North Yorkshire Council
Audit Committee
Minutes of the meeting held on Monday 23 June 2025 commencing at 1.30pm in the Brierley Room, County Hall, Northallerton.
Councillor Cliff Lunn in the Chair plus Councillors Philip Broadbank, David Chance, Felicity Cunliffe-Lister, George Jabbour, Mike Jordan, Andy Paraskos (substitute for Councillor Alyson Baker), Karin Sedgewick, Neil Swannick, Peter Wilkinson and Independent Co-opted Members Mr David Marsh and Mr David Portlock.
Officers present: Karen Iveson, Assistant Director Resources; Sir Stuart Carlton, Corporate Director – Children and Young People’s Service; Howard Emmett, Assistant Director - Resources; John Raine, Head of Finance Corporate and Technical; and David Smith, Senior Democratic Services Officer.
Other Attendees: Councillor Carl Les OBE; Max Thomas, Stuart Cutts and Daniel Clubb, Veritau; and Mark Kirkham and Cath Andrew, Forvis Mazars.
|
Copies of all documents considered are in the Minute Book
|
|
191 |
Apologies for absence
Apologies were received from Councillor Alyson Baker, with Councillor Andy Paraskos acting as her substitute.
|
|
192 |
Minutes of the Meeting held on 17 March 2025
Resolved
That the minutes of the meeting held on 17 March 2025, having been circulated, be signed by the Chair as a correct record.
|
|
193 |
Declarations of interest
There were no declarations of interest.
|
|
194 |
Public questions or statements
There were no public questions or statements submitted to the Committee.
|
|
195 |
Progress on issues raised by the Committee
Karen Iveson introduced the report and raised the salient points. No follow-up actions were raised by the Committee.
Resolved
a) That the Committee, having considered whether any further action is required, notes the report.
|
|
196 |
Annual Report of the Head of Internal Audit
Stuart Cutts introduced the report and highlighted the key points. Particular emphasis was placed on the Opinion of the Head of Internal Audit on page 19 and the two significant control weaknesses identified.
During the discussion, the following points were raised.
- Members queried whether the Committee should be satisfied with a Reasonable Assurance opinion. Max Thomas advised that while the Council should always aim for the highest standards, the current position was considered positive given the significant changes brought about by Local Government Reorganisation and other factors.
- Concerns were expressed regarding the identified weakness in capital scheme management and it was confirmed that Officers are aware of the recommended actions. Members requested that a report on capital scheme management be brought to a future meeting. Karen Iveson confirmed that Officers would report back once the actions had been implemented.
- Members queried why the Claro Road project review had not been given an audit opinion. Max Thomas explained that the audit focused on specific elements rather than the full system, and therefore an overall opinion could not be provided. It was noted that the project was inherited from Harrogate Borough Council and that some issues only became apparent over time. Stuart Cutts emphasised that lessons could be learned from the project.
- A query was raised regarding the Scarborough Waterpark draft audit report. Max Thomas confirmed that fieldwork had been completed and a draft report issued, which was currently under management review. The report is expected to be finalised within a couple of months.
- Members raised a query about the cash handling at leisure centres audit. It was confirmed that some of the agreed actions remain outstanding.
In relation to information security, Members raised the following points.
- Concerns were expressed about the increasing threat from hackers. Max Thomas acknowledged this and stressed the need for appropriate resource allocation.
- Members queried whether all employees had completed information security training and Max Thomas confirmed that mandatory training is in place and ongoing. NYC and NYPF employees are subject to simulated phishing tests using Boxphish emails - Members queried the percentage of staff clicking on these links and the consequences of repeated failures. Officers were unable to provide figures but confirmed that warnings and further training are issued where necessary. It was reported that the failure rate has decreased since the introduction of the tests. Members emphasised the importance of reporting any accidental link clicks to mitigate potential damage. It was noted that phishing emails are becoming increasingly sophisticated.
- Members referred to the data breaches listed on pages 66 and 67 of the report and queried the outstanding case noted at paragraph 5.6 on page 67. Max Thomas confirmed that breaches are reported to the Information Commissioner’s Office (ICO) promptly and that the ICO has not taken regulatory action. The outstanding case was not considered serious.
- Some Members reported issues with the email address used to report spam. Max Thomas agreed to investigate this.
Resolved
That the Committee:
a) notes the Reasonable Assurance opinion of the Head of Internal Audit regarding the overall framework of governance, risk management and control operating within North Yorkshire Council as set out.
b) notes the two significant control issues which are recommended for inclusion in the 2024/25 Annual Governance Statement.
c) notes the outcome of the quality assurance and development arrangements and the confirmation that the internal audit service conforms to relevant professional standards.
d) approves the updated Internal Audit Charter.
Councillor Mike Jordan left at this point in the meeting.
|
|
197 |
Information Governance Annual Report
Max Thomas introduced the report and highlighted the salient points.
Whilst not considered to be significant, it was noted that the number of data breaches had increased compared with 2023/24. Eight breaches had been reported to the Information Commissioner’s Office (ICO), with one subsequently withdrawn after it was determined not to be as serious as initially assessed.
It was also noted that devices updated to Windows 11 benefit from enhanced security features and that the Service Desk contact number is displayed on the top of North Yorkshire Council assets, providing a clear point of contact for support.
Resolved
a) That the Committee note the Council’s information governance arrangements and activities during the year.
|
|
198 |
Annual Counter Fraud Report
Daniel Clubb introduced the report and outlined the key points.
It was noted that the savings highlighted on page 75 relate to reductions in fraud. While not all fraud investigations result in direct financial savings, they play an important role in acting as a deterrent — a benefit that is not always measurable.
Resolved
a) That the Committee notes the counter fraud work undertaken during the year.
|
|
199 |
Assessment of Effectiveness of Governance Arrangements - Children and Young People's Service
Howard Emmett outlined the report before the following points were raised during the discussion.
- A query regarding the red risk areas was raised, specifically whether more ambitious targets could be considered. Officers responded by explaining that the risk relating to the Special Educational Needs and Disabilities (SEND) High Needs Budget reflects the significant financial risk associated with this area and unlikelihood for the financial position to improve.
Further discussion focused on the high level of risk associated with children in care and those on the edge of care. Officers explained that this is largely due to significant pressure in the provider market, where demand continues to exceed supply. This reflects the scale of the challenge, which has been recognised as a national issue, rather than a lack of ambition. It was also noted that the fostering sector is saturated, and some children have complex needs that are not well met by current provision. The Council is exploring the development of its own provision, which is often more cost-effective and better suited to meeting these needs. National reforms may also provide support.
- A query was raised about the support NYC provides to schools. Officers explained that, where there is uncertainty around a school’s financial recovery, a Notice of Financial Concern may be issued. This may impose requirements such as a spend control limit, meaning any expenditure above a threshold must be approved by the Council. It was also confirmed that local authorities cannot allocate additional funding to schools beyond the national funding formula without approval from the Secretary of State, which is considered extremely rare.
Resolved
a) That the Committee notes the review of the effectiveness of governance arrangements in the Children and Young People’s Directorate.
|
|
200 |
Corporate Governance
Karen Iveson introduced the report and outlined the recommendations.
It was clarified that although the draft Annual Governance Statement (AGS) is not included in the papers at this item, it can be seen at Item 12, Appendix D, which was published as a supplementary document.
Concern was expressed regarding the timing of the draft AGS publication, with some Members noting they had not had sufficient opportunity to review it fully and therefore would not be comfortable approving it at this stage. It was also noted that, under usual practice, the AGS would be reviewed by external audit prior to approval. Officers clarified that the Committee is not being asked to approve the final AGS, but rather the draft version. It was noted that the publication of a draft AGS is considered good practice as doing so helps to pre-empt public queries regarding the availability and transparency of the AGS. The final version will be subject to audit and will return to the Committee for formal approval in September.
Reference was made to the table on pages 117 to 125 of the agenda pack. Max Thomas confirmed that the evidence provided in the third column corresponds with a number of the targets listed in the central column. As a result, the evidence has not been aligned to individual points, but instead supports multiple areas collectively.
Resolved
a) That the Local Code of Corporate Governance (Appendix A) for the authority be recommended for approval by the Chief Executive Officer (under paragraph 5.15 of the Officers’ Delegation Scheme), in consultation with the Leader of the Council, the Executive Member for Finance and resources, the Corporate Director of Resources and the Assistant Chief Executive Legal and Democratic Services.
b) That the Draft Annual Governance Statement for 2024/25 be recommended by the approval by the Chair of the Audit Committee.
|
|
201 |
External Audit - Audit Strategy Memorandum
Mark Kirkham and Cath Andrew introduced the report and accompanying supplement, noting that the content was broadly consistent with previous updates provided on this matter.
Reference was made to page 139 of the agenda pack, where clarification was sought as to whether the content related to the Whitby Harbour court case and whether this would continue to have implications over the coming year. It was confirmed that this had been included to track progress and that external audit anticipate improvements in during the year.
A query was raised in relation to page 154 of the agenda pack concerning the proposed fees for non-PSAA work in 2024/25. Members sought clarification on whether these fees had been agreed and whether external audit would be undertaking the work. It was confirmed that the work will be carried out, although the fees have not yet been finalised. It was further reported that no threats to external audit’s independence have been identified in relation to this work.
Resolved
a) That the Committee notes the report.
|
|
202 |
Draft Statement of Accounts 2024/25
John Raine introduced the item and the key areas where further work is still required were highlighted. It was noted that work on the Draft Statement of Final Accounts (SOFA) is ongoing, but it remains on track to be finalised and published by 30 June 2025.
It was confirmed that the accounts will be adjusted to reflect the outcome of the Whitby Harbour court case.
Officers advised that the intention is to bring the SOFA to the 29 September 2025 meeting of the Committee. The statutory backstop date is 27 February 2026, and if the September deadline cannot be met, the accounts likely be considered at the December meeting.
Resolved
a) That the creation and membership of the Corporate Governance Working Group is approved. It was decided that Councillors Lunn, Broadbank, Chance and Swannick, as well as Independent Co-opted Member Mr David Portlock be part of the Working Group.
b) That the draft Statement of Final Accounts for 2024/25 is noted, in advance of the accounts being audited and resubmitted to the Audit Committee on 29 September 2025.
|
|
203 |
Audit Committee Review of Effectiveness
Max Thomas introduced the report and confirmed that the survey questions were derived from the Chartered Institute of Public Finance and Accountancy (CIPFA) guidance.
Members noted the survey result indicating reduced confidence that the work of the Audit Committee is being taken into account by senior officers and the Executive. Councillor Carl Les, who was in attendance, responded by stating that he regularly attends Audit Committee meetings and does consider the comments made by Members. He acknowledged, however, that it may not always be clear to Committee Members how the Executive reflects and acts upon their input.
Members also observed that it was unclear whether the survey responses had been submitted by long-standing Committee Members or those more recently appointed but agreed that no additional weight should be provided based on this information.
Resolved
a) That the results of the self-assessment survey of the Committee’s effectiveness are noted.
b) That Members agreed that no changes were required to the Committee’s current operating practices and that a more in-depth review was not required.
|
|
204 |
Appointment of Independent Co-opted Member
Councillor Cliff Lunn introduced the item and provided a verbal update on the interview held on 18 June 2025. It was reported that the interview panel considered the candidate to be suitable for the role. Other members of the panel also shared details of the questions posed during the interview and the responses received. It was confirmed that positive references had been obtained.
If agreed, the term of appointment was clarified as running until 31 July 2027. The process followed for the appointment was also outlined to the Committee.
Resolved
a) That the Committee recommends to Full Council that Vicky Buckley be appointed to fill the Audit Committee Independent Co-opted Member vacancy for the period of 1 August 2025 to 31 July 2027.
|
|
205 |
Programme of work
Karen Iveson introduced the report and informed Members that the Commercial Governance report, originally scheduled for this meeting, would now be brought to the September meeting.
Resolved
a) That the programme of work is noted.
|
|
206 |
Any other Items
There were none.
|
|
207 |
Date of next meeting
Monday, 29 September 2025 at 1:30pm – Data protection and information security training to start at 12.30pm.
|
The meeting concluded at 2.57 pm.