Agenda item

To consider the Annual Report on the System of Internal Control and the continued developments in overall internal control and financial administration across the Council.

The Committee considered a report of the Head of Audit and Counter Fraud, the purpose of which was to provide Members with the Annual Report and Opinion for 2025/26 on the Systems of Governance and Internal Control for the year ended 31^st March 2026.

The report summarised the work of Internal Audit and Counter Fraud Team carried out for the financial year 2025/26, which informed the Annual Report and Opinion of the Head of Audit and Counter Fraud on the System of Internal Control for the year ended 31^st March 2026.

The Annual Report for 2025/26 had the following sections:

·       Appendix 1: Annual Report and Opinion of the Head of Audit and Counter Fraud on the System of Internal Control for the year ended 31^st March 2026, to assist the Committee’s review of the 2025/26 Annual Governance Statement (AGS) and to assist with the review of the Statement of Accounts.

·       Appendix 2: Counter Fraud Service comparative data 2021/22 to 2025/26.

The Internal Audit and Counter Fraud Plan for 2025/26 was developed based on an assessment of risks to the Council, including those contained in the Corporate Risk Register. The Annual Audit Plan aimed to provide assurance to the Chief Executive and other senior officers of the Council, including key Statutory Officers (Section 151 and Monitoring Officers), on the systems and controls in place that assist the Council in meeting its objectives.

This work allowed the Head of Internal Audit and Counter Fraud at Oldham Council to form an overall opinion on the Governance and Internal Control arrangements within the Council, and the effectiveness of those systems.

The opinion also considered any advisory work undertaken during the year.  High priority findings from such reviews contributed to the overall opinion that is reported. This opinion is then used to support the production of the Council’s Annual Governance Statement (AGS) within the Statement of Final Accounts for the Financial Year 2025/26.

The report also sets out the framework that was used to arrive at the Annual Opinion on the Systems of Governance and Internal Control, and key audit findings for the year.

Following on from the Limited assurance opinion received by the Council for the financial year 2024/25, senior leaders and Members have focussed substantial management and oversight resources to ensure that progress against the areas highlighted in the 2024/25 Annual Governance Statement.

Significant progress was reported by Services across the majority of areas highlighted in the Head of Internal Audit’s Annual Report and Opinion for 2024/25.  Which reflected the clear organisational commitment to strengthening governance, risk management and internal control arrangements.

However, some of these improvements and progress had been realised towards the latter part of the 2025/26 financial year, and some remained ongoing into 2026/27. The benefits of these improvements in terms of outcomes are expected to become fully embedded and evident during 2026/27 and future years.

·                Independent validation of service reported progress has been undertaken where possible.  In some areas full assurance was still being established, mainly as a result of the timing of the implementation of the audit recommendations during the latter part of the year.

·                A number of services were continuing to develop with further progress linked to enabling improvements, including those associated with further work in connection with the development of ICT.

As a result, the overall conclusion and Annual Audit Opinion was that the Council’s systems of governance and internal control during 2025/26 continued to provide Limited assurance.  However, the Committee was advised, that there was a clear implementation plan in place and a positive trajectory of improvement and, should the current momentum be sustained throughout 2026/27, there was an expectation that assurance levels would improve in coming years. 

There were no impairments to the independence or objectivity of the Head of Internal Audit in arriving at this opinion.

It was noted that neither the Council’s Corporate Risk Register nor the Contracts Register were presented to the Audit Committee during 2025/26. The effective management of risk was considered to be a fundamental pillar of good governance. Therefore, it was agreed that both should be added to the Committee’s 2026/27 Work Programme.

Resolved:

1.    That the Audit Committee notes the Members are requested to note the Annual Report on the System of Internal Control presented by the Head of Audit and Counter Fraud.

2.    That the Audit Committee commends the continued developments in overall internal control and financial administration across the Counci, whilst aknowledging that some services have considerable work to do.

3.    That items relating to the Council’s Corporate Risk Register and the Contracts Register, be added to the Committee’s Work Programme for 2026/27.