Agenda and draft minutes

An apology for absence was received from the Independent Member Anumesh Chandra.

To approve the record of the meeting held on 11 September 2025.

The record of the meeting held on 11 September 2025 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 informs Members of the new failure to prevent fraud duty, the results of a self-assessment against Home Office guidance relating to the offence of Failure to Prevent Fraud, and the actions that have been proposed to provide the Council with assurance.

The Head of Internal Audit and Counter Fraud introduced the report. He explained The Economic Crime and Corporate Transparency Act (ECCT) 2023 introduced a new offence of failure to prevent fraud. The offence occurred where a large organisation benefits from the fraudulent activity of an employee or other associated person and the organisation had failed to put in place reasonable procedures to prevent fraud. The service had undertaken a self-assessment against  Home Office guidance for the Council, the results of which were positive. Some actions had been identified which would strengthen counter fraud measures already in place.

The following issues were discussed:

(Local Authority Trading Companies) LATCOs – in response to a question whether the LATCOs were undertaking a similar review, the Head of Internal Audit and Counter Fraud stated that he had undertaken some work with the LATCOs and would meet directors as required. He was aware they were undertaking a governance assurance self-assessment which would be considered by the relevant Shareholder Boards. The LATCOs could request the Council to undertake the assessment against Home Office guidance, however, this would be chargeable.

Training – further information was requested in relation to awareness training for staff. The Head of Internal Audit and Counter Fraud stated that the Council was considering online training options which could be made mandatory through Meta Compliance. This format of training had been used by other services to provide to staff in other areas. The Service would also continue to offer tailored sessions for specific teams as necessary.

Resources – it was asked what resources had been required to undertake the self-assessment as the likelihood of an issue to the Council was low. The Head of Internal Audit and Counter Fraud explained that he could not provide a figure in terms of level of resource required, however, although the likelihood of the Council being the beneficiary of fraud was low the impact could be high with potential for unlimited fines. In addition, the self-assessment provided opportunities for the Council to strengthen its Counter Fraud measures, so it was a useful exercise.

A Member asked if the Council had the necessary resources to undertake proposed action 4: review contracts with third parties. The Head of Internal Audit and Counter Fraud stated that he did not know how many such contracts would require review, however, the Council would need to reassure itself that the third parties delivering services had appropriate anti-fraud measures in place.

It was asked if there was a cost associated with membership of the CIFAS Insider Threat Database as suggested in Action 8. The Head of Internal Audit and Counter Fraud acknowledged that there would be a cost incurred, however, it was proposed to explore the benefits of membership, and no decision had been taken. Membership of the database would assist in identifying candidates who may have a record of poor conduct at recruitment stage which would reduce the Council’s risk of exposure.

Review – in response to a question whether the self-assessment would require  ...  view the full minutes text for item 409.

This report presents an update to the progress of the audit of the Council’s Statement of Accounts for the financial year 2024/25 from Medway Council’s External auditors, Grant Thornton as at the end of September 2025.

Discussion:

The Chief Operating Officer introduced the report, he highlighted that the Audit was 45% complete, and officers continued to work in preparation of Auditors resuming their work in January.

The Director, Grant Thornton highlighted the progress report at appendix one to the report, there was a statutory deadline to complete the audit by February 2026. However, the statutory deadline would move earlier in the year with the backstop for the 2025-26 audit in January 2027.

The following issues were discussed:

Progress – it was commented that there remained a number of outstanding audit items marked red, it was asked whether the auditors were content with progress. The Director, Grant Thornton stated that there had been progress made compared to this time last year and the remaining work was in his view achievable. In terms of the outstanding work some areas were of more concern than others, for example leases was a new standard, so it was important to be able to set a standard for that area. In other areas such as property, plant and equipment the authority could gain assurance in other ways.

The Chief Operating Officer added that the Council acknowledged that it did not have all the evidence it needed and was working to obtain the evidence required. In terms of leases, this was a new standard, and the Chief Operating Officer acknowledged the Council did not have the did not have the necessary information in place and needed to improve. There had been some staffing issues in the finance department, and a review of department would be undertaken to strengthen resilience within the Corporate Finance section.

It was asked whether there was adequate communication between the Council and the auditors, the Public Sector Audit Senior Manager stated that the auditors were in regular contact with the finance team and senior officers, and updates were provided on a fortnightly basis.

Journal – concern was expressed regarding the number of staff which had access to post finance journals as stated in the progress report (page 40 refers). The Chief Operating Officer undertook to investigate and provide information to the Committee following the meeting.

Fees – in response to a question whether the additional work the auditors had undertaken would result in an increase in fees, the Chief Operating Officer stated that the government had provided a grant to facilitate additional work required to regain assurance, however, it was not clear whether this would be enough or additional funds would be required. The Director, Grant Thornton added that there was a balance between the work to be undertaken and cost implications and that would be considered as required. It was requested that the Committee be updated whether this would involve a streamlining of audit processes and the Chief Operating Officer undertook to update the Committee on any changes to works undertaken due to costs.

Lessons learned – in response to a question what lessons had been learned from this year’s audit for the future, the Chief Operating Officer  ...  view the full minutes text for item 410.

This report gives an overview of treasury management activity since 1 April 2025 and presents a review of the Treasury Strategy approved by Council on 27 February 2025.

Discussion:

The Finance Business Partner introduced the report and provided an overview of Treasury activity for the year. Key indicators showed that borrowing remained below the capital finance requirement.

Interest Rates and gilts remained higher than expected, so the Council continued to pursue a short-term borrowing, with £221m remained owed in short term borrowing and £106m repayable this financial year. As interest rates fall, the Council would take opportunities to smooth the debt maturity.

Investment performance continued as expected, in terms of property investment, the Patriza Hannover Property Unit Trust performance was being carefully monitored, and the Council would consider its options.

The following issues were discussed:

Risk – in response to a question whether higher than expected interest rates there was additional risk to Council investments, the Finance Business Partner - technical accounts stated that the Council received updates from treasury advisors on a daily basis, and would act on their advice.

Capital Programme – it was asked whether the higher cost of borrowing would trigger a review of the Capital programme. The Chief Operating Officer stated that he would discuss the programme with the administration when borrowing was required to fund the programme, however, there was no formal trigger which would necessitate a review. Treasury Advisors provided regular advice and had a clear understanding of the Council goals.

Interest and Finance Budget – further information was requested regarding the interest and finance budget position. The Chief Operating Officer stated that interest rates had not fallen as expected and as such an increase in costs and consequently pressure on the budget was likely to be reflected in quarter three monitoring reports.

It was asked if the authority could manage a debt repayment of £10m a month, the Business Finance Partner stated that a little over £10m repayment was being paid. The Chief Operating Officer explained that he had concerns about the level of short term debt being carried, however, it was a result of the economic environment and outside the control of the authority.

Capital Receipts – it was asked whether the Council was meeting expectations in disposal of assets to realise capital receipts. The Chief Operating Officer stated the Council expected to achieve £7m of Capital receipts in 2025 and £25m in 2026 which would represent a good performance. The disposal of property was based on whether the asset was, or could delivering value to the Council. Properties which did not deliver value would be subject to disposal.

A Member expressed concern at the level of borrowing, the Chief Operating Officer stated that unlike some other authorities, borrowing had been to fund a number of significant projects and was held against a number of assets. In addition, projects such as purchasing homes for Temporary Accommodation would ease pressure on ongoing revenue budgets and some investments such as Cozenton Park were performing better than expected.

The Chief Operating Officer acknowledged an ongoing concern regarding the level of working capital available with more monies owed to the Council by third  ...  view the full minutes text for item 411.

This report sets out the Chairperson’s Annual Report 2024/25.

Decision:

The Committee noted the report