Sutton Council's Audit and Governance Committee has reviewed internal audit findings that raise concerns regarding several key areas, including school finances and housing management.
The issues were brought to light during the committee's meeting on 10 July 2025, where members reviewed the Internal Audit Annual Report 2024/25. The report highlighted five limited assurance reviews, indicating areas where significant improvements are needed.
Key Areas of Concern
The internal audit report identified several areas needing improvement:
- Sutton Housing Partnership (SHP) Aids and Adaptation: The audit revealed concerns regarding procurement processes, business continuity, potential conflicts of interest, and data protection practices. Specifically, the Internal Audit Annual Report 2024/25 noted a failure to follow procurement processes, business continuity and resilience concerns due to staff vacancies, the need to strengthen conflict of interest arrangements, and data protection concerns.
- Sherwood Park School: The audit highlighted the need for more detailed explanations of budget overspends and raised concerns about cash flow and management oversight of financial processes. A follow-up audit is planned for 2025/26. The Internal Audit Annual Report 2024/25 also cited concerns regarding business continuity and the resilience of the school in the absence of key officers and insufficient recruitment checks for new starters. The specific budget overspends and measures to improve cash flow and financial oversight were not detailed in the provided documents.
- Foresters Primary School: The audit found instances of unapproved budgets, missing contract registers, and unaudited school funds. The Internal Audit Annual Report 2024/25 noted a failure to input and fix the approved budget onto the FMS system, a lack of evidence of DBS checks for two employees, and that the school fund had not been audited for five years. The specific consequences for these issues were not detailed in the provided documents.
Risk Management Strategy
The committee also reviewed the council's Risk Management Strategy and Guidance and the Corporate Risk Register. Key risks identified in the register include:
- The council requiring exceptional financial support to set a balanced budget in future years. The Corporate Risk Register identifies the high needs deficit, used to fund Education services for Special Educational Needs and Disabilities (SEND), as the biggest financial risk. The council entered a deficit position in 2023/24, which has increased to £10.573m as of the end of 2024/25. The council would immediately require exceptional financial support if the existing statutory override mechanism, which ends in March 2026, is removed.
- Failure to reduce carbon emissions in the borough
- Impact of inflation on the Housing Revenue Account. Current mitigations include prioritising stock investment needs, undertaking a new stock condition survey, and sourcing additional grant funding to support works, such as climate initiatives, according to the Corporate Risk Register.
- Risks associated with damp and mould in social housing. The Corporate Risk Register states that mitigations include a robust management system to track progress on damp and mould cases, a dedicated team that meets weekly to monitor live cases, and a monthly Damp and Mould Review Panel. SHP also commissioned an audit review of the approach to tackling damp and mould.
- Technology failure and cyber security risks. The Corporate Risk Register notes that mitigations in place include IT and service business continuity plans, backup arrangements for Business Continuity / Disaster Recovery, 24/7 Cyber Monitoring, and staff training and awareness campaigns.
- Negative impact of NHS changes on council resources
External Audit Plan
The committee also discussed the External Audit Plan for 2024/25, presented by KPMG, the council's external auditors. The plan identifies significant risks including valuation of land and buildings, management override of controls, and valuation of post-retirement benefit obligations. KPMG anticipates beginning the audit work in July and completing it by the end of December, with the final audit findings and finalized accounts reported to the Committee on 15 January 2026.
