Agenda and draft minutes

It was moved by Councillor Connolly and seconded by Councillor Deering that Councillor Nicholls be appointed as Vice-Chair of the Audit and Governance Committee for 2026/27. After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that Councillor Nicholls be appointed as Vice-Chair of the Audit and Governance Committee for 2026/27.

To receive any apologies for absence

There were apologies for absence from Councillors Nicholls and Willcocks and from Mark Poppy and Nick Sharman (Independent People). It was noted that Councillor Connolly was substituting for Councillor Nicholls and Councillor Jacobs was substituting for Councillor Willcocks.

To approve as a correct record the minutes of the meeting held on 24 February 2026.

It was moved by Councillor Deering and seconded by Councillor Hart that the Minutes of the meeting of the Audit and Governance Committee held on 24 February 2026 be confirmed as a correct record and signed by the Chair, subject to the minutes reflecting that Councillor Deering had asked the question to the Director for Finance, Risk and Performance regarding the understaffing of the planning department.

After being put to the meeting and a vote taken, the motion was declared CARRIED. Councillors Connolly, Deffley and Jacobs abstained from the vote.

RESOLVED – that the Minutes of the Committee meeting held on 24 February 2026 be confirmed as a correct record and signed by the Chair, subject to the minutes reflecting that Councillor Deering had asked the question to the Director for Finance, Risk and Performance regarding the understaffing of the planning department.

To approve as a correct record the minutes of the Joint Meeting of Scrutiny Committees held on 28 January 2026.

It was moved by Councillor Adams and seconded by Councillor Hart that the Minutes of the Joint Meeting of Scrutiny Committees held on 28 January 2026 be confirmed as a correct record and signed by the Chair.

After being put to the meeting and a vote taken, the motion was declared CARRIED. Councillors Connolly, Deffley and Jacobs abstained from the vote.

RESOLVED – that the Minutes of the Joint Meeting of Scrutiny Committees held on 28 January 2026 be confirmed as a correct record and signed by the Chair.

The Chair welcomed all to the meeting and reminded participants to use their microphones when speaking. He welcomed new and substitute members to their first meeting of the Audit and Governance Committee.

The Chair said that the External Auditors Audit Plan report for 2025/26 would not be considered, and this report would be picked up at the meeting in September as the  External Auditor representatives were not able to make it to the meeting today.

The webcast of the meeting can be viewed here.

To receive any declarations of interest.

There were no declarations of interest. Councillor Adams said that he had a membership for Everyone Active at Grange Paddocks.

The Executive Member for Wellbeing submitted a report that presented the annual review of East Herts Council’s fifteen-year leisure contract with Sport and Leisure Management Ltd (SLM) trading as Everyone Active (EA).

Members were advised that the 15-year contract, which commenced in 2020, was continuing to deliver leisure and wellbeing services across the Council’s leisure facilities. The report highlighted a number of key developments during the previous year, including improvements at both Hartham Leisure Centre and Grange Paddocks Leisure Centre. These included refurbishment of the changing village and the introduction of a Reformer Pilates studio at Hartham, together with replacement gym equipment and the introduction of a virtual aqua fitness programme at Grange Paddocks.

The Committee noted that both centres had continued to adapt their fitness programmes through a combination of virtual and instructor-led classes to meet customer demand.

Members were also informed of the contractor’s continued partnership working with organisations including the Alzheimer’s Society, Herts Sports Partnership, WeightWatchers and local Primary Care Networks, supporting residents’ access to health and wellbeing opportunities across the district.

The Committee then received a presentation from representatives of Everyone Active providing further details of the contract’s performance during the year.

Members were advised of a range of community wellbeing initiatives delivered throughout the year, including programmes aimed at children, older adults, health and wellbeing groups, and new and expectant parents. Members also received details of capital investment undertaken at Hartham Leisure Centre and Grange Paddocks Leisure Centre, including gym improvements, changing village refurbishment works and the introduction of Reformer Pilates facilities.

The Committee thanked officers for the presentation and welcomed the positive performance and community outcomes achieved during the year. Members welcomed the positive report and commended the operator on the overall performance of the facilities.

In response to questions regarding a number of key performance indicators shown as underperforming, the representatives from Everyone Active explained that some year-on-year comparisons reflected historic data from four sites compared with the current operation of two sites.

Members were advised that some indicators appeared negative despite strong performance at Hartham and Grange Paddocks. It was reported that, when considered in isolation, both facilities were performing positively, with some impact on swimming participation arising from the closure of the former dual-use sites.

The Committee questioned the recent refurbishment of the Grange Paddocks gym and sought clarification on the business case for the investment. Members were advised that gym equipment was typically refreshed every four to five years and that the popularity of the facility had justified investment after four years.

Members were advised that additional works had also been undertaken to increase group exercise capacity and introduce new fitness facilities in response to customer demand and benchmarking against other leisure centres.

Members discussed the reported reduction in swimming lesson participation following the closure of Fanshawe and Leventhorpe swimming pools. The operator advised that alternative places had been offered to affected swimmers and that the majority of those transferring were younger or less confident swimmers.

In response to questions  ...  view the full minutes text for item 7.

This agenda item was withdrawn from the agenda and deferred to the meeting due to be held on 29 September 2026.

The Shared Internal Audit Service (SIAS) Manager introduced the report which summarised the audit activity and outcomes for 2025/26. He drew Members attention to page 90 of the report which gave the annual assurance opinion.

The SIAS Manager referred to page 93 of the report which showed individual audit opinions and recommendations, which included comparisons with last year in the supporting appendix starting at page 98.

The Shared Internal Audit Service Manager summarised Internal Audit activity and outcomes for 2025/26 and provided an overall Reasonable Assurance opinion, consistent with the previous year. Members were advised that the report also set out Internal Audit’s compliance with the Global Internal Audit Standards, performance against service indicators, and key service developments during the year.

Members were advised that there was content at page 95 of the report that showed how the service had faired against performance indicators for the last year, which were all met without exception.

The Committee was advised that there were also details of main service developments that had taken place, including securing business that generated income from outside of Hertfordshire. The Internal Audit Charter 2026/27 was presented for annual approval, starting at page 106.

The Charter was essentially the terms of reference or mandate for internal audit, and it sets the authority and responsibilities of the service. The charter was reviewed and approved annually by the committee and was substantially unchanged from the previous year, with the exception of an amendment reflecting member involvement in overseeing the role of the Council’s Internal Audit Manager, as required by the Global Internal Audit Standards.

The Committee was also reminded of the requirement for management to confirm that Internal Audit’s scope and resources had not been subject to inappropriate limitations during 2025/26. The Director for Finance, Risk and Performance confirmed that the scope and resources for internal audit were not subject to inappropriate limitations in 2025/26.

In response to a question from a Member regarding the Reasonable Assurance opinion, the Shared Internal Audit Service Manager explained that assurance opinions ranged from Substantial Assurance to No Assurance and that achieving a higher overall opinion would require a greater proportion of individual audit reports receiving Substantial Assurance ratings.

A further question was raised regarding the omission of BEAM from the audit opinions listed within the report. Members were advised that an audit of BEAM was scheduled to commence during Quarter 2 (July to September) and would result in an Internal Audit report with an assurance opinion.

The Chair thanked the SIAS Manager for his report. It was moved by Councillor Deffley and seconded by Councillor Deering, that the recommendations, as detailed, be approved. After being put to the meeting and a vote taken, this motion was declared CARRIED.

RESOLVED – that (A) the Annual Assurance Statement and Internal Audit Annual Report 2025/26, be noted;

(B)   the results of the self-assessment required by the Global Internal Audit Standards (GIAS) and the Quality Assurance and Improvement Programme (QAIP), be noted;

(C)   the SIAS Audit Charter 2026/27,  ...  view the full minutes text for item 9.

The Executive Member for Wellbeing submitted a report that covered the performance and financial position for the 2025/26 year, setting out challenges and control measures in place along with business plan targets for 2026/27 onwards.

The Executive Member for Wellbeing advised that BEAM had recorded a net loss of £970,000 at 31 March 2026, with £440,000 held in future ticket sales relating to 2026/27. Members were advised that this represented a significantly different outcome to that envisaged within the original business plan. It was acknowledged that a number of factors had contributed to the position, including changes in audience behaviour after Covid-19 and wider cost of living pressures and overly optimistic assumptions within the original business case.

The work undertaken by BEAM staff and volunteers was commended by the Executive Member for Wellbeing in going over and above to help ensure a positive experience for all of BEAMs visitors. She said that Head of BEAM had worked tirelessly in securing high performing national shows and building the audience at BEAM. He has also worked on opportunities to best manage the venues cost and there was considerable work on a new website.

The Executive Member for Wellbeing said that part of building new and returning audiences including testing different shows to understand what works for East Herts. This inevitably meant that some shows did not return a profit but there were invaluable insights for future programming. BEAM was now in a much stronger position to attract bigger shows.

The Venue Director for BEAM delivered a presentation on the venue’s operational performance and revised business plan. Members were advised that the venue had hosted more than 3,100 ticketed events during the year, attracting over 77,000 visitors to stage performances and more than 53,000 cinema attendances.

The Venue Director said that despite the strong activity, the first full year resulted in a significant loss, and this was not reflective of a single issue but more of a series of complex early-stage challenges.

Members were advised that a structured action plan had been implemented that focussed on revenue optimisation, cost control and risk management, resulting in improvements in attendance levels, booking fee income, food and beverage income and occupancy rates.

The Committee was advised that an updated business plan had been prepared, which forecast a break-even position by 2028/29. Members heard that the revised plan reflected current market realities and included increased emphasis on commercial income streams such as conferences, meetings, events and catering activity.

During debate, Members welcomed the work that had been undertaken to improve the venue’s performance but expressed significant concern regarding the scale of the reported loss and the variance between earlier financial forecasts and the year-end outturn.

Members questioned the assumptions underpinning the revised business plan, the robustness of financial reporting arrangements and the Council’s ability to identify emerging financial pressures at an earlier stage.

The Venue Director explained that work had been undertaken to strengthen financial monitoring and forecasting arrangements, including the development of improved reconciliation processes and  ...  view the full minutes text for item 10.

The Assistant Director for Finance submitted an overview of the 2025/26 provisional outturn position and the Draft Statement of Accounts for the 2025/26 financial year.

Members were advised that the outturn remained provisional until the council’s accounts had been audited. The Assistant Director for Finance advised that the provisional outturn showed an overspend of £678,000 against the net revenue budget, representing an adverse movement of £172,000 from the Quarter 3 position.

Members were referred to Appendix A for the breakdown of the revenue budget, and this showed the movements from quarter three. The overspend would be funded from earmarked reserves.

The Assistant Director for Finance said that there had been a number of movements since the quarter three budget monitoring had been reported to the committee. The details of these movements were detailed in paragraphs 3.2 and 3.3 of the report and also within Appendix B.

The Committee was informed that just over £2 million of earmarked reserves had been utilised in closing the 2025/26 accounts. These reserves had been utilised to fund expenditure including mobilisation costs associated with the new waste contract, redundancy costs and costs associated with Local Government Reorganisation (LGR).

The Assistant Director for Finance said that reserves had also been used to smooth the impact on the revenue position in respect of housing benefit subsidy, losses arising from property fund investments and the business rates collection fund deficit.

Members were advised that the balance on reserves as at 31 March 2026 was £19.3 million, and this included £3.9 million in the General Fund balance and £15.3 million in earmarked reserves. The Assistant Director for Finance said that these figures were in line with projections in the most recent Medium-Term Financial Plan that was approved by Council in March 2026.

Members were advised that the level of reserves were deemed adequate to support the council’s financial position and medium-term strategy. The Assistant Director for Finance said that capital expenditure of £8.6 million had been incurred during the year, principally relating to the acquisition of waste and recycling vehicles and equipment.

Members were advised that a capital programme underspend of £3.3 million was reported, of which £1.142 million was proposed to be carried forward into 2026/27. Details of the capital schemes where budgets were not required to be rolled forward were contained in paragraph 4.4.

Members were advised that the 2025/26 draft accounts were published on the council’s website ahead of the statutory deadline and the external audit would begin in September 2026 and would need to be completed by 31 January 2027.

Members asked a number of questions and Officers explained that Rapier House was currently occupied by the ground’s maintenance contractor following the relocation from the Buntingford Service Centre depot.

The Assistant Director for Finance said that the planning permission process regarding Amwell End was in progress and was nearing completion.

Members were advised once the contractor had vacated Rapier House, the council would be in a position to lease the building to a potential tenant.  ...  view the full minutes text for item 11.

The Director for Finance, Risk and Performance reported that the Accounts and Audit Regulations 2015 require that all authorities conduct a review of the effectiveness of the system of internal controls and prepare an Annual Governance Statement (AGS) each year.

Members were advised that the AGS must be considered separately from the Statement of Accounts and the Annual Governance Statement report for 2025/26 was being presented for consideration.

Members were advised that the report set out how the Council ensured effective governance, sound decision-making, risk management and internal control arrangements across the authority. Members were advised that the Statement was closely linked to the Statement of Accounts, which had been published during the previous week.

The Committee noted that the statement reflected the challenges faced during the year, including progress made in relation to financial reporting and governance improvements. The report identified a number of actions to be taken during 2026/27 to further strengthen the Council’s governance arrangements.

The Director for Finance, Risk and Performance said that the statement incorporated recommendations arising from previous external audit reports, including statutory recommendations issued by Ernst and Young and recommendations arising from Azets’ recent reviews of the Council’s Statement of Accounts.

Councillor Connolly proposed and Councillor Deffley seconded, a motion that the Audit and Governance Committee have reviewed and commented on the Annual Governance Statement for 2025/26.

After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that Audit and Governance Committee have reviewed and commented on the Annual Governance Statement for 2025/26.

The Director for Finance, Risk and Performance submitted a report that provided Audit and Governance Committee with the corporate risk register for Quarter 4 of 2025/26 and sets out how East Herts manages these risks.

The Director for Finance, Risk and Performance said that at the February meeting, Members had discussed the existing Local Government Reorganisation (LGR) risk. Members had indicated that the risk considerations needed to be broadened out to better reflect the potential impact of significant management time and organisational focus on LGR.

Members were advised that this feedback had been carefully considered and rather than expanding the existing risk, which focused primarily on electoral arrangements and members terms of office, a new strategic risk had been created to specifically capture the impact of LGR.

The Director for Finance, Risk and Performance said that this new strategic risk created greater transparency and allowed the risks associated with LGR to be monitored separately. The Committee was also informed of ongoing work to strengthen the Council’s risk management arrangements, including officer and member training, implementation of recommendations arising from the recent Internal Audit review, and further development of risk indicators and mitigation measures.

Members questioned whether the climate change risk should be reviewed in light of increasingly extreme weather events and the potential impact on Council operations and buildings. Officers advised that all strategic risks were reviewed quarterly by the Leadership Team and the Director for Finance, Risk and Performance agreed to consider whether the risk score, implications and mitigation actions required further revision as part of the next review cycle.

Members also discussed cyber security risks and the rapidly developing threat landscape, including emerging risks associated with artificial intelligence. The Committee suggested that the existing cyber security risk could be broadened to reflect wider technological threats.

The Director for Finance, Risk and Performance explained that cyber security arrangements were regularly reviewed through the shared IT service and that a significant number of attempted cyber-attacks were successfully prevented each year through the Council’s existing security controls and protections.

Councillor Connolly proposed and Councillor Jacobs seconded, a motion that the2025/26 quarter four corporate risk register and actions being taken to control and mitigate risk have been considered and noted.

After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that the 2025/26 quarter four corporate risk register and actions being taken to control and mitigate risk have been considered and noted.

The Director for Finance, Risk and Performance submitted a report that provided an overview of the self-assessment exercise in relation to the Council’s Audit and Governance Committee. The assessment has been undertaken by the Chief Finance Officer, in line with guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA), which advocates regular self-assessment as good practice.

Members were advised that the report was now presented to the Committee to consider, comment on, and amend as appropriate, enabling members to confirm the level of compliance, gain an appreciation of best practice, and identify any areas for further improvement.

The Director for Finance, Risk and Performance said that one of the recommendations was that Members of the Audit and Governance Committee should not be on the Executive and should not be sitting on the Overview and Scrutiny Committee.

Members were advised that no members of the Audit and Governance Committee sat on the Executive, although some members were also members of the Overview and Scrutiny Committee. The Committee was advised that, given the size of the authority and the number of elected members available, complete separation of these roles might not be practical.

The Director for Finance, Risk and Performance said that the current position regarding committee membership had been identified and acknowledged as part of the assessment process. Members were also advised that the Audit and Governance Committee could consider having more informal discussions with both internal and external auditors on matters that may be more appropriately raised outside of the public meeting setting.

During discussion, a member sought clarification regarding the potential conflict arising from membership of both the Audit and Governance Committee and Overview and Scrutiny Committee. In response, officers explained that the guidance was intended to ensure independence and minimise any perceived conflicts of interest. However, it was considered that dual membership of those committees did not present a significant concern, provided the arrangement was transparent and appropriately recognised.

Councillor Hart proposed and Councillor Deffley seconded, a motion that Members have noted and commented on the proposed self-assessment and evaluation of good practice for Audit and Governance Committee in Local Authorities as set out in the Appendix B and any actions required to ensure full compliance which will form the basis of future annual reports be confirmed.

After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that (A) Members have noted and commented on the proposed self-assessment and evaluation of good practice for Audit and Governance Committee in Local Authorities as set out in the Appendix B; and

(B)   Members confirm any actions required to ensure full compliance which will form the basis of future annual reports.

The Director for Finance, Risk and Performance introduced the report, which set out the Committee’s work programme designed to ensure that statutory responsibilities were met, that assurance reports were received at appropriate intervals, and that the Committee maintained a balanced focus on audit, governance, and risk management throughout the year.

The Director for Finance, Risk and Performance said that the work programme will remain flexible and can be amended as new issues emerge. Members were advised that the programme provided a structured framework to support the Committee's oversight role during the year ahead.

Members were invited to comment on the programme and identify any additional training or reporting requirements. The Chair thanked the Director for Finance, Risk and Performance for the report.

Members raised questions in relation to future scrutiny arrangements for BEAM. Officers advised that, following the earlier discussion, there appeared to be a desire for a further discussion on the matter.

Whilst a report was currently scheduled for September, Members expressed support for an additional discussion in July. Officers agreed to consider the matter further and bring forward proposals for discussion in July.

Members supported holding a discussion in July and requested that BEAM remain on the Committee’s agenda for September, with the position to be reviewed thereafter if necessary.

Members said that future reports on BEAM should include profit and loss information and the organisation’s exact financial position, rather than focusing solely on sales performance figures.

The Chair reminded Members that the External Auditor had been unable to attend the current meeting and would therefore attend the September meeting. He said that the work programme would be amended accordingly.

It was moved by Councillor Adams (Chair) and seconded by Councillor Deering that the recommendations, as detailed in the report, be approved. After being put to the meeting and a vote taken, the motion was declared CARRIED.

RESOLVED – that (A) the Finance and Audit Work Programme for the 2026/27 municipal year, as amended, be approved; and

(B)   any training requirements be identified to support Members in fulfilling their roles effectively.

To consider such other business as, in the opinion of the Chairman of the meeting, is of sufficient urgency to warrant consideration and is not likely to involve the disclosure of exempt information.

There was no urgent business. Members had a brief discussion about the timescales for extra meetings in respect the BEAM business plan. Members asked if the slides from the BEAM presentation could be circulated to the committee.

No Part II business has been notified for this meeting.

If Part II business is notified and the procedures set out in the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012 have been complied with, the Chairman will move: - That under Section 100(A)(4) of the Local Government Act 1972, the press and public be excluded from the meeting during the discussion of item XX on the grounds that it involves the likely disclosure of exempt information as defined in paragraph XX of Part 1 of Schedule 12A of the said Act and the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

There was no urgent part two business.