Agenda and draft minutes

Apologies for absence were received from Councillors Browne and Clarke.

To approve the record of the meeting held on 30 July 2026.

The record of the meeting held on 30 July 2026 was agreed and signed by the Chairperson as correct.

The Chairperson will announce any late items which do not appear on the main agenda but which she has agreed should be considered by reason of special circumstances to be specified in the report.

There were none. 

Members are invited to disclose any Disclosable Pecuniary Interests or Other Significant Interests in accordance with the Member Code of Conduct. Guidance on this is set out in agenda item 4.

Disclosable pecuniary interests

There were none.

Other significant interests (OSIs)

There were none.

Other interests

There were none.

This report provides this Committee an update on the progress in Grant Thornton delivering their responsibilities as the Council’s external auditors.

Discussion:

The Head of Corporate Accounts introduced the report which had been provided by external auditors and updated the Committee on the progress of the 2025-26 audit.

The Director, Grant Thornton stated that there had been progress made in some areas and work in relation to capital receipts had been completed this week. However, challenges remained, a review of progress had been undertaken, and a number of technical questions raised with the finance team.  The report highlighted areas those area where less progress had been made and the reasons for this. In particular, there was a lack of specialist knowledge in the team regarding Group Accounts and staffing issues had slowed progress in some areas.

Further meetings would be held between auditors and the Council to consider what worked remained outstanding, and what could be done prior to the January deadline for the audit.

The following issues were discussed:

Progress –  a Member raised concern that there had not been significant progress of the audit compared to last year and he commented there had been disclaimer opinions for the last four years. He asked whether the Council continued to have difficulty in obtaining relevant transaction information. The Director, Grant Thornton stated that progress had been made in the Corporate Finance Team, and that many of the challenges were outside of the direct control of the finance department.

The Head of Corporate Accounts stated that the audit had run more smoothly than last year, so progress had been made. However, the Finance Team were reliant on the information provided by services across the Council which was not always of the necessary quality. Finance continued to work with auditors to improve the information available.

The Chief Operating Officer added the Committee had previously discussed the work that was undertaken to improve the quality of information including greater responsibilities for Finance Business Partners to scrutinise transactions. The work had been undertaken part way through last year, so issues remained. The team had not reviewed whether information had improved for transactions since January, and this was something the team could consider to ensure practice had improved.

A Member asked if the Finance Team need greater resources, the Director Grant Thornton stated that some funding was available to the Council to complete some of this work. However, funding had not had the effect initially hoped for so there had been a pause in the additional funding.

The Chief Operating Officer stated that he had put in place greater resources to support the team, the Council had recruited a Chief Finance Officer and a Head of Financial Planning and Business Partnering. The team had also benefited from temporary additional senior resources. Whilst the team had the necessary skills, it was a lean team with a number of specialists, so sickness or staff absence was a significant issue. There was a development programme in place to create further resilience. Discussions had taken place regarding the structure of the team. There were concerns regarding the financial sustainability of  ...  view the full minutes text for item 300.

This report explains the requirements for reporting and approving an Annual Governance Statement (AGS) covering the financial year 2025/26 and asks Members to approve the Statement.

Discussion:

The Head of Legal Services introduced the report. She highlighted the   changes which had been made to the 2024-25 statement which included the CIPFA Financial Management Code (2019). In addition, a survey of requirements had been sent to each service manager to share with teams to ensure that governance was a thread which ran through the organisation.

The following issues were discussed:

Geography based tendering – a Member requested further information on the reference to geography-based tendering. The Head of Legal Services explained that the term referred to the scoring of tenders and the role played in promoting the local economy, however, the Head of Procurement would be able to provide more detailed advice.

Changes from last year – in response to a question what had changed in the last year, the Head of Legal Services explained that the Annual Governance Statement was shared more widely across the authority including through senior management and Members and responses sought before publication. Managers were also required to ensure that staff were aware of the requirements of the Annual Governance Statement and the policies which supported it.

FIT plan – it was asked whether the savings highlighted in the FIT plan were fully realised, the Chief Operating Officer stated that the Council made assumptions of savings, the FIT plan measured and monitored that those savings were realised. Future monitoring reports to Overview and Scrutiny Committee and Cabinet would more closely link budget monitoring to the savings made in the FIT plan so Members could receive assurance that those savings were fully realised.

Collaborative working – a Member commented that collaborative working across departments remained a remained a challenge and asked whether processes were working effectively to promote this from a governance perspective. The Chief Operating Officer stated that in his opinion remote and hybrid working was negatively affecting collaborative working and productivity and it would be something the Council needed to consider.

Survey - it was asked what feedback had been received from managers and Members regarding the consultation in relation to Annual Governance Statement. The Head of Legal Services stated there had been no significant concerns raised. However, managers sharing the requirements of knowledge of policies under the Annual Governance Statement with their team had been positively received.

Decision:

a)     The Committee commented on and approved the Annual Governance Statement.

b)     The Committee delegated authority to Assistant Director of Legal and Governance, in consultation with the Chairperson of the Audit Committee, to make minor changes to the documents prior to signing by the Leader of the Council and the Council’s Chief Executive.

This report informs Members about the number and nature of concerns raised, between September 2025 and August 2026, under the Council’s Speak up (whistleblowing), Anti- Bribery, Anti-Money Laundering and use of Regulation of Investigatory Powers policies.

Discussion:

The Head of Legal Services introduced the report. She noted that the had been one case reported under the Speak Up policy which had been managed appropriately. There had been no reports of Anti money laundering or instances of RIPA.

The following issues were discussed:

Speak Up Policy – a Member asked what reassurance could be provided to the Committee that staff were aware of and confident reporting under the Speak Up policy. The Head of Legal Services stated that it was impossible to prove a negative, however, the Committee could be reassured that staff were aware of the policy and this had been strengthened through the requirement outlined in the Annual Governance Statement that staff were aware of, and policies were shared at team meetings.

The Head of Internal Audit and Counter Fraud added that the Speak Up policy had specific qualifying disclosures, each concern raised was considered by a group of Senior Staff and a number of concerns had been raised which were ultimately dealt with under other procedures such as grievance. The Committee could be reassured that staff were coming forward.

Decision:

The Committee noted the report. 

This report informs Members of the Internal Audit work completed during 2025-26 and presents the opinion of the Head of Internal Audit & Counter Fraud Shared Service, as Chief Audit Executive, on the Council’s internal control environment.

Discussion:

The Head of Internal Audit and Counter Fraud introduced the report which set out performance of the Internal Audit team for 2025-26. He highlighted his independent opinion as Chief Audit Executive on the adequacy and effectiveness of the Council’s framework of governance, risk management, and internal control. The Head of Internal Audit and Counter Fraud confirmed that he was satisfied that reasonable assurance could be placed upon the Council's corporate governance arrangements, although further work was required to improve consistency and strengthen compliance monitoring arrangements.

87% of reviews had been completed during the year against a target of 95%. Weaknesses found in reviews had been accepted by the relevant service and 57 of 83 recommended actions had been completed. He added that a new section which used AI to analyse themes and root causes of weaknesses had been added this year.

The following issues were discussed:

Private Housing Enforcement  - it was asked if the root cause of weaknesses identified in the private housing enforcement review was resourcing. The Head of Internal Audit and Counter Fraud stated that the service had indicated resourcing and capacity were an issue during the audit. Actions identified in the audit had been accepted and were being addressed by the service.

Manual processes – it was asked whether there was an over reliance on manual processes in the team which could be undertaken by AI. The Head of Internal Audit stated that AI could provide some additional speed in undertaking certain reviews and automation would provide some efficiencies. This would be considered by the team as opportunities arose.

Rough Sleeping -  further information was requested regarding the rough sleeping review, and the significant challenges identified. The Head of Internal Audit and Counter Fraud stated that although there had been some high-priority actions identified in the review, overall, the review was not subject to a red opinion. The Internal Audit plan was focused on the highest areas of risk to the Council which included areas which required significant financial resources such Temporary Accommodation.

Policy work – in response to a question how much of the policy development work was undertaken by the policy team the Chief Operating Officer stated that the policy unit was focused on horizon scanning for policy from central government and ensuring the Council’s strategic plans were consistent with delivering the Council Plan objectives. Some of the impetus of the policy team was Local Government Reorganisation, although that work was currently paused, the day-to-day policy development remained within the relevant service.

Partnerships with Schools – further information was requested in terms of how follow up work, in particular with local schools, was managed. The Head of Internal Audit and Counter Fraud stated that a great deal of work had been undertaken with schools to improve relationships. Internal Audit provided feedback and advice on good practice to support local schools and relationships were more positive now than when the Shared Service was initially implemented.

Decision:

a)     The Committee noted the work undertaken by  ...  view the full minutes text for item 303.

This report provides Members with an update on the work, outputs, and performance of the Internal Audit Team for the period 1 April to 31 July 2026.

Discussion:

The Head of Internal Audit and Counter Fraud introduced the report. He highlighted that 3% of the planned work had been delivered by 31 July with a further 22% underway. The relatively low figure was due to the completion of work from the previous year, as of 10 September 44% of work was underway with a number of reports due to be finished shortly.

The following issues were discussed:

Loss of resource – a Member commented that more resource had been lost than expected due to carried over annual leave being taken during the quarter. He asked for clarification on the annual leave policy. The Head of Internal Audit and Counter Fraud stated that annual leave taken was within policy which allowed for three days of annual leave to be carried forward, or five days with director approval. The resource estimates were calculated around January/February, which is before the end of the leave year. A greater amount of leave was carried forward than was estimated for the resource budgets.

Norse – a Member requested further information in relation to the governance of Norse, the Head of Internal Audit and Counter Fraud stated the company undertook a self-assessment which the Internal Audit team independently assessed and validated in line with best practice. Norse did not provide all the relevant evidence at that time due to commercial sensitivity, a report with additional information would be presented to the Shareholder Board in the near future.

IT Controls – a Member asked what conversations had taken place to ensure an effective disaster recovery policy was in place. The Head of Internal Audit and Counter Fraud stated that the audit was ongoing and it was recognised that it was an area of high risk for the Council.

Actions –  the Independent Member noted that 30% of recommended actions had not been completed, he asked what action could be taken to improve rates completion of recommended actions following reviews. The Head of Internal Audit and Counter Fraud stated that the number of outstanding actions was relatively small with only sixteen in total. However, the team followed up actions on a monthly basis and divisional and directorate management teams received quarterly reports.

Decision:

The Committee noted the outputs and performance against the Internal Audit Plans for Medway for the period 01 April to 31 July 2026 as detailed at Appendix 1.

This report presents for approval the Internal Audit Plan (Q3-Q4) 2026-27.

Discussion:

The Head of Internal Audit and Counter Fraud introduced the report. He highlighted that the plan was focussed on areas of highest risk for the Council.

The following issues were discussed:

Finance Audit – it was asked whether the team could consider work to support the finance team in completing the external audit. The Head of Internal Audit and Counter Fraud stated that the Internal Audit Team planned to undertake a review related to the preparation of final accounts.

Decision:

The Committee approved the Internal Audit Plan (Q3-Q4) 2026-27 presented at Appendix 1.

This report informs Members of the results of Counter Fraud work completed during 2025-26.

Discussion:

The Head of Internal Audit and Counter Fraud introduced the report. He highlighted some of the work the team had undertaken during the year which included proactive work with parking services which enabled the recovery of twenty-four blue badges. The report provided a summary of investigations during the year which included a successful prosecution where monies owed to the Council was recovered. 

The following issues were discussed:

Prosecution – further information was requested in relation to the successful prosecution of a contractor, it was asked how the issue had come to light and whether the team would investigate if there were similar cases with other contractors. The Head of Internal Audit and Counter Fraud stated that a discrepancy had been identified in a management check which had led to further investigation, the team had investigated whether the issue could be replicated for other contractors but were confident this was an isolated case.

He added there had been another successful prosecution related to SEND transport, which had recently received some publicity. However, sentencing  had not yet taken place and he would update the Committee when that had taken place if monies were recovered.

Resources – in response to a question whether there was a case to expand the team given the success of the team, the Head of Internal Audit and Counter Fraud agreed there was a case to increase resources for the team, however, only an increase in the number of cases investigated could be guaranteed; any increase in resources would not necessarily result in a proportionate increase in fraud savings as he could not guarantee the outcomes of investigations.

Automation – the Committee discussed opportunities for automation. The Head of Internal Audit and Counter Fraud stated that he was considering opportunities for further automation such as monitoring tasks, however, there was a need to get data protection rules right. The team had recently recruited someone with skills in digital technology, so it was something which the team would consider in more detail in the future.

Decision:

The Committee noted the work undertaken by the Counter Fraud team for Medway during 2025-26 in providing an effective service to the Council.

This report provides Members with an update on the work, outputs, and performance of the Counter Fraud Team for the period 01 April to 31 July 2026.

Discussion:

The Head of Internal Audit and Counter Fraud introduced the report. The team had undertaken proactive awareness and prevention work with services such as Children’s and Adults Social Care, IT and Parking during the period. They had also taken part in the Medway Live events which been held for staff during the summer.

Sixteen investigations had been completed from 1 April up to 31 July, the cashable savings at the time of the report were relatively small compared to previous years, however he expected this to increase significantly over the next month as Council Tax investigations progressed.

The following issues were discussed:

Data Protection requests – in response to a question whether the number of information requests the team handled was increasing, the Head of Internal Audit and Counter Fraud stated that the team received between 70-100 requests a month from police and other authorities, the team acted as a single point of contact for the Council for those requests because it had significant experience of dealing with Data Protection so had expertise in dealing with the legislation in an accurate and timely manner.

It was asked if there were opportunities to expand automation in this area, the Head of Internal Audit and Counter Fraud stated that every data request was different, so it required judgement and the potential for automation was limited.

Decision:

The Committee noted the outputs and performance of the Counter Fraud Team for Medway for the period 1 April to 31 July 2026 as detailed at Appendix 1.

This report summarises the content of a report which, in the opinion of the proper officer, contains exempt information within one or more of the categories in Schedule 12A of the Local Government Act 1972. It is a matter for the Committee to determine whether the press and public should be excluded from the meeting during consideration of the report.

Decision:

The Committee decided to exclude the press and public during consideration of the following report: Notification of a red audit opinion, because consideration of this matter in public would disclose information falling within one or more of the descriptions of exempt information contained in Schedule 12A to the Local Government Act 1972, as specified below, and, in all the circumstances of the case, the public interest in maintaining the exemption, outweighs the public interest in disclosing the information.

This report notifies Members of a Red audit opinion following a review.

Discussion:

The Head of Internal Audit and Counter Fraud introduced the report. He highlighted this was the second red audit in relation to the area, and the audit raised similar concerns as to the previous audit.  The service had developed a plan to address weakness, however as of the end July 2026 six actions were overdue.

The following issues were discussed:

A Member commented that the situation was unacceptable and proposed that the Director attend a future meeting of the Committee to address those issues.  It was agreed that the Director of Children Services and Assistant Director Children’s Care attend the next meeting of the Audit Committee.

Decision:

a)     The Committee noted the report.

b)     The Director of Children Services and Assistant Director Children’s Care be invited to the October meeting of the Committee.