Agenda item

Report of the Assistant Director of Governance

The Audit Committee considered a report of the Assistant Director of Governance which provided Members with assurance that processes and strengthened oversight were in place for the effective management of member allowances. The report also provided an update, as previously requested by the Committee, on the position of the underpayments and overpayments of Members’ and former Members’ Allowances between 2022/23 and 2024/25, following the review and quality assurance exercise which had identified historic discrepancies.

In October 2025, the Audit Committee had considered an earlier report on the administration of Members’ Allowances, following a review and quality assurance exercise which had identified historic discrepancies affecting both serving and former Members, including instances of underpayments and overpayments dating back to the 2022/23 financial year.

The review found that these issues had arisen from systemic weaknesses in processes, controls and communication between Democratic Services, Finance, HR and Payroll. The responsibility for applying, administering, and ensuring compliance with the scheme rested entirely with officers, because once full Council had approved the Members’ Allowance Scheme, Members had no further involvement in its operation or implementation. Key issues included inconsistent application of payment dates, incorrect allowance rates, insufficient record?keeping (particularly in relation to Members who forwent allowances) and a lack of robust quality assurance arrangements.

The position in relation to overpayments and underpayments identified across the past three municipal years shows a mixed level of progress across former members, newly retired members, and current members.

For former members (28 cases in total), seven cases have been fully resolved, with identified underpayments now settled. In relation to overpayments, 14 cases are currently awaiting confirmation of net amounts from Payroll, which is required before repayment arrangements can be discussed and agreed. Additionally, four former members have not responded to correspondence to date, all related to overpayments. Two former members impacted by this issue had sadly passed away before the review was concluded.

Amongst the former Members who retired in May 2026 (16 cases in total), seven individuals had repayment plans in place prior to retirement, six of those are settled and require no further action, while officers are in the process of collecting the outstanding balance from one individual. Discussions are ongoing with a further six individuals to agree appropriate repayment arrangements. However, there remain three newly retired members who have yet to respond, in these cases officers have asked Group Leaders for their assistance in contacting these members.

For current members (45 cases in total), forty-one individuals have concluded their case, with either repayment plans in place or the debt settled. Four cases remain in progress, with repayment arrangements under discussion.

A series of actions had since been implemented to strengthen governance and to reduce the risk of recurrence. These included the introduction of clear rules for payment start and end dates, improved processes and audit trails between services, independent verification of allowance rates, increased communication with Members, and the establishment of regular quality assurance and internal audit activity.

Resolved:

1.    That the Audit Committee notes the report and the progress being made to strengthen internal controls, together with the position related to underpayments and overpayments for Members’ and Former Members’.

2.    That a further update report, on this matter, be presented to the Committee in approximately six months.