Audit Committee - Wednesday 3 December 2025, 6:30pm

Audit Committee
Wednesday, 3rd December 2025 at 6:30pm

Agenda

Slides

Transcript

Map

Resources

Twitter

Forums

Speakers

Votes

Speaking:

Welcome to our Webcast Player.

The webcast should start automatically for you.

Webcast cameras are not operated by camerapersons; they are automated and linked to speaker microphone units. The aim is to provide viewers with a reasonable visual and audio record of proceedings of meetings held in public.

Note: If your webcast link appears not to be working, please return to the Webcast Home Page and try again, or use the help email address to contact us.

An agenda has not been published for this meeting.

Select an agenda point

Scroll with video

Disclaimer: This transcript was automatically generated, so it may contain errors. Please view the webcast to confirm whether the content is accurate.

Welcome everybody. Welcome to the meeting of the Aldit committee.

My name is Barry Quirk and I chair the meeting.

I'm not a voting member of the meeting properly, but I chair the meeting.

I left this council's employment over 45 years ago.

And it was my first ever job in local government and I enjoyed it immensely because I came

from this area and I absolutely loved the place.

So I'm really pleased to have had the opportunity to apply for this position and to be appointed

by the Council.

I'm very grateful indeed.

Thank you so much.

I wonder because everyone, I welcome everyone here, but I wonder if we could introduce ourselves

singly in order that the those looking online this this event is being webcast

therefore if I wonder if I could start from the far right over there Thank You

Barry I'm Simon Baxter on the corporate director for communities good evening

I'm David I've seen the corporate director of housing and regeneration

Good evening everyone.

Councillor Ahmed Rahman from Green West.

Good evening everyone.

Councillor Haramiya from Sheddle Ward.

Fahanazir, Democratic Services Officer supporting Audit Committee this evening.

Steve Halsey, Chief Executive.

Good evening.

I'm Shupriya, Director of Governance and Legal Services and also the Council's Monetising

Officer.

Councillor Mark Francis from Boat East Ward.

Councillor Esme Islam from Weavers' Ward.

Good evening, Peter Buston, Councillor for Island Gardens.

Good evening, Steve Raddy, Corporate Director of Children's Services.

Good evening, Georgia Chimbani, Corporate Director for Health and Adult Social Care.

The Council is appointed to the external auditor.

Asai Khan, corporate head of financial and technical accounting at the Council.

Good evening.

Hi, my name is Adora Zakasim.

I am the acting corporate director of resources.

Good evening.

I'm John Lloyd.

I'm the strategic director for change and improvement.

Hi, I'm David Dobbs.

some that had been turned into fraud and risk.

I wonder if you could introduce yourself please.

Those who are not present but are online.

and part of the meeting.

Let's take Hayley Clark first.

Yeah, hi there.

So Hayley Clark, partner from EY, from Seven Audit.

Hi, Leah Sykes, Director of Customer Service,

working for Tower Hamlets Council.

Thank you very much.

That's it, that's just the pop -up message

of trying to get rid of the back.

We're getting rid of her.

I wonder if you could advise us if there's apologies received from many members of the

committee.

Apologies have been received.

Councillor Mohammed Chaudhry and Councillor Asma Islam is substituting for Councillor Chaudhry.

Thank you very much.

The issue of declaration of interest?

We confirm the unrestricted minutes of the Audit Committee on 28 July 2025.

Thank you very much, Chair.

Welcome back to Tal Hamlet.

I don't have a declaration of pecuniary interest, but I have received some legal advice from

the Council.

I believe that I have a personal interest in items relating to the procurement of the

home care contract and an investigation into one of those companies, as my wife is a former

cabinet member in the four -year term during which that an investigation took place into

part of that period. So that's a personal interest.

I have a question for clarity. On the back of the advice that was given to Councillor

The principles applies tonight when Councillor Kabir Ahmed, who is the cabinet member for

housing, will be discussing the agenda 3 .1 that covers much of his cabinet role and the

period in which he's been in position.

I know the monitoring officer can advise us.

Ultimately, it's the Councillor's decision if they choose to stay in or out of the meeting.

Obviously this is Matt for the monitoring officer.

So it seems to me you're suggesting a positional issue here in relation to conflict which may or may not occur.

Obviously it is for the member to decide whether the member feels that there is a pecuniary interest or not.

I don't consider that there is. If this is in relation to a matter that you're dealing with at the moment,

I don't think it is the reason the basis for the advice that was given previously was to do with scrutiny in relation to work that was previously done and the legal basis was different.

But obviously as I said it is for the member to decide whether you feel you have an interest or not.

Chair, if it's alright?

Yeah, I don't want to, by all means, yes?

I will ensure that I stay off the topic of housing within any discussions, however I have comments around other areas of the report.

So I will stay off the topic of housing. We have the corporate director here who can respond.

I find it, if you're in an executive position, you're in an executive position, whether it's

in the past or the current, that executive position does not constitute an interest,

a conflict of interest, viewing that executive position, even if the issue under concern

you determined. It may not have been determined by you. So I think this is very much a matter

for the individuals about their individual concerns on this, but I take the point that's

both been made about Councillor Francis and I understand that point.

Again, Madam. Yes, thank you, Chair. So that was actually

my understanding of it until the monitoring officer provided that advice and therefore

it's on that principle that I've asked that question.

Just to come back to this, Councillor Francis' case was slightly one step further because

it was a partner that oversaw a decision on that same basis that you are saying Councillor

Ahmed can contribute in the discussions today.

So that's probably a clarity for the Munching Officer and I'm happy to take it away from

this committee to save some time.

Thank you Councillor Islam.

I was going to suggest exactly that because this part of the agenda is purely for members

to declare their interest.

It's not really to go into a discussion about legal advice previously given that should be taken offline. Thank you

Yeah

Good

Just about the minutes themselves and that's okay. I'm from the minutes of the last meeting

So they

I'm just trying to get the right paragraph within the minutes and the page.

So we talked about the annual governance statement in paragraph 6 .4 of the minutes on page 14

and then page 14.

So look, first of all I should say I love these minutes.

They're very comprehensive and do justice to the discussion in almost every way.

But I would ask, bearing in mind that Ernst & Young have reported back as our external

auditors, particularly in relation to the governance statement, that the discussion

that was had here at the meeting on the 28th of July might need to be more fully represented

in this.

Ordinarily, I think it should just be a very top line summary of the discussion and somebody

said something, but I think that we have consistently questioned the annual governance statements

that were put in front of us and Ernst & Young have now endorsed that and we'll talk about

that later.

I think it would be useful if it could be more fully recorded here in the minutes as

well as online.

Well, there's a danger of process of infinite regression, I'm afraid, in reconsidering minutes

of the previous meeting, particularly when we're discussing the exact same thing now

or in a few moments.

But I think your point is about the correctness and the comprehensiveness of the minutes.

Let's make sure that that happens.

Can I also add that there is the webcast available from that meeting if one wants to revisit

that.

»» You could elicit what was actually said and make sure it's correct.

Okay.

That's fine.

Okay.

So can we resolve to agree and note the minutes?

Yeah.

I did read it.

It wasn't agreed.

So that's quite interesting.

The auditors items for consideration.

Now I think that EY, Steve Reid from EY would like to, and I think it makes sense, but I

sense in respect of presenting the external auditors report.

Otherwise we, as scripted, we are reading commentary on a report which we get to read.

So I think the important thing is that we consider EYs first.

So it's over to you, Steve.

Thank you, Chair.

So this report sets out the Council's arrangements for securing value for money during the financial

year 1st of April 2024 to 31st of March 2025. It is provided to summarise our

findings and to support the committee in discharging your responsibilities in

respect of governance. Many of the weaknesses which we have reported here

in the report are not new. They are long -standing issues that have persisted

some of which over many years. In respect of 24, 25, the pace of improvement has not

matched in all cases the scale of the challenge facing the authority around a number of these

matters. These weaknesses do continue to expose the Council to significant operational, financial

and reputational risk and without urgent and sustained action and clear accountability,

the council risks remaining in a cycle in my view of statutory intervention and limited assurance.

While in management's view some progress has been made since April, much of it is recent and not yet fully embedded.

Leadership changes which I refer to in the report have clearly disrupted some of the momentum

and it's important now that the council demonstrate the improvement that is being made as both sustainable and embedded.

In terms of some of the key headlines within the report, assuming taking the report as read,

and I will turn to Hayley to pick up a few particular aspects.

There are 10 significant value for money weaknesses identified.

These remain across all three of the value for money criteria around governance, financial sustainability, efficiency and effectiveness.

There are four statutory recommendations still in place, three brought forward from the prior

year with one additional recommendation proposed.

The value for money weaknesses include persistent weaknesses in statutory financial reporting,

noting that the most recent unqualified set of financial statements for the authority

date back to 2017 -18.

Risk management and internal control remain in many respects immature and inconsistent.

Contract management and procurement weaknesses continue with some concerns highlighted as a result of investigations.

We have also commented on audit committee effectiveness and the capacity of the Golden Triangle leadership team

are both not where in our view they need to be.

There were also significant governance failings in social housing confirmed by the regulators C3 grading

and ongoing concerns about the effectiveness of internal investigations delaying the resolution of some serious matters.

But on that let me pass to Hayley who is online to briefly cover that point.

Thank you. So yes, on pages 18 and 19 of our report, we comment on the process, the council's

process for conducting internal investigations. So as Stephen's identified, we did identify

a significant weakness in that area in the council's arrangements for managing internal

investigations, which impacts the governance aspect of value for money, specifically the

Council's ability to make informed decisions

and ensure transparency and manage its risks effectively.

Whilst in the report, we have specifically referenced

two ongoing matters that were also present

in the prior year.

In forming our conclusions,

we've also drawn upon our observations and findings

from other matters of non -compliance

with laws and regulations for matters that have been closed,

as well as findings from our EY forensics colleagues

who have been involved in a range of audit procedures and discussions with council employees

to assist the audit team in the completion of our work.

Specifically in relation to the unresolved investigations, as Stephen's highlighted,

the pace and urgency in progressing these investigations has in our view been insufficient

and that's prevented us from concluding on these matters both in 23, 24 and in 24, 25.

And clearly, some of the matters that we've set out in the rest of the report, such as

changes in key personnel in the organisation, may have contributed to that. However, we

do also raise some concerns in relation to the process and some inconsistencies in how

investigations are scoped, conducted and reporting. Accountability is unclear as to whether the

investigations require involvement of the Section 151 Officer, internal audit, the fraud investigations team,

how those policies and the oversight arrangements are defined, and in our view, that's leading to inconsistent approaches and conclusions.

And I think we'd also flag that there doesn't seem to be clarity on where investigations should be reported to at a committee level either.

So should that be coming to the this committee, for example, or another committee, so that you're equally cited on the issues within the organisation.

Some of these matters we did also raise in our 23 -24 reporting and taking into account the progress made in 24 -25 and the significance of the issues and the potential impact for the council and stakeholders.

is we have considered it appropriate to raise an additional statutory recommendation this year in

accordance with our reporting powers and the information and the recommendations that we've

set out are included on page 19 of our report. Now I'll hand back to Stephen.

Thank you Haley. So with those comments chair, very happy to pause there. I'm conscious taking

the report as read. I would emphasise to members that this does relate to the 24 -25 year and

management will come on in their report to talk about the progress and their view that's

been taken since the financial year under audit.

Thank you.

Thank you, Chair.

Thank you, Stephen, for summarising those key issues.

First of all, I would like to thank all our corporate directors for being here today,

because as I say to everyone and as I say to Steve, value for money is a corporate challenge,

so I'm really grateful they're here today.

I'll go through the ten weaknesses that Stephen has identified today and update the committee

on the progress, and I will invite key members to comment on further in terms of those details.

So if I like to start on the first statutory weakness, which is reliable and timely financial reporting,

which relates to the closure of accounts. So progress to date, obviously we've closed all our accounts,

we are up to date in terms of 24, 25. We've closed that just before the statutory deadline to enable us

to basically concentrate on responding to audit. We had the interim audit which was meant to start sometime in April,

But at that point I've asked the team to really concentrate on closing the accounts so that

we can finish slightly earlier, then we can start the audit and auditors came in July.

So that gave us a bit of time to really get the samples sorted.

We had quite significant in terms of substantial audit requests, about 400 for this audit.

We've addressed about 1 ,200 samples back to EY.

We have increased the number of work streams that we have done this year compared to last

year.

So in 24, 25 we have done 24, while in 23, 24 we have done 15.

We have also progressed significantly in terms of key areas that got substantial assurance

from our auditors.

So in comparison, last year we had four, this year we had six and a half.

We have enhanced training, resource allocations and we are working with the EY to really get

better going forward in terms of really shortening that disclaimer time period.

I'll come to that later on.

For the 25 -26, I was just speaking to Stephen, we will start that process really early in

terms of planning and to enable us to really respond to these weaknesses and get better.

Just for context, some of these issues relate going back to 2017 -18 and I think because

we caught up with the accounts in 23, 24,

almost five years of accounts were actually completed

and got audit opinion in 23, 24, 24, 25.

So on that, I'll welcome Arson to comment further.

Thanks, Abdul -Razak.

So I think Abdul -Razak has picked up some of the key points

in terms of the workload within the team,

particularly the backlog that we had to clear

within financial year 23, 24

in regards to financial years 2021 through to 22 -23.

We had value for money reports issued on that in December 24,

so effectively we have been playing catch -up

through publishing historic accounts,

as well as dealing with in -year accounts,

as well as the 24 -25 accounts.

Abdur -Razak mentioned, so EY were the auditors

for the first year in 23 -24.

I think we can demonstrate improvement

in terms of the process and the results in the 24 -25 financial year,

as Abdur -Azak has highlighted, in terms of areas covered.

Also, we embarked on a necessary journey in terms of increasing the capacity of the team

to ensure that we could address issues in terms of the volume and quantity of the audit.

We carried out substantial training, which included EY colleagues,

and we worked collaboratively in a very productive session in April with EY on this

to ensure that that fed through into the quality of our working papers.

So I think there's been active improvement there.

We understand we're on a journey here, so there's much to do.

I think we're going to touch on the mobilisation plan in a few minutes.

And I think we're actively looking to review the action plans that we put in place,

which are also presented as part of the papers to ensure that we continue that journey

and we can react positively in terms of ensuring we meet the requirements from the external audiences.

Can I ask you if you could elaborate how much or what proportion of overall share of the

effort, additional effort on this has been taken by finance and audit internally as opposed

to the management of the organisation?

Thank you, chair. So I think the biggest challenge for us has been obtaining samples, so samples

So normally evidence in terms of invoices or working papers, which we've been working

really closely with the services to enable us to get those.

Some of the challenges we face related to working papers in terms of THH being in -sourced,

which is to do with the HRA, but I think we've really worked really hard to ensure that services

are really engaged and they have engaged.

We've provided training and they've actually, from before the audit started in June at CMT,

we have got buy -in from all corporate directors and services to enable us to turn out those

samples.

Thank you.

Okay, I will go to the next one.

So the next weakness is internal controls and risk management.

Just to recap, we have developed a comprehensive action plan and that is monitored through

our internal assurance board.

We have got implementation rates for 23, 24 internal audit recommendations at 82 % at the

and for the 24, 25 they are at 70%, but there is a paper coming later on which we can elaborate on that.

We've refreshed our corporate risk register and that was presented to the audit committee but is here today as well.

I'll have to say well done to the team, the council won the public sector risk management award in November 2025,

so David and the team, so thank you for that.

We've enhanced our training and integration of risk management into decision making,

So training was provided to CMT and also to the audit committee.

We have a regular reporting and oversight by senior management and audit committee going

forward.

So I will welcome David to expand on that.

Thank you.

So in relation to internal control, when we received this statutory recommendation, we

immediately put in place this reporting mechanism which was quarterly to both CMT and to audit

Committee that was including details of all internal external audit recommendations are

outstanding and progress against them.

You have received those reports quarterly and you have been able to track the implementation

recommendations using the dashboard that has been provided.

As Abdul Razak said, those percentages have recently improved to 82 per cent for 2324,

to 70 per cent for 2425.

We will start soon on internal audit looking at the 25, 26 audits as well.

So that exercise is ongoing and will provide you with comprehensive coverage on ongoing basis of where we are with these internal audit recommendations.

That is a robust and demonstrably robust process and we're open to absolute scrutiny on that.

I would challenge you to ask any of the corporate directors here this evening as to whether

or not we provide adequate or robust challenge and what some of those discussions have looked

like.

I'm pleased to say those percentages have improved more recently and we're now at a

more acceptable rate of implementation.

We will continue monitoring that position as we go into 2026 and as I said, we will

start populating that with the more recently completed orders to make sure that recommendations

are being looked at and are being addressed on an ongoing basis.

The other area mentioned is risk management.

This isn't subject to a statutory recommendation but is referred to in the report of an external

auditor as an area of significant weakness.

I think in terms of this one I'd ask some members to reflect on the journey we've been

on in terms of risk management and what it was like two years ago.

So when I joined as head of internal audit and Chief Broaden Risk, I said where's the

risk team?

And there wasn't one.

So it's been quite a journey.

I'd ask you to reflect on where we were two years ago and where we are now in terms of

the quality information and what you've asked for and what you receive as a committee.

The report alludes to the Zurich report.

Just to clarify, the Zurich report was the one I commissioned personally because as the

head of risk I wanted an independent and external view on risk management and I can't be in

a position of marking my own work.

So that's why we did the Zurich risk management review.

The matters contained within their review, as you'll see in the paper later on the agenda,

have all been addressed.

The key strand of that is the updated risk management strategy.

So we had a strategy that lasted from 2020 to 2025.

We committed to putting a new one in place.

Members were informed of that new strategy and asked to comment on it when it was issued to them in mid -August this year.

So again that has been addressed and that is on the agenda later this evening.

So I think in terms of risk management, it's an area which is progressing.

but I'd ask you to think about that journey we've been on,

where it is now compared to where it was at the start,

and what that looks like in terms of function that is myself

and one other person doing most of the infrastructure,

supported of course by corporate directors and directorate management teams.

So I think there's been immense progress on that

which the council can be actually very proud of.

Thank you.

May I ask a follow -up question to that, which is,

There's a difference between the periodicity of management controls and the periodicity

of reporting on those controls and their effectiveness.

You talked about quarterly reports.

Are they underpinned by monthly management controls and monthly management risk assessments?

Is it just quarterly reporting but monthly management?

Thank you, Chair.

So the formal reporting is on a quarterly basis.

We will attend the directorate management teams to facilitate the review that you described

on a monthly basis.

I see.

Thank you.

If we carry on, we've got a question here.

Let's put this question now because you've been waiting some time.

Have you finished it?

You're about midway through, I think, at best.

At best they're midway through.

So let's, sorry, it's my fault because I keep thinking, oh, I'm going to ask a question

about that.

I apologise.

Thank you, Chair.

The next item is procurement and contract management.

So we have developed a comprehensive procurement improvement programme and an action plan that

was agreed by the committee.

So we are reporting that today and you'll see in Appendix 5 this has all been updated.

We have addressed, you know, in terms of reporting, we've created a central database using Power BI

dashboards that has been rolled out to all corporate directors in terms of procurement

waivers that's now in place.

We do report quarterly in terms of strategic procurement assurance board that looks at

the strategy, risk management and also controls.

Contract management training has been rolled out and that's been facilitated by Lumens

who are here to present today.

We have revised our procedures in line with the Act and contract terms and we have also

got ongoing improvement in terms of spend tracking against contract management.

So I welcome Evelina and Andy from Lumensol to expand on that.

Thank you so much, Admiral Razak.

My name is Evelina Subjun, I'm the programme improvement director here at Hamlet supporting

on the journey through the improvements for procurement and contract management.

So just a little bit more detail.

So over the last sort of 18 months or so, we've really been improving the overall governance

and process across procurement and contract management.

So we have streamlined procurement processes across.

We started with adults social care and then moved on to children's services and then over

time this would then rolled out Council White.

We really standardised all of the templates and documentation that it is in use currently

in line with Procurement Act but also best practise.

Really revised, as Abla Razaq mentioned,

the procedure rules to make it a lot easier

for officers and members to navigate and understand,

and that's now going for formal adoption.

We're also undertaking and going through

a restructure of the service so that when we do leave,

it's actually in a robust, in a good place

with robust controls in place as well.

In terms of transparency and oversight, as is mentioned in the report and also already mentioned,

so the big suite of Power BI dashboards where everything that sort of happens in procurement and in transactions

really can be observed by directors, corporate directors, budget owners and whatnot.

We've got contract register really in a good shape,

so we now are in a position to know where the potential

sort of areas for improvements are.

We've got continuous reporting through the board

that Abulrozak mentioned, but also in particular

those procurement waivers that are mentioned as RCDAs,

this stands for Record of Corporate Act Action,

are also reported to a cabinet, anything over 100K,

and that has always been in place.

In terms of controls and compliance,

so following those, the event of the fraud,

a lot of work has gone in in order to improve

and really strengthen the processes

that colleagues are using across the council.

So thresholds were changed, so anything now

from £5 ,000 needs to go through a procurement process.

Oversight was switched to corporate procurement,

so every single small request for quote

and every single small procurement process

goes through to the corporate procurement team for approval.

We have changed as well, we mirrored the changes

to establishment of the purchase orders,

so again that's another layer of additional approvals

and that has been lowered for corporate procurement to approve every single purchase order at

£5 ,000.

Colleagues in finance work alongside us, introduce bank verification systems to again reduce

fraud risk and that's been going on for some time now and there is also a strengthening

of the sort of segregation of duties as to who is verifying and approving payments.

We've now also rolled out a robust power -up to really capture every single Declaration

of Interest.

That's not only good practise but it's also in line with the new Procurement Act where

the Declaration of Interest also needs to be checked throughout the life of the project,

not just at the procurement stage.

Again, it was already mentioned training.

there were three in particular series of training sessions.

So the very first one was awareness one

for CMT colleagues, for directors, and for members

around the new procurement act.

Then we held a series of sessions around the changes

to the request for quote process, purchase orders,

and the overall procurement awareness

around usage of those lower value procurement actions.

and obviously fraud and the additional duties through there.

And we are currently at module four out of eight,

soon to be 10, of contract management training

and commercial oversight, where we go through

absolutely every single stage of that activity.

We've already mentioned the strategic oversight,

but I think it's worth noting we are very close

to getting a procurement strategy adopted, we have engaged widely with stakeholders,

we've gone to small businesses, we've gone to voluntary and charitable sector, hold events

with them, taught them a little bit, sort of tips how to submit bids, but also got their

engagement on the future procurement strategy for the Council. In terms of the RCDAs in

particular, so procurement waivers. Just really wanted to report that the reporting does happen,

so everything, there is a database, regularly updated, reporting takes place, there is a

noting report every quarter goes to cabinet and obviously the board that we've mentioned

before. In terms of award of contracts, contracts are awarded and added to the overall register.

We are also at the cusp of introducing a similar powerful power -up to actually track the entire

procurement waiver process to evidence approvals at all of the different levels.

So with that, I will hand over to my colleague Andy to just maybe add a detail of two.

Thank you.

Thank you, Madam Chair.

If I may, just a few points of, to reinforce what's been said about we've done all these

things.

When I spoke at the last and the last but one audit committees, I think it was in April

and July, I think there was a great acknowledgement that this is a big ship to turn around in

making sure that everything was done properly.

And I think we spoke a lot about cultural change.

I think it's really encouraging now that we can say that we have reduced the RFQ usage

in the last quarter by almost 50%,

it's the same as that last year.

And a lot of that is now people coming to talk to us.

There is that culture of people engaging,

understanding what needs to happen,

not just going to the RFQ as a last and only resort.

We've had lots of occasions whereby,

as a result of identifying that repeated use

was being for particular suppliers was right.

Absolutely we need five doors today.

We don't have a framework.

So let's go and get a framework.

That framework has now been procured.

So this oversight is not just about stopping the use of the RFQ,

it's putting alternative strategies in place so that people can buy things,

use services, compliantly and more efficiently and getting best value as well.

Looking at the RCDA processes, as Evelina said, with the PowerApp,

much more oversight of how it will work and how it's working and where it isn't.

and they are all reported to the Mayor and Cabinet on a quarterly basis.

Thank you, Chair.

Thank you, Chair, and thank you Andy and Evelina.

Chair, I'll take the next two items together because they'll be reference to David Dobbs.

So the next one is internal investigations, so progress to date.

We've got a new team leader looking at the team structure and capability.

policies and procedures are being reviewed and that will also be standardised and will get external verification.

Oversight arrangements have been strengthened so now search and jury officers meet more regularly to actually look at these investigations and decide which one we take further.

There will be quarterly reporting to the audit committee so that will be coming.

External review of the investigation function is commissioned and is looking to be completed March 2026.

And then the other two items that were mentioned today in terms of forensic discovery, that is looking to be completed by the end of this month.

The next item is internal audit function, how effective that is.

We did have an external quality assessment done in 2024 and that received the highest rating known as Generally Conforms with Professional Standards.

We have a new contract which is co -sourced to look at quality and assurance.

We have also agreed to have a committee to further independent review by June 2026.

On those two points I will invite David Dobbs to add a bit more context.

Thank you.

In terms of investigations, I think there are a couple of things I want to reinforce.

One is there's an investigations team which reports to me and the other thing is there's

a broader investigations process.

So the report refers in much detail to two investigations, details of which I can't go

into but which are very atypical cases.

In those two investigations we took very different routes in terms of how the investigations

were undertook, who coordinated them and how they were reported.

My view is that those decisions were taken completely appropriately by senior officers.

However, what we do accept and I think what EY have highlighted is the documentation,

the governance around those processes needs to be better codified and more explicit so

So that in a given instance of an investigation, when it requires external scrutiny, other

people will understand, or the external observer will understand the decisions we've taken

and why we've taken them.

Because for some of these at the moment we are relying on anecdotal evidence.

And those two cases are said to be two very different routes for very explicit reasons,

and those decisions were taken appropriately by officers.

In terms of the investigations team itself, you've got a team which reports to me which I think has seven investigators.

And as has already been noted, there was a new team leader appointed there on the 1st September.

And I immediately tasked her to look at the team in terms of its structure, its processes, its capabilities, and the policies and procedures which it owns.

So that's quite natural when somebody new comes in to undertake that work and that work is underway.

We do also need to enact on this part about better co -dividing our processes and procedures around investigations,

particularly around those material or high profile investigations.

So we will produce documentation and governance around that so we can be satisfied internally,

but also make sure we're comfortable with the external scrutiny that comes with that.

particularly the role of statutory officers which have a key role to play in the direction of any investigation.

We have also in terms of investigations committed to an external review,

so once we complete our own review there will be an external review to provide that further level of challenge.

So we're moving at pace on this, we want to complete our review in the first quarter of next year and have an external review shortly thereafter.

In terms of internal audit, and again I know this has all been referred to, really important

to say there was an EQA, an external quality assessment during 2024 reported to this committee.

This considered all aspects of internal audits operational work and was demonstrably very

broad in scope.

It didn't just look at compliance with the standards, it looked at everything we did

and some of you were interviewed as part of that exercise or interviews were requested with you to provide stakeholder views.

That was reported to this committee at its October 2024 meeting.

I commissioned that review to be taken externally and independently.

Elsewhere across London, I think every other single other London Council did that through a reciprocal peer review.

We chose to go in another direction to strengthen the outcome of that particular review

So what you'll have found elsewhere was for London Borough a they were reviewed by the chief internal audit the audit team from another

London Borough, so there's a reciprocal peer review system. We chose not to follow that

I think we were the only London Council not to do so and I think that really strengthens the outcome of that particular

EQA review

As I said, the review carried out during 2024, reported to this committee we received the highest grading as an outcome of that review.

Not undertaken by a peer, undertaken completely separately.

The team spent about two weeks on site going through all of our working papers, manuals, talking to stakeholders and so on and so forth.

Nevertheless, the report from EY asks for the further review which is even broader in

scope be undertaken.

Whilst I personally don't think that's a good use of public funds, we will surely undertake

that and we've got nothing to hide as far as that's concerned, so we welcome the scrutiny

that comes with it.

Thank you, David.

Chair, the next item is the annual governance statement.

There is an agenda item on that so we can come to that later on if that's OK.

The next one is the golden triangle.

I will make some comments and invite Steve to comment on that.

Progress to date, the permanent monitoring officer has been appointed.

Recruitment of the section 151 is ongoing.

There is leadership development and mentoring in place.

Strategically mapping and unified dashboard to support leadership.

and finally there's a review of delegation frameworks and resilience across the piece.

So I welcome Steve Halsey to make some comments on that.

Thank you chair, thanks Abur -Razak. I would simply add to that that I've had several conversations

with Stephen Reid around the capacity in the Golden Triangle and have made the point consistently

that the governance arrangements that we've put in place aren't just about the Golden

So working with the envoys, the Transformation Assurance Board, the Member Development Programme

in Chartermark we've achieved, the work that we commissioned for the Centre for Governance

to review our arrangements, the corporate peer challenger outcome and reviews.

Europe Municipal has already been referred to this evening and there are several other.

I think a lot of the conversations I had with Stephen were around about the individuals

as well that comprise the Golden Triangle and we spent some considerable time making

sure that there is appropriate support.

So, latterly, we've asked Stephen Hughes, which is referred to elsewhere in the report,

the ex -Chief Exec of Birmingham City Council, together with LGA appointed mentors for all

three statutory officers that comprise the Statutory Officers Meeting Songs, together

with individual mentoring arrangements as well.

And I should say that the Golden Triangle is also supported by London councils and individual support that officers get from them.

And by the internal assurance board that's been compiled, that's been created to give assurance to the three statutory officers.

And the SOMs that we have appropriate systems and robust procedures in place.

All of this is reflected in the recently endorsed continuous improvement plan that was considered

by the transformation assurance board last week.

Thank you, Steve.

Thank you, chair.

Three more to go.

Audit committee effectiveness.

Just a couple of comments on that.

So we've appointed independent chair, so very welcome.

following external recruitment, we've enhanced member training and development programme,

we've improved the action tracking and transparency, as highlighted by Councillor Mark Francis

in terms of our minutes and actions, more robust, and we are planning to report to full

Council March 2026 as a report, so I welcome Shukriya as a monitoring officer to make some

comments.

Thank you, Abdul -Razak. So I'll keep it brief, Chair.

The Council is obviously committed to supporting and empowering audit committee members to ensure that you have the learning and development opportunity available to help you fulfil your role.

And as Steve mentioned earlier, the Council received the LGA Charter Mark last year in recognition of the quality of our member development programme.

So members have individual budgets.

With that, they can tailor a learning and development programme that's specific to their need.

So what we are currently doing is developing the member learning and development and induction plan for 2026.

So as a part of that process, we'll be looking at learning and development needs of the audit committee.

We're looking at some elements of the training will be mandatory to similar to planning committee

and licencing committee members who need to undertake mandatory training before they can

sit on those committees.

So we're looking at introducing some mandatory element and also there will be optional training

element and regular information briefing available from officers and we will be reaching out

to you, Chair and other committee members, to help us develop the induction plan.

Thank you, Shupriya. On the next item, best value, I'll welcome Jonathan Lloyd to make

some comments. Thank you. Obviously recognising the timescale

of the EY report, there's been quite a huge amount of activity since then. Probably best

best displayed in the creation of the transformation assurance board of which you can see documentation

and see the development of the continuous improvement programme which Steve referenced

that has over 50 projects under four work streams. Many of those areas obviously touch

upon governance and areas within the best value. The Ministry of Envoy July report acknowledged

visible progress and we can continue to get external challenge around those, for example

the recent peer review validated and looked at many of the strengths of the progress,

recognising there's still, it's a really expansive programme of work and there's a long way to

go but we, significant progress is made with both programme assurance and oversight as

well as delivery.

Thank you Jonathan.

And the last item I welcome David Joyce to comment on social housing.

On the timing of the self -referral to the housing regulator and the commentary and the

report around the timing of that, I remember it well because actually I arrived on the

Monday and we submitted the self -referral letter I think on the Thursday or the Friday

and that isn't because I arrived and instantly geed the team into action, it's because actually

The council had been doing a lot of work in the lead up to the submission of that self -referral.

The council in -sourced Tower Hamlets Homes as everyone knows in November 23.

It also then commissioned in February having reviewed the service itself, two independent

reports, one from the housing quality network and one from Pennington's to review the position

and given independence don't take.

And then when upon receipt of those reports

and the concerns contained,

the council did begin dialogue with the housing regulator

significantly before the self -referral.

And following on from the receipt of the auditor's concerns,

I did write to the regulator to ask for their view

about that timeframe.

and their response was that actually the council had engaged very positively with them

upon becoming aware of the concerns and had issued a very comprehensive self -referral

they were very happy with the quality of it and subsequently the engagement with the council through the inspection

Obviously I don't want to take away from the fact that the findings identified serious failures

which is why we've got a C3 rating in common with most London boroughs who've had an

inspection and we take those very seriously and we're addressing them

and in fact the council agreed a plan a cabinet to address those serious failures and

The regulator has has has noted all of that

The other thing I would say is that everything that the regulator find was a self was a serious failure was in the council self -referral

to the regulator which I think is significant.

There wasn't any new issues identified and I think that plays to the point that the regulators

fed back to us that as the yourself referral was comprehensive and I don't want to sort

of take away from the seriousness of the issues because they are serious and we are addressing

them but the thing that I take assurance from and I think the council can take assurance

from is that the council did identify those issues.

It wasn't the case like in some councils where the regulator lands and finds a number of

new issues or perhaps where the council hasn't even self -referred, which is the case for

some of the other councils that have been inspected.

So an important set of findings, but we do very much have a plan and I think the feedback

we've had from the regulator, including our catch -up meeting this week, has been positive

about the way we have engaged and the way we are progressing.

Just to finish off, in the interest of time I want to draw the committee's attention to

appendix 2 which looks at mobilisation action plan to enable us to really accelerate the

delivery of these actions and our statutory recommendations.

So we have four work streams.

We are halfway through phase 1 which is mobilising that action plan working with Stephen Hughes

at a granular level.

That is looking to be completed

on 19 December.

Phase 2, which is getting the work done,

we are looking to complete that by June 2026.

Thank you.

Apologies.

From Councillor Ahmed and then from Councillor Francis.

I'm sorry, you indicated some time ago.

No, no, that's it. Over to you.

Thank you, Chair. So, welcome Chair. Tao Hamlets, back again.

So, I just wanted to be absolutely clear and clarify any misunderstanding that I might have.

And just confirm a few points to be true.

And that's the issues referred to in the EY report have been around for close to a decade.

Deloitte raised the same type of issues in their report to Council covering years 2017,

2018, then 2020, 2021 and 2022.

and yet the council did not receive any statutory recommendations.

The report also reflects on the four to six week period from February to March,

when the council had the opportunity to address the three statutory recommendations that were raised by EY at the February meeting of the Audit Committee.

The cover report reflects on the actions that have been taken since February 2025 to address statutory recommendations that relate to 2024 and 2025 tax year,

but were first applied in the financial year 2023 and 2024.

and a significant part of the justification for them was as a result of the concerns raised by Deloitte's.

So if my understanding is correct, what I would like to raise are the following questions that I hope officers will be able to answer.

So there is a potential of additional statutory recommendations referred to in the EY interim report.

That as I understand relates to the nature and content of internal investigations.

Could I ask the section 151 officer to explain any actions the council has taken in relation to the concerns raised.

and confirm what those concerns are.

And I know you've gone through some of that stuff,

but I just need that level of clarity.

The report also refers to the capacity

of the Golden Triangle, and I know Steve,

you've spoken about it, but can I ask you

as the Chief Executive to comment on what actions

has been taken as head of paid service

to address those questions, and I know you went

through some of that, but really,

so that I need to understand the flesh behind it.

And also, if I can refer you to page 66, where it reads,

desired end of state.

By 19 December 2025, the Council will have developed

and approved a comprehensive action plan.

By 30 June 2026, the action plan will have been addressed

to the point where both the council and the external auditors have confidence that all

statutory recommendations are either met or are on track to be met.

So if relevant officers can comment on that, please.

Thank you, chair. I'll take the clarification points and I'll also welcome EY to comment

on some of the older Deloitte stuff. Just for context, I think yes, Councillor, you

are right, some of these issues do date back quite a long time. One of the reasons of not

as quickly as the council was, most of these accounts were actually signed off in 23 -24.

So for context, you know you're looking at accounts that are meant to be signed off,

2016 -17, 2017 -18 were all progressed March 23, and then 2018 all the way to 22,

they were all done in December 2024. So that left us not enough time to really progress

any recommendations because they were dating way back, we as a team had to concentrate on really producing the 23 -24 accounts

which is EY's first accounts to be audited by the statutory deadline which is May 2024.

So that's the reason why there's a delay but these are all historic and the reason they are statutory is because I don't think

and I'll welcome Stephen your view on this because there wasn't enough progress made given all these years

But for us, as soon as we got our recommendations in February 25, we started progressing them in terms of the actions.

In terms of your question regarding internal investigations, I did recap.

So the key issues that were raised was lack of clarity and process.

So we are looking to get those sorted.

Now we are reviewing all our processes, we are engaging with external parties to kind of verify what good looks like.

There were two key investigations that were raised, which is the next wage and the home care one which David touched on and I'll happily welcome him to expand on that.

The delays in concluding investigations, again there was a timing difference with that one, but however we did progress as soon as we got the opportunity to do so.

and those are looking to be completed this month, end of December.

However, because of the timing, EY could not really get to a position to satisfy themselves to close that.

So they will be looking to do it in 25 -26. I'm quite confident we can progress that quite quickly.

So Rose, your other question?

Is this to Steve? Thank you.

Thank you chair, thank you councillor. Very little to add to the points that I made earlier on in relation to the arrangements we have to support the three statutory officers.

And they've been referred to by other speakers as well. I think it would though just be worth reflecting on.

The decision to put acting arrangements in place was mine.

I did it for several reasons, not least of which my view of the exceptional talent and potential of the Director of Finance,

so I asked to operate in that role whilst we went about our recruitment process.

We have been attempting to recruit to the position of Corporate Director of Resources,

but at the recent, a couple, two or three weeks ago, the appointment subcommittee chose

not to appoint to that role.

So in discussion with the envoys and with other relevant stakeholders, it is my intention

to recruit a longer -term interim postholder, and the arrangements for that are currently

being considered and I will report back to the Audit Committee once that's happened.

In reference to page 66 of the report, have you got that hand or if you want to?

It sets the timeline and says these things will be completed by the end of this calendar

year, I think.

What assurance is it?

I remember reading it.

Do you have?

Yeah.

Thank you, chair.

Thanks, Councillor Kabir.

As I mentioned, appendix 2 really details the plan.

Phase 1 is to really mobilise what we're going to do and get that plan actioned.

Phase 2 is where we will actually action this granular action plan with support from Stephen Hughes.

As it stands today, we're halfway through the process and we're looking to complete phase 1 by 19 December.

Then we will immediately begin phase 2, which is implementing those actions.

We have made significant progress in terms of procurement, financial reporting, it's

just we need to get on with the other two other work streams.

But I welcome Jonathan's view on that.

Yeah, I won't add too much other than I think it's fair to say that within the external

audit report there's a challenge for increased granularity and evidence around improvement

and a key part of the work happening both in the first phase up until December and then

monitoring and tracking the actions that we do but also a very very granular level with

the documentation of improvement to kind of help build the confidence and assurance with

both external audit but obviously also yourselves and the rest of the organisation and internal

assurance board.

Councillor Mark Francis.

Thank you very much, Chair, and thank you to the officers for speaking to their mobilisation

plan.

So the construct of this meeting tonight I have a real problem with.

We've spent 45 minutes listening to officers presenting information to us as a committee which we are being presented with for the first time.

When I look at these papers I look and see that Ernst & Young produced a draught report in August just after our last meeting.

and there's been back and forth been going on for the last four and a bit months between

senior council officers and Ernst & Young about the mobilisation plan and the content

of the report.

And that in itself I think illustrates a really, almost goes to the heart of the problem that

we have here in Tower Hamlets.

We are elected members sitting around this table and yet this information which seems

to be very critical and posing a serious challenge to this authority has been withheld from us

throughout this period.

Former chair of the audit committee herself could have been spoken to about this by someone,

anyone about this and a choice was made not to do so. So I've got a real problem

with us sitting through long explanations about what's in what what

the council believes is in the report and what the council is then going to do

about it. This committee is supposed to be spending its time questioning officers

of the council and obtaining answers and we've lost a lot of time in being able

to do that. We should have had a briefing on this weeks if not months ago and we would

have been able to come to this discussion tonight much further advanced. I also want

to say I have never in my time as a Councillor been to an Audit Committee in which so many

senior Council officers are represented sitting around the table. Four months is a long time

for this corporate leadership team to line its ducks up frankly about how it wants to

to respond to this and I consider the way that this has been responded to tonight to be

very defensive and not what I would want to see us reflecting on, taking from the serious

concerns that have been made. So I would like, I don't think it's helpful for us to bounce around

between each of these significant weaknesses. I would like to propose that we focus and get as far

through each of them individually.

If people have a concern or something

that they would like to raise on each of them,

whether it's the three or four originally put forward,

or whether it's the six new ones that have been identified.

So, Cheryl, I would like to propose that we do that,

so that we can have some focus.

We'll get as far as we can tonight.

We've got another meeting next week,

if we need that as well.

But I think each of these significant weaknesses

deserves proper attention, and bouncing backwards and forwards

between them wouldn't be helpful.

Thank you, Chair and welcome to TET Hamlets.

Congratulations on your new role.

I think it's really disappointing to have this report in front of us.

It's really disappointing to have to read it.

I do agree with Councillor Francis.

I'm very disappointed that we haven't had a briefing on this.

The first I knew of this was when the papers were published.

And I don't think that is in the spirit of good governance.

That said, there is a lot of information to go through.

I think the... and we've had a lot of presentation already this evening.

I would agree with councillor Francis. I don't feel that that presentation itself has given me as an Audit Committee member much assurance

And I think we need the time to be able to question officers on

The detail of their presentations and their action plans. I do have some specific questions for

EY and for some of the officers as well

I'm happy to take your guidance on when you would like those posed

More pages before us than there are in Fellowship of the Rings by Tolkien.

And the presentations were comprehensive, such that members of the committee really

are incredibly informed now, but informed to the point of bewilderment, I would say.

In that there's so much information.

And I understand the point that's being made, which is,

hold on, so how do we deal with this then?

We have, and I think that we, what we have is a report from EY,

and I'd like Stephen to respond, and then maybe we'll go to your question,

a report from EY, and we have the response of the council,

and I think it's important that the whole council responds,

not just the internal audit and the audit people and the director, I think it's very

credible that the senior managers are here.

Most of the senior managers haven't spoken because they haven't been required to, but

they're here because they are being held accountable, because actually the management of these functions

are theirs as well as corporately.

So I think what we've got is a very big issue, which is the EY report and then the very big

response to that and we are trying to work out how do we deal with this now.

Do we just note the reports?

We have considered them and we have noted them.

Where does that take us?

I think it would be helpful, Stephen, if you were to say whether you feel that the responses

that you have from the Council, all are in part, are adequate for the challenge that

they have. We all know that you have to run fast to stand still in the current world and

the legacy of your issues means that you have to run even faster to stand still. To move

forward, you've got to really move at a considerable pace, whether that's the percentage of internal

orders dealt with or whether that's substantive change in areas like social housing that we've

just heard about, or it's substantial change in procurements and the added value of making

a more corporate approach, more coherent approach, more controlling approach perhaps to compliance

in relation to procurement.

But there's ten factors, aren't there?

And I can't see how we can consider each of them

and give each of them in -depth investigation now, this evening.

We would be here all night.

And so the important thing is that we crystallise the comments that you're making

about what's going to be done and when, and will you meet the targets, and not be unnecessarily

optimistic about that, but as realistic as you can be.

Stephen.

Thank you, Chair.

Just a few points picking up on the discussion.

Councillor referenced the, I think the question was, if I can be so bold, was why did EY meet,

statutory recommendations when the points had been previously reported by

Deloitte. So let me just address that one. A number of the points had been

previously reported by Deloitte but not all of them and that's the very reason

that we made statutory recommendations because the issues had been persistent

over a number of years and in our view had not been addressed by the authority

adequately and hence we elevated the reporting on those matters to statutory

recommendations. We didn't place reliance on Deloitte, we formed our own views

based on year one of the audit. Now necessarily we completed the 23 -24

audit in February 25, so earlier this year, and a lot of the discussion that we

had with officers was given that our report necessarily is backward -looking

we are considering the 24 -25 year which in effect finished at the end of March 25, so

one month after we reported on the 23 -24 financial year meant that necessarily the statutory

recommendations that were made in 23 -24 and the significant value for money weaknesses

identified in 23 -24 couldn't possibly have been addressed fully as part of the 24 -25

year because when they were reported the year was almost over. We have

identified an additional statutory recommendation this year and some

additional significant value for money weaknesses clearly that we've drawn

and drawn out in the report. Through the process of the report we did issue a

draught in August there has been robust discussions between ourselves and

officers and we have reached agreement on the report management have confirmed

they are content with the factual accuracy of the report as am I content

with the factual accuracy of the report and that's been a necessary process that

has taken longer than normal but I think that's a reflection on the nature of the

content of the report. There was also a question chair around my view on whether

the responses from the council are adequate.

Clearly as part of the 25 -26 audit we will review the responses and we will subject them

to the normal audit process that we would and we will report back to this committee.

But given we are now in December 25, I've got to get my ears right, which is a good

Park through the 25 -26 financial year. There will be a number of these issues that will

continue to persist into the 25 -26 reporting because the recommendations or the actions

that management have set out in their paper have not been fully implemented and embedded.

It is that embedding that I am looking to see, that sustainable improvement and embedding

within the council before I consider whether the statutory recommendations or the significant

value for money weaknesses have been adequately addressed. So hopefully that's helpful to

you.

And because of the layered nature of, you spoke earlier about, I forget what phrase

you used in relation to the previous year's accounts not being, and therefore this added

a problem and it was almost like a vortex of, because of the layered nature of the accounts

that you have to audit.

Actually what's needed is working at pace to clear, to cover all of these issues in

order that you can then move forward because otherwise we're continually being dragged

back.

I would like to know from you, whether you believe that in these ten issues we are able to deal with them in the way that Councillor Ahmed referred to it.

Because the report says that. It actually says that these issues will be addressed within the calendar year.

That's only another 20 days.

So is that the case, that these issues,

and if not, when is the time scale?

You know, we want dates and time scales,

maybe not now, but that's what's needed

for the committee, certainly for next week,

so that they can be assured of that

before we go into the questions from other councillors.

Thank you, Chair.

Yes, I mean, as I said, so we are looking

to accelerate delivery, and, you know,

So we are doing a deep dive scope, working with EY to make sure that all the granular

actions are going to be implemented. It is a journey. We are aiming for June 26. As I

say, some areas were quite progressed. For example, procurement, financial reporting

again we are getting feedback from EY on how we can get better. We did get better compared

to last year. So I think this will be a continuous process in terms of how we are progressing,

but at this stage we are looking to complete June 26 all the statutory recommendations.

Councillor Kostin, you had a question 2E1. Thank you, Chair. So I think the question

I had was actually when do you expect to close some of these statutory recommendations, because

I think your explanation on the timing of them is helpful, particularly when you're

reporting and the period that you're reporting on and when you actually give the report.

From what you've seen so far of the three statutory recommendations that came about

from the previous audit in terms of the action plans and the progress that's been made, if

If you had seen that progress, say, 12 months ago, do you think you would have made those

statutory recommendations at that time?

I think what I'm trying to get to is a sense of how much progress has actually been made,

because we're seeing a lot of documents, we're seeing a lot of action plans, we're hearing

a lot of what sounds like great work going on, but I don't necessarily have a sense of

what is actually being progressed.

Thank you.

So there was two points there.

One was the would I take the same view in relation to the statutory recommendations.

And I think the first question was around when do I think these are going to be resolved.

So if we think that we are now in the 25 -26 financial year, and I am going to make some

broad brush statement so forgive me but there are a number of issues that are

reflected here that the actions will not have been implemented and embedded for

the 25 -26 year and therefore there's a question about how much can the council

have done by the start of the 26 -27 financial year which is only say three

months three and a half months away and whether actually there is the ability to

embed. To your point Councillor, the council has lots of action plans and progress is being

made but I go back to my point, I want to see the control and the approach to all of

these issues being truly embedded rather than just an action being ticked off a list and

that's going to be super important. So back to your first question, based on where things

are at the current time, 26, 27, might even be a challenge to be able to demonstrate the

true embedding of the improvements necessary to address these and it might need some degree

of evidence to be demonstrated in that financial year to allow serious consideration to whether

the matters have been addressed for 27, 28.

Thank you. And I suppose one of the things that I was reflecting on is in relation to

the second statutory recommendation relating to internal audit. We talked a lot over the

last few months, beginning of 2025, because we haven't actually met since July as a committee,

which I think is problematic as well.

But we talked a lot about the culture.

It's great that the head of internal audit here is presenting

and giving us assurance on that statutory recommendation.

But actually, the recommendation is about the corporate culture

and it's about management and it's about their approach to audit

and implementing those findings.

I think one of the frustrations that we as a committee have seen with the response to

that recommendation, and also I suppose to a certain extent to the procurement, is that

it's taken a long time to get visibility of those action plans in order to be able to

say what actually is management doing in order to make the change that we want to see.

Where am I going with this?

So I guess in terms of what you're going to be assessing against, are you only assessing

against the action plans that the management teams are bringing forward, or are you making

your own assessment as to the adequacy of those action plans as well?

It is the latter of those.

Clearly we want to understand the process that management are undertaking to address

the recommendations.

But also we consider and form a view on the implementation of those recommendations but

we also seek to triangulate what we are seeing elsewhere and whether that fully supports.

In relation to internal audit, Councillor, there is a number of aspects of that that

we have raised in the report. One is around potential or perceived conflicts of interest

there in terms of independence impairment, in terms of some of the other actions the

internal auditor is being asked to fulfil and has fulfilled. And then also a question

for the committee in terms of the assurances which have been provided and the overall opinion

and whether, based on the factors that we have questioned, whether you are content that

that forms a reasonable conclusion for the 2024 -25 financial year.

And then some questions around the process on the reporting of follow -up and actions and recommendations.

And then the addressing of old recommendations and the approach there.

Thank you, Chair. Thank you so much.

So then in response to that, we've had this mobilisation plan.

And what I can't see is who actually owns this plan, where does it belong, and what

assurance is the Audit Committee going to get about the action plan as well.

Because I think the sentence that Councillor Ahmed read out, it said to the point where

both the Council and the external audiences have confidence.

I think we should add all the Audit Committee to that as well.

Thank you.

Thank you, chair.

Thank you very much.

I see there is a concern raised by EY about the manner and speed which the council self -referred

its housing management function to the social housing regulator.

Could I ask the corporate director of housing and regeneration to comment on that, please,

and could it have been done any quicker and with an action plan?

Yeah, I mean, I think as I try to outline earlier from my perspective,

and I don't have any personal skin in the game in this,

in the sense of it happened before my time,

but I am familiar with this process because I also did it at Haringey Council,

So similarly after an insourcing of an ALMO and actually the timeframes are very similar,

it does take some time to insource an organisation with a thousand staff, do a deep dive review

of all the services, commission independent audits and then form a view and start the

engagement process with the housing regulator.

I'm aware that the housing regulator always wants to have informal dialogue before a self -referral

should take place.

and all of that happened from my own perspective, the timeframe was reasonable.

But I respect the view of the auditor and I respect the seriousness of the issues raised

because we do need to get on top of it and clearly the council has a plan that was agreed at cabinet

and we're now in a regulatory engagement relationship with the regulator as appropriate

given the rating that we received. But in terms of your question, I personally feel

the timeframes were reasonable, they were in line with what I've experienced elsewhere

and I would also make the point that there are other councils and landlords who didn't

self -refer before the regulator turns up on their door. This council did make the decision

to really take a look at the services, assess them and self -refer rather than waiting like

some other boroughs for the regulator to turn up on their doorstep.

And so from my perspective,

it was a reasonable approach and quite a thorough approach.

And when I asked the question of the regulator,

their view on our approach and they said that our self -referral

was very comprehensive and of a good quality.

So that's probably as much as I can say.

OK, thank you.

Thank you, chair.

So just for your information, I was actually on this committee for the first two years

of this term.

And I also spent three and a half years in overview scrutiny.

And after two years, I just couldn't do any more of this, but I've been substituting since.

And there's a lot of this report that is familiar to me, but also very, very shocking, because

What you read in the report to the conversations we've had in this committee,

reassurances, the conversations around control and risk management and what's happening,

and a lot of confidence about how things are changing,

going straight from the robustness and the new change of senior leadership,

and we sit here 18 months later and that's completely different and this report picks up exactly that.

It's just there's a systematic cultural issue that is actually weaving through a lot of what this council does,

through all its decision making and some of its committees, and there's too much of a similarity now to be in denial about what the problem is and how we need to solve this.

I have a few questions, I'm just going to put it out if that's okay.

Speaking of similarities, for the Auditor, if you could inform me from the first draught

to the publication, from this Audit Committee first learning about this report itself, the

duration it took.

Obviously we've heard that the Audit Committee have not been briefed about this prior to

this meeting today, which is a shame, but do you think this is a reasonable timeframe

to go from a draught to the publication of it, why did it take so long?

If we can speak to that, that would be really helpful because my understanding,

the best value inspection had a similar sort of journey about how long it took

from its draught to its publication, similarity.

I want to talk about things that absolutely shocked me, which is the internal investigations.

You know, you've got Operation Winter Autumn, on the basis of which decisions were taken,

in this council, overview of scrutiny and what officers had told us, and now there's

failures in those investigations. I don't really know how to even start digesting this.

I think, like you said, Chair, it needs a much longer conversation to grasp this, but

my first question is, because I haven't heard this from the officers that have spoken 45

minutes on this, is what was the risks and the controls that we missed? Were the controls

in place and they were ignored and that was a failure, or the controls wasn't there at

all, how did it happen?

Why on one of the operations, why did it take the police to tell the council that this was

happening and why was this not reported to this committee?

So we talk about the effectiveness of this committee which is a failure, but why was

this not reported?

I think this is quite a serious issue if we're going to build trust between elected members

and officers. And if I may also go on to the Golden Triangle. Now, when I was on this committee,

and I've heard it elsewhere, the Golden Triangle was almost used as a defence of the strength

of the change and the journey of improvement. When the previous section 151 officer left,

For education for me, can I please be told what should have happened?

I see from the report that that wasn't followed, but what should have happened when the previous officer said

she's no longer going to be part of this organisation? Why did we decide that she doesn't need to serve her entire notice period?

What actually happened and what should have happened? What would have been good practise?

because then we can look out, because the turn of senior leadership is a very

very problematic issue that we still can't seem to grapple, so I'd like to

know what it is so that we can at least try and get hold of that and if I think

of any other urgent questions I'll come back to you.

Before the question is answered I just wanted to remind members that in relation to the

really an individual's employment, specific to that individual's employment, so I don't

think we should be discussing the specific issues in relation to her departure.

That wasn't my question. I want to know when in a situation like that, what should

happen, what is the good practise, because this report is saying there's a failure.

I would like to know how to avoid that failure. That's our job as a committee member.

Yeah, that's fine. I'm just saying the reason why...

I understand what you're saying but that was not my question.

So we have a specific thing about the timeliness of the particular investigation.

Then we have a normative question about what is the right thing that happens in these circumstances.

So I think the first is to Abdur -Izak and the second is to Stephen and then I think

that I can take things forward.

Thank you, thank you, chair, and thank you, Councillor Asma.

In terms of the controls regarding the home care, there were two issues.

Both the investigations, please.

I'll start with home care and then I'll come to the next one.

So with home care, as you've been briefed, there was a lot of work that was done by PwC.

The key control failures at the time was the reconciliation exercise, and that happened

in 2021 where they were piloting two payment mechanisms, so hence an overpayment has happened.

The second failure was lack of contract management, where normally when you have a contract you

need to make sure that contract management does happen and we did put that training in

place now to ensure that meetings happen with the supplier.

We do monitor our workload.

We also monitor in terms of how much we paid against the contract.

So those were the two key issues where those issues were one address at the time for controls.

Part of contract management was also working with the supplier to understand their governance

arrangements, to understand if there is any risk in terms of growing concerns, and I think

as my colleague mentioned earlier, those are being addressed in all new contracts going

forward.

So that's to do with home care.

The next wage item –

A question on this is, when that was not applied to all our contracts, what made this investigation

different?

At the time, there was a whistle -blowing case, hence why we had to look into this a bit more,

and that was discussed in the previous section 151.

We also undertook an exercise looking at all our contracts as we were trying to build our

contract register and that flagged a certain supplier that had went way and above their

contracted amount.

So that's when we had to look at what's happened here, you know, why have we gone above and

beyond and when we did that exercise we looked at the overpayment issue that had occurred

at the time.

On the next...

And the second.

Yeah, the second.

I think I'm going to defer that to the monitoring officer because this is...

there is an investigation happening and I'm not sure how much I can talk...

Yeah, I don't know how much I can reveal or talk about at this stage.

What about the fact that this committee was not aware of it until now?

Why is that?

You know, we've had briefings privately away from public.

I am using my microphone.

As I said, this is a criminal investigation, hence why we couldn't bring this to the Committee's attention.

Sorry, Chair, the other investigation had live investigation and it was coming to the Committee for briefing,

so I don't see the same rules applied for both the investigations.

I'm not assured by any of that.

But that wasn't a criminal investigation at the time.

So it was a case of...

It was told to us it possibly could have been.

There's a...

So, could I just suggest a couple of other points as well?

Just for clarification really on my part.

So I wouldn't want the committee to think that officers are here being defensive.

We have spent an awful lot of time, I have had several meetings with Stephen from EY,

which did impact upon the timing of the report between August and November.

and I think we've had three or four iterations, I can't remember the exact number,

and we have robustly challenged and we've been challenged back,

and I agree with Stephen completely that we absolutely agree with the content of this report and welcome it.

This, from my perspective, is one of many tools to improve the performance of the Council,

and we are determined not to be defensive.

You can see how much work has gone into this, not to be defensive, but to make sure we agree the issues.

The final version of the report was received by us in November, I think.

November the...

Sorry, was that you?

In the middle of November, November 15th, I think.

November 15th or 16th.

And here we are two weeks later having the conversation.

And any time, I think, when a senior officer makes a comment about what are very serious concerns raised in the EY report,

it can be considered to be defensive.

It's certainly not meant to be we welcome the report and we're acting upon it in times in terms of the Golden Triangle

This is one of those issues and we agreed very early on but we will have a different perception

We're not going to agree on everything. So the wording in the report that the

And I say I won't go into detail about the individual

I know you're not asking that the the wording in the report that it was an unexpected departure

I disagree with the conversations with the post holder began the previous September

One of the things I have learned and we've discussed is I should have been, we as a local

authority, not necessarily me, should have been talking with EY to keep them in the loop

about the arrangements.

Once the departure was confirmed, I took a view.

I took advice from external, a range of external individuals and organisations and I took the

view that we had the opportunity to ask an internal candidate to take up the reins because

as I've already said, we have a commitment to offering those type of opportunities.

I considered that he had the appropriate skills and the appropriate experience to undertake

the role effectively and I think given the fact that the period we are talking about

comprised a period where the previous post holder was section 151 officer, the work that

Abdul Razak and his team have put in since then is to be commended.

So I took a decision as per the constitution allows for Abdu 'l -Azad to take up that role for a six month period

which actually comes to an end in December.

And following advice to go through a process during the acting up period to warm up the market, to have conversations

with recruitment consultants, envoys and others about the appropriate way forward.

Which we did.

I would make the point though that the section 151 market as the appointment subcommittee

would have experienced recently is a very, very competitive market.

Today I've been having conversations with SIPFA, I've been having conversations with

other relevant bodies to try and ensure that we get the best and most appropriate expertise.

With 31, I'm advised that with over 30 local authorities currently applying for emergency

funding from government, most of the available section 151 officers and those of the quality

that we would like to recruit are gainfully employed elsewhere.

But we will continue our attempts to make sure that we recruit the appropriate person.

Thank you.

Thank you, Chair, and welcome to your new position.

In regards to processes and procedures, I just want to understand in terms of if there was any formula that was used to calculate the materiality.

As you know, normally councils have materiality in excess of 15 -20 million. How did you calculate this?

Was there a process or formula that you used?

I'll cover this again.

So the basis on which we calculate materiality is set out in our audit plan,

which was presented to this committee both this year and last year.

That basis has not altered.

In addition, in our audit plan we set out the risks that we take into account

and that we took into account in calculating and deriving the level of materiality.

I think at the last meeting, or perhaps the meeting before, we also spent some degree of time talking about the focus being by the committee

on challenging me on why I hadn't used a higher level of materiality.

In this report I talk about the fact that the focus of the committee needs to be on driving the improvement and holding officers to account to address the underlying factors and the underlying risks.

The basis of the materiality is my professional judgement in accordance with the EY methodology as a result of the risk profile of the council.

and that's been applied on a consistent basis.

So with respect, Councillor, I'm really happy to have conversations with that,

but I think the question really ought to be how officers can we address the underlying risks

that are driving EY to use that level of materiality.

Thank you very much, that's very helpful.

Now, I don't know whether to go for a second.

Do you want to say, I have another point, I wanted to draw to a close in a way that

I think you might find helpful.

I get that sense, I get that sense, yeah.

So my constituents want their bins collected, the streets swept, they want to be able to

approach homeless services and get a reasonable service.

They want when their mum or dad is like in need of care, they want to ensure that that

happens on a quick basis.

You know, those are the things overwhelmingly that we want, that our constituents want and

that we want to focus our time on.

And yet here we are in order, discussing at length the report which has been again presented

to us from externally.

This didn't originate from within this authority.

This is EY's report which has identified a further series of significant weaknesses.

And the reason why I say defensive and use that word defensive, even though I have massive

respect for the work that some of the senior officers in this council are doing and don't

underestimate in any way the challenges that they face with a huge bureaucracy like this,

is because every single one of those additional significant weaknesses are things that have

been questioned and points that have been raised in this committee over the 18 months

since I've been sitting back on it and were previously.

The competence of the committee, if I can use that word, Chair, has been raised, the

composition of the committee has been raised, the annual governance statement as Mr Reid

indicates and as the minutes confirm of the last meeting, the meeting before that when

we talked about it as well.

You know, this stuff has been raised.

when the next one about the best value inspection itself.

So we raised this in relation to risks

and we were told like initially that

oh that doesn't need to feature as a risk

within the register that we're looking at.

We pushed and kept on keep pushing

and then that was eventually put on there

and now we see it front and centre in the mobilisation plan.

This is absolutely central now in this mobilisation plan

not just in terms of the continuous improvement plan,

but this is something that the Audit Committee

had a legitimate right to be asking questions about,

to be encouraging and pressing for there to be

a less rose -tinted version of itself.

And we've been proven right.

Those of us that have argued for it,

at least, have been proven right.

The final thing that I wanted to say, though,

in relation to the golden triangle.

So I don't even really recognise that concept.

I think we have a corporate leadership team

and the corporate leadership team collectively

are responsible to us as members.

I understand there's a slight separation of this as well.

But for Councillor Islam to be given the answer

that she was given,

that the impact of the formal section 151 officer leaving wasn't fully anticipated

but the process was basically ok.

I mean no, no it wasn't.

We weren't even told as elected members that she was leaving.

And in fact I spoke to someone else involved in the best value inspection

who also hadn't been told that the Section 151 Officer was leaving.

You know, this is about the way that this Council does its business,

the way it respects the public and the way it respects us as elected members.

And I hope that what this mobilisation plan does is fundamentally shift that back in the direction it needs to go.

But if all that we're doing is just coming back and more and more words to obfuscate

the problems that we have in moving this council forward I despair.

And in that respect I'll quote Obama who said progress zigs and zags and moves in fits and starts.

It's never a straight line.

And as an audit committee as an audit committee our role really is to question the executive

the political executive and the

Management executive in relation to the prudence the value for money the risk management

resources at the council's disposal and we

question that

What Stevens was able to do for me wise give us an independent external view and his report?

It is something that we should really thank him for and note and say that is a really

good exercise that we as a committee can read all that and we also read what the Council's

corporate management and its finance people are proposing to do about it in short order.

But I think that there are also questions here about the way in which the committee

is briefed in between meetings and how they are briefed.

I would want personally to have discussions with officers about how we can achieve that,

whether it's about individual issues or whether it's about systemic questions.

But we do need to move forward.

And in moving forward, we want you to act at a great pace.

All the senior managers here in fulfilling the action plan, the mobilisation plan, just

do it.

But I think when we look at the recommendations, the recommendations say that we consider and

note EY reports, we consider and note the additional statutory recommendation, but we

consider and approve the council.

And we consider and approve the council's update.

I think we note.

We consider and note.

We are external.

We are questioning.

So I think we consider a note and also we note the value for money response and we note the actions taken.

Because we must be a force for progress and improvement through questioning the prudential nature.

The golden triangle is simply someone responsible for making sure the council acts lawfully,

making sure the council acts prudentially, and making sure the council staff is well managed.

And they work together. And in many authorities they don't work well together.

It's more of a muted triangle in some councils than a golden triangle.

You know, you've got to say in this organisation people are, and Stephen's described this,

about ensuring that people are working together.

And I think that's the important thing going forward.

Not fissuring or structuring, but actually making sure that people are working together

and people have developed, and so on.

You want to add something, a little embellishment to my conclusion?

Thank you.

On a positive note, I want to say that as a committee member I think it's important

we identify that individual members don't speak for the whole committee and as a committee

member I have absolute confidence in the integrity and honesty and reporting feedback of our

critical thinking or challenging and it can come across particularly as these meetings

are webcast to the public as questioning the integrity of the senior officers we have here.

I think it's very important that we make this point that these members of staff are the

engine of delivering services.

It's our role as a committee to baptise and support that trust and confidence that's needed

So that the whole organisation is able to improve on that.

I would like to thank you for that.

Now with those proposed...

You wanted to say something.

Oh, I beg your pardon.

I'm sorry.

Councillor Isamu was just asking,

she had asked the auditor about the reason for the delay

before the first draught of the report.

Ah, yes she did.

And I answered my view, but I know...

Let me off.

So I think the question was why it took so long and is that normal or standard? Reasonable.

So I think really the question ought to be directed at officers about why it took so long.

But issuing a draught report in August and not finalising it until the 16th of November is

not the normal.

It is longer than would be anticipated.

I recognise the degree of the findings in the report were challenging and hence I would

not expect it to be a traditional two week turnaround so I recognise that that necessarily

would have taken longer.

But in relation to the underlying findings to give the committee some assurance, there

was no fundamental change to the findings within the report as a result of the process.

But there were some amendments made to the report in conjunction as would be the normal

case following discussions with Steve and other executive officers.

If I could say, there was this, you actually explained about the position and you totally

The question is bounced back now.

Top of the triangle, golden triangle, Stephen, I would like you to answer why it took so

long.

So I can give some more.

So we had conversations about some inaccuracies.

We had conversations, for example, some of the information that we wanted to compile

to make sure that we were moving forward as is in the mobilisation plan or in the information

you have been given today was historical.

Some of it, you know, it would be inappropriate given the investigations dated back to 2017,

2018, 2019.

And it took some time to collate, to make sure that the information that we were presenting

and presenting to EY so they could form a view about what ultimately went into the report

was accurate in its nature.

It would be, and from the advice of the monitoring officer, I don't particularly want to reflect

in detail on the issue around home care or the issue around next wage, but they are considerable

and they led to potential substantial financial losses to the Council. We have spent some

considerable time making sure, as you've heard tonight, that assistance are put in place

that are then fairly reflected in some of the changes that have taken place. So it is

the third or fourth version, and what I'm really pleased about, and I've said this to

why personally in one -to -one meetings and in group meetings, the reflections that are

made around the efforts that have gone on since February were not in the first draught.

It was important to me, given the fact that this committee first considered the statutory

recommendations in February of this year, and we then had six weeks to address those

statutory recommendations that the efforts made post -March were included.

Thank you, Chair. And with respect to you, I will be as quick as I can and I'll keep

it to one minute, I promise. But I have two points to make. One is around materiality

and the significant weaknesses that EY have presented us tonight are not to do with the

materiality threshold. The materiality threshold dictates how much detailed testing the auditors

The recommendations and the weaknesses are not related to the testing.

They are related to governance and they are related to culture.

In relation to the point on culture, we have had an update to all councillors

from the Chief Executive today that talks about the peer review,

talks about the Transformation Assurance Board.

It does not talk about this EY report and statutory recommendations.

And I think that is a reflection on the culture of this Council.

I think I will reflect on that because as I say, we welcome the comments that have come

from EY.

We want to move forward on them.

I will also cheque that the statutory recommendations haven't been referred to in previous member

updates.

I will cheque that as well.

I think as far as, and I take the point, I think in terms of the culture of the organisation,

one of the things we haven't been able to talk about in any depth, because actually

it's only just happened, but we've recently, with the support of the envoys, undertaken

a staff survey where nearly 3 ,000 staff have responded, and I now have the outcome of that

survey and I think we will bring that forward in a timely fashion given the comments that

have been made tonight.

I think that will address a number of the concerns that you may have.

There is an action for the next committee meeting that we will have a report which says

whether the information that Councillor Busting said will be brought back to us for the next

meeting whether this has been shared with members or staff or the public.

So two actions, just being absolutely clear.

I don't think it's an action for the committee, but I will cheque, is the point that I made,

whether or not the statute recommendations have been referred to in any other publication.

I will cheque that, and I will come back to members of the committee before the next committee

meeting.

As far as the staff survey is concerned, yes, I think that's given the comments that have

been made about it.

But that is one I think I should bring back, unless members don't want to see it.

Okay.

Thank you.

Thank you for the feedback and input both in July and around July into the AGS.

What we are proposing today is a draught of which it can return on the 10th of December

regarding any kind of final refinement.

So the purpose is to share that draught and how it has evolved following the feedback

from July.

and obviously incorporating many of the recommendations and findings of the EY report as well.

Just some key messages and changes around it.

My team has assumed responsibility in relation to SITFAR practise but also indeed the EY

recommendation.

So bringing forward that kind of SITFAR best practise forward.

So moving away from the internal audit responsibility to my responsibility to present this paper

through today and thank you for the kind of smooth transition to make that work.

In addition to the change of ownership and format we've incorporated

some additional feedback and indeed reflections from the EY report

obviously that change of ownership where the improvements that are presented

presented alongside the kind of significant governance issues that's

including the best value and external audit concerns and some of the

leadership capacity risks that we have.

We strengthened the narrative from some of the feedback from the audit report as well

and some very specific recommendations which have embedded in here.

We've also brought in some additional information that we have now on the LGA peer review and

some of the external challenge and external audit type investigations we've had, anything

from the Good Governance Institute through to the internal audit external quality assessment.

I would end on some kind of key, some conclusion elements which probably incorporate the kind

of nature of the report because I think it's really important to reflect some of the language

that colleagues from EY have put around embedding and about recognising the scale of change

Because I think we we are encouraged as you've seen today and seen in other

Documentations of the improvements we've made this year and to date but recognising a

Lot of these not all but a lot of these are systemic and long -term challenges

So we know that that that lasting change depends on accelerating pace. It depends on

Embedding it's kind of key word that we use repeatedly in the AGS and embedding that into everyday practise

and that means continuing to challenge ourselves and aligning resources more effectively,

related to the mobilisation plan and prioritising with clarity and working differently to deliver

this impact at scale.

So recognising our improvements, recognising the scale of the challenge and recognising

those and looking those in the eye.

I have a question, I don't know if anyone else has.

My question really is about governance statements are really about how the institution governs itself.

But being a democratic institution it should also be about how the institution connects with citizens locally and with businesses.

Because otherwise it's purely a sort of hermetically sealed approach.

Now every council does this and it all follows the guidance, I recognise that.

But I do think the guidance, the purpose of governance,

but local government if it did nothing else would still be around

because you need a means of self -government in a community

to decide how people could live happily with one another or whatever.

And it's not just about the cheques and balances within an organisation

and the functioning of this and the functioning of that.

And I just wondered if you could reflect, not necessarily now,

but I wonder if you could consider whether there is any way

where an annual governance statement could not be about how members connect with their citizens,

how the council connects with citizens and how the council connects with businesses.

Just as a means of enlivening it.

Sorry to use that, sir.

But, you know, literally, otherwise it's a process document,

where as you say, the word embedding isn't used all the time,

which for most people is about, you know, something to do with horticulture.

So I think that to enliven it, it would be really good if there was something about members and the citizens,

rather like there is in the constitution of the council, where the constitution relates to the citizen and its elected members,

and also its citizens and its council.

I don't know, that might be fanciful, but it seems to me.

I just think otherwise it's too dry for me personally.

I don't know about others.

You like that?

You welcome this?

Everyone welcomes that, so that's good.

Now, questions you.

Thank you.

So, well, I want to welcome this.

Whatever journey it's been on over the last six months or so,

I think that this demonstrates what we were told this ought to be seeking to achieve,

which is balance. I would love for it to be a good read as well, but I will take balance.

And bearing in mind where we were, I think that this has moved considerably towards that place.

There are still things where I would hope for a little bit more openness and acknowledgement of

the scale of the criticism in last year's Best Value Inspection Report. But nevertheless,

it does need to, you know, it's signed by the mayor and the chief executive and

you know, it needs to be something that they ultimately can be comfortable saying that they agree with in public as well.

So I want to say this. I want to also say though about, sorry,

so I'm happy with this as it is. If there's a little bit more that can be done then well I'm good.

I want to say though that

in defence of Mr. Dobbs who I think was criticised in some ways

in relation to this.

I think that that was a little bit unfair

because as I understand it, this document

is put together within parameters that are set.

And the head of internal audit isn't a member

of the Golden Triangle or a member

of the corporate leadership team.

So he's done his best in earlier draughts

to reflect the views of the corporate leadership team

and the council corporately as well and perhaps others.

But I think that the change that's been made in terms

of where ownership lies, it makes sense to me.

But I also want to say I don't think that it's a reflection

on the work that was put into it from the officer team

up until that point in time.

And yeah, so I just wanted to make that point.

Thank you, Chair.

I agree it's a step in the right direction,

but I do think there are some areas that are,

or to me, remain unbalanced.

One of those is about the LGA peer review,

where there was a lot of discussion about the positives

and about half a sentence on the 18 areas

that need to be improved upon.

I don't think that is, to me, that is balanced.

Two other areas, like as I understand it, this is continuously worked upon until the

date of signing.

Given the period, I think it should refer to the Ernst & Young report, and I think it

should refer to the significant weaknesses and the statutory recommendations as well.

The other point specifically, which links the two, is around the head of internal audits

annual opinion and appreciate there's been a recommendation from EY on that.

And if the audit opinion isn't going to change, then I think EY's comments should be added

to that section as well.

On the actual authorship of the report, so I think it's good that it's moved away from

internal audit, but my understanding, and I'm happy to be corrected, my understanding

about the purpose of doing that, of having internal audits separate from the drafting

of it, is that audit is then able to give an opinion or audit it or be able to challenge

it in some way.

And I don't think we're going to have time this year for that to happen, but it will

be something that I think we should be expecting to see in future years, starting with 2026.

Thank you.

Thank you, Chair.

I think we have made strides and it's important to acknowledge those strides.

I mean, there was a period of time we had no governance statements and now we are having

and we can have those debates about the governance statement and where we are with those governance

statements.

I think audit has become more robust.

I also think the key issues that are raised within this, we have made progress against those issues,

particularly how members challenge one another and how members challenge officers as well.

I know for me it's been a learning curve and it's important to acknowledge that.

We have had numerous inspections over the last three and a half years and even this

year and we are reporting back on those inspections from the housing regulators to the tab meetings,

the envoys.

So I think it's a balanced report.

It does put kind of capture all the areas.

I appreciate the EY report that we discussed earlier.

And so overall I think as a learning council we need to explore those areas and in terms

of particularly I was not going to speak about housing at all, but it is one of the areas

that was identified and it goes into the report as well.

But that journey and understanding where we are and how to get to that is important as

well.

And I think it's captured that within the annual governance statement.

I think the committee, you know, the recommendation is that we consider, we note the annual governance

The points I made were about future as was points of council that Blasted made were about

future considerations.

But that improvement in this statement is welcomed by the committee and we note it.

Thank you.

Internal audits and anti -fraud.

Progress report.

This is page 19 to 42 of the agenda.

I'll take you through the relevant details of this report, which reports internal audit

activity to the end of November this year.

As we've already alluded to several times, during this period much of the focus of the

audit team has actually been on this really important follow -up work, and I think as a

consequence of that progress in undertaking the planned audit work, the audit work we

set out at the start of the year has been much slower.

And there's been 12 audits finalised,

yielding six reasonable assurance

and six limited assurance audit opinions.

As we go through the year, this number will change.

So it's 50 -50 at the moment if you think of the waterline

between what's acceptable and what's not.

And I think organizationally,

the balance of those audit opinions

We will be looking to improve those as time goes on.

So if the improvement we saw in 24 -25 is to be sustained, then there should be a greater

percentage of internal audits that result in reasonable and substantial assurance.

Those will be reported as we progress during the year and will form the final audit conclusion

which we will bring back to the June -July meeting.

Of the six limited assurance audit reports, we've got four into a very final state that

we can publish and summary details are included in section 5 of this report.

But just a reminder to members that you all have access to a SharePoint or a Dropbox site

that gives you full access to the audit reports.

So if there is anything more you want to ask or look at about the reports that I'm unable

to answer, then you can have access and you do already have access to the full collateral

of finalised audit reports, which I update regularly.

The implementation rates, and again we've referred to this already, we've got the granular

data within the report, the implementation rates is expected of improved over time, and

that's obviously a natural progression, so they will either stay the same or improve

overtime and they now stand at 82 % for 23 -24 and 70 % for 24 -25.

And again as I've already mentioned this process will continue with the addition of the 25 -26

data sets to the exercise during 2026.

So we'll continue this follow -up exercise as time goes on.

We should be in a position very soon and hopefully we will be in a position very soon to save

for 23 -24, we're going to close down that.

The last 11 remaining recommendations have been implemented, so we don't need to monitor

those anymore.

Similarly, with 24 -25, we're at 70 per cent now, so hopefully that number will increase

over time and we'll be in a position, hopefully during 2026, to close down the monitoring

of that.

The only other thing to draw your attention to is the Appendix 2 of this report, which

which is the incipient internal audit strategy,

which is a necessarily high -level document required by the new global internal audit standards.

It doesn't go into a lot of detail simply because a lot of the collateral information we have in terms of strategy

is contained in all the other documentation that this committee sees,

so it's necessarily high -level.

I'm happy to pause there and take any questions, Chair.

Thank you, Chair. This is what the Audit Committee should be focusing on, right? This is the

bulk of the Audit Committee's rumour, I think. So thank you, David, for your report. Really

helpful as usual. I had a question on the reports that have been issued. There were

a couple of draught reports that were issued in May on your chart which haven't been finalised

Could you give us an explanation?

I don't know whether the corporate directors here

are able to respond to that.

One was to do with payroll and the other one was...

Sorry, my screen is so slow.

I can do the ones with planning fees and charges.

I mean, the explanation why they haven't been finalised

is largely because they haven't been finalised,

Insofar as we haven't had proper management responses to enable us to finalise it.

So we've not reached that position of agreement yet.

So in that intervening period, I don't think nothing has been happening.

But there's often a period of negotiation where we agree on final responses.

Now, it goes back to May. Clearly I want to be finalising things much quicker than four, five, six months ago.

But sometimes it does take a long period of time to sit down and have those proper discussions with management.

And we would rather have those proper discussions than exchange things over email and rush to finalise a report.

We now include those dates so you have oversight where there may be delays.

So this isn't necessarily something we're in control of.

Our procedures actually say we want to finalise, once we've issued a draught, we want to finalise the report.

I think it's within 15 days.

So this exceeds that time limit substantially.

There'll be reasons for it, but I don't think those reasons will always be within my control.

And it wasn't a suggestion that it was to do with audit at all, but I think it would

be helpful for us as a committee to understand what the reasons are for the delays, particularly

in holding management to account and supporting you in order to do that.

We need to understand that more, I think.

I think clearly we don't want these things to be held over either because it indicates

there's going to be a prolonged period of time with a potential risk exposure.

So when we present it to management, our representations are we need to close this down as soon as

possible.

The other thing is to use the committee to exercise, so that we're looking at things

on an exception basis because they're still outstanding and shouldn't be.

I'm not particularly interested in the reasons.

I want it to be closed.

Otherwise there's a difference between a reason and an excuse.

Sorry, considering the internal audit progress report.

Thank you very much for that.

And now, this has been a feature of my life for about 30 years, strategic risk registers.

I've never seen one so comprehensive.

Certainly in a public document, and I'm, you know, you should be applauded for that, I'd

say.

listing out all these risks in a very extensive way.

Let's move over to the consideration of it.

Thank you, Chairman.

I think this is a longer than anticipated report because if you recall,

when we had the meeting in July, I had four of the reports

and there wasn't a risk report at that particular meeting.

So this is a sort of a catch -up report which,

which I suppose covers a multitude of aspects.

The first one of course is the updated corporate risk register

which you receive quarterly in summary and detailed form.

And this is combined with this quarter's deep dive

which is the resources director, risk register and heat map.

So the commentary in the report details all of the changes

that were made to the corporate risk register, which go through a process of review through

CMT, an agreement with CMT, involves escalation, relegation of risks from directorate up to

the corporate level.

So there's a very dynamic process in place there.

And similarly, in terms of the resources deep dive, these are things that we undertake for

each directorate quarterly to shine a bit more of a light on what's happening in the

resources directorate.

and the report obviously there alludes to the number of risks, risk owners,

and what the overall risk landscape looks like within the resource directorate.

So that's why the report in itself is so lengthy.

I think if I draw your attention to paragraph 3 .9 on page 46,

you'll see there the resources directorate is actually quite disparate and complex.

So it's easy to say, well, it's all back office stuff,

when in fact a lot of it is actually customer facing.

And we do obviously have customer services division

within resources as well.

So a lot of people employed within resources

and really key to the council's success as well.

Abdul Razak Kazim obviously is the acting director

for that particular directorate.

Of course we discuss regularly resources risk register

with his DMT.

We have a very robust discussion about what should be on the risk register, what shouldn't

be on the risk register, particularly in terms of risk and issues and escalations and de -escalations.

So I think what you've got in front of you is robust.

There'll be one future tweak we make to the resources risk register, which I think is

another example of good governance, and that will be to excise some of the pension risks

that couldn't be shown within resources into a separate risk register for pensions alone.

So that will therefore be excised and nothing will be reported separately to the

Pensions Committee and Pensions Board

In terms of the other enclosures I alluded to earlier

Appendix E is the draught

risk management strategy which we're asking for your approval and appendix F provides the

status update of those actions which were completed following the

Zurich insurance health cheque of risk management that was carried out during 2024 and that review was largely carried out

to inform the strategy

I'm happy to take any questions

I said can't know this have council. I saw councillor Francis first

Thank you. And

Apologies for not having been able to go through all of this and for maybe missing this, but

a couple of things for me were whether within the resources directorate and then also corporately

recruitment and vacancies of senior members of staff should be, is a risk and if it is

Should it be featuring on these?

And then secondly, I didn't see that there was any reference to the EY interim value for money reporting this.

So if there is, if you could just point me to that so that I can see things. Thank you.

So I think the former issue I think is in here somewhere.

I can't direct you to the exact page, but I'm fairly certain issues around the difficult market that we experienced that the Chief Executive referred to,

particularly in terms of recruiting for senior roles. I'm fairly confident that is in here and that's captured within the risk register as you can see before you.

In terms of the second issue, I don't believe that's reflected in here explicitly currently, but all of these issues and risks and things that are populated here are populated by directors and officers.

So my team would own the infrastructure.

We would then advise or challenge directors

whether or not this should be something

that's included in the risk register

and that's certainly something we would take forward

because I don't believe that last one

is in here at the moment.

So happy to take that forward.

Chair, if I could just come back on that if that's okay.

So totally understand that.

Like the report has just been published

but I do think that needs to be reflected in here.

Like I don't know how you would phrase it

but it's the risk of failing to make sufficient progress

towards the 30th of June deadline for the mobilisation plan.

So on recruitment, I mean maybe I've missed it,

I think within each of the directorates,

we've seen not just in the last three years,

but other periods as well,

like gaps and how that can have an impact.

It's really impressive how often other members of staff

kind of step into those roles and are able to perform.

But I guess if the council is consistently finding

that it's a challenging market to recruit senior members

of staff or you know other things that are affecting

then there needs to be a kind of a corporate response

to what we're doing to mitigate that that goes beyond

just acknowledging those as facts I would say.

But not I'm happy with this as it stands today

but for future kind of consideration, I guess.

// I understand and I think what we would do is when that risk is in there, part of

our role is to understand and make sure controls and action plans are properly populated in

there.

So that's certainly we will try and close that loop in terms of the actions that any

risk needs to mitigate or to address specific risks and so forth.

So we would do that job, certainly.

Councillor Gluston.

Thank you, Chair.

I had some questions on the resources risk register.

So I find the heat map really helpful.

So thank you for that.

So the question I had two questions.

One was on the first or the highest risk, which is the overspending of its revenue budget.

Currently the risk score is 25, which is quite a way away from its target risk score.

What are the actions that are being taken in place to get to the target risk score and

when do we expect to see that being achieved?

And then my second question is to do with the Enforcement Monitoring Officer.

What is an Enforcement Monitoring Officer?

What do they do?

That seems like one that should be fairly easy to resolve.

Thank you, thank you, chair.

If I take the first one, you will see in terms of mitigations with regards to overspends,

always reporting on budget monitoring.

Just to recap what we have done so far.

As soon as the Q1 position was established, we basically put in place spending degree

panels to work with corporate directors and services to see what we can mitigate.

And where there were national pressures that we could not mitigate because of the demand

and the complexity, we came together as a corporate team to see what areas can we actually

slow down in terms of expenditure to get through this year.

So that's one option we took.

Homelessness and adult social care, the whole of London are struggling with that, so it's not unique to the Hamlets.

And also we've also looked at how do we actually spend our money in terms of going through expenditure control panels.

So looking at all PO's, are we really getting the best out of every pound that we spend?

So that had two prong action. One is to really raise a culture of awareness across the council,

So, budget holders understand when we go and procure things, are we really doing it to

get the best for the community and for the residents?

So those are the key actions we put in place.

The other element was to see limited resources, obviously, across the country.

We looked at what other strategic resources could we utilise as a one -off to get through

this year.

So, for example, utilisation of where applicable, Section 106 or CIL funding substitutions.

With that in mind, we also, as part of the MTFS process, we are looking at structural deficits and providing for those, especially in homelessness, social care and transport.

So I think with these issues we came together as a corporate team to really put those actions in place and we are going to be reporting as part of Q2 how we are progressing against those actions.

That's the first one.

The second one, the enforcement, I'm trying to find what that page is.

Is that the income collection?

It's probably...

The Enforcement Monitoring Officer...

Yeah, so the other thing is the resource capacity on that one.

So we are looking at, again, to find different ways to collect income and debt.

So instead of relying on enforcement officers, we are looking at systems.

We are looking at working with the cabinet office to really put in place ways to collect debt

by attachment of earnings, for example, against council tax.

So that is something we are working through at this moment.

We had a paper presented to scrutiny that's coming back to cabinet

to really show what those action plans are to enable us to do that.

May I follow up? Thank you.

On the revenue overspend, are you saying that the reason it's so high, the current risk

is so high, is because of adult social care and other factors?

It's less to do with the mitigation that's in place?

So it's a combination.

So demand, I think, for homelessness, for example, adult social care is quite high across

the country.

So we did have mitigations in place at the time, but we've kind of extended that, we've accelerated.

So we've come up, corporate directors were tasked to come up with robust mitigations that are quantifiable.

We do have a weekly spending review panel where each corporate director comes and talks about their mitigations and how that's progressing,

and if there's any slippage or risks that gets mitigated across the piece. So it's a combination of both.

Maybe I'll put it a different way then.

What else can officers do in order to mitigate that risk further, to make that risk score go further down?

What is it within the power of officers and managers to reduce the risk score?

As I mentioned earlier, Councillor Baskin, he's looking at, for example, our policies, that's one.

what other income can we get to enable us to help us control those expenditures.

But also it's looking at how do we manage the demand from the front line services.

So there's a multitude of actions that we are working together at the moment to enable us to do that.

But corporately, other services that are not demand -led, for example,

what else can they do as a corporate team to really address this corporate issue?

So for example in resources where I don't need to spend money this year, I don't spend

it.

And where I can get something cheaper if I had a contract that was costing us more, we

try to look for alternative ways to enable us to underspend so we can help with this

corporate ask.

There are risks, exogenous risks that are out there in terms of needs, demands and so

on, and the economy.

There are risks in the management controls, the effectiveness of the management controls

that mitigate these risks.

And then there are risks of the mitigations themselves.

So this is a layered thing.

It seems to me that the risks you describe, I truly understand and appreciate the work

What I would say is that there is no such thing as an individual risk to this person,

to that person, to this department, to that department, because the council is corporately

responsible.

Anything happens is the council's responsibility, not this department, this team, this whatever.

And I think that underlies the need for a heat map that describes risks generally across the piece for the whole council

and those that are the most urgent and pressing which actually can be controlled to some extent

and others that may not be, may be foreseeable and not controllable.

My final point on this, and this is really about how you develop this further,

my final point is also 200 pages later there's the risk strategy which you're asking us to agree.

I think it's a sound approach to risk. The only thing I would say is that the risks that we're here to prevent

our risk to the public, not to the council's delivery of its services, not to the council's

finances. They're actually secondary because we must do that in order that we can protect

the public. And I said to David earlier about the importance of having risk to the public

because the prevention of harm, the prevention of insecurity, the prevention of, well, it's

extreme risk, necessity for community resilience in terms of external shocks, these things

are really important and it's not just the risks to this institution. As an audit committee

we must be concerned about the risks to the institution but the institution exists for

a purpose which is to deliver services to people or manage projects or manage policy

programmes, it's the risks to those people that we also must somehow, I don't know whether

it's through the use of archetypes or through the use of other things, but think through

how do we demonstrate that we're both not just focusing on risks to our reputation in

delivering something, but actual risks to the public.

I mean, obviously, given my background, this is something that I became extremely aware

of in the last few years.

So in the future, but it seems to me that the internal, the risk management strategy

and framework you're asking us to agree, which is on page 243 onwards, I think that's reasonably

sound.

Did people agree with that or they want to question that?

I do agree.

I just had one question for clarification.

I didn't quite understand the categorisation of risk appetite for contracts and partnerships

as seek.

I got it for the innovation, but it would just help for someone to explain to me why

you would seek out higher risk for contracts and partnerships.

Yeah, thank you.

So I didn't mention this in my initial presentation.

So critically this strategy takes us further forward by introducing the concept of risk

appetite, which is described on pages I think it's 251 and 252, which basically means that

for a given category of risk we're looking to manage it within a certain level.

What you're seeing there in terms of some of the narrative I think is just draught.

So I think when we actually come to codify and properly implement risk appetite,

that will be a discussion that we will have with CMT,

we'll properly set those risk appetite levels in conjunction with discussions with officers.

It is quite difficult because we don't want a proliferation of categories that catch everything,

so some things do have to be quite general.

So there is a sort of a balance there to be struck between what appetite level

how we categorise different risks.

But that's something we'll take for this is just a draught in terms of this particular

element.

So once that's happened it will come back here?

Absolutely, yeah.

Okay.

Thank you.

So we have a motion to approve the audit committee work plan.

We're noting that?

Okay.

Any other business that the chair considers urgent?

No.

Thank you very much.

Thank you. Thank you

Please leave feedback relating to the quality of the webcast (i.e. audio visual elements) only. Comments relating to conduct or contributions of attendees or political statements will be deleted.

Required field

Name

Comments

Need an accessible hCaptcha?
Check available options.
Sign up to hCaptcha or Log in to hChaptcha.

By clicking Send feedback, you agree that Tower Hamlets London Borough Council and Public-i can use the information above to review your feedback and contact you about it. See our Privacy Policy for more details.

Audit Committee - Wednesday 3 December 2025, 6:30pm - Tower Hamlets Council webcasts

Audit CommitteeWednesday, 3rd December 2025 at 6:30pm

Agenda

Slides

Transcript

Map

Resources

Twitter

Forums

Speakers

Leave a comment on the quality of this webcast

Votes

Audit Committee
Wednesday, 3rd December 2025 at 6:30pm