report from Chair of the Audit and Standards (A&S), and the Audit and Standards Advisory (A&SA) Committees.  The report covers the work of both Committees for the municipal year 2024-25 and has been prepared independently by the Chairs’ of the A&S and A&SA Committees.

David Ewart, as Chair, introduced the Annual report produced by the Chairs of both Committee’s providing a summary of the work undertaken by the Audit & Standards Advisory Committee and the Audit & Standards Committee during the 2024-25 Municipal Year, in line with the requirements and principles set out within CIPFA’s Position Statement regarding Audit Committees.

In noting the report was the third annual report produced under the current requirements David Ewart (as Chair) highlighted the following as key issues identified through the work undertaken across both Committee’s during 2024-25 which included a focus on:

• The high and increasing level of risks being faced by the Council and across local government as a whole, given the continuing pressures on local authority finances and need to ensure robust system of governance and financial control were maintained.

• The Council’s financial resilience and sustainability. Whilst noting that Brent remained in a relatively good position with regard to financial sustainability, with an adequate level of reserves, it was recognised that the Council had not been able to contain expenditure within budget.  In commending the efforts made to ensure Brent had been one of the few authorities to have the external audit of its accounts signed off before the backstop date, the Committee had noted there remained a number of ongoing issues which may lead to future problems in terms of the Council’s financial resilience.  These included ongoing pressures on demand for Council services (which had been recognised as a key issue by the External Auditors in their annual (Value for Money) report and accompanying recommendation for action) along with level of external deb,t given the impact of higher interest rates.

• The Council’s governance and internal control arrangements.  Whilst confirmed as sound within both the External Auditor’s Value for Money report for 2023-24 (with the exception of their findings concerning Financial Stability) and Head of Internal Audits report and opinion issued in June 2024 a number of areas had been identified for ongoing review particularly in relation to the continuing need to address the ‘second line’ of defence (i.e. the monitoring and reporting of information and data, by management, in respect of the effectiveness of the ‘first line’ of defence); implementation of internal audit recommendations/actions, the need to review procedures where staff reductions may have weakened existing procures or controls and the continuing need to strengthen the oversight of contract and procurement management.

• The continuing need for both Committees to review and improve their own performance, to further improve the Council’s risk management.  As part of this process, a self-assessment had been completed by members at the end of 2024-25 with the results, it was noted, due to be reported to the July meeting of the Audit & Standards Advisory Committee for more detailed review and reflection.

In support of the issues identified, Councillor Chan (as Vice Chair and Chair of the Audit & Standards Committee) felt it important to reflect on the nature and wider context of the issues which had been highlighted given the challenging financial position  ...  view the full minutes text for item 10.

This report sets out the draft Annual Governance Statement (AGS) for 2024-25 as required by the Accounts and Audit Regulations 2015.

Members are asked to note that the AGS is being presented to the Audit & Standards Advisory Committee for consideration, in advance of referral on to the Audit and Standards Committee for formal approval

(Agenda republished to include the attached report on 12 June 2025)

Marsha Henry, Director of Law, introduced a report from the Corporate Director finance & Resources that set out the draft Annual Governance Statement (AGS) for 2024-25 as required by the Accounts and Audit Regulations 2015.

In presenting the report the Committee noted:

• The seven core governance principles introduced by CIPFA upon which the review of governance arrangements and production of the AGS had been based, as detailed in section 3.5 of the report.

• That no significant governance issues had been identified relating to 2024-25, however some areas of improvement had been identified, as detailed in section paragraph 5 Table 1 within the Annual Governance Statement.  The AGS had also included reference to the outcome of the Corporate Peer Challenge and comprehensive action plan produced in response, the Procurement Review as well as the Council’s self-referral to the housing regulator along with work being undertaken to deliver a refreshed People Strategy accompanied by an updated Equity, Diversity & Inclusion (EDI) Strategy and introduction of the “embrace change” programme .  Details were also provided in relation to progress made in delivery of the Improvement Plan from 2023-24, as set out in section 3.11 of the report.

• The importance of the AGS in outlining the Council’s framework of control in relation to its Governance arrangements and in terms of managing risk, with the review of effectiveness in relation to governance related issues an ongoing process involving officers responsible for key elements of the governance framework as well as members of the Corporate Governance Group, who throughout the year have oversight of governance related issues, supported by the Code of Corporate Governance which had been adopted by the Council and was included as Appendix B to the report.

Having thanked Marsha Henery for presentation of the report, the Chair advised members that they were being invited to comment on the draft AGS in advance of its formal consideration and approval by the Audit and Standards Committee. As a result, the following issues were highlighted:

• In noting the assurance included relating to the role of the Audit & Standards Advisory Committee, the Committee were pleased to note that no significant governance issues had been identified within the AGS although reference was made to the need to ensure paragraph 4.13.3 was updated to reflect the key recommendation and areas for improvements identified as part of the External Audit of the Council’s 2024-25 Statement of Accounts (as opposed to 2022-23 currently referenced in the AGS) and improvement actions identified as a result of the annual review of governance.

·       Members were also keen to ensure that a review of section 5.4 within the AGS was undertaken in relation to the Council’s Self-Referral to the Regulator of Social Housing which it was felt should also include reference to the recorded survey information held in relation to Council Stock. The Committee were reminded that whilst the council had reported it held stock data on 95% of its homes it had subsequently been identified that it did not hold recorded survey information on over  ...  view the full minutes text for item 11.

To provide the Committee with an update on the progress made on the 2024-25 Statement of Accounts.

Ravindar Jassar (Deputy Director Corporate and Financial Planning) introduced a report from the Corporate Director Finance & Resources providing an update on the Statement of Accounts for 2024-25 report.

In presenting the update members were reminded that the Committee had received an update on the preparation of the 2024-25 Statement of Accounts in March 2025 with the following identified as the main significant issues likely to impact on completion of the accounts:

• the implementation of lessons learned from the 2023-24 accounts in relation to the accounting for assets and valuations; and

• the adoption of IFRS 16, where the new standard required changes for most leases to be recognised on the balance sheet impacting both assets and liabilities.

In relation to assets and valuations, members were advised this had been a significant concern for the 2023-24 audit which had caused delay in sign off the accounts.  As part of the preparation for the 2024-25 accounts, a number of cross council working groups had therefore been established in order to address the issues raised, ensure services held accurate information on the assets they were responsible for to enable accurate valuations, and ensure the asset register reconciled to these valuations with over 15,000 assets having been identified across property, housing and regeneration.  The Committee was advised that whilst resource had been dedicated to support this project, it had also created additional work from a finance and service perspective which had led to some delays in validating all of the data required to ensure accurate valuations.  The Committee were advised that whilst significant progress has been made, further refinements and developments were expected to continue beyond year-end as Council-wide processes become more robust and consistently applied creating a risk that some residual issues may arise as part of ongoing efforts to ensure consistent practices and high-quality data across services.

In addition, the adoption of IFRS 16 had also represented a significant change for the 2024-25 financial statements with the key issues noted within the report.  As with assets and valuations, a dedicated resource had been provided to support the project, working with legal and relevant service areas to undertake the necessary reviews to support publication of the accounts.

Members were advised that to date, two review meetings had been held between Grant Thornton and the finance team with the External Auditors having expressed satisfaction with the progress being made although the scale and complexity of the work being undertaken had been recognised as creating some delay in validating the data required by valuers and in processing the necessary accounting adjustments to the financial statements, which it was noted remained a substantial undertaking.

As a result of the work and delays identified and in recognising the importance in undertaking a comprehensive review of the accounts before they were published, the Committee was advised that it was proposed to delay publication of the accounts by three weeks, from 30 June 2025 to 18 July 2025.

The Committee was assured that discussions had been undertaken with Grant Thornton  ...  view the full minutes text for item 12.

For the Committee to receive and consider the Indicative External Audit Plan (including Pension Fund) for the year ending 31 March 2025.

Sophia Brown (Key Audit Partner - Grant Thronton) introduced a report providing the Committee with an update on progress with completion of the initial planning for the 2024-25 audit of the Council’s financial statements and Brent Pension Fund. 

In presenting the indicative audit plan for the London Borough of Brent report the Committee noted:

• The key developments identified as impacting on the current audit approach which included the proposals for reform of the local audit system, the wider national context in relation to the economic, social and health challenges impacting on local government alongside the local context in relation to the financial position in Brent and impact arising from the new accounting standards and reporting developments including IFRS16.
• The backstop arrangements for the publication of audited financial statements for the year ended 31 March 2025 had been set as 27 February 2026.
• The scope of the audit process and outline of significant risks to be considered which had included management of override controls, valuation of land and buildings as well as council dwellings, IFRS16 leases implementation and risk of fraud in revenue and expenditure recognition.
• The planning financial statement materiality had been determined as £22.624m (PY £16.1m) for the Group and £22.524m (PY£16.1m) for the Council, which equated to approximately 2% of the prior year gross operating costs.  In addition, members were advised the External Auditors were required to report uncorrected omissions or misstatements other than those which were ‘clearly trivial’ to those charged with governance. Clearly trivial had been set at £1.131m (PY £0.830m) for the Group and £1.126m (PY £0.805m) for the Council and with a specific lower materiality of £20,000 per individual, for senior officer remuneration and termination benefits.
• At the time of preparing the report it was reported that Grant Thornton had not concluded the detailed VFM planning and risk assessment procedures with a  further update to be provided for the Committee on the outcome of the planning procedures, resulting risk assessment and planned responses to identified risks of significant weaknesses (including those relating to the Council’s financial resilience) at the next Audit & Standards Advisory Committee meeting in July 2025.  The Committee was advised this would also include consideration of the Council’s self-referral to the Regulator of Social Housing as a potential additional significant weakness under the VFM work.
• The update provided on progress against prior year audit recommendations including the management actions identified in response on which a final update would be included as part of the External Audit Annual Report due to be presented to the Committee in September 2025 as well as scope of the IT audit strategy.
• The initial outline of audit logistics and timescales as detailed on page 41 of the report with the initial planning and risk assessment audit visit having taken place in April 2025 and final visits scheduled from July to September 2025.

The Chair thanked Sophie Brown for the update prior to seeking comments from the Committee with the following issues highlighted:

• Further details were sought on  ...  view the full minutes text for item 13.

To consider and note the Committee’s Work Programme for the 2025-26 Municipal Year.

It was RESOLVED to note the Committee’s Forward Plan and Work Programme for the 2025-26 Municipal Year with the dates for further meetings noted as:

• Wednesday 23 July 2025
• Tuesday 25 Septembers 2025
• Wednesday 3 December 2025
• Tuesday 3 February 2026
• Tuesday 24 March 2026

It was noted that development of the Committee’s work programme would continue to be kept under close review with the Chair and Vice Chair working closely with officers to ensure sufficient capacity was maintained to allow for the appropriate consideration of each item at future meetings.

As part of this process, it was AGREED that a further update be scheduled on the working programme for September 25 on progress with the audit of the Council’s compliance arrangements relating to the self-referral to the Regulator of Social Housing and development of the associated Performance Improvement Plan.

Notice of items to be raised under this heading must be given in writing to the Head of Executive and Member Services or his representative before the meeting in accordance with Standing Order 60.

There were no items of urgent business raised for consideration at the meeting.