2a - Appendix A - HBC Regaining Assurance Strategy

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The Council has received disclaimed audit opinions for the past four years: no audit work was completed for 2021/22 and 2022/23, while for 2023/24 and 2024/25 the majority of audit work was completed but disclaimer opinions were issued due to the backstop. p19

The Council has received £21,300 of Section 31 grant funding in 2025/26 to help support the costs of the work required to regain assurance. p10

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• p10MHCLG capacity assessment We have assessed the Authority as Category BSuccessful build-back requires high-quality draft accounts, comprehensive working papers, timely audit access and continued focus on internal controls. We have discussed and agreed the strategy and trajectory for rebuilding assurance with the Section 151 Officer. The fee will be agreed and reported to the Audit Committee in due course. The Council has received £21,300 of Section 31 grant funding in 2025/26 to help support the costs of the work required to regain assurance. Authority Delivery depends on the Authority
• p19Not capable of an ISA-compliant approach by 2027/28 due to major systemic problems. DA B Principal factors supporting our assessment Technical challenges The Council has received disclaimed opinions for the past four years. For 2021/22 and 2022/23, no audit work was completed, and disclaimer opinions were issued. For 2023/24 and 2024/25, disclaimer opinions were issued due to the backstop, although the majority of audit work was completed in both years. In 2023/24, the disclaimer was driven by a lack of assurance over opening balances, closing balances and reserves, together with an inability to obtain sufficient assurance over fees and charges income and debtors. In 2024/25, we carried out a full audit of the Council accounts on a set of unpublished financial statements. Due to the late publication of the 2024/25 accounts, we were unable to carry out any work on the Group accounts. The areas that we did not complete in the 2023/24 and 2024/25 audits will be considered as part of our Regaining Assurance Strategy. Previous audits have been affected by several technical challenges, including the wind-up of the housing company and its impact on Group accounts, the availability of Collection Fund listings, grant income recognition, and a high volume of errors in the accounts. Audited body capacity The Council has engaged well throughout the audit process and worked collaboratively with us to progress the audit and rebuild assurance. Record-keeping is generally strong; with the key challenge in previous years being the timeliness of the preparation and publication of the financial statements. Encouragingly, the 2025/26 accounts were published in line with the 30 June deadline, enabling us to commence planned substantive work in July. Our priority for 2025/26 remains to obtain assurance over the inyear transactions and over the closing balances. We recognise that the additional procedures required to rebuild assurance place a significant demand on the finance team.