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RESOLVED to exclude the public for the following item of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007). The Monitoring Officer has determined that category 3 of the Access to Information Procedure Rules applies to the following item. His view on the public interest test (having taken account of the provisions of Rule 14.8 of the Council's Access to Information Rules) was that to make this information public would disclose information relating to the financial or business affairs of any particular person (including the authority holding that information). These factors in his view outweigh the public interest in disclosing this information. Members are asked to consider these factors when determining the public interest test, which they must decide when considering excluding the public from this part of the meeting.
Apologies for absence were received from committee member Adam Kennerley, Claire Johnson-Wood, Cabinet Member James Gibson-Watt and Officers Clive Pinney, Diane Reynolds Dr Richard Jones, and Matthew Perry.
There were no Declarations of Interest from Members relating to items to be considered on the agenda.
The minutes of the meeting held on the 14th January 2026 were agreed as a correct record.
• Accounts were submitted on time (30th June 2025) and were of satisfactory quality. • An unqualified audit opinion was issued before the 31 October statutory deadline. • No uncorrected misstatements were identified. • Audit Wales highlighted several areas requiring improvement: • Scrutiny Function • Commissioning and Value for Money • Risk Management • Sustainable Powys Governance Arrangements • Weaknesses relate to clarity of reporting, alignment in corporate documents, timeliness of committee papers, and ability to scrutinise proposals effectively. Points raised by the Panel: Responses received from Officers or Cabinet Members. Clarification was sought regarding the statement in the Audit Wales report that no material internal control weaknesses had been identified. Members questioned whether this implied that immaterial control weaknesses had been found. Audit Wales clarified that no significant concerns had arisen during the audit, any issues observed would have been very small and technical, not systemic. The Section 151 Officer queried Audit Wales’s suggestion that there were any control weaknesses at all, noting that no such issues had been flagged to the Council during the audit. It was requested that Audit Wales confirm the accuracy of the wording. It was agreed that Audit Wales would review their records and provide a more precise explanation at a future meeting. ACTION
• The audit plan outlined the annual programme of work for the audit of the Pension Fund’s financial statements. The audit’s purpose was to: • Support an audit opinion on whether the Pension Fund accounts give a true and fair view and confirm whether they have been properly prepared in line with all professional and statutory requirements. • The planned materiality threshold for the 2025–26 audit cycle: • Overall materiality: £8.635 million. • Two other areas also had specific lower materiality levels, due to the sensitivity of disclosures in those areas. • Audit Wales outlined several audit risks that the work would focus on: • a. Risk of management override of controls. • b. Complex investment valuations: Certain Pension Fund investments involving complex valuation methodologies can carry inherent estimation uncertainty. This created a risk of material misstatement in investment asset values. • c. Governance and disclosure changes arising from Local Government Pension Scheme reform. • From 1 April 2026, all investment management functions will be transferred into the Wales Pension Partnership (WPP) under new regulations. The 2025–26 accounts must therefore contain clear and accurate disclosures about: • the progress made during the financial year, and • the future structure and management of Pension Fund assets. Ensuring completeness and accuracy of these disclosures is a key audit focus. • The Committee was informed of the provisional audit fee. • Fees may be adjusted depending on the outcomes of internal moderation and any changes to audit risks. Points raised by the Panel: Responses received from Officers or Cabinet Members. Did geopolitical instability in global markets pose significant risks to the assumptions underpinning the Pension Fund and was there anything further that the Committee ought to consider to ensure the Fund remained effectively managed. The Section 151 Officer explained that the Pension Fund was structured to withstand market volatility through a diversified investment strategy. The Fund operated within a heavily regulated environment, supported by the Pensions Investment Committee, the Pension Board, independent advisers, and the actuary. Immediate advice had been sought from the actuary following recent global events, and the advice at that time was that no urgent action was required. Equity protection measures were in place, the use of which was being reassessed in light of emerging risks. The Committee referred to the recent change in the Fund’s investment vehicle, which had been reported at a previous meeting, and asked whether Audit Wales would review any resulting change in risk as part of their audit work. Would any associated governance implications be examined. It was confirmed that Audit Wales would be reviewing any potential change in financial risk arising from the Fund’s revised investment vehicle as part of their audit procedures. However, confirmation could not be given whether governance implications formed part of their remit and agreed that a more detailed response would be provided subsequently. ACTION Officers acknowledged the significance of the change, noting that it formed part of a national transition to an FCA‑regulated investment management company within the Wales Pension Partnership, and confirmed that governance processes had been closely scrutinised throughout the change.
The report comprised two parts: • The Audit Wales report titled “Sustainable Powys: Are the Council’s governance arrangements effectively supporting its approach?”, and • A progress update on the Council’s actions in response to recent Audit Wales recommendations. • Audit Wales had examined whether the Council’s governance arrangements were effectively supporting its transformation programme. • Sustainable Powys had originated from earlier financial sustainability work, which identified major medium‑term financial challenges, making a clear and coherent transformation approach essential. • The review found the Council’s governance arrangements were not yet fully supporting Sustainable Powys, with weaknesses listed in the report. • Eight recommendations had been issued to strengthen governance arrangements, covering improved documentation, timeliness, clarity, and monitoring. • The Council had already begun to take action in several of the identified areas. Background presented by Leader of Cabinet: • Disappointment was expressed with the nature of the audit, stating that the findings focused on operational matters rather than offering strategic insight or best‑practice learning. • It was expected that the audit would scrutinise the broader, strategic value of Sustainable Powys, rather than revisiting procedural issues from previous audits. • The review duplicated earlier scrutiny‑related audit findings, and it was questioned whether the audit had added value proportionate to its cost. • The importance of Audit Wales supporting councils by sharing good practice from across Wales, was highlighted and suggested to be a more beneficial outcome. Points raised by the Committee: Responses received from Officers or Cabinet Members. Committee expressed concern that the debate taking place about the scope and value of the Sustainable Powys audit ought to have occurred at the scoping stage, rather than after the report’s publication. It was questioned whether there were learning points about how audit scopes were agreed and monitored as work progressed. Officers had challenged the scope of the Audit Wales review at the outset but accepted that the nature of the audit had nonetheless led to overlap with previous work. In that regard, officer comments aligned with those previously expressed by the Leader. A management response had been prepared, was already being implemented, and would continue to be taken forward. It was also noted that other pieces of Audit Wales work were welcomed, such as the cyber‑resilience work. At what point in the process were impact assessments undertaken, did this followed a consistent order, and how did the Council ensure that value for money, community impact, and service resilience were properly evaluated when service changes were proposed. Impact assessments were carried out at the point any decision was made, ensuring that decision‑makers understood the potential effects of the proposal, how those effects had been evaluated, and what the key elements of the anticipated impact were likely to be. Some decisions which required public consultation, and certain areas of service change such as school reorganisation had involved particularly detailed assessments, including objection reports submitted to Cabinet. Considerable work had been undertaken to strengthen public engagement, including improving the way information was shared so the public had a clearer understanding of Council activity. This had been supported through campaigns such as “We Do More Than You Think”, through increased use of social media, and through the development of a new communications and engagement strategy designed to enhance earlier efforts. Improving public involvement remained an ongoing priority, with surveys regularly carried out and response rates gradually improving, although there was still further progress to be made to achieve widespread participation. In relation to closing the loop on impact, it was confirmed that assessments began at the business‑case stage, where anticipated impacts were set out from the outset. These were then reviewed upon completion of the work. For example, the Finance Panel received an annual savings report, which compared the expected impacts of savings proposals with the actual outcomes achieved and assessed whether the intended benefits had been delivered. Similarly, within the Council’s transformation programme, each project began with a business case assessing likely impacts. End‑of‑year reporting had been strengthened, with the most recent transformation report providing clear information on investment made, the return on that investment, and the resulting benefits for residents. The organisation had undertaken substantial work to improve how impact was assessed and reported, and further improvements were expected to become increasingly evident over time. The Chief Executive added that the quarter 3 performance report demonstrated the administration’s improvements, as well as areas where performance had declined. This enabled attention to be directed towards the risks or issues requiring action, and informed any decisions needed to bring performance back on track so that the overarching outcomes set out in the Corporate and Strategic Equality Plan could be achieved. It was acknowledged that the organisation required a stronger focus on evaluation and impact, and that this would be taken forward by building on learning gained particularly from the education service. It was emphasised that performance monitoring should not be limited to numerical data but should also reflect the real difference being made for residents. This aspect could be strengthened further. It was also recognised that an improved inquiry culture was needed across the organisation. Additional professional development support for both members and officers was proposed to help embed this approach. How did the Council translate its corporate objectives into meaningful, measurable actions, and how did it ensure that performance measures aligned with predicted and actual outcomes. The Council’s Corporate and Strategic Equality Plan set out the overarching objectives, which were then translated into Integrated Business Plans at service level. These contained defined actions, deadlines, responsible officers and performance indicators. Performance was monitored through the quarterly performance management framework, enabling senior officers and Members to review progress, identify slippage and take remedial action. The Council had strengthened end‑of‑year reporting, ensuring that the impact and outcomes of major service changes and transformation work were captured, including any variance between expected and actual results. Committee noted that several issues raised by Audit Wales had already been highlighted by the Governance and Audit Committee in previous months.
• The plan had been developed in accordance with the new Global Internal Audit Standards, which required the Chief Audit Executive to produce a plan based on a documented assessment of the organisation’s strategies, objectives and risks. • The plan was fully risk‑based, having been informed by consultation with senior management and Members of the Governance and Audit Committee, as well as a review of key strategic documents and the Council’s risk environment. • The plan was designed to ensure sufficient and appropriate coverage to support the provision of a robust and well‑evidenced annual internal audit opinion at year‑end. • Specific thematic areas were included in the 2026–27 plan, such as climate and nature emergencies, property and asset management, emerging technologies, core system controls (including new systems due to go live from 1 April), procurement, social care pressures, and productivity. • Delivery would be undertaken primarily by SWAP’s core audit team, supported where necessary by specialists in IT, counter‑fraud and data analytics. • The plan included a 5% contingency allocation to allow flexibility to respond to emerging or unforeseen risks during the audit year. • Committee was reminded that the Internal Audit Plan must be approved by the Governance and Audit Committee, in line with the Standards and the Council’s governance framework. Points raised by the Panel: Responses received from Officers or Cabinet Members. How would the effectiveness of the Climate and Nature audit be measured, noting that while Powys could assess its own performance, the UK contributed only a small percentage to global emissions. How would the audit determine what ‘effective’ meant in this context. The audit would measure effectiveness against the Council’s own strategy, actions and defined success measures, rather than wider global climate impacts. The audit would examine how the Council defined success, the measures it used, and whether its actions aligned with its Climate and Nature objectives. Would the Housing Asset Strategy audit examine the impacts of the Council’s expression of interest in the asylum dispersal scheme. Officers could not confirm whether the audit would include this issue, as the final scope would be determined following a structured risk assessment when the audit commenced. The potential impact of the asylum dispersal scheme would be considered during the scoping process and included in the audit if assessed as a significant risk. Assurance was sought that the Highways audit would cover pothole repairs, prioritisation processes, and preparedness for major 2026–27 events, including the Tour de France. Further assurance was sought that the audit would examine the quality and long‑term resilience of pothole repairs, as well as performance metrics. It was agreed that assessing longer‑term durability was important and officers confirmed they would consider adding this aspect into the detailed audit scope, examining the Council’s quality assurance processes and whether repairs remained effective over time. Strong concern was expressed that PRUs were not included in the cycle of school establishment audits. It was stated that Pupil Referral Units should follow the same governance and financial controls as schools and committee asked for their inclusion. It was requested that the Section 151 Officer report back to committee to share the deliberations that were taking place, particularly if it was concluded that the Pupil Referral Units would not be included in a future audit? ACTION PRUs were not included in the current planned audit cycle, but it was agreed to review this position with senior officers, taking into account recent concerns. Powys Officers added that if risks emerged or concerns were raised, audit work could be commissioned during the year outside the planned cycle. Would the productivity audit include analysis of staff resources, and would it look at all outcomes, not only ‘priority outcomes’. It was confirmed that staff resources were included within the scope of the productivity audit, but the team would focus on a sample of priority outcomes, rather than assessing all measures across the Council. Committee formally approved the Annual Plan subject to the ongoing discussion around Pupil Referral Units. Committee formally approved The Annual Audit Charter.
• A deep‑dive review of internal audit actions raised since April 2024 was provided, focusing on identifying recurring root causes rather than individual control issues. • A total of 277 actions had been issued, with the majority implemented. The purpose of the review was to provide organisational learning and insight to help prevent future issues. • Eight root causes had been identified, with the most frequent being: • Management roles and responsibilities (31%) • Human factors such as training and communication (30%) • Policy and process design weaknesses (20%). • The review was intended to support future planning and improvement, enabling the Council to address systemic causes and reduce recurrence of similar audit findings. Points raised by the Panel: Responses received from Officers or Cabinet Members. The percentage of management‑related root causes was significantly higher when schools were included (31%) compared with the wider organisation (20%). Further detail on the specific issues within schools that were driving this variance was requested. This observation was correct, it was agreed that SWAP officers would provide more detail around this to Committee. ACTION Should the report have focused on why actions became overdue, rather than on the root causes of the original audit findings? It was clarified that the purpose of the review was to examine systemic root causes behind audit issues, not to analyse why actions became overdue. It was emphasised that most actions had already been implemented and that the deep dive sought to identify patterns for prevention, not to revisit overdue status. Concern was raised that the wording in the summary, referring to occasional control weaknesses being expected within a complex organisation, could appear complacent. Committee requested reassurance that this did not imply weakened expectations regarding internal control. Officers acknowledged the concern raised and explained that, given the scale and breadth of an organisation such as Powys, occasional control weaknesses were inevitable. What mattered more was the speed with which these issues were identified, addressed, and learned from. The appropriate frameworks for risk and performance management were already in place and there was no complacency within the authority. Future work of this type should be progressed collaboratively, as addressing such matters in isolation would limit their effectiveness. It was requested that a workshop be held with SWAP and the Senior Leadership Team to review the findings and jointly develop the thematic improvements required across the organisation. These improvements could then be incorporated into the service integrated business plans. The importance of ensuring the reports key elements were taken forward in a meaningful and effective way was emphasised. Were there any unexpected findings, and were there lessons learned, either from areas where others had performed better or from human error that could have been shared to support other organisations? No areas of surprise were found. There were patterns across many areas which suggested room for improvement. As more local authorities undertake this audit, there would be opportunity for benchmarking. SWAP Officers committed to bringing this report back to committee in 12 months. ACTION Future analysis could examine patterns in how services respond to audit recommendations, not just the causes of issues. Such thematic analysis could support better business planning and reduce duplication across services. It was confirmed that SWAP would examine whether patterns in service responses could be mapped and reported in future updates, to demonstrate how mitigations had worked. The Highways, Transport and Recycling (HTR) directorate appeared as a single block in the analysis and Committee requested a more detailed breakdown to understand whether issues related to specific areas of the service. Committee was reminded of the Chief Executive’s previous point around workshopping this to respond to evidence and information.
• The Chief Accountant presented the Quarter 3 Treasury Management Report. • The Portfolio Holder for Finance and Corporate Transformation highlighted current geopolitical and economic instability, stating that interest rates were unlikely to fall in the near term and that inflation was set to rise. It was emphasised that these issues would impact future borrowing costs and capital planning. • The Portfolio Holder for Finance and Corporate Transformation thanked the work of the Debt Recovery Team. Points raised by the Panel: Responses received from Officers or Cabinet Members. The closing balances in the Capital Financing Requirements table appeared inconsistent or out of line and queried the reason for the discrepancy. It was explained that the variation resulted from reprofiling undertaken during the year, alongside changes arising when setting the new budget. Some schemes initially reprofiled forward had subsequently been pulled back, and the Quarter 3 estimate reflected the accurate position. A marked improvement in the Council’s aged debt position was noted and asked what factors had contributed to this performance and whether any lessons could be learned for future practice. The improvement resulted from a significant amount of work on debt recovery, including the issue of both soft and firm reminder letters. The Section 151 Officer added that additional resource had been secured, including a lawyer dedicated to pursuing higher‑value or complex cases, while automated reminders and improved service‑level visibility through the finance dashboard had strengthened the overall process. More information was requested around the Council’s financial relationship with Powys Teaching Health Board, particularly regarding outstanding balances and the time needed to resolve cross‑organisational financial matters. It was confirmed that regular joint meetings were held with Powys and the Health Board’s finance teams, and that discussions were constructive. A new process had been developed to ensure clear agreement at the start of each placement regarding financial responsibilities and liabilities, which assisted future resolution of balances.
• The Quarter 3 Fraud and Error Report was presented, confirming release of new National Fraud Initiative (NFI) matches and completion of reviews relating to all high‑risk matches. • Additional NFI matches were expected in the following financial year, with outcomes to be shared with relevant service areas as part of ongoing monitoring activity. Points raised by the Panel: Responses received from Officers or Cabinet Members. Committee thanked Wales Audit Office and Audit Wales Officers for providing clarification around the NFI data.
• The purpose of the paper was to review and agree the Council’s updated risk appetite, replacing the version approved in April 2023. • The risk appetite described the amount and type of planned risk the Council was willing to take to meet its strategic objectives and deliver services. • Appetite would naturally vary between service areas, influenced by factors such as knowledge, understanding, and past experience. • The risk appetite statement and range were detailed in Appendix A and had been designed to complement the Council’s existing Risk Management Policy and Guidance. • The new version of JCAD risk management software had functionality to manage risk appetite. • Following the Audit Wales risk management audit, the Council had committed to integrating the risk appetite into JCAD as part of its agreed action plan. • It was recommended that the Council begin setting a target rating for each risk to strengthen its maturing risk management approach. • Not all risks were undesirable and that a formalised appetite helped distinguish between risks to accept, reduce, or avoid, while also ensuring opportunities were considered. • Programmes and projects could tailor their own risk appetite where appropriate, provided it sat within the overarching corporate framework. Points raised by the Panel: Responses received from Officers or Cabinet Members. How were the numerical risk scores calculated? The numerical scores came directly from the risk matrix contained within the Council’s Risk Management Policy and Guidance. Scores were based on probability (1–5) multiplied by impact (1–5) to produce a combined risk score. This matrix was located at the bottom of the policy/guidance and is the basis for allocating levels such as “low”, “medium”, “high”, and “severe”. Did the risk appetite take account of external or contextual risks that sit outside the Council’s control? Officers confirmed that external risks were covered within the overarching Risk Management Policy and Guidance, not solely in the risk appetite statement. It was acknowledged that the cover report could be updated to make this clearer but emphasised that the overarching framework already included these risk categories. Clarification was requested around the scoring in the table in paragraph 2.10 being ‘low to high’. The approach aligned closely with the risk management matrix, which scored impact and probability from 1 to 5 and used a colour‑graded scale to illustrate levels from low to high. The scoring of 9–12 corresponded directly with this framework. Considerable work had been undertaken to refine the definitions of ‘very low’, ‘low’, ‘moderate’, and ‘high’ to ensure they aligned with the wider risk management framework used by officers, thereby supporting a clearer understanding of risk appetite. Given the breadth of the ‘very low’ to ‘high’ categories, did this mean that the organisation’s risk appetite differed depending on the nature of the service, with some areas requiring a very low appetite and others a higher one? Risk appetite needed to be considered in the context of the accompanying criteria. How did the Council balance compliance with established controls versus encouraging innovation, given the risk appetite statements? Risk appetite was considered at the policy‑setting stage, when determining acceptable levels of risk. Once policies and procedures were set, the Council did not have appetite to deviate from established controls, particularly where compliance was legally or operationally required. Innovation was supported where appropriate but must still operate within the framework of approved policies and control expectations.
The Chair informed the Committee that the Value for Money Report had not been provided ahead of the meeting as required. The Chair formally recorded her disappointment that the report was missing. The Committee noted that the Value for Money Report would instead be added to the agenda for the 22 May 2026 meeting.
• The report was presented by the Director of Social Services and Wellbeing. Points raised by the Panel: Responses received from Officers or Cabinet Members. Members raised concern that mandatory safeguarding training in schools had not been consistently completed and asked for clearer information on levels of compliance. Officers confirmed that performance had improved, with more schools completing the required training. Further comparative data would be included in the next report to give the Committee a clearer understanding of compliance across different school settings. ACTION
• The Quarter 3 Regulatory Tracker presented a consolidated update on all regulatory recommendations issued between October and December. • 38 recommendations were active during the quarter, reflecting work from Audit Wales and the Ombudsman. • 8 new recommendations had been added, consisting of 6 from Audit Wales and 2 from the Ombudsman. • 28 recommendations remained open, with 23 assessed as on track and 5 recorded as off track for delivery. • 10 recommendations had been completed during the reporting period. • The Tracker was now supported by an interactive Power BI report, allowing improved visibility of progress and status changes. Committee noted that the report had been developed and improved over recent months which supported understanding.
Capital Working Group • The Working Group had been actively engaged in early discussions regarding the farm estates consultation. • External consultants had been involved in supporting this work, and the group had continued to monitor the emerging proposals. Internal Audit Working Group • The Internal Audit Working Group had been monitoring the delayed review of the complaints process. • John Brautigam took an action to write to the Leader of Cabinet and ask that a corporate review of the complaints process be conducted by Cabinet.
The Committee noted that the Value for Money Report, which had not been received for the current meeting, was to be added to the Work Programme for the meeting on 22 May 2026.
Decision as recorded
RESOLVED to exclude the public for the following item of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007). The Monitoring Officer has determined that category 3 of the Access to Information Procedure Rules applies to the following item. His view on the public interest test (having taken account of the provisions of Rule 14.8 of the Council's Access to Information Rules) was that to make this information public would disclose information relating to the financial or business affairs of any particular person (including the authority holding that information). These factors in his view outweigh the public interest in disclosing this information. Members are asked to consider these factors when determining the public interest test, which they must decide when considering excluding the public from this part of the meeting.
RESOLVED to exclude the public for the following item of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007). The Monitoring Officer has determined that category 3 of the Access to Information Procedure Rules applies to the following item. His view on the public interest test (having taken account of the provisions of Rule 14.8 of the Council's Access to Information Rules) was that to make this information public would disclose information relating to the financial or business affairs of any particular person (including the authority holding that information). These factors in his view outweigh the public interest in disclosing this information. Members are asked to consider these factors when determining the public interest test, which they must decide when considering excluding the public from this part of the meeting.
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