Agenda and minutes

There were no Member apologies or substitutions.

There were no Member declarations of interest in any items on the agenda.

RESOLVED that the minutes of the meeting held on the 24 September 2025 were true and accurate record and a paper copy be signed by the Chair.

1.     The Verbal Update on Committee Business was delivered by Governance Advisor, Katy Reynolds.  Some of key points included:

        a)     Since publication of the Committee agenda for October, specific action points had been progressed as follows:

                i)   Members had been provided with information which related to the Internal Audit Progress Report (GA035), that addressed questions raised at the previous Committee meeting in September.  The information had been provided via the Microsoft Team Governance and Audit site, however, further information would be provided in due course.

                ii)  Governance and Audit Committee Members had been provided with a briefing on Kent County Council’s Wholly Owned Companies.  This would continue to progress and an action would be included in the Action Plan to reflect Member comments, particularly those in relation finance, which arose during the briefing.

                iii) It was confirmed that Councillors would have the opportunity to speak about their role and purpose as Governance and Audit Committee Members.  Whilst this was not currently included on the Action Plan, it would be followed up.

2.     The Deputy Chief Executive, Mr Ben Watts clarified that the Lessons from

        2023-2024 External Auditor’s Report had been shared with the Corporate

        Management Team and discussion would take place as part of the Annual

        Governance Statement follow up actions.

3.     In answer to a Member’s comment, Mr Watts confirmed that he was

        committed to ensuring that future agendas would include detailed

        performance and finance updates in relation to the Kent County Council

    Wholly Owned Companies, the shareholder board subcommittee of the

    Cabinet and the financial information relating to the board of companies,

    previously requested by a Member at a previous Committee meeting.

4.     RESOLVED that the Committee noted the verbal update on Committee Business.

1.     The item was introduced by the Interim Corporate Director Finance, Mr John Betts.

2.     Mr Betts explained that the Draft Statement of Accounts, the Annual Governance Statement and the External Auditor’s Findings Report were intrinsically linked and needed to be approved, pending overall consideration, and suggested that the Committee that consider the recommendations separately, once all the items had been presented, before signing the Letters of Recommendation.

3.     Sincere thanks were expressed to the Acting Chief Accountant, Mr Joe McKay, the Head of Finance Operations, Ms Cath Head and the Pension Fund and Treasury Investments Manager, Ms Sangeeta Surana, as well as all the officers involved in the preparation of accounts for their extensive work.

4.     Acting Chief Accountant, Mr Joe McKay, clarified that Mr Betts’ proposed way of dealing with the agenda items would enable the official documentation to be completed in relation to signing off the accounts for 2024/25 and explained the recommendation was for the Committee to approve the accounts, note Grant Thornton’s Audit Findings Report and then both Letters of Representation would be signed the Chair and Section 151 Officer for both the Kent County Council and Kent Pension Fund accounts.

5.     Mr McKay confirmed that the publication deadline for the draft accounts for 2024/25 was met on the 30 June 2025 (inclusive of group accounts) as well as the inspection of the accounts window, which ran from 1 July 2025 to 11 August 2025, and the audit work has been completed well in advance of the audit backstop date of the end of February 2026.

6.     It was confirmed that an all Member Training session on the statement of accounts process was held on Thursday 16 October 2025 and thanks was given to all who attended. The recording of the session has been shared on the Member Development site for anyone who was not able to attend.

7.     Mr McKay explained to Members that the major accounting change was the implementation of IFRS 16 Leases which meant the recognition of right of use assets and lease liabilities on the balance sheet.  After thorough testing, Grant Thornton concluded that the implementation was successful.

8.     It was explained to Members that there were a few recommendations which require work between now and the closedown period for 2025/26.

9.     Several Members raised concerns that the Cabinet Member for Finance was not present at the meeting in order to take questions.  Mr Betts indicated that any technical questions relating to the statement of accounts would be best answered by senior finance officers, all of whom were present.

10.   Some Members remarked that they found the absence of a responsible Member of the Administration to address questions unacceptable. It was proposed, and seconded, that the meeting be adjourned until such time that a competent Member of the Administration was present in order to answer questions on behalf of the Executive and decision making.

11.   Members voted in favour of the motion and the Governance and Audit Committee was temporarily  ...  view the full minutes text for item 340.

The Deputy Leader and Cabinet Member for Finance was in attendance for this item

1.     The item was introduced by Lucy Nutley, from Grant Thornton. Ms Nutley confirmed that the audit was complete and the opinion would be unmodified.  No adjustment to the accounts other than disclosure errors had been identified.

2.     Ms Nutley confirmed that the Value for Money was complete and significant weaknesses in the arrangements for ensuring financial sustainability arising from the high spends in Adult Social Care had been identified. No special auditor powers had been used during the audit year.

3.     Materiality had been assessed at £55.5 million for the Council based benchmark of gross revenue expenditure.  This figure did not change on receipt of the draft financial statements.

4.     Significant risks identified as part of the audit work included:

                a) Management override of controls (a standard risk in every audit and not specific to Kent) and nothing had been identified by the external auditors which required reporting.

b)The risk of fraud and error and revenue recognition (another standard risk) but auditors were about to rebut the risk where it was considered the inherent risk to be low.  Grant Thornton rebutted the risk at the planning stage and nothing had been identified to change this conclusion.

                c)  The risk of fraud and error and expenditure recognition was purely focused in the public sector and nothing had been identified by the auditors.

                d) Land building and investment property valuation was primarily assessed as a significant risk due to being subject to a high estimation. No issues arose from this.

                e) Pensions accounting is also a risk due to the high values involved and management engaged the services of an Actuary to provide an evaluation of the Council’s share of the Kent Pension Fund.  Expert advice was obtained from Pricewaterhouse Coopers (PwC) to provide assurance over the assumptions used by the Actuary and there were no issues arising from the work and value of the pension liability.

                f)  In relation to IFRS 16, auditors identified good processes in place for the implementation of the new standard.  It was previously identified as a significant risk but as the value was not material to the financial statement (as previously anticipated) this would drop off as a significant risk for the next year.

5.     Ms Nutley confirmed that as part of the 2025/26 work, there could be a

        detailed review of the aged debt listing of the Adult Social Care debts

        taken in conjunction with the Authority.

6.     It had been agreed by both management and Grant Thornton that the

        unadjusted misstatements were immaterial, and the decision had been

        made not to adjust the financial statements for these figures. The

        differences were drawn to Members’ attention and included in the Letters

        of Representation, which would be signed.

7.     In answer to Member questions and comments the following was said:

        a)     It had been agreed between Grant Thornton and Finance that the Adult Social Care debt would be reviewed in  ...  view the full minutes text for item 341.

1.     The item was introduced by the Interim Corporate Director Finance, Mr John Betts.

2.     Mr Betts explained to Members that by approving the recommendations set out under items 6 and 7 of the agenda, being the Statement of Accounts for the Local Authority and Kent Pension Fund, as well the Annual Governance Statement, the Committee were approving the Letters of Representation to be signed.

3.     RESOLVED the Committee approved the recommendations set out under agenda items 6 and 7 and approved the signing of the Letters of Representation by the Chair and Corporate Director of Finance.

1.     The item was introduced by Mr Paul Dossett of Grant Thornton.

2.     Mr Dossett reminded Members that the item previously came before the Committee in September 2025, when the summary of accounts was yet to be finalised.  It was confirmed that no new material was contained within the report, other than an update on the accounts.

3.     Mr Dossett confirmed that he would be presenting the report to all Kent County Council Members on 6 November 2025, at the Full Council meeting.

4.     In answer to Member comments and questions, the following was said:

        a)     Mr Betts confirmed that as part of budget setting report, the movement of reserves from one area to another had been considered.  Although it was highlighted by the Auditor’s that a level of detail was missing, in the interests of transparency, the risks associated with moving funds from one reserve to another would be highlighted and form part of the budget papers. It was confirmed that it could also be reviewed by the Governance and Audit Committee also.

        b)     It was confirmed that the Outturn Report identified the ramification details of moving resources.

        c)     Mr Dossett confirmed that Local Government Reorganisation was the highest profile risk area for the counties involved and there was a regular forum for considering the activity of all councils in Kent.  It was explained that, if Central Government made a decision, in accordance with the scheduled timetable, it would be delivered within approximately 2 years.  During this period, Grant Thornton would focus on all risks for all Councils, including issues such as funding and spending reserves.

        d)     It was confirmed that Central Government was looking at a way forward for Special Education Needs and escalating costs, although an announcement had been made which confirmed these plans had been deferred. Consequently, engagement with the Safety Valve programme and other Department of Education (DfE) interventions had reduced, pending this change.  Kent was in the same position, as other Authorities in that they had to resolve funding issues without support.

        e)     Mr Betts confirmed that Safety Value Authorities often liaised with one another to review progress; Kent was not alone in their frustrations around the lack of provisions for Special Educational Needs Schools which had been agreed as part of the Safety Value Agreement but then paused.

5.     RESOLVED Members noted the External Auditor’s Annual Report for

        assurance.

The Pensions and Treasury Investment Manager Ms Sangeeta Surana was in virtual attendance for this item, via Microsoft Teams.

1.     The Audit Progress report was presented by Mr Parris Williams from Grant Thornton.  Mr Williams reminded Members that the report had already been presented to the Committee in September 2025, although since this time some small residual procedures had been completed. Mr Williams confirmed that the external auditors were able to issue an unqualified opinion.

2.     Mr Williams provided some further context in relation to the extrapolated difference in relation to benefits payable. It was clarified that an analytical review and a sample test had taken place; the test was conducted by going back to the original award of the pension and then set an expectation based on PI rates, then looked at what the difference was between was what paid and the figured calculated during the sample test.  It was confirmed that in all cases the difference between these rates was small, around 2 to 3%.

3.     When this percentage was projected against the entire balance of the fund, it equated to around £8.4 million, which was not material for the pension fund. It was highlighted to Members that the differences were due to items such as Guaranteed Minimum Pension (GMP) equalisation. The test showed there were no material errors on the accounts.

4.     Mr Williams confirmed that the general processes of the pension fund were good and commented that the accounts could have been signed off on 30 September 2025; if the accounts had been de-coupled, they could have been signed earlier.

5.     In answer to Member questions and comments, the following was said:

        a)     Grant Thornton’s views of journal and management override of controls were shared transparently, particularly where areas could be improved for best practice.  Mr Williams stated that he was not concerned about the control environment, as it was consistent with other local Authorities.

        b)     It was confirmed that Management would need to have a system solution, rather than a manual process.  With the implementation of the new Oracle system, the possibility of using this to resolve the issue would be one for management consideration.

        c)     Mr Betts confirmed that management was looking for a control mechanism as part of the system of the Oracle Cloud programme, however it was uncertain whether one could be easily incorporated.

6.     RESOLVED Members noted the External Audit Kent Pensions Finding

        report and Draft Audit Opinion

1.     The report was presented by the Head of Risk and Delivery Assurance, Mr Mark Scrivener.

2.     Mr Scrivener highlighted the following points to Members:

        a)     Corporate Risk Register item CRR0065 - the Implementation of a fit for purpose of the Oracle Cloud System: Phase 1 had gone live.   The implementation had gone well, although inevitably with some issues to work through, such as the capacity stretch on finance and other colleagues involved.  Mr Scrivener explained the importance of keeping live to these risks and issues, as well as ensuring any temporary workarounds were being actioned effectively all the time that they are required.  It was confirmed that this Corporate Risk would remain on the Risk Register, as phase 2 was approaching, which will impact the whole organisation

        b)     Corporate Risk Register item CRR0042 - Border Fluidity, Infrastructure and Resilience (in relation to the introduction of the EU’s Entry-Exit System). KCC has been working with partners at a local and national level to assess potential implications for the county and prepare for various scenarios.  It had previously been highlighted to the Committee that the risk rating, which at one point was at its maximum rating, had been reduced once it was clear that a phased approach would be employed by the EU, and further modelling at national level conducted.  EES checks were due to commence at a 10% level starting with freight traffic and increase to 100% checks for all traffic over the following 6 months.  The current risk rating is applicable for day one of implementation and will be reviewed as the percentage of checks increases.  The risk will stay on the register until that point has passed.

        c)     The Authority’s significant financial challenges needed to be raised as part of the risk update; it was acknowledged that discussions had taken place during the meeting which sought assurances around the mitigations in place (with an emphasis on Adult Social Care). It was expected that through Cabinet reporting and the budget process, these would be addressed.

        d)     Key upcoming events and external factors which could impact the Authority’s corporate risks included the Chancellor’s budget on the 26 November 2025 and subsequent Local Government Finance Settlement.  In addition, several key elements of the outcome of the Fair Funding Review 2.0 would feed into the corporate risk profile.

        e)     The School’s White Paper had been delayed until early 2026 to enable more consultation with stakeholders and will include information on planned reforms to the SEND system.

        f)      The risks and opportunities associated with Local Government Reorganisation were scheduled to be debated at the Devolution and Local Government Re-organisation Cabinet Committee on Monday 3 November 2025 and again at Full Council on 6 November 2025.

3.     It was agreed that it would be useful for Members to be provided with some brief written details about the changes in the risk profile in future, to enable them to ask specific questions should they wish.

4.     RESOLVED Members noted the verbal risk management update.