Agenda Document Pack - Risk and Audit Scrutiny Committee - 10/03/2026
South Lanarkshire Council · 10 March 2026
Back to Risk and Audit Scrutiny Committee — 10 March 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Council Offices, Almada Street Hamilton, ML3 0AA Monday, 02 March 2026 Dear Councillor Risk and Audit Scrutiny Committee The Members listed below are requested to attend a meeting of the above Committee to be held as follows:- Date: Tuesday, 10 March 2026 Time: 10:00 Venue: Hybrid - Committee Room 1, Council Offices, Almada Street, Hamilton, ML3 0AA The business to be considered at the meeting is listed overleaf. Yours sincerely Paul Manning Chief Executive Members Elaine McDougall (Chair), Mary Donnelly (Depute Chair), Mathew Buchanan, Colin Dewar, Alistair Fulton, Ross Gowland, Celine Handibode, Susan Kerr, Richard Lockhart Substitutes Monique Equi, Gavin Keatt, Julia Marrs, Helen Toner 1
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BUSINESS 1 Declaration of Interests 2 Minutes of Previous Meeting Minutes of the meeting of the Risk and Audit Scrutiny Committee held on 9 December 2025 submitted for approval as a correct record. (Copy attached) 5 - 10 Item(s) for Decision 3 Good Governance Update and Significant Governance Areas Quarter 2 Progress Report Report dated 2 March 2026 by the Executive Director (Finance and Corporate Resources). (Copy attached) 11 - 44 4 Internal Audit Plan 2026/2027 Report dated 13 February 2026 by the Executive Director (Finance and Corporate Resources). (Copy attached) 45 - 72 5 Internal Audit Activity Report Report dated 13 February 2026 by the Executive Director (Finance and Corporate Resources). (Copy attached) 73 - 82 Item(s) for Noting 6a South Lanarkshire Council Annual Audit Plan 2025/2026 Report dated March 2026 by Audit Scotland, External Auditors. (Copy attached) 83 - 104 6b South Lanarkshire Council Charitable Trusts Annual Audit Plan 2025/2026 Report dated March 2026 by Audit Scotland, External Auditors. (Copy attached) 105 - 120 7 Public Audit in Scotland - Interim Evaluation Report dated 13 February 2026 by the Executive Director (Finance and Corporate Resources). (Copy attached) 121 - 124 8 Audit Scotland – Financial Bulletin 2024/2025 Report dated 19 February 2026 by the Executive Director (Finance and Corporate Resources). (Copy attached) 125 - 138 9 Accounts Commission Report Spotlight on Culture and Leisure Services Report dated 2 February 2026 by the Executive Director (Community and Enterprise Resources). (Copy attached) 139 - 168 10 Forward Programme for Future Meetings Report dated 18 February 2026 by the Executive Director (Finance and Corporate Resources). (Copy attached) 169 - 172 2
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Urgent Business 11 Urgent Business Any other items of business which the Chair decides are urgent. For further information, please contact:- Clerk Name: Ishara Opatha Clerk Telephone: 07385370069 Clerk Email: ishara.opatha@southlanarkshire.gov.uk 3
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RISK AND AUDIT SCRUTINY COMMITTEE Minutes of meeting held via Confero and in Committee Room 1, Council Offices, Almada Street, Hamilton on 9 December 2025 Chair: Councillor Elaine McDougall Councillors Present: Councillor Mathew Buchanan, Councillor Colin Dewar, Councillor Ross Gowland, Councillor Richard Lockhart, Councillor Julia Marrs (substitute for Councillor Mary Donnelly) Councillors' Apologies: Councillor Mary Donnelly (Depute), Councillor Alistair Fulton, Councillor Celine Handibode, Councillor Susan Kerr Attending: Chief Executive’s Service T Little, Head of Communications and Strategy Finance and Corporate Resources Y Douglas, Internal Audit Manager; E Maxwell, HR Business Manager; E-A McGonigle, Administration Adviser; A Norris, Administration Assistant; L O’Hagan, Head of Finance (Strategy); I Opatha, Administration Officer; I Strachan, Head of Administration and Legal Services Also Attending: Audit Scotland A Barclay, External Auditor 1 Declaration of Interests No interests were declared. 2 Minutes of Previous Meeting The minutes of the meeting of the Risk and Audit Scrutiny Committee held on 30 September 2025 were submitted for approval as a correct record. The Committee decided: that the minutes be approved as a correct record. 3 Internal Audit Activity Report A report dated 14 November 2025 by the Executive Director (Finance and Corporate Resources) was submitted on work completed by Internal Audit during the period 1 September to 14 November 2025. The Committee had approved the Internal Audit Plan for 2025/2026 in February 2025. Information was provided on the work undertaken since the last progress report, which was considered by the Committee on 30 September 2025. 2 5
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The report highlighted that, as of mid-November 2025, 86% of the 2025/2026 Audit Plan had commenced, and 29% of assignments had reached the draft report stage. This represented reasonable progress at that point in the year. Targets had been set for the remainder of the year to progress delivery of the Plan, as detailed in the table at paragraph 3.1 of the report. There had been no significant concerns regarding the overall deliverability of the Audit Plan at that stage. The risks had remained due to potential unforeseen service demands and the need for timely team upskilling, particularly in digital skills. Those risks had been managed through the use of contingency time, a continued focus on coaching and training, and by setting realistic expectations around the wider use of data analytics in audit work. Any risk of substantial amendments to the Plan, arising from changes in Council priorities or risks, had been controlled through regular reassessment of capacity and ongoing review of the Audit Plan, with incremental updates reported to the Committee as required. Performance indicators for the period to 31 October 2025 were detailed in Appendix 1 to the report, alongside targets and an overall assessment as to whether those would be met by 31 March 2026. All indicators had been included for completeness, but some would not be reported until the end of the financial year. There were currently 4 indicators assessed as amber, and a list of those, with planned corrective actions, was detailed in the table at paragraph 3.6 of the report. A summary of the audit output from assignments completed between 1 September and 14 November 2025 was detailed in Appendix 2 to the report. Four assignments from the 2025/2026 Plan had been completed during the period, as detailed in the table at paragraph 4.2 of the report. Two assignments had been concluded for external clients, as detailed at paragraph 4.6 of the report. The Audit Strategy had set out a structured, forward-looking approach designed to demonstrate compliance with Global Internal Audit Standards (GIAS) by showing how the Internal Audit function added value, used resources effectively, and supported continuous improvement in alignment with the Council’s governance and organisational goals. The Data Strategy outlined objectives for developing automation and data analysis within the audit process. The draft required further refinement and future alignment with the Council’s wider data approach as it continued to develop. In line with GIAS requirements, the Audit Plan had been reviewed in October 2025 to ensure it remained risk-based and aligned with organisational objectives. The review had identified 3 assignments for deferral. The reasons for deferral and the proposed course of action were detailed in the table at paragraph 4.7 of the report. The outline Audit Strategy and the draft Data Strategy were attached at appendices 3 and 4 to the report. A final Audit Strategy would be presented to the Committee in March 2026. Further updates were provided on:- key findings and recommendations, as detailed in section 5 of the report emerging risks and issues, as detailed in section 6 of the report a compliance and standards update, as detailed in section 7 of the report, which included:- a report that set out the requirements and responsibilities of the new GIAS, which were effective from 1 April 2025, that was presented to the Committee on 18 February 2025 a process to map current practice against all elements of the new GIAS that had been ongoing, and a summary assessment as at November 2025, which was attached in Appendix 5 to the report outline Audit and Data Strategies governance and Committee engagement, as detailed in section 8 of the report 6
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The Chair welcomed the ongoing work on the Data Strategy and the wider data landscape, highlighting that both would play a critical role for auditors and for the Council going forward. The Committee decided: (1) that progress with the delivery of the 2025/2026 Internal Audit Plan be noted; (2) that performance in the period to 31 October 2025, as detailed in Appendix 1, be noted; (3) that output from internal audit assignments completed in the period 1 September to 14 November 2025, as detailed in Appendix 2, be noted; (4) that the proposed amendments to the Audit Plan, as detailed in paragraph 4.7, be approved; (5) that the outline Audit Strategy and draft Data Strategy, as detailed in appendices 3 and 4, be noted; and (6) that the assessed level of compliance with the Global Internal Audit Standards (GIAS), as detailed in Appendix 5, be noted. [Reference: Minutes of 18 February 2025 (Paragraph 7) and 30 September 2025 (Paragraph 5)] 4 Accounts Commission 2025 – Scrutiny, Governance and Transparency of Decision-Making of Exit Packages of Senior Officers A report dated 3 November 2025 by the Executive Director (Finance and Corporate Resources) was submitted providing:- an update on a letter recently issued by the Accounts Commission to all councils in relation to the scrutiny, governance and transparency of decision-making of exit packages of senior officers a summary of the Council’s position on the 5 recommendations the Accounts Commission had made in relation to exit packages relating to senior officers Since the late 1990s, a number of reports had been published by the Accounts Commission for Scotland and Audit Scotland on the management of early retirements, with a view to ensuring that public sector organisations had sufficiently robust frameworks in place for decision-making and scrutiny. Details were provided on the background to the Accounts Commission’s correspondence, including the publication of the Section 102 report on senior officer exit packages at Glasgow City Council (GCC), and the Commission’s expectation that councils reviewed their governance and decision-making arrangements in light of the issues identified. The report outlined the key messages from the Accounts Commission’s letter, including the importance of transparency, independent scrutiny, robust record-keeping and adherence to the Key Principles of Public Life. The Accounts Commission stated that, where decisions around restructuring and exit packages were being taken, councils should ensure there was clear evidence of effective governance, independent scrutiny, and value for money, as well as robust and transparent record-keeping. The lessons learned from GCC had been considered in light of the 5 key recommendations set out in a previous Audit Scotland report (2003), which had been adapted by the Accounts Commission for the current context, as outlined in paragraph 4.5 of the report. 7
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The Council’s current position against each of the Commission’s adapted recommendations was set out in section 5 of the report. Reports in relation to any structure changes which resulted in early retirement/voluntary severance of all Chief Officers/Statutory Officers would be presented to the Executive Committee for approval. Those reports would include information on the rationale for early release and any consequential implications, including financial implications, which would allow the Executive Committee to decide on the appropriateness of the proposals. The following proposed next steps were outlined in section 6 of the report:- the Council would continue to review any requirement to change existing policies, and any change would be reported to the Executive Committee for approval a personnel circular would be issued to all employees, reminding them of the Principles of Public Life the Principles of Public Life would be included in elected member and employee induction programmes and circulated on an annual basis with the Employee Code of Conduct. Those would be updated by January 2026 in accordance with the Scheme of Delegation, all requests for early retirement/voluntary severance for Chief Officers and Statutory Officers must be presented to the Executive Committee for decision/approval any request for early release/early severance must demonstrate clear evidence of effective governance, independent scrutiny, and provide evidence of value for money a robust and transparent record-keeping process must be in place The Committee decided: (1) that the report be noted; and (2) that the next steps, as detailed in section 6, be noted. [Reference: Minutes of the Executive Committee of 12 September 2012 (Paragraph 23)] 5 Fraud Statistics 6 Monthly Update 2025/2026 A report dated 14 November 2025 by the Executive Director (Finance and Corporate Resources) was submitted, providing:- a summary of the fraud statistics for the 6 months to 30 September 2025 and a comparison to the same period in 2024 an update on the progress of other fraud awareness activity and anti-fraud work Details were given on the number, types, outcomes and costs of fraud investigations, together with performance measures for the 6-month period to 30 September 2025. A comparison with the statistics for the same period in 2024 was also provided. The fraud statistics for the 6 months to 30 September 2025 highlighted that:- 11 investigations, with a total value of £49,000, had been reported in the period, representing a decrease in the number and an increase in value from the same period in 2024 of the 35 open cases, 15 cases, valued s at £1,000, had been closed in the period, compared to 13 cases valued at £14,000 in the same period in 2024 of the 15 closed cases, 3 were founded, all of which were external, with no internal or benefits-related cases founded concerns reported continued to relate primarily to suspected benefit fraud 8
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It was noted that 19 additional South Lanarkshire Council (SLC) investigations were being progressed by the Department for Work and Pensions (DWP), with a potential cumulative housing benefit overpayment/fraud value of around £7,000. On conclusion of investigations, the Council would seek repayment in line with standard recovery procedures. The following information was provided in section 5 of the report:- the wider fraud workload fraud awareness programme fraud alerts lessons learned exercises comparison of fraud risk arrangements to best practice Details on progress with the National Fraud Initiative (NFI) 2024 were provided in section 6 of the report. As of 30 September 2025, the Council had received 34,547 matches, of which 3,924 were target matches. Progress on investigations was summarised in Table 4 of the report. All target matches were expected to be completed by 31 March 2026. The investigation of fraud, participation in the NFI exercise, and the collection and reporting of fraud statistics had been carried out within existing resources. The 2025/2026 Internal Audit Plan had included 165 days to manage the NFI exercise, disseminate fraud alerts, update fraud risk registers, and undertake anti-fraud assignments and fraud investigations. Fraud was recognised as one of the top risks facing the Council, as detailed in paragraph 10.1 of the report. The Council’s Serious and Organised Crime (SOC) Working Group progressed the delivery of various actions, which would be revised if new or emerging threats were identified through the pan-Lanarkshire Multi Agency SOC Group. Updates would be presented to the Committee periodically. The Committee decided: that the contents of the report be noted. [Reference: Minutes of 18 February 2025 (Paragraph 8), 25 June 2025 (Paragraph 7) and 30 September 2025 (Paragraph 9)] 6 Performance and Review Scrutiny Forum Annual Update A report dated 25 November 2025 by the Chief Executive was submitted on reports considered by the Performance and Review Scrutiny Forum in the period from January to December 2025. A report on the business considered by the Performance and Review Scrutiny Forum would continue to be submitted to the Risk and Audit Scrutiny Committee on an annual basis. The Committee decided: that the report be noted. [Reference: Minutes of 18 February 2025 (Paragraph 9)] 7 Forward Programme for Future Meetings A report dated 19 November 2025 by the Executive Director (Finance and Corporate Resources) was submitted on the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 3 November 2026. As part of future arrangements, members were invited to suggest topics for inclusion in the Committee’s forward programme. 9
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The Committee decided: that the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 3 November 2026 be noted. [Reference: Minutes of 30 September 2025 (Paragraph 12)] 8 Urgent Business There were no items of urgent business. 10
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 10 March 2026 Report by: Executive Director (Finance and Corporate Resources) Subject: Good Governance Update and Significant Governance Areas Quarter 2 Progress Report 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] provide an update on the Council’s annual governance arrangements [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [ (1) that the findings from the annual compliance check against the Local Code of Corporate Governance be noted; (2) that the updated Local Code of Corporate Governance in Appendix 2 be approved; and (3) that progress against the significant governance areas in Appendix 3, being those areas identified within the Annual Governance Statement 2024/2025, be noted. 3. Background 3.1. Each year the Council undertakes a comprehensive review of the governance arrangements that are required to support the Council’s financial and operational controls. The annual review of governance arrangements informs the Governance Statement which is included within the Council’s Annual Accounts. 3.2. On 1 April 2016, a governance framework came into effect, Delivering Good Governance in Local Government and the guidance for Scottish Local Authorities was published in December 2016. This framework was established by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE). 3.3. To achieve good governance, the Council should be able to demonstrate that its governance structures comply with the principles contained in the CIPFA/SOLACE framework (referred to as ‘the framework’ from here on) and should, therefore, develop and maintain a Local Code of Governance and governance arrangements reflecting these principles. A Local Code of Corporate Governance was developed and approved by the Council on 16 May 2018 and this is reviewed, updated and re- published annually. Compliance with the Code is also reviewed as part of the annual review of governance arrangements. 3.4. On 19 June 2019, the Risk and Audit Scrutiny Committee approved a revised reporting process, which is as follows:- 3 11
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Governance Statement - Significant Governance Areas These are areas that have a significant impact on the Council’s governance arrangements. A position statement giving progress against these areas will be provided with the report on the review of the Local Code of Corporate Governance at the end of Quarter 2; and at Quarter 4 with the Governance Statement to the Risk and Audit Scrutiny Committee. Director’s Statement of Assurance - Resource Level Areas for Improvement These are actions approved by each Director in their Statement of Assurance. Progress will be monitored by Resources and reported through the Resource/Service Planning process at Quarter 2 and Quarter 4. 3.5. The purpose of this report is to advise the Committee of the findings from the annual compliance check against the Local Code of Corporate Governance; the outcome of the review of the Code and the updated document; and an update on progress against the significant governance areas highlighted in the 2024/2025 Annual Governance Statement. 4. Findings from the Annual Compliance Check against the Code 4.1. The Council annually reviews the effectiveness of its governance arrangements. There are a few key sources of assurance that inform this review; however, the main purpose of the Annual Governance Statement is to explain how the Council has complied with the principles in its Code and provide assurance as to how these are met. 4.2. The principles in the Code underpin the process for the annual review of governance arrangements and there is a strong golden thread running through the key documents in this process: The Resource/Corporate Self-Assessments; the Directors’ Statements of Assurance; and the Governance Statement. 4.3. The table at Appendix 1 has been extracted from the 2024/2025 Annual Governance Statement and shows the significant elements of the systems and processes that comprise the Council’s governance arrangements and important changes/developments. This section of the statement shows how the Council has complied with its Code. 5. Annual Review of the Code 5.1. As part of the evaluation of the annual review of governance arrangements, an annual review of the Code is carried out. The Code is updated with any changes to the approach the Council uses to review its governance arrangements and it is compared with the corporate annual self-assessment and updated as required. 5.2. Following this review, no amendments are proposed to the Code this year. The Code is attached at Appendix 2 5.3. Subject to the Committee’s approval, the updated Code will be uploaded to the Council’s website. 6. Significant Governance Areas 6.1. Progress on the significant governance areas highlighted within the Annual Governance Statement 2024/2025 is attached at Appendix 3. 12
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7. Communication of the Code 7.1. The Good Governance Learn on Line course was reviewed in late 2019 and republished in March 2020. 7.2. The revised Code is published annually alongside other key governance documents on the governance information pages on the Council’s website. 8. Employee Implications 8.1. There are no employee implications directly associated with this report. Officers will continue to attend the Good Governance Group and will commit time to review and monitor governance and assurance arrangements. 9. Financial Implications 9.1. There are no financial implications directly associated with this report. 10. Climate Change, Sustainability and Environmental Implications 10.1. There are no implications for climate change, sustainability or the environment in terms of the information contained within this report. 11. Other Implications 11.1. There are no significant risk issues associated with this report. 12. Integrated Impact Assessment and Consultation Requirements 12.1. All Resources, through senior officers, are involved in the progress, monitoring and review of governance good arrangements and the development of the Annual Governance Statement and associated improvement plans. 12.2. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. Jackie Taylor Executive Director (Finance and Corporate Resources) 2 March 2026 Link(s) to Council Values/Priorities/Outcomes All Council values/priorities/outcomes. Previous References Risk and Scrutiny Committee - 25 June 2025 (Good Governance Statement 2024/2025 and Q4 Progress Report) List of Background Papers None 13
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Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Iain Strachan, Head of Administration and Legal Services Ext: 4516 (Tel: 01698 454658) Email: iain.strachan@southlanarkshire.gov.uk 14
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Annual Accounts 2025 (1) Good Governance Resource Self-Assessment Draft Statement Final Governance Statement Risk and Audit Scrutiny Committee (RASC) Corporate Management Team (CMT) (11) Group Assurances (8) External Reviews/ Regulation and Inspection Reports (7) Risk Register Monitoring/Reporting (6) Sample checks on Director’s Self-Assessment (4) Complaints/ Comments/ SPSO feedback (3) Executive Directors’ Statement of Assurance (2) Internal Audit Reports/Annual Assurance Report (17) ALEO Good Governance Self-Assessment and Statement of Assurance (16) Information Governance Self- Assessment and Statement of Assurance (15) Community Planning Partnership – Community Plan Progress Report (14) Connect, Resource and Service Plan Progress Reports (other performance reports) (13) Benchmarking Results (12) Performance, Review and Scrutiny Forum Reporting (18) Equality Duty Reporting Reporting Schedule: RASC – 25 June 2025 (19) Self-Assessment Activity (10) Governance Improvement Plan (9) External Audit Reports (20) Annual Report and Public Performance Reports Good Governance Group Minutes (5) Assessment of compliance with the Local Code of Corporate Governance Appendix 1 15
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Appendix 2 Local Code of Corporate Governance Introduction 1. What is Corporate Governance? South Lanarkshire Council has set the framework for strong Corporate Governance by having a clear vision which states that the council will:- “Improve the lives and prospects of everyone in South Lanarkshire” The function of good governance in the public sector is to ensure that organisations achieve their intended outcomes while acting in the public interest at all times. This means doing the right things, in the right way, for the right people, at the right time, in an inclusive, open, honest and accountable manner. 2. Purpose This document sets out South Lanarkshire Council’s Local Code of Corporate Governance which has been produced in accordance with the principles and requirements contained within the framework established by the Chartered Institute of Public Finance and Accountancy (CIPFA) and the Society of Local Authority Chief Executives (SOLACE) in the publication, Delivering Good Governance in Local Government Framework (2016 Edition) (referred to as “The Framework” from here on). It comprises of a framework of policies, procedures, behaviours and values by which the council is controlled and governed. It shows how the council will continue to review the governance arrangements that are currently in place and implement improvements where necessary. The Code is split into two sections:- • Section 1 outlines the actions and behaviours that demonstrate good governance as set out in the framework; and • Section 2 provides links to the policies, procedures and other documentary evidence that demonstrate the council’s governance arrangements. These provide the structures and guidance that our councillors and employees need to ensure effective governance across the council. 3. Good Governance in the Public Sector (The Framework) The Framework defines the principles that should underpin the governance of each council and provides a structure to help councils with their approach to governance. Whatever arrangements are in place, councils should test their governance structures and partnerships against the principles contained in the Framework by:- • reviewing existing governance arrangements; • developing and maintaining an up-to-date local code of governance, including arrangements for ensuring ongoing effectiveness; and 3 17
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• reporting publicly on compliance with their own code on an annual basis and on how they have monitored the effectiveness of their governance arrangements in the year and on planned changes. To achieve good governance, each council should be able to demonstrate that its governance structures comply with the principles contained in this Framework. It should therefore develop and maintain a local code of governance/governance arrangements reflecting the principles set out. The diagram below illustrates the seven principles of good governance in the public sector and how they relate to each other:- Further information regarding each of the above principles and the behaviours and actions that demonstrate good governance in practice are detailed at Section 1. 4. Monitoring and Review The council will monitor its governance arrangements for their effectiveness in practice and will review them on a continuing basis to ensure that they are up to date. For more information on how we do this see the council’s Annual Governance Statement which can be found on the governance information page on the council’s website. 5. Compliance with the Code Compliance with the code will be assessed annually using the councils “Governance Assurance Framework”. This will be carried out by a governance working group which is chaired by the council’s monitoring officer and comprises of senior officers from each of the council’s five Resource departments. The Internal Auditor also attends these meetings. The results of the assessment will be reported to the Risk and Audit Scrutiny Committee. This will incorporate recommendations for additions and/or improvements to the code to reflect any 18
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changes in the way in which the council does business or new legislation affecting the council’s governance arrangements. Each year the council will publish an Annual Governance Statement. The Leader of the Council and the Chief Executive are required to produce this as part of the auditing of the council’s annual accounts. The document sets out the following:- • the scope of the council’s responsibility; • the purpose of the council and it’s governance framework; • how the council monitors and evaluates the effectiveness of its governance arrangements; • key elements of the council’s governance framework. This is the main part of the document which sets out how the council has complied with the principles in this code and provides assurance as to how they are met; • provides an opinion on the effectiveness of the council’s arrangements; and • provides details of improvements that have been delivered and are required moving forward. In addition, the council’s Internal Audit team will also conduct an annual independent audit reviewing the adequacy, effectiveness and extent of compliance with the code. 6. Certification The council is committed to the seven principles of good corporate governance detailed within the Framework and demonstrates this commitment through the development, adoption and implementation of a Local Code of Corporate Governance. We hereby certify our commitment to this Code of Corporate Governance and will make sure that the council continues to review, evaluate and develop the council’s governance arrangements to ensure continuous improvement of the council’s systems. Joe Fagan Leader of the Council Signature: Date: Paul Manning Chief Executive Signature: Date: 19
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Section 1 Actions and behaviours that demonstrate good governance in practice Principle A: Behaving with integrity, demonstrating strong commitment to ethical values, and respecting the rule of law What this means in practice:- The council are accountable not only for how much they spend, but also for how they use the resources under their stewardship. This includes accountability for outputs, both positive and negative, and for the outcomes they have achieved. In addition, they have an overarching responsibility to serve the public interest in adhering to the requirements of legislation and government policies. It is essential that, as a whole, they can demonstrate the appropriateness of all their actions across all activities and have mechanisms in place to encourage and enforce adherence to ethical values and to respect the rule of law. Links to council’s values: Accountable, effective, efficient and transparent; Working with and respecting others; Fair, open and sustainable Sub principles: South Lanarkshire Council is committed to:- A1: Behaving with integrity Ensuring members and officers behave with integrity and lead a culture where acting in the public interest is visibly and consistently demonstrated thereby protecting the reputation of the council. Ensuring members take the lead in establishing specific standard operating principles or values for the council and its employees and that they are communicated and understood. These should build on the Seven Principles of Public Life (The Nolan Principles). Leading by example and using the above standard operating principles or values as a framework for decision making and other actions. Demonstrating, communicating and embedding the standard operating principles or values through appropriate policies and processes which are reviewed on a regular basis to ensure that they are operating effectively. A2: Demonstrating strong commitment to ethical values Seeking to establish, monitor and maintain the council’s ethical standards and performance. Underpinning personal behaviour with ethical values and ensuring they permeate all aspects of the council's culture and operation. Developing and maintaining robust policies and procedures which place emphasis on agreed ethical values. Ensuring that external providers of services on behalf of the council are required to act with integrity and in compliance with ethical standards expected by the council. A3: Respecting the rule of law Ensuring members and employees demonstrate a strong commitment to the rule of the law as well as adhering to relevant laws and regulations. Creating the conditions to ensure that the statutory officers, other key post holders, and members, are able to fulfil their responsibilities in accordance with legislative and regulatory requirements. Striving to optimise the use of the full powers available for the benefit of citizens, communities and other stakeholders. Dealing with breaches of legal and regulatory provisions effectively. Ensuring corruption and misuse of power are dealt with effectively. 20
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Principle B: Ensuring openness and comprehensive stakeholder engagement What this means in practice:- The council is run for the public good, organisations therefore should ensure openness in their activities. Clear, trusted channels of communication and consultation should be used to engage effectively with all groups of stakeholders, such as individual citizens and service users, as well as institutional stakeholders. Links to council’s values: Accountable, effective, efficient and transparent; Fair, open and sustainable; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- B1: Openness Ensuring an open culture through demonstrating, documenting and communicating the council’s commitment to openness. Making decisions that are open about actions, plans, resource use, forecasts, outputs and outcomes. The presumption is for openness. If that is not the case, a justification for the reasoning for keeping a decision confidential should be provided. Providing clear reasoning and evidence for decisions in both public records and explanations to stakeholders and being explicit about the criteria, rationale and considerations used. In due course, ensuring that the impact and consequences of those decisions are clear. Using formal and informal consultation and engagement to determine the most appropriate and effective interventions/courses of action. B2: Engaging comprehensively with institutional stakeholders Effectively engaging with institutional stakeholders to ensure that the purpose, objectives and intended outcomes for each stakeholder relationship are clear so that outcomes are achieved successfully and sustainably. Developing formal and informal partnerships to allow for resources to be used more efficiently and outcomes achieved more effectively. Ensuring that partnerships are based on: trust; a shared commitment to change; a culture that promotes and accepts challenge among partners and that the added value of partnership working is explicit. B3: Engaging with individual citizens and service users effectively Establishing a clear policy on the types of issues that the council will meaningfully consult with or involve individual citizens, service users and other stakeholders to ensure that service (or other) provision is contributing towards the achievement of intended outcomes. Ensuring that communication methods are effective and that members and officers are clear about their roles with regard to community engagement. Encouraging, collecting and evaluating the views and experiences of communities, citizens, service users and organisations of different backgrounds including reference to future needs. Implementing effective feedback mechanisms in order to demonstrate how views have been taken into account. Balancing feedback from more active stakeholder groups with other stakeholder groups to ensure inclusivity. Taking account of the impact of decisions on future generations of tax payers and service users. 21
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Principle C: Defining outcomes in terms of sustainable economic, social, and environmental benefits What this means in practice:- The long-term nature and impact of many of the council’s responsibilities mean that it should define and plan outcomes and that these should be sustainable. Decisions should further the council’s purpose, contribute to intended benefits and outcomes, and remain within the limits of authority and resources. Input from all groups of stakeholders, including citizens, service users, and institutional stakeholders, is vital to the success of this process and in balancing competing demands when determining priorities for the finite resources available. Links to council’s values: Accountable, effective, efficient and transparent; Fair, open and sustainable; Focused on people and their needs; Ambitious, self-aware and improving Sub principles: South Lanarkshire Council is committed to:- C1: Defining Outcomes Having a clear vision which is an agreed formal statement of the council's purpose and intended outcomes containing appropriate performance indicators, which provide the basis for the council’s overall strategy, planning and other decisions. Specifying the intended impact on, or changes for, stakeholders including citizens and service users. It could be immediately or over the course of a year or longer. Delivering defined outcomes on a sustainable basis within the resources that will be available. Identifying and managing risks to the achievement of outcomes. Managing service users' expectations effectively with regard to determining priorities and making the best use of the resources available. C2: Sustainable economic, social and environmental benefits Considering and balancing the combined economic, social and environmental impact of policies and plans when taking decisions about service provision. Taking a longer-term view with regard to decision making, taking account of risk and acting transparently where there are potential conflicts between the council's intended outcomes and short-term factors such as the political cycle or financial constraints. Determining the wider public interest associated with balancing conflicting interests between achieving the various economic, social and environmental benefits, through consultation where possible, in order to ensure appropriate trade-offs. Ensuring fair access to services. 22
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Principle D: Determining the interventions necessary to optimise the achievement of the intended outcomes What this means in practice:- The council achieves its intended outcomes by providing a mixture of legal, regulatory, and practical interventions (courses of action). Determining the right mix of these courses of action is a critically important strategic choice that the council has to make to ensure intended outcomes are achieved. They need robust decision-making mechanisms to ensure that their defined outcomes can be achieved in a way that provides the best trade-off between the various types of resource inputs while still enabling effective and efficient operations. Decisions made need to be reviewed frequently to ensure that achievement of outcomes is optimised. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- D1: Determining interventions Ensuring decision makers receive objective and rigorous analysis of a variety of options indicating how intended outcomes would be achieved and associated risks. Therefore ensuring best value is achieved however services are provided. Considering feedback from citizens and service users when making decisions about service improvements or where services are no longer required in order to prioritise competing demands within limited resources available including people, skills, land and assets and bearing in mind future impacts. D2: Planning interventions Establishing and implementing robust planning and control cycles that cover strategic and operational plans, priorities and targets. Engaging with internal and external stakeholders in determining how services and other courses of action should be planned and delivered. Considering and monitoring risks facing each partner when working collaboratively, including shared risks. Ensuring arrangements are flexible and agile so that the mechanisms for delivering goods and services can be adapted to changing circumstances. Establishing appropriate key performance indicators (KPIs) as part of the planning process in order to identify how the performance of services and projects is to be measured. Ensuring capacity exists to generate the information required to review service quality regularly. Preparing budgets in accordance with objectives, strategies and the medium term financial plan. Informing medium and long-term resource planning by drawing up realistic estimates of revenue and capital expenditure aimed at developing a sustainable funding strategy. D3: Optimising achievement of intended outcomes Ensuring the medium term financial strategy integrates and balances service priorities, affordability and other resource constraints. Ensuring the budgeting process is all-inclusive, taking into account the full cost of operations over the medium and longer term. Ensuring the medium-term financial strategy sets the context for ongoing decisions on significant delivery issues or responses to changes in the external environment that may arise during the budgetary period in order for outcomes to be achieved while optimising resource usage. 23
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Ensuring the achievement of ‘social value' through service planning and commissioning. 24
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Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it What this means in practice:- The council needs appropriate structures and leadership, as well as people with the right skills, appropriate qualifications and mindset, to operate efficiently and effectively and achieve intended outcomes within the specified periods. The council must ensure that it has both the capacity to fulfil its own mandate and to make certain that there are policies in place to guarantee that its management has the operational capacity for the organisation as a whole. Because both individuals and the environment in which an organisation operates will change over time, there will be a continuous need to develop its capacity as well as the skills and experience of individual staff members. Leadership is strengthened by the participation of people with many different types of backgrounds, reflecting the structure and diversity of communities. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Excellent employer; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- E1: Developing the entity’s capacity Reviewing operations, performance and use of assets on a regular basis to ensure their continuing effectiveness. Improving resource use through appropriate application of techniques such as benchmarking and other options in order to determine how resources are allocated so that defined outcomes are achieved effectively and efficiently. Recognising the benefits of partnerships and collaborative working where added value can be achieved. Developing and maintaining an effective workforce plan to enhance the strategic allocation of resources. E2: Developing the capability of the entity's leadership and other individuals Developing protocols to ensure that elected and appointed leaders negotiate with each other regarding their respective roles early on in the relationship and that a shared understanding of roles and objectives is maintained. Publishing a statement that specifies the types of decisions that are delegated and those reserved for the collective decision making of the governing body. Ensuring the leader and the chief executive have clearly defined and distinctive leadership roles within a structure whereby the chief executive leads in implementing strategy and managing the delivery of services and other outputs set by members and each provides a check and a balance for each other's authority. Developing the capabilities of members and senior management to achieve effective leadership and to enable the council to respond successfully to changing legal and policy demands as well as economic, political and environmental changes and risks by: • Ensuring members and employees have access to appropriate induction tailored to their role and that ongoing training and development matching individual and council requirements is available and encouraged; • Ensuring members and officers have the appropriate skills, knowledge, resources and support to fulfil their roles and responsibilities and ensuring that they are able to update their knowledge on a continuing basis; and 25
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• Ensuring personal, organisational and system-wide development through shared learning, including lessons learnt from governance weaknesses both internal and external. Principle E: Developing the entity’s capacity, including the capability of its leadership and the individuals within it (continued) Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Excellent employer; Focused on people and their needs; Working with and respecting others Sub principles: South Lanarkshire Council is committed to:- E2: Developing the capability of the entity's leadership and other individuals (continued) Ensuring that there are structures in place to encourage public participation. Taking steps to consider the leadership's own effectiveness and ensuring leaders are open to constructive feedback from peer review and inspections. Holding staff to account through regular performance reviews which take account of training or development needs. Ensuring arrangements are in place to maintain the health and wellbeing of the workforce and support individuals in maintaining their own physical and mental wellbeing. 26
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Principle F: Managing risks and performance through robust internal control and strong public financial management What this means in practice:- The council needs to ensure that the organisations and governance structures that it oversees have implemented, and can sustain, an effective performance management system that facilitates effective and efficient delivery of planned services. Risk management and internal control are important and integral parts of a performance management system and are crucial to the achievement of outcomes. Risk should be considered and addressed as part of all decision making activities. A strong system of financial management is essential for the implementation of policies and the achievement of intended outcomes, as it will enforce financial discipline, strategic allocation of resources, efficient service delivery and accountability. It is also essential that a culture and structure for scrutiny are in place as a key part of accountable decision making, policy making and review. A positive working culture that accepts, promotes and encourages constructive challenge is critical to successful scrutiny and successful delivery. Importantly, this culture does not happen automatically, it requires repeated public commitment from those in authority. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving Sub principles: South Lanarkshire is committed to:- F1: Managing risk Recognising that risk management is an integral part of all activities and must be considered in all aspects of decision making. Implementing robust and integrated risk management arrangements and ensuring that they are working effectively. Ensuring that responsibilities for managing individual risks are clearly allocated. F2: Managing performance Monitoring service delivery effectively including planning, specification, execution and independent post-implementation review. Making decisions based on relevant, clear objective analysis and advice pointing out the implications and risks inherent in the council's financial, social and environmental position and outlook. Ensuring an effective scrutiny or oversight function is in place which provides constructive challenge and debate on policies and objectives before, during and after decisions are made thereby enhancing the council’s performance and that of any organisation for which it is responsible. (Or, for a Committee system - Encouraging effective and constructive challenge and debate on policies and objectives to support balanced and effective decision making). Providing members and senior management with regular reports on service delivery plans and on progress towards outcome achievement. Ensuring there is consistency between specification stages (such as budgets) and post-implementation reporting (e.g. financial statements). F3: Robust internal control Aligning the risk management strategy and policies on internal control with achieving objectives. Evaluating and monitoring risk management and internal control on a regular basis. Ensuring effective counter fraud and anti-corruption arrangements are in place. Ensuring additional assurance on the overall adequacy and effectiveness of the framework of governance, risk management and control is provided by the internal auditor. 27
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Principle F: Managing risks and performance through robust internal control and strong public financial management (continued) Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving Sub principles: South Lanarkshire is committed to:- F3: Robust internal control (continued) Ensuring an audit Committee or equivalent group/function, which is independent of the executive and accountable to the governing body; • provides a further source of effective assurance regarding arrangements for managing risk and maintaining an effective control environment; and • that its recommendations are listened to and acted upon. F4: Managing data Ensuring effective arrangements are in place for the safe collection, storage, use and sharing of data, including processes to safeguard personal data. Ensuring effective arrangements are in place and operating effectively when sharing data with other bodies. Reviewing and auditing regularly the quality and accuracy of data used in decision making and performance monitoring. F5: Strong public financial management Ensuring financial management supports both long-term achievement of outcomes and short-term financial and operational performance. Ensuring well-developed financial management is integrated at all levels of planning and control, including management of financial risks and controls. 28
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Principle G: Implementing good practices in transparency, reporting, and audit to deliver effective accountability What this means in practice:- Accountability is about ensuring that those making decisions and delivering services are answerable for them. Effective accountability is concerned not only with reporting on actions completed, but also ensuring that stakeholders are able to understand and respond as the council plans and carries out its activities in a transparent manner. Both external and internal audit contribute to effective accountability. Links to council’s values: Accountable, effective, efficient and transparent; Ambitious, self-aware and improving; Working with and respecting others; Fair, open and sustainable Sub principles: South Lanarkshire Council is committed to:- G1: Implementing good practice in transparency Writing and communicating reports for the public and other stakeholders in a fair, balanced and understandable style appropriate to the intended audience and ensuring that they are easy to access and interrogate. Striking a balance between providing the right amount of information to satisfy transparency demands and enhance public scrutiny while not being too onerous to provide and for users to understand. G2: Implementing good practices in reporting Reporting at least annually on performance, value for money and stewardship of resources to stakeholders in a timely and understandable way. Ensuring members and senior management own the results reported. Ensuring robust arrangements for assessing the extent to which the principles contained in this Framework have been applied and publishing the results on this assessment, including an action plan for improvement and evidence to demonstrate good governance (the annual governance statement). Ensuring that this Framework is applied to jointly managed or shared service organisations as appropriate. Ensuring the performance information that accompanies the financial statements is prepared on a consistent and timely basis and the statements allow for comparison with other, similar organisations. G3: Assurance and effective accountability Ensuring that recommendations for corrective action made by external audit are acted upon. Ensuring an effective internal audit service with direct access to members is in place, providing assurance with regard to governance arrangements and that recommendations are acted upon. Welcoming peer challenge, reviews and inspections from regulatory bodies and implementing recommendations. Gaining assurance on risks associated with delivering services through third parties and that this is evidenced in the annual governance statement. Ensuring that when working in partnership, arrangements for accountability are clear and that the need for wider public accountability has been recognised and met. 29
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Section 2 Policies, Procedures and other documentary evidence Evidence that the council complies with the requirements of the framework (see Section 1) (Link provided where available) Core Principles A B C D E F G Annual Accounts Annual Performance Spotlights Annual Resource budget strategy meeting Fraud management plan and procedures Asset Management Audit Scotland monitoring and reporting process Behaviours Framework/Performance Appraisal Budget Consultations and Savings Plans Business Continuity Plans CEO/Political leaders meetings Codes of Conduct (Link to Councillors Code) Committee Management Procedural Documents Communication plans and strategies Community Engagement and Participation Strategy Community Engagement Partnership Group Community Engagement Team Participation Requests Community Asset Transfer Community Planning Partnership Plans Community Plan Annual Report Complaints Handling; You said, we did Consultation Database Corporate Management Team, Committees and Forums Council Plan – Connect Devolved school management scheme 2022 Digital Communications 30
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Empower Self-Assessment process Equalities/Equality & Diversity Policy Integrated Impact Assessments, including Equality Impact Assessments and Fairer Scotland Duty Impact Assessments Financial Management Evidence that the council complies with the requirements of the framework (see Section 1) (Link provided where available) Core Principles A B C D E F G Financial Regulations Freedom of Information Act Publication Scheme (How the council works) Housing Charter Performance Report Register of Partnerships Induction process/programme Information Governance Data Protection Privacy Impact Assessment Internal Audit Plan Information Security Policy Investors in People Award Learning and Development Programmes Local Code of Corporate Governance Local Government Benchmarking Framework Media and Public Relations Members Role profiles Monitoring Officer provisions Multi-member ward protocol Neighbourhood Planning Officer job description/specifications Participatory Budgeting Partnerships: Glasgow Region City Deal/Clyde Valley 31
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People’s Panel Performance Management Personnel strategies, policies and procedures Health and social care - Planning with People Procurement Public Performance Reports Records Management Plan Records Management Policy Register of gifts and hospitality/Register of Interests Evidence that the council complies with the requirements of the framework (see Section 1) (Link provided where available) Core Principles A B C D E F G Resource Contingency Plans Resource Plans / Health and Social Care Strategic Commissioning Plan Risk and Audit Scrutiny Committee Risk Management Scheme of Delegation Scrutiny Forums Service Review Framework Standards and Procedures Advisory Forum Standing Orders on Procedures / Standing Orders on Contracts Statutory guidance Strategic Environmental Assessments Strategies and Policies Terms of Reference, the Council, Committees and associated forums Whistle blowing policies (link to Third Parties) Workforce planning 32
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Annual Governance Statement 2024/2025 – Significant Governance Areas Quarter 2 Update No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update 1 Information Governance Compliance with statutory and Council performance targets. Continue to closely monitor performance on information governance including FOI requests and Subject Access requests and data breaches. Review the guidance provided to staff regarding the safe use of emails and sharing of data supported by regular staff communication. Executive Director of Finance and Corporate Resources Information Governance performance is reported quarterly to the Corporate Management Team, including on information and subject access requests and information security incidents. In Q1 and Q2 95.8% of FOIs were responded to on time; In Q1 and Q2 96.7% of EIRs were responded to on time; In Q1 and Q2 93.7% of Subject Access requests were responded to on time; The cross service Information Governance Board meets regularly, and has received refresher training on information governance The Council’s RIPSA policy has been updated, reported to this Committee in September, and cascaded to managers Appendix 3 3 33
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update 2 Cyber Resilience Compliance with legislative and regulatory policy A programme of actions to maintain cyber security and resilience in 2025/2026 will include: • Refresh/retiral of legacy systems, network equipment and end user devices (mobile phones, PCs) • Programme of security patching of all systems • Compliance with PSN and Cyber Essentials schemes • Incident response • Officer training and awareness (e.g., phishing) • Data security reviews as part of new system installation and security monitoring Executive Director of Finance and Corporate Resources Refresh programme is ongoing, retiral of legacy systems is monitored and reported on by the IT Security team on a fortnightly basis and to the IT SMT monthly. Enhancements to patching processes continue to follow best practice and provide protections to ever changing threats. Council is aligned to PSN and Cyber Essentials Plus standards. Incident response processes and supply chain is reviewed by the IT management team on an annual basis working with the Resilience team. Ongoing staff awareness driven by regular campaigns such as Cyber Scotland week and posts. Whole organisation Phishing Exercise currently in planning. Security reviews are embedded into the onboarding of new systems and an enhanced Change Control process is followed. 34
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update 3 Digital Modernisation Deliver the implementation of new digital solutions that will support the wider transformation of the Council, including the more efficient and effective delivery of services, to internal and external service users. This will include the implementation of Liquidlogic (Social Work) and HOME (Housing & Technical Resources) and solutions to deliver the outputs of the Customer Engagement and Digital Transformation Reviews. Executive Director of Finance and Corporate Resources Major system upgrades progressing. Work continues on LiquidLogic and Home projects. Formal Project Review Boards are in place for all major projects planned or underway. Digital Transformation programme continues to develop with work on governance, transformation opportunities well underway. Project Review Board established. Project to refresh the Council public website and subsites now underway, as is Microsoft Copilot Accelerator project. Work to evaluate the need for a data strategy underway with a data maturity assessment being undertaken in Q3 25/26. Work to transform Customer Engagement continues with consultant onboarded and action plan being delivered. 4 Financial Challenges Cost increases, real terms reduction in council funding, resulting The Council continues to face a challenging financial situation in the medium to long-term because of reduced funding in real terms, rising costs and an increase in demand. Chief Executive Director of Finance and Reports on the Council’s financial position and challenges are regularly presented to the Executive Committee and / Council. 35
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update in difficulties maintaining front line services The Council has developed a long-term strategy which identifies budget pressures, future risks and uncertainties, and projects budget gaps to 2027/2028 with a high level projection to 2032/2033. The Budget Strategy for 2027/2028 and beyond will be updated and presented to councillors in 2026. This will include the Longer Term Outlook.. Corporate Resources Throughout the year, the Budget position for the next 2 years has been reported to elected members in detail, with the first report titled 2026/2027 to 2027/2028 Revenue Budget Strategy presented to the Executive Committee in June 2025. That report focussed on the financial outlook for the next 2 years, highlighting a Budget Gap of £42.000 million. An update to Committee on 5 November 2025 noted that the budget gap had been reduced to £36.315 million across 2026/2027 and 2027/2028, with the shortfall for 2026/2027 specifically totalling £14.146 million. Following the Local Government Settlement, on 25 February 2026, the Council was presented with a report which identified a balance budget for 2026/2027, however, the medium term outlook continued to be challenging, noting a budget gap of £41.7 million across 2027/2028 and 36
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update 2028/2029 before savings and Council Tax. 5 Homelessness The Council has seen unprecedented need and demand for statutory homelessness services including the need for temporary accommodation. Presentations levels during 2023/24 are the highest in the Council since records began, placing significant pressure on the service and the general services fund. A range of mitigations were approved at Housing and Technical Resources Committee on 7 February 2023 and these are now in place with managing and monitoring actions in place. Temporary accommodation solutions continue to be explored to minimise breaches of the unsuitable accommodation order and costs incurred through the use of B&B. Other implications such as the Prisoner Early Release, increased asylum levels, continued removal of local connection and potentially new duties of ‘Ask & Act’ within the new Housing Bill could have consequences for the service. Director of Housing and Technical Resources The operating context in relation to homelessness continues to be extremely challenging. The prevailing socio-economic conditions adversely impacted upon the ability to prevent homelessness during 2025/2026. This trend has been mirrored nationally. Whilst there has been an 9.6% decrease in presentations since 2023/24 to 2024/25, the demands which continue to be placed upon services remain at levels unprecedented prior to the surge in demand. The Homelessness Strategic Action Plan continues to provide the focus for action to help alleviate the pressures The plan has been shared with both the Scottish Housing Regulator and the Scottish Government. The Council continues to engage with the Scottish Government to discuss 37
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update work being progressed and issues encountered in addressing the Housing Emergency. These actions agreed by committee will continue to be monitored closely, with progress updates provided to committee on a regular basis. 6 Sustainable Development and Climate Change A new Strategy for 2022 to 2027 was developed and presented to Council in June 2022 for approval together with the Council Plan and Community Plan. An Action Plan was developed for the first year of the Strategy, and this . continues to be implemented and reviewed annually with progress updates being reported to the Climate Change and Sustainability Committee on a 6 monthly basis. Following a period of public consultation, the council will introduce its first Local Heat & Energy Efficiency Strategy (LHEES) in June 2024. Subject to the availability of finance and taking account of the need to address inequalities and just transition, the introduction of the LHEES will be a key component of a Director of Community and Enterprise Resources The Council’s Sustainable Development and Climate Change (SDCC) Strategy 2022 to 2027 and its accompanying 5-year action plan was developed in 2022. An annual Action Plan sitting under the 5-year Plan is produced each year and reported biannually at the Climate Change and Sustainability Committee (CCS). Delivery of the SDCC action plan provides the main focus for the Council’s sustainable development activity and incorporates actions from across all five Resources. The 2024/2025 Q2 and Q4 progress reports for the SDCC Strategy were presented at CCS Committee on 18 December 2024 and 4 June 2025 respectively. 38
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update long-term strategy to reduce of carbon emissions, and reduce fuel poverty. The Action Plan for 2025/2026 was approved by CCS Committee on 19 March 2025. This year’s action plan assigns each action a thematic focus aligning with the three statutory duties for public bodies: mitigation, adaptation, and acting sustainably. This is the first year this has been carried out and has been done to align with refreshed guidance on statutory duties, better enabling the Council to track action against each duty. A mid-point review for the 5-year SDCCS Action Plan is planned for 2025 to 2026. This review will be presented to CCS Committee in February 2026. Refreshed statutory guidance from the Scottish Government on public bodies climate change duties is anticipated to be released early 2026. This new guidance will inform action in this area and the sustainability team are beginning to plan how the Council’s future climate change work beyond SDCCS 2022-27 can best 39
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update incorporate any new statutory guidance. 7 Economic Strategy A new Economic Strategy 2022 to 2027 was approved by Council in June 2022 as part of a suite of documents accompanying the draft Council Plan and Community Plan. The vision within the Strategy is “to make South Lanarkshire a flourishing, green, dynamic and equitable place for communities, visitors, businesses and investors”. The Strategy is framed around the 3 themes of sustainable, inclusive, economic development- People, Place and Business. Progress on the delivery of the Action Plan will be measured 6-monthly with the results being reported annually to the relevant committees. The Council continues to lead on local economic growth supporting South Lanarkshire businesses and promoting inward investment. The Council has prepared masterplans to support the regeneration of Hamilton and Est Kilbride and is now working on the Director of Community and Enterprise Resources There have been number of positive economic indicators through the last financial year, with the investment of the Council a key factor in driving these. There are a number of multi-year projects that underpin the Economic Strategy including the following: Work on the masterplans in both East Kilbride and Hamilton is continuing at pace with significant funding for both masterplans now in place. Discussions and agreements with key partners continue and it is clear that the investment by the Council in the masterplans has been fundamental to the progress made. The sale of sites in East Kilbride to third parties shows the strength of the industrial land in terms of stimulating market confidence in South Lanarkshire. 40
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update delivery of various projects and liaising with a number of external parties. The delivery of City Region projects continues in line with programme particularly around the school estate, roads improvement projects and the design development of the Larkhall Leisure Centre replacement project. There has been significant market interest in a number of business use sites which again points to the success of these projects and improving market. There has also been success in securing external funding including the Enabling Business Space fund through the City Region and Regeneration Capital Grant Funding for business space. These are all key indicators that the Council and partners have a strong economic base to continue to build from. 8 South Lanarkshire Leisure and Culture (SLLC) Continue to work in partnership with SLLC to develop relationship, in particular around commissioning, use of assets and financial sustainability. Director of Community and Enterprise Resources A Commissioning Plan for Services Delivered by SLLC was approved at Executive Committee on 25 June 2025. The Commissioning Plan defines the strategic ask of SLLC over the medium to long term, in support of 41
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update the Council’s own priorities and outcomes. An exercise is now being undertaken to review, update and streamline the legal documentation that underpins the Council and SLLC relationship. Officers are also developing a performance framework to enable SLLC to demonstrate to the Council that they are responding to the ‘ask’ with the Commissioning Plan. A report setting out the proposals was presented to Executive Committee in December 2025. 9 Recruitment and Retention Challenges The labour market has tightened and employees have more mobility through agile working which is not necessarily tied to a geographical location. In addition some older workers have reassessed priorities and taken up an option for partial or full retiral earlier than they would have done previously. As a result there are a number of skills in short supply nationally and this is putting pressure on local government Chief Executive and all Directors The Council Workforce Strategy and Planning process provides the framework for workforce planning in the Council. The Strategy and Plans are aligned to current and future Council service needs and details the approach by the Council to ensure that the workforce required is in place to meet those needs. The Council Workforce Strategy and Plan was 42
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No. Areas identified in 2024/2025 Actions Lead Officer Q2 Progress Update services. Examples of this include planners, environmental health officers, procurement, Social Care and Education posts. South Lanarkshire Council has experienced these issues and is taking the following actions:- • Workforce Strategy and Plans for 2025 – 27 • A recruitment strategy to provide a framework of improved recruitment actions and standards. • A strategic review of maximising attendance • Enhanced employee support arrangements are in place and well developed approved at Executive Committee, 28 May 2025. Resource workforce plans detail: • The key areas of focus for Resources for 2025 – 27, • The current resource workforce profiles, the key workforce challenges and Actions identified to address challenges. Resource Workforce Plans have been approved at committee September 2025/26. 43
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 10 March 2026 Report by: Executive Director (Finance and Corporate Resources) Subject: Internal Audit Plan 2026/2027 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] set out the requirements and responsibilities of the Global Internal Audit Standards relative to the Internal Audit Plan 2026/2027 seek approval of the revised Internal Audit Mandate and Charter seek endorsement of the Audit Strategy seek approval of the proposed Internal Audit Plan for 2026/2027 [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [recs] (1) that the requirements and responsibilities of the Global Internal Audit Standards relative to the Internal Audit Plan 2026/2027 be noted; (2) that the revised Internal Audit Mandate and Charter (Appendix 2) be approved; (3) that the Audit Strategy (Appendix 3) be endorsed; and (4) that the proposed Internal Audit Plan for 2026/2027 (appendices 4 and Appendix 5) be approved. 3. Background 3.1. In line with section 7(1) of The Local Authority Accounts (Scotland) Regulations 2014, local authorities must operate a professional and objective internal auditing service in accordance with recognised standards and practices in relation to internal auditing. 3.2. Internal Audit within South Lanarkshire Council forms part of the Council’s wider governance framework. Output from the function is the delivery of a planned programme of internal audit assignments. Each assignment is formally reported to the Council’s Risk and Audit Scrutiny Committee and an ‘assignment conclusion’ (previously an ‘audit opinion’) is expressed based on the level of assurance that testing has provided. 3.3. The definitions of the various levels of assurance that are expressed within an audit report are included at Appendix 1. These assurances, in turn, inform an overall assessment of the adequacy and effectiveness of the Council’s framework of governance, risk management and control arrangements that is reported annually to the Risk and Audit Scrutiny Committee and captured within the Council’s Governance Statement that forms part of the Annual Accounts. 4 45
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4. Global Internal Audit Standards Background 4.1. From 1 April 2025, the internal audit function has operated in compliance with the requirements of the Global Internal Audit Standards. These standards were issued by the Internal Audit Standards Board and endorsed by the Chartered Institute of Internal Auditors. 4.2. The Standards provide confidence that a quality internal audit service, based on conformance with standards, delivers assurance alongside advice, insight, oversight and foresight. The role of the internal audit function is envisaged as one that enhances an organisation’s ability to serve the public interest. 4.3. The Standards are based on 15 core principles and set out across four ‘domains’; ethics and professionalism; governance of the Internal Audit function; managing the Internal Audit function and performing Internal Audit services. 4.4. The Standards are supplemented by two documents. Firstly, a Code of Practice for the Governance of Internal Audit in Local Government. This Code addresses the responsibilities of senior management and the audit committee towards Internal Audit to ensure that Internal Audit services delivered have the necessary authority, support and oversight of the organisation. The Code provides a link between the recommended practices in the Global Internal Audit Standards and established governance arrangements of local government bodies and reflects the legislation and practices of these bodies. 4.5. The other supplementary document is an application note that assists with the implementation of the Global Internal Audit Standards within the public sector. The Application Note: Global Internal Audit Standards in the UK Public Sector has been issued by the Relevant Internal Audit Standard Setters and sets out interpretations and requirements that need to be applied to the Global Internal Audit Standards, in order that these form a suitable basis for Internal Audit practice in the UK public sector. 4.6. From an organisational perspective, the core principles of Internal Audit as well as codes of ethics, standards and guidance are incorporated within a single set of Standards. The Standards provides confidence that a quality Internal Audit service, based on conformance with standards, delivers assurance alongside advice, insight, oversight and foresight. The role of the Internal Audit service is envisaged as one that enhances an organisation’s ability to serve the public interest. 4.7. The planning process for 2026/2027 has paid cognisance to the Global Internal Audit Standards and audit assignments undertaken in 2026/2027 and the Annual Report for this year will also reflect the requirements of the Standards. 4.8. Compliance with the Standards continues to be an annual self-assessment exercise (with a periodic, independent external inspection) and for this to be reported on an annual basis. Within South Lanarkshire Council, the outcome of this first self- assessment exercise will be reported within the 2025/2026 Annual Assurance Report with the first external assessment anticipated to be in 2027/2028. 4.9. The Committee is asked to note the requirements and responsibilities of the Global Internal Audit Standards and Code of Practice for the Governance of Internal Audit in UK Local Government. 46
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The Internal Audit Mandate and Charter 4.10. The Global Internal Audit Standards requires the service to be delivered within the context of an Internal Audit Mandate and Charter. This sets out the authority as well as the principle of independence (in terms of the function’s organisational position and reporting relationships). The Charter also sets out responsibilities and expectations regarding management support of the internal audit service. As those charged with the governance, the Global Internal Audit Standards require this ‘mandate’ to be granted by the Council’s audit committee. 4.11. A copy of the Internal Audit Mandate and Charter is attached at Appendix 2. Circumstances may require either or both the Internal Audit Mandate or elements of the Internal Audit Charter to be amended or updated. This could be because of a significant change in the Global Internal Audit Standards or material changes in organisational structure, operational environment or new laws or regulations that impact on the nature and scope of internal audit services within South Lanarkshire Council. 4.12. Where such a revision is required, an updated Internal Audit Mandate and Charter will be presented to the Risk and Audit Scrutiny Committee for approval. 4.13. The Committee is asked to approve the revised Internal Audit Mandate and Charter as reflecting their expectations of the internal audit service to be delivered in 2026/2027. 5. Audit Strategy 5.1. The Audit Strategy, that underpins the 2026/2027 Internal Audit Plan is set out in Appendix 3, and is designed to focus Internal Audit resources on the areas of greatest risk to South Lanarkshire Council, considering:- key strategic and corporate risks financial and budgetary pressures major change programmes and transformation activity regulatory and statutory compliance and areas of known or emerging concern. 5.2. The Strategy reflects the need for effective consultation as part of the planning process and, for 2026/2027, meetings took place with Members as well as Heads of Service and Executive Directors of all Resources. 5.3. The strategy sets out a consideration of all returned suggestions and the matrix used to independently assess areas for inclusion in the annual plan. 5.4. The Committee is asked to endorse the Internal Audit Strategy. 6. Internal Audit Plan 2026/2027 Capacity Planning 6.1. At the outset of the planning process each year, capacity to deliver the Audit Plan needs to be determined. Capacity in 2026/2027 has been adjusted to remove the time required to deliver audit plans for the function’s external clients1 and for estimated planned and unplanned leave during the year. This process has determined that 1,258 days are available to deliver the Council’s audit plan in 2026/2027. 1 South Lanarkshire Leisure and Culture, Lanarkshire Valuation Joint Board, SEEMIS and South Lanarkshire Health and Social Care Partnership 47
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Planning Themes 6.2. The work of the function contributes towards the priorities and values set out within the Council Plan by committing resources to support corporate activity and delivering a core, rolling programme of work that assesses the extent to which financial, operational and reputational risks are mitigated by a series of effective internal controls. This is presented as a balanced plan that complies with the Global Internal Audit Standards in terms of its methodology and approach, maximises the resources and skills available within the Council’s internal audit function and delivers a programme of work that informs the annual report. An audit plan must satisfy many criteria (as detailed in the diagram below) for it to be an effective, credible and compliant2 programme of work. Each of these requirements has been considered in developing the 2026/2027 Internal Audit Plan. Content of the Plan 6.3. In 2026/2027, the Plan recognises a continuation of the commitment to audit time around Fusion, the human resources and financial accounting system that was implemented by South Lanarkshire Council in 2024/2025. This IT system has brought fundamental changes to the Council’s business processes and a suite of new, embedded system controls. During 2025/2026, the focus has been on providing support in the early implementation period and providing advice and guidance around new automated processes and workflows. 2026/2027 will require a continuation of similar support alongside the start of a programme of audit work to test all aspects of the system spanning multi-years. This plan will be refined as testing is progressed and reviewed on an annual basis as part of the planning process. 2026/2027 will also see the full implementation of new social care and housing solutions and there will be some limited testing of these systems as part of planned audits. 6.4. These commitments must be balanced with the delivery of routine corporate activities, a programme of audits that reflect South Lanarkshire Council’s top risks and the delivery of the function’s core objectives as set out in the Internal Audit Mandate and Charter. 2 With the Global Internal Audit Standards. GIAS compliant Audit Plan risk based approach effective consultation/ assurance mapping flexibility to address emerging risks prioritises areas of change reflects resource and timing constraints aligns with Council priorities 48
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6.5. There has been an investment in time to develop skill sets within the Council’s own internal audit function in 2025/2026 and this will continue in 2026/2027. Specifically, this will be to develop the use of data analytics to interrogate systems and controls and to consider how Copilot, an artificial intelligence assistant, can bring efficiencies to the completion of routine tasks. 6.6. Reflecting the overall audit strategy, having completed a capacity planning exercise and having conducted a programme of extensive consultation, a draft Internal Audit Plan has been developed and is attached at Appendix 4 and Appendix 5. 6.7. The Plan sets out the name of the proposed assignment, the lead Resource and a brief outline scope for each proposed assignment. Objectives and scopes will be refined by auditors prior to the commencement of work and once a full risk analysis has been completed and key controls identified. Clients will be involved in this initial risk and control assessment and will be consulted prior to the preparation of the audit remit for each assignment. 6.8. To provide further context for this work, assignments have been linked to the Council Plan’s values and, where relevant, the top risks as set out in the Corporate Risk Register3. 6.9. The Committee is asked to approve the draft 2026/2027 Internal Audit Plan attached at appendices 4 and 5. 7. Employee Implications 7.1. 1,418 audit days have been calculated as being available in 2026/2027 (inclusive of days to deliver an internal audit service to external clients). Year on year comparisons of the number of days available are difficult due to in year variations linked to periods of planned leave, secondments and personnel changes. All known factors have been reflected in capacity planning. The underlying assumptions will be reviewed throughout the year and any significant changes to the Plan will be re-presented to the Risk and Audit Scrutiny Committee. There are no resourcing constraints that would prevent the delivery of the Audit Plan required to be reported under the Global Internal Audit Standards. 8. Financial Implications 8.1. Capacity planning has been based on the available budget. This is considered to provide sufficient resources to deliver the Audit Plan. 9. Other Implications 9.1. To mitigate against the risk of non-delivery of the Plan, the progress of every assignment is monitored using the Council’s risk management software, Figtree. Audit performance requires co-operation from Services and delivery of the Plan is dependent on assignments being completed within reasonable timeframes. To assist, Resource Management Teams have been reminded of relevant timescales. 10. Integrated Impact Assessment and Consultation Requirements 10.1. This report does not introduce a new policy, function or strategy or recommend a change to existing policy, function or strategy and, therefore, no impact assessment is required. 10.2. There is no requirement to undertake any further consultation in terms of the information contained within this report. 3 Assignments related to corporate tasks do not have a link to the Council’s top risk register. 49
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10.3. The Plan includes time to provide data to the Council’s External Auditors to assist with their audit and to respond to queries. A copy of the 2026/2027 Audit Plan will be shared with Audit Scotland to ascertain any areas on which they intend to place reliance. Jackie Taylor Executive Director (Finance and Corporate Resources) 13 February 2026 Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent Previous References Risk and Scrutiny Committee-18 February 2025 (2025/2026 Internal Audit Plan Report) List of Background Papers Global Internal Audit Standards Governance of Internal Audit in Local Government | CIPFA Application Note: Global Internal Audit Standards in the UK Public Sector Internal Audit planning documentation Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas Internal Audit Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 50
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Definitions of Assurance Appendix 1 •There is a sound system of internal control designed to achieve the Service objectives. Advisory risk assessment may be given. No action required or advisory action recommended by Internal Audit.Substantial •Whilst there is a basically sound system of internal control, there are weaknesses which do not have a risk impact but have been raised to highlight areas of inefficiencies. Advisory or low risk assessment given. Actions recommended by Internal Audit.Reasonable •Weaknesses in the internal controls are such as to put the Service objectives at risk. Medium or high risk assessment given. Limited •Control is generally weak leaving the Service open to significant error or abuse. None 51
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Appendix 2 South Lanarkshire Council Internal Audit Mandate and Charter Purpose 1.1 In line with section 7(1) of The Local Authority Accounts (Scotland) Regulations 2014, local authorities must operate a professional and objective internal auditing service in accordance with recognised standards and practices in relation to internal auditing. 1.2 Internal Audit is an independent and objective assurance and advisory function that seeks to provide the Council’s audit committee and senior management with independent and objective assurance and consultative guidance that meets professional standards. 1.3 Internal Audit seeks to enhance governance, risk management and control processes within the Council to support achievement of the organisation’s objectives and its ability to serve the public interest, to add value and improve South Lanarkshire Council’s operations. 1.4 The internal audit function aims to operate in a: • professional and competent manner in compliance with the Global Internal Audit Standards issued by the Internal Audit Standards Board and endorsed by the Chartered Institute of Internal Auditors effective from 1 April 2025. • position of organisational independence with a direct accountability to the Council’s audit committee. • environment that is free from undue influence and demonstrates a commitment to making objective assessments. Adherence to Global Internal Audit Standards 2.1 The internal audit function will adhere to the mandatory elements of the Global Internal Audit Standards effective from 1 April 2025 and align delivery with the CIPFA Code of Practice for the Governance of Internal Audit in Local Government and the Application Note: Global Internal Audit Standards in the UK Public Sector. 2.2 The Global Internal Audit Standards are reflected in the Code of Practice for the Governance of Internal Audit in Local Government. This Code addresses the responsibilities of senior management and the audit committee towards Internal Audit to ensure that Internal Audit services delivered have the necessary authority, support and oversight of the organisation. The Code provides a link between the recommended practices in the Global Internal Audit Standards and established governance arrangements of local government bodies and reflects the legislation and practices of local government bodies. 2.3 The Application Note: Global Internal Audit Standards in the UK Public Sector has been issued by the Relevant Internal Audit Standard Setters and sets out interpretations and requirements which need to be applied to the Global Internal 52
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Audit Standards, in order that these form a suitable basis for internal audit practice in the UK public sector. 2.4 Compliance with the Standards will be a self-assessment exercise using a quality assurance and improvement programme. Output from this programme will be reported by the Chief Internal Auditor on an annual basis to the audit committee and senior management. 2.5 An external assessment of the internal audit function’s compliance with the Global Internal Audit Standards will be undertaken on a periodic basis and in a manner that is compliant with the requirement of the Standards. The arrangements to appoint an external evaluator will be reported to the audit committee and senior management in advance of engaging and the output from their review will be reported timeously to both. Mandate Authority 3.1 The audit committee grants the internal audit function the mandate to provide the audit committee and senior management with objective assurance, advice, insight and foresight. 3.2 The authority of the function is established through its direct reporting relationship to the Council’s audit committee that allows for unrestricted access. 3.3 The audit committee authorises the internal audit function to: • examine all council records, data, information, systems, cash, stores and other property, to obtain explanations and to enter Council property or land. Access is unrestricted and shall be granted on demand and not necessarily be subject to prior notice. • unrestricted access to all employees and members granted on demand and not necessarily subject to prior notice. • allocate resources, formulate plans and communicate findings that deliver the function’s objectives. • seek cooperation and assistance to deliver internal audit services within South Lanarkshire Council. 3.4 The authority to deliver an internal audit service is also set out within the Council’s Financial Regulations, Standing Orders and Scheme of Delegation. Independence, Organisational Position and Reporting Relationships 3.5 Internal Audit is located within Finance and Corporate Resources, under the direction of the Proper Officer, the Executive Director Finance and Corporate Resources. 3.6 In addition, general management duties will be delegated from the Executive Director Finance and Corporate Resources to the Chief Internal Auditor and will cover audit matters as well as general management duties, including representation on the Resources Senior Management Team. 53
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3.7 The Chief Internal Auditor is positioned at a level in South Lanarkshire Council that enables an internal audit service and responsibilities to be performed without interference from management and establishes the idependence of the internal audit function. 3.8 The establishment structure of the internal audit function will comprise Auditor and Assistant posts with a mix of professional specialisms. Structural reviews may take place from time to time and regular resource monitoring is reported to the Risk and Audit Scrutiny Committee. 3.9 The Chief Internal Auditor reports directly to the Risk and Audit Scrutiny Committee. This Committee serves as the audit committee for South Lanarkshire Council and independently provides assurance on the soundness of the Council’s control environment and the adequacy of governnace and risk management frameworks. It also delivers scrutiny and oversees external financial reporting processes. The Committee is made up of ten members of the Council and is chaired by a member of the opposition party. Membership changes with each new Council to ensure political balance. 3.10 Internal Audit reports plans, an annual conclusion and all signifcant audit findings to the Risk and Audit Scrutiny Committee. For external clients, reports and conclusions are presented to audit committees or to client Boards and senior management teams. 3.11 The Chief Internal Auditor has direct access, reports administratively to the Executive Director Finance and Corporate Resources, the Proper Officer, as defined in Section 95, Local Government Act 1973, meeting with this officer on a regular one to one basis. 3.12 This relationship will be the escalation route for issues arising within Internal Audit and for those matters where it is appropriate for the Chair of the Risk and Audit Scrutiny Committee to be briefed. 3.13 The Chief Internal Auditor also has direct access to the Council’s Monitoring Officer and will use this route to report as appropriate. 3.14 The Chief Internal Auditor will confirm to the audit committee on an annual basis that the internal audit function is organisationally independent. Any factors that impact on independence will be disclosed to the audit committee along with any issues encountered relating to a limitation of scope, performance or communication of internal audit findings and conclusions. This disclosure will include an assessment as to the implication of this limitation and the impact on the internal audit function’s ability to fulfil its mandate. Changes to the Mandate and Charter 4.1 Circumstances may require either or both the internal audit mandate or elements of the internal audit charter to be amended or updated. This could include a significant change in the Global Internal Audit Standards or material changes in organisational structure, operational environment or new laws or regulations that impact on the nature and scope of internal audit services. 4.2 Where such a revision is required, a revised Internal Audit Mandate and Charter will 54
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be re-presented to the Risk and Audit Scrutiny Committee and senior management for approval. The role of the Audit Committee 5.1 The Executive Director Finance and Corporate Resources and the Chief Internal Auditor should seek to maintain sound working relationships with appropriate elected members and ensure that good channels of communication are maintained. 5.2 The audit committee will discuss with the Chief Internal Auditor the function’s mandate in terms of its role, responsibility, scope and services and will review and approve the Internal Audit Mandate and Charter on an annual basis. 5.3 Members of the the Risk and Audit Scrutiny Committee and the Chief Internal Auditor are able to meet privately. Internal Audit report all findings from concluded assignments via progress reports to the Risk and Audit Scrutiny Committee. Lines of communication between the Chairs of all Committees and the Chief Internal Auditor will be open at all times. 5.4 All elected members are free to raise concerns directly with the Chief Internal Auditor and input to the Internal Audit Charter and Audit Plan. Areas suggested for inclusion in the Audit Plan will be assessed in terms of risk prior to any audit work being undertaken. 5.5 Enquiries from elected members will follow the Council’s protocols and guidance. 5.6 The Risk and Audit Scrutiny Committee will approve a risk-based internal audit plan on an annual basis having satisfied itself around the adequacy of budgets, qualifications and comptencies of the internal audit function and of the Chief Internal Auditor to deliver the plan. 5.7 The Risk and Audit Scrutiny Committee will receive regular update reports throughout the year on progress with delivering the approved Internal Audit Plan and an Internal Audit Annual Assurance report expressing an overall Internal Audit conclusion for the year. 5.8 The Committee will also satisfy itself that a quality assurance and improvement programme has been established and review the results of the quality assurance and improvement programme on an annual basis. 5.9 The Risk and Audit Scrutiny Committee will seek assurances that there have been no limitiations in scope or resources and receive regular updates in relation to performance to allow this to be assessed relative to the function’s objectives and individual roles and responsibilities. Chief Internal Auditor Role and Responsibilities 6.1 The Chief Internal Auditor will ensure that internal auditors: • comply with the Global Internal Audit Standards and the key principles of Ethics and Professionalism set out within the Standards. • understand and embace the organisation’s legitimate and ethical expectations, recognising conduct that is contrary to those expectations. • promote an ethics based culture within South Lanarkshire Council. 55
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• report organisational behaviour that does not conform with the organisation’s ethical expectations. Objectivity 7.1 The Chief Internal Auditor has a responsibility to ensure that the internal audit function operates in an environment where the ability of auditors to carry out their responsibilities in an objective manner across all aspects of the audit engagement is not threatened. Any impairment in such will be disclosed to the approriate parties. 7.2 Within South Lanarkshire Council, the Employee Code of Conduct provides guidance on the type and nature of interests that should be declared (including paid employment outside the Council and personal interests in contracts). Auditors must declare their interests in accordance with the Code of Conduct and with regard to the audit principle of independence, notifying the Chief Internal Auditor of any conflicts of interest which may arise. This formal declaration is required to be renewed on an annual basis but will be revisited should any conflicts arise. 7.3 This disclosure extends to any impairments of independence either actual or perceived with an expectation that internal auditors will act with profesional objectivity in all aspects of the audit engagement, that this results in balanced assessments that considers all facts and circumstances and avoids bias and undue influence. 7.4 Auditors will not be assigned to review or be involved in any activity where they have previously had operational or other involvement, usually within a period of one year. This includes instances where Internal Audit employees have been consulted during system, policy or procedural developments. 7.5 Internal auditors will maintain an objective approach in the delivery of audit assignments, avoid compromising quality and retain overall authority over the presentation of audit findings. They will also ensure that they display professional objectivity in all aspects of their role, making informed and balanced assessments and avoiding conflicts of interest, bias and undue influence. Managing the Internal Audit function 8.1 The Chief Internal Auditor has a responsibility to: • prepare an annual plan for formal review and agreement by the audit committee and senior management. • review the plan, amending to reflect significant changes in the organisation’s risks, operations or objectives and communicating these amendments to the audit committee and senior management. • communicate the impact of any resource implications. • ensure that all audit engagements are conducted in accordance with the Global Internal Audit Standards. • deliver a range of audit assignments, as set out in the approved annual Audit Plan, and communicate assignment findings and conclusions to management. • make recommendations for improvements and follow up on the delivery of these actions. • communicate the results of each audit assignment to the audit committee and senior management. 56
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• ensure a system of close supervision of audit work, and maintain a review of audit files through the supervisory structure ensuring that the function possesses the knowledge, skills and competencies to meet the requirements of the Global Internal Audit Standards and fulfil the internal audit mandate. • monitor trends, patterns and emerging issues, reporting to the audit committee and senior management as appropriate. • consider and promote new approaches to internal audit service delivery. • ensure adherence to South Lanarkshire Council’s wider policies and procedures. Any conflict with such and either the Internal Audit Mandate and Charter or the Global Internal Audit Standards will require to be resolved and reported to the audit committee and senior management. • consider extent to which reliance can be placed on the work of external auditors, inspectors and regulators. Communicating with the Audit Committee and Senior Management 9.1 The Chief Internal Auditor will report to the audit committee and senior management, the internal audit function’s mandate; the Audit Plan and delivery of this Plan; significant revisions to the Plan; any potential impairments to independence; results of the quality assurance and improvement programme (including conformance with the Global Internal Audit Standards) and an action plan to address any gaps in compliance, if required. 9.2 The Chief Internal Auditor will also convey any significant risk exposures and any mangement responses which are deemed to represent a level of risk contrary to South Lanarkshire Council’s risk management approach. 9.3 All planned audit assignments will formally be reported and every assignment will be closed after review by audit management. All Internal Audit reports will be submitted to the Executive Director Finance and Corporate Resources, and to recipients within the Resource being audited, incluing the Executive Director, Head of Service and the auditee. Copies of reports relating to routine planned assignments will also be forwarded to external auditors. 9.4 The Audit Manager will plan for regular formal consultations with Heads of Service and Executive Directors, especially when preparing the audit plan. Feedback on performance and value of work undertaken will be sought. Heads of Service will be copied on every report affecting their area of responsibility. Effective relationships will be maintained by both parties and confidentiality of information will be protected, unless this would prevent the delivery of audit assurance. Quality Assurance and Improvement Programme 10.1 The Chief Internal Auditor will develop, deliver and maintain a quality assurance and improvement programme that will assess all aspects of the internal audit function. This includes compliance with professional standards and applicable and relevant laws and regulations. 10.2 In addition, a suite of performance measures will be reported at each meeting of the audit committee and to senior management as part of the annual reporting process. 10.3 All elements will be considered to assess the internal audit function’s progress with the delivery of its objectives. Where required, an improvement plan will be developed to promote an ethos of continuous improvement. 57
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10.4 The quality and assurance programme will be internally assessed with an external inspection being completed once in each five-year period. 10.5 The quality and assurance programme will be reported on an annual basis to the audit committee and to senior management. Scope and Types of Internal Audit Service 11.1 Internal Audit covers the breadth of South Lanarkshire Council activities and operations to provide independent assurance and advisory services in relation to: • governance, risk management and control arrangements 11.2 Where required, this will lead to recommended improvements in control, performance and productivity to support the achievement of corporate objectives. 11.3 This may include an assessment of: • risks that compromise achievement of organisational strategic objectives. • the extent of compliance with financial and operational procedures, policies, regulations and legislation and their impact on operation. • contribution to and the identification of opportunities. • financial and operational controls in terms of their adequacy and application. • compliance with all corporate standards and frameworks, ensuring that management information is produced accurately. 11.4 The existence of Internal Audit does not diminish the responsibility of management to exercise sound systems of internal control. It is clearly and solely a management responsibility to ensure that activities are conducted in a secure, efficient and well- ordered manner and that finances are safeguarded and used to maximum effect. This includes identifying and managing risks including fraud. 11.5 Managers are expected to provide requested information within reasonable timescales and accept and implement agreed actions. 58
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Internal Audit Strategy for South Lanarkshire Council Appendix 3 Purpose of Internal Audit Internal Audit is an independent assurance function that seeks to provide the Council’s audit committee and senior management with independent and objective assurance and consultative guidance that meets professional standards. Internal Audit seeks to enhance governance, risk management and control processes within the Council to support achievement of the organisation’s objectives and its ability to serve the public interest. The internal audit function aims to operate in compliance with Global Internal Audit Standards issued by the International Internal Audit Standards Board and endorsed by the Chartered Institute of Internal Auditors effective from 1 April 2025. The Internal Audit service’s wider objectives are set out in the Internal Audit Mandate and Charter. Vision 1.1. The internal audit function will be recognised as a strategic advisor, proactively assessing risks and providing well-supported recommendations that help South Lanarkshire Council achieve its objectives in governance, sustainability, efficiency, and public trust. The function will promote transparency, accountability, continuous improvement, and ethical conduct across the Council. Independence and Reporting 2.1. Internal Audit is independent of South Lanarkshire Council’s operational management. The Internal Audit service reports functionally to the Council’s Risk and Audit Scrutiny Committee and has unrestricted access to Senior Management. 2.2. Internal Audit reports regularly to management and the Risk and Audit Scrutiny Committee on: • Internal Audit findings and agreed actions, • progress against the approved Internal Audit Plan, and • significant governance, risk and control issues. 2.3. This reporting arrangement ensures Internal Audit can carry out its work free from undue influence and in line with the Global Internal Audit Standards requirements on independence and objectivity. 2.4. An annual Internal Audit report is provided to support South Lanarkshire Council’s Annual Governance Statement and to give assurance over the overall adequacy and effectiveness of South Lanarkshire Council’s governance, risk management and internal control framework. 59
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Strategic Approach to Audit Planning 3.1. Internal Audit adopts a risk-based approach to planning and delivery that complies with the Global Internal Audit Standards utilising the resources available and prioritising assignments to ensure key areas of work are completed in the year. The annual Internal Audit Plan is designed to focus Internal Audit resources on the areas of greatest risk to South Lanarkshire Council, considering: • key strategic and corporate risks, • financial and budgetary pressures, • major change programmes and transformation activity, • regulatory and statutory compliance, and • areas of known or emerging concern. 3.2. The Internal Audit Plan is informed by South Lanarkshire Council’s risk management framework, consultation with senior officers along with wider External Audit reports and national sector developments. The Risk and Audit Scrutiny Committee approves the Internal Audit Plan annually. 3.3. In determining items for inclusion in a draft Internal Audit Plan, all proposed assignments, generated from research and consultation, are risk assessed to determine suitability. The risk of significant subsequent changes to the Internal Audit Plan, arising from a change in South Lanarkshire Council’s priorities or risks, are managed through a level of contingency time that provides a degree of flexibility throughout the year. 3.4. Significant amendments to the Internal Audit Plan will be presented to the Risk and Audit Scrutiny Committee for approval. Assurance and Advisory Work 4.1. Internal Audit delivers a mix of assurance and advisory work, providing: • independent conclusions on the adequacy and effectiveness of internal controls, • practical recommendations to improve systems and processes, and • early advice on new systems, policies and projects to help manage risk proactively. 4.2. The strategy aims to align Internal Audit work with South Lanarkshire Council’s risks, strategic goals and objectives in line with recognised standards, guidance and other best practice. Time is invested to develop Internal Audit practices and skills within the teams. 4.3. All Internal Audit work is undertaken in accordance with the Global Internal Audit Standards and the Internal Audit Charter. Stakeholder Expectations 5.1. Internal Audit will seek to meet stakeholder expectations which are defined as follows: • Senior Management: seeks assurance that council resources are managed transparently and efficiently. • Risk and Audit Scrutiny Committee: expects robust risk-based assurance, strategic advice, and effective reporting. 60
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• External Auditors and Regulators: require evidence of compliance with standards and effective governance. • Public and Partners: expect value for money, ethical conduct, and continuous improvement. Strategic Objectives, Initiatives, and Key Performance Measures Objective 1: Delivery of Core Purpose 6.1. Initiative: set interim targets for % of the Plan to draft report stage throughout the year • Measured by KPI 6 (Plan complete to draft report stage by 30 April) • Measured by KPI 10 (planned assignments deferred to a future year to accommodate unplanned work) • Interim targets set and reported to the Risk and Audit Scrutiny Committee in routine update reports Objective 2: Build Expertise in Key Risk Areas 6.2. Initiative: Develop formal training programmes for auditors in digital transformation and new council systems (e.g., Fusion, housing, social work). • Measured by KPI 2 (employees holding a qualification from a recognised Consultative Committee of Accountancy Bodies or Institute of Internal Auditors) with resulting continuous professional development requirements • Measured by KPI 5 (number of training days per employee) Objective 3: Enhancing Fraud Prevention Role 6.3. Initiative: Develop formal training programmes for auditors in fraud prevention • Measured by KPI 5 (number of training days per employee) • Measured by delivery of fraud awareness programme (tracked and reported separately) Objective 4: Enhancing Perception 6.4. Initiative: Deliver a service that is perceived as enhancing governance, risk management and control processes • Measured by KPI 3 (number of audits completed that comply with the requirements of the Global Internal Audit Standards) • Measured by KPI 7 (Internal Audit recommendations delivered on time) • Measured by KPI 8 (utilisation of contingency time) • Measured by KPI 9 (meetings with Heads of Service during each year) • Measured by KPI 19 (number of formal complaints about the Service) • Measured by KPI 21 (issue of questionnaire to support audit planning and to assess levels of satisfaction with the Service) • Measured by KP 26 (meetings with Executive Directors and Chief Executive) Objective 5: Optimise Resource Utilisation 6.5. Initiative: Leverage data analytics to automate routine audit tasks and improve efficiency • Measured by KPI 4 (number of processes where continuous control monitoring is used) • Measured by KPI 5 (number of training days per employee) 61
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Key Challenges 7.1. Key challenges for the team are around: • Delivery of the core purpose of the function alongside responding to unplanned requests for support and assistance • Building expertise in emerging areas (e.g., digital transformation, new systems) • Enhancing the fraud prevention role in response to new legislation and emerging threats • Enhancing perception of the function’s role as a trusted strategic advisor, not just a compliance unit. • Optimising resources available through best use of technology. Addressing Weaknesses 8.1. To address perceived weaknesses, we will take the following action: • Expertise Gaps: introduce targeted training in emerging areas (e.g., digital, fraud, cybersecurity). • Resource Constraints: further develop the support network with other Councils to share tools and training. • Perception Issues: meet with Resources on a six-monthly basis to discuss our Strategy, Plan and performance. Communicate the Strategy 9.1. To implement the Strategy, we will present the vision and objectives to senior management and the Risk and Audit Scrutiny Committee. We will use internal communications to build credibility and shift perceptions of the Service from compliance to that of a strategic advisor. Quality and Improvement 10.1. Internal Audit maintains a Quality Assurance and Improvement Programme to ensure ongoing compliance with the Global Internal Audit Standards and to support continuous improvement. This includes internal quality reviews, performance monitoring and periodic external assessment. Outputs from the Quality Assurance and Improvement Programme are reported to the Risk and Audit Scrutiny Committee. 10.2. Progress against the Internal Audit strategy is reported to the Risk and Audit Scrutiny Committee through regular monitoring reports that are presented at each meeting. Delivery of the strategy will be evidenced by the completion of the Internal Audit Plan in-year and will be monitored by the performance indicators regularly reported to Risk and Audit Scrutiny Committee. 62
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Alignment with Council Priorities and Standards 11.1. This strategy is fully aligned with the Global Internal Audit Standards, the Council’s own Mandate and Charter, and the priorities set out in the annual Audit Plan. It supports the council’s objective of accountability, efficiency, and continuous improvement, and ensures the internal audit function remains independent, well- resourced, and strategically focused. Review and Revise 12.1. The Internal Audit Strategy will be subject to an annual review and presented alongside the annual Internal Audit Plan to the Risk and Audit Scrutiny Committee each financial year. 63
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Assessment Criteria (Appendix to Audit Strategy) • Systems that process significant income or expenditure. Materiality -value • An estimate of the number of transactions processed by the systems / activities per annum. Materiality -volume • The significance of the system / process to the activities of the Council. Significance / profile • Consideration of the Council's top risks and the controls that mitigate these risks (has IA reviewed the effectiveness of the controls recently / can IA add any value via review). 's top risks • Recent changes to the system / process or the likelihood of change to the systems / process in the audit period planned. Change • Extent to which the system / activity is subject to regulation or contractual obligation. Regulatory / contractual • The extent to which a service / activity is monitored or audited by an external body (may mean less priority for IA work unless external reviews are highlighting risks that would benefit from IA review). Other areas of assurance (assurance mappintg) • Highlighting areas of risk based on IA team knowledge (via output from previous audits, team knowledge/awareness). Prior audits / audit knowledge Areas where there is "opportunity" inherent within a system / activity for fraud and corruption to occur. • The turnover of staff, especially with key skills (new teams / areas with significant vacancies may bring risks via "opportunity for process not to be followed, controls to be overriden, such as appropriate authorisation or SOD). Staff tunover • Consideration of the processes and systems that facilitate acheivement of the • 's priorities. Council priorities 64
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Proposed 2026/2027 Internal Audit Plan Appendix 4 Lead Resource Audit assignment Outline Scope Days Council Value Top Risk ranking Priority Assurance: Governance and Corporate Tasks FCR Governance Tasks Undertake review of evidence that supports SLC’s Annual Governance Statement and provide 2025/2026 annual assurance statement for Glasgow City Region – City Deal. 18 Accountable, effective, efficient and transparent 1 All Informal Follow Up Prompt Resources on a quarterly and monthly basis of actions due within that period. Collate responses for reporting. 6 Ambitious, self- aware and improving 1 FCR 2025/2026 Annual Report Finalise 2025/2026 audit reports. Prepare annual statement of assurance for 2025/2026. Present to RASC. 75 Accountable, effective, efficient and transparent 1 All Monitoring, Admin and Committee reporting Prepare reports to present to RASC. 114 Accountable, effective, efficient and transparent 1 All 2027/2028 Audit Plan Develop draft plan in compliance with the Global Internal Audit Standards. 21 Accountable, effective, efficient and transparent 1 All Data Analytics Develop strategy, train team and identify areas of application. 52 Ambitious, self- aware and improving 1 FCR Global Internal Audit Standards Application of Global Internal Audit Standards across all aspects of the internal audit service. 25 Accountable, effective, efficient and transparent 1 65
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Lead Resource Audit assignment Outline Scope Days Council Value Top Risk ranking Priority FCR External Audit Provide 2025/2026 general ledger data to External Audit for the audit of the financial accounts for the year ended 31 March 2026 and interim audit for the year ended 31 March 2027. 25 Accountable, effective, efficient and transparent 2 All Attend internal and external working groups Attend, respond to requests, participate in consultations and provide updates. 14 Ambitious, self- aware and improving 2 Assurance: Internal Controls All Follow Up For all Council Resources, identify audit recommendations due in the period April 2025 to March 2026. Risk assess and follow-up to ensure implementation of all high-risk actions. 15 Ambitious, self- aware and improving 1 All General contingency Respond to requests for unplanned work. 47 N/A N/A N/A FCR Fusion Testing of system post implementation. 60 Accountable, effective, efficient and transparent 1 All Fraud See Appendix 5. 181 Accountable, effective, efficient and transparent Very High 1 SWR Self-Directed Support Assessment of how new system is addressing (system) actions from original audit. 10 Focused on people and their needs High 2 All External Reports Review recommendations made by external inspectors and regulators in wider, national reports to ensure there has been an appropriate response by South Lanarkshire Council with action taken where required. 10 Ambitious, self- aware and improving High 1 All Inventory Review of procedures to ensure these act as an effective process to control the physical security of the Council’s assets. 20 Accountable, effective, efficient and transparent 1 66
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Lead Resource Audit assignment Outline Scope Days Council Value Top Risk ranking Priority FCR Refunds Checking of refund payments ahead of payment. 10 Accountable, effective, efficient and transparent 1 FCR Payment Controls Review of software and processes that manage duplicate checks on invoices to ensure these are effective. 10 Accountable, effective, efficient and transparent Very High 1 HTR Stores Attend year end stock check. Undertake a sample check of stock quantities. Assess stock controls to provide assurance that these are effective. 15 Accountable, effective, efficient and transparent 2 All Overtime Review of overtime processes to ensure business need confirmed and authorised in advance of working. Test check key controls in the claim process to provide assurance that these are effective and working as intended. 30 Accountable, effective, efficient and transparent 1 CER Developer Contributions Review of process to spend and track contributions. 40 Working with and respecting others 2 FCR Workforce Planning Provide assurance that South Lanarkshire Council has effective arrangements to plan for, resource, and develop its workforce so that it can meet current and future service demands. 30 Excellent Employer High 1 SWR Service Delivery Review of controls that validate amounts invoiced to ensure that these match contracted commitment and confirm service has been delivered. 30 Focused on people and their needs 1 HTR Capital Project Delivery To provide assurance that projects are being managed effectively, economically, and in line with Council’s 40 Accountable, effective, efficient and transparent High 1 67
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Lead Resource Audit assignment Outline Scope Days Council Value Top Risk ranking Priority Financial Regulations and Standing Orders on Contracts. HTR/CER/ FCR Fusion: Capital Testing of new Projects module of Fusion. 40 Accountable, effective, efficient and transparent 1 All Benefit Realisation Provide assurance that the anticipated benefits set out in a business case or proposal have been properly defined, tracked, measured, and achieved. 40 Ambitious, self- aware and improving 2 HTR Housing Allocation Ensure the Housing Allocation Policy sets out the rules and principles as to how Council housing is allocated. Seek assurance that there is evidence that decisions are fair, consistent, transparent, and legal, and that housing stock is allocated based on assessed need. 40 Fair, open and sustainable Very High 1 HTR Personal Digital Assistants (PDA) Provide assurance that new PDA devices meet service need, are being used effectively, use is limited to that of business use only and physical and data security risks attached to devices are managed. 35 Accountable, effective, efficient and transparent 1 CER City Deal Prompt Resources of actions due within that period. Collate responses to inform Governance Statement. 2 Ambitious, self- aware and improving 2 All Conflict of Interest Collate quarterly register. Prepare and disseminate annual communication. 5 Accountable, effective, efficient and transparent Very High 1 Assurance: Risk Management All Sustainability Provide ongoing assurance that plans are practically deliverable in the short, medium and long term and that in-year 37 Fair, open and sustainable Very High 1 68
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Lead Resource Audit assignment Outline Scope Days Council Value Top Risk ranking Priority progress against targets is monitored and reported. FCR IT Follow up of progress in managing risks around cyber, business resilience, digital transformation projects, Artificial Intelligence and Public Switched Telephone Network progress. 5 Accountable, effective, efficient and transparent Very High 1 All Assurance Mapping Overview of assurance provided by external inspectors and regulators. 10 Accountable, effective, efficient and transparent High 1 TOTAL DAYS (ASSURANCE) 1,112 Non-Assurance: Advisory All Advice and guidance Provision of advice and guidance. 46 N/A N/A N/A All Consultancy Provision of support to implement new systems, processes or procedures. 100 N/A N/A N/A TOTAL DAYS (ADVISORY) 146 Delivery of an internal audit service to external clients N/A Audit Plan Deliver internal audit service to External Clients. 160 N/A N/A N/A TOTAL DAYS (EXTERNAL CLIENT) 160 TOTAL AUDIT DAYS 1,418 69
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Proposed 2026/2027 Internal Audit Fraud Plan Appendix 5 Lead Resource Audit assignment Outline Scope Days Council Value Top Risk ranking Priority Risk Management FCR Fraud Working Group Attend, respond to requests, participate in consultations and provide updates. 3 Accountable, effective, efficient and transparent Very High 1 All National Fraud Initiative Completion of investigation of matches from 2024 National Fraud Initiative Exercise. Upload data for 2026 National Fraud Initiative. Report outcomes to RASC. 39 Accountable, effective, efficient and transparent Very High 1 All Fraud Risk Register Annual review of fraud risk registers. 5 Accountable, effective, efficient and transparent Very High 1 All Fraud Queries/Freedom of Information Respond to fraud queries and Freedom of Information requests. 24 Accountable, effective, efficient and transparent Very High 1 All Investigations Undertake investigations as required. 55 Accountable, effective, efficient and transparent Very High 1 HTR Follow Up For all Council Resources, identify audit recommendations due in the period April 2025 to March 2026. Risk assess and follow-up to ensure implementation of all high-risk fraud actions. 5 Accountable, effective, efficient and transparent Very High 1 All Monitoring Monitoring of trends. 2 Accountable, effective, efficient and transparent Very High 1 All Action Plan Delivery of specific fraud actions. 3 Accountable, effective, efficient and transparent Very High 1 70
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All Communications/ Reporting Preparation of formal Circulars. Reporting to RASC. 5 Accountable, effective, efficient and transparent Very High 1 All Rolling fraud checks Development of a programme of anti- fraud checks (procurement/contract, purchase card and petty cash). 40 Accountable, effective, efficient and transparent Very High 1 TOTAL FRAUD DAYS 181 71
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 10 March 2026 Report by: Executive Director (Finance and Corporate Resources) Subject: Internal Audit Activity Report 1. Purpose of Report 1.1. The purpose of the report is to:- update the Risk and Audit Scrutiny Committee on the progress, performance and output from the Internal Audit service in the period 15 November 2025 to 13 February 2026 seek approval to make an amendment to the 2025/2026 Internal Audit Plan 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- (1) that progress with delivering the 2025/2026 Internal Audit Plan be noted; (2) that performance in the period to 31 January 2026, detailed in Appendix 1, be noted; (3) that output from internal audit assignments completed in the period 15 November 2025 to 13 February 2026, as summarised at Appendix 2, be noted; and (4) that the proposed amendment to the 2025/2026 Internal Audit Plan, as set out at paragraph 4.5, be approved. 3. Audit Plan: Progress and Performance Audit Plan: Progress 3.1. The Internal Audit Plan for 2025/2026 was approved by the Risk and Audit Scrutiny Committee (RASC) in February 2025. A copy of this plan can be found here. A summary of the progress, at 13 February 2026, with delivering this Plan is as follows:- 100% of 2025/2026 Internal Audit Plan is in progress 67%1 at draft report stage 99%2 of the Audit Plan is projected to be at draft report stage by April 2026 22/24 performance indicators are meeting targets 1 Target of 68% by March 2026 reported to RASC in December 2025 2 Target of 100% by May 2026 reported to RASC in December 2025 5 73
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3.2. All assignments within the 2025/2026 Internal Audit Plan are in progress at 13 February 2026 with 67% of audit assignments at draft report stage. A further 32% of assignments are planned to be at this same stage by April 2026 with the remaining 1% of assignments anticipated as being carried forward into 2026/2027 to be completed in this year. 3.3. This represents good progress with the overall delivery of the 2025/2026 Internal Audit Plan. There are no significant concerns, at this point in the year, around the overall deliverability of the Plan ahead of presenting an annual report to this Committee in June 2026. 3.4. There remains, however, a continuing risk, of unforeseen service demands and, potentially, wider, though a less significant, risk around responding timeously to team up-skilling requirements, particularly around the development of digital skills. These risks are mitigated by inclusion of contingency time within the annual plan, a focus on coaching and training and setting realistic expectations around the extent to which data analytics can begin to be incorporated more widely within audit assignments. 3.5. There is also a risk of significant, subsequent amendments to the Plan, arising from a change in the Council’s priorities or risks, although this reduces as the year progresses. This is managed by a regular re-assessment of capacity to allow incremental adjustments to the content of the Audit Plan and reporting to the RASC as the year progresses (see 4.5 for details of the latest review). Audit Plan: Performance 3.6. Having provided the mandate for an internal audit service to be delivered within South Lanarkshire Council (that includes the authority, role and responsibilities under which Internal Audit operates), the Committee should satisfy itself that the function is fulfilling its mandate. One element of this is to evaluate how the Service has performed in the period under review. 3.7. Performance indicators for the period to 31 January 2026 are set out in Appendix 1 alongside targets and an overall assessment as to whether it is anticipated that these will be met by 31 March 2026. All indicators have been included for completeness but some are not reported until the end of the financial year. The table notes how these are being progressed, in the interim, to provide assurance that all aspects of performance are being managed. 3.8. There is currently 1 indicator assessed as red and 1 at amber (see Appendix 1). Details of these indicators and planned corrective action, where possible, is as follows: Indicator Corrective Action Plan completed to draft Report stage by 30 April. Projecting 99% of Audit Plan will be completed by 30 April 2026. Marginal under-delivery now projected (1%). Internal Audit recommendations followed up. Programme of work in Quarter 4. Output will be reported in the Internal Audit Annual Report presented to RASC in June 2026. 3.9. Members are asked to note progress with delivering the approved Plan in the reporting period, and that overall performance against delivery targets is positive in the period to 31 January 2026. 74
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4. Audit Plan: Output and Key Findings 4.1. The last progress report to RASC was in December 2025 and reported on work completed in the period 1 September to 14 November 2025. This report covers all work completed in the period 15 November 2025 to 13 February 2026. A summary of the audit plan output to date is set out below: 16 assignments have concluded in the period 9 relate to assignments that have been delivered across 2025/2026 1 assignment generated an action plan proposal to defer one assignment to 2026/2027 4.2. All assignments from 1 April 2025 are conducted in conformance with the Global Internal Audit Standards (GIAS). Sixteen assignments from 2025/2026 were completed in the period from 15 November 2025 to 13 February 2026 (including 3 amendments to the Internal Audit Plan that were approved by RASC in December 2025). These are as follows: Audit Assignment Scope of Assignment Informal Follow-up To provide quarterly advance prompts of actions falling due. Collate monthly responses for reporting. Continuous Controls Monitoring To complete programme of data downloads from main financial systems during 2025/2026 to inform audit sampling and provide management reports. Fraud Reporting To collate statistics, review legislation, report six monthly and annually to RASC. Internal Working Groups: Procurement Working Group Information Governance Board Risk Sponsors Group To attend and participate in internal working groups. External Working Groups: Scottish Local Authorities Internal Audit Group (SLACIAG) Scottish Local Authorities Investigators Group (SLAIG) Computer Audit Sub-Group (CASG) To attend and participate in external working groups. Fusion External Audit To develop reports to allow financial data to be extracted. Waste Service Action Review To establish progress with Service improvements and determine scope of future audit work. Three Lines Risk Analysis To conclude work on Three Lines analysis and use to inform wider assurance mapping exercise. School Cash Controls To review and assess gaps in cash-handling controls. 4.3. A summary of the audit output for each of these assignments is detailed in Appendix 2. 75
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4.4. In addition to completing work across these audit areas, audit work for external clients has been progressed in the period. Mid-year reports were presented to the relevant external Committee or Board in November and December 2025 and 78% of the 2025/2026 External Client Internal Audit Plan is now at draft report stage. Arrangements are in place to conclude the External Client Internal Audit Plan in full by 30 April 2026. 4.5. GIAS requires re-consideration of the Plan as the year progresses to ensure that it continues to be risk-based and aligns to the organisation’s objectives. This review, undertaken most recently in February 2026, suggests that work in 1 area should be deferred. The reason for this and the proposed course of action are set out in the table below: Assignment Audit Days Reason for Deferral Proposed Action Follow Up 35 Assignment relates to audit actions where the Fusion Projects module will alter how controls will be applied. Days are used in Fusion to provide specific support around complex and technical accounting issues required to support the financial year-end process. Time to be added to the 2026/2027 Internal Audit Plan to test the implementation of actions within Fusion Projects and undertake a wider review of the module. 4.6. Members are asked to note the assignments completed and closed in the period and approve the proposal to defer 1 assignment and the proposed alternative use of days. 5. Audit Plan: Recommendations 5.1. Across all the assignments concluded in the period, Council Resources have demonstrated a good level of engagement and, where required, an action plan has been developed and agreed to address areas for improvement. These actions have now been logged together with a ‘responsible owner’ and a due date. Verbal updates are obtained when the action falls due. This is classed as informal follow up and performance data is included within routine indicators reported to RASC. Separately, actions will be formally followed up to confirm that there is evidence of action being taken and the findings of these reviews reported to RASC throughout the year. 5.2. Sixty internal audit actions fell due in the period to 31 January 2026. Most of the actions were in response to special investigation assignments. 95% have been verbally advised as implemented on time. Progress with delivering audit recommendations will continue to be monitored and performance for 2025/2026 will be reported as part of the annual report presented to this Committee in June 2026. 6. Emerging Risks and Issues 6.1. The Council’s top risks were reviewed and reported to the RASC in September 2025. These revised risks have been mapped to the approved 2025/2026 Internal Audit Plan, with 3 from 5 of the top risks (categorised as very high) within the scope of planned assignments in 2025/2026. A further 5 from 11 of the top risks (categorised as high) are within the scope of planned assignments in 2025/2026. 76
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6.2. New and emerging risks will continue to develop as the year progresses and there are periodic re-assessments of the Plan to ensure that it remains risk-based and aligned to the organisation’s objectives. Any proposed amendments to the Plan will be presented to RASC for approval. 7. Compliance and Standards Update 7.1. A report that set out the requirements and responsibilities of the new GIAS, which was effective from 1 April 2025, was presented to this Committee on 18 February 2025. A copy of the report can be found here. 7.2. As an audit committee, the RASC have a key role to play in ensuring that the internal audit function adheres to the Standards and fulfils its mandate effectively and efficiently. The role of audit committees is set out in some detail in Domain 3. “Governance of the Internal Audit function”. The RASC demonstrates support for the Service by engaging constructively with Internal Audit’s findings, conclusions and advice. 7.3. The Code of Practice for the Governance of Internal Audit in UK Local Government assists with the interpretation of the new GIAS. Specifically, in relation to these activity updates, the Committee should be satisfied that the content is such to allow them to effectively scrutinise and challenge. 7.4. A Quality Assurance and Improvement Program (QAIP) is a mandatory framework used to evaluate and ensure that an internal audit function conforms to GIAS. An interim assessment was presented to this Committee in December 2025, confirming that the 2 main gaps in compliance with GIAS have now been addressed by reporting a revised and extended suite of performance indicators together with the development and presentation of a detailed Audit Strategy. 7.5. The 2025/2026 Internal Audit Annual Report, that will be presented to this Committee in June 2026, will confirm that a QAIP is in place and operating, summarise the level of compliance and detail any remaining areas where improvements are required. 8. Governance and Committee Engagement 8.1. The Council’s Internal Audit Manager attends all meetings of the RASC. The authority of the internal audit function is established through its direct reporting relationship to the Council’s audit committee that allows for unrestricted access. 8.2. Members of the RASC met privately with the Internal Audit Manager, as required by GIAS, in December 2025. This provided an opportunity to offer feedback around the revised format of the activity report and to share suggestions for areas for inclusion in the 2026/2027 Internal Audit Plan. 8.3. Opportunities to further support Members are now being considered alongside the continuation of one-to-one or group support, as required, to allow Members to ensure appropriate scrutiny can be undertaken by them in their role. 9. Employee Implications 9.1. There have been no changes to the team in the period to 13 February 2026 and there are no vacancies within the Service. Training arrangements includes regular team briefs, internal training sessions, attendance at professional body conferences and external seminars and briefings. Further online resources have been secured to support team training throughout the year. 77
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10. Financial Implications 10.1. The Internal Audit plan for the year aligns to the budget that has been set, and sufficient resources are in place to deliver the approved programme of audit assignments. 11. Climate Change, Sustainability and Environmental Implications 11.1. There are no implications for climate change, sustainability or the environment in terms of the information contained in this report. 12. Other Implications 12.1. There are no implications for sustainability in terms of the information contained in this report. 13. Integrated Impact Assessment and Consultation Requirements 13.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 13.2. There was no requirement to undertake any consultation in terms of the information contained in this report. Heads of Service are consulted on each and every audit assignment. Jackie Taylor Executive Director (Finance and Corporate Resources) 13 February 2026 Link(s) to Council Values Accountable, Effective, Efficient and Transparent Previous References Risk and Scrutiny Committee - 9 December 2025 (Internal Audit Activity Report) List of Background Papers Figtree extracts of Action Plans Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Internal Audit Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 78
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Key audit performance indicators – October 2025 Appendix 1 Measures reported during financial year No Area Monthly Measure Target Actual Status 1 Operation Number of open vacancies 0 0 2 Operation Employees holding a qualification from a recognised CCAB body or Institute of Internal Auditors 75% 75% 3 Operation Number of audits completed that comply with the requirements of Global Internal Audit Standards 100% 100% 4 Operation Number of processes where we use continuous control monitoring 3 3 5 Operation Number of training days per employee 5 >5 6 Operation Plan completed to draft report stage by 30 April 100% 67%3 7 Performance Internal Audit recommendations delivered on time 80% 95% 8 Performance Utilisation of contingency time by 30 April 100% 90% 9 Performance Meetings with Heads of Service during each audit 2 2 10 Performance Planned assignments deferred to a future year to accommodate unplanned work 0 0 11 Performance Draft reports issued by target date 80% 100% 12 Performance Audit assignments completed within budget days 80% 100% 13 Performance Internal Audit recommendations followed up 80% 0% 3 Forecast performance at 30 April 2026 is 99% 79
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No Area Monthly Measure Target Actual Status 14 Performance Top risks covered in the audit plan on an annual basis 33% 50% 15 Performance Number of Council Services covered by Audit Plan on an annual basis 33% 62% 16 Strategic Number of audits where objectivity or independence is impaired 0 0 17 Strategic Audits that align to the Council's values 100% 100% 18 Strategic Internal Audit Manager attendance at meetings of the RASC 100% 100% 19 Strategic Number of formal complaints about the Service 0 0 20 Strategic Audit Plan presented to Risk and Audit Scrutiny Committee March 2025 February 2025 21 Strategic Annual Internal Audit Report presented to Risk and Audit Scrutiny Committee June 2025 June 2025 22 Strategic Audit Strategy presented to Risk and Audit Scrutiny Committee March 2026 December 2025 23 Strategic Meeting with members of the Risk and Audit Scrutiny Committee (in private and without senior management) 1 1 24 Strategic Meetings with five Executive Directors and Chief Executive 1 1 Measures to be reported at the end of the financial year No Area Monthly Measure Target Actual Status 25 Operation Number of key performance indicators achieved 100% March 2026 26 Performance Planned annual audit days delivered by 30 April 100% March 2026 27 Strategic Issue of Service questionnaires to support audit planning process and assess levels of satisfaction with the Service March 2026 March 2026 80
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Definition of Measures AREA DEFINITION Operation measures that assess day to day operational targets for the Service Performance measures the effectiveness of the Service in its delivery of core objectives Strategic measures as to how activity aligns to wider organisational objectives STATUS DEFINITION anticipate that target will not be met by 31 March 2026 anticipate that target will be met by 31 March 2026 but some slippage that requires corrective action anticipate that target will be met by 31 March 2026 81
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Assignments completed 15 November 2025 to 13 February 2026 Appendix 2 Number Assignment name Draft Issue Final Issue Audit Conclusion I411105 Informal Follow-up Close at Year End Provided quarterly advance prompts of actions falling due. Collated monthly responses for reporting. I612242 Continuous Controls Monitoring Close at Year End Completed programme of data downloads from main financial system during 2025/2026 to inform audit sampling and provided management reports. I615243 Fraud Reporting Close at Year End Collated statistics, reviewed and reported legislation, reported six monthly and annually to RASC. I730102 Procurement Working Group Close at Year End Attendance at and participation in internal working group. I731101 Information Governance Board Close at Year End Attendance at and participation in internal working group. I732098 Scottish Local Authorities Internal Audit Group (SLACIAG) Close at Year End Attendance at and participation in external working group. I732099 Scottish Local Authorities Investigators Group (SLAIG) Close at Year End Attendance at and participation in external working group. I732100 Computer Audit Sub-Group (CASG) Close at Year End Attendance at and participation in external working group. I737103 Risk Sponsors Group Close at Year End Attendance at and participation in internal working group. I342124 Financial Sustainability N/A N/A Amendment to the Audit Plan. Approved by RASC 9.12.25 I542028 New Housing System N/A N/A Amendment to the Audit Plan. Approved by RASC 9.12.25 I542029 New Social Work System N/A N/A Amendment to the Audit Plan. Approved by RASC 9.12.25 I261128 Fusion External Audit 30/01/2026 30/01/2026 Developed reports to extract financial data for External Audit. I342130 Waste Service Review 30/01/2026 30/01/2026 Received update of progress with delivering Service improvements. Further time now added to the 2026/2027 Internal Audit Plan to test progress. I350137 Three Lines Risk Analysis 18/11/2025 18/11/2025 Shared findings with Risk Sponsors Group. I672246 School Cash Controls 03/02/2026 04/02/2026 Reviewed cash controls. Four recommendations around reconciliations and sharing of learning points with wider school community. Assignment generated an action plan 82
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South Lanarkshire Council Annual Audit Plan 2025/26 Prepared for South Lanarkshire Council March 2026 6a 83
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South Lanarkshire Council Annual Audit Plan | 2 Contents Introduction 3 Audit scope and responsibilities 4 Audit of the annual accounts 6 Wider scope audit 13 Best Value audit 15 Reporting arrangements, timetable and audit fee 17 Other matters 20 Accessibility You can find out more and read this report using assistive technology on our website www.audit.scot/accessibility. 84
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Introduction | 3 Introduction Purpose of the Annual Audit Plan 1. The purpose of this Annual Audit Plan is to provide an overview of the planned scope and timing of the 2025/26 audit of South Lanarkshire Council’s annual accounts. It outlines the audit work planned to meet the audit requirements set out in auditing standards and the Code of Audit Practice, including supplementary guidance. Appointed auditor and independence 2. John Boyd, of Audit Scotland, has been appointed by the Accounts Commission as external auditor of South Lanarkshire Council, hereafter referred to as ‘the council’, for the period from 2022/23 until 2026/27. The 2025/26 financial year is therefore the fourth of the five-year audit appointment. 3. John Boyd and the audit team are independent of the council in accordance with relevant ethical requirements, including the Financial Reporting Council’s Ethical Standard. This standard imposes stringent rules to ensure the independence and objectivity of auditors. Audit Scotland has robust arrangements in place to ensure compliance with ethical standards. The arrangements are overseen by the Executive Director of Innovation and Quality, who serves as Audit Scotland’s Ethics Partner. 4. The Ethical Standard requires auditors to communicate any relationships that may affect the independence and objectivity of the audit team. There are no such relationships pertaining to the audit of the council to communicate. 85
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Audit scope and responsibilities | 4 Audit scope and responsibilities Scope of the audit 5. The audit is performed in accordance with the Code of Audit Practice, including supplementary guidance, International Standards on Auditing (UK), and relevant legislation. These set out the requirements for the scope of the audit which includes: • An audit of the financial statements and an opinion on whether they give a true and fair view and are free from material misstatement. • An opinion on statutory other information published with the financial statements in the annual accounts, namely the Management Commentary and the Annual Governance Statement. • An opinion on the audited part of the Remuneration Report. • Conclusions on the council's arrangements in relation to the wider scope areas: Financial Management, Financial Sustainability, Vision, Leadership, and Governance, and Use of Resources to Improve Outcomes. • Reporting on the council’s arrangements for securing Best Value. • Providing assurance on the Housing Benefit Subsidy Claim, Non-Domestic Rates Return, and the Whole of Government Accounts return. • A review of the council’s arrangements for preparing and publishing statutory performance information. • Provision of an Annual Audit Report setting out significant matters identified from the audit of the annual accounts and the wider scope areas specified in the Code of Audit Practice. Responsibilities 6. The Code of Audit Practice sets out the respective responsibilities of the council and the auditor. A summary of the key responsibilities is outlined below. 86
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Audit scope and responsibilities | 5 Auditor’s responsibilities 7. The responsibilities of auditors in the public sector are established in the Local Government (Scotland) Act 1973. These include providing an independent opinion on the financial statements and other information reported within the annual accounts, and concluding on the council’s arrangements in place for the wider scope areas and to secure Best Value. The council’s responsibilities 8. The council has primary responsibility for ensuring proper financial stewardship of public funds, compliance with relevant legislation and establishing effective arrangements for governance, propriety and regularity that enables it to successfully deliver its objectives. The features of proper financial stewardship include: • Establishing arrangements to ensure the proper conduct of its affairs. • Preparation of annual accounts, comprising financial statements that give a true and fair view and other information. • Establishing arrangements for the prevention and detection of fraud, error and irregularities, and bribery and corruption. • Implementing arrangements to ensure its financial position is soundly based. • Making arrangements to secure Best Value. • Establishing an internal audit function. 87
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Audit of the annual accounts | 6 Audit of the annual accounts Introduction 9. The audit of the annual accounts is driven by materiality and the risks of material misstatement in the financial statements, with greater attention being given to the significant risks of material misstatement. This chapter outlines materiality, the significant risks of material misstatement that have been identified, and the impact these have on the planned audit procedures. Materiality 10. The concept of materiality is applied by auditors in planning and performing an audit, and in evaluating the effect of any uncorrected misstatements on the financial statements or other information reported in the annual accounts. 11. Broadly, the concept of materiality is to determine whether matters identified during the audit could reasonably be expected to influence the decisions of users of the financial statements. Auditors set a monetary threshold when determining materiality, although some issues may be considered material by their nature. Therefore, materiality is ultimately a matter of the auditor’s professional judgement. 12. The materiality levels determined for the audit of the council and its group are outlined in Exhibit 1. Exhibit 1 2025/26 Materiality levels for the council and its group Materiality The council Group Materiality – based on an assessment of the needs of users of the financial statements and the nature of the council operations, the benchmark used to determine materiality is gross expenditure (less Integration Joint Board contributions) based on the audited 2024/25 financial statements. Materiality has been set at 2 per cent of the benchmark. £27.145 million £27.581 million 88
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Audit of the annual accounts | 7 Materiality The council Group Performance materiality – this acts as a trigger point. If the aggregate of misstatements identified during the audit exceeds performance materiality, this could indicate that further audit procedures are required. Using professional judgement, performance materiality has been set at 75 per cent of planning materiality. £20.358 million £20.685 million Reporting threshold – all misstatements greater than the reporting threshold will be reported. This represents 5 per cent of planning materiality. £1.357 million £1.379 million Source: Audit Scotland Significant risks of material misstatement to the financial statements 13. The risk assessment process draws on the audit team’s cumulative knowledge of the council, including the nature of its operations and its significant transaction streams, the system of internal control, governance arrangements and processes, and developments that could impact on its financial reporting. 14. Based on the risk assessment process, significant risks of material misstatement to the financial statements have been identified and these are summarised in Exhibit 2, page 8. These are the risks which have the greatest impact on the planned audit approach, and the planned audit procedures in response to the risks are outlined in Exhibit 2. 15. The risk assessment process is ongoing, including outstanding discussions around fraud. The assessment of risks set out in this Annual Audit Plan and Exhibit 2 may change as more information and evidence is obtained over the course of the audit. Where such changes occur, these will be reflected in our audit planning and reported to the council and those charged with governance, where relevant. 89
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Audit of the annual accounts | 8 Exhibit 2 Significant risks of material misstatement to the financial statements Risk of material misstatement Planned audit response Fraud caused by management override of controls Management is in a unique position to perpetrate fraud because of management’s ability to override controls that otherwise appear to be operating effectively. The audit team will: • Evaluate the design and implementation of controls over journal entry processing. • Make inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries. • Test journals entries, focusing on those that are assessed as higher risk of fraud. • Evaluate significant transactions outside the normal course of business. • Assess the adequacy of controls in place for identifying and disclosing related party relationships and transactions in the financial statements. • Assess changes to the methods and underlying assumptions used to prepare accounting estimates and assess these for evidence of management bias. 90
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Audit of the annual accounts | 9 Risk of material misstatement Planned audit response Valuation of property, plant and equipment The council held £4,113 million of property, plant, and equipment (PPE) as at 31 March 2025, of which £3,697 million was land and building assets, including £1,668 million of council dwellings. The council is required to value land and building assets at existing use value where an active market exists for these assets (with a social housing adjustment factor for council dwellings). Where there is no active market, these assets are valued on a depreciated cost replacement (DRC) basis. There is a significant degree of subjectivity in these valuations which are based on specialist assumptions, and changes in the assumptions can result in material changes to valuations. For 2025/26, CIPFA/LASAAC has updated the Code of Practice to reflect HM Treasury’s reforms to public sector asset valuations. Under the revised approach, local authorities will now move to quinquennial (five-yearly) valuations, usually through a rolling programme of valuations, with annual indexation applied in the intervening years to ensure asset values remain materially accurate. There is an increased risk of material misstatement due to greater reliance on management judgement and estimation, particularly in selecting appropriate indices and determining when additional valuations are necessary in between formal valuations. For assets subject to valuation in year, the audit team will: • Evaluate the design and implementation of controls over the valuation process. • Review the information provided to the valuer and assess this for completeness and accuracy. • Evaluate the competence, capabilities, and objectivity of the valuer. • Obtain an understanding of management’s involvement in the valuation process to assess if appropriate oversight has occurred. • Review the appropriateness of the key data and assumptions used in the 2025/26 valuation process, and challenge these where required. For assets where indexation is applied in year, the audit team will: • Review the indices applied by management to assets not subject to valuation in 2025/26 and assess if these are reasonable and have been correctly applied. • Review the information provided to the valuer and assess this for completeness and accuracy. • Evaluate the competence, capabilities, and objectivity of the valuer. • Review the appropriateness of the key data and assumptions used in the 2025/26 indexation process, and challenge these where required. 91
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Audit of the annual accounts | 10 Risk of material misstatement Planned audit response Estimation of the pension balance The council recognised a pension balance of £97.992 million at 31 March 2025. The council is a member of the Local Government Pension Scheme (LGPS), which is a defined benefit pension scheme. LGPS is subject to formal valuation every three years, and this sets out each member’s share of the scheme’s overall pension balance and contributions for the next three years. The last formal valuation was carried out at 31 March 2023. An estimation of the council’s share of the overall pension balance is required in each intervening year between formal valuations, and these are carried out by Hymans Robertson. There is a significant degree of subjectivity in the estimation of the funded and unfunded pension balances as the estimation is based on specialist assumptions, and changes in the assumptions can result in material changes to the estimation. The audit team will: • Evaluate the design and implementation of controls over the pension balance estimation process. • Review the information provided to the actuary and assess this for completeness and accuracy. • Evaluate the competence, capabilities, and objectivity of the actuary. • Obtain an understanding of the management’s involvement in the estimation process to assess if appropriate oversight has occurred. • Review the appropriateness of the key data and assumptions used by management for the estimation of the pension balance, and challenge these where required. • Audit Scotland uses PwC as an auditor’s expert to inform the planned audit procedures outlined above. Therefore, the audit team will also review the information provided by PwC and reflect this in the planned audit procedures where required. Source: Audit Scotland Key audit matters 16. The Code of Audit Practice requires public sector auditors to communicate key audit matters. Key audit matters are those matters, that in the auditor’s professional judgement, are of most significance to the audit of the financial statements and require most attention when performing the audit. 17. In determining key audit matters, auditors consider: • Areas of higher or significant risk of material misstatement. • Areas where significant judgement is required, including accounting estimates that are subject to a high degree of estimation uncertainty. • Significant events or transactions that occurred during the year. 92
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Audit of the annual accounts | 11 18. The matters determined to be key audit matters will be communicated in the Annual Audit Report. Exhibit 2 outlines the significant risks of material misstatement to the financial statements that have been identified, including those that have greatest impact on the planned audit procedures and require most attention when performing the audit. Group audit 19. The council is part of a group and prepares group financial statements. The group is made up of nine components, including the council which is the parent of the group. Risk assessment procedures have been performed on the group audit to identify if there are any risks of material misstatement to the group financial statements, or any components where audit procedures are required for the purposes of the group audit. The outcome of the risk assessment procedures on the group audit are outlined in Exhibit 3. Exhibit 3 Outcome of risk assessment procedures on the group audit Group component Accounting treatment Risk of material misstatement Audit procedures required Auditor South Lanarkshire Council Consolidated on a line-by-line basis Yes – Exhibit 2 Yes – full scope audit Audit Scotland Common Good Fund Consolidated on a line-by-line basis No Yes – analytical procedures at group level Audit Scotland Routes to Work South Consolidated on a line-by-line basis No Yes – analytical procedures at group level AAB Audit & Accountancy Limited South Lanarkshire Leisure and Culture Limited Consolidated on a line-by-line basis No Yes – audit procedures on decommissioning provision Henderson Loggie Clyde Valley Learning and Development Joint Committee Accounted for on equity basis No Yes – analytical procedures at group level Audit Scotland Lanarkshire Valuation Joint Board Accounted for on equity basis No Yes – analytical procedures at group level Audit Scotland 93
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Audit of the annual accounts | 12 Group component Accounting treatment Risk of material misstatement Audit procedures required Auditor Strathclyde Concessionary Travel Scheme Joint Committee Accounted for on equity basis No Yes – analytical procedures at group level Audit Scotland Strathclyde Partnership for Transport Accounted for on equity basis No, but is material to group financial statements Yes – risk assessment questionnaire and analytical procedures Audit Scotland South Lanarkshire Integration Joint Board Accounted for on equity basis No Yes – analytical procedures at group level Audit Scotland Source: Audit Scotland 20. Where audit procedures are required on a component’s financial statements, and the component auditor is different to the council’s appointed auditor, group audit instructions will be issued to the component auditor outlining expectations and requirements in performing these audit procedures. 94
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Wider scope audit | 13 Wider scope audit Introduction 21. Reflecting the fact that public money is involved, the Code of Audit Practice requires that public audit is planned and undertaken from a wider perspective than in the private sector. The wider scope audit set out by the Code of Audit Practice broadens the audit of the annual accounts to include consideration of additional aspects or risks in four wider scope areas, which are summarised below: • Financial Management – this means having sound budgetary processes. Factors that can impact on the council being able to secure sound financial management include the strength of the financial management culture, accountability, and arrangements to prevent and detect fraud, error and other irregularities, bribery and corruption. • Financial Sustainability – this means looking forward over the medium and longer term in planning the services to be delivered and how they will be delivered effectively. This is assessed by considering the council’s medium to longer-term planning for service delivery. • Vision, Leadership and Governance – this means having a clear vision and strategy, with set priorities within the vision and strategy. This is assessed by considering the clarity of plans in place to deliver the vision and strategy and the effectiveness of the governance arrangements to support delivery. • Use of Resources to Improve Outcomes – this means using resources to meet stated outcomes and improvement objectives through effective planning and working with partners and communities. This is assessed by considering the council’s arrangements for ensuing resources are deployed to improve strategic outcomes, meet the needs of service users, and deliver continuous improvement. 22. A conclusion on the effectiveness and appropriateness of arrangements the council has in place for each of the wider scope areas will be reported in the Annual Audit Report. 95
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Wider scope audit | 14 Significant wider scope risks 23. The risk assessment process has identified significant risks in the wider scope areas as outlined in Exhibit 4, and this includes the planned audit procedures in response to the risks. Exhibit 4 Significant wider scope Description of risk Planned audit response Financial sustainability South Lanarkshire Council continues to operate in an increasingly complex and challenging environment, aiming to provide the best possible service within the resources available. Although a surplus position of £3.579 million before final transfers to reserves is projected for 2025/26, the council has identified a savings requirement of £29.2 million over the next three years to 2028/29. A long-term programme of transformational reviews is ongoing to contribute towards addressing the financial pressures. However, there is a risk that the council plans do not deliver the required savings to address the projected shortfall. The audit team will: • Review the council’s annual budget setting arrangements. • Review and assess budget monitoring arrangements. • Review the council’s medium to longer term financial planning including how the council aligns savings plans and transformation activity with strategic priorities. • On-going review of the council’s financial position and delivery of planned savings. Source: Audit Scotland 96
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Best Value audit | 15 Best Value audit Introduction 24. Under the Code of Audit Practice, the audit of Best Value in councils is fully integrated within the annual audit. As part of the annual audit, auditors are required to take a risk-based approach to assessing and reporting on whether the council has made proper arrangements for securing Best Value, including follow up of findings previously reported in relation to Best Value. 25. The Accounts Commission also reports nationally on thematic aspects of councils’ approaches to, and performance in, meeting their Best Value duties. As part of the annual audit, thematic reviews, as directed by the Accounts Commission, are conducted on the council. The thematic review for 2025/26 is on the subject of asset management and involves considering how the council is managing its assets to ensure high quality services whilst also responding to the challenges around financial sustainability and climate change. Conclusions and judgements on the thematic review will be reported in a separate Management Report and summarised in the Annual Audit Report, where required. 26. At least once over the five-year appointment, the Controller of Audit will report to the Accounts Commission on the council’s performance in meeting its Best Value duties. The fourth year of this programme runs from October 2026 to August 2027. The council is included in the fourth year of the programme, with a planned reporting date of December 2026. 27. Auditors have a statutory duty to satisfy themselves that councils have made proper arrangements for preparing and publishing statutory performance information in accordance with the Statutory Performance Information Direction 2024 (the Direction) issued by the Accounts Commission. The outcome of this will be reported in the Annual Audit Report, which will include: • A conclusion on the council’s arrangements for preparing and publishing the statutory performance information. • Any instances where the arrangements or reporting are not in accordance with the Direction. • Areas where the arrangements require to be improved. 97
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Best Value audit | 16 28. Auditors may carry out specific work covering the seven Best Value characteristics set out in the Scottish Public Finance Manual and are required to carry out specific work on the Fairness and Equality characteristic at least once during the audit appointment. This work will be completed as part of the 2025/26 audit. 29. In addition, the Accounts Commission requires auditors to include a summary of Local Government Benchmarking Framework (LGBF) indicators that the council has reported in the Annual Audit Report. Significant Best Value risks 30. No significant Best Value risks were identified from the risk assessment process. Audit work on the wider scope areas will help support conclusions around Best Value. Shared risk assessment and joint scrutiny 31. The Shared Risk Assessment process is the vehicle for scrutiny bodies to share intelligence and agree scrutiny risks at councils. Appointed auditors have a role in co-ordinating scrutiny through Local Area Networks (LAN). As part of our audit work, we engage with contacts in other scrutiny bodies through LAN meetings to understand information on performed and planned scrutiny to facilitate engagement with the council and inform risk assessment discussions. 32. The LAN meeting for the council is planned in the coming weeks, and we will incorporate the outcome of the meeting into our ongoing risk assessment procedures. The outcome of the meeting will be communicated to the council’s Chief Executive. 98
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Reporting arrangements, timetable and audit fee | 17 Reporting arrangements, timetable and audit fee Audit outputs 33. The outputs from the 2025/26 audit include: • This Annual Audit Plan. • An Independent Auditor’s Report to the council and the Accounts Commission setting out opinions on the annual accounts. • An Annual Audit Report to the council and the Accounts Commission setting out significant matters identified from the audit of the annual accounts, conclusions from the wider scope and Best Value audit, recommendations, where required, and any good practice identified. 34. The matters to be reported in the outputs will be discussed with the council for factual accuracy before they are issued. All outputs from the audit will be published on Audit Scotland’s website, apart from the Independent Auditor’s Report, which is included in the audited annual accounts. 35. Target dates for the audit outputs are set by the Accounts Commission. In setting the target dates for the audit outputs, consideration is given to the statutory date for approving the annual accounts, which is 30 September 2026 for local government bodies. 36. The Independent Auditor’s Report and Annual Audit Report are planned to be issued by the target date of 30 September 2026. Audit timetable 37. Achieving the timetable for production of the annual accounts, supported by complete and accurate working papers, is critical to delivery of the audit to agreed target dates. Exhibit 5 includes a timetable for the audit, which has been agreed with management. Agreed target dates will be kept under review as the audit progresses, and any changes required, and their potential impact, will be discussed with the council and reported to those charged with governance, where required. 99
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Reporting arrangements, timetable and audit fee | 18 Exhibit 5 2025/26 audit timetable Audit activity The council target date Audit team target date Relevant committee date Issue of Annual Audit Plan 27 February 2026 10 March 2026 Annual Accounts: Consideration of unaudited annual accounts by those charged with governance 23 June 2026 23 June 2026 Submission of unaudited annual accounts and all working papers to audit team 30 June 2026 Latest date for audit clearance meeting 4 September 2026 4 September 2026 Issue of draft Letter of Representation, proposed Independent Auditor’s Report, and proposed Annual Audit Report 11 September 2026 29 September 2026 Agreement of audited and unsigned annual accounts 11 September 2026 11 September 2026 Approval by those charged with governance and signing of audited annual accounts 29 September 2026 29 September 2026 Signing of Independent Auditor’s Report and issue of Annual Audit Report 29 September 2026 Issue of Best Value Thematic Report 14 August 2026 25 August 2026 Certification of Non-Domestic Rates Return 18 December 2026 Certification of Housing Benefit Subsidy Claim 18 December 2026 Certification of Whole of Government Accounts 18 December 2026 Source: Audit Scotland 100
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Reporting arrangements, timetable and audit fee | 19 Audit fee 38. The council’s audit fee is determined in line with Audit Scotland’s fee setting arrangements. The proposed audit fee for the 2025/26 audit is set out in Exhibit . 39. In setting the audit fee, it is assumed that the council has effective governance arrangements in place and the complete annual accounts will be provided for audit in line with the agreed timetable. The audit fee assumes there will be no significant changes to the planned scope of the audit. Where the audit cannot proceed as planned, for example, due to incomplete or inadequate working papers, the audit fee may need to be increased. Exhibit 6 Audit fee Fee component1 Fee (£) External auditor remuneration 402,410 Pooled costs, such as travel and subsistence costs 13,880 Contribution to the performance audit programme 116,300 Adjustment for average audit price increase 128,340 Total 2025/26 fee 660,930 Source: Audit Scotland 1 Information on the components that make up the total fee can be found in Audit Scotland’s Audit management and quality guidance. 101
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Other matters | 20 Other matters Internal audit 40. The council is responsible for establishing an internal audit function as part of an effective system of internal control. As part of the audit, the audit team will obtain an understanding of internal audit, including its nature, responsibilities, and activities. 41. While internal audit and external audit have differing roles and responsibilities, external auditors may seek to rely on the work of internal audit where it is considered appropriate. A review of internal audit’s 2025/26 audit plan was carried out to identify if there were any areas where the audit team could rely on its work. The audit team concluded it will not rely on internal audit’s work. However, the audit team will review internal audit's reports and assess if there is any impact on the audit. Audit quality 42. Audit Scotland is committed to the consistent delivery of high-quality audit. Audit quality requires ongoing attention and improvement to keep pace with external and internal changes. Details of the arrangements in place for the delivery of high-quality audits is available from the Audit Scotland website. 43. The International Standards on Quality Management (ISQM) applicable to Audit Scotland for 2025/26 audits are: • ISQM (UK) 1, which deals with an audit organisation’s responsibilities to design, implement, and operate a system of quality management (SoQM) for audits. Audit Scotland’s SoQM consists of a variety of components, such as governance arrangements and culture to support audit quality, compliance with ethical requirements, ensuring Audit Scotland is dedicated to high- quality audit through engagement performance and resourcing arrangements, and ensuring there are robust quality monitoring arrangements in place. Audit Scotland carries out an annual evaluation of its SoQM and has concluded it complies with this standard. • ISQM (UK) 2, which sets out arrangements for conducting engagement quality reviews, which are performed by senior management not involved in an audit, to review significant judgements and conclusions reached by the audit team, and the appropriateness of proposed audit opinions on high-risk audits. 102
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Other matters | 21 44. To monitor quality at an individual audit level, Audit Scotland carries out internal quality reviews on a sample of audits. Additionally, the Institute of Chartered Accountants of England and Wales (ICAEW) carries out independent quality reviews on a sample of audits. 45. Actions to address deficiencies identified by internal and external quality reviews are included in a rolling Quality Improvement Action Plan, which is used to support continuous improvement. Progress with implementing planned actions is monitors on a regular basis by Audit Scotland’s Quality and Ethics Committee. 46. Audit Scotland may periodically seek the views of the council on the quality of audit services provided. The audit team would also welcome feedback at any time. 103
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South Lanarkshire Council Annual Audit Plan 2025/26 Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 www.audit.scot AS.5.0 104
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South Lanarkshire Council Charitable Trusts (SC025089) Annual Audit Plan 2025/26 Prepared for South Lanarkshire Council Charitable Trusts (SC025089) March 2026 6b 105
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South Lanarkshire Council Charitable Trusts (SC025089) Annual Audit Plan | 2 Contents Introduction 3 Audit scope and responsibilities 4 Audit of the annual accounts 6 Wider scope and Best Value 9 Reporting arrangements, timetable and audit fee 10 Other matters 13 Accessibility You can find out more and read this report using assistive technology on our website www.audit.scot/accessibility. 106
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Introduction | 3 Introduction Purpose of the Annual Audit Plan 1. The purpose of this Annual Audit Plan is to provide an overview of the planned scope and timing of the 2025/26 audit of South Lanarkshire Council Charitable Trusts’ annual accounts. It outlines the audit work planned to meet the audit requirements set out in auditing standards and the Code of Audit Practice, including supplementary guidance. Appointed auditor and independence 2. Mark Ferris, of Audit Scotland, has been appointed by the Accounts Commission as external auditor of South Lanarkshire Council Charitable Trusts (SC025089), hereafter referred to as ‘the Charitable Trusts’, for the period from 2022/23 until 2026/27. The 2025/26 financial year is therefore the fourth of the five-year audit appointment. 3. Mark Ferris and the audit team are independent of the Charitable Trusts in accordance with relevant ethical requirements, including the Financial Reporting Council’s Ethical Standard. This standard imposes stringent rules to ensure the independence and objectivity of auditors. Audit Scotland has robust arrangements in place to ensure compliance with ethical standards. The arrangements are overseen by the Executive Director of Innovation and Quality, who serves as Audit Scotland’s Ethics Partner. 4. The Ethical Standard requires auditors to communicate any relationships that may affect the independence and objectivity of the audit team. There are no such relationships pertaining to the audit of the Charitable Trusts to communicate. 107
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Audit scope and responsibilities | 4 Audit scope and responsibilities Scope of the audit 5. The audit is performed in accordance with the Code of Audit Practice, including supplementary guidance, International Standards on Auditing (UK), and relevant legislation. These set out the requirements for the scope of the audit which includes: • An audit of the financial statements and an opinion on whether they give a true and fair view and are free from material misstatement. • An opinion on statutory other information published with the financial statements in the annual accounts, namely the Trustees' Report. • Concluding on the financial sustainability of the Charitable Trusts. • Reporting on the Charitable Trusts’ arrangements for securing Best Value. • Provision of an Annual Audit Report setting out significant matters identified from the audit of the annual accounts and the wider scope areas specified in the Code of Audit Practice. Responsibilities 6. The Code of Audit Practice sets out the respective responsibilities of the Charitable Trusts and the auditor. A summary of the key responsibilities is outlined below. Auditor’s responsibilities 7. The responsibilities of auditors in the public sector are established in the Local Government (Scotland) Act 1973. These include providing an independent opinion on the financial statements and other information reported within the annual accounts, and concluding on the Charitable Trusts’ arrangements in place for the wider scope areas. The Charitable Trusts’ responsibilities 8. The Charitable Trusts have primary responsibility for ensuring proper financial stewardship of public funds, compliance with relevant legislation and establishing effective arrangements for governance, propriety and regularity that enables it to successfully deliver its objectives. The features of proper financial stewardship include: 108
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Audit scope and responsibilities | 5 • Establishing arrangements to ensure the proper conduct of its affairs. • Preparation of annual accounts, comprising financial statements that give a true and fair view and other information. • Establishing arrangements for the prevention and detection of fraud, error and irregularities, and bribery and corruption. • Implementing arrangements to ensure its financial position is soundly based. • Making arrangements to secure Best Value. • Establishing an internal audit function. 109
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Audit of the annual accounts | 6 Audit of the annual accounts Introduction 9. The audit of the annual accounts is driven by materiality and the risks of material misstatement in the financial statements, with greater attention being given to the significant risks of material misstatement. This chapter outlines materiality, the significant risks of material misstatement that have been identified, and the impact these have on the planned audit procedures. Materiality 10. The concept of materiality is applied by auditors in planning and performing an audit, and in evaluating the effect of any uncorrected misstatements on the financial statements or other information reported in the annual accounts. 11. Broadly, the concept of materiality is to determine whether matters identified during the audit could reasonably be expected to influence the decisions of users of the financial statements. Auditors set a monetary threshold when determining materiality, although some issues may be considered material by their nature. Therefore, materiality is ultimately a matter of the auditor’s professional judgement. 12. The materiality levels determined for the audit of the Charitable Trusts are outlined in Exhibit 1. Exhibit 1 2025/26 Materiality levels for the Charitable Trusts Materiality Charitable Trusts Materiality – based on an assessment of the needs of users of the financial statements and the nature of the Charitable Trusts’ operations, the benchmark used to determine materiality is net assets based on the audited 2024/25 financial statements. Materiality has been set at 2 per cent of the benchmark. £24,234 Performance materiality – this acts as a trigger point. If the aggregate of misstatements identified during the audit exceeds performance materiality, this could indicate that further audit procedures are required. Using professional judgement, performance materiality has been set at 75 per cent of planning materiality. £18,175 110
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Audit of the annual accounts | 7 Materiality Charitable Trusts Reporting threshold – all misstatements greater than the reporting threshold will be reported. £1,211 Source: Audit Scotland Significant risks of material misstatement to the financial statements 13. The risk assessment process draws on the audit team’s cumulative knowledge of the Charitable Trusts, including the nature of its operations and its significant transaction streams, the system of internal control, governance arrangements and processes, and developments that could impact on its financial reporting. 14. Based on the risk assessment process, significant risks of material misstatement to the financial statements have been identified and these are summarised in Exhibit 2, page 8. These are the risks which have the greatest impact on the planned audit approach, and the planned audit procedures in response to the risks are outlined in Exhibit 2. 15. The risk assessment process is an iterative and dynamic process. The assessment of risks set out in this Annual Audit Plan and Exhibit 2 may change as more information and evidence is obtained over the course of the audit. Where such changes occur, these will be reported to the Charitable Trusts and those charged with governance, where relevant. 111
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Audit of the annual accounts | 8 Exhibit 2 Significant risks of material misstatement to the financial statements Risk of material misstatement Planned audit response Fraud caused by management override of controls Management is in a unique position to perpetrate fraud because of management’s ability to override controls that otherwise appear to be operating effectively. The audit team will: • Evaluate the design and implementation of controls over journal entry processing. • Make inquiries of individuals involved in the financial reporting process about inappropriate or unusual activity relating to the processing of journal entries. • Test journals entries, focusing on those that are assessed as higher risk. • Evaluate significant transactions outside the normal course of business. • Assess the adequacy of controls in place for identifying and disclosing related party relationships and transactions in the financial statements. Source: Audit Scotland Key audit matters 16. The Code of Audit Practice requires public sector auditors to communicate key audit matters. Key audit matters are those matters, that in the auditor’s professional judgement, are of most significance to the audit of the financial statements and require most attention when performing the audit. 17. In determining key audit matters, auditors consider: • Areas of higher or significant risk of material misstatement. • Areas where significant judgement is required, including accounting estimates that are subject to a high degree of estimation uncertainty. • Significant events or transactions that occurred during the year. 18. The matters determined to be key audit matters will be communicated in the Annual Audit Report. Exhibit 2 outlines the significant risks of material misstatement to the financial statements that have been identified, including those that have greatest impact on the planned audit procedures and require most attention when performing the audit. 112
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Wider scope and Best Value | 9 Wider scope and Best Value Introduction 19. Reflecting the fact that public money is involved, the Code of Audit Practice requires that public audit is planned and undertaken from a wider perspective than in the private sector. The wider scope audit set out by the Code of Audit Practice broadens the audit of the annual accounts to include consideration of additional aspects or risks in four wider scope areas. 20. Due to the nature and size of the Charitable Trusts and its limited financial activity, it is considered a less complex body for the wider scope audit. Therefore, the wider scope audit does not consider all four wider scope areas and is instead limited to concluding on the financial sustainability of the Charitable Trusts. 21. Financial sustainability means looking forward over the medium and longer term in planning the services to be delivered and how they will be delivered effectively. This is assessed by considering the Charitable Trusts’ medium to longer-term planning for service delivery. A conclusion on the financial sustainability of the Charitable Trusts with be reported in the Annual Audit Report. Best Value 22. Under the Code of Audit Practice, the duty on auditors to consider the arrangements an audited body has in place to secure Best Value applies to audited bodies that fall within section 106 of the Local Government (Scotland) Act 1973, which the Charitable Trusts does. 23. Consideration of the arrangements the Charitable Trusts has in place to secure Best Value will be carried out alongside the wider scope audit, and a conclusion on the arrangements the Charitable Trusts has in place will be reported in the Annual Audit Report. Significant wider scope and Best Value risks 24. No significant risks in the wider scope areas or Best Value were identified from the risk assessment process. 113
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Reporting arrangements, timetable and audit fee | 10 Reporting arrangements, timetable and audit fee Audit outputs 25. The outputs from the 2025/26 audit include: • This Annual Audit Plan. • An Independent Auditor’s Report to the Charitable Trusts and the Accounts Commission setting out opinions on the annual accounts. • An Annual Audit Report to the Charitable Trusts and the Accounts Commission setting out significant matters identified from the audit of the annual accounts, conclusions from the wider scope and Best Value audit, recommendations, where required, and any good practice identified. 26. The matters to be reported in the outputs will be discussed with the Charitable Trusts for factual accuracy before they are issued. All outputs from the audit will be published on Audit Scotland’s website, apart from the Independent Auditor’s Report, which is included in the audited annual accounts. 27. Target dates for the audit outputs are set by the Accounts Commission. In setting the target dates for the audit outputs, consideration is given to the statutory date for approving the annual accounts, which is 30 September 2026 for local government bodies. 28. The Independent Auditor’s Report and Annual Audit Report are planned to be issued by the target date of 30 September 2026. Audit timetable 29. Achieving the timetable for production of the annual accounts, supported by complete and accurate working papers, is critical to delivery of the audit to agreed target dates. Exhibit 3 includes a timetable for the audit, which has been agreed with management. Agreed target dates will be kept under review as the audit progresses, and any changes required, and their potential impact, will be discussed with the Charitable Trusts and reported to those charged with governance, where required. 114
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Reporting arrangements, timetable and audit fee | 11 Exhibit 3 2025/26 audit timetable Audit activity Charitable Trusts target date Audit team target date Relevant committee date Issue of Annual Audit Plan 27 February 2026 10 March 2026 Annual accounts: • Consideration of unaudited annual accounts by those charged with governance 23 June 2026 23 June 2026 • Submission of unaudited annual accounts and all working papers to audit team 30 June 2026 • Latest date for audit clearance meeting 4 September 2026 4 September 2026 • Issue of draft Letter of Representation, proposed Independent Auditor’s Report, and proposed Annual Audit Report 11 September 2026 29 September 2026 • Agreement of audited and unsigned annual accounts 11 September 2026 11 September 2026 • Approval by those charged with governance and signing of audited annual accounts 29 September 2026 29 September 2026 • Signing of Independent Auditor’s Report and issue of Annual Audit Report 29 September 2026 Source: Audit Scotland Audit fee 30. The Charitable Trusts’ audit fee is determined in line with Audit Scotland’s fee setting arrangements. The proposed audit fee for the 2025/26 audit is set out in Exhibit 4. 115
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Reporting arrangements, timetable and audit fee | 12 31. In setting the audit fee, it is assumed that the Charitable Trusts has effective governance arrangements in place and the complete annual accounts will be provided for audit in line with the agreed timetable. The audit fee assumes there will be no significant changes to the planned scope of the audit. Where the audit cannot proceed as planned, for example, due to incomplete or inadequate working papers, the audit fee may need to be increased. Exhibit 4 Audit fee Fee component1 Fee (£) External auditor remuneration 2,500 Total 2025/26 fee 2,500 Source: Audit Scotland 1 Information on the components that make up the total fee can be found in Audit Scotland’s Audit management and quality guidance. 116
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Other matters | 13 Other matters Internal audit 32. The Charitable Trusts is responsible for establishing an internal audit function as part of an effective system of internal control. As part of the audit, the audit team will obtain an understanding of internal audit, including its nature, responsibilities, and activities. 33. While internal audit and external audit have differing roles and responsibilities, external auditors may seek to rely on the work of internal audit where it is considered appropriate. A review of internal audit’s 2025/26 audit plan was carried out to identify if there were any areas where the audit team could rely on its work. The audit team concluded it will not rely on internal audit’s work. However, the audit team will review internal audit's reports and assess if there is any impact on the audit. Audit quality 34. Audit Scotland is committed to the consistent delivery of high-quality audit. Audit quality requires ongoing attention and improvement to keep pace with external and internal changes. Details of the arrangements in place for the delivery of high-quality audits is available from the Audit Scotland website. 35. The International Standards on Quality Management (ISQM) applicable to Audit Scotland for 2025/26 audits are: • ISQM (UK) 1, which deals with an audit organisation’s responsibilities to design, implement, and operate a system of quality management (SoQM) for audits. Audit Scotland’s SoQM consists of a variety of components, such as governance arrangements and culture to support audit quality, compliance with ethical requirements, ensuring Audit Scotland is dedicated to high- quality audit through engagement performance and resourcing arrangements, and ensuring there are robust quality monitoring arrangements in place. Audit Scotland carries out an annual evaluation of its SoQM and has concluded it complies with this standard. • ISQM (UK) 2, which sets out arrangements for conducting engagement quality reviews, which are performed by senior management not involved in an audit, to review significant judgements and conclusions reached by the audit team, and the appropriateness of proposed audit opinions on high-risk audits. 117
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Other matters | 14 36. To monitor quality at an individual audit level, Audit Scotland carries out internal quality reviews on a sample of audits. Additionally, the Institute of Chartered Accountants of England and Wales (ICAEW) carries out independent quality reviews on a sample of audits. 37. Actions to address deficiencies identified by internal and external quality reviews are included in a rolling Quality Improvement Action Plan, which is used to support continuous improvement. Progress with implementing planned actions is monitored on a regular basis by Audit Scotland’s Quality and Ethics Committee. 38. Audit Scotland may periodically seek the views of the Charitable Trusts on the quality of audit services provided. The audit team would also welcome feedback at any time. 118
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South Lanarkshire Council Charitable Trusts (SC025089) Annual Audit Plan 2025/26 Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 www.audit.scot AS.5.0 119
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 10 March 2026 Report by: Executive Director (Finance and Corporate Resources) Subject: Public Audit in Scotland: Interim Evaluation 1. Purpose of Report 1.1. The purpose of the report is to:- provide a summary of the information contained within Audit Scotland’s: Public Audit in Scotland interim evaluation report, published in December 2025 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation:- (1) that the key messages and recommendations set out in the Audit Scotland publication, Public audit in Scotland, be noted. 3. Background 3.1. The Auditor General for Scotland and the Accounts Commission for Scotland are responsible for securing the independent audit of the accounts and performance of public sector bodies in Scotland. 3.2. The Auditor General for Scotland is appointed by the Crown, on the recommendation of the Scottish Parliament. The independent post was created under the Scotland Act 1998 to help ensure that public money is spent properly, efficiently and effectively. The Auditor General for Scotland is responsible for the audits of Scottish Government and its agencies, NHS bodies, police and fire and further education colleges. 3.3. The Accounts Commission holds councils and other local government bodies in Scotland to account and helps them improve by reporting to the public on their performance. It operates impartially and independently of councils and of the Scottish Government. 3.4. Audit Scotland is Scotland’s national public sector audit agency and exists to provide the Auditor General for Scotland and the Commission with the services they need. 3.5. Public audit in Scotland 2023 to 2028 was published in 2023 (covering the period 2023 to 2028) as a shared statement of purpose between the Auditor General for Scotland, the Accounts Commission and Audit Scotland. It articulated both a vision and mission and intended outcomes for public audit services in the years through to 2028. 7 121
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3.6. 2025/2026 is the halfway point of Public Audit in Scotland’s 5-year lifespan and a mid-term evaluation, published in December 2025, looked at progress with achieving intended outcomes, and in driving delivery of the declared mission and vision. The review also considered how well performance is recorded and monitored and where there can be further improvement. The interim evaluation sets out recommendations for Audit Scotland to improve both its audit work and its evaluation approach. 4. Findings and Recommendations 4.1. The evaluation findings are summarised in a Key Messages page at the outset of the report, with the review then going on to set out a series of recommendations that will be taken forward between now and 2027, when a final evaluation report will be published. A brief overview of both the findings and recommendations are set out in paragraphs 4.2 to 4.5 below. 4.2. Finding: Public audit is having an impact, but pace of change is slow: though the majority of audit recommendations have been accepted (94%), implementation was noted as being slow, linked to complexity and the competing demands on public bodies. Despite broad acceptance, many of the recommendations were noted as not having had timebound targets. the evaluation recommends that auditors follow new guidance on timebound recommendations and to more consistently produce supplementary outputs across sectors and audit, better monitoring stakeholder engagement using the provided tools and guidance. 4.3. Finding: stakeholder relationships are effective, feedback is positive but fragmented: although engagement was viewed as collaborative and respectful and stakeholder feedback was positive, it was considered to be fragmented and there was a need for a more coordinated and comprehensive stakeholder feedback approach. the evaluation recommends improved training on relationship building and an improvement as to how stakeholder feedback is coordinated and collated to address gaps and provide a more coherent picture across all stakeholders. 4.4. Finding: Parliamentary engagement is strong and supports scrutiny: the review concluded that public audit played a crucial role in helping the Scottish Parliament perform scrutiny. despite this positive finding, the evaluation recommends a review of the approach to the tools, resources and guidance that supplement audit work, to ensure they complement the work of wider scrutiny partners, support improvement and add value. 4.5. Finding: audit work supports all four Public audit In Scotland outcomes, but is not balanced: despite half of the audit recommendations evaluated directly contributing to the four Public audit In Scotland outcomes, nearly three quarters of these focused on two outcomes and fewer focused on outcomes looking at collaboration, resource prioritisation and service improvement. the evaluation recommends a review of the balance of audit recommendations against the four outcomes, setting out more clearly what ‘good’ looks like for each outcome and analysing conclusions across all audit work to better understand their contribution to outcomes. 122
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5. Next Steps 5.1. The interim evaluation report states, in conclusion, that there has been “good progress against our shared outcomes for public audit. We have developed and tested our theory of change, systematically drawing on significant evidence, and we can be confident that our work can and is contributing to public audit outcomes. Despite the challenging context for public services in Scotland, we will continue to be ambitious in our efforts to support public sector reform”. 5.2. Reflecting the commitment to continuous improvement, the report then articulates the key messages and recommendations (see paragraphs 4.2. to 4.5) as a series of next steps within wider development areas. These are as follows:- to embed outcomes in planning: support colleagues to consider the contribution to the four Public audit In Scotland outcomes as part of audit planning to improve feedback: develop a more coordinated and comprehensive approach to obtaining, collating and reporting stakeholder feedback to update the audit model: consider the relationship between public audit outcomes and the next Code of Audit Practice to enhance evaluation: strengthen reflective practice and explore automation. 5.3. A final evaluation of progress will be conducted and reported in 2027. The key messages from this report will be reported to the Risk and Audit Scrutiny Committee once published. 6. Employee Implications 6.1. There are no direct employee implications for the Council. Finance Services and wider Council Services will continue to engage with Audit Scotland in their role as the Council’s External Auditors and respond, as required, to requests for stakeholder feedback. 7. Financial Implications 7.1. None 8. Climate Change, Sustainability and Environmental Implications 8.1. There are no implications for climate change, sustainability or the environment in terms of the information contained in this report. 9. Other Implications 9.1. There are no implications for sustainability in terms of the information contained in this report. 10. Integrated Impact Assessment and Consultation Requirements 10.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and therefore no impact assessment is required. 10.2. There is also no requirement to undertake any consultation in terms of the information contained in the report. 123
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Jackie Taylor Executive Director (Finance and Corporate Resources) 13 February 2026 Link(s) to Council Values/Priorities/Outcomes Accountable, effective, efficient and transparent Previous References None List of Background Papers Public audit in Scotland 2023-2028 Public audit in Scotland: Interim evaluation Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Yvonne Douglas, Internal Audit Manager Ext: 2618 (Tel: 01698 452618) E-mail: yvonne.douglas@southlanarkshire.gov.uk 124
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 10 March 2026 Report by: Executive Director (Finance and Corporate Resources) Subject: Audit Scotland – Financial Bulletin 2024/2025 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] provide a summary of the information contained within the Audit Scotland Financial Bulletin 2024/2025, published in January 2026 provide a summary of the information contained within The Scottish Budget 2026/2027: Supplement to the Financial bulletin 2024/2025, published in February 2026 provide a summary of the Checklist for Elected Members: Supplement to the Financial bulletin 2024/2025, published in January 2026 2. Recommendation(s) 2.1. The Risk and Audit Scrutiny Committee is asked to approve the following recommendation(s):- (1) that the key messages and recommendations of the Audit Scotland Financial Bulletin 2024/2025 (detailed in Sections 4 and 5), be noted; (2) that the commentary on the Council’s position as included in the Audit Scotland report (Section 6), be noted; (3) that the key points from The Scottish Budget 2026/2027: Supplement to the Financial bulletin 2024/2025 (Section 7), be noted; and (4) that the Checklist for Elected Members (Section 8 and Appendix 1), be noted. 3. Background 3.1. In January 2026, on behalf of the Accounts Commission, Audit Scotland published the Local government in Scotland: Financial bulletin 2024/2025. They also published 2 supplementary papers being The Scottish Budget 2026/2027 and the Checklist for Elected Members. 3.2. The Local government in Scotland: Financial bulletin 2024/2025 is divided into 2 parts:- Part 1: Council Funding and Financial Performance Part 2: Financial Position and Outlook 3.3. The key messages from each of the 2 parts are outlined in Sections 4 and 5 of this report. Section 6 notes commentary on the Council’s data included in the Audit Scotland report. The key points from The Scottish Budget 2026/2027 are outlined in Section 7 of this report. Finally, the checklist for elected members is outlined in Section 8. 8 125
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3.4. Audit Scotland have advised that, in addition to the supplementary paper on the Scottish Budget 2026/2027, in Spring 2026 they will publish a detailed briefing examining the 2026/2027 budgets set by councils, including analysis of anticipated budget gaps and the decisions made by councils when setting their budgets. This will be brought to the Committee following publication. 4. Part 1 – Council Funding and Financial Performance 4.1. A number of key messages are presented by Audit Scotland in their report in relation to 2024/2025 Council funding and financial performance. Comments in relation to the Council’s position on these are included in italics alongside the Audit Scotland key messages where appropriate:- Funding and Budgets a. Annual real terms increase in funding from the Scottish Government to all 32 councils in 2024/2025 was 1 per cent. It is not possible to provide the Council’s total revenue funding and income movement in real terms. The base grant position for 2024/2025 was a cash decrease of £3.6 million with a like for like decrease in grant of £0.250 million. b. Ring-fenced and directed funding amounted to £3.2 billion in 2024/2025 (24 per cent of the total revenue funding to councils). This is higher than the 21 per cent of funding that was directed in 2023/2024. The Council’s Specific Grant grants amounted to 1.7% of the overall Government Grant in 2024/2025, however, that did not take account of monies earmarked for specific policy intent. c. Councils identified £542 million of budget gaps at the start of 2024/2025 (£744 million in 2023/2024) and agreed plans to close them. d. As outlined within Local government budgets 2025/2026, at the start of the current financial year, Scotland’s 32 councils identified budget gaps totalling £647 million. In June 2024, the Council declared a Budget Gap of £77 million across the period 2025/2026 to 2027/2028. Financial Performance e. Analysis of 29 councils where 2023/2024 and 2024/2025 accounts were available shows that revenue funding and income increased by £0.3 billion in real terms (1.3 per cent). As noted previously, it is not possible to provide the Council’s total revenue funding and income movement in real terms. The base grant position for 2024/2025 was a cash decrease of £3.6 million and a like for like decrease in grant of £0.250 million. f. Twelve out of 29 councils reported overspends against their agreed General Fund revenue budgets. Collectively, councils reported a £19.4 million (0.1 per cent) overspend against General Fund revenue budgets totalling £16.1 billion. The Council presented a General Fund underspend at the end of 2024/2025. 126
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g. Twenty-eight out of 30 councils reported underspends against their agreed General Fund capital budgets in 2024/2025. h. Twenty-three out of 25 councils reported underspends against their agreed HRA capital budgets in 2024/2025. The Council presented an HRA underspend at the end of 2024/2025. 5. Part 2 – Financial Position and Outlook 5.1. A number of key messages are presented by Audit Scotland in their report in relation to financial position and outlook, namely:- a. The Councils’ net debt in 2024/2025 was £21.9 billion, a 13.5 per cent increase since 2023/2024. Councils’ long-term external debt includes £14.9 billion borrowed directly from the Public Works Loan Board. b. Given their financial challenges, councils must focus on service transformation and allocate adequate resources to ensure sustainability. 24 councils identified they hold committed/earmarked reserves for transformation work. Glasgow City, Orkney Islands, Shetland Islands, South Lanarkshire and West Dunbartonshire did not separately identify transformation funds within their reserves, but councils may have other funds to progress transformation. The total value held is around £269 million, which is around 12 per cent of the total General Fund committed balance and 1.5 per cent of the total net cost of services. The Council has a number of approved and ongoing capital projects that support of our transformational work and these include: a Leisure and Culture Transformation Programme with a budget of £13.000 million which is being spent across 2025/2026 to help modernise the leisure and culture estate, optimise use of assets and assist in the transition towards net zero; an Estates Transformation programme with an allocation of £24.000m which will improve community access and service delivery and transition towards net zero; a Transformational Residential Care allocation of £0.500m which is looking at how we deliver residential care moving forward; and a Net Zero Innovation Fund of £0.150m for Heat Network feasibility studies. In addition, as part of the in-year outturn exercise, approval was given from elected Members to earmark £1.000m of the current year budget to progress activity related to the Marmot findings, including any required staffing and implementation costs to pilot a new way to deliver targeted services to those in most need in our communities. All of these ongoing programmes of work are transformational and demonstrate the Council’s commitment to Transformation. We also are nearing completion of 3 significant systems related transformation projects (in relation to Housing, Social Care and Enterprise Resource Planning systems). In our 2024/2025 Best Value Thematic management report focussing on transformation, we detailed £2.680 million approved savings which will be delivered from a number of transformational reviews including consideration of management structures and changes in procurement. These demonstrate the Council’s continuing drive for efficiencies through transformation. 127
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To support the Best Value Thematic Review, the Council provided 2 examples of successful transformation projects it has delivered to date; the Analogue to Digital: Shared Cloud-Based Alarm Receiving Centre (ARC) Solution project which ensured the continued delivery of community alarms services ahead of the UK-wide analogue switch off in October 2025, and South Lanarkshire Futures, a transformational initiative led by South Lanarkshire Council, in partnership with Barnardo’s and local services to support young people transitioning from care to independent living. Audit Scotland noted that both of these examples highlighted effective partnership working and community engagement. c. There was a 7 per cent annual decrease in usable reserves between 2023/2024 and 2024/2025 (£4.1 billion in 2023/2024 to £3.8 billion in 2024/2025) The Council has a reserves policy which was presented to Finance and Corporate Resources Committee on 10 September 2025. This details the approach to managing the Council’s reserves taking cognisance of strategic, operational and financial risks facing the authority at a local level. d. Sixteen out of 30 councils made unplanned use of reserves in 2024/2025 (around £78 million) This compares to 12 out of 30 councils in 2023/2024. All Transfers to Reserves are approved by Elected Members. These monies are set aside for contract commitments or to carry forward grant received for a specific purpose. e. Eighty-six per cent of General Fund reserves are committed for specific purposes, impacting the level of contingency funding available to manage emerging pressures. The Council’s Unearmarked General Fund, the Reserve held for unforeseen events, and which has no specific commitments, remains at £13.043 million. 6. South Lanarkshire Council – Financial Overview 2024/2025 6.1. The Audit Scotland report contains a number of tables that set out information for all councils, however, there are 3 tables of data which show the performance of individual councils. Commentary on the Council’s position in each of these tables is provided below. 6.2. The bridging actions councils identified within their 2024/2025 budgets as a proportion of net cost of services ranged between 1% and 8% with the Council at the lower end at just over 2%. These 8 bridging actions relate to increase to council tax, increase to income, agreed savings recurring, agreed savings non-recurring, unidentified savings, use of reserves, financial flexibilities and other. Bridging actions making up just over 2% of the net cost of services, comprised of increase to income, agreed savings recurring, use of reserves and other. Recurring savings, using reserves and other, made up the majority of how councils intended to meet their identified budget gaps. 6.3. The percentage of revenue savings targets achieved in 2024/2025, split by recurring and non-recurring savings (some councils relied heavily on non- recurring, one-off measures to make in-year savings in 2024/2025) shows the Council has achieved 96% of their recurring savings for 2024/2025 with the remainder managed as part of the outturn underspend. 128
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6.4. Scotland’s 32 councils had outstanding PWLB loans of £14.9 billion at the end of 2024/2025. Loans of over £12.8 billion nationally, around 86 per cent, were taken out on a maturity basis, meaning the amount borrowed will need repaid at the end of each loan. The Council had around £1,000 million in outstanding PWLB debt on a maturity basis at the end of 2024/2025. All Council borrowing is approved by Committee with the revenue consequences identified for Members’ information. The revenue impact of borrowing for capital expenditure has been built into the long-term revenue budget strategy. 7. The Scottish Budget 2026/2027: Supplement to the Financial Bulletin 2024/2025 7.1. This supplement to Local government in Scotland: Financial bulletin 2024/2025 sets out an analysis of the recently published 2026/2027 Scottish Budget and the draft financial settlement for local government. Both are currently subject to parliamentary scrutiny as part of the budget process. The primary sources of information for this supplement are Scottish budget documents and relevant local government finance settlements published alongside these. 7.2. A number of key messages are presented by Audit Scotland in this supplement. Comments in relation to the Council’s position on these are included in italics alongside the Audit Scotland key messages where appropriate:- a. The Scottish Government plans to increase funding to councils in 2026/2027. The settlement outlines £15.7 billion of funding and, on that basis, funding is expected to increase annually in real terms by two 2% between 2025/2026 and 2026/2027. It is not possible to provide the Council’s total revenue funding and income movement in real terms. The base grant position for 2026/2027 is a cash increase of £52.4 million with a like for like increase in grant of £12.9 million. b. Total revenue funding of around £15 billion is a 3% real-terms increase. Capital allocations, however, are to decrease in both cash and real terms between 2025/2026 and 2026/2027, with 2026/2027 capital funding of £681.4 million representing a 14 per cent annual real-terms reduction from initial 2025/2026 funding. Combined, this equates to a two 2% overall funding increase. The Council has been advised of General Capital Grant funding of £20.951 million for 2026/2027. This is less than in previous years and relates to capital funding which can be attributed to known cessation or reduction of previous funding streams such as Play Parks and Nature Restoration. c. The Scottish Government plans to reduce funding to councils over the next 3 years. d. Significant elements of funding remain directed to support national priorities. Significant items baselined have included: £522 million for early learning and childcare expansion (2024/2025); £125 million to support the living wage for social care workers (2025/2026); and £244 million for teachers’ pay (2026/2027). Specific Revenue Grants for Gaelic (£4.5 million), Pupil Equity Funding (£130 million) and Criminal Justice Social Work (£86.5 million) remain ring-fenced. The Council’s Specific Grant grants amounts to 1.6% of the overall Government Grant in 2026/2027, however, that does not take into account of monies earmarked for specific policy intent. 129
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e. Progress has been made in delivering upon the agreed commitments under the fiscal framework between national and local government, including baselining of specific grants, exploration of greater revenue-raising powers (targeted council tax revaluation of homes worth over £1 million, ahead of introducing two new high-value bands from 1 April 2028 and the Visitor Levy (Amendment) (Scotland) Bill currently going through parliament) and multi-year settlements. 8. Checklist for Elected Members: Supplement to the Financial Bulletin 2024/2025 8.1. Audit Scotland note the importance of elected members understanding the financial pressures facing the Council and how they impact on service delivery and on future priorities. The checklist at Appendix 1 captures several questions for elected members to consider when assessing the Council’s financial sustainability. 8.2. The questions posed are designed to support elected members in scrutinising and understanding how well the Council is working, exploring how well the Council collaborates with other councils, communities and wider partners to change the way we deliver services within a very challenging financial context. The questionnaire is a self-assessment tool for elected members to assist them in their role. Officers have added responses to these questions for Members’ assistance. 9. Employee Implications 9.1. None. 10. Financial Implications 10.1. The Audit Scotland Report raises a number of financial areas for consideration by councils, however, there are no direct financial implications as a result of the content of this report. 11. Climate Change, Sustainability and Environmental Implications 11.1. There are no implications for climate change, sustainability or the environment in terms of the information contained in this report. 12. Other Implications 12.1. None. 13. Integrated Impact Assessment and Consultation Requirements 13.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and therefore no impact assessment is required. 13.2. There is also no requirement to undertake any consultation in terms of the information contained in the report. Jackie Taylor Executive Director (Finance and Corporate Resources) 19 February 2026 130
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Link(s) to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References None List of Background Papers Local Government in Scotland – Financial bulletin 2024/2025. Audit Scotland, January 2026. Checklist for Elected Members: Supplement to the Financial bulletin 2024/2025. Audit Scotland, January 2026. The Scottish Budget 2026/2027: Supplement to the Financial bulletin 2024/2025. Audit Scotland, February 2026. Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Jackie Taylor, Executive Director of Finance and Corporate Resources Ext: 5637 (Tel: 01698 455637) E-mail : jackie.taylor@southlanarkshire.gov.uk 131
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Appendix 1 Checklist for elected members Questions to consider What do I know? Do I need to ask any further questions? Savings and transformation plans Are savings reported comprehensively, including comparison to agreed targets and clarity on whether they are recurring or non-recurring? Savings are presented to Members are part of the Budget Setting process, and a defined process in place to allow members to ask questions prior to budget setting . This discussion covers whether the saving is recurring or non-recurring. The Management Commentary in the Accounts includes reference to the level of savings achieved in year. The most recent savings package considered by Members can be found here. How well does the council collaborate with partners (local, regional and across Scotland) and communities to change the way services are delivered in response to financial challenges? The Council is participating in the SOLACE / Improvement Service work on Transforming Public Services in order to respond to financial challenges. This is included in the reports to the Performance and Review Scrutiny Forum. The November 2025 Revenue Budget Strategy paper can be found here. The most recent Transformational Reviews update report can be found here. Am I assured the council is clear about the financial challenges it faces, with suitable transformation activities needed to Members are presented with a series of Budget Strategy papers in advance of each new financial year. These papers detail the 132
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Questions to consider What do I know? Do I need to ask any further questions? address financial pressures identified and under way? Budget Gap for the medium term. The Performance and Review Scrutiny Forum receives regular reports on the impact of Transformational Reviews and the financial savings that can be achieved. Are projects designed to deliver on transformation achieving their aims regarding performance, quality and cost? Papers submitted to the Performance and Review Scrutiny Forum demonstrate the impact of the Transformational Reviews, any savings and any spend to save requirements. Is income from fees and charges clearly reported with explanations on the impacts any increases will have on local citizens? How does fees and charges compare with those of other councils? Savings resulting from increases in charges are presented to Members are part of the Budget Setting process. This covers the impact of the increase on each charge. Charging increases are included in the most recent savings package considered by members which can be found here. Financial planning and budget: Is the impact of capital underspends, future borrowing, and use of financial flexibilities on council indebtedness and future revenue budgets clearly reported? The Council reports through regular monitoring the spend position on Capital, and has reported as part of budget strategy reports the ability to utilise flexibilities in accounting for loan charges. Recurring savings and use of one-off underspends from the Loan Charges budget are included in the Revenue Budget Strategy. The November 2025 Revenue Budget Strategy paper can be found here. 133
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Questions to consider What do I know? Do I need to ask any further questions? Does my council understand the reasons for any capital underspends and are we taking appropriate action to prevent this? Any underspends in capital projects are presented to Members in the regular capital monitoring reports. Explanations are provided as well as the impact of the underspend as required. The most recent Capital Monitoring report considered by members can be found here. Are there services that are regularly accumulating overspends/underspends against budgets? How are these explained and what action needs to be taken to address underlying issues or review baseline budgets? A forecast against annual budgets across Services is reported to Members in the regular revenue monitoring reports. Explanations are provided as well as actions required to address moving forward where appropriate. The most recent Revenue Monitoring report considered by members can be found here. Use of reserves Do reserve policies explicitly set out the nature and timing of committed usable reserves, as well as the planned uncommitted balance? The Council’s Reserves Strategy was reported to Finance and Corporate Resources on 10 September 2025. All provided details of all Reserves and noted that they are all committed, except the Unearmarked / Uncommitted General Fund Balance of £13.043 million. The Reserves Strategy can be found here. How have reserves been used in recent years, e.g. for bridging funding gaps or transforming services? Reserves have been used in a managed way within the Council’s Revenue Budget Strategy to bridge Budget Gaps. What are the actions necessary to stay within our The review of reserves is a key part of understanding 134
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Questions to consider What do I know? Do I need to ask any further questions? reserve policy in future years? the Council’s level of financial resilience in light of the financial risks and challenges it faces. The Budget Strategy is the way in which the Council can manage a number of these key risks which directly impact on the money available to deliver Council outcomes. We will continue to monitor and report on the reserves as appropriate. The Reserves Strategy can be found here. Financial reporting Are financial monitoring reports to elected members focused on financial sustainability, with relevant indicators and clear public reporting? The Council’s Financial Resilience and Sustainability was reported to the Risk and Audit Scrutiny Committee on 30 September 2025. The paper can be found here. 135
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Questions to consider What do I know? Do I need to ask any further questions? How is my council using external indicators (e.g., LGBF, CIPFA) on financial sustainability and how does performance compare with similar councils? A common set of financial sustainability measures that are comparable across all Scottish local authorities, support robust discussions around financial decision- making, on the robustness of budgets. To see how we compare against other councils, links to the data are available in the ‘Benchmarking’ paragraph on the Improvement and how we compare page on our website. This report demonstrates the Council’s financial resilience by explaining its detailed financial planning, its level of reserves and its key financial strengths in terms of its balance sheet position. Any risks identified through horizon scanning are mitigated where appropriate through the Budget Strategy, a key part of the Council’s financial resilience framework. 136
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Questions to consider What do I know? Do I need to ask any further questions? Does the management commentary of annual accounts provide a clear, fair and easily understandable view of the council’s finances? The Management Commentary includes a simple summary of the Council’s financial position at the end of the financial year, and also includes reference to the longer term financial strategy. Infographics are used to aid understanding where possible. The Council’s Annual Report and Accounts can be found on our website at the following link Plans and policies - South Lanarkshire Council. Is it clear how my council’s expenditure is making a positive contribution to improving outcomes for communities? The Council’s revenue and Capital budgets align with the Council’s vision and priorities as part of the Council Plan. This includes communities and environment, education and learning, health and wellbeing, children and young people, housing and land and our economy. The Connect – Council Plan can be found on our website at the following link Connect Council Plan 2022-2027 (ODT) Plans and policies - South Lanarkshire Council. Level of council debt What are the implications of current and future borrowing requirements for existing and forthcoming revenue budgets? The Council does not undertake borrowing without Members’ approval. Members are advised of the impact of borrowing on the Revenue Budget, before any decision ia taken. 137
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Questions to consider What do I know? Do I need to ask any further questions? What share of the council’s revenue budget is taken up with interest payments and debt repayment? The Prudential Indicators, Treasury Management Strategy and Annual Investment Strategy 2026/2027 report to Members includes affordability indicators which shows the extent of which the Council’s net revenue budget is used for servicing debt. The Treasury Management paper can be found here. To what extent are movements in interest rates affecting debt repayments? Expected movements in interest rates are taken from forecasts provided by the Council’s treasury adviser, and are reflected in the Treasury Management Strategy and the Revenue Budget Strategy. The November 2025 Revenue Budget Strategy paper can be found here. The Prudential Indicators, Treasury Management Strategy and Annual Investment Strategy 2026/2027 report can be found here. How is my council preparing for any PFI/PPP contracts that are due to expire? What impact will this have on the council’s budget? The Schools PPP contract is due to expire in 2039/2040. This will be taken into account in the Council’s Revenue Budget Strategy in these later years. 138
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 10 March 2026 Report by: Executive Director (Community and Enterprise Resources) Subject: Accounts Commission Report: Spotlight on Culture and Leisure Services 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] outline the findings from the Accounts Commission report – Spotlight on Culture and Leisure Services 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation:- [recs] (1) that the Accounts Commission report – Spotlight on culture and leisure services (Appendix 1), and the key messages and expectations therein, be noted. [1recs] 3. Background 3.1. In October 2025, the Accounts Commission published a report on local government performance in relation to the provision of culture and leisure services. This report is part of a series of outputs produced by the Accounts Commission that, taken together, provide an independent overview of the local government sector. It follows their annual briefing on local government budgets, looking at the decisions councils took when setting their annual budgets. 3.2. The ‘Spotlight on culture and leisure services’ report is specifically focused on how councils are delivering culture and leisure services, including the use of culture and leisure trusts, and considers performance in this service area over time. 4. Commission Expectations 4.1. Using the Scottish Local Government Finance Statistics (LGFS) and information submitted by councils and auditors when preparing the Local government in Scotland: Financial Bulletin 2023/2024 and Local government budgets 2025/2026 briefing, the Accounts Commission has analysed spending on culture and leisure services and has outlined a number of commission expectations which it states will ‘strengthen [councils’] understanding of the possible longer-term effects of the decisions they are taking now to address financial pressures’ (page 5 of the Accounts Commission report). 4.2. In the following section of this report, the Council and South Lanarkshire Leisure and Culture (SLLC) have assessed how the current delivery of culture and leisure services in South Lanarkshire aligns with these commission expectations: 9 139
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5. South Lanarkshire Council and SLLC context 5.1. Commission Expectation 1: Ensure that public consultations and effective Equality Impact Assessments (EIAs), that appropriately consider longer-term outcomes, are undertaken when considering proposed changes to eligibility criteria for accessing services, and new or existing service charges 5.1.1. The Accounts Commission report states: ‘Public bodies must complete an EIA when proposing changes to the delivery of both new and existing services. Not adequately considering the equality impacts of such a decision, at an early stage, risks the possibility of the Council exacerbating inequalities, damaging outcomes or facing a judicial review. The quality of EIAs in assessing the potential impact from changes to culture and leisure services varies (para 32). 5.1.2. Paragraph 34 of the Accounts Commission report refers to an example of how South Lanarkshire Council consulted on a change to leisure and culture services in 2024/2025. Following a period of community and stakeholder consultation on the 2024/2025 budget proposals, the Council reduced a funding cut to SLLC by £0.75 million and created a £1 million Community Fightback Fund (to help keep facilities open) and a £150,000 Future Libraries Fund (to support facilities while alternative service models were explored). 5.1.3. As well as the above example cited in the report, other ways in which the Council and SLLC consult with the public on service charges and service changes more generally include:- changes to service charges:- the SLLC Board retains full autonomy over pricing as part of its financial business planning. For the 2026/2027 price increases on leisure and culture charges, SLLC completed impact assessments before presenting the proposals to the SLLC Boardith respect to SLLC’s concessionary pricing schemes, the Council retains the final decision on any changes. The reason for this is that these prices are in place to deliver on the Council’s social and community objectives. This includes prices such as Leisure for All, Activage, under 16’s clubs and Gold Card, as well as community-based lets in halls. These prices are agreed through the Council’s budget setting process each year which is informed by the budget consultation and impact assessment procedures. changes to service provision:- the Council carried out a wide-ranging consultation on its leisure and culture services between 24 November 2023 and 15 February 2024. Over 3 consultation phases, 14,500 responses were received. Outputs relevant to this report and the Accounts Commission expectations include the following: across the consultation, respondents were generally supportive of the value for money of our current service provision and of increasing prices to help secure future provision. as part of the above consultation, the Council asked for residents’ views on each of the facilities considered for withdrawal, including libraries. Equalities and inclusion questions were included in all 3 surveys. The outcome of this consultation helped inform the decision-making process to ensure the proposals represented the least adversely impactful way forward. 140
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going forward, the Council is in the process of developing a 10-year Estates Strategy which will support SLLC to deliver services that are accessible and affordable. An engagement plan and consultation process is in place for the Estates Strategy, with a high-level public consultation exercise launched and the outcomes presented to the Executive Committee on 25 June 2025. At the implementation stage, consultation will include direct communications with people who actively use properties, and will take the form of online surveys and community events. An Integrated Impact Assessment will be carried out as part of the development work to inform the decision-making process. 5.2. Commission Expectation 2: Ensure council services are supported by clear, balanced and transparent local performance reporting and monitoring that can respond to, and capture the impact of, service transformation and wider reform 5.2.1. The Council and SLLC are developing a performance framework which will underpin the ‘Commissioning Plan for Services Delivered by SLLC 2025 to 2027’. This performance framework will monitor how our ask of SLLC is impacting on the people and communities of South Lanarkshire. Information will be gathered across 3 levels to inform, support and influence future decision making:- the South Lanarkshire Context - this will include a suite of external indicators that collectively provide the South Lanarkshire context around health and wellbeing. improving Outcomes - this will include a series of indicators and case study information that will allow SLLC to demonstrate how well they are responding to the ask within the Commissioning Plan. SLLC Operational Performance - the Council will continue to annually monitor the outcomes from the Culture and Leisure Services indicators contained within the Local Government Benchmarking Framework (LGBF). The results from the LGBF are presented annually to the Performance and Review Scrutiny Forum, in line with other Council service areas, and uploaded onto the performance pages on Council’s website. 5.3. Commission Expectation 3: Continue to proactively engage with the Improvement Service and other partners to expand the range of culture and leisure service indicators beyond satisfaction, attendance and cost metrics, better reflecting the important role these services play in prevention and in support of health and wellbeing outcomes 5.3.1. In addition to the development of the above performance framework (5.2.1), the Council and SLLC will continue to engage with the Improvement Service on the development of new LGBF indicators. This engagement takes place via the Council’s Research and Improvement Manager (Corporate Improvement Unit), who is a member of the Improvement Service Steering Group. The introduction of new culture and leisure LGBF indicators is discussed at these steering group meetings. 5.3.2. Aside from this, discussions will continue through Improvement Service learning events on culture and leisure services, which are attended by council officers. 6. Financial Position 6.1. A key message within the Accounts Commission report is that ‘despite councils now spending more on delivering services, spending on culture and leisure services, such as libraries and sports facilities, reduced by 3% in real terms between 2018/2019 and 2023/2024’ (page 4 of the report). It should be noted, however, that the relative increase in investment in other services such as Social Work Services and Education Services is potentially a result of government funding for specific initiatives such as the Living Wage, Early Years and teachers’ pay. 141
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6.2. The report also notes that ‘the contribution of fees and charges to the funding of culture and leisure services [in Scotland] has been increasing but still represents a relatively small proportion of total spending’ (Exhibit 3, page 15). The report notes that approximately 12.5% of culture and leisure services income comes from fees and charges, with the remaining 87.5% from ‘other funding’. In the case of SLLC, 62% of funding comes from fees, charges or reserves, with the remaining 38% derived from SLC funding. Further analysis would be required to ensure accurate comparisons. 6.3. Nevertheless, over recent years, SLLC’s income has reduced due to a range of external factors, and it is recognised that longer-term sustainability for SLLC and service delivery is needed. This is why a more sustainable business model has been developed that will move the Council and SLLC away from year-by-year financial planning cycles to a new rolling 3-year financial plan linked to 3-year management fee modelling. 6.4. The Council is also overseeing growing capital investment within the Council’s leisure and culture facilities: the new build of Larkhall Leisure Centre over the next 2 years will be a major project, as will be the implementation of the Council’s £13m Leisure and Culture Transformation Fund. This work, together with the above Estates Review (5.1.3), will help modernise and optimise the leisure and culture assets. Throughout these service changes, the Council will continue to ensure that public consultations and effective Equality Impact Assessments are undertaken, thereby giving consideration to the longer-term outcomes. 7. Employee Implications 7.1. This report has no employee implications. 8. Financial Implications 8.1. This report has no financial implications. 9. Climate Change, Sustainability and Environmental Implications 9.1. This report has no climate change, sustainability and environmental implications. 10. Other Implications 10.1. One of the Council’s Top Risks included within its Council Risk Register is as follows: The Budget Gap that the Council faces across the medium term continues to be the biggest risk faced by the Council. The Budget Gap is the result of the cumulative real terms reductions in Government funding, as well as the ongoing impact of increased demand, increased cost of services due to inflation, and increased staff costs resulting from pay awards. The potential of reduced fees/income being received by the Council would further add to budget pressures across Services. 142
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10.2. A further risk within the Council Risk Register is as follows: The Council fails to comply with its statutory duties by not conducting sufficiently robust impact assessments where the same are required, including in respect of budget/service redesign proposals, leading to potential legal and financial challenges, which could result in failure to deliver those proposals. 11. Integrated Impact Assessment and Consultation Requirements 11.1. This report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no integrated impact assessment is required. 11.2. There was no requirement to undertake any consultation in terms of the information contained in this report. Kevin Carr Executive Director (Community and Enterprise Resources) 2 February 2026 Link(s) to Council Values/Priorities/Outcomes Focused on people and their needs Working with and respecting others Accountable, effective, efficient and transparent Fair, open and sustainable We will work to put people first and reduce inequality We will work to progress and improve We will work towards a sustainable future in sustainable places People live the healthiest lives possible Caring, connected, sustainable communities Previous References None List of Background Papers Executive Committee report on Commissioning plan for Services Delivered by South Lanarkshire Leisure and Culture (SLLC), 25 June 2025 Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Name: Michelle Wilkie Designation: Performance and Planning Development Manager E-mail: michelle.wilkie@southlanarkshire.gov.uk 143
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Local government performance Spotlight on culture and leisure services Prepared by Audit Scotland October 2025 9 145
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2 Contents Key facts 3 Key messages 4 Commission expectations 5 Introduction and methodology 6 Culture and leisure services 8 Endnotes 23 Accessibility You can find out more and read this report using assistive technology on our website www.audit.scot/accessibility. Local government performance: Spotlight on culture and leisure services 146
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3Key factsKey facts Key facts 13 Councils with a single trust delivering leisure and culture services 10 Councils with either a leisure trust, a culture trust or both £675m Council net revenue spending on culture and leisure services in 2023/24, a three per cent decrease in real terms since 2018/19 £118m The amount of money councils raised by charging for culture and leisure services in 2023/24, a 27 per cent increase in real terms since 2018/19 £9.9m Culture and leisure savings approved by councils for 2025/26 44m The number of visits to libraries in Scotland in 2023/24, the same as in 2018/19 43m The number of visits to sports facilities in 2023/24, a 21 per cent decrease since 2018/19 15m The number of visits to museums in 2023/24, a 25 per cent increase since 2018/19 147
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4Key messages Key messages Key messages Key messages 1 Despite councils now spending more on delivering services, spending on culture and leisure services, such as libraries and sports facilities, reduced by three per cent in real terms between 2018/19 and 2023/24. The level of services offered, and how they are provided, is a decision for individual councils, with most choosing to provide some services using an arm’s‑length external organisation (ALEO). 2 There is an increasing reliance on charging people to use these services, and a mixed picture of community consultation and the use of Equality Impact Assessments when considering service changes, such as potentially closing facilities or increasing charges. 3 The provision of culture and leisure services is important to help improve longer‑term physical and mental wellbeing, linked to activity across a range of other services, and reducing them risks deepening inequalities. 4 There is a general lack of comprehensive and comparable data available to assess the performance of culture and leisure services. Limitations within the Local Government Benchmarking Framework data, beyond attendance and satisfaction indicators, currently makes it difficult to monitor how effectively culture and leisure services are contributing to improving outcomes. 148
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5Commission expectations Commission expectations Commission expectations Culture and leisure services play an important role in supporting positive outcomes, supporting health and wellbeing, and in prevention. Reducing these services can have a disproportionate impact on vulnerable members of society. As a Commission, we place reliance on the Local Government Benchmarking Framework (LGBF) to inform our view of how councils are performing across key services. We welcome the work the sector is currently undertaking to strengthen indicators and improve its usefulness. It is already apparent that financial pressures and rising demand have begun to impact the performance of frontline services. Without a better understanding of how individual services interact to support longer-term outcomes, it becomes increasingly difficult to make informed budgetary decisions that support the sustainability of council services. In order to make informed decisions about the longer-term costs that may be associated with reducing accessible culture and leisure services, councils must work collaboratively with the wider public sector, as well as partners in the private and third sectors. They must strengthen their understanding of the possible longer-term effects of the decisions they are taking now to address financial pressures. Councils should: • ensure that public consultations and effective Equality Impact Assessments, that appropriately consider longer‑term outcomes, are undertaken when considering proposed changes to eligibility criteria for accessing services, and new or existing service charges (paragraphs 32 and 34). • continue to proactively engage with the Improvement Service and other partners to expand the range of culture and leisure service indicators beyond satisfaction, attendance and cost metrics, better reflecting the important role these services play in prevention and in support of health and wellbeing outcomes (paragraph 43). • ensure council services are supported by clear, balanced and transparent local performance reporting and monitoring that can respond to, and capture the impact of, service transformation and wider reform (paragraph 49).149
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6Introduction and methodology Introduction and methodology Introduction 1. This report is part of a series of outputs produced by the Accounts Commission that, taken together, provide an independent overview of the local government sector. It follows our annual briefing on local government budgets, looking at the decisions councils took when setting their annual budgets; and will be followed by our annual financial bulletin, looking at the financial performance and position of councils. 2. The report focuses on a particular council service area, this year providing a spotlight on culture and leisure services. It looks at how councils are delivering these services, including the use of culture and leisure trusts, and considers performance in this important service area over time. Privately operated culture and leisure services are not considered within the report. Methodology 3. To analyse spending we are making use of the Scottish Local Government Finance Statistics (LGFS) that are published annually by the Scottish Government. Previously, councils used pre‑defined service categories to record their spending, but council accounts are now prepared in‑line with their own corporate structures, so some services may be shown together in the accounts. By using the standardised LGFS information to analyse spending across specific service areas, we hope to provide a consistent national trend of spending on specific services, and to aid comparability across councils. The service level expenditure within LGFS also more closely and consistently aligns to the service categories defined within the LGBF. The funding councils receive from external sources, such as sportscotland or Creative Scotland, are reflected within overall council spending on culture and leisure services. 4. Within this report we also make use of information previously submitted to us by councils and auditors when preparing the Local government in Scotland: Financial Bulletin 2023/24 and Local government budgets 2025/26 briefing. Alongside Provisional Outturn and Budget Estimates (also submitted to the Scottish Government by councils) this allows us to consider the decisions taken by councils, and the impact on specific services, when setting their 2024/25 and 2025/26 budgets. Auditors are currently carrying out audits of councils’ 2024/25 accounts. 150
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Introduction and methodology 7 5. When looking at financial trends, we convert some figures to real terms. The most recent LGFS relate to 2023/24 and we have adjusted financial information from past years into 2023/24 prices to take account of inflation so that trend information is comparable. To do this we use gross domestic product (GDP) deflators, which are published quarterly by HM Treasury. GDP deflators are the standard approach adopted by both the UK Government and Scottish Government when analysing public expenditure. 151
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8Culture and leisure services Culture and leisure services Background 6. The Accounts Commission regularly reports on the financial challenges facing councils across Scotland. Our Financial Bulletin 2023/24 and Local government budgets 2025/26 briefing outlined the challenging financial climate that all councils are operating within. In recent years, councils have been consistently reliant on implementing measures to balance their budgets, including increasing council tax. Asking the public to pay more for local services raises a greater expectation on the performance of councils in delivering local services. At the same time, councils have been identifying savings, closing public facilities, and raising the fees and charges for accessing some services such as culture and leisure facilities. Culture and leisure services play an important role in prevention 7. Councils deliver a range of culture and leisure services. While offerings such as museums, galleries, and other cultural programmes often reflect the unique traditions of local communities, services like libraries and leisure facilities are commonly provided across council areas. As part of our first service spotlight report, we have decided to look at these services given the important contribution they provide in supporting longer‑term outcomes, promoting wellbeing and preventing health issues. 8. High‑quality culture and leisure services align with the Scottish Government’s and Convention of Scottish Local Authorities’ (COSLA’s) Scotland’s Population Health Framework 2025-2035, which prioritises taking preventative action to improve health outcomes. Culture and leisure services help improve physical and mental wellbeing through providing accessible health and learning opportunities, easing the pressures on public bodies by reducing overall demand and associated costs. Reducing culture and leisure services can disproportionately impact certain groups within communities, particularly people with a protected characteristic. 9. It is also important to recognise the interdependencies that exist across council services, and how they support outcomes. Reductions in one service area may lead to a decline in outcomes which initially appear linked directly to other performance indicators. For example, reductions in library services could be seen as related primarily to educational attainment outcomes, but may also disproportionately impact older people and outcomes that are closely aligned to adult social Financial Bulletin 2023/24 highlighted that councils are becoming increasingly reliant on identifying savings which becomes progressively more difficult year‑on‑year. Local government budgets 2025/26 briefing identified a range of actions being taken by councils to address budget gaps. These included raising council tax rates, identifying savings, drawing on reserves and increasing or introducing charges for accessing some services. 152
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Culture and leisure services 9 care indicators. This can make it difficult to directly attribute changes in performance to individual budget and spending decisions. Councils must ensure adequate leisure, culture and library services, but the level of provision is decided locally 10. Councils have statutory responsibilities to deliver some services, such as education, social care and housing, to a defined standard. They also receive specified funding to support national outcomes and priorities. But the exact proportion of spending on individual services will vary across councils. This reflects local priorities, commitments and decisions, as well as wider factors such as rurality and the demographics of local populations. 11. There is less clarity over how councils must meet their statutory requirement to ensure there is an adequate provision of leisure, cultural and library services. Several reports explain the impact of this lack of clarity, including variation in the level of services provided across Scotland and the differing ways these services are delivered.1 12. Whereas some statutory services have been prioritised when councils set their budgets, others like culture and leisure have been expected to contribute proportionately more to delivery of the savings required. Our Local government budgets 2025/26 briefing explains how councils are implementing savings measures to ease their financial pressures, and we explore this further in paragraph 31. Spending on culture and leisure services has reduced, despite overall spending increasing 13. Overall, there has been an increase in councils’ day‑to‑day spending on services over the last six years. Councils’ net revenue expenditure increased in real terms by £1.7 billion (13 per cent) between 2018/19 and 2023/24. 14. In 2023/24, councils spent £14.8 billion across key council services with spending on education and social work representing around 78 per cent of this total. Councils’ spending on education increased by 13 per cent in real terms between 2018/19 and 2023/24, with spending on social work services increasing by 17 per cent over the same period. Much of this increased spending, however, can be attributed to increasing staff costs, with these accounting for around 70 per cent of total expenditure, and recent high inflation contributing to other costs increasing (Exhibit 1, page 10). 15. Spending on culture and leisure services, referred to as culture and related services within the LGFS, represents a relatively small proportion of overall council spending, approximately five per cent in 2023/24. The Improvement Service (IS) and Society of Local Authority Chief Executives (Solace) are leading on work to clarify the statutory services that councils must provide and the discretionary services that many also deliver. This work is being carried out as part of the wider transformation programme they are leading, and aims to inform a future operating model for councils as they respond to wider financial challenges. This work is due to conclude in late 2025. Net revenue expenditure refers to the amount of money councils spend on delivering services from their funding or reserves, adjusted for any spending supported via other means, such as income from fees and charges. It excludes any capital spending. 153
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Culture and leisure services 10 Exhibit 1. Councils’ net revenue expenditure, in real terms, has been increasing Most of councils’ spending is on providing education and social care services, in line with statutory responsibilities. 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Other Services Social Work Services Education Services 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Culture and Related Services 699 657 675 671 689 675 Roads and Transport 460 434 529 458 455 452 Environmental Services 824 812 842 815 798 811 Building, Planning and Development 251 226 254 284 261 263 Central Services 421 931 449 411 360 691 Non-HRA Housing 383 307 316 329 341 339 Trading Services ‑42 ‑42 ‑33 ‑33 ‑26 ‑41 Social Work Services 3,943 4,106 4,104 4,324 4,543 4,604 Education Services 6,146 6,328 6,046 6,645 6,852 6,960 Total General Fund (£ millions) 13,085 13,757 13,541 13,904 14,273 14,755 Note: Net revenue expenditure reflects day‑to‑day spending funded by general funding or reserves. Real‑terms analysis, with financial information adjusted to 2023/24 prices. Source: Local Government Finance Statistics 2018/19 to 2023/24, Scottish Government 154
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Culture and leisure services 11 Net revenue spending on culture and leisure services, however, reduced by £24 million in real terms between 2018/19 and 2023/24 (three per cent), despite overall expenditure on council services increasing. 16. Some service areas within culture and leisure services have faced more significant funding cuts than others: • Total council spending on library services reduced by around six per cent in real terms from 2018/19 to 2023/24, whereas spending on museums and galleries increased by nine per cent over the same period. Satisfaction levels for libraries and for museums and galleries have declined over the long term. • From 2018/19 to 2023/24, council spending on sport and recreation reduced by three per cent. Spending on sports facilities increased by six per cent over this period, but, at the same time, less was spent by councils on parks and open spaces and countryside management. Satisfaction levels with leisure services have declined over the long term and attendances are still below pre‑pandemic levels (paragraphs 38 and 39). Many councils use an arm’s-length external organisation (ALEO) to deliver services, which can impact how they monitor performance 17. How councils choose to deliver culture and leisure services is decided locally, and different councils adopt different models of delivery, reflecting local circumstances: • Twenty‑three councils use ALEOs to help deliver either their culture services or leisure services. Thirteen councils have a single trust helping to deliver both and ten councils have either a leisure trust, a culture trust or operate both separately. The council pays a management fee and transfers the management of facilities, and the employment of staff, over to the ALEO. • Other culture and leisure services are delivered directly by councils. This ‘in‑house’ delivery model provides councils with direct control and management in delivering local services.2 18. As outlined in the Accounts Commission’s Councils’ use of arm’s-length external organisations report published in 2018, there were a range of financial benefits that influenced the decisions made when ALEOs were established (Exhibit 2, page 12). All ALEOs are different, with a range of factors impacting oversight arrangements including how they were initially set up and the council’s own governance and committee structures. An arm’s-length external organisation (ALEO) is a term used to describe an organisation that a council has set up to deliver certain services. They are separate from the council but are still subject to its control and influence. Culture and leisure ALEOs were set up as charitable trusts to allow them to benefit financially from charitable grants and donations, and certain tax exemptions, such as non‑domestic rates reliefs. In 2017, the Barclay Review of non‑ domestic rates recommended an end to the rates relief offered to ALEOs. The Scottish Government retained this for existing ALEOs, but introduced measures to prevent automatic exemptions for any newly created ALEOs, and any existing ALEOS that were subsequently expanded. 155
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Culture and leisure services 12 Exhibit 2. Factors that may influence a council’s decision to set up an ALEO Business case assumption Factors for councils to consider ALEOs bring financial benefits through tax advantages, commercial trading and new funding opportunities ALEOs bring financial benefits through NDR relief, new funding and wider commercial trading. Charitable status encourages donations and volunteering. The ALEO model safeguards against contract over‑pricing as any surpluses can be retained in the public sector. However, points to bear in mind: There are uncertainties about whether new sources of income will continue over the longer term. For example: • Taxation benefits, eg NDR and VAT are subject to change. • Future income is affected by market forces. • Grants and new funding tend to be one‑off, time limited or project specific; and there is increasing competition for them. ALEOs bring strong identity, focus and responsiveness Direction through an ALEO board can be more immediate and responsive than through a larger council body that has competing demands for attention. An ALEO's defined purpose, separate identity, and contractual obligations give a clear focus on performance. ALEO boards bring greater diversity and specialist expertise; ALEOs can compete to attract workforce talent. However, points to bear in mind: Councils can achieve similar benefits when ALEOs are not involved: • Councils can create a service identity and focus, for example through setting up separate business units with a distinct brand. • Councils already attract external expertise, eg through partnership working, and joint boards or committees. • Outsourcing can also bring expertise and specialisms to the benefit of the service. ALEOs can bring workforce flexibility and efficiencies ALEOs have brought new and improved practice in areas of workforce deployment. They have negotiated more flexible employment terms, for example to extend opening hours; and make use of casual staff and volunteers. However, points to bear in mind: • The best performing councils also demonstrate good workforce management and practice. These features are not unique to ALEOs. • Planned changes in an ALEO may be limited by expectations over workforce terms and conditions. • Financial pressures in an ALEO may impact on its ability to uphold terms and conditions including access to pensions. • If an ALEO is brought back into the council any differences in terms will need to be harmonised. Source: Councils’ use of arm’s‑length organisations, Accounts Commission, 2018156
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Culture and leisure services 13 19. Governance structures must ensure the council retains a degree of oversight and control over services delivered on their behalf by an ALEO. Common ways for councils to retain oversight over an ALEO include: • ALEOs having elected members that serve on their boards. All culture and leisure ALEOs include council representation on their boards. The level of council representation, however, varies and depends on how the organisation was established. For example, East Ayrshire Leisure has seven council representatives on its 13‑member board, five of whom are councillors and two of whom are senior officers (with no voting rights, therefore maintaining the ALEO’s independence). • Councils setting out the level of funding the ALEO will receive and paying a management fee. This is typically accompanied by a set of targets and objectives that the ALEO is expected to achieve during the financial year and how they will report on progress. The service delivery contract between Highland Council and High Life Highland, for example, sets out how annual performance and annual financial targets are agreed and reported by the ALEO. • Councils working with the ALEO to determine short‑ and medium‑ term priorities for culture and leisure services. Some councils may impose limits on the fees that ALEOs can charge to access culture and leisure services. For example, Angus Council must approve any changes ANGUSalive makes to the cost of accessing services. The financial impact from Covid-19 has led to some councils returning certain culture and leisure services back in-house 20. Several leisure and culture ALEOs experienced financial challenges during the pandemic through a loss of income due to the withdrawal of services and closure of facilities to comply with public health restrictions. Some councils provided additional funding to help address immediate financial pressures, but the impact on the financial position of ALEOs has been a factor in the decisions taken by councils to bring some services back in‑house: • Falkirk Council provided Falkirk Community Trust with additional funding to help ease their financial pressures from the pandemic. This support prompted the council to reassess the delivery of local culture and leisure services. A review led to Falkirk Council resuming control of all culture and leisure services in April 2022. • The closure of services during the pandemic led Scottish Borders Council to provide regular financial support to Live Borders. A review of ALEOs has resulted in the council bringing Active Schools and Sports Development services back in‑house. The council believes this will allow better alignment of these services with key priorities whilst also retaining the ALEO‑related benefit of non‑domestic rates relief as there are no buildings associated with these services. 157
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Culture and leisure services 14 21. Councils must provide an objective assessment on costs, performance and quality when reviewing the use of the ALEO model to deliver culture and leisure services, ensuring any decision aligns with Best Value principles. Culture and leisure services are funded through direct funding, based primarily on population, and by charging for access 22. Funding to councils for culture and leisure services comes from a variety of sources including from the Scottish Government. Total Scottish Government revenue funding to councils in 2025/26 is £14.1 billion, with £0.4 billion distributed on the basis of the Grant Aided Expenditure (GAE) for the provision of leisure and recreation services (2.9 per cent). As this forms part of the General Revenue Grant, it is not ringfenced, and councils have autonomy when setting their budgets for these services. 23. GAE calculations for culture and leisure services typically take into account population size and age distribution, usage rates of cultural and leisure facilities, and geographic and socio‑economic factors. Within leisure and recreation services for 2025/26: • Parks and Open Spaces received the highest amount of GAE at 31.3 per cent (£129.1 million). • Sports Facilities and Swimming Pools, and Libraries both received around 20.8 per cent (at £85.8 million and £85.4 million respectively). • Museums and Galleries received 7.2 per cent (£29.8 million), of which Glasgow City Council receives 43 per cent (£12.7 million). 24. The Scottish Government also provide capital funding to councils through capital grants, and councils also finance investment in physical assets through a mixture of borrowing, revenue transfers and capital receipts. The Financial Bulletin 2023/24 explains how councils are borrowing more to compensate for long‑term reductions in capital funding from the Scottish Government. 25. In 2023/24, councils’ total capital expenditure was £3.7 billion, of which 5.8 per cent (£209 million) was used to invest in culture and leisure services. Overall, capital expenditure within culture and leisure related services increased by 7.7 per cent from 2018/19 (£194 million) to 2023/24, although there was a 12.9 per cent annual decrease between 2022/23 (£240 million) to 2023/24. The Scottish Government issues councils with a General Revenue Grant (GRG) on an annual basis to support councils’ day‑to‑day spending. The individual council allocations of the total GRG funding are largely determined by aggregating Grant Aided Expenditure (GAE) calculations and projections. GAE is a needs‑ based methodology used by the Scottish Government to distribute funding. It is calculated using a client‑group approach which estimates the relative need for services in each council area. GAE service allocations are not spending targets or budgets and councils have discretion to allocate the majority of their GRG across services in‑line with local needs and priorities. 158
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Culture and leisure services 15 Fees and charges have been increasing as spending has been falling, and culture and leisure services are increasingly reliant upon these 26. Councils and ALEOs retain the right to generate income by charging for access to certain culture and leisure services. The income generated from increases in fees and charges has helped to offset reductions in budgeted funding and to support overall spending. The Scottish Local Government Finance Statistics (LGFS) provides information on the income from fees and charges raised by charging people to access culture and leisure services. 27. Income from fees and charges to service users increased by 26.9 per cent in real terms from 2018/19 (£92.7 million) to 2023/24 (£117.6 million). This is despite councils electing to increase charges at lower rates than the historically high inflation seen in recent years, suggesting that real terms increases are also attributable to an increase in the number of users being charged and the introduction of new charges. Despite these increases, income from fees and charges still make up a relatively small proportion of the money used to provide these services (Exhibit 3). Exhibit 3. The contribution of fees and charges to the funding of culture and leisure services has been increasing, but still represents a relatively small proportion of total spending 0 100 200 300 400 500 600 700 800 900 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 Income from fees and charges Other funding £ million Note: Other income sources mean that the amount shown within ‘Other funding’ is higher than the net expenditure figures in Exhibit 1. Source: Local Government Finance Statistics 2018/19 to 2023/24, Scottish Government 159
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Culture and leisure services 16 28. The sportscotland 2024/25 report on sport facility charges provides a summary of current fees and examines trends back to 2017. This is based on 31 out of 32 data submissions and used the ten most popular activities to enable comparisons over time, which gives 19 benchmark charges for comparison. It includes a range of charges for adult, juvenile and senior citizen users. The report found that most charges have seen an increase in the most recent year which continues the trend of price increases, although the rise was lower compared to previous years. In 2024, average prices within the ten most popular activities increased by 3.9 per cent compared to 10.3 per cent across the same charges in 2023. Although the overall charges have increased, when adjusted for inflation, 18 of the benchmark activities decreased with only one increasing (weekend golf for young people). 29. Councils generally proposed further increases to fees and charges as part of their 2025/26 budgets, with councils reporting this as necessary due to increased operating costs such as rising energy and staff costs. Two councils reported a larger proportionate rise in their fees and charges within leisure services since 2024/25 than others: • Falkirk Council reported a six per cent increase in leisure charges. The council now expects to raise £5.6 million in total in 2025/26. • Midlothian Council reported an average eight per cent increase in sport and leisure charges, with total expected income of £5.9 million in 2025/26. Despite increases to funding and the income from charging for services, councils have overspent against budgets and are again having to identify savings within culture and leisure services 30. In 2023/24, more than half of councils’ reported overspending against the budgets approved for providing culture and leisure services. Overspends were mostly attributed to falling income, cost increases and workforce pressures, with reported underspends attributed to increasing income and vacant staff posts that resulted in savings. 31. When setting their 2025/26 budgets, 19 councils agreed to make total savings of £9.9 million within their culture and leisure services. This is 4.7 per cent of the total 2025/26 savings target of £209.6 million and 1.5 per cent of the overall planned spending within culture and leisure services (£652 million). Some councils have also reduced funding or provision of services as part of recent budgets: • Glasgow City Council, as part of their 2024/25 budget, asked Glasgow Life to identify savings within culture and leisure services. They approved reductions of £9.8 million to be delivered from 2024/25 to 2026/27. The savings target for 2025/26 is £3.7 million. 160
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Culture and leisure services 17 • Clackmannanshire Council reported that community councils, who play an important role in supporting culture and leisure services by using facilities, would see their funding reduce by 50 per cent. There are proposals to close local libraries and for library services to be centralised at the Speirs Centre in Alloa. • In October 2023, following public opposition, North Lanarkshire Council reversed its decision to close 12 sport and leisure facilities it considered to be underused. In 2024 as part of a wider efficiency programme, however, the council closed one facility (Birkenshaw Sports Barn), discontinued the mobile library service, and relocated some services from Iain Nicolson Leisure Centre to a new community sports hub at Chryston High School. Councils differ in how effectively they consult with and consider equality impacts when planning changes to services 32. An Equality Impact Assessment (EIA) is a process used by councils to examine the potential impact of policies, for example, the decision to increase the fees and charges to access a local culture and leisure facility. Public bodies must complete an EIA when proposing changes to the delivery of both new and existing services. Not adequately considering the equality impacts of such a decision, at an early stage, risks the possibility of the council exacerbating inequalities, damaging outcomes or facing a judicial review. 33. The quality of EIAs in assessing the potential impact from changes to culture and leisure services varies: • Clackmannanshire Council’s EIA for its 2024/25 budget noted the impact from increasing fees for leisure services by ten per cent, and its review of libraries, may have on vulnerable individuals. The EIA led the council to pause the decision to review libraries for 12 months to enable further consultation with groups affected. The council continued with the decision to increase fees and charges. • Glasgow City Council’s 2024/25 budget included a savings measure to review secondary school library services. The council only had limited information on the impact of the possible outcomes of this on those with a protected characteristic, but recognised they will require further information on the equalities impact as the process advances. • Angus Council’s EIA for its 2025/26 budget provided minimal information on the impact on certain groups through ANGUSalive’s review of their fees and charges to access services. No prior consultation had been carried out before preparing the EIA. 34. The Accounts Commission’s Local government budgets 2025/26 report underlined the importance of councils consulting with 161
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Culture and leisure services 18 communities to explore solutions for their financial challenges. Failure to engage effectively with groups over proposed changes to services, including changes to eligibility criteria to access services, exposes councils to substantial risks, including the need to withdraw proposals or to defend legal challenges. Councils vary in the extent to which they have consulted on proposed changes to their services: • Aberdeenshire Council announced its intention to deliver efficiencies within its library services, which was met with community opposition. The council engaged with affected communities and five of these libraries will remain in their existing buildings. Library services will be retained within the other eight local areas, either, by locating them elsewhere or in partnership with community groups and associations. • Campaigners submitted a judicial review to challenge Aberdeen City Council’s decision to close six libraries and a swimming pool. This led to the council carrying out further consultation on the saving proposals and to reverse the decision to close the swimming pool in Bucksburn. • South Lanarkshire Council announced a proposal to reduce funding to South Lanarkshire Leisure and Culture (SLLC) by £1.5 million in 2024/25. Following community and stakeholder feedback, the level of reduction was reduced to £0.75 million. South Lanarkshire Council also created a £1 million Community Fightback Fund to help keep facilities open and a £150,000 Future Libraries Fund to support facilities while alternative service models are explored. 35. Several councils are currently reviewing their estates, often including their sport and leisure facilities. A range of options are being considered, including facility closures, consolidation of services into a central building and community asset transfers. There are examples of communities taking ownership of culture and leisure facilities to stop their closure 36. Councils are actively considering the benefits of transferring culture and leisure facilities to community groups under formal community asset transfers, but this is currently happening on a small scale. For example: • Clackmannanshire Council are reviewing a potential asset transfer for Sauchie Hall and the Ben Cleuch Centre. This would potentially allow access to funding and investment not available to the council. • Dundee City Council have actively been engaging in community asset transfers as part of their broader community empowerment strategy. Alternative futures for the proposed closures of Broughty Castle Museum and Caird Park Golf Course include potential asset transfers. Community asset transfers are a process where councils transfer the management or ownership of public buildings or land to community organisations, often at a reduced rate. 162
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Culture and leisure services 19 • Fife Council are planning for the vacant Cowdenbeath Town House to be used as a community and cultural hub which will align with their asset management strategy to divest non‑operational buildings and promote community ownership. • West Dunbartonshire Council agreed to an asset transfer, via a lease agreement, of Dalmuir Golf Course to a community‑ led consortium after previously announcing its closure in the 2025/26 budget. 37. It is important that councils undertake a thorough appraisal of the business case and associated risks before transferring a culture or leisure facility to a community group. This includes ensuring the group has the necessary skills, resources, and governance structures to manage the asset effectively over the long term. Covid-19 impacted on attendances at culture and leisure services, and recovery remains uneven 38. The pandemic forced organisations to close local culture and leisure facilities (paragraph 20), impacting on attendance numbers. Attendance levels across different culture and leisure services, and among councils, have recovered unevenly: • Libraries: At a national level, library visits had been gradually increasing before Covid‑19. They fell during the pandemic, but an increase in using digital technology to allow virtual visits helped to offset the reduction in physical visits. Nationally, the number of library visits increased in 2023/24, but they remain slightly below pre‑Covid levels. There is, however, considerable variation among council areas; in four council areas library visits have more than halved since 2019/20, whereas in two council areas library visits have more than doubled over the same period. • Museums and galleries: The pandemic significantly impacted on the visitor numbers to museums and galleries with fewer than four million visits across Scotland in 2020/21. Nationally, visits have now recovered, increasing by nearly 20 per cent compared to 2019/20. The picture, however, varies across Scotland, with just under half of councils recording an increase in museum visits and the rest showing decreases compared to 2019/20. • Leisure facilities: Attendances at leisure facilities reduced significantly across Scotland when lockdown restrictions were in place. Although attendances have increased over the last three years, at a national level they remain 17 per cent lower than in 2019/20. Compared to 2019/20, leisure facility attendances in 2023/24 were lower in 24 council areas, with a quarter of councils still showing a decrease of 30 per cent or more (Exhibit 4, page 20). 163
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Culture and leisure services 20 Exhibit 4. Visits to culture and leisure services and public satisfaction with those services Visits to all culture and leisure services dropped during Covid-19; while visits to libraries and museums have recovered, visits to sports facilities are still much lower than pre-pandemic. 2010/11 2012/13 2014/15 2016/17 2018/19 2020/21 2022/23 0 10 20 30 40 50 60 Number of visits, in millions Museum and galleries Libraries Sport facillities Public satisfaction with culture and leisure services has declined over the long term. Adults satisfied, in percentage 60 65 70 75 80 85 90 2010/11 2012/13 2014/15 2016/17 2018/19 2020/21 2022/23 Park and open spaces Museum and galleries Libraries Leisure facillities Note: Survey data collected during the Covid‑19 pandemic (2020/21 and 2021/22) is not directly comparable to other years due to differences in the way it was collected, therefore it has been excluded from this chart. Source: Improvement Service and Audit Scotland164
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Culture and leisure services 21 LGBF indicators show that public satisfaction with libraries and leisure facilities has declined significantly over the long term. However, additional data is needed to fully understand the reasons for this 39. Public satisfaction with key culture and leisure services has declined, with libraries experiencing a significant 17.5 percentage point drop in satisfaction between 2010/11 and 2023/24. Satisfaction with leisure facilities and museums and galleries has also decreased since 2010/11 (by 9.6 and 6.5 percentage points respectively). In contrast, parks and open spaces have maintained high levels of satisfaction, with 84 per cent of adults expressing approval in 2023/24 (Exhibit 4). 40. LGBF satisfaction indicators, however, are based on survey data that estimate levels of satisfaction among all adults regardless of whether they use certain services. Satisfaction rates for service users are consistently higher than for the public in general, but these estimates are based on much smaller groups of survey respondents. This means that it is not possible to confidently assess service user satisfaction at council level based on the available data. There is a lack of national culture and leisure performance data 41. While the LGBF includes some cost and satisfaction indicators for culture and leisure services, there are currently no formal national indicators on performance. Councils tend to use internally collected data, tailored to meet their own structures, to assess the performance of local culture and leisure services. It is, therefore, challenging to assess at a national level how well councils are delivering these services, where services can improve and how effectively culture and leisure is supporting agreed local and national priorities around health and wellbeing. 42. A lack of appropriate national performance information also means it is not possible to assess if the adoption of the ALEO model has positively or negatively impacted the performance of culture and leisure services, compared to the council‑led delivery model (paragraph 17). 43. Work is ongoing between the LGBF board, COSLA, professional associations and councils to identify indicators that will provide a better understanding of local government’s contribution to physical activity and health and wellbeing outcomes in Scotland. 44. More than ever, ongoing financial constraints, growing demand and workforce challenges underline the importance of clear, transparent and effective public reporting of council performance and decision‑making. Best Value Statutory Guidance3 and our Statutory Performance 165
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Culture and leisure services 22 Information (SPI) Direction4 set out the duties that councils have regarding this and the important role that the LGBF plays in supporting this process. 45. In March 2023, the Improvement Service launched a publicly available dashboard that allows councils to explore their LGBF indicator data and compare performance against other similar councils over time. It is currently developing new dashboard functionality to provide councils with even greater flexibility in how they view this data, allowing more nuanced exploration and analysis. This new functionality is expected to be available to users of the dashboard in late 2025. Councils should support and embrace these new developments to help improve knowledge of their local area and performance reporting in general. 46. In order to support better informed decision‑making in the short‑, medium‑ and long‑term, councils should work to strengthen their outcomes indicators to help clearly demonstrate the impact of their decisions on local communities. Given the cross‑cutting impact of services on people and their families, it is important to take a whole‑ systems approach to developing these indicators. This is also key given the focus of the Verity House Agreement on better outcomes for communities with structures in place which provide accountability for delivery of these outcomes. The need for transformation 47. The Accounts Commission’s Transformation in councils report highlights the urgent need for councils to rethink and redesign how they deliver services, in order to meet growing financial pressures and rising public demand. Transformation activity is happening across all councils, with auditors currently preparing reports on this activity across all 32 councils as part of their 2024/25 audits. This work will form the basis for our next Best Value national report in 2026. 48. In the face of an increasingly difficult operating environment, councils need to consider the role services such as culture and leisure play in prevention and supporting longer‑term outcomes. Councils should also be considering their role in directly providing services, and how they might encourage innovation through supporting communities to take greater ownership of culture or leisure facilities. 49. Councils’ activities must be supported by clear, balanced and transparent performance reporting. This will allow councils to systemically evaluate the impact of reform and transformation of services and contribute to the wider transformation agenda being led by Solace and the Improvement Service, as well as help identify areas where the LGBF could be further improved. 166
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23EndnotesEndnotes Endnotes 1 A Review of the Scottish Sporting Landscape, Scottish Government, September 2019; Review of Culture and Leisure Services in Scotland, ekos, August 2024; Sports and Culture in Scotland, The Jimmy Reid Foundation, April 2025. 2 Shetlands Islands Council manages and delivers its leisure and culture services in partnership with external charitable trusts that are not classified as ALEOs 3 Best Value: revised statutory guidance 2020, Scottish Government, March 2020. 4 The Publication of Information (Standards of Performance) Direction 2021 Statutory Performance Indicators, and Accounts Commission Statutory Performance Information Direction 2024, Accounts Commission, December 2021 and December 2024. 167
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Local government performance Spotlight on culture and leisure services Audit Scotland, 4th Floor, 102 West Port, Edinburgh EH3 9DN Phone: 0131 625 1500 www.audit.scot ISBN 978 1 915839 85 5 168
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Report Agenda Item Report to: Risk and Audit Scrutiny Committee Date of Meeting: 10 March 2026 Report by: Executive Director (Finance and Corporate Resources) Subject: Forward Programme for Future Meetings 1. Purpose of Report 1.1. The purpose of the report is to:- [purpose] advise members of the forward programme for the meetings of the Risk and Audit Scrutiny Committee to 26 January 2027, and invite members to suggest topics for inclusion in the Committee’s forward programme [1purpose] 2. Recommendation(s) 2.1. The Committee is asked to approve the following recommendation(s):- [recs] (1) that the report and the outline forward programme for the meetings of the Risk and Audit Scrutiny Committee to 26 January 2027, attached as an Appendix to the report, be noted. [1recs] 3. Background 3.1. As part of a range of improvement measures introduced as a result of Audit Scotland’s report on the Audit of Best Value and Community Planning (2009), an Action Plan was prepared. One of the actions was to include, as a standard agenda item, a list of items proposed for consideration at subsequent meetings of this Committee to provide an opportunity for members to inform future agendas. The outline forward programme to 26 January 2027 is attached, for members’ information, as an Appendix to the report. 4. Employee Implications 4.1. There are no employee implications. 5. Financial Implications 5.1. There are no financial implications. 6. Climate Change, Sustainability and Environmental Implications 6.1. There are no Climate Change, Sustainability or Environmental implications in terms of the information contained within this report. 7. Other Implications 7.1. There are no risk implications in terms of the information contained within this report. 10 169
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8. Integrated Impact Assessment and Consultation Requirements 8.1. The report does not introduce a new policy, function or strategy or recommend a change to an existing policy, function or strategy and, therefore, no impact assessment is required. 8.2. There was no requirement to undertake any consultation in terms of the information contained in this report. Jackie Taylor Executive Director (Finance and Corporate Resources) 18 February 2026 Link(s) to Council Values/Priorities/Outcomes Accountable, Effective, Efficient and Transparent Previous References Executive Committee 8 July 2009 List of Background Papers Audit Scotland Audit of Best Value and Community Planning Contact for Further Information If you would like to inspect the background papers or want further information, please contact:- Ishara Opatha, Administration Officer Tel: 07307385370069 E-mail:- ishara.opatha@southlanarkshire.gov.uk 170
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APPENDIX – RASC OUTLINE FORWARD PROGRAMME Meeting Date Item Responsibility 26 May 2026 Internal Audit Activity Report Internal Audit Manager 2025 NFI Exercise Internal Audit Manager Audit Scotland – Financial Bulletin 2024/2025 Head of Finance (Strategy) Financial Resources Scrutiny Forum Activity Head of Finance (Strategy) 23 June 2026 (Special) Internal Audit Assurance Report 2025/2026 Internal Audit Manager Annual Governance Statement for 2025/2026 and Significant Governance Areas for Quarter 4 Progress Report Head of Administration and Legal Services Unaudited Annual Accounts 2025/2026 Head of Finance (Strategy) 25 August 2026 Internal Audit Activity Report Internal Audit Manager Year End Insured Risks Report 2025/2026 Head of Finance (Transactions) Year End Risk Management Report 2025/2026 and Review of Council’s Top Risks 2026/2027 Head of Finance (Transactions) Fraud Statistics Annual Report 2025/2026 Financial Resilience and Sustainability Report Internal Audit Manager Head of Finance (Strategy) 29 September 2026 (Special) External Auditor’s Annual Report to South Lanarkshire Council 2025/2026 External Audit Audited Annual Accounts 2025/2026 Head of Finance (Strategy) 3 November 2026 Internal Audit Activity Report Internal Audit Manager Annual Update on the Use of Head of Administration and 171
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Surveillance Powers - The Regulation of Investigatory Powers (Scotland) Act 2000 Legal Services 26 January 2027 Internal Audit Activity Report Internal Audit Manager Performance and Review Scrutiny Forum Annual Update Head of Communications and Strategy 2025/2026 Internal Audit Plan Internal Audit Manager Good Governance Update Head of Administration and Legal Services N.B:- Audit Scotland national studies and reviews will appear as a recurring item, but the frequency and subject matter will vary according to their programme. 172