Apologies were received from Councillors Greg Ebbs and Mark Owen.

Members are reminded that they must declare their disclosable pecuniary interests and other registrable or non-registrable interests in any matter being considered at the meeting as set out in Appendix B of the Members’ Code of Conduct and consider if they should leave the room prior to the item being considered. Further advice can be sought from the Monitoring Officer in advance of the meeting.

Members were reminded that they must not participate in the discussion or voting on any matter in which they have a Disclosable Pecuniary Interest and should leave the room prior to the commencement of the debate.

The Minutes of the meeting held on the 15 July 2026 are attached for confirmation. 

Contact Michelle Dulson (01743) 257719

RESOLVED: 

That the Minutes of the meeting of the Audit & Governance Committee held on the 15 July 2026 be approved as a true record and signed by the Chairman.

To receive any questions from the public, notice of which has been given in accordance with Procedure Rule 14.  The deadline for this meeting is 12noon on Monday 21 September.

A public question had been received from Mr Graham Layton.  The Head of Policy & Governance read the question, and the Chair provided the response on behalf of the Committee.

A full copy of the question and response provided are attached to the web page for the meeting.

To receive any questions from the public, notice of which has been given in accordance with Procedure Rule 14.  The deadline for this meeting is 12noon on Monday 21 September.

There were no questions from Members.

The report of the Chief Executive is attached.

Contact: Tanya Miles (01743) 255811

The Chief Executive introduced a report providing an update on governance improvement activity over the past 12 months, highlighting work undertaken to strengthen governance, accountability, risk management, internal control and insurance arrangements across the Council. It was reported that the Council had received a limited assurance opinion on its governance and control framework for a period of seven years, and that addressing this position remained a key organisational priority. The report acknowledged both progress made and the ongoing scale of required improvement. It was emphasised that governance arrangements remained in transition and that sustained effort would be required over time to embed change across the organisation.

The Chief Executive outlined a series of actions already implemented, including the introduction of regular statutory officer meetings, the establishment of a governance group chaired by the Chief Executive, strengthened oversight of performance, risk and compliance, improved engagement with internal and external audit, and a review of the Constitution and scheme of delegation. It was further noted that a revised senior leadership structure and recent senior appointments were intended to strengthen corporate capacity, improve accountability and provide clearer leadership for organisational improvement.

The Chief Executive explained that governance improvement was closely linked to wider organisational transformation, financial sustainability and the Council’s response to external assurance and challenge. A more coordinated corporate approach was described, with increased visibility of governance issues and improved escalation routes enabling earlier intervention where required. Reference was made to emerging evidence of improvement, including increased engagement from services, stronger ownership of governance issues, and improved tracking of risk and compliance matters.

In response to questions regarding cultural change, a member expressed concern that improvements may not be embedded across all levels of the organisation and that organisational culture and underlying values required further attention, particularly within frontline services. The Chief Executive acknowledged that cultural change was central to the improvement programme and stated that the focus extended beyond behaviours to organisational values and expectations. It was noted that a structured programme for managers was being implemented, setting out clear expectations regarding performance, behaviours and accountability. It was also stated that some individuals may require additional support or reassessment of their suitability for roles where expectations were not met. The Chief Executive added that a staff engagement survey (“pulse survey”) was being introduced and that a temporary dip in performance in some areas was anticipated as the organisation adjusted to increased expectations.

Clarification was requested on how independent oversight from the Audit and Governance Committee would interact with the Council’s governance group, particularly in terms of access and engagement. The Chief Executive confirmed that the Chair of the Audit and Governance Committee, along with the Vice-Chair, would be welcome to attend the governance group and that further discussions would take place to strengthen joint working and improve responsiveness to governance issues.

A further question was raised regarding how the success of governance improvement would be measured and how the Committee would be assured that progress was being embedded. In response, the  ...  view the full minutes text for item 38.

The report of the Interim S151 Officer is attached.

Contact: Duncan Whitfield (01743) 254928

The Committee received the report of the Section 151 Officer’s which provided an update on the External Assurance Review linked to the Council’s application for Exceptional Financial Support for the 2026/27 financial year. It was explained that approval of the support had been subject to an independent appraisal commissioned by the Department for Levelling Up, Housing and Communities and undertaken by CIPFA, which had been completed earlier in the year and subsequently published following ministerial consideration.  The Section 151 Officer summarised that the findings of the review were highly critical, reflecting the scale of the Council’s financial challenges, including a significant adverse budget variation of approximately fifty million pounds in the 2025/26 financial year and the cancellation of major capital schemes, including the North West Relief Road.

Members were advised that the findings of the external review were consistent with previously identified financial pressures and the Council’s wider improvement programme, and therefore did not contain unexpected conclusions. It was further explained that the Council was required to respond formally to the review by the end of the month, and that draft management responses had been prepared for submission. It was also noted that these responses would subsequently be incorporated into a refreshed and consolidated improvement plan due to be presented later in the year, in order to ensure a single coherent framework for monitoring progress.

A detailed discussion followed regarding the Council’s financial position and the credibility of its recovery planning. Concern was raised regarding the statement within the report indicating that it was unlikely the Council would be able to bridge the entire financial gap through currently viable plans at this stage. The Committee challenged whether it was appropriate to continue seeking Exceptional Financial Support without a clearly articulated and deliverable plan to achieve financial sustainability, noting that all councils face uncertainty but are still required to set balanced budgets and medium-term financial strategies.

In response, the Section 151 Officer stated that the Council’s financial position was extremely challenging due to the scale of the budget gap, the high proportion of statutory services, particularly in social care, and the inherent unpredictability of demand-led services. It was emphasised that external factors such as demographic pressures, inflation, and borrowing costs could not be reliably forecast. The Officer stated that it was not considered responsible to present figures that could not be delivered, and that discussions with government were therefore focused on explaining the level of uncertainty and the constraints faced, rather than committing to precise numerical solutions that would not be achievable.

The Chief Executive supported this position, stating that the Council must avoid undermining its credibility by presenting unrealistic savings assumptions, referencing previous years where savings had been planned but not achieved. It was noted that loss of credibility could increase the risk of direct intervention or the appointment of commissioners. It was also stated that other local authorities were facing similar pressures, with some experiencing even more severe financial distress, and that the Council’s approach needed to be realistic  ...  view the full minutes text for item 39.

The report of the Head of Policy and Governance is attached.

Contact: Barry Hanson 07990 086409

The Committee received a report providing an update on corporate risk management arrangements, including the annual review of strategic, operational, and project risks, and proposals for a revised risk management framework.

The Head of Policy and Governance introduced the report and advised that it represented a fundamental reset of the council’s approach to risk management, reflecting previously identified weaknesses in the control environment and the need for stronger corporate assurance. It was reported that responsibility for risk management would transfer into the governance and legal function from October, creating closer alignment with internal audit. It was confirmed that internal audit assurance over risk management would remain independently reported to the Committee to preserve audit objectivity. It was further noted that an interim Risk Manager had been appointed to support implementation of the revised framework, with permanent recruitment planned later.

The Committee was informed that the Council currently had twelve strategic risks, alongside approximately eighty-two operational risk registers containing over one thousand individual risks, and a further six hundred and thirty-nine project risks. It was explained that these would be subject to a comprehensive review between October and December, with all operational and project risks being reassessed using an updated ten-by-ten scoring matrix. The outputs of this exercise would then inform a refreshed set of strategic risks, which would feed into the Annual Governance Statement process for the following year.

Members sought assurance on whether the revised approach would include retrospective learning from previous major projects and decisions, including transport infrastructure schemes and other significant capital programmes. In response, it was stated that the process would primarily be forward-looking, but that previously identified risks arising from past decisions would be reassessed and incorporated where relevant into the new risk profile. It was also acknowledged that certain historic decisions had created ongoing risk exposures which now required formal recognition within the risk framework.

Concerns were raised regarding whether the revised approach would be sufficiently independent and robust to challenge historical organisational decisions and whether it would have the capacity to address politically sensitive or complex legacy issues. It was confirmed that the methodology would be applied consistently across all risk areas, and that professional internal audit standards would ensure that significant issues identified through the process would be escalated appropriately.

The Committee discussed whether strategic risk ownership should sit at senior statutory officer level or be delegated to service directors. It was clarified that strategic risks would be owned at statutory officer level following recent workshops, while responsibility for implementing mitigating actions would remain with Service Directors and operational leadership.

Members questioned whether the current draft strategic risks were sufficiently developed to be formally endorsed. It was noted that the risks had been extracted from the Annual Governance Statement and were not yet fully re-scored under the new framework. Some members expressed concern that the risks remained too high level and insufficiently refined for formal approval. In response, it was explained that the document represented an interim position pending completion of the  ...  view the full minutes text for item 40.

The report of the Head of Policy and Governance is attached.

Contact: Barry Hanson 07990 086409

The Committee received a report from the Head of Policy and Governance presenting the internal audit performance position for the period April to August 2026 and the revised annual audit plan for 2026/27. The Head of Policy and Governance reported that twenty-nine final audit reports had been issued during the period, with seventeen providing either good or reasonable assurance. This represented 58% of opinions issued, compared with 35% in the equivalent period of the previous year. It was also reported that there had been a corresponding reduction in limited and unsatisfactory assurance opinions to 42%, compared with 65% in the previous equivalent period and 48% in the prior year outturn. The Committee was advised that 222 recommendations had been made across the reports, including two fundamental recommendations, and that revisions to the audit plan had been undertaken in response to resource constraints, slippage in delivery, emerging risks and consultation with Senior Officers.

In response to questions from Members, the Chair sought assurance regarding the significance of the reported improvement in assurance levels and whether there were areas of repeated limited assurance. The Head of Policy and Governance advised that repeated limited assurance findings were a concern, as they indicated that previously agreed management actions had not been implemented, and confirmed that such issues were taken into account when forming his year-end audit opinion.

In response to a query about how assurance was obtained that management had implemented agreed audit recommendations along with the escalation processes that existed where actions were not completed, the Head of Policy and Governance explained that there was a defined escalation framework depending on audit assurance levels, whereby reports with limited or unsatisfactory assurance were escalated to relevant Service Directors and, where necessary, statutory officers including the Section 151 Officer, the Chief Executive and the Monitoring Officer. It was confirmed that implementation of significant and fundamental recommendations was monitored and escalated where required.

Further concern was raised regarding whether the audit plan appropriately reflected the Council’s financial position and whether sufficient audit focus was being placed on high-cost and high-risk areas, particularly Children’s Services and Adult Social Care. It was noted that Children’s Services were experiencing significant financial pressure and that some key transformation-related audits appeared to have been reduced or removed. It was explained that the audit plan was developed through statutory requirements, risk assessment, consultation with Service Directors and statutory officers, and consideration of available audit resources. It was further explained that some audit areas had been adjusted due to resource reductions following staff departures and that certain areas were removed where alternative assurance existed, where management had already acknowledged issues and implemented action plans, or where work was ongoing and audit activity would not add value at that time. The Internal Audit Manager added that audit timing was a key factor, particularly where services were mid-transformation or where assurance work would duplicate existing reviews or management activity.

The Section 151 Officer further advised that internal audit was intended to support management improvement rather  ...  view the full minutes text for item 41.

The report of the Interim Section 151 Officer is attached.

Contact: Duncan Whitfield (01743) 254928

The Committee received the report of the Section 151 Officer who introduced the item and advised that the Terms of Reference were broadly sufficient to support the Committee’s role, particularly in relation to governance, audit, and risk oversight. However, it was noted that, given the wider discussions during the meeting on audit, external reporting, and governance arrangements, Members may wish to consider whether any amendments were required, and Officers confirmed they were content to take any proposed amendments away for incorporation.

A point of clarification was raised regarding the CIPFA definition of an Audit Committee’s purpose, noting that it referred to providing those charged with governance with independent and high-level focus. It was queried whether “those charged with governance” should be interpreted as the Council as a whole or the leadership and executive function, particularly given that the Council’s constitution places governance responsibilities within the Cabinet structure. In response, it was stated that the Committee reported to full Council and not to Cabinet, and that governance arrangements and definitions were expected to be clarified further through the ongoing constitutional review.

Further clarification was requested regarding the appointment of independent co-opted members and whether the Committee itself appoints such members or whether this responsibility rested elsewhere within the Council, and how the process operated where more than one suitable candidate was identified. It was confirmed that delegated responsibility for the appointment process existed within the Section 151 function, but it was also clarified that, in practice, interviews and appointments had previously involved the Chair of the Committee alongside Officers, and that any appointment would ultimately be subject to Council agreement.

Concern was raised that the wording in the Terms of Reference relating to independent members required clarification, particularly in light of potential future changes indicating that more than one independent member may be required. It was suggested that the relevant paragraph should be reviewed and revised to reflect both current practice and anticipated developments.

Further concerns were raised that the constitutional review process had progressed without formal consultation with the Audit and Governance Committee. It was stated that governance matters of this nature should ordinarily be presented to the Committee prior to wider Council consideration, particularly where they relate directly to the Committee’s remit. In response, it was confirmed that the intention was for any new draft constitution to be brought to the Committee for consideration, and that this would include opportunities for comment.

Following discussion, it was proposed that, rather than approving the Terms of Reference in their current form, the item be deferred to the next meeting to allow clarification and refinement of the issues raised, including the CIPFA definition wording, independent member appointment arrangements, and reference to the constitutional review process. The Committee agreed that these matters required further clarification before formal approval.

RESOLVED:

that the Annual Review of the Audit and Governance Committee Terms of Reference be deferred for further review, with an updated version to be presented to the next meeting incorporating the clarifications requested by  ...  view the full minutes text for item 42.

The report of the Head of Policy and Governance is attached.

Contact: Barry Hanson 07990 086409

The Committee received the report of the Head of Policy and Governance who introduced the Internal Audit Charter and Mandate, which set out the position, authority, scope and reporting arrangements of the internal audit function within the organisation. The report confirmed that the charter provided internal audit with unrestricted access to personnel, records and assets required to undertake its work and defined its role in supporting governance and assurance. It also noted alignment with the new CIPFA Code of Practice for the Governance of Internal Audit and the requirement to comply with Global Internal Audit Standards, including annual reporting on conformance through a quality assurance and improvement programme.

Assurance was sought regarding safeguards in light of changes bringing risk management within the same broader governance structure as internal audit, and how independence would be maintained if concerns arose. In response, the Internal Audit Manager confirmed that professional standards require internal audit to maintain independence and that clear escalation routes remained in place, including reporting concerns to the Chair of the Audit and Governance Committee, External Audit, Section 151 Officer, the Chief Executive or the Leader if necessary. It was further confirmed that the reporting structure and statutory protections ensured audit objectivity would not be compromised.

RESOLVED:

to approve the Internal Audit Charter and Mandate.

The report of the Engagement Lead is attached.

Contact: Avtar S Sohal (0121) 232 6420

The External Auditor presented an update on the Shropshire County Pension Fund audit, advising that the audit was substantially complete, with only a small number of outstanding items of evidence required prior to finalisation. It was noted that the ISA 260 report would be issued once these matters were resolved. The External Auditor confirmed that completion of the pension fund audit would be aligned with completion of the Council’s main financial statements audit, and that final sign-off was expected to take place in November.

It was further explained that while the audit fieldwork was largely complete, the certification process remained dependent on final completion procedures and the receipt of necessary assurances. A potential delay risk was highlighted in relation to the timing of the final confirmation of Exceptional Financial Support arrangements, which had previously resulted in delays in the prior year.

The External Auditor also confirmed that the financial statements audit for the Council was progressing in parallel and remained on track for completion within the same timeframe. It was noted that the audit findings report and draft value for money commentary had been completed and shared with management for response. The findings were described as robust, and it was indicated that statutory recommendations were likely to arise from the finalised report, subject to refinement following management responses. The report was also described as containing forward-looking commentary in addition to retrospective assessment of the 2025/26 arrangements.

In response to a query regarding whether any governance lessons from the pension fund audit could be applied more widely across the Council, the External Auditor advised that the pension fund operated as a distinct governance and financial structure with different regulatory and operational characteristics. It was noted that, although the governance framework differs significantly from that of the Council, improvements had been observed in responsiveness to audit queries and timeliness of audit completion across both areas.

A Member raised a query regarding the differing risk scoring methodologies used in the pension fund audit compared with the wider Council risk framework, specifically the use of three-level and four-level risk colour systems. The External Auditor confirmed that risk reporting approaches would be aligned at the point of final reporting to ensure consistency across the pension fund and Council audit outputs.

The Section 151 Officer provided clarification on the timetable for consideration of external audit outputs. It was confirmed that the Auditor’s Annual Report and Value for Money conclusions would be presented to a special meeting of full Council within the statutory timeframe, followed by consideration by the Audit and Governance Committee at its subsequent meeting. It was further confirmed that the financial statements audit was expected to conclude in November, although final confirmation of Exceptional Financial Support arrangements was not anticipated until February, which could impact final sign-off timings.

The External Auditor confirmed that the draft Auditor’s Annual Report had been shared with senior officers and that management responses were currently being finalised. It was indicated that the final report would reflect both identified weaknesses  ...  view the full minutes text for item 44.

The next meeting of the Audit Committee will be held on the 26 November 2026 at 10.00 am.

Members noted that the next meeting of the Audit & Governance Committee would be held on Thursday 26 November 2026 at 10.00am.

To RESOLVE that in accordance with the provision of Schedule 12A of the Local Government Act 1972, Section 5 of the Local Authorities (Executive Arrangements)(Meetings and Access to Information)(England) Regulations and Paragraphs 2, 3 and 7 of the Council’s Access to Information Rules, the public and press be excluded during consideration of the following items.

RESOLVED:

That in accordance with the provision of Schedule 12A of the Local Government Act 1972, Section 5 of the Local Authorities (Executive Arrangements)(Meetings and Access to Information)(England) Regulations and Paragraphs 1, 2, 3 and 7 of the Council’s Access to Information Rules, the public and press be excluded during consideration of the following item.

The exempt report of the Monitoring Officer is attached.

Contact: Richard Phillips (01743) 256603

The Committee received the exempt report of the Assistant Director of Legal and Governance which provided an update on the exemptions sought from the Council’s Contract Procedure Rules and the reasoning for approving or rejecting them.

RESOLVED:

that the concerns raised by the Committee be formally escalated to Senior Officers for further investigation and response, and that further clarity be provided regarding the specific issues raised.

The exempt report of the Internal Audit Manager is attached.

Contact: Katie Williams 01743 255637

The Committee received the exempt report of the Internal Audit Manager which provided a brief update on current fraud and special investigations undertaken by Internal Audit and the impact these have on the internal control environment, together with an update on current Regulation of Investigatory Powers Act (RIPA) activity.

RESOLVED:

To note the contents of the report.