Audit, Finance & Performance

Minutes AUDIT, FINANCE & PERFORMANCE COMMITTEE 14 May 2026 Meeting held at Council Chamber - Civic Centre, High Street, Uxbridge UB8 1UW Committee Members Present: Councillors Higgins, Banerjee, Huddle, Riley & Eginton 1. ELECTION OF VICE CHAIR (Agenda Item 1) RESOLVED: That Councillor Henry Higgins be elected as Vice Chair of the Audit, Finance & Performance Committee for the 2026/27 municipal year. The meeting, which commenced at 9:00PM, closed at 9:10PM. These are the minutes of the above meeting. For more information on any of the resolutions please contact Anisha Teji, Democratic Services ATeji@Hillingdon.gov.uk on . Circulation of these minutes is to Councillors, Officers, the Press and Members of the Public.

Minutes AUDIT COMMITTEE 10 February 2026 Meeting held at Committee Room 5 – Civic Centre, High Street, Uxbridge, UB8 1UW Committee Members Present: John Cheshhire Councillor Nick Denys (Vice-Chair), Councillor Douglas Mills, Councillor Tony Burles, and Councillor Sital Punja Officers Present: Claire Baker – Head of Internal Audit and Risk Assurance, Alex Brown – Head of Counter Fraud Steve Muldoon – Corporate Director of Finance Andrew Macleod – Chief Accountant Pete Carpenter – Director – Pensions, Treasury & Statutory Accounts Matthew Wallbridge – Chief Operating Officer Daniel Toohey – Head of Legal Services Lloyd White – Head of Democratic Services Ryan Dell – Democratic Services Officer Also Present: Stephen Reid, Ernst & Young Mark Rutter, Ernst & Young Neal Dempsey, Grant Thornton Councillors Present: Councillor Stuart Mathers, Leader of the Labour Group 46. APOLOGIES FOR ABSENCE (Agenda Item 1) Apologies had been received from Councillor June Nelson with Councillor Sital Punja substituting. Apologies had also been received from Councillor Henry Higgins. 47. DECLARATIONS OF INTEREST (Agenda Item 2) None. 48. TO CONFIRM THAT ALL ITEMS MARKED IN PART I WILL BE CONSIDERED IN PUBLIC AND THAT ANY ITEMS MARKED PART II WILL BE CONSIDERED IN PRIVATE (Agenda Item 3) 49. MINUTES OF THE MEETING HELD ON 18 NOVEMBER 2025 (Agenda Item 4) RESOLVED: That the minutes of the previous meeting be agreed as a correct record 50. STATEMENT OF ACCOUNTS & EXTERNAL AUDIT REPORTS (Agenda Item 5) Officers introduced the item, outlining the report and appendices. The 2024/25 accounts had a backstop date of the end of February. There were some dependencies within the accounts. It was noted that confirmation of the Council’s EFS application was awaited before final updates were made to the Statement of Accounts. It was highlighted that the recommendation was to delegate approval of the Statement of Accounts to the Corporate Director of Finance in consultation with the Chair, pending the outcome of the EFS application, which was expected in approximately one week. The 2024/25 audit opinion would be disclaimed, reflecting sector -wide cha llenges. Returning to ‘clean’ accounts was estimated to take approximately two to four years. Progress against recommendations noted within the GRIP showed improving RAG statuses but substantial work remained. EY outlined their two appendices:  the Audit Results Report, which summarised the results of audit work on the financial statements for 2024/25; and  the Draft Auditor’s Annual Report, which summarised the overall results of the audit to date and consideration of the Council ’s value for money arrangements and any significant weaknesses. Both would be updated to reflect the final position once the accounts were updated and approved. EY thanked officers for their cooperation. In relation to the 2024/25 audit, EY had identified four significant weaknesses in the Council’s Value for Money arrangements: 1. Financial sustainability: low reserves, a significant DSG deficit, and a large budget challenge 2. Quality of financial/ performance information, including impacts of the Or acle implementation 3. Finance team capacity 4. Implementation of Oracle Fusion Seven statutory recommendations had been reported in July 2025, related to:  Developing and delivering savings and transformation plans  Reviewing service delivery models for efficiency and value for money  Managing the DSG deficit  Improving forecasting  Fixing Oracle issues and associated processes  Strengthening the finance function  Maintaining pace on finance modernisation and GRIP In the Draft Auditor ’s Annual Report, EY had issued an additional non -statutory recommendation asking the Council to reassess whether the assumptions and forecasts underpinning the 2025/26 budget were sufficiently robust to support the conclusion that a balanced budget was set and to consider further actions if that could not be demonstrated. EY described the Council ’s financial position as critical, and unsustainable without corrective action and EFS. Reserves were very low; the DSG deficit was significant; and the ability of the Council to absorb further shocks was limited. It was also highlighted that Internal Audit has been unable to provide overall assurance for 2024/25, which heightened concerns in relation to governance and control. EY raised concerns that the Draft Auditor ’s Annual Report (i ssued on 27 November 2025) had not been considered by Members prior to this meeting. The audit opinion for 2024/25 Council accounts will be disclaimed, citing incomplete procedures and lack of assurance over prior years following earlier disclaimers. EY noted that the Audit Results Report had considered arrangements during 2024/25 (up to 31 March 2025), and there had been actions since then which would be referenced in updates on the GRIP and FMP. Early -year forecasts of overspends had emerged unusually quickly, prompting the budget-assumptions recommendation. On Oracle, EY highlighted governance observations including around the decision to launch it, addressing associated risks, and monitoring the project costs and benefits. On information quality, there had been challenges with Oracle EPM budget reporting, and difficulties in accessing certain school information which had impacted audit execution. There had been delays on routine controls and publication of draft accounts in September which had reflected a conscious quality focus. However, future timeliness must align with statutory guidance to rebuild assurance. Across these weaknesses, a number of recommendations were presented within the report, such as the statutory recommendation s and the additional recommendati on around reviewing the balanced budget. There were also recommendations within the appendix, specifically in relation to Oracle implementation, as well as any future IT implementations. It had been agreed that, given the delays to the publication of draft accounts and some of the challenges encountered in previous audits and capacity of the finance team, and to complete the audit by the backstop date, PPE calculations would be descoped. EY had been unable to make all the progress they had hoped but had made progress in a number of areas that had proved difficult in previous years. EY thanked officers for their help in those areas. The Council was approximately two years behind the sector-wide envisaged rebuilding timetable. EY wanted to see all green/ amber RAG statuses in 2025/26 to move away from disclaimed opinions. Officers advised that while a significant dent was expected in the 18 red areas flagged for March 2025, they were cautious about achieving zero red statuses, noting that PPE was out of the scope. Regarding a risk around Oracle data migration, assurance was ultimately obtained, but only with significant effort due to complex legacy structures and post -migration adjustments. There was a new control recommendation rel ating to timely completion of bank and fixed-asset reconciliations, and several 2022/23 recommendations remained open pending completion of work. Referencing the misstatement section of the report, it was noted that not all procedures had been completed. There were no significant findings in terms of monetary values. There were some findings on classifications. Discussions were ongoing around the Annual Governance Statement. On the Pension Fund, a ll procedures had been completed, and a clean opinion was anticipated. There was only one control recommendation. Members queried whether EFS would cover both 2024/25 and 2025/26. Officers confirmed the original 2024/25 request (to bolster reserves) was deferred and rolled into the 2025/26 request to align with accounts closure timelines. EFS confirmation was expected next week and officers were optimistic. Members asked why negative reserves and treasury misallocations were not spotted through usual monitoring. Officers cited capacity pressures and heavy workl oads resulting in missed review points. Adjustments expected to wash out had not done so, indicating that the review process was not robust enough at that time. Members asked if the late introduction of the FMP represented a failure in financial governance. Officers clarified that the beginning of the FMP was in early 2025, before the Section 24 report had been issued. The FMP was then amended as a result of this and other internal and external reviews. Members asked what role Grant Thornton and Local Government Association had played in identifying these issues and why with such external intervention was necessary to recover basic balance sheet problems. Officers advised that as part of the last budget, there was an initial assessment of the financial position prior to the FMP . Grant Thornton had been engaged for phase one and two. The LGA had been engaged to support as necessary. On audit adjustments of £3.278 m, officers stated that these followed norm al audit dialogue. The largest adjustment related to a £2m dividend from Hillingdon First. The Council can received dividends if they are valid. Members asked about how the recommendation around the balanced budget had been taken forward. Officers advised that they had undertaken a lot of work on assessing the reasons behind the financial forecasts to ensure a good understanding of the current position. The GRIP and FMP had begun prior to the issue of the S24 report. Regarding EY’s additional recommendation around the budget, this would be tracked via the GRIP . Officers would also be doing a review. Councillors raised concern that the Draft Auditor ’s Annual Report had not been considered prior to this evening. Councillors also suggested convening another Audit Committee to sign off the accounts. EY clarified that the Draft Auditor ’s Annual Report had been issued on 27 November 2025, before the deadline of 30 November, and summarised the status of the audit at that point in time. Given the significant value for money findings, EY would have expected that report to have been considered prior to this evening. Officers advised that it was within the Committee’s discretion to decide if they wanted to hold an additional meeting, or to delegate approval of the accounts. Members asked for more information about notice to EY of planned restatements . EY clarified that under accounting standards, during the preparation of the current financial statements, if a material error was identified in the prior period’s statements, there was a requirement to restate it. Within the draft financial statement, published in September, there were a number of restatements. EY had since worked through these with officers and concluded that these were not restatements and should not have been res tated within the accounts. The only restatement left concerned a directorate restructure. Members asked about compliance of the Annual Governance Statement with the Local Code. Officers said the published draft was signed in July based on knowledge at that date. Final wording of the Annual Governa nce Statement will be updated to reflect current evidence and audit feedback. The Chair thanked everyone for their work. EY had noted the critical financial position that the authority was in. The Chair noted that the Committee needed to express its concern about the position and stressed the seriousness of it. The Chair thanked EY for the clarity of their reporting. A motion to delegate authority to sign off the accounts was moved, seconded and, when put to a vote, agreed. The intention was to pro ceed by delegation unless unexpected issues arose from the EFS decision. RESOLVED: That the Audit Committee: 1. Noted the final position regarding the Statement of Accounts, Draft Auditors Annual Report, and Audit Results Report 2024/25 for the London Borough of Hillingdon for ratification and delegate d final sign-off to the Corporate Director of Finance, in consultation with the Chair who will sign off the accounts on behalf of the Audit Committee, following approval of the Council’s EFS application; and 2. Noted the final position regarding the Statement of Accounts, Auditors Annual Report, and Audit Results Report 2024/25 for the Hillingdon Pension Fund for ratification. 51. UPDATE ON THE GRIP (Agenda Item 6a) Officers introduced an update on the GRIP, reminding Members that the GRIP consisted of three core workstreams: financial governance, directorate governance and constitutional governance. The report summarised the progress since the last Audit Committee meeting. The forecast position from Month 6 through to Month 9 had remained stable, which officers regarded as a positive development. Spend controls had been in place since before Christmas. Budget development for 2025/26 had embedded learning from this year’s issues, with savings delivery plans developed for proposals where appropriate. The Council will start the budget -setting and MTFS process significantly earlier next year. Officers confirmed EFS progress was ongoing. The final Local Government Financ e Settlement (announced the previous day) provided long -awaited clarity on national DSG deficit treatment: Councils will receive 90% of the DSG deficit s in Autumn 2026, with further support anticipated thereafter. This significantly reduce d local financial impact. Significant preparatory work was underway to get ready for the 2025/26 audit. The Council had increased transparency and oversight by reporting performance to Cabinet, Select Committees, and Full Council. A Governance Masterclas s for senior managers had been delivered; and a Governance Toolkit was now available on the intranet. Officers emphasised the need to begin business and financial planning earlier than in previous years. Members asked whether the budget -holder training p rogramme had been tested for effectiveness. Officers responded that training had been rolled out to ensure understanding that financial responsibility extended beyond the Finance team. It was too early to meaningfully assess outcomes. Additional training w ill occur as part of Oracle process changes and the new EPM rollout. Cultural and behavioural change was expected to take time and would require repeated reinforcement. There would be a two-stage process including a learning and development session with senior managers to understand changes within Oracle and changes to reporting budgets. At the start of the FMP, the aim was always to start 2026/27 monitoring on Oracle and so there would be training before month 2. The FMP was in two parts, the finance part and the Oracle part. Members asked whether EY ’s recommendations on Oracle were being integrated. Officers confirmed that improvements were underway around access, authorisation levels, and procure -to-pay processes. The Council was moving away from legac y processes to Oracle-standard methods. Integration between HR and Finance systems was being strengthened to ensure organisation and staffing data flowed correctly into Oracle. EY’s Oracle-related recommendations had been positively adopted, particularly those around price and quantity controls, HR –Finance integration, and improving technical configuration. Members asked why many process, access, and governance issues appear ed to be addressed after go-live. Officers explained that the original implementati on effectively ‘lifted and shifted ’ the legacy Oracle R 12 configuration into Oracle Fusion, replicating old limitations. The Council was now correcting this by moving to a more standard, optimised Oracle configuration. Rather than rushing mid -year changes, officers intentionally aligned improvements with the start of the new financial year for stability and to avoid compounding past mistakes. Oracle improvements must be phased and cannot be completed in a single cycle without risking further errors. Members asked whether officers underst ood the system ’s full functionality. Officers stated that Oracle was a cloud -based, continuously developing platform with far more functionality than required on day one. The aim was to ensure the system fully supported core processes from the start, then expand its use over time. Additional functionality will be introduced gradually through planned, properly governed phases. Members asked if a formal Post -Implementation Review will be conducted. Officers confirmed that an implementation review will be carried out after completion of the Finance Modernisation Programme. Members welcomed the new cross -organisational approach, crediting strengthened senior leadership roles and a more integrated view of IT, HR, and Finance. In response to a question about reviewing the Council Constitution, officers advised that a commissioned review from Lawyers in Local Government was received just before Christmas. The review took a broad -brush approach, examining legislative compliance and fitness-for-purpose. Recommendations included:  Review of financial delegations and procurement rules (last updated in 2023).  Greater transparency around Part 2 items, including considering transferring material into Part 1 where appropriate.  Review of the Members’ Code of Conduct, which had not been updated since 2012; national changes are expected from central government. Constitutional updates will be brought to Members – larger amendments aimed to be delivered for Annual Council in May. Routine updates continue under delegated authority where appropriate. RESOLVED: That the update to the Governance Review Improvement Plan was noted. 52. UPDATE ON THE FMP (PRESENTATION) (Agenda Item 6b) Officers introduced the Finance Modernisation Programme (FMP) update. The programme had been established to respond to findings from past internal audits and external audits and was designed to address weaknesses in financial management; improve the Oracle system and related processes; strengthen the Council ’s capability to manage and understand its financial performance; and provide sustainable, reliable insight into the Council’s financial position. Officers summarised that Phase 1 centred on strengtheni ng internal basics and addressing previously identified control weaknesses. This included: Financial Management & Core Controls: Addressing balance sheet risks; validating accounting transactions; enhancing accuracy of reporting; and improving audit readiness. Improving Budget Monitoring: Training delivered to all budget holders; simplified budget-monitoring processes; corrections to pay forecasting and other mis-forecasting issues; and introduction of good-practice standards for monitoring and forecasting. Reducing Oracle Burden: Tackling data and access risks; reducing manual admin effort and requisition workload; increasing system availability and reducing errors during monthly resets; and improving user understanding of Oracle. The strategic vision of the finance function was to build a strong foundation of consistent processes, accurate data, and reliable systems; develop continuous improvement as a cultural norm; move Finance from correcting numbers to interpreting them, offering insight a nd analysis ; to become trusted advisors to support organisational decision-making; and to ensure staff have clear expectations, strong support, career paths, and relevant training. Current work in Phase 2 included: Audit Readiness (2025/26): Continuing work to strengthen controls and processes ahead of the next audit cycle. Planning, Budgeting & Reporting: Oracle improvements and a new forecasting system, ensuring staff can access the right reports and rely on them, and strengthened MTFS modelling and forward planning. Financial Clarity: Improving strategic insight; and identifying weak areas and shaping support frameworks. Officers highlighted the importance of clear financial and performance accountability as well as a coherent leadership culture ac ross senior officers, linking financial, performance, HR, and risk responsibilities. Officers presented a detailed forward plan covering January to June: Current Period – Foundations: Included reviewing organisational hierarchies for budget reporting; Corporate Directors validating structures for future monitoring; and ensuring system setup aligned to how services actually manage budgets. March: Included reviewing licensing costs and ensuring only staff who require d monitoring access were licensed. April: Included finalising reporting elements for launch at start of financial year. May–June (Month 2 Execution) Included execution of Month 2 budget monitoring in Oracle – the first full cycle of new arrangements (core target of FMP); and tracking return on investment and resolving identified issues. Officers stressed that success depend ed on clear communication; trained change champions; business-led training; and avoiding a repeat of past mistakes. Officers described extensive work on mapping skills across all finance roles and Member learning needs. Oracle changes would require continuous training, and it was important to ensure that new starters were consistently trained. A new framework had been established to strengthen professional capability across the finance function. Officers outlined current constraints. These included: Capacity Pressures: Finance was simultaneously running EFS, audit readiness, budget monitoring reforms, FMP, and the Oracle rebuild. Concurrent Corporate Change: Many large corporate programmes running simultaneously require d careful sequencing and communication. Supplier Dependency: Implementation depends on Mastek, who must support deployment into the live environment. Budget Holder Accountability: A critical dependency is strengthening accountability across directorates, not just within Finance. Change Fatigue: Previous Oracle experiences create d scepticism; robust comm unications and visible quick wins were needed. It was summarised that the 2026/27 budget monitoring would be managed through Oracle and start in month 2. There would also be a learning and development framework aligned with finance. Members asked why the presentation focused heavily on vision rather than tangible updates. Officers responded that Phase 1 results had been included. Phase 2 necessarily involved significant behind-the-scenes technical work. Members asked if Phase 2 was on track. Officers confirmed it was on track. Workstreams were progressing in accordance with the detailed roadmap and technical elements were being implemented. Members asked about risk management and mitigations. A detailed FMP risk register was maintained and reviewed regularly with the Leader and Chief E xecutive. Mitigations were in place for all major risks. Members stressed the need for a clear narrative in financial reporting, better modelling explanation, and stronger Member development. Officers acknowledged the point and confirmed that member train ing will be strengthened as part of the organisation -wide development refresh. RESOLVED: That the update to the Finance Modernisation Programme was noted. 53. RISK MANAGEMENT & STRATEGIC RISK REPORTS (Agenda Item 7) Officers presented the Risk Management report. As at 28 January 2026 there were 225 risks recorded on the risk register. 22 red risks were live at the time of reporting. Four red risks were closed in-period. Seven risks were downgraded (from red to amber/ green). Three risks were added to the Corporate Risk Register (one new risk; two escalated from amber). There was only one unscored risk, which had been added on the same day the report was run. This was scored shortly afterwards. Five risks were overdue for review, a substantial improvement from 41 in November. 32 risks had overdue actions, significantly reduced from 107 in November. Officers emphasised that this represented significant and sustained improvement in risk management. Notably, improvements had arisen from stronger governance, not from chasing outstanding updates. Directorates were proactively engaging, supported by new business managers. Officers presented the Strategic Risk Register, which covered cross-cutting, corporate risks. This reg ister was owned by CMT and link ed into the wider performance dashboard. It will undergo a full review at the start of next year. In terms of further improvement, Members asked what may still be missing or inconsistent within the risk framework. Officers highlighted: Consistency Across Services: some services were highly proactive in reporting emerging risks; others show ed signs that they may not always escalate issues promptly. Directorate-level governance meetings now challenge d services on any. Timely Risk Closure & Action Completion: while risks were now logged promptly, the next step was ensuring faster action planning, faster action completion, and faster downgrading or closure when mitigations take effect. A new focus for next year will be KPI development to monitor the duration that risks remained high; speed of action implementation ; and evidence of risk score movement (u p or down). Members asked about cyber risk following incidents in other London authorities. Officers noted that Hillingdon had provided mutual aid support to the impacted boroughs due to the severity of the incident. The Tri -Borough cyber incident had originated from an unauthorised individual joining a Teams call, gaining unintended system access. Hillingdon has since strengthened internal controls, including requiring officers to check attendee lists on virtual meetings, encouraging cameras on where possible, briefing senior managers to treat unfamiliar participants as potential access risks. Hillingdon maintains close coordination with the National Cyber Security Centre, other London boroughs, and central government. External reviews had given significant assurance over cyber controls. The Council monitor ed cyber threats daily, with increased vigilance applied where national threat levels rise. Cyber awareness training and phishing simulations were mandatory and reinforced through regular communications and directorate briefings. Members asked what “PEEPs” stands for. Officers confirmed it referred to Personal Emergency Evacuation Plans. Members proposed that risk summaries relevant to each service area could be shared quarterly with the Select Commi ttees to improve risk -based scrutiny and assist Members in identifying priority areas. Officers confirmed this was already planned via the developing corporate performance dashboard. The intention was for Select Committees to receive risk subsets relevant to their remit, enabling deeper, more targeted scrutiny. The Committee welcomed the significant improvement in both the quality and timeliness of risk reporting; the clear evidence of increasing maturity across service areas; and the progress toward embed ding risk awareness across the organisation rather than within a single team. Members noted the value of the improved governance culture and thanked officers for their work. RESOLVED: That the Audit Committee noted the reports and level of assurance received 54. INTERNAL AUDIT PROGRESS REPORT (Agenda Item 8) Officers introduced the Internal Audit progress report. Five audit reports ha d been finalised since the last Committee meeting. Four audit reviews were currently at draft stage. Fieldwork had now commenced for all but one of the audits in the current year’s Internal Audit Plan. A number of reviews were close to completion, with draft reports expected by the end of the month, to be finalised before year end. The Head of Internal Audit Opinion will be drafted post year end. Officers highlighted the part -limited/ part-reasonable assurance rating issued for the Savings Programme. The limited assurance element relate d to savings development work undertaken in December 2024 for the 2025/26 savings programme. Several savings lines were written off early in the year. The reasonable assurance reflect ed improvements in ongoing in -year monitoring, including a new Savings Tracking App; regular updates and challenge sessions; and strengthened governance around whether savings remain deliverable. Internal Audit did not formally audit the early development of the 2026/27 savings programme due to timing, but officers confirmed that improvements were observed in real time and issues raised in the 2025/26 audit appeared to be actively addressed. A full audit of 2026/27 savings development was included in next year’s Audit Plan. Members asked why a planned HR -related review was removed. Officers explained that Internal Audit relied on access to evidence and engagement from the service. If a service was unable to provide this due to significant vacancies, sickness, or project pressure, an audit conducted at that time would simply return “No Assurance” due to lack of evidence, adding no value. Instead, timing was reconsidered, or alternative audit methods explored. Members noted several older management actions. Officers responded that the Council had previously paused its follow -up process, resulting in a backlog in 2023. Many historical actions had now been cleared. Where actions remained overdue, new dates were set only after discussion with services, and reasons recorded. Some actions ha d been superseded by wider system or process changes. A new automated follow -up system was being introduced next year whereby extensions will be automatically escalated to the relevant Corporate Director and then to CMT. Repeated extensions would be visible corporately, increasing challenge and accountability. Members queried whether KPIs could distinguish between recommendations still within deadline and recommendations overdue or repeatedly extended. Officers confirmed Internal Audit was already reviewing its KPIs and monitoring arrangements for the next financial year. The new automated system will allow more granular monitoring, including overdue actions, extensions, and time from due date to completion. The Internal Audit Team is also seeking to automate its own internal KPIs. The Chair noted that, where items were repeatedly extended or remain amber/ red, the Committee may request relevant officers to attend and explain delays. Members asked whether giving ‘reasonable’ assurance rather than ‘limited’ on monitoring savings was justified given that not all savings are being delivered. Officers explained that Internal Audit did not give assurance that outcomes will be achieved; it gave assurance on whether controls and governance were in place to manage risks. At the time of audit more savings had been banked or were on track than in previous years; and the main issue was not the monitoring arrangements but the scale and stretch of the savings programme. Monitoring ha d remained stable since Q1 even though the stretch remained significant. Members thanked officers for their work. RESOLVED: That the Audit Committee noted the IA progress since the last Committee meeting 55. INTERNAL ADUIT CHARTER (Agenda Item 9) Officers introduced the item, which included the Internal Audit Charter; Draft Internal Audit Plan 2026/27; and Internal Audit Standards Compliance & Quality Improvement Action Plan. The Internal Audit Charter set out the purpose, authority, and responsibilities of Internal Audit, as required by the Global Internal Audit Standards. The Charter was unchanged from the previous year, having already been updated last year to conform to the latest global standards. It formalised Internal Audit’s mandate and responsibilities. Officers highlighted that the Draft Annual Plan 2026/27 was risk-based, highly flexible, and should change throughout the year as risks evolved. It was noted that Internal Audit must be dynamic and respond to emerging risks, service requests, and new areas of assurance need. The plan included:  Planned assurance reviews – assessing risk areas and the controls miti gating them.  Planned advisory reviews – supporting services during change or process redesign.  Ad hoc advisory work – frequent in 2025/26, including project group participation.  Grant claim verification – independent checks required for funding.  Follow-up work – supported by a new automated process under development to connect to Power BI dashboards for visibility across CMT and directors. Several planned reviews were highlighted, including:  Project management – ensuring projects had plans and oversight  Directorate Governance – testing whether governance improvements were embedded in practice across directorates  Business & Financial Planning – reviewing whether directorates ha d robust business plans and whether mid -year progress reporting aligns with agree d outcomes  Spend Control Panels – reviewing the operation of new spend controls, including whether spend was going through the correct routes  Budget & Savings Monitoring – reviewing budget holder ownership, forecasting quality and confidence, and savings delivery scrutiny.  Company Governance – reviewing governance for Hillingdon First and the Hillingdon Care Company, ensuring benefits, oversight, and collaborative working remain aligned to corporate expectations. Members were content that the plan covered a wide and relevant range of topical areas already discussed earlier in the meeting. The Committee approved the Internal Audit Plan 2026/27. Officers presented the Global Internal Audit Standards. Internal Audit was required to comply with the Global Internal Audit Standards and to discuss annually the purpose and mandate for Internal Audit. Essential conditions reflected the role and responsibility of the Audit Committee. Officers had self -assessed compliance as generally achieving the standards. Areas marked partially achieved related mostly to evidence not yet available ( for example, Audit Committee involvement in future appointments of the Head of Internal Audit which cannot yet be evidenced), and further work to strengthen Internal Audit ’s use of technology. Appendix A set out the roles and responsibilities of CMT and the Audit Committee, as required by the standards. The Committee must review these annually. If the Committee chose not to comply with a require d element, Internal Audit must formally disclose non-compliance on an ongoing basis. Appendix D outlined propose d amendments to the Committee ’s Terms of Reference. This was not yet a formal ToR review, but an invitation for Members to commence one if des ired. Members indicated they wished the review process to begin, and that amendments should be explored to ensure compliance with best practice. Members queried the current staffing level. Internal Audit currently had five staff, rising to six next year, against a structure of seven posts. The team was small and junior, by design, to support career development. Benchmarking showed that the team was very good value for money, and Hillingdon delivered more risk-based audits than many other London authorities, despite its relatively small size. Officers stated that they were comfortable that they had sufficient resources to deliver the plan. No consultants or outsourced audit suppliers were currently used. Officers explained why they proposed rem oving the ToR that Internal Audit work may be requested “subject to approval of the Leader or Cabinet Member ”. Internal Audit’s functional accountability was directly to the Audit Committee. Routing Committee requests through Cabinet Members could compromi se perceived independence. Members may contact Internal Audit directly where they require work to be undertaken. RESOLVED: That the Audit Committee: 1. Approved the Internal Audit Annual Plan for 2026/27; 2. Noted the purpose and responsibilities of Internal Audit as outlined in the Charter; and 3. Noted the Essential Conditions and self -assessment against the Global Internal Audit Standards 42. COUNTER FRAUD PROGRESS REPORT (Agenda Item 10) Officers introduced the Quarter 3 Counter Fraud progress report. The team had achieved £3.5million savings in Q3, bringing the year -to-date total to £10.1million, exceeding the year-to-date target of £8.8 million. On housing fraud, 29 additional properties had been recovered in Q3, bringing the year- to-date total to 84. 10 cases of emergency accommodation had been closed due to non -occupation, resulting in savings of £268,000 (26 closures year-to-date). 15 businesses had been identified as liable but unlisted for business rates resulting in a billings total of £733,000. The Counter Fraud Team had been shortlisted for the Public Sector Fraud Awards in two categories, Local Excellence, and Team of the Year. The nominations were based on 2024/25 outcomes with the award ceremony due to take place in two weeks. National Adult Social Care data matching had returned to the National Fraud Initiative (NFI) for the first time in 10 years, following legislative changes enabling matching for fraud purposes. Over 130 live investigations into property recovery continued, and the team must maintain the current high recovery rate, which forms a major part of the Council ’s fraud-related savings. A new Power BI Counter Fraud dashboard was nearing completion (due late Q4 / early Q1). Officers intended to replace lengthy narrative repo rts with data -driven, visual performance reporting from Q1-Q2 onwards. Members commended the team for their award nominations. Members queried the distinction between cashable savings (approximately £849k) and notional savings (approximately £7.9million). Notional savings had two elements. First was business rates retention, only 30% was retained by the Council with the remaining 70% returned to government. Therefore, some revenue gains cannot be counted as direct cashable inflow. The second was related to tenancy fraud. The national tenancy fraud formula defined notional savings which represented nationally recognised avoided costs. Each recovered property avoided significant expenditure on temporary accommodation (approx. £26–27k per property). Members queried why asset leasing and lettings were not explicitly referenced in the fraud categories. Officers clarified that these areas were covered indirectly under multiple fraud categories, including money laundering or internal fraud. Any fraudulent activity relating to leasing and lettings would fall into these categories and be investigated. Members commended the high quality of reporting, the team ’s performance, and the widely green KPI performance. The Committee expressed appreciation for the team ’s work and wished the team good luck at the upcoming Public Sector Fraud Awards. RESOLVED: That the Audit Committee noted the Counter Fraud Progress Report for 2025/26 Quarter 3 43. COUNTER FRAUD OPERATIONAL WORKPLAN (Agenda Item 11) Officers introduced the Counter Fraud Operational Workplan for the upcoming year. The operational framework remained stable year-to-year and was underpinned by the Council’s overarching Counter Fraud Strategy. The framework outlined the strategic operating model, governance structure, and delivery methodology of the Counter Fraud Team . No major changes had been made to the framework for 2026/27. Officers highlighted that Appendix A set out a risk assessment of potential fraud risks that could affect the Council in the year ahead. These risks reflected analysis of 2024/25 activity; insights from the Council’s Corporate Risk Register; and horizon scanning for emerging fraud risks in the public sector. These risks are not unique to Hillingdon, they were common across the public sector. Appendix B contained the detailed operational plan for 2026/27. Officers emphasised that the plan was entirely risk-based, ensuring Counter Fraud resources were targeted where they deliver the greatest benefit. The highest -risk, highest -demand are as continued to be Social Care, Housing, and Revenues. The plan included a balanced mix of proactive activity (e.g., intelligence-led operations, data-matching, tenancy checks), and reactive investigations arising from referrals and intelligence. The plan was designed to support delivery of the 2026/27 financial target of £9.4 million. Officers noted that the year ’s plan included a new addition of a full explanation of the savings methodology, showing exactly how each category of saving) was calculated. This was provided to increase transparency. The Committee welcomed the clarity of the methodology appendix and reiterated appreciation for the team’s work. RESOLVED: That the Audit Committee noted the Counter Fraud Annual Operational Plan for 2026/27 44. WORK PROGRAMME (Agenda Item 13) Members considered the work programme. Officers confirmed that apologies had also been received from Councillor Henry Higgins. The Chair noted the dates of the upcoming meetings. EY highlighted that there may be a need to alter the date of the February 2027 meeting to better suit presentation of accounts and audits to the Committee, as the current planned date of 10 February 2027 was after the backstop date for 2025/26 audits of 31 January 2027. It was suggested that this meeting be moved to before the Christmas break. A new date would be confirmed in due course. RESOLVED: That the Audit Committee noted the dates for Audit Committee meetings The meeting, which commenced at 5.10 pm, closed at 7.45 pm. These are the minutes of the above meeting. For more information on any of the resolutions please contact Democratic Services on democratic@hillingdon.gov.uk. Circulation of these m inutes is to Councillors, officers, the Press and Members of the Public. The public part of this meeting was filmed live on the Council's YouTube Channel to increase transparency in decision -making, however these minutes remain the official and definitive record of proceedings.

Audit, Finance & Performance Committee – 9 June 2026 Part I – Public EXTERNAL AUDIT UPDATE: PROCESS FOR AUDITING THE 2024/25 ACCOUNTS MAIN ACCOUNTS AND PENSION FUND ACCOUNTS Committee name Audit, Finance and Performance Committee Officer reporting Pete Carpenter - Director Pensions, Treasury & Statutory Accounts Papers with report Council Audit Planning Report 2025/26 Pension Fund Audit Planning Report 2025/26 Ward All HEADLINES This report provides the committee sets with the high-level process for the Audit of the 202 5/26 Council and Pension Fund Accounts. RECOMMENDATIONS That the Audit, Finance and Performance Committee: 1. Note the draft plan for the Audit of the 2025/26 Council Accounts. 2. Note the draft plan for the Audit of the 2025/26 Pension Fund Accounts. SUPPORTING INFORMATION The Ministry of Housing, Communities and Local Government has announced measures to tackle the backlog of local government audits and have proposed backstop dates for the publication of audited accounts: 2025/26: 31 January 2027 2026/27: 30 November 2027 2027/28: 30 November 2028 The backstop legislation has resulted in significant numbers of Councils receiving “Disclaimer Opinions” due to time constraints and number of audits required to be delivered to comply with the legislation resulting in Auditors collectively not having the time to complete Audits and therefore issue “Disclaimer Opinions”. The Council has received “Disclaimer Opinions” for the past three years. The Pension fund has unqualified audits for the corresponding period. A total of 227 disclaimed audit opinions have been issued by auditors to local government bodies because of the “final” backstop date for the 2023 -24 financial year. This is 4 9.3% of all local government Audits in England. Update on 2023/24 Statement of Accounts audit Opinions for both the Council and the Pension Fund accounts were made by the backstop date of the 27th February. Audit Reports and final Statement of Accounts for the Council are set out on the Councils website at the following link: https://pre.hillingdon.gov.uk/performance-spending/statement-accounts Audit, Finance & Performance Committee – 9 June 2026 Part I – Public Council Audit Planning Report 2025/26 The purpose of the planning report is to provide the committee with a basis to review our proposed audit approach and scope for the 2025/26 audit, in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office’s 2024 Code of Audit Practice, the Statement of Responsibilities issued by Public Sector Audit Appointments (PSAA) Ltd, auditing standards, and other professional requirements. Key items highlighted in the planning report include:  The shared strategy for recovery from the disclaimed audit opinions and rebuild assurance.  Key risks to be assessed include: o Presumptive risk of management override of control o Risk of fraud in revenue and expenditure recognition, through inappropriate capitalisation of revenue expenditure or use of capital reserves o Valuation of land and buildings, including surplus assets o Valuation of pension assets and liabilities o Valuation of council dwellings  Value for Money Assessments centre on the below and delivery of 2024/25 audit recommendations: o Financial sustainability - How the Council plans and manages its resources to ensure it can continue to deliver its services o Governance - How the Council ensures that it makes informed decisions and properly manages its risks o Improving economy, efficiency and effectiveness - How the Council uses information about its costs and performance to improve the way it manages and delivers its services. The audit is expected to be completed in mid November to enabler the draft 2025/26 Audit Report to be issued by the 30 November 2026. Pension Fund Audit Planning Report 2025/26 The purpose of th e planning report is to provide the Committee with a basis to review our proposed audit approach and scope for the 2025/26 audit, in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office’s 2024 Code of Audit Practice, the Statement of Responsibilities issued by Public Sector Audit Appointments (PSAA) Ltd, auditing standards, and other professional requirements. This report summarises our evaluation of the key issues driving the development of an effective audit. We have aligned our audit approach and scope accordingly. Key issues highlighted are:  Presumptive risk of management override of controls.  Valuation of complex and hard to value investments (Level 3 Investments).  IAS26 Disclosure – Actuarial present value of promised retirement benefits.  Completeness of investment income. FINANCIAL IMPLICATIONS In September 2024 the PSAA launched a consultation on the fee scale for 2024/25 audits. Audit, Finance & Performance Committee – 9 June 2026 Part I – Public Following consultation, PSAA has published the 2025/26 scale of audit fees for bodies that have opted into its national auditor appointment scheme . The fee values for 202 5/26 are £542,111 (£433,673 in 2024/25) for the Council audit and £9 6,295 (£92,572 in 2024/25) for the Pension Fund. EY have advised there will be scale fee variations in respect of the 2024/25 audit but this has not yet been finally approved by PSAA at this time. LEGAL IMPLICATIONS The Secretary of State for Communities and Local Government delegated statutory functions (from the Audit Commission Act 1998) to P ublic Sector Audit Appointments (PSAA) on a transitional basis under powers contained in the Local Audit and Accountability Act 2014. BACKGROUND PAPERS Council Audit Planning Report 2025/26 Pension Fund Audit Planning Report 2025/26

Provisional Audit Planning Report Year ended 31 March 2026 London Borough of Hillingdon 30 April 2026 The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a member firm of Ernst & Young Global Limited. A list of members’ names is available for inspection at 1 More London Place, London SE1 2AF, the firm’s principal place of business and registered office. Ernst & Young LLP is a multi-disciplinary practice and is authorised and regulated by the Institute of Chartered Accountants in England and Wales, the Solicitors Regulation Authority and other regulators. Further details can be found at http://www.ey.com/UK/en/Home/Legal. Private and Confidential 30 April 2026 Dear Audit Committee members Provisional Audit Planning Report 2025/26 We are pleased to attach our provisional Audit Planning Report for the forthcoming meeting of the Audit Committee. The purpose of this report is to provide the committee with a basis to review our proposed audit approach and scope for the 2025/26 audit, in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office’s 2024 Code of Audit Practice, the Statement of Responsibilities issued by Public Sector Audit Appointments (PSAA) Ltd, auditing standards, and other professional requirements. This report is intended solely for the information and use of the Audit Committee and management, and is not intended to be, and should not be used, by anyone other than these specified parties. We welcome the opportunity to discuss this report with you on 28 May 2026 as well as understand whether there are other matters which you consider may influence our audit. Yours faithfully Stephen Reid, Partner For and on behalf of Ernst & Young LLP Enc Audit Committee London Borough of Hillingdon Hillingdon Civic Centre 225-226 High St Uxbridge UB8 1UW Confidential — All Rights Reserved Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 3 1 4 7 Audit risks 2 Overview of our 2025/26 audit strategy 3 56 8 Value for money Audit materiality Scope of our audit Audit team Audit timeline Appendices Public Sector Audit Appointments Ltd (PSAA) issued the ‘Statement of responsibilities of auditors and audited bodies’. It is available from the PSAA website (https://www.psaa.co.uk/managing-audit-quality/statement-of-responsibilities- of-auditors-and-audited-bodies/statement-of-responsibilities-of-auditors-and-audited-bodies-from-2023-24-audits/). The Statement of responsibilities serves as the formal terms of engagement between appointed auditors and audited bodies. It summarises where the different responsibilities of auditors and audited bodies begin and end, and what is to be expected of the audited body in certain areas. The ‘Terms of Appointment and further guidance (updated October 2025)’ issued by the PSAA (Terms of appointment and further guidance from 1 October 2025 - PSAA) sets out additional requirements that auditors must comply with, over and above those set out in the National Audit Office Code of Audit Practice 2024 (the NAO Code) and in legislation, and covers matters of practice and procedure which are of a recurring nature. This report is made solely to the Audit Committee and management of the London Borough of Hillingdon. Our work has been undertaken so that we might state to the Audit Committee and management of the London Borough of Hillingdon those matters we are required to state to them in this report and for no other purpose. To the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the Audit Committee and management of the London Borough of Hillingdon for this report or for the opinions we have formed. It should not be provided to any third-party without our prior written consent. Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report Overview of our 2025/26 audit strategy01 4 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 5 As the Council’s body charged with governance, the Audit Committee plays a crucial role in ensuring assurance over both the quality of the draft financial statements prepared by management and the Council’s wider arrangements to support a timely and efficient audit. Failure to achieve this will significantly increase the level of resources required to fulfil our respective responsibilities. As part of our responsibilities, we assess and report on the adequacy of the Council’s external financial reporting arrangements, as well as the effectiveness of the Audit Committee in fulfilling its role within those arrangements as part of our Value for Money assessment. Our ability to complete the audit is dependent on the timely formulation of appropriately supported accounting judgements, provision of accurate and relevant supporting evidence, access to the finance team and management’s responsiveness to issues identified during the audit. Wherever necessary, we will consider invoking other statutory reporting powers to highlight any weaknesses in these arrangements. We direct Audit Committee members and officers to the Public Sector Audit Appointment Limited’s Statement of Responsibilities (paragraphs 26-28) for expectations on preparing financial statements (see Appendix A). The purpose of this report We are now in Phase 2 of the implementation of the Ministry for Housing, Communities and Local Government’s (MHCLG) measures to address the backlog facing local government audit. Throughout 2023/24 and 2024/25, we applied a structured, risk-based prioritisation approach to local government audits to support a return to unqualified audit opinions wherever feasible, while still meeting statutory backstop requirements. Our approach recognises that recovery depends heavily on the Council’s own capacity and preparedness and that audit effort must be targeted where it can deliver meaningful assurance. Management has overall responsibility for leading and sustaining the Council’s recovery from a disclaimed audit opinion. This includes ensuring that the financial statements are prepared in accordance with proper practices and supported by complete, accurate and timely audit evidence. To deliver this, it is essential that management:  Strengthen the underlying control environment, particularly in areas linked to prior year disclaimers;  Provide high quality working papers and ensure that all audit evidence is complete, consistent and readily accessible;  Allocate sufficient, knowledgeable resources throughout the audit cycle;  Actively engage with auditors, promptly addressing findings and resolving weaknesses in financial reporting arrangements; and  Communicate transparently with the Audit Committee, as those charged with governance, ensuring that committee members have clear visibility of risks, progress and emerging issues. In line with the National Audit Office’s Local Audit Reset and Recovery Implementation Guidance (LARRIGs) - and specifically the guidance on rebuilding assurance following a disclaimed opinion - management must support the restoration of reliable opening balances and enable a phased progression from disclaimed to qualified and ultimately unmodified audit opinions. Achieving this requires sustained delivery of the “natural rebuild,” through the completion of all planned audit procedures across successive annual cycles, alongside targeted work to rebuild assurance over historical balances, including both usable and unusable reserves, where cumulative gaps in evidence present the most significant challenges. Our shared strategy to rebuild assurance 2025/26 audit strategy overview: Rebuilding assurance Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 6 Appendix A explains the expected timeline to full assurance set out within the NAO’s LARRIG 01 guidance, along with our assessment of the Council’s status. During 2023/24 and 2024/25, the focus of the rebuild process has been on this “natural” rebuild, to complete all planned audit procedures for each respective audit year. As set out in our Audit Results Reports dated 18 March 2025 and 27 February 2026, we were not able to complete all planned audit procedures for the following reasons: • For 2023/24, we encountered difficulty in performing our audit procedures due to a combination of poor-quality working papers and supporting information being provided by the Council and capacity limitations within the Council’s finance team. Due to the implementation of the backstop date of 28 February 2025 for the completion of that audit, we agreed with management that both Council and audit resources would be prioritised on those account areas which contribute the most towards the rebuilding of assurance following the disclaimed 2022/23 audit report. Consequently, we were not able to complete all of our planned procedures. • For 2024/25, commencement of our year-end audit fieldwork was delayed as a result of the Council not publishing its draft Statement of Accounts until 22 September 2025, nearly three months after the statutory deadline for commencement of the public inspection period of 1 July 2025. In addition, we again encountered difficulty in performing our audit procedures due to delays in the provision of working papers and supporting information by the Council, including where such information is held outside of the Council’s finance team, and capacity limitations within the Council’s finance team. Due to the implementation of the backstop date of 27 February 2026 for the completion of the audit, during the execution of our audit we worked with management where progress was not satisfactory to prioritise the Council’s and audit resources on those account areas which contribute the most towards the rebuilding of assurance following previous disclaimed audit reports and/or there was the highest probability of being able to complete our planned audit procedures by the backstop date. Consequently, we were not able to complete all of our planned procedures. As part of our interim audit procedures for 2025/26, we will undertake a detailed risk assessment to evaluate the risk of material misstatement in the opening reserves balances at 1 April 2025, and to assess management’s readiness to support the historic rebuild process over transactions and balances in 2022/23 that were not subject to audit. This work is expected to be completed by 30 June 2026 and is essential to determining whether the pre-2023/24 gaps in assurance - particularly those relating to reserves and other cumulative balances - can be sufficiently addressed to support future progression towards qualified or unmodified audit opinions. We will discuss the outcome of our risk assessment over the opening reserves balances with management to confirm our planned approach for 2025/26. However, because we were unable to complete all planned audit procedures for 2023/24 and 2024/25 for the reasons outlined above, it is unlikely that we will commence any rebuilding of assurance over the historic position during the 2025/26 audit cycle. In line with our established prioritisation principles, we will focus our audit resources on rebuilding assurance for those bodies where planned audit procedures were completed in 2023/24 and 2024/25, in order to support the sector wide objective of returning to unmodified audit opinions as quickly and sustainably as possible. It is therefore critical that management ensure they can provide high quality working papers, robust audit evidence, and resolve the underlying issues identified in prior years as part of the 2025/26 audit cycle. This will be essential to avoid any further delay in the eventual process for rebuilding assurance over the Council’s historic position. Our shared strategy to rebuild assurance continued 2025/26 audit strategy overview: Rebuilding assurance Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 7 An audit timetable has been agreed with management. In Section 7 we include a provisional timeline for the audit. It is essential that all parties collaborate to ensure compliance with this timeline. Timeline Our ability to complete the audit is dependent on the timely formulation of appropriately supported accounting judgements, provision of accurate and relevant supporting evidence, access to the finance team and management’s responsiveness to issues identified during the audit. Our 2024/25 reporting included our assessment of the effectiveness of the Council’s arrangements to support the external audit process across a range of relevant measures (reproduced in Appendix A). We concluded that the Council was not fully prepared for the audit and that improvements were required in relation to:  the provision of a complete and high-quality draft Statement of Accounts to the agreed timetable;  the provision of working papers and other supporting information, including where such information is held outside of the Council’s finance team, in line with the agreed Client Assistance Schedule and timetable; and  the availability of key finance personnel to support the execution phase of the audit in accordance with the agreed project plan. We will continue to report on our assessment of the quality of the Council’s financial statements’ preparation and support, to support ongoing transparency of the audit process to those charged with governance, and to facilitate benchmarking and tracking of progress in future years. Please refer to Appendix B for our update on independence. Our independence considerations In accordance with the NAO Code, our primary objectives are to conduct work that supports the delivery of our audit report to the Council. Additionally, we aim to ensure that the Council has established proper arrangements for securing economy, efficiency, and effectiveness in its use of resources, as mandated by relevant legislation and the requirements of the NAO Code. We will issue an Audit Results Report that the summarises our opinion on the financial statements by 30 November 2026 and the results of other procedures required by the Code. This includes our assessment of the control environment, including our follow up of the recommendations that we made in 2024/25 (refer to Appendix C). In addition, our Auditor’s Annual Report will conclude on whether the Council has put in place ‘proper arrangements’ to secure economy, efficiency and effectiveness on its use of resources and report a commentary on those arrangements. Scope of our audit Preparedness for audit 2025/26 audit strategy overview: Rebuilding assurance Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 8 The purpose of our audit is to obtain reasonable assurance to express an opinion about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. There is one significant change to the scoping for the audit of the 2025/26 financial statements, relating to the implementation of CIPFA’s Bulletin 22 in relation to the valuation of Property, Plant and Equipment. The following ‘dashboard’ summarises the significant accounting and auditing matters outlined in this report. It seeks to provide the Audit Committee with an overview of our initial risk identification for the upcoming audit and any changes in risks identified in the current year. DetailsChange from PYRisk identified Risk/area of focus There is a risk that the financial statements as a whole are not free from material misstatement whether caused by fraud or error. We perform mandatory procedures regardless of specifically identified fraud risks. No change in risk or focus Fraud riskPresumptive risk of management override of controls Under ISA 240 there is a presumed risk that revenue may be misstated due to improper revenue recognition. In the public sector, this requirement is modified by Practice Note 10 issued by the Financial Reporting Council, which states that auditors should also consider the risk that material misstatements may occur by the manipulation of expenditure recognition. We have assessed the risk is most likely to occur through the inappropriate capitalisation of revenue expenditure. No change in risk or focus Fraud riskRisk of fraud in revenue and expenditure recognition, through inappropriate capitalisation of revenue expenditure or use of capital reserves The valuation methods for land and buildings, including surplus assets, involve higher risk estimates due to the significant assumptions and judgements involved, and for which the Council uses external specialists. These estimates heighten the risk of material errors. For the 2025/26 financial statements, the Council will be required to apply CIPFA Bulletin 22 which reassesses the current regime of valuation for non-investment assets across the public sector. The guidance mandates a quinquennial revaluation or a five-year rolling programme for formal valuations, supported by annual indexation in the intervening years. The Council has opted to perform revaluation of the entirety of the asset base to which CIPFA Bulletin 22 applies as at 31 March 2026, to establish a baseline for indexation to be applied in the following years. Given full revaluations will not be required again until 2030/31, with indexation applied in intervening years, it is even more important that valuations as at 31 March 2026 are appropriate and that the Council is able to support completion of audit procedures over these valuations. No change in risk Additional focus due to implementation of CIPFA Bulletin 22 Significant riskValuation of land and buildings, including surplus assets Audit risks and areas of focus 2025/26 audit strategy overview: Audit risks and materiality Confidential — All Rights Reserved 2025/26 audit strategy overview: Audit risks and materiality London Borough of Hillingdon Audit Planning Report 9 Materiality Planning materiality £15.4m Materiality has been set at £15.4 million, which represents 1.5% of gross expenditure on provisions of services in 2024/25 (2024/25: £14.4 million, 1.4%). Performance materiality £7.7m Performance materiality has been set at £7.7 million, which represents 50% of materiality. We will report all uncorrected misstatements relating to the Comprehensive Income and Expenditure Statement and Balance Sheet that have an effect on the deficit on provision of services, and misstatements in the other comprehensive income and expenditure, over £0.77 million. Other misstatements identified will be communicated to the extent that they merit the attention of the Audit Committee. Audit differences £0.77m Audit risks and areas of focus continued DetailsChange from PYRisk identified Risk/area of focus Accounting for the Council’s participation in the Hillingdon Pension Fund involves significant estimation and judgement, including financial and demographic assumptions. There is a risk that the net pension asset/liability recognised is materially misstated, as its recognition and measurement is subject to significant management judgement, including the application of the IAS 19 asset ceiling and the assessment of the Council’s ability to realise future economic benefits. The Council engages an actuary to undertake the calculations on their behalf. ISAs (UK) 500 and 540 require us to undertake procedures on the use of management experts and the assumptions underlying fair value estimates. No change in risk or focus Risk of material misstatement Valuation of pension assets and liabilities The carrying amount of Council dwellings represents a significant balance in the Council’s financial statements and is subject to revaluation changes on an annual basis. Management is required to make material judgmental inputs and apply estimation techniques to calculate the year end balances recorded in the balance sheet. Note: The changes to be implemented under CIPFA Bulletin 22 set out on the previous page are not applicable to the valuation of council dwellings. No change in risk or focus Risk of material misstatement Valuation of council dwellings Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 10 Under the NAO Code we are required to:  Satisfy ourselves that the Council has made proper arrangements to secure economy, efficiency and effectiveness in its use of resources, having regard to NAO AGN 03.  Design work to provide sufficient assurance to support reporting against the Code’s specified reporting criteria outlined below;a n d  Apply a risk-based approach to our work, informed by sector knowledge, the Annual Governance Statement, evidence from the financial statements audit and relevant work of other bodies. In undertaking our risk assessment, we obtain an understanding of the key processes the Council has in place, including financial management, risk management and partnership working arrangements. Our Auditor’s Annual Report, which will be issued before 30 November 2026, will include a summary of our commentary on the arrangements in place against each of the three value for money criteria and recommendations raised as a result of any significant weaknesses identified. A key part of our work will be the follow up of previous recommendations to provide the Committee with assurance on the pace of planned improvements. Improving economy, efficiency and effectiveness How the Council uses information about its costs and performance to improve the way it manages and delivers its services. Governance How the Council ensures that it makes informed decisions and properly manages its risks. Financial sustainability How the Council plans and manages its resources to ensure it can continue to deliver its services.  No additional risks identified, however we note that risks identified against other reporting criteria have implications for the effectiveness of arrangements under this reporting criteria.  Quality of Council Information (inc. impact on ability to support the external audit)  Capacity of the finance team  Financial sustainabilityRisks of significant weaknesses in arrangements identified in 2025/26:  No recommendations were raised within 2024/25 specifically in relation to improving economy, efficiency and effectiveness.  Two recommendations issued as statutory recommendations in July 2025; and  Two further recommendations issued as part of our 2023/24 audit not satisfactorily addressed during 2024/25.  Five recommendations issued as statutory recommendations in July 2025; and  One further recommendation issued in our Auditor’s Annual Report on 27 November 2025. Recommendations identified in 2024/25 (refer to Appendix C): 2025/26 audit strategy overview: Value for money Our risk assessment Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 11 Audit risks02 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 12 We have set out the significant risks (including f raud risks denoted by*) identified for the current year audit along with the rationale and expected a udit approach. The risks identified below may change to reflect any significant findings or subsequent issues we identify during the audit. Our response: Key areas of challenge and professional judgementWhat is the risk, and the key judgements and estimates? In order to address the risks outlined we will carry out a range of procedures including:  Identifying fraud risks during the planning stages of our audit;  Inquiry of management about risks of fraud and the controls put in place to address those risks;  Understanding the oversight given by those charged with governance of management’s processes over fraud;  Discussing with those charged with governance the risks of fraud in the entity, including those risks that are specific to the entity’s activities and financial position;  Considering whether there are any fraud risk factors associated with related party relationships and transactions and if so, whether they give rise to a risk of material misstatement due to fraud;  Considering the effectiveness of management’s controls designed to address the risk of fraud and determining an appropriate strategy to address those identified risks of fraud;  Performing mandatory procedures regardless of specifically identified fraud risks, including testing of journal entries and other adjustments in the preparation of the financial statements;  Undertaking procedures to identify significant unusual transactions; and  Considering whether management bias was present in the key accounting estimates and judgements within the financial statements. Having evaluated this risk, we have considered whether we need to perform other audit procedures not referred to above. We concluded that those procedures included under the risk ‘inappropriate capitalisation of revenue expenditure’ are required. In accordance with ISA 240, the presumptive risk of management override of controls is present at every entity and we design the appropriate procedures to consider such risk.  Management has the primary responsibility to prevent and detect fraud. It is important that management, with the oversight of those charged with governance, has put in place a culture of ethical behaviour and a strong control environment that both deters and prevents fraud.  Our responsibility is to plan and perform audits to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatements whether caused by error or fraud. Our response to significant risks Presumptive risk of management override of controls* Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 13 Our response: Key areas of challenge and professional judgementWhat is the risk, and the key judgements and estimates?Financial statement impact In order to address the risks outlined we will carry out a range of procedures including:  Testing additions to Property, Plant and Equipment (PPE) to ensure that the expenditure incurred and capitalised is clearly capital in nature;  Assessing whether the capitalised spend clearly enhances or extends the useful life of asset rather than simply repairing or maintaining the asset on which it is incurred;  Considering whether any development or other related costs that have been capitalised are reasonable to capitalise, i.e., the costs incurred are directly attributable to bringing the asset into operational use;  Testing transactions recorded as REFCUS, if material, to ensure that it is appropriate for the revenue expenditure incurred to be financed from ringfenced capital resources; and  Seeking to identify and understand the adjustments made between usable reserves and unusable capital reserves to confirm they are appropriate, and agreeing the value of such adjustments to other financial statement balances or appropriate supporting evidence. Under ISA 240 there is a presumed risk that revenue may be misstated due to improper revenue recognition. In the public sector, this requirement is modified by Practice Note 10 issued by the Financial Reporting Council, which states that auditors should also consider the risk that material misstatements may occur by the manipulation of expenditure recognition. We have assessed the risk is most likely to occur through the inappropriate capitalisation of revenue expenditure or use of capital reserves. We have assessed that the risk of misreporting revenue outturn in the financial statements is most likely to be achieved through:  Revenue expenditure being inappropriately recognised as capital expenditure at the point it is posted to the general ledger;  Expenditure being classified as revenue expenditure financed as capital under statute (REFCUS) when it is inappropriate to do so;  Inappropriate adjustments between usable reserves and unusable capital reserves. If this were to happen it would have the impact of understating revenue expenditure and overstating Property, Plant and Equipment (PPE) and/or REFCUS in the financial statements. Our response to significant risks Inappropriate capitalisation of revenue expenditure or use of capital reserves* Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 14 Our response: Key areas of challenge and professional judgementWhat is the risk, and the key judgements and estimates?Financial statement impact In response to this risk we will carry out a range of procedures including:  Seeking to understand the Council’s approach to the valuation of land and buildings, including surplus assets;  Reviewing and assessing management’s assessment and planned approach to CIPFA Bulletin 22;  Reviewing and appraising the work performed by the Council’s valuer, including the adequacy of the scope of the work performed, their professional capabilities and the results of their work;  Sample testing key asset information used by the valuers in performing their valuation (e.g. floor plans to support price per square metre);  Involving our EY internal specialists to challenge the work performed by the Council’s valuers, focusing on more material assets assessed as posing higher risk of material misstatement;  Assessing any changes to the useful economic lives against the most recent valuer assessments;  Testing accounting entries have been correctly processed in the financial statements;  Sample testing transfers from assets under construction to ensure timely reclassification upon completion, and confirming for a sample of assets that remain within assets under construction that development is still in progress; and  Reviewing and assessing management’s impairment assessment of ongoing and completed capital projects to ensure assets are held at an appropriate value. The valuation methods for land and buildings, including surplus assets, involve higher risk estimates due to the significant assumptions and judgements involved, and for which the Council uses external specialists. These estimates heighten the risk of material errors. For the 2025/26 financial statements, the Council will be required to apply CIPFA Bulletin 22 which reassesses the current regime of valuation for non- investment assets across the public sector. The guidance mandates a quinquennial revaluation or a five-year rolling programme for formal valuations, supported by annual indexation in the intervening years. The Council has opted to perform revaluation of the entirety of the asset base to which CIPFA Bulletin 22 applies as at 31 March 2026, to establish a baseline for indexation to be applied in the following years. Given full revaluations will not be required again until 2030/31, with indexation applied in intervening years, it is even more important that valuations as at 31 March 2026 are appropriate and that the Council is able to support completion of audit procedures over these valuations. The relevant account balances in the 2024/25 financial statements were:  Other land and buildings: £833.7 million  Surplus assets: £44.8 million Our response to significant risks Valuation of land and buildings, including surplus assets Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 15 We have identified other areas of the audit, that have not been classified as significant risks, but are still important when considering the risks of m aterial misstatement to the financial statements and disclosures. Other areas of audit focus Our response: Key areas of challenge and professional judgementWhat is the risk, and the key judgements and estimates?Financial statement impact Valuation of pension assets and liabilities In response to this risk we will carry out a range of procedures including:  Liaising with the auditor of the Hillingdon Pension Fund to obtain assurances over the information supplied to the actuary, including membership data supplied in respect of the 2025 triennial valuation of the Hillingdon Pension Fund, and confirm joint assurances in respect of employer and employee contributions;  Engaging our EY actuarial specialists to assess the work of the Council’s actuary, including evaluating the reasonableness of the Pension Fund actuary’s calculations by comparing them to the outputs of our own auditor’s specialist’s model. This will involve a consideration of the net asset/liability and any calculation of the asset ceiling in accordance with IFRIC 14 where relevant;  Assessing the work of PwC, who are appointed to consider actuarial assumptions used at the year end for all local government sector bodies;  Reviewing and testing the accounting entries and disclosures made within the Council’s financial statements in relation to IAS 19, as well as any asset ceiling applied under IFRC 14; and  Assessing the valuation and disclosure of unfunded liabilities, for which there are no plan assets to meet the pension liabilities. The Local Authority Accounting Code of Practice and IAS 19 require the Council to make extensive disclosures within its financial statements regarding its membership of the Local Government Pension Scheme administered by the Council. The Council’s pension fund deficit is a material estimated balance and the Code requires that this liability be disclosed on the Council’s balance sheet. The information disclosed is based on the IAS 19 report issued to the Council by the Council’s actuary. Accounting for this scheme involves significant estimation and judgement and therefore management engages an actuary to undertake the calculations on their behalf. ISAs (UK) 500 and 540 require us to undertake procedures on the use of management experts and the assumptions underlying fair value estimates. The Council’s net pension asset or liability is measured as the sum of the long-term payments due to members as they retire against the Council’s share of the Hillingdon Pension Fund’s investments. At 31 March 2025, the Council’s net asset totalled £40.3 million but was constrained to a £100.4 million net liability by the accounting requirements of IFRIC 14. An unfunded liability of £20.1 million was also recorded on the Council’s balance sheet. Confidential — All Rights Reserved Our response: Key areas of challenge and professional judgementWhat is the risk, and the key judgements and estimates?Financial statement impact Valuation of council dwellings In response to this risk we will carry out a range of procedures including:  Seeking to understand the Council’s approach to the valuation of council dwellings;  Reviewing and appraising the work performed by the Council’s valuer, including the adequacy of the scope of the work performed, their professional capabilities and the results of their work;  Sample testing key asset information used by the valuers in performing their valuation (e.g. nature and number of beacons, valuations of units within beacons);  Testing accounting entries have been correctly processed in the financial statements; and  Ensuring that the social housing discount factor has been applied to the valuations of any council dwellings acquired during the period under audit. The carrying amount of Council dwellings represents a significant balance in the Council’s financial statements and is subject to revaluation changes on an annual basis. Management is required to make material judgmental inputs and apply estimation techniques to calculate the year end balances recorded in the balance sheet. Council dwellings held on the Council’s balance sheet at 31 March 2025 totalled £898.4 million. London Borough of Hillingdon Audit Planning Report 16 Other areas of audit focus Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 17 Value for money03 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 18 Financial sustainability How the Council plans and manages its resources to ensure it can continue to deliver its services. Governance How the Council ensures that it makes informed decisions and properly manages its risks. Improving economy, efficiency and effectiveness How the Council uses information about its costs and performance to improve the way it manages and delivers its services. The Council is required to maintain an effective system of internal control that supports the achievement of its policies, aims and objectives while safeguarding and securing value for money from the public funds and other resources at its disposal. As part of the material published with the financial statements, the Council is required to bring together a commentary on the governance framework and how this has operated during the period in a governance statement. In preparing the governance statement, the Council tailors the content to reflect its own individual circumstances, consistent with the requirements of the relevant accounting and reporting framework and having regard to any guidance issued in support of that framework. This includes a requirement to provide commentary on arrangements for securing value for money from the use of resources. Under the NAO Code we are required to consider whether the Council has put in place ‘proper arrangements’ to secure economy, efficiency and effectiveness on its use of resources. The Code requires the auditor to design their work to provide them with sufficient assurance to enable them to report to the Council a commentary against specified reporting criteria (see below) on the arrangements the Council has in place to secure value for money through economic, efficient and effective use of its resources for the relevant period. The specified reporting criteria are: Value for money Council’s responsibilities for value for money Auditor responsibilities Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 19 The NAO’s guidance notes require us to conduct a risk assessment that collects sufficient evidence to document our evaluation ofthe Council's arrangements, allowing us to draft a commentary under the three reporting criteria. This involves identifying and reporting on any significant weaknesses in those arrangements and making appropriate recommendations. In considering the Council’s arrangements, we consider:  The Annual Governance Statement;  Evidence of arrangements during the reporting period;  Evidence obtained from our audit of the financial statements;  The work of inspectorates and other bodies; and  Any other evidence that we deem necessary to facilitate the performance of our statutory duties. We then evaluate whether there is evidence indicating significant weaknesses in arrangements. According to the NAO's guidance, determining what constitutes a significant weakness and the extent of additional audit work required to address the risk is based on professional judgment. The NAO indicates that a weakness can be considered significant if it:  Exposes, or could reasonably be expected to expose, the council to significant financial loss or risk;  Leads to, or could reasonably be expected to lead to, significant impact on the quality or effectiveness of service or on the council’s reputation or unlawful actions;  Identifies a failure to take action to address a previously identified significant weakness, such as failure to implement or achieve planned progress on action/improvement plans. When planning work identifies a risk of significant weakness, the NAO’s guidance requires us to consider the additional evidence needed to verify whether there is a significant weakness in arrangements. This involves conducting further procedures as necessary. We are required to report our planned procedures to the Audit Committee. If we determine that the Council has not made proper arrangements for securing economy, efficiency, and effectiveness in its use of resources, the NAO Code mandates that we reference this by exception in the audit report on the financial statements. Additionally, we are required to provide a commentary on the value for money arrangements in the Auditor’s Annual Report. The NAO Code specifies that this commentary should be clear , readily understandable, and highlight any issues we wish to draw to the Council’s or the wider public’s attention. This may include matters that are not considered significant weaknesses in arrangements but should still be brought to the Council’s attention. It will also cover details of any recommendations from the audit and the follow-up of previously issued recommendations, along with our assessment of their satisfactory implementation. Our 2025/26 Auditor’s Annual Report must be issued in draft by 30 November 2026 to comply with the requirements of the NAO Code. Planning and identifying risks of significant weakness in value for money arrangements Reporting on value for money arrangements Value for money Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 20 Value for money Value for money risk assessment We have completed our initial value for money planning, where we have considered:  Our entity level controls and understanding the business assessment;  The Council’s risk register;  Council meeting minutes and our planning meetings with management;  Key financial and budget information;  Key performance and internal audit reports; and  Findings of other inspectorates, review agencies and other relevant bodies. As part of our initial planning work, we considered whether there were any risks of significant weakness in the body’s arrangements for securing value for money that we needed to perform further procedures on. The risks we have identified are detailed in the table below, along with the further procedures we will perform. We will continue to review the body’s arrangements and report on our observations to the Audit Committee. 2025/26 expected procedures to respond2025/26 risk assessment2024/25 judgements on arrangementsCriteria We developed a detailed understanding of the Council’s arrangements with regards to financial sustainability through to February 2026 as part of the prior year audit. We will draw on our observations of these arrangements to inform our conclusions on the Council’s arrangements for 2025/26, as well as:  Reviewing the Council’s progress through to 31 March 2026 against its Financial Modernisation Programme.  Reviewing the Council’s final outturn for 2025/26 against budget, including the extent to which the Council was able to deliver the savings included within its 2025/26 budget;  Reviewing the Council’s 2026/27 Budget and Medium-Term Financial Strategy, approved in February 2026, as well as the accompanying Section 25 report of the Council’s Section 151 Officer;  Assessing whether the Council’s reporting during 2026/27 of its performance against its 2026/27 budget provides evidence of the reliability of the assumptions underpinning the Council’s 2026/27 Budget and Medium-Term Financial Strategy; and  Assessing the financial resilience of the Council against external benchmarks.  A risk of significant weakness has been identified relating to financial sustainability.  The prior year significant weakness is an indicator of a risk in the current year. Based on our current understanding we consider it likely we will continue to report by exception in 2025/26. The Council did not have proper arrangements in place to identify and manage risks to its financial sustainability. Financial sustainability Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 21 Value for money Value for money risk assessment continued 2025/26 expected procedures to respond2025/26 risk assessment2024/25 judgements on arrangementsCriteria We will respond to this identified risk by:  Reviewing the Council’s progress through to 31 March 2026 against its Governance Review Improvement Plan (GRIP);  Obtaining and reviewing the data quality audit the Council had planned to take place during 2025/26;  Enquiring of management as to the actions taken to address any findings and recommendations of the above data quality audit, as well as reviewing any evidence available to support the implementation of those actions;  Considering whether indicators of weaknesses in the quality of the Council’s information are highlighted by other reviews, including the annual opinion of the Council’s Head of Internal Audit; and  Considering our observations over the quality of the Council’s financial records and other supports for the financial statements during the execution of our audit procedures.  A risk of significant weakness has been identified relating to the quality of Council information.  The prior year significant weakness is an indicator of a risk in the current year. The Council did not have proper arrangements in place to ensure the quality of Council information. Quality of Council information (inc. impact on ability to support external audit) We will respond to this identified risk by:  Reviewing the Council’s progress through to 31 March 2026 against its Financial Modernisation Programme.  Considering whether the Council is able to meet the statutory deadline for commencement of the public inspection period of its 2026/27 accounts by 1 July 2026;  Considering our observations over the quality of the Council’s financial statements, and the Council’s ability to support the execution of audit procedures, through the delivery period of our audit.  A risk of significant weakness has been identified relating to the capacity of the Council’s finance team.  The prior year significant weakness is an indicator of a risk in the current year. The Council did not have proper arrangements in place to ensure the capacity of its finance team was sufficient to support the level of activity required of it. Capacity of the finance team Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 22 Audit materiality04 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 23 Materiality Materiality For planning purposes, materiality for 2025/26 has been set at £15.4 million. This represents 1.5% of the Council’s 2024/25 gross expenditure on provision of services in the 2024/25 financial statements. It will be reassessed throughout the audit process. We have chosen gross expenditure on provision of services as we consider that this is of primary interest to the users of the financial statements. We have chosen 1.5%, which is in the middle of the range of percentages within our audit approach for comparable size councils, after consideration of a range of factors such as the public profile of the entity and the level and nature of its borrowings. We have marginally increased our materiality from the 1.4% of gross expenditure on provision of services applied in 2024/25 as the Council’s receipt of exceptional financial support means the Council’s financial position is not as precarious in 2025/26 as it was during 2024/25. Planning materiality £15.4m Performance materiality £7.7m Audit differences £0.77m Gross expenditure on provision of services £1,031m We request that the Audit Committee confirm its understanding of, and agreement to, these materiality and reporting levels. Key definitions Planning materiality — the amount over which we anticipate misstatements would influence the economic decisions of a user of the financial statements. Performance materiality — the amount we use to determine the extent of our audit procedures. We have set performance materiality at £7.7 million which represents 50% of planning materiality. We have used 50%, which is at the lower end of the range within our audit approach, after consideration of a range of factors including the difficulties encountered in performing audit procedures in prior years and the significant weakness in arrangements we reported in relation to the quality of the Council’s data and capacity of the Council’s finance team for 2024/25. Audit difference threshold — We will report to you all uncorrected misstatements over £0.77 million, relating to the Comprehensive Income and Expenditure Statement and Balance Sheet that have an effect on the deficit on provision of services, and misstatements in the other comprehensive income and expenditure, over £0.77 million. Other uncorrected misstatements, such as reclassifications and misstatements in the Statement of Cash Flows or disclosures, and corrected misstatements, will be communicated to the extent that they merit the attention of the Audit Committee, or are important from a qualitative perspective. Specific materiality — we report all differences identified over £5,000 for remuneration disclosures, and apply a lower judgemental materiality to our audit work in this area to reflect our understanding that an amount less than our materiality would influence the economic decisions of users of the financial statements in relation to this. We do not apply a specific lower materiality to the disclosure of related party transactions; however, we do consider the materiality of transactions as they apply to both parties involved. Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 24 Scope of our audit05 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report In accordance with the NAO Code, our primary objectives are to conduct work that supports the delivery of our audit report to the Council. Additionally, we aim to ensure that the Council has established proper arrangements for securing economy, efficiency, and effectiveness in its use of resources, as mandated by relevant legislation and the requirements of the NAO Code. We will issue an audit report that covers: 1. Financial statement audit Our opinion on the financial statements:  Whether the financial statements give a true and fair view of the financial position of the Council and its expenditure and income for the period in question; and  Whether the financial statements have been prepared properly in accordance with the relevant accounting and reporting framework as set out in legislation, applicable accounting standards or other direction. Our opinion on other matters:  whether other information published together with the audited financial statements is consistent with the financial statements. Other procedures required by the Code:  Examine and report on the consistency of the Whole of Government Accounts schedules or returns with the body’s audited financial statements for the relevant reporting period in line with the instructions issued by the National Audit Office. 2. Arrangements for securing economy, efficiency and effectiveness (value for money) We are required to consider whether the Council has put in place ‘proper arrangements’ to secure economy, efficiency and effectiveness on its use of resources and report a commentary on those arrangements. Internal audit We will review internal audit plans and the results of their work. We will reflect the findings from these reports, together with reports from any other work completed in the year, in our detailed audit plan, where they raise issues that could have an impact on the financial statements. In 2024/25, the Council’s Head of Internal Audit concluded that they could provide no assurance over the internal control, risk management and governance arrangements during 2024/25. Audit process and strategy Objectives of our audit scoping 25 Confidential — All Rights Reserved Audit team06 London Borough of Hillingdon Audit Planning Report 26 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 27 The engagement team is led by Stephen Reid, who has overall responsibility for the performance of the audit and for the auditor’s report issued on behalf of EY. Stephen is supported by Chloe Wilkinson, who joins the audit team for 2025/26 as a second partner. Stephen Reid Key Audit Partner Mark Rutter Senior Manager Cameron Halliday Manager Diva Bhagi Lead Senior Specialist (PPE) EY Real Estates Specialist (Pension) Specialist PWC consulting actuary and EY Actuaries When auditing key judgements, we are often required to use the input and advice provided by specialists who have qualifications and expertise not possessed by the core audit team. The areas where EY specialists are expected to provide input for the current year audit are: In accordance with Auditing Standards, we will evaluate each specialist’s professional competence and objectivity, considering their qualifications, experience and available resources, together with the independence of the individuals performing the work. We also consider the work performed by the specialist in light of our knowledge of the Council’s business and processes and our assessment of audit risk in the particular area. For example, we would typically perform the following procedures:  Analyse source data and make inquiries as to the procedures used by the specialist to establish whether the source data is relevant and reliable;  Assess the reasonableness of the assumptions and methods used;  Consider the appropriateness of the timing of when the specialist carried out the work; and  Assess whether the substance of the specialist’s findings are properly reflected in the financial statements. SpecialistsArea EY Real EstatesValuation of Land and Buildings EY ActuariesPensions disclosure Audit team leadership Our approach to the use of specialists Audit team Chloe Wilkinson Partner Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 28 Audit timeline07 Confidential — All Rights Reserved Planning Walkthroughs Substantive testing Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Auditor’s Annual Report Audit opinion on the Council’s financial statements and Auditor’s Annual Report summarising the results of our 2025/26 work at the Council Audit Planning Report Reporting our independence, risk assessment, planned audit approach and the scope of our audit Audit Results Report Reporting our conclusions on key judgements and estimates and confirmation of our independence Below is a timetable showing the key stages of the audit and the deliverables we have agreed to provide to you through the audit cycle in 2025/26. From time to time matters may arise that require immediate communication with the Audit Committee and we will discuss them with the Audit Committee Chair as appropriate. We will also provide updates on corporate governance and regulatory matters as necessary. London Borough of Hillingdon Audit Planning Report 29 Timetable of communication and deliverables Timeline Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 30 Appendices08 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 31 As set out in Appendix B our fee is based on the assumption that the Council complies with PSAA’s Statement of Responsibilities of auditors and audited bodies. See https://www.psaa.co.uk/managing-audit-quality/statement-of-responsibilities-of-auditors-and-audited-bodies/statement-of-responsibilities-of-auditors-and-audited-bodies-from-2023- 24-audits/. In particular, the Council should have regard to paragraphs 26-28 of the Statement of Responsibilities which clearly set out what is expected of audited bodies in preparing their financial statements. We set out these paragraphs in full below: Preparation of the statement of accounts 26. Audited bodies are expected to follow Good Industry Practice and applicable recommendations and guidance from CIPFA and, as applicable, other relevant organisations as to proper accounting procedures and controls, including in the preparation and review of working papers and financial statements. 27. In preparing their statement of accounts, audited bodies are expected to:  prepare realistic plans that include clear targets and achievable timetables for the production of the financial statements;  ensure that finance staff have access to appropriate resources to enable compliance with the requirements of the applicable financial framework, including having access to the current copy of the CIPFA/LASAAC Code, applicable disclosure checklists, and any other relevant CIPFA Codes.  assign responsibilities clearly to staff with the appropriate expertise and experience;  provide necessary resources to enable delivery of the plan;  maintain adequate documentation in support of the financial statements and, at the start of the audit, providing a complete set of working papers that provide an adequate explanation of the entries in those financial statements including the appropriateness of the accounting policies used and the judgements and estimates made by management;  ensure that senior management monitors, supervises and reviews work to meet agreed standards and deadlines;  ensure that a senior individual at top management level personally reviews and approves the financial statements before presentation to the auditor; and  during the course of the audit provide responses to auditor queries on a timely basis. 28. If draft financial statements and supporting working papers of appropriate quality are not available at the agreed start date of the audit, the auditor may be unable to meet the planned audit timetable, and the start date of the audit will be delayed. As we have outlined in prior years, our ability to complete the audit is dependent on the timely formulation of appropriately supported accounting judgements, provision of accurate and relevant supporting evidence, access to the finance team and management’s responsiveness to issues identified during the audit. We presented our views on the effectiveness of the Council’s arrangements to support external financial audit across a range of relevant measures as part of our 2024/25 Audit Results Report. We have repeated this assessment on the following page. Where we have been unable to undertake all planned procedures, this is likely to extend the timetable to recover assurance on the Council’s financial statements, see page 34 for further details. Appendix A – Rebuilding assurance: responsibilities The Council’s responsibilities Observations from 2024/25 Confidential — All Rights Reserved London Borough of Hillingdon Audit Planning Report 32 Appendix A – Rebuilding assurance: responsibilities Factors impacting the execution of the 2024/25 audit Explanation Status Area GA R The financial statements were published on 22 September 2025, nearly three months after the statutory deadline for commencement of the public inspection period of 1 July 2025.IneffectiveTimeliness of the draft financial statements Ensuring the quality of the draft financial statements was one of management’s reasons for the delayed publication of the draft financial statements. Compared to 2023/24, the draft financial statements were of a noticeably better quality with significantly fewer internal inconsistencies or typographical and arithmetic errors, although our checks did identify a small number of such points. We did however note a number of incorrect restatements of the prior period comparatives within the draft financial statements which management has agreed to revert in the final statements. Requires improvement Quality and completeness of the draft financial statements The original timetable agreed with management for the delivery of supporting working papers was predicated on the Council having draft financial statements prepared by 30 June 2025. The delays in finalising the draft financial statements also resulted in delays providing the supporting working papers for audit. Against revised timelines agreed with management,

Provisional Audit Planning Report Year ended 31 March 2026 Hillingdon Pension Fund 28 April 2026 The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with registered number OC300001 and is a member firm of Ernst & Young Global Limited. A list of members’ names is available for inspection at 1 More London Place, London SE1 2AF, the firm’s principal place of business and registered office. Ernst & Young LLP is a multi-disciplinary practice and is authorised and regulated by the Institute of Chartered Accountants in England and Wales, the Solicitors Regulation Authority andother regulators. Further details can be found at http://www.ey.com/UK/en/Home/Legal. Private and Confidential April 2026 Dear Audit Committee Members, Audit Planning Report 2025/26 We are pleased to attach our Audit Planning Report for the forthcoming meeting of the Audit Committee. The purpose of this re port is to provide the Committee with a basis to review our proposed audit approach and scope for the 2025/26 audit, in accordance with the requirements of the Local Audit and Accountability Act 2014, the National Audit Office’s 2024 Code of Audit Practice, the Statement of Responsibilities issued by Public Sector Audit Appointments (PSAA) Ltd, auditing standards, and other professional requirements. This report summarises our evaluation of th e key issues driving the development of an effective audit. We have aligned our audit approach and scope accordingly. This report is intended solely for the information and use of the Audit Committee and management, and is not intended to be, and should not be used, by anyone other than these specified parties. We welcome the opportunity to discuss this report with you on 28 May 2026 as well as understand whether there are other matte rs which you consider may influence our audit. Yours faithfully Debbie Hanson For and on behalf of Ernst & Young LLP Enc Audit Committee London Borough of Hillingdon Uxbridge UB8 1UW Confidential — All Rights Reserved Confidential — All Rights Reserved Hillingdon Pension Fund Audit planning report 3 1 1 4 4 7 7 Audit risks Audit risks 2 2 Overview of our 2025/26 audit strategy Overview of our 2025/26 audit strategy 3 3 5 5 6 6 Audit materiality Audit materiality Scope of the audit Scope of the audit Audit team Audit team Audit timeline Audit timeline Appendices Appendices Public Sector Audit Appointments Ltd (PSAA) issued the ‘Statement of responsibilities of auditors and audited bodies’. It is available from the PSAA website (https://www.psaa.co.uk/managing-audit-quality/statement-of-responsibilities- of-auditors-and-audited-bodies/statement-of-responsibilities-of-auditors-and-audited-bodies-from-2023-24-audits/). The Statement of responsibilities serves as the formal terms of engagement between appointed auditors and audited bodies. It summarises where the different responsibilities of auditors and audited bodies begin and end, and what is to be ex pected of the audited body in certain areas. The ‘Terms of Appointment and further guidance (updated October 2025)’ issued by the PSAA (Terms of appointment and further guidance from 1 October 2025 - PSAA) sets out additional requirements that auditors must comply with, over and above those set out in the National Audit Office Code of Audit Practice 2024 (the NAO Code) and in legislation, and covers matters of practice and procedure which are of a recurring nature. This report is made solely to the Audit Committee and management of London Borough of Hillingdon. Our work has been undertake n so that we might state to the Audit Committee and management of London Borough of Hillingdon those matters we are required to state to them in this report and for no other purpose. To the fullest extent permitted by la w we do not accept or assume responsibility to anyone other than the Audit Committee and management of London Borough of Hillingdon for this report or for the opinions we have formed. It should not be provided to any third -party without our prior written consent. Confidential — All Rights Reserved Hillingdon Pension Fund Audit planning report Overview of our 2025/26 audit strategy01 {68}: 4 Confidential — All Rights Reserved 2025/26 audit strategy overview: Rebuilding Assurance Hillingdon Pension Fund Audit planning report 5 As the Fund’s body charged with governance, the Audit Committee plays a crucial role in ensuring assurance over both the qual ity of the draft financial statements prepared by management and the Council’s wider arrangements to support a timely and efficient audit. Failure to achieve this will signifi cantly increase the level of resources required to fulfil our respective responsibilities. Our ability to complete the audit is dependent on the timely formulation of appropriately supported accounting judgements, pr ovision of accurate and relevant supporting evidence, access to the finance team and management’s responsiveness to issues identified during the audit. We direct Audit Committee m embers and officers to the Public Sector Audit Appointment Limited’s Statement of Responsibilities (paragraphs 26-28) for expectations on preparing financial statements. The purpose of this report Our 2024/25 reporting included our assessment of the control environment at the Pension Fund. We concluded that the Pension F und had sufficient controls for the audit but that improvements were required in relation to disclosures in the financial statements and strengthening diligence when reviewing the treatment of distributions by the custodian to ensure that classification is correct. We will continue to report on our assessment of the quality of the Pension Fund’s financial statements’ preparation to suppor t ongoing transparency of the audit process to those charged with governance, and to facilitate benchmarking and tracking of progress in future years. Preparedness for audit In accordance with the NAO Code, our primary objectives are to conduct work that supports the delivery of our audit report on the Pension Fund financial statements to the Council. We are also required to issue an Auditor’s Statement on the consistency of the pension fund accounts within its Annual Report , to the audited financial statements. We will issue an Audit Results Report that the summarises our opinion on the financial statements by 30 November 2026 and other procedures req uired by the Code. This includes our assessment of the control environment, including our follow up of the recommendations that we made in 2024/25, if any. Scope of our audit In Section 6 we include a provisional timeline for the audit. It is essential that all parties collaborate to ensure complian ce with this timeline. The completion of initial planning procedures is currently delayed due to outstanding data analytics from the Pension Fund. To maintain the agreed audit timetable, it is essential that this information is provided promptly. Significant delays may result in a revised timeline and a potential scale fee variatio n. Timeline There are no issues that we believe impact our independence and objectivity. Please refer to Appendix B for our update on in dependence. Our independence considerations Confidential — All Rights Reserved 2025/26 audit strategy overview: Audit risks and materiality Hillingdon Pension Fund Audit planning report 6 The purpose of our audit is to obtain reasonable assurance to express an opinion about whether the pension fund financial sta tements as a whole are free from material misstatement, whether due to fraud or error. The following ‘dashboard’ summarises the significant accounting and auditing mat ters outlined in this report. It seeks to provide the Audit Committee with an overview of our initial risk identification for the upcoming audit and any changes in risks identifie d in the current year. Risk/area of focus Risk identified Change from PY Details Presumptive risk of management override of controls Fraud risk No change in risk or focus There is a risk that the financial statements as a whole are not free from material misstatement whether caused by fraud or error. We perform mandatory procedures regardless of specifically identified fraud risks. Valuation of complex and hard to value investments (Level 3 Investments) Significant risk No change in risk The Fund’s investments includes a significant balance of level 3 investments, £270 million as at 31 March 2025, such as pooled investment vehicles, property and private debt whose prices are not publicly available. These may contain a number of assets where significant judgements are taken by Investment Managers to value those investments. There is a risk that these are materially misstated given the complexity of the measurement and degree of estimation involved. IAS26 Disclosure – Actuarial present value of promised retirement benefits Risk of material misstatement No change in risk IAS 26 requires post-employment benefit plans to disclose annually the basis used to determine the actuarial present value of promised retirement benefits, including the key demographic and financial assumptions applied. For 2025/26, the estimate will reflect the results of the new 2025 triennial valuation, updated where necessary, and incorporates factors such as mortality rates, expected pay progression, inflation measures and long-term investment yields. We consider there to be a risk relating to the estimation process, the completeness and accuracy of data used, and the appropriateness of the assumptions selected by the actuary. Completeness of investment income Risk of material misstatement No change in risk There is a risk that investment income is incomplete where distributions are reinvested and not clearly reported by fund managers or custodians. This risk has crystallised in prior years, where reinvested distributions were not identified or recognised as income, resulting in a material understatement of investment income and a corresponding overstatement of the change in market value of investments. Audit risks and areas of focus Confidential — All Rights Reserved 2025/26 audit strategy overview: Audit risks and materiality Hillingdon Pension Fund Audit planning report 7 Materiality Planning materiality £14.1m Materiality has been set at £14.1 million, which represents 1% of total net assets in 2024/25. Performance materiality £10.6m Performance materiality has been set at £10.6 million, which represents 75% of materiality. Audit differences £0.7m We will report to you all uncorrected misstatements over £0.7 million, relating to the Fund Account and Net Asset Statement. Other uncorrected misstatements, such as misstatements in disclosures, and corrected misstatements will be communicated to the extent that they merit the attention of the Committee or are important from a qualitative perspective. We will revisit our materiality on publication of the draft pension fund financial statements. Confidential — All Rights Reserved Hillingdon Pension Fund Audit planning report 8 Audit risks02 {68}: Confidential — All Rights Reserved Our response to significant risks Hillingdon Pension Fund Audit planning report 9 We have set out the significant risks (including fraud risks denoted by*) identified for the current year audit along with the rationale and expected audit approach. The risks identified below may change to reflect any significant findings or subsequent issues we identify during the audit. Presumptive risk of management override of controls* What is the risk, and the key judgements and estimates? Our response: Key areas of challenge and professional judgement In accordance with ISA 240, the presumptive risk of management override of controls is present at every entity and we design the appropriate procedures to consider such risk. ▪ Management has the primary responsibility to prevent and detect fraud. It is important that management, with the oversight of those charged with governance, has put in place a culture of ethical behaviour and a strong control environment that both deters and prevents fraud. ▪ Our responsibility is to plan and perform audits to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatements whether caused by error or fraud. To address the risks outlined we will carry out a range of procedures including: ▪ Identifying fraud risks during the planning stages; ▪ Inquiry of management about risks of fraud and the controls put in place to address those risks; ▪ Understanding the oversight given by those charged with governance of management’s processes over fraud; ▪ Discussing with those charged with governance the risks of fraud in the entity, including those risks that are specific to the entity’s business sector (those that may arise from economic industry and operating conditions); ▪ Considering whether there are any fraud risk factors associated with related party relationships and transactions and if so, whether they give rise to a risk of material misstatement due to fraud; ▪ Considering the effectiveness of management’s controls designed to address the risk of fraud and determining an appropriate strategy to address those identified risks of fraud; ▪ Performing mandatory procedures regardless of specifically identified fraud risks, including testing of journal entries and other adjustments in the preparation of the financial statements; ▪ Undertaking procedures to identify significant unusual transactions; and ▪ Considering whether management bias was present in the key accounting estimates and judgements in the financial statements. Confidential — All Rights Reserved Our response to significant risks Hillingdon Pension Fund Audit planning report 10 Valuation of complex hard to value investments (Level 3 Investments) Financial statement impact What is the risk, and the key judgements and estimates? Our response: Key areas of challenge and professional judgement Misstatements that occur in relation to complex investments valued at Level 3 fair value hierarchy such as unquoted equities, property and pooled investments could affect the valuation of the Net Assets. Total of level 3 investments held by the Fund at 31 March 2025 was £270 million. The Fund’s investments include unquoted pooled investment vehicles such as private debt, infrastructure and property investments. These may contain a number of assets where significant judgements are taken by Investment Managers to value those investments. The nature of these types of investments, means that errors in judgement could result in a material valuation error. To address the significant risk, we will carry out a range of procedures including: ▪ Analysing the schedule of investments to determine the level of judgement and estimation risk, to identify the population of hard to value assets as at 31 March 2026; ▪ Obtaining an understanding and evaluating the work of fund managers, and Custodian, including ISAE3402 control reports (or equivalent) where available; ▪ Reviewing the latest audited accounts for the relevant Fund Managers to ensure there are no matters arising that highlight weaknesses in the funds valuation; ▪ Reviewing the basis of valuation of unquoted investments and assessing the appropriateness of the valuation methods used; and ▪ Performing analytical procedures and checking the valuation output for reasonableness against our own expectations, where the latest audited accounts were not as at 31 March 2026. We will also: • Ensure correct classification, presentation and disclosure of items in the financial statements and corresponding notes; • Review investment valuation disclosures to verify that significant judgements surrounding the valuation Investments have been appropriately made in the financial statements; ▪ Perform triangulation work to agree amount per the financial statements to Fund Manager and to Custodian; and ▪ Test accounting entries have been correctly processed in the financial statements We will involve our Pensions Centre of Excellence in undertaking this work, and If necessary other internal valuation specialists. Confidential — All Rights Reserved Other areas of audit focus Hillingdon Pension Fund Audit planning report 11 IAS26 Disclosure – Actuarial present value of promised retirement benefits Financial statement impact What is the risk, and the key judgements and estimates? Our response: Key areas of challenge and professional judgement IAS 26 requires post-employment benefit plans to disclose annually the basis used to determine the actuarial present value of promised retirement benefits, including the key demographic and financial assumptions applied. For 2025/26, the estimate reflects the results of the new 2025 triennial valuation, updated where necessary, and incorporates factors such as mortality rates, expected pay progression, inflation measures and long-term investment yields. We consider there to be a risk relating to the estimation process, the completeness and accuracy of data used, and the appropriateness of the assumptions selected by the actuary. To address the risks outlined we will carry out a range of procedures including: ▪ Assessing the competence of management’s actuary, Hymans Robertson; ▪ Engaging with the NAO’s consulting actuary, PwC, and our EY Pensions Advisory Team to review the IAS 26 approach and assumptions applied by management’s actuary to assess whether these are reasonable and compliant with IAS 26; ▪ Ensuring that the IAS 26 disclosure is in line with the relevant standards and consistent with the valuation provided by the actuary; and ▪ Assessing the adequacy and clarity of disclosures relating to actuarial assumptions, sensitivities and estimation uncertainty in accordance with the CIPFA Code and ISA (UK) 540 (Revised). We have identified other areas of the audit, that have not been classified as significant risks, but are still important when considering the risks of material misstatement to the financial statements and disclosures. Confidential — All Rights Reserved Other areas of audit focus Hillingdon Pension Fund Audit planning report 12 Completeness of investment income Financial statement impact What is the risk, and the key judgements and estimates? Our response: Key areas of challenge and professional judgement Misstatements that occur in relation to completeness of investment income would result in investment income being understated and a corresponding overstatement of the change in market value of investments. Total investment income in 2024/25 was £17,573 million. Total profit and losses on disposal of investments and changes in market value of investments in 2024/25 was £52,595 million. There is a risk that investment income is incomplete where distributions are reinvested and not clearly reported by fund managers or custodians. This risk has crystallised in prior years, where reinvested distributions were not identified or recognised as income resulting in a material understatement of investment income and a corresponding overstatement of the change in market value of investments. This is indicative of a potential control weakness over the identification, completeness and classification of investment income. To address the risks outlined we will carry out a range of procedures including: ▪ Agreeing the investment income back to the fund manager reports to ensure completeness and accuracy, and that any distributions reinvested in the fund are correctly treated. ▪ Performing analytical procedures and checking the output for reasonableness against our own expectations. Confidential — All Rights Reserved Hillingdon Pension Fund Audit planning report 13 Audit materiality03 {68}: Confidential — All Rights Reserved Materiality Hillingdon Pension Fund Audit planning report 14 For planning purposes, materiality for 2025/26 has been set at £14.1 million. This represents 1% of the Pension Fund’s net assets at 31 March 2025. It will be reassessed throughout the audit process. In an audit of a Pension Fund, we consider the net assets to be the appropriate basis for setting the materiality as they represent the best measure of the schemes’ ability to meet obligations rising from the pension liabilities. We have provided supplemental information about audit materiality in Appendix D. Planning materiality — the amount over which we anticipate misstatements would influence the economic decisions of a user of the financial statements. Performance materiality — the amount we use to determine the extent of our audit procedures. We have set performance materiality at £10.6 million which represents 75% of materiality. We have considered factors such as the number of errors in the prior year, the adequacy of the control environment, and any significant changes in 2025/26 when determining the percentage of performance materiality. Audit difference threshold — We will report to you all uncorrected misstatements over £0.7million, relating to the Fund Account and Net Asset Statement. Other uncorrected misstatements, such as misstatements in the disclosures and corrected misstatements will be communicated to the extent that they merit the attention of the Audit Committee or are important from a qualitative perspective. Hillingdon Pension Fund materiality Key definitions We request that the Audit Committee confirm its understanding of, and agreement to, these materiality and reporting levels. Planning materiality £14.1m Performance materiality £10.6m Audit differences £0.7m Net Assets £1,410m Confidential — All Rights Reserved Hillingdon Pension Fund Audit planning report 15 Scope of our audit04 {68}: Confidential — All Rights Reserved Audit process and strategy Hillingdon Pension Fund Audit planning report 16 In accordance with the NAO Code, our primary objectives are to conduct work that supports the delivery of our audit report to the Hillingdon Pension Fund. We will issue an audit report that covers: 1. Financial statement audit Our opinion on the financial statements: ▪ Whether the financial statements give a true and fair view of the Revenue and Fund Account and Net Asset Statement for the Pe nsion Fund for the period in question; and ▪ Whether the financial statements have been prepared properly in accordance with the relevant accounting and reporting framewo rk as set out in legislation, applicable accounting standards or other direction. Our opinion on other matters: ▪ whether other information published together with the audited financial statements is consistent with the financial statement s. Other procedures required by the Code: ▪ Reviewing and reporting on matters on which we report by exception as required. ▪ We are also required to issue an Auditor’s Statement on the consistency of the pension fund accounts within its Annual Report , to the audited financial statements. Objectives of our audit scoping Internal audit We will review internal audit plans and the results of their work. We will reflect the findings from these reports, together with reports from any other work completed in the year, in our detailed audit plan, where they raise issues that could have an impact on the financial statements. Confidential — All Rights Reserved Audit team05 {68}: Hillingdon Pension Fund Audit planning report 17 Confidential — All Rights Reserved Audit team Hillingdon Pension Fund Audit planning report 18 The global engagement team is led by Debbie Hanson, who has overall responsibility for the performance of the audit and for the auditor’s report issued on behalf of EY. In the current year, Debbie Hanson is supported by Chloe Wilkinson as other engagement partner. Audit team leadership Lead audit partner* Debbie Hanson Nimisha Dosa Manager Josna Jose Senior Niña Rose Cutaran Senior EY Centre of Excellence - Pensions Specialist PWC consulting actuary and EY Actuaries When auditing key judgements, we are often required to use the input and advice provided by specialists who have qualifications and expertise not possessed by the core audit team. The areas where EY specialists are expected to provide input for the current year audit are: In accordance with Auditing Standards, we will evaluate each specialist’s professional competence and objectivity, considering their qualifications, experience and available resources, together with the independence of the individuals performing the work. We also consider the work performed by the specialist in light of our knowledge of the Group’s business and processes and our assessment of audit risk in the particular area. For example, we would typically perform the following procedures: ▪ Analyse source data and make inquiries as to the procedures used by the specialist to establish whether the source data is relevant and reliable ▪ Assess the reasonableness of the assumptions and methods used ▪ Consider the appropriateness of the timing of when the specialist carried out the work ▪ Assess whether the substance of the specialist’s findings are properly reflected in the financial statements. Our approach to the use of specialists Area Specialists Investment Valuation EY Centre of Excellence - Pensions Pensions Fund valuation and disclosures EY Actuaries PwC (Consulting Actuary to the NAO on behalf of audit providers) Other engagement partner Chloe Wilkinson Confidential — All Rights Reserved Hillingdon Pension Fund Audit planning report 19 Audit timeline06 {68}: Confidential — All Rights Reserved Planning Walkthroughs Substantive testing Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Signing of Audit Opinion Audit opinion on the Pension Fund accounts and consistency statement on the Pension Fund Annual Report for year ended 31st March 2026 Audit planning report Reporting our independence, risk assessment, planned audit approach and the scope of our audit Audit Results Report Reporting our conclusions on key judgements and estimates and confirmation of our independence Timetable of communication and deliverables Below is a timetable showing the key stages of the audit and the deliverables we have agreed to provide to you through the au dit cycle in 2025/26. From time to time matters may arise that require immediate communication with the Audit Committee and we will discuss them wi th the Audit Committee Chair as appropriate. We will also provide updates on corporate governance and regulatory matters as necessary. Hillingdon Pension Fund Audit planning report 20 Timeline Confidential — All Rights Reserved Hillingdon Pension Fund Audit planning report 21 Appendices07 {68}: Confidential — All Rights Reserved Appendix A — PSAA Statement of Responsibilities Hillingdon Pension Fund Audit planning report 22 As set out in Appendix B our fee is based on the assumption that the Fund complies with PSAA’s Statement of Responsibilities of auditors and audited bodies. See https://www.psaa.co.uk/managing-audit-quality/statement-of-responsibilities-of-auditors-and-audited-bodies/statement-of-responsibilities-of-auditors-and-audited-bodies-from-2023- 24-audits/. In particular, the Fund should have regard to paragraphs 26-28 of the Statement of Responsibilities which clearly set out what is expected of audited bodies in preparing their financial statements. We set out these paragraphs in full below: Preparation of the statement of accounts 26. Audited bodies are expected to follow Good Industry Practice and applicable recommendations and guidance from CIPFA and, as applicable, other relevant organisations as to proper accounting procedures and controls, including in the preparation and review of working papers and financial statements . 27. In preparing their statement of accounts, audited bodies are expected to: ▪ prepare realistic plans that include clear targets and achievable timetables for the production of the financial statements; ▪ ensure that finance staff have access to appropriate resources to enable compliance with the requirements of the applicable f inancial framework, including having access to the current copy of the CIPFA/LASAAC Code, applicable disclosure checklists, and any other relevant CIPFA Codes. ▪ assign responsibilities clearly to staff with the appropriate expertise and experience; ▪ provide necessary resources to enable delivery of the plan; ▪ maintain adequate documentation in support of the financial statements and, at the start of the audit, providing a complete s et of working papers that provide an adequate explanation of the entries in those financial statements including the appropriateness of the accounting policies used and th e judgements and estimates made by management; ▪ ensure that senior management monitors, supervises and reviews work to meet agreed standards and deadlines; ▪ ensure that a senior individual at top management level personally reviews and approves the financial statements before prese ntation to the auditor; and ▪ during the course of the audit provide responses to auditor queries on a timely basis. 28. If draft financial statements and supporting working papers of appropriate quality are not available at the agreed start date of the audit, the auditor may be unable to meet the planned audit timetable, and the start date of the audit will be delayed. The Fund’s responsibilities Confidential — All Rights Reserved Appendix B - Independence and Fees Hillingdon Pension Fund Audit planning report Planning stage Final stage ▪ The principal threats, if any, to objectivity and independence identified by Ernst & Young (EY) including consideration of all relationships between you, your affiliates and directors and us; ▪ The safeguards adopted and the reasons why they are considered to be effective, including any Engagement Quality review; ▪ The overall assessment of threats and safeguards; ▪ Information about the general policies and process within EY to maintain objectivity and independence ▪ The IESBA Code requires EY to provide an independence assessment of any proposed non-audit service (NAS) to the PIE audit client and will need to obtain and document pre-concurrence from the audit committee/those charged with governance for the provision of all NAS prior to the commencement of the service (i.e., similar to obtaining a “pre-approval” to provide the service). ▪ In order for you to assess the integrity, objectivity and independence of the firm and each covered person, we are required to provide a written disclosure of relationships (including the provision of non - audit services) that may bear on our integrity, objectivity and independence. This is required to have regard to relationships with the entity, its directors and senior management, its affiliates, and its connected parties and the threats to integrity or objectivity, including those that could compromise independence that these create. We are also required to disclose any safeguards that we have put in place and why they address such threats, together with any other information necessary to enable our objectivity and independence to be assessed; ▪ Details of non-audit/additional services provided and the fees charged in relation thereto; ▪ Written confirmation that the firm and each covered person is independent and, if applicable, that any non-EY firms used in the group audit or external experts used have confirmed their independence to us; ▪ Details of any non-audit/additional services to a UK PIE audit client where there are differences of professional opinion concerning the engagement between the Ethics Partner and Engagement Partner and where the final conclusion differs from the professional opinion of the Ethics Partner ▪ Details of any inconsistencies between FRC Ethical Standard and your policy for the supply of non -audit services by EY and any apparent breach of that policy; ▪ Details of all breaches of the IESBA Code of Ethics, the FRC Ethical Standard and professional standards, and of any safeguards applied and actions taken by EY to address any threats to independence (for breaches of the FRC Ethical Standard include details of its significance); and ▪ An opportunity to discuss auditor independence issues. The FRC Ethical Standard 2024 and ISA (UK) 260 ‘Communication of audit matters with those charged with governance’, requires us to communicate with you on a timely basis on all significant facts and matters that bear upon our integrity, objectivity and independence. The Ethical Standard requires that we communicate formally both at the planning stage and at the conclusion of the audit, as well as during the course of the audit if appropriate. The aim of these communications is to ensure full and fair disclosure by us to those charged with your governance on matters in which you have an interest. In addition, during the course of the audit, we are required to communicate with you whenever any significant judgements are made about threats to objectivity and independence and the appropriateness of safeguards put in place, for example, when accepting an engagement to provide non -audit services. We ensure that the total amount of fees that EY and our network firms have charged to you and your affiliates for the provisi on of services during the reporting period, analysed in appropriate categories, are disclosed. 23 Required communications Confidential — All Rights Reserved Appendix B - Independence and Fees continued Hillingdon Pension Fund Audit planning report 24 Overall Assessment We highlight the following significant facts and matters that may be reasonably considered to bear upon our objectivity and i ndependence, including the principal threats, if any. We have adopted the safeguards noted below to mitigate these threats along with the reasons why they are considered to be effect ive. However we will only perform non-audit services if the service has been pre-approved in accordance with your policy. Overall, we consider that the safeguards that have been adopted appropriately mitigate the principal threats identified and w e therefore confirm that EY is independent and the objectivity and independence of Debbie Hanson, your audit engagement partner and the audit engagement team have not been comp romised. Self interest threats A self interest threat arises when EY has financial or other interests in your company. Examples include where we have an inv estment in your company; where we receive significant fees in respect of non-audit services; where we need to recover long outstanding fees; or where we enter into a business relatio nship with you. At the time of writing, there are no long outstanding fees. We believe that it is appropriate for us to undertake those permitted non-audit/additional services set out in Section 5.40 of the FRC Ethical Standard 2024 (FRC ES), and we will comply with the policies that you have approved. None of the services are prohibited under the FRC's ES and the services have been approved in accordance with your policy on pre-approval. At the time of writing, there are no non-audit fees with Hillingdon Pension Fund. No additional safeguards are required. A self interest threat may also arise if members of our audit engagement team have objectives or are rewarded in relation to sales of non-audit services to you. We confirm that no member of our audit engagement team, including those from other service lines, has objectives or is rewarded in relation to s ales to you, in compliance with FRC ES Section 4. There are no other self interest threats at the date of this report. Relationships, services and related threats and safeguards Self review threats Self review threats arise when the results of a non-audit service performed by EY or others within the EY network are reflected in the amounts included or disclosed in the financial statements. There are no self review threats at the date of this report Management threats Partners and employees of EY are prohibited from taking decisions on behalf of management of your company. Management threats may also arise during the provision of a non-audit service in relation to which management is required to make judgements or decisions based on that work. There are no management threats at the date of this report. Confidential — All Rights Reserved Appendix B - Independence and Fees continued Hillingdon Pension Fund Audit planning report 25 Other threats Other threats, such as advocacy, familiarity or intimidation, may arise. There are no other threats at the date of this report. EY Transparency Report EY has policies and procedures that instil professional values as part of firm culture and ensure that the highest standards of objectivity, independence and integrity are maintained. Details of the key policies and processes in place within EY for maintaining objectivity and independence can be found in our annual Transparency Report which the firm is required to publish by law. The most recent version of this Report is for the period ended 30 June 2025 and can be found here: EY UK 2025 Transparency Report. Confidential — All Rights Reserved Appendix B — Independence and Fees continued The duty to prescribe fees is a statutory function delegated to Public Sector Audit Appointments Ltd (PSAA) by the Secretary of State for Housing, Communities and Local Government. This is defined as the fee required by auditors to meet statutory responsibilities under the Local Audit and Accountability Act 2014 in accordance with the requirements of the Code of Audit Practice and supporting guidance published by the National Audit Office, the financial reporting requirements set out in the Code of Practice on Local Authority Accounting published by CIPFA/LASAAC, and the professional standards applicable to auditors’ work. The agreed fee presented is based on the following assumptions: ▪ officers meeting the agreed timetable of deliverables; ▪ our financial statement opinion and value for money conclusion being unqualified; ▪ appropriate quality of documentation is provided by the Fund; ▪ an effective control environment; and ▪ compliance with PSAA’s Statement of Responsibilities of auditors and audited bodies. See https://www.psaa.co.uk/managing-audit- quality/statement-of-responsibilities-of-auditors-and- audited-bodies/statement-of-responsibilities-of-auditors- and-audited-bodies-from-2023-24-audits/. In particular the Fund should have regard to paragraphs 26–28 of the Statement of Responsibilities which clearly sets out what is expected of audited bodies in preparing their financial statements. These are set out in full on the previous page. If any of the above assumptions prove to be unfounded, we will seek a variation to the agreed fee. This will be discussed with the Fund in advance. Hillingdon Pension Fund Audit planning report 26 All fees exclude VAT 1. The 2024/25 work has just been completed, and a final fee will be determined shortly. We have submitted a scale fee variation to PSAA for additional 2024/25 work including investment valuations and quality and preparation issues, as well as the incremental work by our IT audit specialists to provide assurance over the migration of financial records of the Hillingdon Pension Fund from Oracle R12 to Oracle Fusion alongside the work performed as part of the Council’s audit for 2024/25. 2. For 2025/26 the planned fee represents the base fee, i.e., not including any extended testing. The scale fee also may be impacted by a range of other factors which will result in additional work, which include but are not limited to: ▪ Consideration of correspondence from the public and formal objections. ▪ New and revised accounting standards ▪ Non-compliance with law and regulation with an impact on the financial statements. ▪ The need to exercise auditor statutory powers. ▪ Prior period adjustments. ▪ Modified financial statement opinions ▪ We expect to request an additional fee for 2025/26 because it is a triennial valuation year which requires extended audit testing of the membership data submitted to the actuary. Current Year Prior Year £ £ Total Fee — Code Work 96,295 92,572 Proposed Scale Fee Variation Note 2 Note 1 Total fees 96,295 92,572 Confidential — All Rights Reserved Appendix C — Required communications with the Audit Committee We have detailed the communications that we must provide to the audit committee. Our Reporting to you Required communications What is reported? When and where Terms of engagement Confirmation by the audit committee of acceptance of terms of engagement as written in the engagement letter signed by both parties. The statement of responsibilities serves as the formal terms of engagement between the PSAA’s appointed auditors and audited bodies. Our responsibilities Reminder of our responsibilities as set out in the engagement letter Audit planning report – April 2026 Planning and audit approach Communication of: ▪ The planned scope and timing of the audit ▪ The planned use of internal audit ▪ The significant risks identified When communicating key audit matters this includes the most significant risks of material misstatement (whether or not due to fraud) including those that have the greatest effect on the overall audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team Audit planning report – April 2026 Significant findings from the audit ▪ Our view about the significant qualitative aspects of accounting practices including accounting policies, accounting estimates and financial statement disclosures ▪ Significant difficulties, if any, encountered during the audit ▪ Other significant matters, if any, arising from the audit that were discussed, or subject to correspondence with management ▪ Circumstances that affect the form and content of our auditor’s report ▪ Other matters if any, significant to the oversight of the financial reporting process Audit results report – expected September 2026 Hillingdon Pension Fund Audit planning report 27 Confidential — All Rights Reserved Appendix C — Required communications with the Audit Committee continued Our Reporting to you Required communications What is reported? When and where Going concern Events or conditions identified that may cast significant doubt on the entity’s ability to continue as a going concern, including: ▪ Whether the events or conditions constitute a material uncertainty related to going concern ▪ Whether the use of the going concern assumption is appropriate in the preparation and presentation of the financial statements ▪ The appropriateness of related disclosures in the financial statements Audit results report – expected September 2026 Misstatements ▪ A request that any uncorrected misstatement be corrected ▪ Material misstatements corrected by management ▪ Uncorrected misstatements and their effect on our audit opinion, unless prohibited by law or regulation ▪ The effect of uncorrected misstatements related to prior periods Audit results report – expected September 2026 Fraud ▪ Enquiries of the audit committee to determine whether they have knowledge of any actual, suspected or alleged fraud affecting the entity ▪ Any fraud that we have identified or information we have obtained that indicates that a fraud may exist ▪ Unless all of those charged with governance are involved in managing the entity, unless prohibited by law or regulation any identified or suspected fraud involving: ▪ Management; ▪ Employees who have significant roles in internal control; or ▪ Others, when the identified or suspected fraud is other than clearly inconsequential. ▪ The nature, timing and extent of audit procedures necessary to complete the audit when fraud involving management is suspected ▪ Matters, if any, to communicate regarding management’s process for identifying and responding to the risks of fraud in the entity and our assessment of the risks of material misstatement due to fraud ▪ Any other matters related to fraud, relevant to Audit Committee responsibility Audit results report – expected September 2026 Hillingdon Pension Fund Audit planning report 28 Confidential — All Rights Reserved Appendix C — Required communications with the Audit Committee continued Our Reporting to you Required communications What is reported? When and where Related parties Significant matters arising during the audit in connection with the entity’s related parties Audit results report – expected September 2026 Independence Communication of the relevant ethical requirements, including those related to independence, that we apply for the audit engagement, including any independence requirements specific to audits of financial statements of the entity. Communication of all significant facts and matters that bear on EY’s, and all individuals involved in the audit, integrity, objectivity and independence Communication of key elements of the audit engagement partner’s consideration of independence and objectivity such as: ▪ The principal threats ▪ Safeguards adopted and their effectiveness ▪ An overall assessment of threats and safeguards ▪ Information about the general policies and process within the firm to maintain objectivity and independence ▪ Breaches of IESBA Code of Ethics, local independence regulations or professional standards (for breaches of the FRC Ethical Standard, include details of the breach and its significance) Communication whenever significant judgements are made about threats to integrity, objectivity and independence and the appropriateness of safeguards put in place. Communication of relevant information to those charged with governance, to enable them to provide concurrence on the non-audit services being provided. Audit planning report – April 2026 Audit results report – expected September 2026 Hillingdon Pension Fund Audit planning report 29 Confidential — All Rights Reserved Appendix C — Required communications with the Audit Committee continued Our Reporting to you Required communications What is reported? When and where External confirmations ▪ Management’s refusal for us to request confirmations ▪ Inability to obtain relevant and reliable audit evidence from other procedures Audit results report – expected September 2026 Consideration of laws and regulations ▪ Subject to compliance with applicable regulations, matters involving identified or suspected non - compliance with laws and regulations, other than those which are clearly inconsequential and the implications thereof. Instances of suspected non-compliance may also include those that are brought to our attention that are expected to occur imminently or for which there is reason to believe that they may occur ▪ Enquiry of the audit committee into possible instances of non-compliance with laws and regulations that may have a material effect on the financial statements and that the audit committee may be aware of Audit results report – expected September 2026 Internal controls ▪ Significant deficiencies in internal controls identified during the audit Management Letter of Representation Audit results report – expected September 2026 Hillingdon Pension Fund Audit planning report 30 Representations Written representations we are requesting from management and/or those charged with governance Audit results report – expected September 2026 System of quality management How the system of quality management (SQM) supports the consistent performance of a quality audit Audit results report – expected September 2026 Material inconsistencies and misstatements Material inconsistencies or misstatements of fact identified in other information which management has refused to revise Audit results report – expected September 2026 Auditors report ▪ Any circumstances identified that affect the form and content of our auditor’s report Audit results report – expected September 2026 Confidential — All Rights Reserved Appendix D — Additional audit information Hillingdon Pension Fund Audit planning report 31 In addition to the key areas of audit focus outlined within the plan, we have to perform other procedures as required by audi ting, ethical and independence standards and other regulations. We outline the procedures below that we will undertake during the course of our audit. ▪ Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, desi gn and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. ▪ Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Pension Fund’s internal control. ▪ Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclos ures made by management. ▪ Concluding on the appropriateness of management’s use of the going concern basis of accounting. ▪ Evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and whethe r the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. ▪ Maintaining auditor independence. Objective of our audit Other required procedures during the course of the audit For the purposes of determining whether the accounts are free from material error, we define materiality as the magnitude of an omission or misstatement that, individually or in the aggregate, in light of the surrounding circumstances, could reasonably be expected to influence the economic decisions of the users of the financial statements. Our evaluation of it requires professional judgement and necessarily takes into account qualitative as well as quantitative considerations implici t in the definition. We would be happy to discuss with you your expectations regarding our detection of misstatements in the financial statements. The amount we consider material at the end of the audit may differ from our initial determination. At this stage, however, it is not feasible to anticipate all of the circumstances that may ultimately influence our judgement about materiality. At the end of the audit we will form our final opinion by reference to all matters that could be significant to users of the accounts, including the total effect of the audit misstatements we identify, and our evaluation of materiality at that date. Purpose and evaluation of materiality EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com. 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Audit, Finance & Performance Committee – 9 June 2026 Part I – Public GOVERNANCE REVIEW IMPROVEMENT PLAN Committee name Audit, Finance & Performance Committee Officers reporting Peter Carpenter , Director of Pensions, Statutory Accounting, Deputy s151 Officer Matthew Wallbridge, Chief Operating Officer Daniel Toohey, Director of Legal & Governance/ Monitoring Officer Papers with report Governance Review Improvement Plan Ward N/A HEADLINES 1. The Governance Review Improvement Plan (GRIP) is Hillingdon Council’s strategic response to identified governance areas for improvement . It aims to strengthen internal controls, clarify internal decision-making and improve accountability, ensuring the Council is well-governed corporately, financially resilient, and transparent. RECOMMENDATION: That the update to the Governance Review Imp rovement Plan be noted and the Committee s eek any clarifications and assurances and provide comments to officers. SUPPORTING INFORMATION 2. The GRIP (attached as Appendix) is a strategic programme launched by the London Borough of Hillingdon in March 2025 to address key governance weaknesses identified in several reviews, including the CIPFA review (March 2025) , Directorate Governance Internal Audit (September 2025) and the Provisional Audit Results Report (February 2025). 3. In addition, Members will recall that, on 24 July 2025, the Council’s External Auditors issued the Council with a Value for Money Update and Recommendations Under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 (S24 Report). That report was given consideration by Full Council at the meeting on 11 September 2025, and it was resolved, inter-alia, that:  the programmes of work and actions which were already in place to address the S24 Report recommendations, as clearly set out in the Financial Modernisation Programme (FMP) which commenced in February 2025, and the Governance Review Improvement Plan (GRIP) which commenced in March 2025, be welcomed and approved, and p rogress made to June 2026 be noted where 2 of the 7 recommendations are now RAG’d Green and the other 5 Amber.  the Audit Committee, who have already been monitoring the progress of the FMP and GRIP, be instructed to continue to monitor the delivery of the actions and report back to Council in no later than 12 months, or earlier if required, to ensure the S24 Report recommendations have been fully addressed. 4. In addition, Ernst and Young have presented their final Auditor’s Annual Report Year ended 31 March 2025, dated 27 February 2026, containing additional recommendations which Audit, Finance & Performance Committee – 9 June 2026 Part I – Public have been subsequently added to the GRIP for implementation. 5. Accordingly, this report is brought before Members to provide an update on the work and actions contained within the GRIP. 6. Led by the Corporate Governance Group, the GRIP is structured around three workstreams:  financial governance – including the S24 recommendations  directorate governance, and  constitutional / democratic governance 7. Each workstream has defined actions and leadership. The overall aim of the GRIP is to embed a tiered governance model, improve business planning, and strengthen internal arrangements and protocols. 8. The GRIP is a public-facing initiative, with progress upda tes presented at this Committee and to future meetings, demonstrating the Council’s commitment to reform and accountability. Workstream #1 - Financial Governance: 9. The Finance Modernisation Programme (FMP) is a significant transformation initiative by the London Borough of Hillingdon to review and strengthen the Council’s financial systems, processes, and structures. The programme was initiated to address budget challenges and to modernise the Council’s financial infrastructure. 10. There are a significant number of challenges that the council is seeking to address both in this programme and more broadly in addressing the council’s adverse financial position. It is recognised that addressing all of these is of critical importance to the council’s recovery, however this will be costly in both resources and time. Some of this resourcing will be provided through phase 2 of the FMP which will see additional external resource seconded in to support the annual accounts and MTFS processes. 11. Summary of progress since the last meeting includes the following:  Spend control measures in place in 2025/26 have continued through the first quarter of the 2026/27. These measures include review of invoice related expenditure, staffing spend controls, and Temporary Accommodation placements.  The MHCLG in February issued a ‘minded to’ letter to the Council in relation to the request for Exceptional Financial Support (EFS). This is a standard approach triggering engagement with CIP FA and then further engagement with the MHCLG to settle the arrangement. The Council, as part of its EFS Governance, has set up a voluntary independently chaired Improvement Board to oversee progress.  Closure of 2025/26 Accounts is progressin g. This will produce an outturn report for both Capital and Revenue which will be presented to Cabinet in June 2026 . It is still expected that draft accounts will be produced by the 30th June deadline.  Initial Month 2 2026/27 monitoring (which happens in June) will co mpare spending against budget and also against the outturn position for 2025/26 to look for any initial issues. Month 2 will also review the progress to delivery of initial savings plans.  The updated Oracle EPM solution for monitoring council finances is in implementation Audit, Finance & Performance Committee – 9 June 2026 Part I – Public and testing for use in 2026/27. This includes improved controls over establishment and agency staff as well as the ability for managers to drill down into transactions (something not available at the moment). The solution has been in the t esting phase since early April and is expected that it will be cleared for use, following extensive training, in late June 2026, for the June Monitoring Cycle. Training will be on a departmental level to ensure it is relevant to users.  The Government has u pdated its guidance on DSG and the Council is expecting to recoup 90% of its DSG deficit in the autumn. The actual outturn for 2025/26 was just under £10m, which is significantly less than the initial projection. The Council is working with MHCLG on the detail required for the funding recoupment in the autumn.  The following updates to Oracle have been actioned:  Implementation of revised use of Procurement resulting in more streamlined use of the system. This was delivered on the 1st April.  Delivery of the updated Oracle functionality to reflect the updates in procurement legislation. This went live on the 8th April.  Work has continued on the rationalisation of Oracle Licences.  Updated controls have been tested and are ready for implementation to ensure that Capital spending governance is improved.  Work is underway to allow different ways to chase debt (dunning channels) to allow the Council to do more effectively as the most effective route is department specific.  More punchout procurement access is being developed (including Amazon) with associated controls, to streamline procurement processes and costs.  At the end of June, the Council will start the process of Quarterly Balance Sheet reviews to ensure issues in the balance sheet are rectified closer to whe n they have happened.  Monthly Oracle information is used as part of the balanced scorecard which goes to SMTs and CMT on a monthly basis, including the monthly monitoring of all savings and key projects. The end of year performance report is on the committee forward plan.  Having considered the relevant information, the legal regulatory position and guidance, the Monitoring Officer has concluded that the local authority has met the statutory requirement in relation to the setting of its budget for the financial year 2025/26. In reaching this conclusion the Monitoring Officer notes intervention actions taken by the Council and the S151 Officers throughout the course of the 2025/26 year to ensure compliance, in particular actions to secure the obtaining of EFS. Although technically the Council has met the statutory requirement, in order to draw lessons from the course of that year, the Monitoring Officer has made the following recommendations: 1. That for this year (2026/27) and coming years, in order to underpin the delivery of robust sustainable budgets, the Council commence its budget setting exercise at an early stage, in June/July, deploying appropriate budget setting tools and modelling with timescales to be set at key stages in order to fully engage council directorates, model demand, test savings and income assumptions, and conclude directorate budgets with achievable and well-understood targets, with appropriate in-year milestones. 2. That the Council proceeds to implement any outstanding elements relating to recommendations contained in the external auditor reports, more fully detailed in its Governance Review Improvement Plan (GRIP). Workstream #2 – Directorate Governance: Audit, Finance & Performance Committee – 9 June 2026 Part I – Public 12. Summary of progress since the last meeting:  All recommendations are now implemented, with the regular review of Directorate plans the remaining ongoing requirement.  An annual review of the Directorate Business and Financial Plans and templates has been presented to the Council’s Corporate Management Team (CMT) , in order to review the approach for 2026/27.  CMT agreed a new balanced scorecard approach for 2026/27, with b alanced scorecards in place for all Directorates as well as CMT. Good practice is for all Corporate Director reports to have a balanced scorecard, for example in Corporate Services. These are being worked up into more detailed Business and Financial Plans for each Directorate. Balanced scorecard to be reflected in performance appraisals across the organisation. Workstream #3 - Constitutional Governance: 13. Summary of progress since the last meeting:  Council AGM approved a range of Constitutional changes and , more minor updates made under delegated powers.  A f urther report is being prepared for the July Council meeting reviewing the Procurement standing orders within the Constitution.  Council will receive regular reports reviewing the Constitution as and when required. BACKGROUND PAPERS: Nil

Governance Review Improvement Plan (GRIP) Executive Summary and Purpose The accountability and governance arrangements in the Council are established but need to be reset, developed and improved further to manage the increasingly complex and high value projects being undertaken to deliver the challenging MTFS savings targets as approved by Council on the 27th February 2025. The Governance Review Improvement Plan (GRIP) was therefore commissioned and sponsored by Tony Zaman, as Chief Executive and Head of Paid Service, in early March 2025. It will focus on three (3) workstreams, and be overseen by the Corporate Governance Group, which will take regular reports from the individual workstream leads. It is intended that the use of workstreams will bring focus and rigour to the financial and governance management process. GRIP Programme and Workstreams The GRIP will consist of the following three (3) workstreams: 1. Financial Governance - lead by the Council's s151 Officer 2. Directorate (Officer Decision-making) Governance - lead by the Council's Chief Operating Officer, on behalf of the Council's Head of Paid Service 3. Remaining Areas - i.e. Constitutional/ Democratic Governance - lead by the Monitoring Officer Each Workstream will have two stages: 1. Governance Review Improvement Plan - a review phase, whereby the Council takes stock of recommendations provided by an independent review, or auditor 2. Governance Recommendations Implementation Plan - an implementation phase, where the Council will set out its plan of action and detail for implementing the GRIP recommendations, providing updates on progress The workstream leads will report on progress with the delivery of their associated actions on the Governance Recommendations Implementation Plan to the Corporate Governance Group. The Corporate Governance Group via the Corporate Business Manager will manage and oversee the delivery of the Governance Recommendations Implementation Plan. Project Drivers and High-Level Issues The workstreams will be responsible for delivering the recommendations as referenced in the following reviews that have been undertaken. • Directorate Governance Int Audit report (Sept 2024) • LBH Final Audit Results Report (5 February 2025) • Note - recommendations to follow an Independent Review of Constitutional and Democratic Governance The workstreams will also link to the Council Strategy Commitments of a well-run, sustainable council with sound financial management, achieving positive outcomes for residents. By establishing and delivering the outcomes from the three reviews through the creation of the three workstreams will provide a robust oversight that the Council it is doing the right things, in the right way, for the right people in a timely, inclusive, open, honest and accountable manner. Finance Modernisation Programme (FMP) and Engagement with Grant Thornton Workstream 1 (Finance Governance) actions and improvements will be delivered in conjunction with the work being carried out by the Council via its Finance Modernisation Programme (FMP). The Council has engaged Grant Thornton in order to review areas including Oracle improvement work, and to provide further capacity and capability to enable financial improvements to be delivered at pace. This will be looked at going forward so as to dovetail with this work and also to explore if further assistance from Grant Thornton team may be required in relation to the broader FMP actions. Theme Title of Review Recommendation Actions Detailed Delivery Actions Senior Responsible Officer Lead Action Delivery Lead Start Date End Date RAG Status Quarterly Progress Update (Oct - Dec 2025) Quarterly Progress Update (Jan - Mar 2026) Quarterly Progress Update (April - June 2026) 1.1 Financial Sustainability London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 (Statutory recommendations to the Council under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 - Recommendation 1) The Council to build upon the steps already taken to control its expenditure to identify specific deliverable savings over the short term and medium term (next 12-24 months) to protect its limited remaining reserves in the context of the forecast levels of funding. (That the Council ensures it has detailed implementation plans supporting all of the planned savings included within its 2025-26 budget and future medium-term financial strategy and identifies and develops implementation plans for further savings which can be pursued should additional budgetary pressures emerge or the Council fails to achieve all of its currently planned savings). 1. Agree a savings programme to deliver a balanced budget . 2. Deliver a mechanism for the regular review of savings progress and governance to change/add to savings depending on the levels of reserves. 3. Agree and implement spend control measures. 4. Review of the level of service provision across its services to ensure that the Council is striking an affordable balance between the monies it receives to fund services and the cost of those services. 5. Devise and roll out the updated Directorate Business and Financial Plan Template.(see ref: Directorate Governance workstream recommendation 2.1) Through CMT and all SMTs: 1. Monitor delivery of agreed savings programmes - M2 2. Monitor use of MTFS savings app to ensure tight control - M3 & M4. 3. Enforce spend control measures across the Council. 4. Ensure compliance of Business and Financial Plan Template across Corporate Directors Steve Muldoon Andy Goodwin Matt Davis 01/04/25 31/03/26 G 1. Additional spend control measures are being introduced to ensure that all new spend through PO's/invoices undergoes a review and sign off process that the spend is essential. 2. An updated savings template has been issued and training workshops held on these to ensure that there is sufficient detail captured on savings and proposals to ensure that they can be assessed as sufficiently robust to sign off. This will also capture the prospective cost of implementing the savings. More detailed plans will be requested in respect of specific proposals identified as being at higher risk of slippage or non-delivery. This is being undertaken for prospective 2026/27 savings rather than as part of the 2025/26 budget which has already been set. 3. A review of the deliverability of all 25/26 savings has been undertaken as part of the M5 forecast process and savings are being reviewed closely each month with Corporate Directors. This has flushed out any optimism bias in the previous reporting and so a firmer position is now reported. This will feed into the MTFS 26/27 - 28/29 cycle. 4. All 25/26 savings which have been downgraded and no longer forecast to deliver in year will undergo a separate review to assess whether they are completely undeliverable, or if the value and timing of future delivery needs reprofiling and can be achieved in 2026/27. 5. P-cards being reviewed in light of contract extension to reduce the number of cards in use and enforce tighter use on essential spend. 6. An application to MHCLG for Exceptional Financial Support has been made with subsequent substantive discussions, which will address the reduction in reserves in recent years by re-establishing a base level of reserves, address the projected deficit in 25/26 and project the support required over subsequent years. 1. Spend control boards now embedded with the organisation. This includes requests for new P-cards and spend over £500. Anecdotal evidence that unnecessary spend is being captured/stopped at Head of Service/Director level or not being put forward. 2. 2025/26 Growth and Savings schedules re-reviewed as part of the initial 2026/27 Budget Report presented to Cabinet on the 23rd December 2025. Delivery plans requested in respect of those 2026/27 proposals considered more challenging to deliver. 3. Savings assessed as undeliverable or at risk in the 2025/26 position have been reviewed to assess the impact on 2026/27 with adjustments as necessary in the 2026/27 base budget setting. Amber savings at this stage also being assessed more closely as the outcome on these should now be getting clearer. 4. The Council has submitted its EFS application and had the initial review undertaken by CIPFA in January. Final submission due end of January to MHCLG and discussions being held with MHCLG on this. This will necessarily include some rebuilding of reserves which are now depleted. Some rephasing likely. Now awaiting final in-principle decision on approval of EFS and the agreed value, expected in February. 5. A list of further potential opportunities to investigate for further savings in the next iteration of the MTFS is being compiled which will be discussed with the ruling administration post May elections. 1. Spend boards have continued through to 2026/27 2. Detailed 2026/27 budgets, approved at Council on the 26th February 2026, and agreed updated Hierarchies loaded on Oracle in readiness for 2026/27 Monitoring Cycles (This should be the case by Friday 15th as issue with loading is being resolved). 3. Initial Month 2 monitoring (which happens in June) will compare spending against budget and also against the outturn position for 2025/26 to look for any initial issues. Month 2 will also review the progress to delivery of initial savings plans. 4. Exceptional Financial Support (EFS) was awarded to the Council in February. Conversations continue to take place with MHCLG and CIPFA for assurance requirements of the EFS funding that the Government was "minded to" award to the Council in February. 5. Council has set up an Assurance Advisory Board to oversee improvements 6. Closure of 2025/26 Accounts will produce an outturn report for both Capital and Revenue which will be presented to Cabinet in June 2026 and also used to compare Month 2 2026/27 monitoring against. 1.2 Service Delivery London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 (Statutory recommendations to the Council under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 - Recommendation 2) The Council to review its service delivery models to ensure that they are efficient, represent value for money and achieve the outcomes required for the resources invested. Where opportunities to improve service delivery models are identified, the Council should develop detailed plans for implementation of service delivery transformation and how the up-front transformation costs will be funded. • Review of the level of service provision across its services to ensure that the Council is striking an affordable balance between the monies it receives to fund services and the cost of those services. • Devise and roll out the updated Directorate Business and Financial Plan Template (note ref Directorate Governance workstream - recommendation 2.1) The impact of the review of the saving programme for Month 2 along with the initial estimate of these new measures to be included in the Month 2 budget monitoring report to Cabinet and refined as proposals are further developed. In parallel to the M2 monitoring position, the Cabinet to also receive the 2024/25 Outturn position. This will enable the complete Council final position to be reviewed and consolidated in one meeting. Steve Muldoon Andy Goodwin Matt Davis 01/04/25 31/03/26 A 1. Officers are currently updating and reviewing demand modelling for key areas of service provision to understand the key drivers of demand and cost, and hence where focus on efficiency needs to be undertaken. A significant number of KPIs and dashboards have been prepared to support the analysis, and benchmarking is being reviewed to understand the key areas where the council is high/average/low cost and where opportunities for further efficiencies should be explored further. 2. Approval was given at October Cabinet to progress disposal of the council car park at Cricket Field Road (the "Lobster Pot") in order that an increase in local adult social care provision can be provided, helping offset the increasingly expensive external provision the council currently faces. 3. The Capital Programme has been reviewed with a view to accelerating the acquisition of property through the HRA to be used to help mitigate the high cost of and increasing demand for temporary accommodation. 4. A review of the use of capital receipts for transformation funding has been undertaken to clarify what capital receipts will be available for use and qualify under the regulations, and what expenditure will be able to be offset against these receipts. 5. A review of the personnel hierarchy structures in Oracle has been undertaken to ensure these are reflective of understanding, correct errors therein, and correct any vacant posts or supernumerary positions that can be removed to mitigate the in-year position. 6. The Corporate Management Team meet on a weekly basis and as part of the agenda the Service Delivery Board reviews options, projects and changes to service provision in light of the council's financial position. 7. The Council are reviewing the Medium Term Financial Strategy which includes service provision and options for consideration as part of budget setting 1. A number of rounds of meeting (at all levels, Officer and Member) have taken place to review service demand models and base budget requirements as part of the 2026/27 Budget Process. 2. Areas which will require more in-depth delivery model reviews in 2026 are being formulated and built into the MTFS from 26/27. 3. The cost implementing changes and savings in 2026/27 is being identified to ensure that this is captured as part of the MTFS and delivery plans are being requested where transformational or complex savings proposals have been put forward. Anticipated to be funded from flexible capital receipts. 4. Hierarchy structures in Oracle are being reviewed and updated to ensure that these better align with how directorates want to view their services 5. Meetings have resulted in updated base budgets as part of the initial 2026/27 Budget Report presented to Cabinet on the 23rd December 2025. This includes significant adjustments (growth) to savings and pressures that are implicit in the £36m Period 7 2025/26 overspend position. The mitigation/intervention target set of £2m in 26/27 is being reduced as improvements in the Directorate forecasts are coming through. 6. Interface between the HR system (Zellis) and Oracle to ensure all establishment changes are managed in a more effective manner. Expected implementation of this daily interface is expected late in Quarter 4 2025/16. 1. Detailed 2026/27 budgets, approved at Council on the 26th February 2026, and agreed updated Hierarchies loaded on Oracle in readiness for 2026/27 Monitoring Cycles (This should be the case by Friday 15th as issue with loading is being resolved). 2. New Oracle EPM solution is in implementation and testing for use in 2026/27. This includes controls over establishment and agency staff as well as the ability for managers to drill down into transactions (something not available at the moment). The solution has been in the testing phase since early April and is expected that it will be cleared for use, following extensive training, in late June 2026, for the June Monitoring Cycle. Training will be on a departmental level to ensure it is relevant to users. 3. An interface has now been developed to update Oracle (and the monitoring solutions) with HR/Payroll data on a daily basis. 4. Updated controls have been tested and are ready for implementation to ensure that Capital spending governance is improved. 1.3 Schools Budget London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 (Statutory recommendations to the Council under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 - Recommendation 3) The Council to seek to balance its schools budget to prevent further growth in its Dedicated Schools Grant (DSG) deficit. In the absence of confirmed alternative arrangements, the Council should also perform scenario planning for how it would manage the impact of the current deficit on its financial position when the current statutory override ends in March 2028. 1. The Council to seek to balance its school’s budget to prevent further growth in its Dedicated Schools Grant (DSG) deficit. 2. Council to consider performing scenario planning for how it would manage the impact of the current deficit on its financial position when the current statutory override ends in March 2028. 1. Officers to review existing and likely positions and outcomes. 2. The Council to continue to monitor the national picture on this issue - Note - This is a known national issue with many councils unable to fully fund their DSG deficits within General Fund reserves and resources. Steve Muldoon Andy Goodwin Andy Goodwin 01/04/25 31/03/26 G A letter has been received from DfE commending the Council on "the significant progress that has been achieved in Hillingdon and your rigorous approach to providing a high quality, financially efficient SEND service". The Government intends to set out plans for reforming the SEND system in the coming months: Average EHCP costs, EHCP numbers, number of EHCP cases in mainstream settings, placements in independent settings and a revised banding framework. A projection of the DSG deficit up to March 2028, when the statutory override ends, indicates that the council's cumulative DSG deficit will reach £90.8m without any further safety valve contributions from DfE or LBH. The one known scenario that can be modelled for as a potential solution at present would be for this to be capitalised (using EFS) which would lead to an annual MRP charge to the council's revenue budget of £2.6-2.8m/yr. At that point, from 2028/29, the annual in-year position is anticipated to be break-even. However this is a scenario that affects councils up and down the country and so we await further guidance from Government on how this multi-£bn national issue will be addressed. A number of indicators being tracked demonstrate that significant progress is being made in reducing the cost burden on the DSG deficit which will help to bring this down over time: Average EHCP costs, EHCP numbers, EHCPs in mainstream settings, numbers in independent settings and a revised banding framework. The white paper on SEND reform is anticipated to come through very soon, although not as soon as the local government funding settlement arrives. All councils eagerly await clarity from government on how the DSG deficit balances as at 31/3/2028 will be treated from that point onwards. The annual cost to the council in the form of interest is approaching £4m/year to fund the cash cost of the deficit. The council's in-year deficit was budgeted at £12.5m, down from the actual deficit in 2024/25 of £15m. The P7 forecast was a reduction of £1.9m at £10.6m and early indications from P9 workings are that this will reduce further to below £10m, a significant reduction on the prior year. The number of EHCP requests has dramatically increased recently in response to the imminent announcements and so may slow this down but the council is still projecting to bring the annual deficit down further over the next two years. Meetings on SEND Reform have commenced with DfE officers and advisors ahead of the announcements. The Government has updated its guidance on DSG and the Council is expecting to recoup 90% of its DSG deficit in the autumn. The actual outturn for 2025/26 was just under £10m, which is significantly less than the initial projection. The Council is working with MHCLG on the detail required for the funding recoupment in the autumn. 1.4 Financial Forecasting London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 (Statutory recommendations to the Council under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 - Recommendation 4) The Council review its financial forecasting processes to understand why significant financial pressures, over and above those anticipated and reflected in the Council’s annual budget, emerge and ensure future forecasting reflects the lessons learned. 1. Deliver detailed finance procedures manual as described in the Constitution. To assist with clearly defining the responsibilities of budget holders and other individuals with finance responsibilities. Will assist in holding individuals to account and to promote the ownership of budgets. 2. Existing Financial Regulations to be updated as part of the Oracle Roll Out. (e.g. in regard to setting policies for budget setting, income, journals etc). 3. Current spreadsheet-based systems being used pending full EPM implementation, also need to be fully documented and communicated. 4. Training to be delivered on the financial responsibilities and wider financial regulations to ensure effective governance and organisational financial management. The responsibility of all officers but should be well understood and supported by finance officers and business partners. They have a key role in promoting good practice and identifying areas of weakness and non-compliance, working to support colleagues across the Council to help them discharge their responsibilities. 1. Progress with the process underway under the banner of the Finance Modernisation Programme (FMP) that the Council is embarking on with partners Grant Thornton. 2. The Council to report on the expected financial position for 2025/26 will take place for the first time this year when the Month 2 monitoring cycle is completed and reported to Cabinet on 24th July, and the forecasting processes and underlying assumptions (as well as the 24/25 closure of accounts) will ensure this is a more robust and transparent process than last year. 3. Scrutiny finance training for Members to take place in September '25. 4. EPM to be refreshed over this period. Steve Muldoon Matt Davis Andy Goodwin 01/04/25 31/03/26 A The forecast outturn during the course of 2025/26 has flagged up that a £30m+ deficit is likely, meaning that the budget setting process is flawed, rather than the forecasting process. Drivers of this are considered to be heavily influenced by the following: - Savings need to be more robustly developed and challenged at the time of submitting proposals. This will be improved upon through more detailed templates and challenge sessions. - Growth has outstripped expectations but also the understanding of the level of demand in the current year is weak. Growth and demand models and in-year tracking need to be better developed. - Optimism bias needs to be removed. Cross-cutting savings need to be tightly owned and managed or they do not move forward at pace. RAG ratings of savings need better definition and savings need challenge through the year. - Dependency on capital receipts to fund revenue spend creates a risk of overspend if these do not materialise to plan. This approach will be removed from future budgets. - A significant movement in 2024/25 came from balance sheet corrections as the balance sheet review process progressed. This exercise needs concluding to ensure there are no further hidden surprises. Reconciliations need to be maintained more frequently and reviewed by others. - There needs to be an exercise after each year end to review changes from the final forecast to the outturn to understand which variances are ongoing and have not been fully built into the new year's budget. Many of the above issues arise due to a lack of clarity in the current year position as the budget setting process for the following year begins, and a weak challenge of new proposals which undermines deliverability of savings through the following year. Growth modelling needs improvement and the budget setting process tightening. This needs to begin earlier in the year than has been the case in recent years as the process becomes rushed and insufficient time remains to perform a thorough process. While these issues will be addressed during the current MTFS cycle, the fact that the council is having to address so many issues at once and has limited time available for turnaround does present a risk that these will not be fully resolved. A contingency will be required to mitigate any such unforeseen/unidentified issues. 1. The P6 forecast outturn indicated a £36m deficit which has stayed steady in P7 and is expected to remain steady in the P9 forecast also. As part of the budget process, as set out in 1.1 and 1.2 above initial 2026/27 Budget Report presented to Cabinet on the 23rd December 2025 includes significant adjustments (growth) to savings and pressures that are implicit in the £36m forecast. The variances contained in this demonstrate that it is the budget setting process that has been flawed, rather than the forecasting process. Drivers of this, that have been scrutinised to deliver the 23rd December initial 2026/27 Budget Report include: - Savings achievability is key - for 26/27 these have been more robustly developed and challenged and delivery plans are now being worked up. - Growth, demand and inflation have been understated previously - models and in-year tracking have been developed to understand the underlying trends. - Variances carried forward from the previous year not properly addressed - budget rebasing forms a significant part of the growth in 26/27 MTFS modelling - Optimism bias (e.g. growth and savings) - this has been removed and cross-cutting savings minimised as these lack clear ownership - Dependency on capital receipts to fund revenue spend has been removed from future budgets and will only be used for one-off savings implementation costs. - Contingency has been rebuilt 2. There will be an exercise at each year end to review changes from the final forecast to the outturn to understand which variances are ongoing and may not been fully built into the new year's budget. 3. Given time pressure experienced in this year’s budget process, the process will need to begin earlier in the year to perform a thorough, unrushed process. While many of the above issues will be addressed during the current MTFS cycle, the fact that the council is having to address so many issues at once and has limited time available for turnaround does present a risk that these will not be fully resolved. A contingency has been rebuilt to mitigate 1. The Detailed 2026/27 budgets, approved at Council on the 26th February 2026, and agreed updated Hierarchies are loaded on Oracle in readiness for 2026/27 Monitoring Cycles (This should be the case by Friday 15th as issue with loading is being resolved). 2. New Oracle EPM solution is in implementation and testing for use in 2026/27. This includes controls over establishment and agency staff as well as the ability for managers to drill down into transactions (something not available at the moment). The solution has been in the testing phase since early April and is expected that it will be cleared for use, following extensive training, in late June for the June Monitoring Cycle. Training will be on a departmental level to ensure it is relevant to users. 3. Initial Month 2 monitoring (which happens in June) will compare spending against budget and also against the outturn position for 2025/26 to look for any initial issues. Month 2 will also review the progress to delivery of initial savings plans. 4. The Council will provide an outturn report for both Capital and Revenue for 2025/26 which will be presented to Cabinet in June 2026 and also used to compare Month 2 2026/27 monitoring against. Figures are looking generally in line with those that have been reported during the 2025/26 monitoring cycle. 1.5 - Financial Information London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 1.5.1 The Council perform data quality assessments, using the Government Data Quality Framework or another suitable framework, of its key activities to enable it to better understand what its key data sources are, how it uses such data, the maturity of its data quality processes and any limitations in the data it uses; 1.5.2 That having completed the data quality assessments, the Council should develop action plans to address any areas of weakness identified and ensure that implementation of those action plans is monitored and remedial action taken where necessary 1. Ensure that key data in the organisation that informs decision making are available and accessible to senior managers 2. Prepare Power BI dashboards that relate to the Council's performance and expenditure across all service areas, with a process for assessing data content and data quality in each. 1. The Finance Modernisation Programme to include workstream to improve processes and controls and improve Oracle functionality to enable modern processes and drive compliance with process and data standards. The Finance Systems workstream is to support a range of improvement actions including: - Integrations - Improving existing integrations with feeder systems and developing additional interfaces to significantly reduce the level of manual intervention in the transfer and validation of data into Oracle. This work will support and be informed by the Council's wider initiative to improve the data management. 2. The FMP/FS workstream to work on short term actions to improve data validation prior to transfer into Oracle and sustainable processes changes to reduce the high level of changes required to master data and ensure more robust management of cut off procedures to support Oracle maintenance and financial reporting processes. 3. End of year performance report to the Cabinet and also select committees. 4. End of year performance report to the select committees. 5. Performance reports to be taken to SMTs and CMT on a monthly basis to review progress, actions and data quality Matthew Wallbridge Ian Kavan Darren Persaud/ Darren Everden/ Matt Davis 01/04/25 31/03/26 A 1. Annual Performance Report being presented to Select Committees 2. MTFS Dashboard to track savings progress presented to SDB on a monthly basis 3. Over 100 Power BI dashboards are available across the organisation with finance, performance and benchmarking data to support Corporate Directors and senior managers to help inform decision making 4. Power BI dashboard has been produced to make the data from Oracle clearer to budget managers, heads of service and corporate directors. This will drive greater understanding or challenge of the veracity of the data, hence continuous improvement in the quality of data. 1. In line with a more recent recommendation, closer attention will be paid to reconciliations for core balance sheet control accounts and balances. 2. The Oracle programme will be a key contributor in ensuring that budget managers take ownership of their data and forecasts. Training has already been rolled out to both budget holders and senior managers to clarify expectations of them in their forecasts and underlying financial information. 1. Monthly Oracle information is used as part of the balanced scorecard which goes to SMTs and CMT on a monthly basis, including the monthly monitoring of all savings and key projects. The end of year performance report is on the committee forward plan. 1.6 Capacity and Capability London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 The Council to review the capacity and skill mix within the Council’s finance team to ensure that the Council is able to support the production and audit of its financial statements within statutory timeframes, as this is a key enabler for supporting appropriate scrutiny of the Council’s financial performance by stakeholders. 1. Recruit to a permanent s151 officer role. 2. Commission and fund specialist capacity and capability to inject extra support to deliver the audit recommendations and the improvements in the CIPFA report. This is to align with the improvements needed in the Oracle programme 3. Restructure the Finance directorate, and review the additional areas within Finance 1. Deliver restructure and recruitment campaign to deliver the right skills and capacity to deliver the outputs from the FMP. 2. In the interim bring in extra capacity and capability to deliver the FMP through consultants who have the experience, tools and techniques to accelerate the improvements. 3. The Finance Moderation Programme is to support key actions to improve capacity and capability with the Council's finance team, these include: - Advice into the designing of senior finance roles including S151 Officer - Design of a new finance operating model, including finance team structure - Mapping of detailed tasks and roles and responsibilities across the new finance structure - Advising on the transition approach to move from the As Is to Be structure aligned to achievement of process and technology based improvements. 4. Further transition planning activities include: - development of a full competency model for all finance roles - detailed skill assessment across all finance roles Steve Muldoon Andy Goo Andy Goodw01/04/25 31/03/26 A 1. Grant Thorton have come to an end of phase 1 of their work on the Finance Modernisation Programme, with phase 2 to begin shortly. Additional resource is being seconded in to support capacity and capability on the annual accounts process and the Medium Term Financial Strategy. 2. Specialist support from GT to drive the Finance Modernisation Plan forward in respect of Oracle and the annual accounts has included: - implementation of an updated Oracle monitoring template for users that has simplified the monitoring process for budget managers with one return for all budget managers' budgets (was one return for each cost centre). This has now been running for 2 periods. - work with the HR team to define and specify an interface that will work daily to transfer establishment data from the HR system to Oracle, meaning the establishment position on Oracle will be continuously updated. Now awaiting an upgrade on the HR system to move forward. - Technical support in reviewing key working papers such as IFRS16 to identify possible issues and ensure compliance to new auditing standards, and to provide support and quality assurance of the 2024/25 audit process. - Work with the capital team to establish and define the issues being encountered in the use of projects to enable resolution. - with new processes in place to manage hierarchical changes, work with the Council in reviewing Oracle access and authorisation setups, taking into account External Audit recommendations supplied in October following the audit of the Oracle R12 to Fusion transition. 1. Key roles in the Finance team have been or are being recruited to on a permanent basis with appointments to two Head of Finance positions and recruitment to a lead capital position underway. 2. Joint work with Grant Thorton has now moved into a shorter, sharper, phase 2 work package on the Finance Modernisation Programme. 3. Specialist support in Phase 2 from GT to drive the Finance Modernisation Plan forward in respect of Oracle and the annual accounts includes: a. implementation of Oracle items as set out in 1.8 below – workshops and design work are already under way. b. finalisation of the work on the interface that will undertake daily transfer of establishment data from the HR system to Oracle. c. work with the capital team to establish and define the issues being encountered in the use of projects to enable resolution. d. Reviewing the Governance and processes linked to the Council financial reporting processes e. Reviewing the transaction processes & recharging models for efficiency across the Council – starting with procurement processes f. Working with the DOF on a new structure and financial skills of the Finance department and the Council. This may include some bolstering of resource in key areas to increase in- house capacity and capability and reduce future dependency on external resource from consultants. 1. Specialist support in Phase 2 from GT and the Councils Oracle Support Consultants Mastek to drive the Finance Modernisation Plan forward in respect of Oracle and the annual accounts has included: a. The items set out in 1.8 below of which the most significant is the new EPM solution. b. Work on shortening the financial reporting process - which will happen once the new EPM interface goes live. This will shorten the Officer end to end process by at least 3 days. c. Improvement models to Accounts Payable and Accounts Receivable processes have been presented and await prioritisation. Finance Governance Recommendations and Actions Governance Review Improvement Plan (Finance Governance) 1.7 A clear financial position London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 (Statutory recommendations to the Council under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 - Recommendation 5) We recommend that the Council urgently establishes a clear understanding of its current financial position, including the extent to which that position has diverged from the assumptions underpinning the 2025/26 budget and may require immediate action to prevent further depletion of reserves during 2025/26. 1. Review and update the reported forecast position to reflect all known issues, avoiding optimism bias, so the extent of the challenge facing the council is properly understood and can be firmly addressed. 2. Assess the impact on EFS request to MHCLG and update accordingly; engage further with MHCLG to progress this. 3. Assess the closing level of reserves as at 31/3/25 and how this compares to what the council set itself as a minimum level and the average position across London Boroughs. 4. Derive the impact on the MTFS for the council over the next 3 years and how this will need to be addressed through savings and EFS. 1. Assess and challenge all current year savings to assess deliverability, keeping these under regular review each month. 2. Identify other key risks to the forecast and financial position, assess reliability of forecasting in these areas, how these can be improved and any further potential financial impact. 3. Implement further spend controls, communicate these to staff. 4. Engage productively with MHCLG to press for early decision on EFS if possible, clarify the process and timetable. 5. Benchmark reserves to determine how LBH compares to peers and inform the EFS application. 6. Progress the MTFS process to understand the gap and the level of EFS that may be required over the next 2-3 years 7. Assess the asset base for potential disposals to contribute capital receipts towards offsetting the EFS required. Steve Muldoon Andy Goo Andy Goodw01/04/25 31/03/26 A This theme has been added this quarter to ensure completeness of S24 recommendations in the GRIP. 1. The recent P5 and P6 reports demonstrate that the Council has been reviewing the current financial position closely with regard to the deliverability of the savings target, removing optimism bias from the forecast. The seriousness of the position has been communicated to and acknowledged by senior management and Cabinet members, with further spend control measures now being introduced. Further financial risks have been identified and clarified in the report as these may further impact the outturn, and are in the process of being scrutinised further. 2. Growth modelling is being reviewed and improved to ensure that there is a stronger understanding of the key cost indicators in temporary accommodation and social care, both to inform the forecast and the MTFS. 3. Reserves have been compared to those held by other London boroughs at 31/3/25. Some of those are of course inflated by the EFS they have already received and so adjusting for this, LB Hillingdon was 5th lowest for General Fund reserves at that date. Reserves are being sought to be bolstered through the EFS application, to bring these back above the minimum level recommended in the February S25 report. 4. Cash flow modelling has been scrutinised to understand the impact this will have on the council's ability to borrow to cover expenditure through the remainder of the year, including how much headroom it still has. 5. Capital projects are being reviewed to identify any which show signs of likely slippage, or can be reduced or deferred. This action will assist the forecast cash position and reduce the eventual impact on the general fund. 1. The P6 forecast deficit of £36m has stayed steady through to P9 which indicates that many of the issues inherent in the budget as set have been flushed out, in respect of savings, growth and other budgeting issues. This has enabled the MTFS to be built on a more confident and stable base, reducing the risk of avoidable issues arising in 2026/27 budget setting. 2. The position has been clearly communicated to, discussed with, and acknowledged by senior management and Cabinet members and reflected in the 2026/27 initial Budget Report. Enhanced spend control measures are now embedded. 3. Reserves are being sought to be bolstered through the EFS application, to bring these back to an acceptable level. 4. Cash flow continues to be modelled and scrutinised to understand the impact this will have on the council's ability to borrow to cover expenditure through the remainder of the year, including how much headroom it still has. The council will be able to manage any short- term pressures to avoid any critical cashflow issues. 5. Existing capital projects have been reviewed as part of the 2026/27 MTFP process to identify any which show signs of likely slippage or can be reduced or deferred. This action will assist the forecast cash position and reduce the eventual impact on the general fund. 1. The Council is planning to close its accounts and produce draft accounts at the 30th June. Part of this process includes the delivery of Revenue and capital outturn reports to Cabinet in June. These will be compared against the present projected £36m deficit (which has been a consistent position since September). 2. The Council, following negotiations with DLUHC, has received a "minded to" award of EFS to help it on the path to financial sustainability. This has its own associated costs (which have been accounted for) and oversight requirements (which are still being defined). This will help the 2026/7 budget and also rebuild reserves. 3. The 2026/27 budget has been agreed taking these factors into account. The Council continues to monitor/challenge its spending in all areas through assurance panels. 4. As set out in previous sections, the 2026/27 position will be reviewed for the first time in Period 2 monitoring. This will compare spending against budget and also against the outturn position for 2025/26 to look for any initial issues. Month 2 will also review the progress to delivery of initial savings plans. 1.8 Oracle EPM London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 (Statutory recommendations to the Council under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 - Recommendation 6) We recommend that the Council urgently addresses the issues it has encountered with implementation of Oracle EPM to ensure that, at both individual budget holder and overall Council level, decision makers are able to access accurate and complete budgetary information to inform decision-making. 1. Stabilise Oracle EPM environment and resolve outstanding Implementation issues. 2. Strengthen governance and control processes around system access and configuration. 3. Ensure accurate and reliable reporting against budget for all budget holders and decision makers. 1. Conduct a retrospective review of all risks and issues logged during implementation to confirm closure or mitigation. 2. Complete a user access review for Fusion and EPM, ensuring appropriate authorisation and removal of conflicting permissions. 3. Ensure month end close processes run efficiently and effectively and data has integrity. 4. Update system security policies to enforce password controls, login attempt limits, and account lockout protocols. 5. Implement a data quality assessment for EPM outputs to validate completeness and accuracy for decision-making. 6. Develop and roll out training sessions for budget holders on using EPM, dashboards and interpreting financial data. Matthew Wallbridge Pete CarpMartin Brow 01/04/25 31/3/26 A This theme has been added this quarter to ensure completeness of S24 recommendations in the GRIP. 1. Oracle Programme Manager appointed in October. 2. Worked with External Auditors to undertake an implementation audit of the transition from Oracle R12 to Oracle Fusion. The review highlighted a number of access and authorisation improvements which are being integrated into the improvement programme. 3. Implementation of an updated Oracle EPM monitoring template for users that has simplified the monitoring process for budget managers with one return for all budget managers' budgets (was one return for each cost centre). This has now been running for 2 periods. 4. Workshop review sessions run on period end closing in mid October, taking on board learning points from the first 2 months of the updated EPM monitoring solution, to ensure the month end process for October is run more efficiently. 5. Updated governance processes being implemented by new programme manager to ensure Oracle updates are properly designed, owned and understood by the business, and rolled out with the appropriate levels of testing and training. 6. Workshops run through October to document and provide a solution for the issues being encountered with projects. 7. Contracted for Phase 2 of the Oracle element of the FMP 8. Presentation to the Audit Committee on Oracle (with progress updates in more detail and the future plan) The 2024/25 draft Auditor's Report has highlighted a number of Oracle improvements that are set out in Appendix C of that report. These are being actively implemented by: 1. A clear prioritised deliverable plan now being in place setting out the required work over the upcoming period. 2. Improving the updated EPM monitoring template using more of the Oracle Fusion technology for implementation as part of the Month 2 2026/27 monitoring. 3. Updating of the Council's access and authorisation arrangements to simplify its use and maximise the how the Council utilises its Oracle licences - due for implementation at the end of the quarter, with joint workshops already taking place. 4. Implementation of updated procurement processes, including additional punchout access to Amazon for users within the quarter and building of resilience to ensure quicker punchout implementation for additional suppliers. The following updates to Oracle have been actioned: a. Implementation of revised use of Procurement to ensure that Price and Quantity are correctly entered on Oracle - resulting in more streamlined use of the system. This was delivered on the 1st April. b. Delivery of the updated Oracle functionality to reflect the updates in the procurement legislation. This went live on the 8th April. c. Work has continued on rationalisation of Oracle Licences. The Council holds Full Licences, Self Service Licences and Procurement Licences. The new EPM solution and other processes in place are reducing the requirement for Full licences and switching this to cheaper Self Service licences. d. New Oracle EPM solution is in implementation and testing for use in 2026/27. This includes controls over establishment and agency staff as well as the ability for managers to drill down into transactions (something not available at the moment). The solution has been in the testing phase since early April and is expected that it will be cleared for use, following extensive training in late June, for the June Monitoring Cycle. Training will be on a departmental level to ensure it is relevant to users. e. Updated controls have been tested and are ready for implementation to ensure that Capital spending governance is improved. f. Work is underway to allow different ways to chase debt (dunning channels) to allow the Council to do more effectively as the most effective route is department specific. g. More punchout procurement access is being developed (including Amazon, with associated controls, to streamline procurement processes and costs. 1.9 Issues highlighted by external reviews London Borough of Hillingdon Final Audit Results Report Year ended 31 March 2024 (Statutory recommendations to the Council under Section 24 Schedule 7(2) of the Local Audit and Accountability Act 2014 - Recommendation 7) We recommend that the Council continues at pace with the development and implementation of its FMP, as well as the wider GRIP, and ensures that the scope of these programmes addresses all of the weaknesses in current arrangements highlighted by the various internal and external reviews the Council has received. 1. Progress the FMP and GRIP as already laid out. 2. Review all other documents which highlight weaknesses and make recommendations for improvement and implementation, and capture relevant actions in the GRIP/FMP plans 3. Review feedback from EY on the issues they have raised in the past year and capture these to ensure they get addressed. 1. Review the Internal Audit reports for 2024/25 to pull out relevant actions not yet addressed or completed. 2. Review the CIPFA review report for issues and actions to address Steve Muldoon Pete CarpPete Carpen01/08/25 27/02/26 A This theme has been added this quarter to ensure completeness of S24 recommendations in the GRIP. 1. Recommendations from the 2023/24 External Audit Report are included in this document as are the additional recommendations in the S24 Report. These are reviewed on an ongoing basis internally and reported quarterly to Audit Committee. 2. The External Auditors have undertaken a transaction audit for the move from Oracle R12 to Fusion. A number of recommendations linked to access rights were made in October and these have been included in the access and authorisation review mentioned in 1.6 above. 3. Work continues with the External Auditors on the Audit of the 2024/25 Accounts and there is an update on this work reported to the Audit Committee. 1. Draft 2024/25 Auditor's Report has 3 sets of recommendations (previous year, 2024/25, and Oracle) in its appendices which are picked up in this statement. 2. Final 2024/25 Auditor's Report and associated updated recommendations are part of the February 2026 Audit Committee agenda. 3. Oracle Recommendations set out in item 1.8 Oracle EPM. 4. Preparation for 2025/26 Accounts has started – including implementation of a full balance sheet review (and correction) as at Quarter 3 to speed up processes and ensure with greater probability that the draft accounts are delivered by the 30 June 2026 deadline. This builds on initial work undertaken for Quarter 2 of 25/26. 5. The GRIP and FMP are being reported on at each Audit Committee to update on the progress being made, with new recommendations being added as they arise. 1. The Council received its Final Audit Reports on the backstop deadline day and these have been posted on its website.in March. 2. The GRIP and this report measures progress against recommendations of the 2024/5 External Audit reports. 3. The closure process for the 2025/26 accounts is under way with the target of draft accounts produced and quality assured by the 30th June. 4. The Council has additional external resource to quality assure the audit and accounts process to ensure it complies with the requirements of the process. 5. At the end of June, the Council will start the process of Quarterly Balance Sheet reviews to ensure issues in the balance sheet are rectified closer to when they have happened. 1.10 Robustness of the Budget 2025/26 London Borough of Hillingdon Draft Auditor's Annual Report Year ended 31 March 2025 VFM Recommendation We recommend that the Council reassesses whether the assumptions and forecasts underpinning its 2025/26 budget were sufficiently robust to support the conclusion that the Council has set a balanced budget for the 2025/26 financial year. If the Council is unable to conclude that it has a balanced budget, it should consider what further actions it may be required to take to comply with its statutory responsibilities. 1. Assess the S25 Statement and Budget report published in February 2025 re the 2025/26 financial year. 2. Review and assess the assumptions and forecasting underpinning the budget for 2025/26. 3. Review and assess intervention actions taken by the Council and the S151 Officers throughout the course of the 2025/26 year to ensure compliance with statutory responsibilities. 1. Monitoring Officer team to lead on preparing a review and assessment. 2. MO team to interview statutory and other officers as required. 3. MO team to meet with external auditor to discuss their concerns. Dan Toohey Dan Toohey Brendan Molloy 27/11/25 27/2/26 in draft form G The Monitoring Officer team has commenced a review exercise and has had initial discussions with the S151 Officer and Head of Paid Service. The review exercise will culminate in an assessment with conclusions and/or recommendations aiming for end of February 2026. The Monitoring Officer will then seek comment from the External Auditor, S151 Officer and Head of Paid Service, with a view to it being concluded by the end of March 2026 The Monitoring Officer has conducted a review exercise and has consulted/ received feedback from the Head of Paid Service, the s151 officer and the External Auditor. Having carefully considered the relevant information, the legal regulatory position and guidance, the Monitoring Officer has concluded that the local authority has technically met the statutory requirement in relation to the setting of its budget for the financial year 2025/26. In reaching this conclusion the Monitoring Officer has considered intervention actions taken by the Council and the S151 Officers throughout the course of the 2025/26 year to ensure compliance, which included actions to secure the obtaining of EFS. Although technically meeting the statutory requirement, it is noted that the s25 Statement (2025/26) in itself highlights a fundamental difficulty in relation to a lack of robustness re estimates used in the budget calculations. In order to draw lessons from the 2025/26 year, the Monitoring Officer has made the following recommendations: Monitoring Officer Recommendation 1. That for this year (2026/27) and coming years, in order to underpin the delivery of robust sustainable budgets, that the Council commence its budget setting exercise at an early stage, in June/July, deploying appropriate budget setting tools and modelling with timescales to be set at key stages in order to fully engage council directorates, model demand, test savings and income assumptions, and conclude directorate budgets with achievable and well-understood targets, with appropriate in-year milestones. Monitoring Officer Recommendation 2. That the Council proceeds to implement any outstanding elements relating to recommendations contained in the external auditor reports, more fully detailed in its Governance Review Improvement Plan (GRIP). Theme Title of Review Recommendation Actions Detailed Delivery Actions Senior Responsible Officer Lead Action Delivery Lead Start Date End Date RAG Status Quarterly Progress Update (April - June 2025) Quarterly Progress Update (July - September 2025) Quarterly Progress Update (Oct - Dec 2025) 2.1 - Directorate Business and Financial Plan Template Internal Audit Report on Governance September 2024 1. The Directorate Business and Financial Plan template should be updated to require directorates to set clear objectives aligned to the Council’s corporate/strategic objectives. 2. These objectives should then be taken into consideration when allocating resources, developing directorate action plans and setting key performance indicators for the 2025/26 year. 3. The Directorate Business and Financial Plans should be reviewed and approved through CMT to ensure there are no cross-directorate impacts, and they are consistent with the wider corporate/strategic objectives. 1. Complete a review and update of the business and financial planning requirements, including corporate objectives and business plan template. 2. Ensure Directorate Annual Plans are in place for all areas. 3. Template to be reviewed Annually and brought to CMT for approval. 4. Directorate Business and financial plans to be completed annually by CMT. 5. CMT to monitor Directorate Business and financial plans quarterly. 1. Updated Directorate Business and Financial Plan Template to be approved by COO. 2. Circulate the Directorate Business and Financial Plan Template to all Corporate Director's to complete with a deadline date. Directorate Business and Financial Plans to be sent to Corporate Business Manager. 3. Schedule all Directorate Business and Financial Plans to be approved by CMT. 4. Circulate final Directorate Business and Financial Plans to CMT. 5. Save all final Directorate Business and Financial Plans in the SMT SharePoint folder. 6. Template will be reviewed by CMT on an annual basis. 7. Directorate Business and financial plans will be completed annually for approval at CMT. 8. CMT will monitor Directorate Business and financial plans quarterly. 9. The updated Directorate Business and Financial Plans, once underway and having been in place for a time, will be the subject of an internal audit exercise to consider areas for improvement (what has worked well vs. what has not etc) Matthew Wallbridge Darren Persaud Michelle Smith 31/03/25 30/07/25 G 1. Business and Financial Plan Template draft settled by COO then discussed at CMT and sent to all Corporate Directors 2. The Directorate Business and Financial Plan Template has been circulated to all Corporate Director's to complete with a deadline date and a copy sent to the Corporate Business Manager. 1. All scheduled Directorate Business and Financial Plans have been approved by CMT. 2. Final Directorate Business and Financial Plans have been circulated to CMT. 3. Directorate Business and Financial Plans are to be uploaded into the CMT SharePoint folder. 1- The Directorate Business and Financial Plans internal audit exercise (to consider areas for improvement) will report by end of Oct' 2.2 - SMT Standardisation and Reporting Internal Audit Report on Governance September 2024 1. CMT to agree a standard agenda template and reporting schedule for all SMT meetings covering the following key areas of governance as a minimum: 1.Workforce 2.Service delivery & performance against set objectives 3.Financial performance 4.Risk management 5.Key Projects 2. The SMT reporting schedule should also be aligned to the CMT reporting schedule to ensure any issues identified within the Directorates are appropriately escalated to CMT. System to ensure Directors are held to account for maintaining these SMT meetings in line with the agreed expectations and format. 1. As part of the review of governance and corporate working across the Council, a new standardised meetings structure and agenda for management and governance arrangements to be implemented. Standard Agenda/Minutes template to be produced for CMT & SMT meetings 2. Minutes should be recorded for all Directorates, which should be including the topics of discussion, and any decisions or actions agreed. Actions should be followed up at the next meeting to ensure they are completed. 3. A formal Corporate Governance Group (CCG) (formerly an informal statutory officers governance group)

Audit, Performance & Finance Committee – 9 June 2026 Part I – Public CABINET FORWARD PLAN Committee name Audit, Finance & Performance Committee Officer reporting Anisha Teji, Democratic Services Papers with report Appendix A – Latest Forward Plan Ward As shown on the Forward Plan HEADLINES To monitor the Cabinet’s latest Forward Plan which sets out key decisions and other decisions to be taken by the Cabinet collectively and Cabinet Members individually over the coming year. The report sets out the actions available to the Committee. RECOMMENDATION That the Committee considers the Cabinet Forward Plan. SUPPORTING INFORMATION This is for consideration under the Committee’s Overview and Scrutiny distinct remit only. The Cabinet Forward Plan is published monthly, usually around the first or second week of each month. It is a rolling document giving the required public notice of future key decisions to be taken. Should a later edition of the Forward Plan be published after this agenda has been circulated, Democratic Services will update the Committee on any new items or changes at the meeting. As part of its Terms of Reference, the Committee should consider the Forward Plan and , if it deems necessary, comment as appropriate to the decision-maker on the items listed which relate to services within its remit. For reference, the Forward Plan helpfully details which committee’s remit covers the relevant future decision item listed. The Committee’s monitoring role of the Forward Plan can be undertaken in a variety of ways , including both pre -decision and post -decision scrutiny of the items listed . The provision of advance information on future items listed (potentially also draft reports) to the Committee in advance will often depend upon a variety of factors including timing or feasibility, and ultimately any such request would rest with the relevant Cabinet Member to decide. However, the 2019 Protocol on Overview & Scrutiny and Cabinet Relations (part of the Hillingdon Constitution) does provide guidance to Cabinet Members to:  Actively support the provision of relevant Council information and other requests from the Committee as part of their work programme;  Where feasible, provide opportunities for committees to provide their input on forthcoming executive reports as set out in the Forward Plan to enable wider pre -decision scrutiny (in addition to those statutorily required to come before committees , i.e. policy framework documents – see para. below). Audit, Performance & Finance Committee – 9 June 2026 Part I – Public Therefore, in general, the Committee may consider the following actions on specific items listed on the Forward Plan: Committee action When How 1 To provide specific comments to be included in a future Cabinet or Cabinet Member report on matters within its remit. As part of its pre-decision scrutiny role, this would be where the Committee wishes to provide its influence and views on a particular matter within the formal report to the Cabinet or Cabinet Member before the decision is made. This would usually be where the Committee has previously considered a draft report or the topic in detail, or where it considers it has sufficient information already to provide relevant comments to the decision-maker. These would go within the standard section in every Cabinet or Cabinet Member report called “Committee comments”. The Cabinet or Cabinet Member would then consider these as part of any decision they make. 2 To request further information on future reports listed under its remit. As part of its pre-decision scrutiny role, this would be where the Committee wishes to discover more about a matter within its remit that is listed on the Forward Plan. Whilst such advance information can be requested from officers, the Committee should note that information may or may not be available in advance due to various factors, including timescales or the status of the drafting of the report itself and the formulation of final recommendation(s). Ultimately, the provision of any information in advance would be a matter for the Cabinet Member to decide. This would be considered at a subsequent Committee meeting. Alternatively, information could be circulated outside the meeting if reporting timescales require this. Upon the provision of any information, the Committee may then decide to provide specific comments (as per 1 above). 3 To request the Cabinet Member considers providing a draft of the report, if feasible, for the Committee to consider prior to it being considered formally for decision. As part of its pre-decision scrutiny role, this would be where the Committee wishes to provide an early steer or help shape a future report to Cabinet, e.g., on a policy matter. Whilst not the default position, Committees do occasionally receive draft versions of Cabinet reports prior to their formal consideration. The provision of such draft reports in advance may depend upon different factors, e.g., the timings required for that decision. Ultimately any request to see a draft report early would need the approval of the relevant Cabinet Member. Democratic Services would contact the relevant Cabinet Member and Officer upon any such request. If agreed, the draft report would be considered at a subsequent Committee meeting to provide views and feedback to officers before they finalise it for the Cabinet or Cabinet Member. An opportunity to provide specific comments (as per 1 above) is also possible. 4 To identify a forthcoming report that may merit a post- decision review at a later Committee meeting As part of its post-decision scrutiny and broader reviewing role, this would be where the Select Committee may wish to monitor the implementation of a certain Cabinet or Cabinet Member decision listed/taken at a later stage, i.e., to review its effectiveness after a period of 6 months. The Committee should note that this is different to the use of the post-decision scrutiny ‘call-in’ power which seeks to ask the Cabinet or Cabinet Member to formally re-consider a decision up to 5 working days after the decision notice has been issued. This is undertaken via the new Scrutiny Call-in App members of the relevant Committee. The Committee would add the matter to its multi- year work programme after a suitable time has elapsed upon the decision expected to be made by the Cabinet or Cabinet Member. Relevant service areas may be best to advise on the most appropriate time to review the matter once the decision is made. BACKGROUND PAPERS  Protocol on Overview & Scrutiny and Cabinet relations adopted by Council 12 September 2019  Scrutiny Call-in App

Status Consultation / Scrutiny Ref Business Item Further information Ward(s) NEW ITEM CABINET meeting Cabinet Member Shareholder Committee Full COUNCIL Cabinet Member(s) Responsible Relevant Committee Report Author Corporate Director Responsible Public or Private (with reason) Consultation related to any decision & planned scrutiny committee engagement 26 Annual Performance Report Cabinet will receive the Council's annual report performance report for its activities over the last year. All 25 June All Cabinet Members Audit, Finance & Performance Ian Kavanagh Matthew Wallbridge Public Audit, Finance & Performance Committee SI Budget Outturn 2025/26 Cabinet will review the Council's budget outturn position for the previous financial year. All 25 June Cllr Eddie Lavery Audit, Finance & Performance Jon Alsop / Matt Davis Steve Muldoon Public Audit, Finance & Performance SI Consideration of setting a licensed deficit budget for any schools in the Borough A standard report each year, where Cabinet may consider whether it is required to set any licensed deficit budget for any schools that have applied. TBC 23 July Cllr Susan O'Brien / Cllr Eddie Lavery Audit, Finance & Performance Luisa Hansen Steve Muldoon / Julie Kelly Public SI Monthly Council Budget - monitoring report The Cabinet receives a monthly report setting out in detail the Council’s revenue and capital position. All 23 July Cllr Eddie Lavery Audit, Finance & Performance Jon Alsop / Matt Davis Steve Muldoon Public SI Monthly Council Budget - monitoring report The Cabinet receives a monthly report setting out in detail the Council’s revenue and capital position. All 17 September Cllr Eddie Lavery Audit, Finance & Performance Jon Alsop / Matt Davis Steve Muldoon Public 134 Banking, Client Money Manager and Merchant Services Following delegated authority from Cabinet in 2019, the Leader and relevant Cabinet Member will consider contract decisions for the Council's banking services, Client Money Manager Account and Merchant Services. N/A NEW ITEM September Cllr Eddie Lavery Audit, Finance & Performance Annette Reeves / Trudie Eldriny / Michelle Kenyon Steve Muldoon Private (3) SEPTEMBER 2026 The Cabinet's Forward Plan is an official document by the London Borough of Hillingdon, UK JUNE 2026 Schedule of Individual Cabinet Member Decisions that may be taken each month (standard items non key-decisions) Decision-Maker Cabinet Member Lead & Officers 1

Classification: Public Audit, Finance & Performance Committee – 9 June 2026 AUDIT, FINANCE & PERFORMANCE COMMITTEE – MULTI-YEAR WORK PROGRAMME Committee name Audit, Finance & Performance Committee Officer reporting Anisha Teji, Democratic Services Papers with report None Ward All HEADLINES This report is to enable the Audit, Finance & Performance Committee to review planned meeting dates and the work programme. RECOMMENDATIONS That the Committee considers the Work Programme and agrees any amendments. SUPPORTING INFORMATION The Committee's meetings will start at 6pm. Forthcoming meeting dates are as follows and the work programme set out afterwards which can be adjusted as the Committee sees fit: Meetings Room 9 June 26 CR 5 15 July 26 CR 5 5 August 26 CR 5 23 September 26 CR 5 3 November 26 CR 5 25 November 26 CR 5 27 January 27 CR 5 3 March 27 CR 5 1 April 27 CR 5 5 May 27 CR 5 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 9 June 2026 Audit/Assurance Session Overview/Scrutiny Session Lead Officer Recruitment for Independent Chair of the Committee (Verbal) Anisha Teji, Democratic Services Governance Review Improvement Plan Update Deputy s151 - Pete Carpenter Matthew Wallbridge, Corporate Services Daniel Toohey, Monitoring Officer External Audit Update Pete Carpenter Statutory Accounting, Investments & Pension Forward Plan Anisha Teji, Democratic Services Work Programme Anisha Teji, Democratic Services Report Deadline: 28 May 2026 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 15 July 2026 Audit/Assurance Session Overview/Scrutiny Session Lead Officer External Audit (Verbal Update) Pete Carpenter - Statutory Accounting, Investments & Pension Risk Assurance Annual Report - 25/26 Claire Baker - Internal Audit & Risk Assurance Risk Assurance Reports Claire Baker - Internal Audit & Risk Assurance Internal Audit Annual Report - 25/26 Claire Baker - Internal Audit & Risk Assurance Counter Fraud Annual Report - 25/26 Alex Brown – Counter Fraud Audit Committee Annual Report - 25/26 (forwarded to full Council on 17 September) Claire Baker - Internal Audit & Risk Assurance Introduction to Overview and Scrutiny Mark Braddock – Democratic Services Budget Outturn 25/26 (reported to Cabinet on 25 June 26) Steve Muldoon – Finance Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report Deadline: 19 June 2026 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 5 August 26 Audit/Assurance Session Overview/Scrutiny Session Lead Officer M2 Monthly Budget Monitoring (reported to Cabinet on 23 July 26) Steve Muldoon – Finance Service Scrutiny item - TBC TBC Strategic Risk Register Steve Muldoon / Pete Carpenter – Finance Annual Performance Report 25/26 (reported to Cabinet on 25 June) Matthew Wallbridge/ Ian Kavangh – Corporate Services Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report Deadline: 17 July 2026 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 23 September 2026 Audit/Assurance Session Overview/Scrutiny Session Lead Officer Governance Review Improvement Plan Update + Financial Modernisation Plan Update s151 – Steve Muldoon Matthew Wallbridge Daniel Toohey, Monitoring Officer Report back to Full Council on Section 24 recommendations Pete Carpenter - Statutory Accounting, Investments & Pension Updates on Accounts + AGS sign off by Members Pete Carpenter - Statutory Accounting, Investments & Pension External Audit item Pete Carpenter - Statutory Accounting, Investments & Pension Risk Assurance Reports Claire Baker - Internal Audit & Risk Assurance Counter Fraud Progress Report 26/27 Q1 Alex Brown – Counter Fraud Internal Audit Update Claire Baker - Internal Audit & Risk Assurance M4 Monthly Budget Monitoring (reported to Cabinet 17 September) Steve Muldoon – Finance Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report Deadline: 11 September 2026 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 3 November Audit/Assurance Session Overview/Scrutiny Session Lead Officer Service Scrutiny item - TBC TBC M5 Monthly Budget Monitoring (reported to Cabinet on 22 October) Steve Muldoon – Finance Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report Deadline: 21 October 2026 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 25 November 2026 Audit/Assurance Session Overview/Scrutiny Session Lead Officer Governance Review Improvement Plan Update + Financial Modernisation Plan Update s151 – Steve Muldoon Matthew Wallbridge Daniel Toohey, Monitoring Officer External Audit Draft Annual Reports (Pension Fund & Council) Risk Assurance Reports Claire Baker - Internal Audit & Risk Assurance Internal Audit Update Claire Baker - Internal Audit & Risk Assurance Counter Fraud Progress Report – 26/27 Q2 Alex Brown – Counter Fraud Forward Pan Anisha Teji - Democratic Services M6 Monthly Budget Monitoring (reported to Cabinet on 19 November) Steve Muldoon – Finance Work Programme Anisha Teji - Democratic Services Report Deadline: 13 November 2026 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 27 January 2027 Audit/Assurance Session Overview/Scrutiny Session Lead Officer Statement of Accounts Cabinet Budget Proposals on behalf of all Select Committees (reported to Cabinet 17 December) Steve Muldoon – Finance Strategic Risk Register Steve Muldoon – Finance Bi- Annual Performance Report 26/27 (reported to Cabinet 17 December) Matthew Wallbridge/ Ian Kavangh – Corporate Services Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report Deadline: 15 January 2027 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 3 March 2027 Audit/Assurance Session Overview/Scrutiny Session Lead Officer Governance Review Improvement Plan Update + Financial Modernisation Plan Update s151 – Steve Muldoon Matthew Wallbridge Daniel Toohey, Monitoring Officer External Audit item Risk Assurance Reports Claire Baker - Internal Audit & Risk Assurance Internal Audit Update Claire Baker - Internal Audit & Risk Assurance Internal Audit Plan 27/28 Claire Baker - Internal Audit & Risk Assurance Internal Audit Charter Claire Baker - Internal Audit & Risk Assurance Counter Fraud Operational Work Plan 27/28 Alex Brown – Counter Fraud Counter Fraud Progress Report – 26/27 Q3 Alex Brown – Counter Fraud M9 Monthly Budget Monitoring (reported to Cabinet 18 February) Steve Muldoon – Finance Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report Deadline: 19 February 2027 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 1 April 2027 Audit/Assurance Session Overview/Scrutiny Session Lead Officer Service Scrutiny item - TBC TBC M6 Monthly Budget Monitoring (reported to Cabinet 25 March) Steve Muldoon – Finance Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report Deadline: 19 March 2026 Classification: Public Audit, Finance & Performance Committee – 9 June 2026 Meeting Date: 5 May 2026 Audit/Assurance Session Overview/Scrutiny Session Lead Officer Governance Review Improvement Plan Update + Financial Modernisation Plan Update s151 – Steve Muldoon Matthew Wallbridge Daniel Toohey, Monitoring Officer External Audit Claire Baker - Internal Audit & Risk Assurance Risk Assurance Annual Report – 26/27 Claire Baker - Internal Audit & Risk Assurance Internal Audit Annual Report – 26/27 Claire Baker - Internal Audit & Risk Assurance Committee Annual Report - 26/27 Counter Fraud Progress Update– 26/27 Q4 Alex Brown – Counter Fraud M6 Monthly Budget Monitoring (reported to Cabinet 29 April) Steve Muldoon – Finance Forward Plan Anisha Teji - Democratic Services Work Programme Anisha Teji - Democratic Services Report deadline: 23 April 2026