Document Pack - Audit Committee - 02 09 26
West Dunbartonshire Council · 2 September 2026
Back to Audit Committee — 2 September 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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Agenda Audit Committee Date: Wednesday, 2 September 2026 Time: 10:00 Venue: Council Chambers, Clydebank Town Hall, 5 Hall Street, Clydebank Contact: Scott Kelly, Committee Officer Tel: 01389 737220 Email: scott.kelly@west-dunbarton.gov.uk committee.admin@west-dunbarton.gov.uk Dear Member Please attend a meeting of the Audit Committee as detailed above. The business is shown on the attached agenda. Yours faithfully PETER HESSETT Chief Executive Page 1
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Distribution: Councillor Ian Dickson Councillor Michelle McGinty Councillor John Millar Provost Karen Murray Conaghan Councillor Lauren Oxley Councillor Martin Rooney Councillor Gordon Scanlan (Chair) Councillor Sophie Traynor (Vice Chair) All other Councillors for information Chief Executive Chief Officers Date of Issue: 20 August 2026 Page 2
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AUDIT COMMITTEE WEDNESDAY, 2 SEPTEMBER 2026 AGENDA 1 APOLOGIES 2 DECLARATIONS OF INTEREST Members are invited to declare if they have an interest in any of the items of business on this agenda and the reasons for such declarations. 3 MINUTES OF PREVIOUS MEETING 5 – 7 Submit for approval, as a correct record, the Minutes of Meeting of the Audit Committee held on 10 June 2026. 4 OPEN FORUM The Committee is asked to note that no open forum questions have been submitted by members of the public. 5 STRATEGIC RISKS 2022-2027 9 – 35 Submit report by Chief Officer – People and Technology providing an update on the strategic risks for 2022-2027. 6 INTERNAL AUDIT PLAN 2026/27 – PROGRESS TO 37 – 52 30 JUNE 2026 Submit report by Chief Officer – Resources advising of progress to 30 June 2026 against the Internal Audit Plan for 2025/26. 7 FORVIS MAZARS – 2025/26 ANNUAL AUDIT PLAN 53 – 107 Submit report by Chief Officer – Resources presenting for information the Forvis Mazars Annual Audit Plan for the year ending March 2026. 8/ Page 3
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8 EXTERNAL AUDIT ENQUIRIES – 2025/26 ACCOUNTS 109 – 121 Submit report by Chief Officer – Resources:- (a) informing of External Audit’s requirement for the provision of information regarding the Council’s approach to dealing with fraud, litigation, laws and regulations as part of their audit of the Council’s 2025/26 Statement of Accounts and 2025/26 Trust Accounts; and (b) providing Members with the opportunity to comment on the response related to ‘Those Charged with Governance’. 9 2025/26 TREASURY MANAGEMENT ANNUAL REPORT 123 – 138 Submit report by Chief Officer – Resources advising of the operation of the treasury function and its activities in 2025/26 and seeking approval agreement to remit the report to the full Council for its approval. Page 4
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AUDIT COMMITTEE At a Meeting of the Audit Committee held in the Civic Space, 16 Church Street, Dumbarton on Wednesday, 10 June 2026 at 2.00 p.m. Present: Councillors Martin Rooney, Gordon Scanlan and Sophie Traynor. Attending: Laurence Slavin, Chief Officer – Resources; Gillian McConnachie, Chief Internal Auditor; Amanda Graham, Chief Officer – Citizen, Culture and Facilities; Gail Macfarlane, Chief Officer – Roads and Neighbourhood; Carol Alderson, Finance Manager; Michelle Lynn, Asset Manager; Andrew Brown, Senior Education Officer; Craig Wilson, Building Services Manager; Nicola Pettigrew, Housing Operations Manager; Louise Hastings, Strategic People and Change Manager; and Lynn Straker, Committee Officer. Apologies: Apologies for absence were intimated on behalf of Councillors Ian Dickson, Michelle McGinty, John Millar and Lauren Oxley; Peter Hessett, Chief Executive; Alan Douglas, Chief Officer – Regulatory and Regeneration and Victoria Rogers, Chief Officer – People and Technology. Councillor Gordon Scanlan in the Chair DECLARATIONS OF INTEREST It was noted that there were no declarations of interest in any of the items of business on the agenda. MINUTES OF PREVIOUS MEETING The Minutes of Meeting of the Audit Committee held on 18 February 2026 were submitted and approved as a correct record. OPEN FORUM The Committee noted that no open forum questions had been submitted by members of the public. ITEM 3 Page 5
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INTERNAL AUDIT ANNUAL REPORT TO 31 MARCH 2026 A report was submitted by the Chief Officer – Resources advising of the work undertaken by Internal Audit in respect of the 2025/26 Annual Audit Plan and advising of the contents of the Assurance Statement given to Members of West Dunbartonshire Council, the Chief Executive and the Section 95 Officer (Chief Officer – Resources) in support of the Annual Governance Statement. After discussion and having heard the Chief Internal Auditor and the Chief Officer – Resources in further explanation and in answer to Members’ questions, the Committee agreed to note the content of the report. ANNUAL REPORT ON THE AUDIT COMMITTEE 2025-2026 A report was submitted by the Chief Officer – Resources providing the Audit Committee Chair’s 2025/26 Annual Report on the Audit Committee. After discussion and having heard the Chief Officer – Resources in further explanation, the Committee agreed to review and endorse the Chair’s Annual Report on the Audit Committee for 2025/26 and that the report should be presented to a future meeting of the Council in line with best practice guidance. 2026/2027 INTERNAL AUDIT PLANNING A report was submitted by the Chief Officer – Resources advising of the approach to planning for the Internal Audit Section for the year 2026/2027. After discussion and having heard the Chief Internal Auditor in further explanation and in answer to Members’ questions, the Committee approved the 2026/27 Internal Audit Planning document and proposed 2026/27 allocation of Internal Audit resources set out in the plan which is included as Appendix 1 in the report. INTERNAL AUDIT PLAN 2025/26 PROGRESS TO 30 APRIL 2026 A report was submitted by the Chief Officer – Resources advising of progress to 30 April 2026 against the Internal Audit Plan for 2025/26. After discussion and having heard the Chief Internal Auditor and the Building Services Manager in further explanation and in answer to Members’ questions, the Committee agreed to note the content of the report. Page 6
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TREASURY MANAGEMENT STRATEGY AND ANNUAL INVESTMENT STRATEGY A report was submitted by the Chief Officer – Resources providing Members with the opportunity to further scrutinise the Treasury Management Strategy Statement and Annual Investment Strategy and the indicators contained within. After discussion and having heard the Chief Officer – Resources in further explanation, the Committee agreed to note what was agreed by Council in the report. The meeting closed at 2.27 p.m. Page 7
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WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer – People & Technology Audit Committee: 2 September 2026 ___________________________________________________________________ Subject: Strategic Risks 2022-2027 1. Purpose 1.1 To provide an update on the strategic risks for 2022-27. 2. Recommendations 2.1 It is recommended that the Committee note: The strategic risks as detailed at Appendix 1. 3. Background 3.1 The Council’s 2022 – 2027 strategic risks were agreed by the Corporate Services and Audit Committees in November 2022. The appended risks have been reviewed with re-assessment undertaken before being reported to this committee. This report is submitted as agreed to Audit Committee on a bi- annual basis. 4. Main Issues Strategic Risk 4.1 In line with the Council’s Risk Management Framework, a re-assessment of the strategic risks has taken place as detailed within Appendix 1. Each risk is managed through internal controls, linked actions and associated milestones with the objective being to reduce or stabilise the level of risk through completion of linked actions over a period and/or ensure mitigation factors are adequate should the risks actually materialise. 4.2 Table 1 represents a risk dashboard that includes information on the original, current and target rating for each strategic risk, as well as an assessment of the current risk status. Each strategic risk is identified and supported by more detailed information available on a “drill-down” basis in Appendix 1. Six strategic risks associated actions and milestones are met and are progressing as expected whilst getting closer to reaching their assigned targets. SR001, SR007, SR008, SR011 and SR012 are currently off target, which is explained in further detail below. ITEM 5 Page 9
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4.3 Following feedback from the Audit Committee meeting in February 2026, a strategic review has been undertaken of SR005 Engaging Positively with Residents, Communities and Partnerships. The review concluded that this area no longer meets the criteria for a strategic risk, compared to other strategic risks the milestones within are less definitive and more difficult to measure. The proposal reflects a change in the level and mechanism of oversight, rather than engagement no longer being important. Therefore, SR005 has been removed from the Strategic Risk Register. This risk will be monitored and managed at a service level going forward as part of the Regulatory and Regeneration service plan. 4.4 In preparation for September’s meeting of the Audit Committee, the risk posed by the potential for a national power outage has been explored and given wide ranging impacts on the council’s ability to deliver services, a new risk: SR012 National Electricity Transmission System (NETS) outage is proposed be added to the strategic risk register. Page 10
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Table 1 Key Strategic Risk Information Strategic Risk Original Risk October 2022 Current Risk September 2026 Target Risk March 2027 Risk Status Rationale SR 001 Significant financial funding reductions/limitations from Scottish Government SR 002 Challenges in implementing broad- ranging school improvement to raise attainment and achievement SR 003 Maintaining Council Assets that are fit for purpose SR 004 Keeping abreast of developments in the innovative use of Information Technologies SR 006 Challenges in protecting the Health and Safety of Employees and Others SR 007 Complexities in ensuring an appropriately resourced and resilient workforce Page 11
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Risk Methodology and Reporting 4.5 Each strategic risk is populated in Pentana in terms of the following template: Risk title and code; Description; Ownership; Potential effect; Measures of impact; Risk factors; Internal controls; Risk opportunity; and Linked actions. 4.6 Each risk has been scored using a “4 x 4” matrix for likelihood and impact in relation to: Current risk (with review dates set at pre-determined intervals); and Target risk (i.e. 31 March 2027 - the duration of the Strategic Plan). The risk descriptors used in the “4 x 4” matrix are as follows: SR 008 Threat of Cyber Attack SR 00 Challenges in delivering effective services in relation to Roads & Neighbourhoods SR 010 Failure to maintain Housing Stock SR 011 Inability to reduce carbon footprint in line with targets SR 012 National Power Outage (NETS Failure) Page 12
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Likelihood Score Descriptor 1 Unlikely 2 Likely 3 Very likely 4 Certain Impact Score Descriptor 1 Minor 2 Moderate 3 Significant 4 Critical 4.7 For ownership, each strategic risk is “Managed By” a Chief Officer and “Assigned To” a Senior Officer. Strategic risks are also reported on a bi- annual basis to the Performance & Monitoring Review Group. Service Risk 4.8 Following the methodology in 4.3 to 4.4 above, each service has owned operational risk registers in Pentana (the Council’s performance system) which were reviewed as part of the 2025/26 service planning process. 4.9 Significant financial funding reductions/limitations from Scottish Government It is expected the Council will continue to be faced with significant real term funding reductions from the national settlement. This is based on the Spending Review published by the Scottish Government in January 2026 which sets out multi-year spending plans over the three-year period 2026/27- 2028/29 across the various portfolios. It illustrates that Local Government funding, in cash terms, is expected to decrease by 0.07% over the three-year period which will require councils to absorb the financial pressures brought about by all inflationary increases. 4.10 Threat of Cyber Attack This risk will always be high as the threat and likelihood of a Cyber Attack remains. The UK public sector is still experiencing elevated levels of targeted Cyber-attacks including recent attacks on Scottish councils. As this risk continues to be high the emphasis remains on proactive measures to protect the confidentiality, integrity and availability of our data, critical infrastructure, and overall business operations. Key risks and continual threats include: Page 13
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Geopolitical threat increasing due to current world tensions. Russia is recognised by national security operations as the world’s largest cyber threat actor. Demand for emerging technologies such as Artificial Intelligence solutions present new challenges for the council to implement and secure. Risk to Backup technology and corruption of council data. Ransomware attacks – surge in recent years, potential for significant financial loss and operational disruption. Advanced Persistent Threats (APT’s) – sophisticated stealthy attacks conducted by well-resourced groups, targets include critical infrastructure, government bodies and large corporations. User awareness – Phishing attempts on the rise with more sophisticated techniques being deployed including voice and text phishing. Targeted threats tailored to specific areas of the Council are being observed. Social Engineering and ‘old school’ cyber-attacks now present a higher risk. Third Party Risks – The Council often relies on third party vendors and suppliers, increasing the risk of cyber-attacks through the supply chain. Mitigations: Implementation of a new Cyber Incident Logging and Response system (MDR) offering enhanced protection. Continual improvement of our vulnerability/patch management systems and processes. Continual promotion of Cyber awareness through simulated phishing campaigns supported by our online security training and awareness platform. Social Engineering guidance issued to all employees with new ‘Be Cyber Smart’ campaign. Engagement with ICT Security Partners to highlight and advise on specific areas of risk. Continual assessment and improvement of our Cyber Security posture. Robust Business Continuity and Disaster Recovery plans with a new ICT backup policy in place. Progress continues to take place to improve our security posture in line with the national Public Sector Action plan (PSAP) and Public Sector Network (PSN) compliance. Vigilance of the National Cyber Security Centre (NCSC) Cyber Security and Scottish Government (SC3) guidance continues to remain in place. 4.11 Complexities in ensuring an appropriately resourced and resilient workforce Workforce Planning Strategy in place for 2022-2027. People First Strategy is in place covering 2022-2027 and this is a consolidation of a number of areas: well-being, employee engagement, workforce planning, learning and development and digital. Page 14
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WDC continue to offer a range of flexible working practices and have a range of employee supports in place that are reflective of best practice. However, absence levels continue to be high with little change in the top 3 reasons for sickness absence. Absence continues to be monitored through committee and management practices and improvements are currently being made to the Supporting Employee Wellbeing procedure that will improve data and strengthen the organisation’s ability to measure the effectiveness of absence management interventions. A range of communication tools and channels are regularly utilised to ensure that employee voice is heard, and key information is shared with the workforce. Engagement measures continue to show a downward trend in relation to the workforce feeling valued, which is in-keeping with the wider public sector and in the context of the ongoing financial challenges and restructure exercises to deliver savings options. Maximising digital tools and solutions to aid the workforce continues with the ongoing rollout of M365 Sharepoint and the Fit for Future programme focussing on corporate processes to identify efficiencies, starting with the Supporting Employee Wellbeing process. Additionally, the Digital team continue to highlight digital learning resources and tools available to aide adoption levels. Resources in the people support functions continue to be limited impacting on the scale of proactive improvement work that can be undertaken and presenting challenges in supporting services 4.12 Inability to reduce carbon footprint in line with targets The risk assessment remains unchanged from mid-year. The Council's most recent emissions reported in November for 2024/25 showed significant progress. (Details are set out under the PI ‘Tonnage of carbon dioxide emissions from Council operations and assets’ above.) The long-term Climate Change Coordinator vacancy has been filled internally; this currently leaves another vacancy within the energy team that will be filled as soon as possible. Participation from service areas has increased at Climate Change Action Plan meetings and emission reductions actions and projects are forthcoming. The Council also has the opportunity to utilise ClimateView and track trajectory to Net Zero, allowing actions and projects to be prioritised and a more collective, strategic approach to be implemented. The Strategic Risk will be reviewed at the next Climate Change Action Plan meeting for relevance and an amended risk / set of risks will be reported to future meetings. Page 15
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5. People Implications 5.1 There are no people implications associated with this report, other than in relation to the mitigation of risk. 6. Financial and Procurement Implications 6.1 There are no financial and/or procurement implications directly associated with this report however there are in relation to any expenditure linked to mitigation. 7. Risk Analysis 7.1 Failure to ensure robust risk management is likely to result in the Council being criticised by External Auditors for not having an integrated approach to embedding risk management within the authority with the result that a “no scrutiny required” status would not be achieved. 7.2 Progressing with a robust risk management approach will demonstrate that the Council is taking ownership of risk management and ensuring effective measures are in place. The ability to demonstrate risk ownership should benefit the Council in terms of: Understanding risk and its potential impact on the Council’s priorities and objectives; Reducing insurance premiums going forward by recognising that a mature approach to risk management will contribute to a reduction in the number and value of claims across a range of insurance classifications; Contributing towards incident prevention based upon post-incident investigation; Meeting statutory/regulatory requirements; and Ensuring better partnership working with external and internal partners. 8. Equalities Impact Assessment (EIA) 8.1 EIA 548 notes the positive impacts of an approach to risk that integrates considerations on equalities, human rights health and social and economic impacts that is aligned with the content of the new Strategic Plan. 9. Consultation 9.1 The strategic risks have been discussed with the Chief Officers and senior management. The reports to committee are available to the Trades Union and consultation undertaken as required. 9.2 The strategic risks have been cross checked with WD HSCP. This ensures that issues affecting HSCP are reflected within the wider council strategic risk report. Page 16
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10. Strategic Assessment 10.1 At its meeting on 26 October 2022, the Council agreed that its four main strategic priorities for 2022 - 2027 are as follows: Our Communities - Resilient and Thriving Our Environment - A Greener Future Our Economy - Strong and Flourishing Our Council - Inclusive & Adaptable 10.2 The strategic risks have been identified to complement and underpin all strategic priorities. Name: Victoria Rogers Designation: Chief Officer People & Technology Date: 3rd August 2026 Person to Contact: Harry McGhie, Risk & Health and Safety Officer Harry.McGhie@west-dunbarton.gov.uk Appendices: Appendix 1: Detailed Strategic Risk List Background Papers: West Dunbartonshire Council Strategic Plan 2022-2027 Risk Management Framework EIA screening Page 17
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1 Official Strategic Risk Report Generated on: 31 July 2026 SR 01 Significant financial funding reductions / limitations from Scottish Government It is expected the Council will continue to be faced with significant real term funding reductions from the national settlement. This is based on local government settlements in recent years (with the exception of 2025/2026). This coincides with a period where costs and demographic pressures are continuing to rise in relation to social care, significant inflationary increases and pay award pressures linked to inflation. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 27-Jul- 2026 16 31-Mar-2027 4 Laurence Slavin Potential Effect Shortfall in finances resulting in the Council being unable to provide all services as intended and needing to identify further cuts to services to deliver a balanced budget. This extends to those services delegated by the Council to the Health and Social Care (HSCP) Board. Measures of Impact - Real terms reduction in Scottish Government settlement - Demographic change (population decline/growth, aging population) - Cost reduction required including reducing level and/or quality of service provision - Increased Debt (collection of Council Tax, HRA rents, etc) -Depletion of reserves Risk Factors - Insufficient funding to retain essential services and fully fund policy commitments. - Lack of time to plan for changes in the level of grant funding due to single year settlements - General inflationary factors - Instability of Bank of England Base Rate - Significant additional cost pressures, driven by demographic profile. - Insufficient capital receipts to cover loan repayments (creating a revenue pressure) Internal Controls - Long Term Financial Strategy - Regular Financial Updates to Council - Monitor and maintain General Services and Housing Revenue Account prudential targets - Reporting and monitoring of Treasury Management Strategy - Budgetary control process - Regular budgetary control and savings monitoring reports provided to CMT and Council / committees - Active engagement with HSCP Chief Officer on financial performance and budget planning - Rigorous debt collection processes - Annual Internal Audit Plan - Work of External Auditors (external control) - Annual Governance Statement Latest Note It is expected the Council will continue to be faced with significant real term funding reductions from the national settlement. This is based on the Spending Review published by the Scottish Government in January 2026 which sets out multi-year spending plans over the three-year period 2026/27-2028/29 across the various portfolios. It illustrates that Local Government funding, in cash terms, is expected to decrease by 0.07% over the three-year period which will require councils to absorb the financial pressures brought about by all inflationary increases. Risk Opportunity -Significant council projects focusing on long term economic development in the West Dunbartonshire area to grow the local economy and generate revenue - Annual exercise to identify efficiencies - Projects to implement new ways of working (e.g. digitisation, automation, asset management) Linked Actions Code & Title Progress Status Assigned To RES/26-27/001 Commence the implementation of the new Financial Management System Carol Alderson; Arun Menon Page 19
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2 Official RES/26-27/002 Review ways of decreasing corporate debt through continued improvements to debt collection processes in relation to sundry, non-domestic rates, Council Tax and rent Ryan Chalmers RES/26-27/003 Review ways to improve rent collection rates in conjunction with Housing and W4U Ryan Chalmers RES/25-26/004 Review ways of decreasing corporate debt through continued improvements to debt collection processes in relation to sundry, NDR, Council Tax and rent Ryan Chalmers RES/25-26/005 Review ways to improve rent collection rates in conjunction with Housing and W4U Ryan Chalmers SR 02 Challenges in implementing broad-ranging school improvement to raise attainment and achievement This risk concerns delivering excellence and equity for children and young people. National and local indicators have been set to monitor progress with outcomes relating to attainment and achievement with a key focus on making progress to narrow the poverty related attainment gap. Scottish Equity funding devolved to local authorities aims to deliver on priorities between 2023-26. This funding will end in 2026. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 31-Jul- 2026 6 31-Mar-2027 2 Julie McGrogan Potential Effect Improved outcomes for young people would not be attained and achieved. The Council would fail to meet the needs of individual learners particularly those children and young people most disadvantaged by poverty. Risk of reputational damage to the service and the wider Council if outcomes and targets not as education as a statutory service is subject to close scrutiny of local authority performance with outcomes for children and young people by the local community and by the national agencies. Measures of Impact Stretch Aims and Targets for attainment and achievement 3-18 et to be achieved by 2026. The Stretch Aims are scrutinised annually by Scottish Government and Education Scotland. West Dunbartonshire Performance Targets for attainment and narrowing the poverty related attainment gap in Early Years, Broad General Education and Senior Phase West Dunbartonshire Improvement Board Quality Indicator Evaluations National Qualifications Attainment and Achievement Results Broad General Education Achievement of Level Results West Dunbartonshire Scottish National Standardised Assessment Data Positive Destination Data West Partnership Attainment , Equity and Destination Performance Measures Her Majesty’s Inspectors of Education inspection reports Stakeholder Feedback Risk Factors Reduced funding 2022 -2026; no confirmation of future funding from 2026: This Strategic Priority has been supported by Scottish Government Attainment Challenge Funding since 2015 and since 2022 Strategic Equity Funding. Also, schools in West Dunbartonshire have received Pupil Equity Funding since 2016. The national funding streams are committed to until 2026 – there is uncertainty as to future funding provision. From 2022 – 2026 the Strategic Equity Fund is being tapered with annual reductions in the funding the local authority receives. This will reduce resources available to deliver work streams related to SEF at a time with an increased proportion of children and young people with ASN and EAL; combined with high levels of deprivation persisting in West Dunbartonshire. Internal Controls -Strategy for Excellence and Equity 2023 – 2026 ( developed to embed improvements achieved and support an exit strategy from Strategic Equity Funding by 2026). -Project management by Senior Education Officer -Education Improvement Board chaired by Chief Education Officer -Scrutiny by Scottish Government and Education Scotland (progress reports produced and submitted) -WDC Improvement Framework -Termly progress reports submitted as part of Educational Service committee reports -Relevant Continuous Professional Development programme to support education staff -Meetings between WDC and Education Scotland/Her Majesty's Inspectors of Education -BGE Attainment and Performance Data -Literacy, Numeracy and HWB Steering Group Page 20
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3 Official -National Improvement Framework (NIF) -Education Recovery Plan Latest Note As the result of interim assessment analysis, we anticipate a dip in attainment as predicted in our trend analysis in the last two academic sessions. Whilst positive gains have been made for children in our most deprived areas the annual progress made has been impacted by: • increased numbers of children with additional support needs; • reduced Strategic Equity Fund; • reduced roll profile. Risk Opportunity Improved attainment - improved attendance - reduced exclusions - reduced violent incidents - reduction requirement for targeted support over time - reduction requirement for specialist placements over time - improved learning & community engagement - children/pupils at risk identified earlier and more effectively - more empowered community providing self-sustaining peer support - increase in the percentage and range of positive destinations over time - increased access to digital learning resources Linked Actions Code & Title Progress Status Assigned To ED/25-26/003 Close the attainment gap between the most and least disadvantaged children and young people Julie McGrogan ED/25-26/004 Improve attainment, particularly in literacy and numeracy Julie McGrogan ED/25-26/005 Improve skills and sustained, positive school leaver destinations for all young people Andrew Brown ED/26-27/001 Place the human rights and needs of every child and young person at the centre of education Claire Cusick ED/26-27/002 Improve children and young people's health and well being Claire Cusick ED/26-27/003 Close the attainment gap between the most and least disadvantaged children and young people Julie McGrogan ED/26-27/004 Improve attainment, particularly in literacy and numeracy Julie McGrogan ED/26-27/005 Improve skills and sustained, positive school leaver destinations for all young people Andrew Brown SR 03 Maintaining Council Assets that are fit for purpose The risk that the Council's assets and facilities are not fully fit for purpose with consequent adverse impact on our ability to deliver efficient and effective services. Assets included in this assessment are; the Council’s property portfolio. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 15-Jul- 2026 2 31-Mar-2027 2 Michelle Lynn Potential Effect - Assets are not utilised in the most effective and efficient manner - Service cannot be properly delivered to the satisfaction of service users - Service users require to seek alternative service provision -Increase in reactive maintenance costs/ demand/ volume -Council assets in poor conditions -Council assets fail to meet relevant standards which are reported to either Scottish Government and/or Care Inspectorate. Measures of Impact - Condition surveys - Suitability surveys - Customer perceptions of service delivery - Investment levels in upkeep and improvement of asset base and facilities -Asset user satisfaction - Operating costs and savings Risk Factors - Adequacy of funding available to improve asset base Page 21
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4 Official - Adequacy of staff resources allocated to the area of asset management - Council buildings/assets deemed to be unfit for existing purpose - Economic conditions may reduce level of potential capital receipts from surplus property sales - Increase public liability claims Internal Controls - Corporate Asset Framework - Learning Estate Strategy 2020-2030 - Property Asset Plan 2023-2028 - Property and Land Disposal Strategy - Capital project meetings are carried out regularly in addition to project specific meetings and Building Services/Asset Management monthly meetings - Capital Programme - Strategic Asset Management Group - Learning Estate Project Board - Detailed asset database that shows relevant information on a property by property basis in relation to operational, non-operational - Sustainability Policy Latest Note The risk score remains low due to the continued delivery of the Council's capital investment programme, implementation of the Property Action Plan 2023-2028 and ongoing monitoring through established governance arrangements including the Strategic Asset Management Group. Whilst financial pressures continue to create challenges in maintaining and improving the asset base, assets are actively reviewed and investment is prioritised based on condition, suitability, statutory compliance and service need. This supports the Council's ability to maintain assets that are fit for purpose and deliver effective services. Risk Opportunity -Enhance reputation of Council by being able to improve Council assets. -Estate, assets and service delivery (e.g. new school buildings, operational building upgrades, office and depot rationalisation projects) - Enhance employee "feel good" factor by providing modern office accommodation equipped with up to date IT facilities -Improved satisfaction from public building users - Secure external funding for development of assets (e.g. EC, lottery, Historic and Environment Scotland) - Prioritised Building Upgrade Plan Linked Actions Code & Title Progress Status Assigned To RES/26-27/005 Progress the disposal of key strategic sites Michelle Lynn RES/26-27/011 Develop and implement plans and support services to achieve the asset related savings agreed by Council Michelle Lynn RES/25-26/007 Progress the disposal of key strategic sites Michelle Lynn RES/25-26/012 Develop and implement plans and support services to achieve the asset related savings agreed by Council Michelle Lynn SR 04 Keeping abreast of developments in the innovative use of Information Technologies Failure to keep pace with changing technology environment Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 27-Jul- 2026 2 31-Mar-2027 2 James Gallacher; Patricia Kerr; Dorothy Nicolson Potential Effect A lack of consistent, sufficiently robust service planning in respect of ICT arrangements is likely to result in the Council being ill prepared to meet future demands in key service areas and lacking the capacity to respond effectively to changing need such as increased requirement for remote working as identified during covid pandemic. Measures of Impact • Close relationship and working practices with council Asset Management Service regarding property rationalisation. Page 22
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5 Official • Implementation of mobile and flexible working, enabling a downsizing of required office accommodation as people to work more efficiently and to adopt a more flexible policy towards office accommodation and desk provision. • Number of systems that have supplier maintenance contracts. – annual process. • Invocation of Service Business Continuity Plans and ICT Disaster Recovery plan • Degree of compliance with security controls to prevent data loss through poor o/s patching, cyber- attack, firewall configurations, switch replacements/upgrades etc • Fit for purpose primary and secondary data centres • Modern Wi-Fi technology in all council locations. • Broadband speed in the Council area - WDC has 2nd highest broadband speeds in Scotland. Investigating funding options for fibre network. • Number of ICT Service Desk incidents resolved within half day - exceeded the target and higher target set. • Extent of functionality development in key Council systems (i.e., lack of development beyond base system leading to ineffective management information) – several channel shift projects delivered, and more are in progress. PSN/Risk/challenging. Support service areas. • Fit for purpose Council website, delivering information and services to a significant percentage of the Council's customers. • Provide efficient desktop services supporting laptops, Chromebooks, PCs, Thin client terminals to meet changing workforce flexibility and property rationalisation requirements. 5-year Device replacement programme in place. Risk Factors • Insufficient resourcing of ICT developments so that benefits and opportunities identified are not realised • Lack of network security controls implemented. I. e Lack of intrusion detections alerts • failure to respond to audit / PSN test findings and recommendations, • insufficient resources allocated to security tasks. However, Service redesign and ICT resources aligned to security tasks and improved monitoring processes and tools as well as additional tools purchased to help support remote working environment all help to mitigate this risk. • Insufficient Service Business Continuity Plans and/or Disaster Recovery Capability. • Lack of project and programme change management arrangements. • Poor quality of mobile communication provision. • Lack of uptake on channel shift. Internal Controls - Ongoing Capital programme established for technology refresh projects - Information & Communication Technology (ICT) Policies such as ICT Security Framework - Governance structures such as ICT Steering Board, Education ICT Steering Board, Digital Transformation Board in place to support governance, integrated planning and decision making in relation to ICT -Use of both internal IT resources from across the Council and skilled specialist consultants in key areas - Fit for purpose primary and secondary data centres Latest Note April 2026 The Council continues to embrace innovation through the delivery of several service improvement projects. The Council’s legacy telephony system was replaced in 2026 with a new cloud-based platform, enabling the implementation of a modern Contact Centre solution and supporting Customer Services to enhance communication with citizens. Investment in cloud services continues, with corporate service areas currently migrating to Microsoft SharePoint and OneDrive. It is anticipated that all services and partners will be migrated by September 2026, at which point the project will be completed. Microsoft Copilot Chat has been deployed across the Council, helping employees save time on day-to-day tasks. ICT is planning a pilot of Copilot for Microsoft 365, which will support deeper integration across Council data and systems. The People & Technology teams are also exploring the use of AI agents to help service areas automate workflows and processes. The SWAN (Scottish Wide Area Network) project to increase bandwidth capacity across Council sites has been completed, with 80 sites migrated to the new network. In addition, ICT upgraded the Council’s internet connection and the Aurora Data Centre to 10Gb, strengthening the Council’s digital-ready infrastructure. ICT has also launched a live chat service that enables employees to raise ICT incidents and requests directly with Service Desk analysts. The service has been well received by Council employees. ICT is also supporting service areas with a range of technology pilots, including AI note-taking within HSCP and the implementation of new finance and planning systems. Risk Opportunity -365. Provide Council employees with secure access to email and supporting systems from anywhere. Page 23
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6 Official -Opportunity to redesign infrastructure and introduce new tools and security measures to support hybrid working environments. – - Annual network penetration tests and for PSN compliance audit - Annual External Audit on ICT Controls - Continued investment in ICT infrastructure and its focus on network security and resilience. - Provide appropriate technology for employees, pupils, and service users as well as for ICT support teams - Rationalise IT systems - Increased use of mobile devices e.g., laptop/tablet devices and Chromebooks - Review of device strategy and efficient/effective approach. - Provide self-service style systems to employees and citizens Linked Actions Code & Title Progress Status Assigned To P&T/26-27/ICT/03 Implement next phase of Microsoft 365 Sharepoint & One Drive James Gallacher P&T/26-27/ICT/04 Complete review of devices due to be replaced James Gallacher; Dorothy Nicolson P&T/26-27/ICT/05 Review and explore next generation technologies,including AI agents James Gallacher P&T/25-26/ICT/03 Develop and Implement next stage of Microsoft 365 roadmap James Gallacher; Patricia Kerr P&T/25-26/ICT/04 Complete review of ICT devices due to be replaced James Gallacher; Patricia Kerr; Dorothy Nicolson P&T/25-26/ICT/05 Review and explore next generation technologies Andrew Cameron; James Gallacher; Patricia Kerr; Dorothy Nicolson SR 06 Challenges in protecting the Health and Safety of Employees and Others Failure to meet the Council’s duty to protect the health, safety and welfare of its employees and other people who might be affected by its business Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 27-Jul- 2026 4 31-Mar-2027 4 Louise Hastings Potential Effect Poor health and safety culture within the organisation leading to; Risk of an employee, service user, pupil (young person) or member of the public being seriously / fatally injured by fault of the Council; reputational risk regarding negative publicity; financial risk in terms of claims management compensation to the injured party; increase in insurance premiums; risk of prosecution by the HSE resulting in a fine and/or a Council Employee being subject to criminal charges, poor employee morale, high staff turnover leading to diminished service delivery. Measures of Impact Resources associated with in-house/HSE investigation. Incident statistics. Service delivery impact in terms of injury-related absence and potentially enforced cessation of work activities. Impact of injury on employees/members of the public, legal proceedings, financial penalties, potential reputational damage and risk of criminal charges. Hazard reporting. Actions at health and safety committees. Implementation of Corporate health and safety plan. Risk Factors Lack of resources, inadequate Safety Management Standards and H&S strategy. Poor health and safety culture. Under reporting of incidents. Blame culture. Poor communication between management and employees. Competent advice. Internal Controls •Competent health and safety advice readily available from the Corporate H&S team. •Corporate health and safety plan developed and monitored via Pentana. •Robust health and safety management system, FIGTREE. • Council has in place a robust H&S policy, Safety Management Standards and Fire Risk Management Strategy that includes service specific health and safety plans, duties and responsibilities for Chief Officers, managers and employees. • Adequate H&S resources in place to that will allow statutory obligations in terms of the Health and Safety at Work etc. Act and supporting legislation. Page 24
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7 Official • Embedded H&S culture that discusses H&S issues at senior level and cascades throughout the organisation through the health and safety committee system. • Monthly reports to PMRG on organisational safety performance and issues. •Chief Officers attend service H&S committees on a quarterly basis. • Workplace inspection and audit programme. • Service risk profiling. • H&S training needs analysis for every employee group. • The Council has in place a Trade Union Health and Safety Partnership Agreement. • Council promotes health and safety training for TUs to diploma level. • Hazard reporting module via FIGTREE. • Health & safety e-learning package. • Risk assessment working groups for service areas and review process. Latest Note Corporate H&S are actively reviewing and optimising key service areas, including Safety Management Standards and training. Work is also being carried out to refine and simplify the health surveillance process in collaboration with OH and line managers. The ongoing management of H & S within the Council includes overseeing the management workplace inspection programe. Alongside this the Corporate H&S team are conducting inspections, noise monitoring, completing audits benchmarking against the councils safety management standards, scaffold inspections and facilitating training. Additionally, the Corporate H&S team manage and facilitate the monitoring of risk assessments council wide to ensure all risk assessments are up to date and relevant. Fire safety management remains a priority for the Corporate H&S team. The team are conducting fire risk assessments in line with the teams annual H&S plan for 26-27. The team are also providing fire safety training to staff within HSCP and on an ad-hoc basis to other services across the council. The Corporate H&S team also regularly provide updates to PMRG on the status of overdue actions. In doing this there has been a marked reduction in the overall number of overdue actions. This forum allows Corporate H&S to have closer ties with management across the council which in turn facilitates a more proactive approach for the management of H&S. No change to risk matrix. Risk Opportunity Demonstrate to committees, elected members, Trade Unions, employees, the community and other external partner’s evidence of robust H&S culture. Good knowledge and awareness of health and safety throughout all services. Positive relationship with Corporate health & safety team and all services. Reduced incidents, costs and absence rates. Linked Actions Code & Title Progress Status Assigned To P&T/26-27/P&C/03 Continue to embed key Health and Safety practices – Prioritise cross skilling in and developing team knowledge of Health Surveillance. Louise Hastings SR 07 Complexities in ensuring an appropriately resourced and resilient workforce Failure to ensure that there is an appropriately resourced and resilient workforce in place to meet future organisational needs, in effectively executing the Council’s 2022-27 Strategic Plan. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 27-Jul- 2026 6 31-Mar-2027 2 Louise Hastings Potential Effect Inability to deliver services effectively Reduced level of service HSCP - workforce capacity, recruitment and retention challenges; appropriate training for roles Lack of improvement or increase in staff absences Council underachieves as an organisation Low staff morale Employee conflict and increase in associated costs Increased turnover Inability to attract/recruit Page 25
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8 Official Measures of Impact - Access to and participation of employees in learning and development activities - Absence rate and trends - Employee turnover - Grievance, discipline and other monitoring information - Employee voice and associated actions - Reports from external scrutiny bodies and award bodies - Benchmarking with appropriate comparators Risk Factors - Inability to attract/recruit - Lack of appropriate development - inadequate skills -risk to new models of service delivery - Lack of resource/capability to deliver - Workforce unable to adapt to change Internal Controls - HR processes designed to meet service delivery needs - Develop new structures to reflect strategic priorities and aligned to Standard Operation Model (SOM) - Align workforce plan to the Council's strategic planning processes (i.e. have the right people available at the right time with the right skills to fulfil properly all of the Council's strategic priorities) - Periodic review of pay arrangements in accordance with EHRC guidance (currently every 3 years) - Incorporation of succession planning into workforce planning framework - Identify training programmes to upskill staff - Effective use of SWITCH to support alternative careers - Flexible HR policies, in particular People First covering workforce planning, learning & development (including elearning), digital/continuous improvement, employee wellbeing & engagement. - Effective use of Occupational Health Service - Robust Be the Best Conversations process - Effective leadership and management behaviours, practice and programmes Latest Note Workforce Planning Strategy in place for 2022-2027. People First Strategy is in place covering 2022-2027 and this is a consolidation of a number of areas: well- being, employee engagement, workforce planning, learning and development and digital. WDC continue to offer a range of flexible working practices and have a range of employee supports in place that are reflective of best practice. However, absence levels continue to be high with little change in the top 3 reasons for sickness absence. Absence continues to be monitored through committee and management practices and improvements are currently being made to the Supporting Employee Wellbeing procedure that will improve data and strengthen the organisation’s ability to measure the effectiveness of absence management interventions. A range of communication tools and channels are regularly utilised to ensure that employee voice is heard and key information is shared with the workforce. Engagement measures are continue to show a downward trend in relation to the workforce feeling valued, which is inkepping with the wider public sector and is in the context of the ongoing financial challenges and resulting restructure exercises to deliver savings options. Maximising digital tools and solutions to aid the workforce continues with the ongoing rollout of M365 Sharepoint and the Fit for Future programme focussing on corporate processes to identify efficiencies, starting with the Supporting Employee Wellbeing process. Additionally, the Digital team continue to highlight digital learning resources and tools available to aide adoption levels. Resources in the people support functions continue to be limited impacting on the scale of pro active improvement work that can be undertaken and presenting challenges in supporting services. Risk Opportunity - Identify previously unknown skills and talents in the workforce - Realise the potential of staff Linked Actions Code & Title Progress Status Assigned To P&T/26-27/P&C/05 Prioritise digital improvements to Strategic HR service delivery Louise Hastings P&T/26-27/P&C/01 Progress the plan to mainstream digital transformation across the council Louise Hastings Page 26
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9 Official P&T/25-26/P&C/04 Improve employee life cycle and optimise employee development opportunities Leeanne Galasso; Louise Hastings P&T/25-26/P&C/06 Undertake a strategic review of job profiles across the Council John Duffy; Louise Hastings; Lisa MacGregor SR 08 Threat of Cyber-attack Data, systems and/or infrastructure are impacted as result of security attacks which are increasing in number at a time when this threat is already placing demands on resources to deliver increased levels of security controls. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 27-Jul- 2026 9 31-Mar-2027 4 Andrew Cameron; James Gallacher; Patricia Kerr Potential Effect • Remote working could be impacted for Council employees and partners HSCP, VJB and WDL by loss of internet services. • Disruption to services impacting service delivery to citizens • Employee and Citizen data loss with the potential for misuse such as identity fraud • Misinformation being delivered to the public via WDC communication channels • Potential for significant fines currently under the Data Protection Act and from May 2018 under the provisions of the General Data Protection Regulations • Reputational damage • Redirection of resources to deal with the impact of an attack and away from BAU work • Potential for significant fines currently under the Data Protection Act and from May 2018 under the provisions of the General Data Protection Regulations • Reputational damage • Inability to provide a secure information management network for Council and partners including HSCP, VJB and WDL. Measures of Impact • Obligation to secure Cabinet Office PSN compliance certification. • Obligation to comply with DWP MOU • Monitor remote access usage to capacity plan • Recorded attempts from unauthorised sources to breach council cyber defences • Recorded cyber related incidents in the Cyber incident log • Quantity of breaches/incidents reported to the Information Commissioners Office • Fines levied for breaches Risk Factors • Potential for attacks out of normal working hours /days • Inappropriate Cyber defences at the perimeter of the council network and NHS interconnect network • Inappropriate delivery of security patches to desktop, network switches and server estates • Compliance with security standards such as PSN, PCI, Public Sector Action Plan on Cyber resilience for Scotland • Continually changing threat landscape • Maintaining relevant skill sets among employee group / cost of securing expert resources • Increased targeted attacks and risks due to Remote working. •Remote access technology may not remain fit for purpose in a Smart working environment Internal Controls Robust backup strategy in place on premise and cloud backup for 365 with immutable capability. • Service Continuity Plans • ICT Disaster Recovery Plan • Continually review and update internal policies on patching and system hardening to ensure we keep abreast of emerging threats and trends • Annual PSN compliance audit including a comprehensive IT Health Check • Governance structure in place, ICT Steering Board consisting of senior management and relevant stakeholders meeting bi-monthly or as required in response to incidents/events • Programme of Internal and External ICT audits • Information Security/Data Protection forum. Project specific forums • Multiple layers of Cyber defences • Network Segregation • Rolling programme of security awareness sessions • Interagency and cross Council working groups and sharing. • National Digital Office / Scottish Government Public Sector Security programme and guidance • Continually review technologies in line with new working practices to ensure security and assurance is integral. • Monthly device and server patching regime. Page 27
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10 Official Latest Note This risk will always be high as the threat and likelihood of a Cyber Attack remains. The UK public sector is still experiencing elevated levels of targeted Cyber-attacks including recent attacks on Scottish councils. As this risk continues to be high the emphasis remains on proactive measures to protect the confidentiality, integrity and availability of our data, critical infrastructure, and overall business operations. Key risks and continual threats include: • Geopolitical threat increasing due to current world tensions. Russia is recognised by national security operations as the world’s largest cyber threat actor. • Demand for emerging technologies such as Artificial Intelligence solutions present new challenges for the council to implement and secure. • Risk to Backup technology and corruption of council data. • Ransomware attacks – surge in recent years, potential for significant financial loss and operational disruption. • Advanced Persistent Threats (APT’s) – sophisticated stealthy attacks conducted by well-resourced groups, targets include critical infrastructure, government bodies and large corporations. • User awareness – Phishing attempts on the rise with more sophisticated techniques being deployed including voice and text phishing. Targeted threats tailored to specific areas of the Council are being observed. Social Engineering and ‘old school’ cyber-attacks now present a higher risk. • Third Party Risks – The Council often relies on third party vendors and suppliers, increasing the risk of cyber-attacks through the supply chain. Mitigations: • Implementation of a new Cyber Incident Logging and Response system (MDR) offering enhanced protection. • Continual improvement of our vulnerability/patch management systems and processes. • Continual promotion of Cyber awareness through simulated phishing campaigns supported by our online security training and awareness platform. • Social Engineering guidance issued to all employees with new ‘Be Cyber Smart’ campaign. • Engagement with ICT Security Partners to highlight and advise on specific areas of risk. • Continual assessment and improvement of our Cyber Security posture. • Robust Business Continuity and Disaster Recovery plans with a new ICT backup policy in place. Progress continues to take place to improve our security posture in line with the national Public Sector Action plan (PSAP) and Public Sector Network (PSN) compliance. Vigilance of the National Cyber Security Centre (NCSC) Cyber Security and Scottish Government (SC3) guidance continues to remain in place. Risk Opportunity • Increase Cyber resilience and awareness for employees, members and citizens, this can be done through existing training and awareness platform • Contribute to Scottish Government Public Sector Action Plan on Cyber resilience for Scotland and potential to become involved in a national/shared security operations centre • Upskill employees to address current and emerging threats • Increased employee awareness across Council and partners HSCP, VJB and WDL. Linked Actions Code & Title Progress Status Assigned To P&T/26-27/ICT/01 Further secure the next phase of the Council’s technology infrastructure Andrew Cameron; James Gallacher P&T/26-27/ICT/04 Complete review of devices due to be replaced James Gallacher; Dorothy Nicolson P&T/26-27/ICT/05 Review and explore next generation technologies,including AI agents James Gallacher P&T/25-26/ICT/01 Further secure the next phase of the Council’s technology infrastructure Andrew Cameron; James Gallacher; Patricia Kerr P&T/25-26/ICT/04 Complete review of ICT devices due to be replaced James Gallacher; Patricia Kerr; Dorothy Nicolson P&T/25-26/ICT/05 Review and explore next generation technologies Andrew Cameron; James Gallacher; Patricia Kerr; Dorothy Nicolson Page 28
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11 Official SR 09 Challenges in delivering effective services in relation to Roads & Neighbourhoods The risk that the Council’s fails to deliver on the three service areas within Roads & Neighbourhood: Roads & Transportation, Waste & Greenspace and Fleet & Working 4 You. These areas provide services across a range of areas including managing and maintaining roads, footpaths and associated infrastructure, managing flood risk, winter gritting, grounds maintenance, street cleaning, burial and cremation, outdoor facilities, waste and recycling, vehicle fleet management and providing working 4 you services such as employability, child poverty plan, access to benefits etc. Failing to ensure these services are not fully fit for purpose could result in adverse consequences in relation to delivering efficient and effective services. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 05-Jan- 2026 4 31-Mar-2027 2 Gail Macfarlane Potential Effect - Service cannot be properly delivered to the satisfaction of service users - Service users seek alternative service provision -Increase in reactive maintenance costs/ demand/ volume - Failure of assets and non delivery of services ie crematorium, fleet vehicles, street lighting -Council assets in poor conditions -Council assets fail to meet relevant standards - Council projects are not delivered on time or on budget -Failure to comply with Transport (Scotland) Act 2019 -Failure to comply with Waste (Scotland) Regulations 2012 - Assets not fit for future and investment not sufficient to fulfil capital investment needs. - Failure to comply with Good Operator License requirements. - Increased reliance on hire vehicles should fleet investment not be adequate. Measures of Impact - Condition surveys - Defect inspection and management - Suitability surveys - Road Condition SPI - Tree Condition surveys -Customer perceptions of service delivery - Investment levels in Assets ie Road Network, Street Lighting Columns, Fleet Vehicles, Crematorium -Asset user satisfaction -Operating costs and savings -Local Government Benchmarking Framework (LGBF) -Association for Public Service Excellence (APSE) -Waste Managers Network Group - Child Poverty Annual Monitoring Report Risk Factors -Adequacy of funding available to improve assets ie parks, road network, fleet - Adequacy of funding to maintain asset base ie roads at a steady state - Adequacy of staff resources allocated to the area ie winter gritting, safety repairs -Over one third of the road network is in need of repair and the current long term capital funding only sustains a steady state condition of the road network - Increased public liability claims due to poor condition of roads network - Increase public liability claims due to poor condition of footpaths and roads which are not part of our adopted network. -Risk of flooding increase due to climate change - Risk of failure of street lighting columns due to significant number outwith 25 year life span - Adequacy of funding available to manage ash dieback -Poor customer engagement for recycling, deposit return scheme, refuse transfer station -Financial challenges - Budget Sensitivity Analysis (fuel costs, waste refuse disposal tonnage costs, bitumen availability and costs) Internal Controls -Strategic Asset Management Group - Corporate Asset Management Strategy - Capital project meetings are carried out monthly in addition to project specific meetings. - Capital plan - Roads and Lighting Asset Implementation Plan - Fleet Asset Implementation - Open Space Asset Implementation Plan Page 29
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12 Official - Sustainability Policy - Waste Strategy and Project Board - Net Zero Cooperation Agreement Project Board -User feedback – complaints data, Citizens’ Panel -Climate Change Strategy -Community Empowerment Strategy -Food Growing Strategy and Allotments -Equality Outcomes Latest Note No change to current scoring. Monitoring and action plans in place to manage risk. Risk Opportunity -Enhance reputation of Council -Ensure services are fit for the future and are compliant with legislation changes -Assets and service delivery (e.g. roads upgrade programme, vehicle replacement programme, greenspace upgrade projects) - Secure external funding for development of projects inc flooding, sustainable travel, net zero and public realm improvements - The continued implementation of the net zero cooperation agreement will maximise the opportunity to reduce costs and carbon use. Linked Actions Code & Title Progress Status Assigned To R&N/25-26/GS/04 Develop a new local biodiversity action plan Ian Bain R&N/26-27/GS/05 Remove trees affected by Ash Die Back- phase two of plan Ian Bain R&N/26-27/R&T/02 Progress phased delivery of public electric charging points Liam Greene R&N/26-27/R&T/03 Progress preparatory work for Gruggies Burn Flood Management with contractor Liam Greene R&N/26-27/WFU/04 Compile and publish the local child poverty report to demonstrate our actions to address poverty and disadvantage Stephen Brooks; Clare English; Clare Henry R&N/25-26/GS/05 Develop ash die back action plan – next phase Ian Bain R&N/25-26/R&T/06 Progress phased delivery of public and fleet electric charging points – next phase Liam Greene R&N/25-26/R&T/10 Develop new Roads and Transport Winter Plan for consideration at May Committee Liam Greene SR 10 Failure to maintain Housing Stock The risk that Council’s Housing Stock are not fully fit for purpose with consequent adverse impact on our ability to deliver efficient and effective housing for Council tenants. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 14-Jul- 2026 4 31-Mar-2027 4 Alan Young Potential Effect - Housing stock is not utilised in the most effective and efficient manner - Service cannot be properly delivered to the satisfaction of service users -Increase in reactive maintenance costs/ demand/ volume -Housing stock in poor condition -Housing stock fail to meet relevant standards - Non-compliance with Scottish Housing Quality Standard Measures of Impact - Condition surveys - Suitability surveys - Customer perceptions of service delivery - Investment levels in upkeep and improvement of housing stock -User satisfaction -Operating costs and savings - Local Government Benchmarking Framework (LGBF) Page 30
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13 Official Risk Factors - Adequacy of funding available to improve housing stock - Adequacy of staff resources allocated to the management of housing stock - Housing stock deemed to be unfit for existing purpose -Increasing issues relating to supply of labour and materials, due to increased energy, transport and raw material costs, impacted on supply chains, and third parties and our ability to carry out works within budget and on time. Internal Controls - Housing Capital Investment Programme (refreshed and delivered annually) - Housing Capital Improvements - WDC Local Housing Strategy 2021-25 - The Housing Capital Investment Team - The Planned Maintenance Section - Housing Asset Management Strategy - Detailed asset database that shows relevant information on a property by property basis in relation to HRA properties. - More Homes Better Home Project Board. - Telephone Survey feedback - Fit for future reviews -Other benchmarking/ feedback - Climate Change Strategy Latest Note No change to risk score, programme for investment and upgrades to council housing continues into 26-27 and a further five year programme to 26-31. Risk Opportunity -Enhance reputation of Council by being able to improve Council housing stock -Estate, assets and service delivery (housing investment programme ) -Improved satisfaction from tenants - The effect of these energy efficiencies has demonstrated that significant savings and environmental benefit can be achieved through the utilisation of developing technology. -Improvement of SHQS & EESSH compliance performance and points, and reduced SHQS abeyance numbers through the strategic planning and management of housing assets. - Increase in environmental improvements including bin stores - Increase in internal (e.g kitchens, bathrooms, showers, special needs adaptations, central heating, smoke detectors, windows and doors) and external updates (e.g new roof coverings, external insulated render and tenement structural refurbishments) - Increase in number of New Build Homes as part of the Strategic Housing Investment Programme (SHIP) -Achieve energy efficiency standard for social housing Linked Actions Code & Title Progress Status Assigned To HS/26-27/HAI/01 Ensure the Council’s Housing stock maintains compliance with the Scottish Housing Quality Standard and reduce the number of properties held in abeyance. Alan Young HS/26-27/HAI/02 Ensure the Council’s Housing stock progresses towards the achievement of the energy efficiency standard for social housing. Alan Young HS/26-27/HAI/03 Explore opportunity for partnership working with Octopus energy to promote zero bills homes Alan Young SR 11 Inability to reduce carbon footprint in line with targets The risk that the Council will be unable to achieve net zero emissions by 2045, both in relation to mitigating carbon emissions and adapting to the impacts of climate change. Net zero refers to achieving an overall balance between emissions produced and emissions taken out of the atmosphere. This target has been developed in a way that mirrors the emission reduction trajectory set by the Scottish Government in light of the Climate Emergency. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 27-Jul- 2026 9 31-Mar-2027 2 Alan Douglas; Amanda Kean; Gail Macfarlane Potential Effect Failure to meet mandatory national and international policy drivers Failure to meet duties placed on Council by The Climate Change (Scotland) Act 2009 Failure to meet duties placed on Council by The Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 Page 31
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14 Official Failure to meet duties placed on the Council by The Heat Networks (Scotland) Act 2021 and Local Heat and Energy Efficiency Strategies (Scotland) Order 2022. Failure to meet the provisions set out in Waste (Scotland) Regulations 2012 which help Scotland move toward the objectives and targets set out in the Scotland’s Zero Waste Plan to help transition toward a circular economy. Reputational damage. Financial burden of responding to adverse events such as extreme weather (including, but not limited to, flooding, heat waves, wind driven storm events, etc.) resulting in action. Impacts to Council operations and supply chains as a result of adverse climate/extreme weather events. This also impacts residents, local businesses and wider infrastructure across West Dunbartonshire. Financial burden on WDC from increasing energy prices in light of current energy and economic crises’. Energy Efficiency works on our own estate must increase to counteract these impacts. Measures of Impact Improving organisational resilience against the impacts of climate change. Improving local biodiversity through planting of native trees and bulbs in WDC WDC Waste Services Citizens Panel Survey regarding attitudes towards recycling improving The extension of the Queens Quay District Heating Network to NHS Golden Jubilee Hospital, Social Housing, NHS Health Centre, Council buildings and further connections as per scope. Inspiring change through including climate change learning in staff induction, training, team meetings, etc. Uptake in e-learning modules on climate change. Uptake in staff carrying out Sustainable Procurement assessments for tenders. Ensuring climate change and sustainability metrics are included in tenders for suppliers/contractors/etc. (such as carbon reduction measures) so they are being measured for accountability for the impacts they have on the environment Management of service areas setting climate change targets for their operations and staff. The uptake of Green Champion roles, which help normalise Climate Change and Sustainability, practices across the Council. Uptake in sustainable travel such as walking cycling and public transport Risk Factors Funding availability – delivery of actions to mitigate will require resources, capital works and investment by the Council- e.g enhanced energy measures, and heating and renewables projects in both domestic and non-domestic building assets Budget stress – notably due to energy and economic crisis, meaning it’s more difficult for Council to set aside budget to deliver on Climate Change and Net Zero projects and actions. Funding approach – a combination of internal and external funding sources will be need to delivery climate action at scale. Short term funding mechanisms such as annual payback of Council expenditure presents difficulties for delivering long-term projects. Climate Change investments also need to take account of whole-life costs including reduced maintenance costs and avoided Adaptation costs. Internal capacity – limited staff time and availability, largely due to reduced Council budgets, further impacted by Covid19. Communication – both internally (to avoid ‘silo’ working) and externally (engaging with the public and keeping abreast of local/national/international changes to policy). Economics – some technologies, materials and skills are still very expensive so innovation must progress to enhance the viability of climate actions within the context of the Council’s budget constraints. Strategy and planning – all existing and future Council plans should place responding to the climate emergency at their core and ensure integration with other Council services. Legislation & Regulatory – the ability to implement some climate actions is constrained at the local level by minimum standards and other restrictions set through legislation and national policy, for example in relation to building regulations, planning and procurement. Public attitudes and behaviours - Changing behaviour of residents, businesses and stakeholders positively and proactively, especially where there are cost implications to the delivery of climate actions. Internal Controls . Climate Change Strategy 2021-2026 . Action Plan 2021-2026 . Climate Change Action Group (CCAG) . Pentana Risk Management System – devolved responsibilities of climate change actions/milestones/KPI’s to service areas. . Scottish Government – Mandatory annual Climate Change Duties Reporting . Queens Quay District Heating Network . Strategic Environment Assessment (SEA) . Air quality monitoring . Converting some Council pool fleet to Electric Vehicles (EVs). . Climate Ready Clyde (CRC) – a cross-sector initiative funded by fifteen member organisations and supported by the SG. Delivery of a Locale Heat & Energy Efficiency Strategy (LHEES) and delivery plan by December 2023 – which sets out the Council’s area-based approach to reducing emissions of heating and energy efficiency improvements to ALL assets across WD. This includes private housing, businesses, etc. which are not owned/operated by WDC. . Waste infrastructure and greatly improving approach to how Council and residents reduce, reuse and recycle waste. Notably, taking a Circular Economy approach to waste services and implementing appropriate infrastructure and contracts to do so. Latest Note The risk assessment remains unchanged from mid-year. Page 32
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15 Official The Council's most recent emissions reported in November for 2024/25 showed significant progress. (Details are set out under the PI ‘Tonnage of carbon dioxide emissions from Council operations and assets’ above.) The long-term Climate Change Coordinator vacancy has been filled internally; this currently leaves another vacancy within the energy team that will be filled as soon as possible. Participation from service areas has increased at Climate Change Action Plan meetings and emission reductions actions and projects are forthcoming. The Council also has the opportunity to utilise ClimateView and track trajectory to Net Zero, allowing actions and projects to be prioritised and a more collective, strategic approach to be implemented. The Strategic Risk will be reviewed at the next Climate Change Action Plan meeting for relevance and an amended risk / set of risks will be reported to future meetings. Risk Opportunity Our local environment is protected, enhanced and valued rOur residents feels pride in their local neighbourhood The percentage of household waste sent for reuse, recycling and composting has increased resulting in reduction in the percentage that was being landfilled. The percentage of council land which promotes diversity of habitat and species has increased Our resources are used in an environmentally sustainable way Increase in the percentage of businesses taking action to reduce their carbon impact Reduction in CO2 emissions under the Council’s influence Reduction in West Dunbartonshire Area-Wide emissions as per requirements of the climate change (Scotland) act Residents actively involved in tackling climate change and protecting the environment The economy and infrastructure become more low carbon and environmentally-friendly Our neighbourhoods are sustainable and attractive Increased investment in our housing stock including improving energy efficiency Housing developments are meeting the needs of our changing population The quality of neighbourhoods has improved Our roads and transport network are maintained and they promote safe travel routes Linked Actions Code & Title Progress Status Assigned To R&R/25-26/025 Develop the Local Heat and Energy Efficiency Strategy Delivery Plan Amanda Kean; Elaine Troup R&R/26-27/021 Complete the Local Heat and Energy Efficiency Delivery Plan for implementation Amanda Kean R&R/25-26/024 Co-ordinate, monitor and report the progress of the Council’s Climate Change Action Plan for 2025/26 Amanda Kean; Elaine Troup SR 12 National Power Outage (NETS Failure) There is a risk that a sustained or widespread national power outage results in a loss of electricity across West Dunbartonshire, leading to major disruption of council services, ICT systems, communications, care provision, and critical infrastructure. This may result in risks to vulnerable residents, employee safety, service continuity, statutory compliance, and reputational damage. Current Risk Matrix Last Review Date Current Rating Target Risk Matrix Target Date Target Rating Assigned To 31-Jul- 2026 8 31-Mar-2027 4 Victoria Rogers Potential Effect A loss of electricity across West Dunbartonshire would lead to major disruption of council services. Impacts would be felt on ICT systems, council communications both internally and externally, care provision to residents, and critical infrastructure. This may result in an increased risk to vulnerable residents, employee's safety, service continuity, statutory compliance, and reputational damage. Measures of Impact - Inability to deliver essential services (care at home, social care, waste, housing support) - ICT and data system outages (telecommunications, data networks, email, telephony, business applications, case management) Page 33
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16 Official - Reputational damage and loss of public confidence - Loss of digital payments and access to online services - Disruption to emergency response and multi‑agency coordination - Employee welfare issues (health, safety, lone working) - Reduced ability to deliver essential and statutory services - Increased risk to vulnerable residents reliant on powered medical or care equipment Risk Factors - An increased number in instances of extreme weather caused by climate change - Damage to power grid infrastructure (accidental or intentional) - Failure in power grid infrastructure due to lack of maintenance or failure in maintenance processes - Failure to have appropriate Business Continuity Planning in place to ensure provision of council services during a power outage - lack of co-ordination with neighbouring local authorities and national organisations on steps to be taken during a power outage - Lack of employee knowledge on council and HSCP Business Continuity Plans with a specific focus on steps to be taken during a power outage - The only council asset currently equipped with a secondary power system (generator) which could be deployed during a power outage is the Data Centre - Cyber or hostile state attack on power grid infrastructure - No charging facilities for EV fleet - Increase to life risk of vulnerable residents within WDC premises due to lack of secondary power systems within high-risk buildings (care homes etc.) - Loss of staff which will impact upon service delivery. Internal Controls - Council and HSCP Business Continuity Plans covering NETS failure and loss of utilities - Identification and prioritisation of Essential Services - ICT Disaster Recovery and Cyber Incident Response Plans - Pre‑identified fallback locations - Cross‑service power resilience planning and assurance checklists - Multi‑agency emergency planning via Local Resilience Partnership - Established resilient communications, including Raynet antenna installations in WD area, now covering all authorities under the CCS umbrella - Employee awareness through business continuity and emergency planning guidance Latest Note 4/8/26- further work required at Church St to extend Raynet coverage (fully funded by CCS); work ongoing to complete BCP for all services with senior leadership awareness sessions and power resilience exercise delivered in 2026 Risk Opportunity - Risk reviewed through Corporate Risk Register and Service Risk Registers - Progress monitored via Business Continuity assurance checks - Lessons learned captured following exercises or incidents - Reported through appropriate governance and resilience forums Linked Actions Code & Title Progress Status Assigned To SR 12/001 Finalise and maintain a Council wide list of Essential Services and priorities Scott Mcfarlane SR 12/002 Define offline working arrangements for critical services in business continuity plans James Gallacher SR 12/003 Extend testing of Raynet and alternative communications arrangements Scott Mcfarlane SR 12/004 Deliver annual NETS failure exercises Scott Mcfarlane SR 12/005 Communications plan for public messaging during power outage Lauren Crooks SR 12/006 Employee welfare plan including redeployment, transport, and safety measures Louise Hastings SR 12/007 Continue annual review of business continuity plans to ensure relevance Scott Mcfarlane Risk Status Alert High Risk Warning Page 34
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WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer – Resources Audit Committee: 2 September 2026 Subject: Internal Audit Plan 2026/27 – Progress to 30 June 2026 1. Purpose 1.1 The purpose of this report is to advise Members of progress to 30 June 2026 against the Internal Audit Plan for 2026/27. 1.2 The report also advises Members of: • further detail on the Internal Audit Plan for 2026/27 • progress towards completion of the Internal Audit Plan for 2026/27 • the status of implementation progress relating to action plans from previously issued Internal Audit reports. 2. Recommendations 2.1 It is recommended that Members note the contents of this report. 3. Background 3.1 The Internal Audit Planning document for 2026/27, setting out the approach to planning and the allocation of resources was approved by the Audit Committee on 10 June 2026. This report provides further detail on the plan at Appendix 1 and on progress towards the plan at Appendix 2. 3.2 When audit reports are issued by Internal Audit, an action plan is agreed with management in relation to issues highlighted by the audit report. Progress on implementing the actions is monitored by Internal Audit on a monthly basis and reported to the Audit Committee. 4. Main Issues 4.1 The annual audit plan sets out the audit coverage for the year utilising available staff resources to enable the Chief Internal Auditor to provide the annual internal audit opinion regarding the adequacy and effectiveness of internal control within West Dunbartonshire Council (the Council). 4.2 In the period to 30 June 2026 the focus has been on: year-end deliverables, recruitment into the vacant Auditor post, completion of ongoing audit work and implementation of the new shared Chief Auditor arrangements. As previously advised, previously there has been a Shared Service Manager covering West Dunbartonshire and Inverclyde Councils. This arrangement has been extended to include East Dunbartonshire Council from 1 April 2026, with a Chief Internal Auditor covering the three Councils. ITEM 6 Page 37
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4.3 There have been no audit reviews finalised since the June 2026 Audit Committee. This has been primarily due to vacancies within the team, the other competing priorities referred to at 4.2 above and due to timing issues around completion of the work that is in progress. 4.4 Two rounds of recruitment for the Auditor post have, to date, been unsuccessful. A third round has commenced and interviews are scheduled for August. A verbal update will be provided to Members on progress. 4.5 Notwithstanding the above resource challenges, work has continued on Budgetary Control and on Investigatory work. In addition, work on Waste Stock Controls is underway. Integration Joint Board 4.6 A draft plan for audit work for the Integration Joint Board 2026-27 has been prepared which will be presented to and regularly reported on to the Integration Joint Board Audit & Performance Committee. Internal Audit Action Plans 4.7 Internal audit action plans are monitored by Internal Audit on a monthly basis. The status report at 30 June 2026 is provided at Appendix 3. Ongoing Corporate Fraud Team Work 4.8 The Corporate Fraud team’s day to day work continues to focus on referrals relating to council tax reduction/single person discounts, joint working with DWP in relation to housing benefit and council tax reduction, referrals relating to housing tenancies and investigating relevant national fraud initiative matches. 4.9 The Internal Audit Team and the Corporate Fraud Team continue to work together as appropriate in order to ensure a joined-up approach to fraud investigation and detection for example in relation to whistleblowing enquiries. National Fraud Initiative 4.10 The National Fraud Initiative is a series of biennial exercises run by the Cabinet Office and Audit Scotland to identify or prevent fraud and error by matching electronic data held by public bodies. Participating bodies are required to investigate data discrepancies within a set timescale and report back on any savings. 4.11 In relation to the 2024 exercise, a significant number of matches were received in relation to a range of datasets including Housing Benefit, Council Tax Reduction, Payroll, Business Rates, Creditors and Blue Badges. This work is substantially complete and planning has commenced in preparation for the next round of National Fraud Initiative matches. Benchmarking 4.12 In accordance with the Council’s Strategic Improvement Framework, the Council’s Internal Audit service continues to be part of a benchmarking group which involves seven other Councils. Page 38
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5. People Implications 5.1 There are no people implications. 6. Financial and Procurement Implications 6.1 The Corporate Fraud Team activity can result in actual recoveries, charges and re-billings. The total amount of actual recoveries, charges and re-billings identified from 1 April 2025 to 31 March 2026 was £416,424, a significant increase on 2024/25 which was £123,651. Results can materially vary from year to year due to the timing of National Fraud Initiative data matches being made available, new data sets being available for the first time and other factors such as fraud referrals. The results in 2025-26 were significantly positively impacted by the release of HMRC datasets for the first time which led to the team establishing material fraud or error. 6.2 There are no procurement implications arising from this report. 7. Risk Analysis 7.1 There is a risk that failure to deliver the Internal Audit Plan would result in an inability to provide a reasonable level of assurance over the Council’s system of internal financial control to those charged with governance. The main basis for providing assurance is coverage of the planned risk-based audits. Every endeavour is made to ensure that no material slippage occurs in risk-based audits by concentrating resources on these audits. 8. Equalities Impact Assessment (EIA) 8.1 There are no direct equalities impacts arising from the report however where an agreed action results in a change in process this will be considered for equalities impact by the relevant service. 9. Consultation 9.1 This report has been subject to consultation with appropriate Chief Officers. 10. Strategic Assessment 10.1 This report helps ensure strong governance and will help support delivery of the Council Plan, and in particular priority 4: Inclusive and Adaptable, with the Council seeking to provide high quality and adaptable services that deliver value for money. .................................... Laurence Slavin Chief Officer - Resources Date: 2 September 2026 Person to Contact: Gillian McConnachie, Chief Internal Auditor E-mail: gillian.mcconnachie@eastdunbarton.gov.uk Appendices: Internal Audit Plan Summary (Appendix 1) Page 39
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2026/27 Annual Audit Plan – Progress to 30 June 2026 (Appendix 2) Status of Internal Audit Action Plans at 30 June 2026 (Appendix 3) Wards Affected: All wards Page 40
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Appendix 1 – Detailed Audit Plan 2026/27 – allocation of resources Outputs Legal entity Area Strategic Accountability Review Planned Days 1 WDC 1 - Audit Housing Housing Capital Budget Setting 25 2 WDC 1 - Audit People & Technology Absence Management 30 3 WDC 1 - Audit People & Technology Overtime 23 4 WDC 1 - Audit People & Technology Use of agencies 25 5 WDC 1 - Audit Resources Budgetary Control 15 6 WDC 1 - Audit Resources Commercial and Industrial Property Rents and Leases 15 7 WDC 1 - Audit Roads & Neighbourhood Services Waste Management Supplier Management 25 8 WDIJB 1 - Audit Integrated Joint Board Care at Home - Delayed Discharge Arrangements 25 9 WDIJB 1 - Audit Integrated Joint Board WDIJB - Strategic Planning and Performance Management Arrangements 20 10 WDC 2 - Regularity DABVJB Valuation Joint Board 2 11 WDC 2 - Regularity Education Education Control Self-Assessment 29 12 WDC 2 - Regularity Regulatory & Regeneration Corporate Purchase Cards – regularity review 20 13 WDC 2 - Regularity Roads & Neighbourhood Services Waste Stock Controls - Bins (In progress) 10 14 WDC 2 - Regularity WDC Annual Audit Report 15 15 WDC 2 - Regularity WDC Annual Governance Statements 15 16 WDC 2 - Regularity WDC Internal Audit Plan 2027/28 15 17 WDC 2 - Regularity WDC Follow Up 20 18 WDIJB 2 - Regularity Integrated Joint Board HSCP Section Payments 25 19 WDC 3 - Consultancy Resources New Finance System 15 20 WDC 3 - Consultancy WDC Posties Park Investigation 5 Total 374 Page 41
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2026-2027 Internal Audit Annual Audit Plan – Progress to 30 June 2026 Appendix 2 Audit/Status Not Started Planning Fieldwork Fieldwork Complete Draft Report Final Report Date Reported to Audit Committee Risk-Based Reviews Housing Capital Budget Setting ✓ Corporate Health and Safety ✓ Excessive Overtime Controls ✓ Use of Agencies ✓ Budgetary Control (b/f from 2025/26) ✓ ✓ Commercial and Industrial Properties Rent and Leases (b/f from 2025/26) ✓ Waste Management Supplier Management ✓ Care at Home - Delayed Discharge Arrangements ✓ Integration Joint Board Risk Based Review (Strategic Planning) ✓ Regularity Audits Education Control Self-Assessment Exercise Not started Corporate Purchase Cards – Quarterly Checks Not started Waste Stock Controls In progress Section Payments (HSCP) Not started Annual Audit Report 2025/26 Annual Audit Report completed Annual Governance Statements 2025/26 Annual Governance Statement completed Internal Audit Plan 2027/28 Not started Page 43
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2026-2027 Internal Audit Annual Audit Plan – Progress to 30 June 2026 Appendix 2 Other Work Investigation work (Posties Park) In progress New Finance System Consultancy Not stated Integration Joint Board – Internal Audit Service Not started National Fraud Initiative Matches for the 2024 Exercise is substantially complete and planning for the next exercise will be completed in the coming months. Page 44
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Appendix 3 REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS AT 30 JUNE 2026 Summary: Section 1 Summary of Management Actions due for completion by 30/06/2026 There were 5 actions due for completion by 30 June 2026. One action has been reported as completed by management and the completion date for 4 actions has been revised. Section 2 Summary of Current Management Actions at 30/06/2026 At 30 June 2026 there were no audit reports delayed due to management not finalising the action plan within agreed timescales. Section 3 Current Management Actions at 30/06/2026 At 30 June 2026 there were 10 current audit actions. Section 4 Analysis of Missed Deadlines At 30 June 2026 there were 7 audit actions where the original agreed deadline has been missed. Section 5 Summary of Actions by Audit Year Page 45
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REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS SUMMARY OF ACTION PLANS DUE FOR COMPLETION BY 30.06.2026 SECTION 1 2 Strategic Area No. of Actions Due No. of Actions Completed Deadline missed Revised Date set* Revised Date required to be set* Housing 4 0 4 0 Education 1 1 0 0 Total 5 1 4 0 * These actions are included in the Analysis of Missed Deadlines – Section 4 Page 46
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REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS SUMMARY OF CURRENT ACTION PLANS AT 30.06.2026 SECTION 2 3 CURRENT ACTIONS BY STRATEGIC AREA Roads and Neighbourhood Due for completion September 2026 1 Total Actions 1 Housing Due for completion July 2026 3 Due for completion August 2026 3 Due for completion September 2026 1 Due for completion December 2026 2 Total Actions 9 Total current actions: 10 Page 47
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REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS CURRENT ACTION PLANS AT 30.06.2026 SECTION 3 4 Status Key On track Complete Overdue – update required Missed original due date Current Internal Audit Action Plans Control Self-Assessment (CSA) Education Procedures (Report Issued May 2024) Code Agreed Action Status Original Due Date Due Date Assigned To Managed By IAAP/231 Adequacy of School Fund Procedures (Amber) A review of the procedures will be undertaken and updated to reflect up to date practice and provide sufficient guidance to staff involved in maintaining and managing school funds. A copy of the updated school fund procedures will be disseminated to Heads of establishments. 31-Mar-2025 30-Jun-2026 Senior Education Officer Chief Officer – Education, Learning and Attainment UK Shared Prosperity Fund Assurance Review (Report Issued June 2024) Code Agreed Action Status Original Due Date Due Date Assigned To Managed By IAAP/237 Inadequate policies and procedures to support closure of the fund (Amber) Confirmation has been received that there is a transition year for 26/27 with the council being allocated a budget of £400k. This will be advised to council in the city region update on 29th April. Planning is now underway to move to a new delivery model and determine the workforce impact. The Council is able to utilise UK Shared Prosperity Fund until September when we require to be operating the new model. WDC has a full set of HR policies relating to staff terms and conditions and processes for dealing with the loss of funding which will be implemented where required. 31-Dec-2024 30-Sep-2026 Chief Officer Roads and Neighbourhood Chief Executive Page 48
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REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS CURRENT ACTION PLANS AT 30.06.2026 SECTION 3 5 Status Key On track Complete Overdue – update required Missed original due date Housing Repairs and Maintenance (Report Issued May 2025) Code Agreed Action Status Original Due Date Due Date Assigned To Managed By IAAP/263 /1 Adequacy of Housing Client Function (Red) Carry out a review of the Client Function to identify any areas that require improvement to ensure quality, value for money repair and maintenance services are provided. 31-Jul-2025 31-Aug-2026 Building Services Manager Chief Officer Housing and Employability IAAP/263 /2 Adequacy of Housing Client Function (Red) Implement any necessary Client Function changes identified. 31-Mar-2026 31-Aug-2026 Building Services Manager Chief Officer Housing and Employability IAAP/265 /1 Adequacy of Stock Control Procedures (Amber) Complete the procurement of an appropriate barcoding hardware and software solution. 30-Jun-2025 31-Dec-2026 Contracts Manager Chief Officer Housing and Employability IAAP/265 /2 Adequacy of Stock Control Procedures (Amber) Implement the procurement of an appropriate barcoding hardware and software solution. 31-Jul-2026 31-Jul-2026 Contracts Co- ordinator Chief Officer Housing and Employability IAAP/265 /3 Adequacy of Stock Control Procedures (Amber) Present a decision paper to the Integrated Housing Management System (IHMS) Project Board to approve development of the automatic reordering module. 30-Jun-2025 30-Sep-2026 IHMS Change Officer Chief Officer Housing and Employability IAAP/265 /4 Adequacy of Stock Control Procedures (Amber) Following approval, complete necessary work implement, test and go live on QL housing management system. 31-Aug-2026 31-Aug-2026 IHMS Change Officer Chief Officer Housing and Employability IAAP/269 /2 Inefficient Allocation of Resources (Amber) Develop alternative scheduling and appointment system to replace Dynamic Resource Scheduling (DRS). 31-Jul-2025 31-Jul-2026 IHMS Change Officer Chief Officer Housing and Employability IAAP/269 /4 Inefficient Allocation of Resources (Amber) Implement new scheduling and appointment system. 30-Sep-2025 31-Jul-2026 Building Services Manager/IHMS Change Officer Chief Officer Housing and Employability Page 49
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REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS CURRENT ACTION PLANS AT 30.06.2026 SECTION 3 6 Status Key On track Complete Overdue – update required Missed original due date Code Agreed Action Status Original Due Date Due Date Assigned To Managed By IAAP/274 /4 Compliance with HMRC Benefit in Kind Guidelines (Amber) Carry out a review of the homestart protocol with workforce, Trades Unions (TUs) and transport service ensuring this remains fit for purpose. 31-Jan-2026 31-Dec-2026 Maintenance Manager/Projects Manager Chief Officer Housing and Employability Page 50
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REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS ANALYSIS OF MISSED DEADLINES AT 30.06.2026 SECTION 4 Status Key 7 On track Complete Overdue – update required Missed original due date –new date set Report Agreed Action Original Due Date Revised Date Management Comments Housing Repairs and Maintenance (May 2025) Adequacy of Housing Client Function (Red) Carry out a review of the Client Function to identify any areas that require improvement to ensure quality, value for money repair and maintenance services are provided. 31-Jul-2025 31-Dec-2025 30-Jun-2026 31-Aug-2026 Significant work has taken place to produce a Client Function document to capture how Building Services manage Quality, Performance, Accountability and Monitoring within the section to meet requirements. This has been reviewed by the senior management team and a final draft is awaiting final approval from Value for Money (VfM) Group. Housing Repairs and Maintenance (May 2025) Adequacy of Housing Client Function (Red) Present Building Services 2025/2026 improvement action plan to the Building Service Board for approval. 30-Jun-2025 31-Dec-2025 30-Jun-2026 31-Aug-2026 Input received from VfM Group and incorporated within amendments. Final approval pending. Housing Repairs and Maintenance (May 2025) Inefficient Allocation of Resources (Amber) Develop alternative scheduling and appointment system to replace DRS. 31-Jul-2025 31-Jul-2026 Go live date revised to July 2026. Agreed that this was required due to testing, training and implementation required Housing Repairs and Maintenance (May 2025) Inefficient Allocation of Resources (Amber) Implement new scheduling and appointment system. 30-Sep-2025 31-Jul-2026 Go live date revised to July 2026. Agreed that this was required due to testing, training and implementation required Housing Repairs and Maintenance (May 2025) Adequacy of Stock Control Procedures (Amber) Complete the procurement of an appropriate barcoding hardware and software solution. 30-Jun-2025 30-Jun-2026 31-Dec-2026 Work has taken place to establish the requirements of a system which will facilitate better efficiencies and controls within the Stores. An appropriate software solution is yet to be identified which will interface with QL housing management system to allow the implementation. Housing Repairs and Maintenance (May 2025) Adequacy of Stock Control Procedures (Amber) Present a decision paper to the IHMS Project Board to approve development of the automatic reordering module. 30-Jun-2025 31-Dec-2025 30-Sep-2026 The action requires to be re-evaluated and a review undertaken of available packages. Housing Repairs and Maintenance (May 2025) Compliance with HMRC Benefit in Kind Guidelines (Amber) Carry out a review of the homestart protocol with workforce, TUs and transport service ensuring this remains fit for purpose. 31-Jan-2026 30-Jun-2026 31-Dec-2026 Initial discussions have taken place with TUs and noted the requirement to review, however unable to gauge what impact electric charging will have on the Homestart protocol. Review of existing protocol to be done in the meantime and add appendix once charging infrastructure in place. Page 51
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REPORT TO AUDIT COMMITTEE ON STATUS OF INTERNAL AUDIT ACTIONS SUMMARY OF ACTIONS BY AUDIT YEAR SECTION 5 8 Status at 30 June 2026 Audit Year No of Agreed Actions No of actions complete Current actions by Grade Red Amber Green* 2020/2021 25 25 0 0 0 2021/2022 51 50 0 0 1 2022/2023 51 51 0 0 0 2023/2024 62 60 0 2 0 2024/2025 80 71 2 6 1 Total 269 257 2 8 2 * Green actions are within the Council’s risk appetite and are therefore not included in Audit Committee reports. Page 52
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WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer – Resources Audit Committee: 02 September 2026 ___________________________________________________________________ Subject: Forvis Mazars – 2025/26 Annual Audit Plan 1. Purpose 1.1 To present the Forvis Mazars Annual Audit Plan for the year ending March 2026 to Committee for information. 2. Recommendations 2.1 Members are asked to note the 2025/26 Forvis Mazars Annual Audit Plan. 3. Background 3.1 Forvis Mazars (the Council’s external auditors) have produced their 2025/26 Annual Audit Plan which provides an overview of their audit scope, approach, timescales, the significant risks they have identified through their audit planning process, the audit fee and describes the outputs the Council can expect to receive. The Annual Audit Plan is appended to this report for noting. 4. Main Issues 4.1 Forvis Mazars are the Council’s appointed external auditors with 2025/26 being the forth year of their five year appointment. They have completed the audit planning phase of their audit approach and issued the Council’s 2025/26 Annual Audit Plan. 4.2 Forvis Mazars’s audit timeline is set out on page 5 of the Plan and indicates a targeted completion of the audit in February 2027. This means the Council will not meet the statutory deadline for the sign off of the 2025/26 financial statements. Similar to the delayed 2022/23, 2023/24 and 2024/25 audits, an external audit process which is significantly delayed creating issues for the Council including capacity issues for officers, missing deadlines for other statutory returns, and reducing the time finance staff can commit to the annual budget process, budget monitoring and providing support to services. As the audit completion is February 2027 this will create further pressures at a time when finance staff are working on the annual budget process. Audit of Financial Statements 4.3 Page 17 of the Plan sets out the Council’s group account components and the scope of work Forvis Mazars will perform in relation to the group components. ITEM 7 Page 53
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4.4 Pages 25-30 set out what Forvis Mazars have identified as the key risks that are relevant to the Council’s financial statements and their planned response. There are three identified risks: - Management override of controls - Valuation of Property, Plant and Equipment - Valuation of the net defined pension liability/surplus It should be noted that these three risks will feature in the audit plans of most, if not all, local authorities). ` Wider Scope and Best Value Audit 4.5 At least once every five years, the Controller of Audit will report to the Accounts Commission on the Council’s performance in meeting its Best Value duties. The Council was included in the first year of the programme which ran from October 2023 to August 2024 and was subject to a specific report to Council. 4.6 The Code of Audit Practice also requires areas of significant audit risk to be considered as part of wider scope audit work. These are set out on pages 31- 36 of the Audit Plan including the planned procedures Forvis Mazars intend to carry out as part of their audit work. They focus on: - Financial sustainability - Timeliness - Using resources effectively Audit Fee 4.7 The 2025/26 audit fee is set out on page 38 of the Plan. They are set at £356,220 for the Council which is a £14,810 increase (4%) on the base 2024/25 audit fee. 4.8 The fee to audit the Council’s charitable trusts is £10,628 which is a £438 increase on the 2024/25 audit fee, 4.9 Representatives of the Forvis Mazars audit team will be in attendance at the Committee to present the report and answer any questions. 5. People Implications 5.1 There are no personnel issues. 6. Financial and Procurement Implications 6.1 The total Council fee of £356,220 compares to £341,410 for 2024/25. The Trust Fund fee of £10,628 is also funded by the Council. 6.2 There are no direct procurement implications arising from this report. Page 54
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7. Risk Analysis 7.1 Mazar’s assessment of the risks facing the Council is detailed within their audit strategy memorandum. An additional internal risk assessment was not required. 8. Equalities Impact Assessment (EIA) 8.1 There are no EIA issues. 9. Consultation 9.1 The report has been subject to consultation with appropriate Chief Officers. 10. Strategic Assessment 10.1 This report relates to all of the Council’s Strategic Priorities. Laurence Slavin Chief Officer - resources Date: 02 September 2026 Person to Contact: Laurence Slavin, Chief Officer - Resources Email: Laurence.slavin@west-dunbarton.gov.uk Appendices: Appendix 1 – Forvis Mazar’s 2025/26 Annual Audit Plan Page 55
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Annual Audit Plan West Dunbartonshire Council – Year ending 31 March 2026 August 2026 Appendix 1 Page 57
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Annual Audit Plan Letter Audit Committee West Dunbartonshire Council 16 Church Street Dumbarton Glasgow G82 1QL 17 August 2026 Forvis Mazars 100 Queen Street Glasgow G1 3DN Dear Audit Committee Members, Annual Audit Plan – Year ending 31 March 2026 I am pleased to present our Annual Audit Plan (“AAP”) for West Dunbartonshire Council for the year ended 31 March 2026. This document will be presented at the Audit Committee meeting on 2 September 2026. If you would like to discuss any matters in more detail, please contact me on 0781 6354 994. This report provides an overview of the planned scope and timing of our audit, including the significant and enhanced audit risks we have identified. In addition, as it is a fundamental requirement that we are, and are seen to be, independent of the Council this report also summarises our considerations and conclusions on our independence. Two-way communication with you is key to a successful audit and is important in: • Reaching a mutual understanding of the scope of our audit and our respective responsibilities, • Sharing information to assist each of us with fulfilling our respective responsibilities, • Providing you with constructive observations arising during our audit, and • Ensuring that we gain an understanding of your attitude and views in respect of the risks facing the Council which may affect our audit, including the likelihood of those risks materialising and how they are monitored and managed. Wales with registered number OC308299 and with its registered office at 30 Old Bailey, London, EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001139861. VAT number: GB 839 8356 73 Forvis Mazars LLP – 100 Queen Street- Glasgow- G1 3DN Tel: 0141 227 2400 – www.forvismazars.com/uk Forvis Mazars LLP is the UK firm of Forvis Mazars Global, a leading global professional services network. Forvis Mazars LLP is a limited liability partnership registered in England and Page 58
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Annual Audit Plan Letter (continued) Annual Audit Plan – Year ending 31 March 2026 (continued) This report, which we have prepared following our initial planning discussions with management, facilitates a discussion with you on our audit approach. We welcome any questions, concerns, or input you may have on our approach. Providing a high-quality service is extremely important to us and we strive to provide technical excellence with the highest level of service quality, together with continuous improvement to exceed your expectations. During the meeting, we would be grateful for your views/ knowledge on the following specific matters: • Whether you have identified any other risks (business, laws & regulation, fraud, going concern, etc.) that may result in material misstatements in the financial statements. • If you are aware of any significant communications between the Council and its regulators. • If there are any matters that you consider warrant particular attention during our audit and/ or any areas where you would like additional procedures to be undertaken. This report has been prepared in accordance with the responsibilities set out within the Audit Scotland’s Code of Audit Practice (“the Code”) and for the sole benefit of the Audit Committee. Except where required by law or regulation, it should not be used, quoted or made available to any other parties without our prior written consent. Yours faithfully, Tom Reid (Director) Forvis Mazars LLP Wales with registered number OC308299 and with its registered office at 30 Old Bailey, London, EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001139861. VAT number: GB 839 8356 73 Forvis Mazars LLP – 100 Queen Street- Glasgow- G1 3DN Tel: 0141 227 2400 – www.forvismazars.com/uk Forvis Mazars LLP is the UK firm of Forvis Mazars Global, a leading global professional services network. Forvis Mazars LLP is a limited liability partnership registered in England and Page 59
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4 Contents 01 Engagement and responsibilities summary 02 Your audit engagement team 03 Audit scope, approach and timeline 04 Materiality and misstatements 05 Significant risks and other key judgement areas 06 Wider scope and Best Value 07 Audit fees and other services 08 Confirmation of our independence Appendix A – Key communication points Appendix B - Current year updates, forthcoming accounting and other issues This document is to be regarded as confidential to West Dunbartonshire Council. It has been prepared for the sole use of the Audit Committee as the appropriate sub-committee charged with governance. No responsibility is accepted to any other person in respect of the whole or part of its contents. Our written consent must first be obtained before this document, or any part of it, is disclosed to a third party. Page 60
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Executive summary 5 Audit risks and other significant matters (pages 25 – 30) Risk Significant risk Enhanced risk Risk evolution Page Management override of controls (applies to Council and Group) ● ○ = Page 27 Valuation of property, plant and equipment (applies to the Council only) ● ○ = Page 28 Valuation of the net defined benefit (liability)/surplus (applies to the Council only) ● ○ = Page 29 (pages 20 – 24) Consolidated Gross Expenditure at Surplus/deficit on Provision of Services: £651,582,000 Materiality Performance materiality Reporting threshold £13,031,640 £9,773,730 £390,949 Council Gross Expenditure at Surplus/deficit on Provision of Services: £641,743,000 Performance materiality Reporting threshold £12,834,860 £9,626,145 £385,046 Audit timeline (pages 14 and 43) Planning and Risk Assessment July to August 2026 Review of Key Business Processes August 2026 Presentation of Annual Audit Plan September 2026 Year-End Fieldwork August to December 2026 Presentation of Findings from Thematic Reviews December 2026 Completion Procedures January to February 2027 Presentation of Annual Audit Report and Independent Auditor’s Report February 2027 Fees (page 38) Audit fees £356,220 Non-audit fees N/A Total fees £356,220 Our independence (pages 39 – 41) We are independent of the Council in accordance with the ethical requirements that are relevant to our audit in the UK, including the FRC’s Ethical Standard Materiality Page 61
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01Engagement and responsibilities summary Page 62
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7 Engagement and responsibilities summary We are appointed to perform the external audit of West Dunbartonshire Council (the Council) for the year to 31 March 2026. The scope of our engagement is set out in the Code of Audit Practice, issued by the Auditor General and the Accounts Commission available from the Audit Scotland website: Code of audit practice | Audit Scotland (audit-scotland.gov.uk). Our responsibilities are principally derived from the Local Government (Scotland) Act 1973 (the 1973 Act) and the Code of Audit Practice, as outlined below and overleaf. Audit opinion We are responsible for forming and expressing an opinion on whether the financial statements are prepared, in all material respects, in accordance with applicable law and UK adopted international accounting standards as interpreted and adopted by the Code of Practice on Local Authority Accounting un the United Kingdom 2025/26. Our audit does not relieve management or the Audit Committee, as Those Charged With Governance, of their responsibilities. Management is responsible for the assessment of the Council’s ability to continue as a going concern. As auditors, we are required to obtain sufficient, appropriate audit evidence regarding, and conclude on: a) whether a material uncertainty related to going concern exists, and b) the appropriateness of Management’s use of the going concern basis of accounting in the preparation of the financial statements. Fraud The responsibility for safeguarding assets and for the prevention and detection of fraud, error, and non-compliance with law or regulations rests with both you and management. This includes establishing and maintaining internal controls over asset protection, compliance with relevant laws and regulations, and the reliability of financial reporting. As part of our audit procedures in relation to fraud, we are required to inquire of you and key management personnel and internal audit, on their knowledge of instances of fraud, and their views on the risks of fraud and on internal controls that mitigate those risks. In accordance with International Standards on Auditing (UK), we plan and perform our audit to obtain reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether due to fraud or error. However, our audit should not be relied upon to identify all such misstatements. Page 63
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8 Engagement and responsibilities summary (continued) Internal control Management is responsible for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. We are responsible for obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Council‘s internal control. Wider reporting We are required to provide assurance on the Whole of Government Accounts (WGA) returns prepared by West Dunbartonshire Council. The level of auditor assurance required depends on monetary thresholds set by HM Treasury. Wider scope and Best Value We are also responsible for reviewing and reporting on the wider scope arrangements that the Council has in place and its arrangements to secure Best Value. We discuss our approach to wider scope and Best Value work further in the ‘Wider scope and Best Value’ section of this report. Page 64
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02Your audit engagement team Page 65
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Tom Reid Engagement Director Caleb Oguche Engagement Manager Mark Ramsay Team Leader Tom.Reid@mazars.co.uk 07816 354 994 Caleb.Oguche@mazars.co.uk 07974 124 504 Mark.Ramsay@mazars.co.uk 07816 209 265 Your audit team Your audit team Wewill utilise internal and external expertson this engagementin thefollowing areas: • Forvis Mazars Internal Property Team for Property, Plant and Equipment valuation • PwC Actuarial Services in relation to Pension valuation. 9 Page 66
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03Audit scope, approach, and timeline Page 67
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Audit scope, approach, and timeline Audit scope Our audit approach is designed to provide an audit that complies with all professional requirements. Our audit of the financial statements will be conducted in accordance with International Standards on Auditing (UK), relevant ethical and professional standards, our own audit methodology, and in accordance with the terms of our engagement. Our work is focused on those aspects of your business which we consider to have a higher risk of material misstatement, such as those impacted by management judgement and estimation, application of new accounting standards, changes of accounting policy, changes to operations, or areas found to contain material errors in the past. Audit approach Our audit approach is risk-based, and the nature, extent, and timing of our audit procedures are primarily driven by the areas of the financial statements we consider to be more susceptible to material misstatement. Following our risk assessment where we assess the inherent risk factors (subjectivity, complexity, uncertainty, change and susceptibility to misstatement due to management bias or fraud) to aid in our risk assessment, we develop our audit strategy and design audit procedures to respond to the risks we have identified. If we conclude that appropriately designed controls are in place, we may plan to test and rely on those controls. If we decide controls are not appropriately designed, or we decide that it would be more efficient to do so, we may take a wholly substantive approach to our audit testing where, in our professional judgement, substantive procedures alone will provide sufficient appropriate audit evidence. Substantive procedures are audit procedures designed to detect material misstatements at the assertion level and comprise tests of detail (of classes of transaction, account balances, and disclosures), and substantive analytical procedures. Irrespective of our assessed risks of material misstatement, which takes account of our evaluation of the operating effectiveness of controls, we are required to design and perform substantive procedures for each material class of transaction, account balance, and disclosure. Our audit has been planned and will be performed to provide reasonable assurance that the financial statements are free from material misstatement and give a true and fair view. The concept of materiality and how we define a misstatement is explained in the ‘Materiality and misstatements’ section of this report. Where appropriate our Annual Audit Plan reflects discussions with the Local Area Network. The diagram on page 14 outlines the procedures we perform at the different stages of our audit. We have also provided, later in this report, a table setting out the procedures we perform for the significant financial statement areas. 12 Page 68
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Audit scope, approach, and timeline (continued) 13 Management’s and our experts Management makes use of experts in specific areas when preparing West Dunbartonshire Council’s financial statements. We also use experts to assist us to obtain sufficient appropriate audit evidence on specific items of account. Item of account Management’s expert Our expert Property, Plant and Equipment Newmark Gerald Eve LLP Forvis Mazars Internal Property Team will assist us in reviewing the management expert’s valuation of council dwellings. Net Defined Benefit Liability/Surplus Hymans Robertson We have identified PwC as an auditor’s expert. PwC assist in providing assurance over pension calculations and assumptions. We have also identified EY, auditors of the Fund Administrator (Strathclyde Pension Fund), as another auditor. We will request assurances under the Audit Scotland protocol. Financial Instruments Fair value Calculations and Disclosures MUFG Pension & Market Services We do not intend to engage an internal expert, but we will take into consideration relevant information available from third parties. Service organisations International Auditing Standards (UK) (ISAs) define service organisations as third party organisations that provide services to West Dunbartonshire Council that are part of its information systems relevant to financial reporting. We are required to obtain an understanding of the services provided by service organisations as well as evaluating the design and implementation of controls over those services. We are not aware, from our planning procedures and enquiries of management, that the Council uses any service organisations Reliance on internal audit Where possible, we will use the work performed by internal audit when designing the nature, extent, and timing of our audit procedures. We will discuss with internal audit the progress of their work and their findings prior to commencing our controls evaluation procedures. Where we intend to rely on the work on internal audit, we will evaluate the work performed by them and perform our own procedures to determine the adequacy of that work for our audit. Page 69
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Audit scope, approach, and timeline (continued) 14 Planning and risk assessment July to August 2026 • Planning our visit and developing our understanding of the Council • Documenting systems and controls and performing walkthroughs • Risk identification and assessment • Considering proposed accounting policies and accounting treatments • Developing our audit strategy and planning the audit work to be performed • Agreeing timetable and deadlines • Preliminary analytical review • Determination of materiality • Undertake planning work for our wider scope and best value responsibilities Fieldwork August to December 2026 • Executing our strategy, starting with significant risks and other higher-risk areas • Receiving and reviewing the draft financial statements • Form a view on the adequacy of the Council’s arrangements across the four wider scope areas and in relation to securing best value Communication Throughout Audit • Communicating progress and any issues arising • Clearance meeting(s) Completion January to February 2027 • Final review of financial statements, and disclosure checklist • Final Engagement Director review • Agreeing the content of the letter of representation • Preparing our auditor’s report • Reporting to the Audit Committee including wider scope/best value reporting • Subsequent events procedures • Signing our auditor’s report Page 70
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15 Audit scope, approach, and timeline (continued) Audit approach for significant financial statement areas Our audit approach on significant financial statement areas is set out below. Financial statement area Significant risk Key judgement area or enhanced risk Testing of controls Substantive procedures Comments Property, Plant and Equipment Yes No No Yes See page 28 for details of significant risk. Net Pensions Liability Yes No No Yes See page 29fordetails of significant risk. Short Term Debtors No No No Yes Standard risk Cash and Cash Equivalents (net) No No No Yes Standard risk Short Term Creditors No No No Yes Standard risk Loans and Borrowings No No No Yes Standardrisk PPP and Finance Lease Liabilities No No No Yes Standardrisk Provisions and Contingencies No No No Yes Standardrisk Usable and Unusable Reserves No No No Yes Standardrisk Housing Revenue Account No No No Yes Standardrisk Non-Domestic Rate Account No No No Yes Standardrisk Financial Instruments No No No Yes Standardrisk Cost of Services Income No No No Yes Standard risk Cost of Services Expenditure No No No Yes Standard risk OtherComprehensive Operating (Income)/Expenditure No No No Yes Standard risk Financing and investment (Income)/Expenditure No No No Yes Standard risk Taxation and Non-specific GrantIncome No No No Yes Standard risk Consolidation and Investment in Associates & Joint Ventures No No No Yes Standard risk Page 71
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16 Audit scope, approach, and timeline (continued) Audit approach for significant financial statement areas Our audit approach on significant financial statement areas is set out below. Financial statement area (Disclosures) Significant risk Key judgement area or enhanced risk Testing of controls Substantive procedures Comments Cash Flow Statement No No No Yes Related partytransactions No No No Yes RemunerationReport No No No Yes ManagementCommentary No No No Yes Annual GovernanceStatement No No No Yes Page 72
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17 Audit scope, approach, and timeline (continued) Group audit approach The preliminary scope of our group audit is set out below. When scoping our group audit, we have considered quantitative criteria (the contribution of each of the group’s consolidated components to the group financial statements); qualitative criteria (the risks of material misstatement of the group financial statements that consolidated components may present individually at component level); and we have assessed the risk of material misstatement across the group’s consolidated components in aggregate. The nature and extent of audit work we plan to perform on the consolidated components is set out below. Component name % (of net operating activity) Location Auditor Scope West Dunbartonshire Council 98 Dumbarton,Scotland Forvis Mazars LLP An audit of the financial information WestDunbartonshire Integration Joint Board - Dumbarton,Scotland Forvis Mazars LLP Not in scope Dunbartonshire and Argyll and Bute Valuation Joint Board - Dumbarton,Scotland Forvis Mazars LLP Not in scope WestDunbartonshire Leisure Trust 2 Alexandria, Scotland Wbg(Audit Limited) Not in scope Clydebank PropertyCompany - Clydebank, Scotland Azets Audit Services Not in scope WestDunbartonshire Energy Limited Liability Partnership - Dumbarton,Scotland Azets Audit Services Not in scope DumbartonCommonGood - Dumbarton,Scotland Forvis Mazars LLP Not in scope TrustFunds - Dumbarton,Scotland Forvis Mazars LLP Not in scope Page 73
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18 Audit scope, approach, and timeline (continued) Group audit approach The significant financial statement areas in the consolidated financial statements are set out below, including the work that we plan to perform and the coverage we plan to achieve through our group audit approach. Financial statement area Consolidated balance (£’000) Work to be performed % coverage Property, Plant and Equipment 1,272 Substantive audit procedures 99.63 Investment in Associates & Joint Ventures 11,831 Substantive audit procedures 100 Short Term Debtors 77,011 Substantive audit procedures 99.81 Cash and Cash Equivalents (net) 29,670 Substantive audit procedures 92.41 Short Term Creditors (62,938) Substantive audit procedures 99.67 PPP and Finance Lease Liabilities (78,508) Substantive audit procedures 100 Net Pensions Liability (37,020) Substantive audit procedures 100 Loans and Borrowings (870,083) Substantive audit procedures 100 Usable Reserves (39,791) Substantive audit procedures 66.06 Unusable Reserves (309,356) Substantive audit procedures 97.93 Cost of Services Income (280,886) Substantive audit procedures 96.49 Cost of Services Expenditure (596,730) Substantive audit procedures 98.35 Other Operating Expenditure and (income) - (Gain) / loss on Disposal of non-current assets 8,229 Substantive audit procedures 100 Financing and Investment (Income) and Expenditure 41,285 Substantive audit procedures 100 Taxation and Non-specific GrantIncome (350,927) Substantive audit procedures 100 Other Comprehensive (Income) and Expenditure 20,958 Substantive audit procedures 100 Page 74
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19 Audit scope, approach, and timeline (continued) Audit of trusts registered as Scottish charities The Charities Accounts (Scotland) Regulations 2006 outline the accounting and auditing requirements for charitable bodies. The 2006 Regulations require charities to prepare annual accounts and an auditor to prepare a report to the charity trustees where any legislation requires an audit. The Local Government (Scotland) Act 1973 specifies the audit requirements for any trust fund where some or all members of a Council are the sole trustees. Therefore, a full and separate audit and independent auditor’s report is required for each registered charity where members of the Council are sole trustees. Members of the Council are the sole trustees for four trusts registered as West Dunbartonshire Council Charitable Trusts, with total assets of £261,365. The preparation and audit of financial statements of registered charities is regulated by the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. We have not identified any significant risks, other than the risk of management override of controls which we have also identified as a risk for the Council’s annual accounts, for the financial statements of the West Dunbartonshire Council Charitable Trusts. Page 75
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04Materiality and misstatements Page 76
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Materiality and misstatements 21 Definitions Materiality is an expression of the relative significance or importance of a particular matter in the context of the financial statements as a whole. Misstatements in the financial statements are considered to be material if they could, individually or in aggregate, reasonably be expected to influence the economic decisions of users based on the financial statements. Materiality We determine materiality for the financial statements as a whole (overall materiality) using a benchmark that, in our professional judgement, is most appropriate to entity. We also determine an amount less than materiality (performance materiality), which is applied when we carry out our audit procedures and is designed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Further, we set a threshold above which all misstatements we identify during our audit (adjusted and unadjusted) will be reported to the Audit Committee. Judgements on materiality are made in light of surrounding circumstances and are affected by the size and nature of a misstatement, or a combination of both. Judgements about materiality are based on a consideration of the common financial information needs of users as a group and not on specific individual users. An assessment of what is material is a matter of professional judgement and is affected by our perception of the financial information needs of the users of the financial statements. In making our assessment we assume that users: • Have a reasonable knowledge of business, economic activities, and accounts; • Have a willingness to study the information in the financial statements with reasonable diligence; • Understand that financial statements are prepared, presented, and audited to levels of materiality; • Recognise the uncertainties inherent in the measurement of amounts based on the use of estimates, judgement, and consideration of future events; and • Will make reasonable economic decisions based on the information in the financial statements. We consider overall materiality and performance materiality while planning and performing our audit based on quantitative and qualitative factors. When planning our audit, we make judgements about the size of misstatements we consider to be material. This provide a basis for our risk assessment procedures, including identifying and assessing the risks of material misstatement, and determining the nature, timing and extent of our responses to those risks. The overall materiality and performance materiality that we determine does not necessarily mean that uncorrected misstatements that are below materiality, individually or in aggregate, will be considered immaterial. We revise materiality as our audit progresses should we become aware of information that would have caused us to determine a different amount had we been aware of that information at the planning stage. Page 77
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Materiality and misstatements (continued) 22 Materiality and misstatements (continued) Materiality (continued) For the consolidated and single-entity financial statements, we consider that Gross Expenditure at Surplus/deficit on Provision of Services is the key focus of users of the financial statements. We have therefore determined our initial materiality levels using Gross Expenditure at Surplus/Deficit on Provision of Services as the benchmark. We expect to set a materiality of 2% of Gross Expenditure at Surplus/Deficit on Provision of Services for the consolidated financial statements, and a materiality of 2% of Gross Expenditure at Surplus/deficit on Provision of Services for the single-entity. As set out in the tables alongside, based on currently available information being the unaudited 2025/26 financial statements, we anticipate overall Group materiality for the year ended 31 March 2026 to be in the region of £13.032m (£11.924m in the prior year), and performance materiality to be in the region of £9.774m (£8.347m in the prior year). This represents 75% of headline materiality (70% in 2024/25). The choice of this percentage reflects our assessment that For the single-entity, we anticipate overall materiality for the year ended 31 March 2026 to be in the region of £12.835m (£11.806m in the prior year), and performance materiality to be in the region of £9.626m (£7.674m in the prior year). This represents 75% of headline materiality (65% in 2024/25). The choice of this percentages for both the Group and single entity reflects our assessment that: • that the main users of the financial statementsare the Scottish Government,other Local Authorities,Regulators,Elected Members, Local Communities,and otherStakeholders; • that the primaryaggregatethat users tend to focuson is grossrevenue expenditure at surplus/deficit level, as it reflectsthe extent of services delivered by the Council; • thatusers of thefinancial statementsand decision makers(theCouncil, Audit Committee and ScottishGovernment)have an understandingof theinherent uncertaintiesaround accounting estimatesand judgements; • that setting 2% of the chosen benchmarkis consistent with prior period and as part of our audit, we have gained an understandingthattheCouncil has a well established and experienced financeteamcapable of applying therelevant accounting standards;and • thatAudit Committeemembersdemonstratean ability toscrutinise financial informationat a high level. As set out in the tables overleaf, forthe WestDunbartonshire Council Charitable Trusts,we anticipate overall materiality forthe year ended 31 March 2026 to be in the region of £0.005m (£0.005m in the prior year), and performance materiality to be in the region of £0.004m (£0.004min the prior year). Wewill continue to monitor materialitythroughoutour audit to ensure it is set at an appropriatelevel. Group financial statements 2025/26 £’000s 2024/25 £’000s Overall materiality 13,032 11,924 Performancemateriality 9,774 8,347 Clearly trivial 391 358 Page 78
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Materiality and misstatements (continued) Materiality and misstatements (continued) 23 Materiality(continued) Council’s single-entity financial statements 2025/26 £’000s 2024/25 £’000s Overall materiality 12,835 11,806 Performancemateriality 9,626 7,674 Clearly trivial 385 354 Specific materiality We assess the Remuneration Report as sensitive given user’s interest in this specific section of the annual accounts. • For senior councillors and senior employees' remunerationand pensions benefits,our specific materialitywill be £1,000. • For other employees' remuneration,these are disclosed in bands, hence we have set a specific materialityof £5,000 which equatesto one banding. • For exit packages,we have set a specific materiality of £30,000 (2024/25:£50,000). West Dunbartonshire Council Charitable Trusts financial statements 2025/26 £ 2024/25 £ Overall materiality 5,227 5,336 Performancemateriality 4,182 4,269 Clearly trivial 125 160 Page 79
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Materiality and misstatements (continued) Misstatements We will accumulate misstatements identified during our audit that are above our determined clearly trivial threshold. We have set a clearly trivial threshold for individual misstatements we identify (a reporting threshold) for reporting to the Audit Committee and management that is consistent with a threshold where misstatements below that amount would not need to be accumulated because we expect that the accumulation of such amounts would not have a material effect on the financial statements. Based on our preliminary assessment of overall materiality, our proposed clearly trivial threshold is £390k for the Group and £384k for the single-entity, based on 3% of overall materiality. If you have any queries about this, please raise these with the Engagement Director, Tom Reid. Each misstatement above the reporting threshold that we identify will be classified as: • Adjusted: Those misstatements that we identify and are corrected by management. • Unadjusted: Those misstatements that we identify that are not corrected by management. We will report all misstatements above the reporting threshold to management and request that they are corrected. If they are not corrected, we will report each misstatement to the Audit Committee as unadjusted misstatements and, if they remain uncorrected, we will communicate the effect that they may have individually, or in aggregate, on the financial statements and on our audit opinion. Misstatements also cover qualitative misstatements and include quantitative and qualitative misstatements and omissions relating to the notes of the financial statements. Reporting In summary, we will categorise and report misstatements above the reporting threshold to the Audit Committee as follows: • Adjusted misstatements; • Unadjusted misstatements; and • Disclosure misstatements (adjusted and unadjusted). 24 Page 80
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05Significant risks and other key judgement areas Page 81
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Significant risks and other key judgement areas Definitions Following the risk assessment approach set out in the ‘Audit scope, approach, and timeline’ section, we have identified the risks of material misstatement in the financial statements. These risks are categorised as significant, enhanced, or standard. The definitions of these risk ratings are set out below. 26 Risk Level Definition Significant A risk that is assessed as being at or close to the upper end of the spectrum of inherent risk, based on a combination of the likelihood of a misstatement occurring and the magnitude of any potential misstatement. A fraud risk is always assessed as a significant risk (as required by auditing standards), including management override of controls and revenue recognition. Enhanced An area with an elevated risk of material misstatement at the assertion level, other than a significant risk, based on factors/ information inherent to that area. Enhanced risks require additional consideration but do not rise to the level of a significant risk. These include but are not limited to: • Key areas of management judgement and estimation uncertainty, including accounting estimates related to material classes of transaction, account balances, and disclosures but which are not considered to give rise to a significant risk of material misstatement; and • Risks relating to other assertions and arising from significant events or transactions that occurred during the period. Standard A risk related to assertions over classes of transaction, account balances, and disclosures that are relatively routine, non-complex, tend to be subject to systematic processing, and require little or no management judgement/ estimation. Although it is considered that there is a risk of material misstatement, there are no elevated or special factors related to the nature of the financial statement area, the likely magnitude of potential misstatements, or the likelihood of a risk occurring. Page 82
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Significant risks and other key judgement areas (continued) 27 Audit risks and planned responses In this section, we have set out the risks that we deem to be significant and enhanced, and our planned response. An audit is a dynamic process, and should we change our view of risk and/ or our approach to address those risks during our audit, we will report this to the Audit Committee. Significant risks Blank Risk name Fraud Error Judgement Risk description Planned response 1 Management override of controls (applies to Council and Group) Yes No Yes Management at various levels within an organisation are in a unique position to perpetrate fraud because of their ability to manipulate accounting records and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. Due to the unpredictable way in which such override could occur there is a risk of material misstatement due to fraud on all audits. You should assess this risk as part of your oversight of the financial reporting process. In line with our methodology, we plan to address the management override of controls risk for the Council through performing audit work over: • accounting estimates: by evaluating the methods and assumptions used by management to develop the estimate; • journal entries: testing journals that meet our fraud risk criteria, and other adjustments made in preparing the financial statements; and • significant transactions: considering and testing any significant transactions outside the normal course of business or otherwise unusual. For the Group, we will review the consolidation adjustments made by officers in preparing the Group financial statements. Page 83
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Significant risks and other key judgement areas (continued) 28 Significant risks (continued) Blank Risk name Fraud Error Judgement Risk description Planned response 2 Valuation of property, plant and equipment (applies to the Council only) No Yes Yes The Council held land and buildings (including council dwellings) with a net book value of £1.27 billion at 31 March 2026. The Council has adopted a rolling revaluation model with other land and buildings revalued over a five-year cycle, with indexation being applied in the intervening years. There is an inherent risk of material misstatement in asset valuations as these are based on specialist and management assumptions and changes in these can result in material changes to asset values. We have also determined there is a significant risk of material misstatement from assumptions that are incorrect and/or not supported by relevant evidence being applied. The CIPFA Code of Practice on Local Authority Accounting in the United Kingdom introduced changes to the valuation requirements for non-investment property, plant and equipment assets, effective from 1 April 2025 (for the 2025/26 Code). A key change is the move to a quinquennial (five-year) revaluation cycle for relevant non-investment assets, supplemented by annual indexation in the intervening years. Authorities using locally derived indices should maintain sufficient evidence to demonstrate that the indices are appropriate to their asset base and local circumstances and should be able to provide that evidence to auditors. See page 49 for more details. We plan to address this risk by: • assessing the scope and terms of engagement with the valuer; • assessing the competence, skills and objectivity of the valuer; • assessing how management use the valuer’s report to value land and buildings included in the financial statements; • testing the accuracy of the data used in valuations; • challenging the Council and the valuer’s assumptions and judgements applied in the valuations; • reviewing the valuation methodology used, including the appropriateness of the valuation basis; • considering the reasonableness of the valuation by comparing the valuation output with market intelligence; • testing a sample of revaluations in the year, by agreeing the revaluations recorded in the Annual Accounts to the Valuer’s reports. As part of this testing, we will check whether the movements have been accounted for in accordance with the Code; and • reviewing management’s application of indexation to confirm that appropriate and relevant indices have been selected and applied correctly. . Page 84
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Significant risks and other key judgement areas (continued) 29 Significant risks (continued) Blank Risk name Fraud Error Judgement Risk description Planned response 3 Valuation of the net defined benefit (liability)/ surplus (applies to the Council only) No Yes Yes The Council’s net defined benefit liability was £37 million as at 31 March 2026. Estimation of the net pension asset or liability depends on several complex judgements which are sensitive to changes. These include the discount rate used, the rate at which salaries are predicted to increase, inflation rates and life expectancy. Due to the high degree of estimation uncertainty associated with the valuations, we have determined there is a significant risk in this area. In addressing this risk, we will: • challenge the reasonableness of the Actuary’s assumptions that underpin the relevant entries made in the financial statements; • critically assess the competency, objectivity and independence of the Actuary; • liaise with the auditors of the Pension Fund Administrator to gain assurance that the overall procedures and controls in place at the Pension Fund are operating effectively; • compare assumptions to expected ranges; • review the accuracy and completeness of the membership data used by the actuary in preparation of the Actuary’s valuation report; • independently obtain confirmation of pension contributions, benefits paid and any material transfers from the Pension Fund Administrator and compare with the data used by the Actuary in the actuarial valuation; and • agree data in the Actuary’s valuation report for accounting purposes to the relevant accounting entries and disclosures in the Council’s financial statements. Page 85
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Significant risks and other key judgement areas (continued) 30 Other considerations In consideration of ISA (UK) 260 Communication with Those Charged with Governance, we would like to seek the Audit Committee’s views/ knowledge of the following matters: • Did you identify any other risks (business, laws & regulation, fraud, going concern etc.) that may result in material misstatements? • Are you aware of any significant communications between the Council and regulators? • Are there any matters that you consider warrant particular attention during the course of our audit, and any areas where you would like additional procedures to be undertaken? Internal audit function We do not expect to use the work of the internal audit function for the purpose of our audit. Nonetheless, we will obtain a copy of the reports issued by internal audit relating to the financial period under audit to determine whether any findings will have an impact on our risk assessment and planned audit procedures. Page 86
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06Wider scope and Best Value Page 87
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Wider scope and Best Value 32 The framework for wider scope work The Code of Audit Practice sets out the four areas that frame the wider scope of public sector audit. We are required to form a view on the adequacy of the Council’s arrangements in four areas: 1. Financial management 2. Financial sustainability 3. Vision, leadership, and governance 4. Use of resources to improve outcomes Financial management Financial management means having sound budgetary processes. Audited bodies require the ability to understand the financial environment and whether internal controls are operating effectively. Auditors consider whether the body has effective arrangements to secure sound financial management. Vision, leadership and governance Audited bodies must have a clear vision and strategy, and set priorities for improvement within this vision and strategy. They work together with partners and communities to improve outcomes and foster a culture of innovation. Auditors consider the clarity of plans to implement the vision, strategy and priorities adopted by the leaders of the audited body. They also consider the effectiveness of governance arrangements for delivery. Financial sustainability Financial sustainability means being able to meet the needs of the present without compromising the ability of future generations to meet their own needs. Auditors consider the extent to which audited bodies have shown regard to financial sustainability. They look ahead to the medium term (two to five years) and longer term (over five years) to consider whether the body is planning effectively so that it can continue to deliver services. Use of resources to improve outcomes Audited bodies need to make best use of their resources to meet stated outcomes and improvement objectives, through effective planning and working with strategic partners and communities. Auditors consider the clarity of the arrangements in place to ensure that resources are deployed to improve strategic outcomes, meet the needs of service users taking account of equalities, and deliver continuous improvements in priority services. Page 88
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Wider scope and Best Value (continued) 33 Our approach Our planned audit work against the four wider scope areas is risk based and proportionate. We need to gather sufficient evidence to support our commentary on the Council’s arrangements and to identify and report on any significant risks. We will carry out more detailed work where we identify significant risks. Where significant risks are identified we will report these to the Council and make recommendations for improvement. In addition to local risks, we consider challenges that are affecting the public sector as a whole. Best Value Under the Code of Audit Practice, the audit of Best Value in councils is fully integrated within our annual audit work. We are required to consider the seven Best Value themes which are: 1. Vision and leadership 2. Governance and accountability 3. Effective use of resources 4. Partnerships and collaborative working 5. Working with communities 6. Sustainability 7. Fairness and equality We are required to consider the Council’s arrangements in respect of the seven Best Value themes to identify any significant risks. Best Value at the Council will be assessed over the period of the audit appointment. Where we identify risks or improvement areas we will plan appropriate coverage over the period of the audit appointment on a risk basis. We have not identified any significant risks planned for coverage in 2025/26. We will also follow up previously reported Best Value findings to assess the pace and depth of improvement. This work will be integrated into our audit approach, including our work on the wider scope areas. We are required to undertake work on performance reporting each year. Specifically in respect of assessing the Council’s effectiveness of performance reporting we will consider the following matters for compliance with the Direction from the Accounts Commission: • Using resources effectively; • Financial sustainability; and • timeliness. We will also conduct thematic reviews as directed by the Accounts Commission. In 2025/26 this will be on asset management. We will prepare a separate management report to document the findings of this work. At least once every five years, the Controller of Audit will report to the Accounts Commission on the Council’s performance in meeting its Best Value duties. The Council’s Controller of Audit report is due to be presented to the Accounts Commission on 17 September 2026. Page 89
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34 Wider scope and Best Value (continued) Wider scope risks The Code of Audit Practice requires us to consider the significant audit risks in areas defined in the Code as the wider scope audit. The table below outlines the wider scope audit risks that we have identified to date. We will report any further identified risks to the Audit Committee on completion of our planning and risk identification work. Blank Significant Risk Description Financial management Financial sustainability Vision, leadership and governance Use of resources to improve outcomes Planned procedures 1 Financial sustainability The council has forecast significant cumulative budget gaps increasing from £10 million in 2026/27 to £44 million by 2030/31. This presents a significant risk to the Council's long-term financial sustainability. Continued financial pressures arising from inflation, pay awards, increasing demand for services, and wider economic uncertainty could further widen the funding gap. The measures required to achieve a sustainable financial position may adversely affect the Council's ability to maintain service levels, deliver strategic priorities, and meet the needs of the people of West Dunbartonshire. No Yes No No In responding to this risk, we will; • review the Council’s medium to long term financial strategy, financial position and achievement of recurring and non-recurring savings in 2025/26; • evaluate the timeliness and effectiveness of the Council's reporting to elected members on its financial position and savings plans; and • review progress in developing plans to address future years' budget gaps. Page 90
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35 Wider scope and Best Value (continued) Our work to follow-up on previous wider scope recommendations As part of our 2024/25 audit, we identified wider scope risks in the Council’s arrangements. The table below sets out the risks identified, our previous recommendations and the work we intend to carry out as part of our 2025/26 audit. Previously identified significant risks in arrangements Relevant reporting criteria Our 2024/25 recommendations Planned procedures for 2025/26 Financial sustainability – Level 1 The Council is forecasting cumulative budget gaps rising from £5.21m in 2026/27 to £52.88m by 2030/31. It understands the scale and drivers of its medium and long- term financial pressures, but its capacity to respond to these is constrained by limited reserves and reliance on service reductions to balance budgets. It is unsustainable for the Council to continue to rely on reserves and other short-term measures to address funding gaps. Financial sustainability The Council should ensure it has a clear approach to addressing its longer-term financial challenges, including the extent to which this will be supported by use of reserves. This includes ensuring its reserves and financial strategy are aligned. As part of our follow up procedures, we will: • review the progress of the Council’s budget working group in considering options for addressing budget gaps; and • review the Council’s revised medium to long term financial strategy which is due to be submitted to Council in October 2026. Progress in delivering strategic priorities – Level 2 The Council has a clear strategic framework, but improvement activity is not progressing at a pace sufficient to mitigate its financial and operational pressures. Its performance reporting against the 2022–27 Strategic Plan shows mixed progress, with under performance in areas including environmental quality, neighbourhood maintenance, customer experience and resident satisfaction. If the pace and depth of improvement does not accelerate, the Council risks declining service quality and reduced public satisfaction. This may undermine its ability to deliver its strategic priorities. Use of resources to improve outcomes The Council should review the areas where it is not on track to achieve its strategic priorities and identify actions to address this. As part of our follow up procedures, we will: • review the Council’s performance in the areas where it is underperforming; and • review the action plans developed by the Council for these areas. Page 91
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36 Wider scope and Best Value (continued) Best Value risks The Code of Audit Practice requires us to consider the significant audit risks in areas defined in the Code as the Best Value audit. Although we have not fully completed our planning and risk assessment work, we have not identified any Best Value audit risks to date. If we identify any Best Value audit risks as our work progresses, we will report details of them to the Audit Committee on completion of our planning and risk identification work. Our work to follow-up on previous best value recommendations As part of our 2024/25 audit, we identified Best Value risks in the Councils arrangements. The table below sets out the risks identified, our previous recommendations and the work we intend to carry out as part of our 2025/26 audit. Previously identified significant risks in arrangements Relevant reporting criteria Our 2024/25 recommendations Planned procedures for 2025/26 Staff absence– Level 2 Some staff are finding the pace of change challenging and staff absence remains an issue. The council is taking positive steps to try and address this and should continue to explore opportunities for improvement. Effective use of resources The Council should implement a focused attendance improvement plan that strengthens early intervention, enhances management capability, and uses data more effectively to address the main drivers of short-term absence. This should be supported by clearer performance measures to assess the impact of wellbeing initiatives on reducing absence and associated costs As part of our follow up procedures, we will: • review the Council’s reported absence levels; and • review the outcomes of the Council’s ‘Fit for Future’ review of Employee Wellbeing. Page 92
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07Audit fees and other services Page 93
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Audit fees and other services Audit fees and other services 38 Our fees for the audit of West Dunbartonshire Council‘s financial statements for the year ended 31 March 2025, are outlined below. At this stage of the audit, we are not planning any divergence from the expected fees set by Audit Scotland, which is available on the Audit Scotland website: Audit Scotland expected fees for 2025/26 audits. Area of work 2025-26 Proposed Fee 2024-25 Actual Fee Auditor remuneration £287,130 £276,620 Pooled costs £9,900 £6,950 Contribution toPABV costs £64,870 £64,060 Sectoralcap adjustment (£5,680) (£6,220) 2024/25 additional fees for additional work required due to the application of accounting standard IFRS 16 (Leases) and overruns. N/A TBC Total fees £356,220 £TBC Wehave not provided any non-audit services to WestDunbartonshire Council during the year. Fees for work as the West Dunbartonshire Charitable Trusts appointed auditor Wepropose setting a fee forthe audit of WestDunbartonshire Trust Funds of £10,628 (2024/25 feewas £10,190). Wehave not provided any non-audit services to the Charitable Trustsin 2025/26. Servicesprovided to other entities within the Council’s group Weprovide audit services to the following group entities; • WestDunbartonshire IntegrationJoint Board with a total feeof £35,480 (2024/25feewas £34,000) • Dunbartonshire and Argyle and Bute Valuation Joint Board with a totalfeeof £9,910 (2024/25 feewas £9,500). Page 94
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08Confirmation of our independence Page 95
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Confirmation of our independence 40 Requirements We comply with the International Code of Ethics for Professional Accountants, including International Independence Standards issued by the International Ethics Standards Board for Accountants together with the ethical requirements that are relevant to our audit of the financial statements in the UK reflected in the ICAEW Code of Ethics and the FRC Revised Ethical Standard. Compliance We are not aware of any relationship between Forvis Mazars and West Dunbartonshire Council that, in our professional judgement, may reasonably be thought to impair our independence. We are independent of West Dunbartonshire Council and have fulfilled our independence and ethical responsibilities in accordance with the requirements applicable to our audit. Non-audit and Audit fees We have set out a summary of the non-audit services provided by Forvis Mazars (with related fees) to West Dunbartonshire Council, together with our audit fees and independence assessment. We are committed to independence and confirm that we comply with the FRC’s Revised Ethical Standard. In addition, we have set out in this section any matters or relationships we believe may have a bearing on our independence or the objectivity of our audit team. Based on the information provided by you and our own internal procedures to safeguard our independence as auditors, we confirm that in our professional judgement there are no relationships between us and any of our related or subsidiary entities, and you and your related entities, that create any unacceptable threats to our independence within the regulatory or professional requirements governing us as your auditors. We have policies and procedures in place that are designed to ensure that we carry out our work with integrity, objectivity, and independence. These policies include: • All partners and staff are required to complete an annual independence declaration. • All new partners and staff are required to complete an independence confirmation and complete annual ethical training. • Rotation policies covering audit engagement partners and other key members of the audit team. • Use by managers and partners of our client and engagement acceptance system, which requires all non-audit services to be approved in advance by the audit engagement partner. We confirm, as at the date of this report, that the engagement team and others in the firm as appropriate, Forvis Mazars LLP are independent and comply with relevant ethical requirements. However, if at any time you have concerns or questions about our integrity, objectivity or independence, please discuss these with me in the first instance. Page 96
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Confirmation of our independence Prior to the provision of any non-audit services, I will undertake appropriate procedures to consider and fully assess the impact that providing the service may have on our independence as auditor. Principal threats to our independence and the associated safeguards we have identified and/ or put in place are set out in Framework Agreement issued by Audit Scotland available from the Audit Scotland website: Audit Scotland Framework Agreement (audit-scotland.gov.uk). Any emerging independence threats and associated identified safeguards will be communicated in our Annual Audit Report. 41 Page 97
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Appendices A: Key communication points B: Current year updates, forthcoming accounting and other issues Page 98
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Appendix A: Key communication points We value communication with you, as a two-way feedback process is at the heart of our client service commitment. ISA (UK) 260 Communication with Those Charged with Governance and ISA (UK) 265 Communicating Deficiencies In Internal Control To Those Charged With Governance And Management specifically require us to communicate a number of points with you. Relevant points that need to be communicated with you at each stage of the audit are outlined below. Form, timing and content of our communications We will present the following reports: Our Annual Audit Plan in September 2026; Our Annual Audit Report in February 2027; Our independent auditor’s report in February 2027; and Our thematic report in December 2026. These documents will be discussed with management prior to being presented to yourselves and their comments will be incorporated as appropriate. Key communication points at the planning stage as included in this Annual Audit Plan Our responsibilities in relation to the audit of the financial statements; • The planned scope and timing of the audit; • Significant audit risks and areas of management judgement; • Our commitment to independence; • Responsibilities for preventing and detecting errors; • Materiality and misstatements; and • Fees for audit and other services. Key communication points at the completion stage to be included in our Annual Audit Report Significant deficiencies in internal control; Significant findings from the audit; Significant matters discussed with management; Significant difficulties, if any, encountered during the audit; Qualitative aspects of the entity’s accounting practices, including accounting policies, accounting estimates and financial statement disclosures; Our conclusions on the significant audit risks and areas of management judgement; Summary of misstatements; Management representation letter; Our proposed draft audit report; and Independence. 43 Page 99
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Appendix A: Key communication points ISA (UK) 260 Communication with Those Charged with Governance, ISA (UK) 265 Communicating Deficiencies In Internal Control To Those Charged With Governance And Management and other ISAs (UK) specifically require us to communicate the following: Required communication Where addressed Our responsibilities in relation to the financial statement audit and those of management and Those Charged with Governance. Annual Audit Plan The planned scope and timing of the audit including any limitations, specifically including with respect to significant risks. Annual Audit Plan With respect to misstatements: • Uncorrected misstatements and their effect on our audit opinion; • The effect of uncorrected misstatements related to prior periods; • A request that any uncorrected misstatement is corrected; and • In writing, corrected misstatements that are significant. Annual Audit Report With respect to fraud communications: • Inquiries with the Audit Committee to determine whether you have knowledge of any actual, suspected, or alleged fraud affecting the entity; • Any fraud that we have identified or information we have obtained that indicates that fraud may exist; and • A discussion of any other matters related to fraud. Annual Audit Report and discussion at Audit Committee Audit planning and clearance meetings Where relevant, any issues identified with respect to authority to obtain external confirmations or inability to obtain relevant and reliable audit evidence from other procedures. Annual Audit Report 44 Page 100
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Appendix A: Key communication points (continued) Required communication Where addressed Significant matters arising during the audit in connection with the entity’s related parties including, when applicable: • Non-disclosure by management; • Inappropriate authorisation and approval of transactions; • Disagreement over disclosures; • Non-compliance with laws and regulations; and • Difficulty in identifying the party that ultimately controls the entity. Annual Audit Report Significant findings from the audit including: • Our view about the significant qualitative aspects of accounting practices including accounting policies, accounting estimates and financial statement disclosures; • Significant difficulties, if any, encountered during the audit; • Significant matters, if any, arising from the audit that were discussed with management or were the subject of correspondence with management; • Written representations that we are seeking; • Expected modifications to the audit report; and • Other matters, if any, significant to the oversight of the financial reporting process or otherwise identified in the course of the audit that we believe will be relevant to the Council or the Audit Committee in the context of fulfilling their responsibilities. Annual Audit Report Significant deficiencies in internal controls identified during the audit. Annual Audit Report 45 Page 101
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Appendix A: Key communication points (continued) Required communication Where addressed Audit findings regarding non-compliance with laws and regulations where the non-compliance is material and believed to be intentional (subject to compliance with legislation on tipping off)} and inquiry of the Audit Committee into possible instances of non-compliance with laws and regulations that may have a material effect on the financial statements that the Audit Committee may be aware of. Annual Audit Report and Audit Committee meetings With respect to going concern, events or conditions identified that may cast significant doubt on the entity’s ability to continue as a going concern, including: • Whether the events or conditions constitute a material uncertainty; • Whether the use of the going concern assumption is appropriate in the preparation and presentation of the financial statements; and • The adequacy of related disclosures in the financial statements. Annual Audit Report Communication regarding our system of quality management, compliant with ISQM (UK) 1, developed to support the consistent performance of quality audit engagements. To address the requirements of ISQM (UK) 1, our firm’s system of quality management team completes, as part of an ongoing and iterative process, key steps to assess and conclude on our firm’s system of quality management, including: • Ensuring there is an appropriate assignment of responsibilities, • Establishing and reviewing quality objectives each year, ensuring our firm’s quality objectives align with our strategies and priorities, • Identifying, reviewing, and updating quality risks each quarter, taking into consideration multiple input sources (such as FRC/ ICAEW review findings, internal monitoring findings, findings from our firm’s root cause analysis and remediation functions, etc.), • Identifying, designing, and implementing responses to strengthen our firm's internal control environment and overall quality, and • Evaluating our quality responses and remediating control gaps or deficiencies. We perform an evaluation of our system of quality management on an annual basis. We publish the details of our annual evaluation, and our conclusion, in our Transparency Report, which can be accessed on our website at: https://www.forvismazars.com/uk/en/who-we- are/corporate-publications/transparency-reports. Annual Audit Plan 46 Page 102
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Appendix A: Key communication points (continued) Required communication Where addressed We are required to communicate certain matters to you which include, but are not limited to, significant difficulties, if any, that are encountered during our audit. Such difficulties may include: • Significant delays in management providing information that we require to perform our audit. • An unnecessarily brief time within which to complete our audit. • Extensive and unexpected effort to obtain sufficient, appropriate audit evidence. • Unavailability of expected information. • Restrictions imposed on us by management. • Unwillingness by management to make or extend their assessment of the entity’s ability to continue as a going concern when requested. We will highlight to you on a timely basis should we encounter any such difficulties (if our audit process is unduly impeded, this could require us to issue a modified auditor’s report). Annual Audit Report and audit clearance meetings 47 Page 103
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Appendix A: Key communication points (continued) Required communication Where addressed Any limitations on the scope of the group audit, for example, significant matters related to restrictions on access to people or information. Annual Audit Plan and Annual Audit Report, as necessary Fraud or suspected fraud involving group management, component management, employees who have significant roles in the group’s system of internal control or others when the fraud resulted in a material misstatement of the group financial statements. Annual Audit Report and discussion at Audit Committee meetings, audit planning meetings, and audit clearance meetings 48 Page 104
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49 Appendix B: Current year updates, forthcoming accounting & other issues HM Treasury changes to non-investment asset valuation Code of Practice on Local Authority Accounting in the United Kingdom 2025/26 (the “Code”) Following a thematic review of non-current asset valuations for financial reporting in the public sector, HMT has made a number of changes to its requirements for the valuation frequency, valuation methodology and classification of non-investment property assets. The changes are effective from 1 April 2025 as set out in the 2025-26 Code and include: • A change to the requirements regarding revaluation frequency. Rather than adhering to paragraph 34 of IAS 16 which requires an asset to be revalued whenever its carrying value differs materially from its fair value, entities will be required to revalue assets on a quinquennial basis, i.e. every five years, supplemented by annual indexation in the intervening years. This requirement can be adhered to either as part of a full revaluation or as part of a rolling programme. The Code requires bodies to use the best index available to them. Should management determine that there is no appropriate index to use, then the quinquennial valuation is supplemented by a valuation in the third year. • Revaluations carried out prior to 2025/26, in line with former requirements of the Code, remain valid throughout the transition period (being 1 April 2025 to the date the next revaluation is due for a given asset). During the transition period, the maximum period between revaluations must not exceed five years. • The requirement to consider indicators of impairment under IAS 36 remains, so management will still be required to undertake an annual assessment of whether there are indicators of impairment, and where these are present, it may be necessary to undertake valuations outside of the 5-yearly valuation programme. Whilst management will no longer need to consider annually whether it is necessary to revalue non-investment assets, they will need to be satisfied that they have appointed a suitably qualified valuer to undertake the valuation of assets whenever they fall due either as part of a full valuation or a rolling programme. If local indices are used, management will need to have sufficient evidence to demonstrate these indices are appropriate and relevant to the entity’s circumstances, and to provide this evidence to the auditor. Effective for accounting periods beginning on or after 1 January 2027 IFRS 18 Presentation and Disclosure in Financial Statements The standard was UK-adopted in December 2025, and the date of incorporation into the Code is not confirmed, though expected to be within the 2028/29 financial year. It is not yet confirmed what interpretations and adaptations HMT will determine are necessary for implementation in the public sector. We have provided an outline of the main changes arising from IFRS 18 as unadapted and without interpretation and will provide an update on the expected impact on the Council as and when detail is available as to when and how the standard is incorporated into the Code. IFRS 18 Presentation and Disclosure in Financial Statements (IFRS 18) is a new standard that replaces IAS 1 Presentation of Financial Statements. The new standard aims to increase the comparability, transparency and usefulness of information about companies’ financial performance. It introduces three key new requirements focusing on the presentation of information in the statement of profit or loss and enhancing certain guidance on disclosures within the financial statements. Page 105
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50 Appendix B: Current year updates, forthcoming accounting & other issues Effective for accounting periods beginning on or after 1 January 2027 (continued) IFRS 18 Presentation and Disclosure in Financial Statements • New categories and subtotals for inclusion within the statement of profit or loss • Income and expenses are to be classified into three new defined categories: operating, investing and financing, in addition to the income taxes and discontinued operations categories. • All companies are to present new defined subtotals – operating profit and loss, and profit or loss before financing and income taxes. • New reporting requirements on Management Performance Measures (MPMs) • New requirements are introduced for management-defined performance measures (MPMs), which may also be called Alternative Performance Measures (APMs). These are described as subtotals of income and expenses that an entity: (a) uses in public communications outside financial statements; (b) uses to communicate to users of financial statements management’s view of an aspect of the financial performance; and (c) are not listed within IFRS 18 or specifically required to be presented or disclosed by another IFRS Accounting Standard. • All MPMs are required to be disclosed in a single note in the financial statements setting out: • an explanation of why the MPM is reported, and • a reconciliation to a directly comparable GAAP measure within IFRS 18 or another IFRS Accounting Standard. • Enhanced requirements for aggregation & disaggregating information • Enhanced requirements are set out for the aggregation and disaggregation of items based on similar and dissimilar characteristics. Items that have dissimilar characteristics must be disaggregated when the resulting information is material. Guidance is also included on how to describe items within the financial statements, requiring an entity to label items presented or disclosed as ‘other’ only if a more informative label cannot be found. • New guidance is provided on whether information should be reported in the primary financial statements or the notes. This includes guidance on presentation and disclosure of expenses classified in the operating category, alongside introducing more prescribed requirements for an entity that classifies expenses by function as well as the requirement to disclose expenses by nature in a single note for certain amounts - depreciation, amortisation, employee benefits, impairment and write-downs of inventories Many principles and requirements have been brought forward from IAS 1 to IFRS 18 such as frequency of reporting, comparative information, offsetting, capital disclosures and the requirements for the statement of financial position and for the statement of changes in equity. Page 106
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Contact Forvis Mazars Forvis Mazars LLP is the UK firm of Forvis Mazars Global, a leading global professional services network. Forvis Mazars LLP is a limited liability partnership registered in England and Wales with registered number OC308299 and with its registered office at 30 Old Bailey, London, EC4M 7AU. Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001139861. VAT number: GB 839 8356 73 © Forvis Mazars 2026. All rights reserved. Tom Reid Audit Director Tel: +44 781 635 4994 Tom.Reid@mazars.co.uk Page 107
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WEST DUNBARTONSHIRE COUNCIL Report by Chief Officer – Resources Audit Committee: 2 September 2026 Subject: External Audit Enquiries – 2025/26 Accounts 1. Purpose 1.1 The purpose of this report is to: • inform members of External Audit’s requirement for the provision of information regarding the Council’s approach to dealing with fraud, litigation, laws and regulations as part of their audit of the Council’s 2025/26 Statement of Accounts and 2025/26 Trust Accounts. • allow members to comment on the response related to ‘Those Charged with Governance’. 2. Recommendations 2.1 It is recommended the Audit Committee: • consider the enquiries for those charged with governance for the 2025/26 Council Accounts and 2025/26 Trust Accounts • approve the submission of the draft responses set out in appendix 1 for the Council and appendix 2 for the Trust Funds to the Council’s external auditors. 3. Background 3.1 As part of the annual audit approach taken by the Council’s external auditors, Forvis Mazars (Mazars), they seek responses to a range of enquiries concerning the Council’s approach and reporting arrangements for a number of key areas relating to themes surrounding fraud, litigation, laws and regulations together with some areas specific to the accounts such as related parties and estimates used in the accounts. The responses to these provided by officers will inform the approach taken by Mazars to the audit of the 2025/26 Accounts. 4. Main Issues 4.1. In addition to the officer enquiries, Mazars require a response to several enquiries relating to the arrangements for identifying, responding to and managing risks around fraud from ‘those charged with governance’. Details of the specific enquiries and a proposed response to each is provided in Appendix 1 for the Council and 2 for the Trust Funds for members to review and comment on ahead of agreeing the final version for submission to Mazars. 5. People Implications ITEM 8 5.1 There are no people implications Page 109
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6. Financial and Procurement Implications 6.1 There are no financial implications arising from this report. 6.2 There are no procurement implications arising from this report. 7. Risk Analysis 7.1 There are no specific risk implications arising from this report. 8. Equalities Impact Assessment (EIA) 8.1 There are no direct equalities impacts arising from the report. 9. Consultation 9.1 This report has been subject to consultation with appropriate Chief Officers. 10. Strategic Assessment 10.1 This report relates to strong corporate governance. .................................... Laurence Slavin Chief Officer - Resources Date: 2 September 2026 Person to Contact: Laurence Slavin, Chief Officer - Resources E-mail: laurence.slavin@west-dunbarton.gov.uk Appendices: 1 – External Audit Enquiries for Those Charged with Governance (WDC) 2 – External Audit Enquires for Those Charged with Governance (Trust Funds) Background Papers: None Wards Affected: All wards Page 110
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Appendix 1 International Standard for Auditing 240 - The auditor’s responsibility to consider fraud in an audit of financial statements 1) How does the Committee, in its role as those charged with governance, exercise oversight of management's processes in relation to: • Undertaking an assessment of the risk that the financial statements may be materially misstated due to fraud or error (including the nature, extent and frequency of these assessments); • Identifying and responding to risks of fraud in the organisation, including any specific risks of fraud which management have identified or that have been brought to its attention, or classes of transactions, account balances, or disclosure for which a risk of fraud is likely to exist; • Communicating to employees of views on business practice and ethical behaviour (for example by updating, communicating and monitoring against the organisation’s code of conduct); and • Communicating to those charged with governance the processes for identifying and responding to fraud or error? Response The Council’s financial statements are prepared by experienced and professionally qualified accountants who are regulated by the standards of their respective institutes. The financial statements reflect the transactions which have been processed by the Council’s financial systems. These systems are protected by internal controls and procedures which are periodically reviewed and tested by internal audit and our external auditors. Consequently, although the material misstatement cannot be ruled out, its likelihood is low. The Audit Committee provides oversight and challenge in relation to the financial statements and seeks assurances from the Chief Officer - Resources that the accounts are not materially misstated. Updates are provided to Audit Committee and/or full Council on key areas of the statement, any changes in accounting policies and their impact on the statements. The Audit Committee plays a key oversight role in relation to fraud and error identification. The Committee receives regular progress reports on anti-fraud activities taking place within the Council. The Council has a code of conduct which describes the standards of conduct and practice which all Council employees should follow. The code of conduct is a key component of the Council’s Code of Good Governance. The Council’s Whistleblowing Policy enables any individual to register, in confidence, any concerns regarding alleged misconduct and fraudulent or corrupt activity. This can be found on the Council’s website and intranet. 2) How does the Committee oversee management processes to identify and respond to the risk of fraud and possible breaches of internal control? Is the Committee aware of any breaches of internal control during 2025/26? Please provide details. Response It is the responsibility of management to develop and maintain sound systems of risk management, governance and internal control. This includes the requirement to identify and respond to any identified breaches of internal control. However it is noted that internal control systems, no matter how well designed and operated, are affected by inherent limitations. These include the possibility of poor judgement in decision making; human error; control processes being deliberately circumvented by employees and others; management overriding controls and Page 111
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Appendix 1 unforeseeable circumstances. In terms of oversight, the Council’s Internal Audit function plays a key role in this regard. Internal Audit work is not a substitute for management’s responsibilities for the design and operation of these systems, and is not responsible for identifying all significant control failures. However, the Internal Audit team has an important role in providing assurance on the Council’s control environment and providing a view on the Council’s processes for identifying control failures, and endeavours to plan its work so that work is focused on those areas where there is higher risk. A risk-based audit plan is produced annually based on best practice, taking cognisance of the strategic and operational risk registers and engagement with senior managers. The methodology for prioritising audit work is set out in the audit strategy and plan. Findings are reported as Red, Amber or Green which aligns with the Council’s risk management strategy. Red and Amber findings are reported to Audit Committee together with management’s agreed actions to address these issues. The Audit Committee receive a range of assurances/reports during the year which touch upon aspects of internal control. Reports in 2025/26 have included: • Annual Audit Plans from internal and external audit • Annual Internal Audit Report and Assurance Statement • Internal Audit progress reports • Code of Good Governance and the Annual Governance Statement • Accounting policies, Annual Accounts and External audit Annual Report • Treasury management annual report and updates • Regular reports on National Fraud Initiative • Risk management update on Strategic Risk register • Annual Complaints Report • Responses to External Audit Enquiries to Those Charged with Governance Where deemed necessary the Audit Committee will ask that a relevant officer of the Council is present at Audit Committee meetings to respond to questions on a report being presented. 3) Has the Committee knowledge of any actual, suspected or alleged fraud during the period 1 April 2025 – 31 March 2026? Where appropriate please provide details. Response A number of suspected/alleged instances of fraud occurred during 2025/26. These are detailed within the regular reports to Audit Committee. Cases included those relating to housing benefit/council tax and misuse of council resources. 4) Has the Committee any suspicion that fraud may be occurring within the organisation? Please provide details. • Has the Committee identified any specific fraud risks within the organisation? Please provide details. • Does the Committee have any concerns that there are areas within the organisation that are at risk of fraud? Please provide details. • Are there particular locations within the organisation where fraud is more likely to occur? Please provide details. Response As with any large and complex organisation there are a range of fraud risks and emphasis on reducing fraud risk is continuous. The results of the NFI, internal audit work and reported fraud show some low value frauds. Management and the Audit Committee is kept up to date with fraud risks through updates on counter fraud arrangements, Internal Audit and other ad hoc reports. Page 112
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Appendix 1 Fraud risks are acknowledged in key areas. Members and officers are aware of these and the risks are managed through established risk management processes. 5) Is the Committee satisfied that internal controls, including segregation of duties, exist and work effectively? Please provide details. • If not, where are the risk areas? • What other controls are in place to help prevent, deter or detect fraud? Response Key controls such as the segregation of duties, management review and supervision and authorisation and approval are evident in each of the Council’s core systems. It is acknowledged that maintaining an effective control environment is challenging in a time of reducing resources and a changing operating environment. For this reason, internal audit will have a continued role in supporting the Council in ensuring that an adequate but appropriate control environment is in place. In overall terms, Internal Audit have concluded that reasonable assurance can be provided on the Council’s system of internal control for 2025/26. 6) Is the Committee satisfied that staff are encouraged to report their concerns about fraud, and the types of concerns they are expected to report? Please provide details. Response The Council promotes a zero tolerance toward fraud and promotes a culture that enables individuals to identify potential fraud and empowers them to report their concerns in a safe and secure manner to the appropriate people at the right time. The means by which employees can report fraud are publicised on the Council’s intranet. Fraud issues are widely communicated both internally and externally to provides a deterrent to fraudsters by highlighting the Council’s commitment to identify fraud and take proactive action to pursue fraudsters. 7) From a fraud and corruption perspective, what are considered by the Committee to be high risk posts within the organisation? Please provide details. • How are the risks relating to these posts identified, assessed and managed? Response Fraud and corruption, and associated risks, come in many forms and, consequently, it is not easy to specifically identify specific posts where there are greater risks than others. However there is a general recognition that there is an inherent risk of fraud within an organisation like a Council and the risk of fraud is managed through existing controls and procedures which are in place across the organisation. The Committee takes assurance from the work of internal audit, the established fraud policies in place and ongoing embedding of a culture of fraud awareness through a programme of anti-fraud training and the work of the Council’s fraud team. This helps ensure that issues identified as a result of Internal Audit work or fraud investigations, result in recommendations to management to address gaps in control to ensure that risks are properly mitigated to acceptable levels. 8) Is the Committee aware of any related party relationships or transactions that could give rise to instances of fraud? Please provide details. • How are the risks associated with fraud related to such relationships and transactions mitigated? Response We are not aware of any related party relationships or transactions that could give rise to instances of fraud. Disclosure of significant related party relationships is required for both members and officers in positions of influence. Page 113
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Appendix 1 9) Is the Committee aware of any entries made in the accounting records of the organisation that it believes or suspects are false or intentionally misleading? Please provide details. • Are there particular balances where fraud is more likely to occur? Please provide details. • Is the Committee aware of any assets, liabilities or transactions that it believes were improperly included or omitted from the accounts of the organisation? Please provide details. • Could a false accounting entry escape detection? If so, how? • Are there any external fraud risk factors which are high risk of fraud? Please provide details. Response We are not aware of any accounting entries which are suspected to be false or intentionally misleading. Should management become aware of any suspect accounting entries, these would be subject to immediate investigation through Internal Audit. We are not aware of any assets, liabilities or transactions that have been improperly included or omitted from the Council’s accounts. Should any issues arise it is expected that these would be identified through review and approvals processes. The Council is a complex multidisciplinary organisation so there is a risk that management is unaware of any potential false accounting occurring however this is unlikely given the controls in place for processing transactions. An added control in this area is the review by the external audit team who provide added assurance for transactions which are in excess of the materiality value. Current and emerging risks are identified from a number of sources including the National Anti-Fraud Network (NAFN) and other law enforcement agencies. These are disseminated to relevant Council teams to raise awareness. 10) Is the Committee aware of any organisational, or management pressure to meet financial or operating targets? Please provide details. • Is the Committee aware of any inappropriate organisational or management pressure being applied, or incentives offered, to you or colleagues to meet financial or operating targets? Please provide details. Response The Committee understands that the Council has financial and operating targets to meet and these are progressed through normal management arrangements. However we are not aware of any inappropriate organisational or management pressure to meet financial or operating targets and there is no evidence of any incentive ever being offered to do so.. Monthly budget monitoring is conducted with Chief Officers and service managers and reconciliations of key balances are conducted monthly, and significant variances are investigated. There is regular reporting on Budgetary Control to relevant committees. International Standard for Auditing 250 – Consideration of laws and regulations in an audit of financial statements 11) How does the Committee gain assurance that all relevant laws and regulations have been complied with. For example: • Is the Committee aware of the process management has in place for identifying and responding to changes in laws and regulations? Please provide details. • What arrangements are in place for the Committee to oversee this process? • Is the Committee aware of the arrangements management have in place, for communicating with employees, non-executive directors, partners and stakeholders regarding the relevant laws and regulations that need to be followed? Please provide details. Page 114
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Appendix 1 • Does the Committee have knowledge of actual or suspected instances where appropriate laws and regulations have not been complied with, and if so is it aware of what actions management is taking to address it? Please provide details. Response The Council is subject to a range of legal and regulatory frameworks. The Council has a Local Code of Good Governance and has appointed a Monitoring Officer (Chief Officer Regulatory and Regeneration) to ensure that the Council acts lawfully. All committee reports are subject to legal review and comment to ensure key issues are identified. The Council’s Chief Officer Regulatory and Regeneration is a member of the Senior Management Team and is sighted on any new strategic projects or initiatives with the Council’s Legal Services having specialist officers who provide legal advice and support to particular service areas. As required, training is provided to officers on particular legal issues, some of it being mandatory, for example around data protection and equalities. Accepting that there will be minor operational instances of non-compliance, we are not aware of any instances of significant non-compliance during the financial year. This is supported by the annual review of the Local Code of Good Governance. International Standard for Auditing 501 – Specific consideration of the potential for, and actual, litigation and claims affecting the financial statements 12) Is the Committee aware of any actual or potential litigation or claims that would affect the financial statements? Please provide details. Response The Council’s financial statements disclose contingent liabilities and any provisions for legal claims. The Council’s s95 Officer engages with members of the Council’s Senior Management Team, including the Chief officer Regulatory and Regeneration Service (Council’s Monitoring Officer) as part of the annual accounts preparation process to identify any ongoing or potential cases which require disclosure in the financial statements. International Standard for Auditing 570 – Consideration of the going concern assumption in an audit of financial statements 13) How has the Committee assessed and satisfied itself that it is appropriate to adopt the going concern basis in preparing the financial statements? Response Going concern has been assessed as part of Council’s budget setting process in March 2025. The budget setting process requires the Council’s s95 Officer (Chief Officer - Resources) to provide a view on the robustness of estimates and the adequacy of reserves. No issues in relation to going concern were highlighted as part of the report presented to the Council in October 2025. 14) Has the Committee identified any events or conditions since the assessment was undertaken which may cast significant doubt on the organisation’s ability to continue as a going concern? Please provide details. Response The Council agreed a balanced 2026/27 budget on 4 March 2026 and that report presented future budget gaps that will need to be closed in subsequent years. This is consistent with all Scottish local authorities and reflects the financial climate local authorities are operating in with ongoing real terms funding reductions. The Council delivers a number of non-statutory services which, if required could be reduced or stopped in the event that insufficient funding is made available. Therefore, whilst the Council does Page 115
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Appendix 1 have future budget gaps, there are viable options available to close the gap meaning there is not a risk to the Council’s ability to continue as a going concern. Page 116
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Appendix 2 International Standard for Auditing 240 - The auditor’s responsibility to consider fraud in an audit of financial statements 1) How do the Trustee’s, in their role as those charged with governance, exercise oversight of management's processes in relation to: • undertaking an assessment of the risk that the financial statements may be materially misstated due to fraud or error (including the nature, extent and frequency of these assessments); • identifying and responding to risks of fraud in the organisation, including any specific risks of fraud which management have identified or that have been brought to its attention, or classes of transactions, account balances, or disclosure for which a risk of fraud is likely to exist; • communicating to employees of views on business practice and ethical behaviour (for example by updating, communicating and monitoring against the organisation’s code of conduct); and • communicating to those charged with governance the processes for identifying and responding to fraud or error? Response The Annual Governance Statement within West Dunbartonshire Council’s (WDC) annual financial statements contains a review of the adequacy and effectiveness of the governance framework including the system of internal control. These systems are periodically reviewed and tested by internal audit, and our external auditors. Consequently although the material misstatement cannot be ruled out, its likelihood is low. All financial transactions relating to the delivery of the Trusts are hosted within the WDC ledger, therefore the Trusts rely on the processes and controls implemented by WDC including approval and authorisation processes, defined limits for all authorised signatories and adherence to WDC Financial Regulations. The financial statements reflect the transactions which have been processed by the WDC financial system. The Trust’s financial statements are prepared by experienced and professionally qualified accountants who are regulated by the standards of their respective institutes. The WDC Chief Internal Auditor provides regular reports to the Audit Committee which include information on control issues identified within the partner organisations and any potential impact on the Trusts. If the Trustees became aware of any fraud or suspected fraud then appropriate reporting processes would be followed e.g. the Chief officer - resources would be notified in conjunction with reporting to Internal Audit, Fraud Liaison Officer or Legal teams for cases involving suspected data breaches. Through the Code of Conduct for Staff, all WDC employed staff are obliged to comply with the partner’s Corporate Governance documentation, which includes the responsibilities of managers and other staff arising from the Financial Regulations, SFIs and Fraud Policies – all available on WDC websites and intranet 2) How does the Trust oversee management processes to identify and respond to the risk of fraud and possible breaches of internal control? Is the Trust aware of any breaches of internal control during 2025/26? Please provide details. Response It is the responsibility of management to develop and maintain sound systems of risk management, governance and internal control. This includes the requirement to identify and respond to any identified breaches of internal control. However it is noted that internal control systems, no matter how well designed and Page 117
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Appendix 2 operated, are affected by inherent limitations. These include the possibility of poor judgement in decision making; human error; control processes being deliberately circumvented by employees and others; management overriding controls and unforeseeable circumstances. In terms of oversight, the Council’s Internal Audit function plays a key role in this regard. Internal Audit work is not a substitute for management’s responsibilities for the design and operation of these systems, and is not responsible for identifying all significant control failures. Where deemed necessary the Audit Committee will ask that a relevant officer of the Trust is present at Audit Committee meetings to respond to questions on a report being presented. 3) Has the Trust knowledge of any actual, suspected or alleged fraud during the period 1 April 2025 – 31 March 2026? Where appropriate please provide details. Response There have been no suspected/alleged instances of fraud during 2025/26. 4) Has the Trust any suspicion that fraud may be occurring within the organisation? Please provide details. • Has the Trust identified any specific fraud risks within the organisation? Please provide details. • Does the Trust have any concerns that there are areas within the organisation that are at risk of fraud? Please provide details. • Are there particular locations within the organisation where fraud is more likely to occur? Please provide details. Response As with any large and complex organisation there are a range of fraud risks and emphasis on reducing fraud risk is continuous. The results of the NFI, internal audit work and reported fraud show some low value frauds. Management and the Audit Committee is kept up to date with fraud risks through updates on counter fraud arrangements, Internal Audit and other ad hoc reports. Fraud risks are acknowledged in key areas. Members and officers are aware of these and the risks are managed through established risk management processes. 5) Is the Trust satisfied that internal controls, including segregation of duties, exist and work effectively? Please provide details. • If not, where are the risk areas? • What other controls are in place to help prevent, deter or detect fraud? Response Key controls such as the segregation of duties, management review and supervision and authorisation and approval are evident in each of WDC’s core systems. It is acknowledged that maintaining an effective control environment is challenging in a time of reducing resources and a changing operating environment. For this reason, internal audit will have a continued role in supporting the Council in ensuring that an adequate but appropriate control environment is in place. In overall terms, Internal Audit have concluded that reasonable assurance can be provided on the Trust’s system of internal control for 2025/26. 6) Is the Trust satisfied that staff are encouraged to report their concerns about fraud, and the types of concerns they are expected to report? Please provide details. Response The Council promotes a zero tolerance toward fraud and promotes a culture that enables individuals to identify potential fraud and empowers them to report their concerns in a safe Page 118
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Appendix 2 and secure manner to the appropriate people at the right time. The means by which employees can report fraud are publicised on the Council’s intranet. Fraud issues are widely communicated both internally and externally to provides a deterrent to fraudsters by highlighting the Council’s commitment to identify fraud and take proactive action to pursue fraudsters. 7) From a fraud and corruption perspective, what are considered by the Trust to be high risk posts within the organisation? Please provide details. • How are the risks relating to these posts identified, assessed and managed? Response Fraud and corruption, and associated risks, come in many forms and, consequently, it is not easy to specifically identify specific posts where there are greater risks than others. However there is a general recognition that there is an inherent risk of fraud within an organisation like a Council and partner organisations the risk of fraud is managed through existing controls and procedures which are in place across the organisation. The Trust takes assurance from the work of internal audit, the established fraud policies in place and ongoing embedding of a culture of fraud awareness through a programme of anti-fraud training and the work of the Council’s fraud team. This helps ensure that issues identified as a result of Internal Audit work or fraud investigations, result in recommendations to management to address gaps in control to ensure that risks are properly mitigated to acceptable levels. 8) Is the Trust aware of any related party relationships or transactions that could give rise to instances of fraud? Please provide details. • How are the risks associated with fraud related to such relationships and transactions mitigated? Response We are not aware of any related party relationships or transactions that could give rise to instances of fraud. Disclosure of significant related party relationships is required for both members and officers in positions of influence. Page 119
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Appendix 2 9) Is the Trust aware of any entries made in the accounting records of the organisation that it believes or suspects are false or intentionally misleading? Please provide details. • Are there particular balances where fraud is more likely to occur? Please provide details. • Is the Trust aware of any assets, liabilities or transactions that it believes were improperly included or omitted from the accounts of the organisation? Please provide details. • Could a false accounting entry escape detection? If so, how? • Are there any external fraud risk factors which are high risk of fraud? Please provide details. Response We are not aware of any accounting entries which are suspected to be false or intentionally misleading. Should management become aware of any suspect accounting entries, these would be subject to immediate investigation through Internal Audit. We are not aware of any assets, liabilities or transactions that have been improperly included or omitted from the Trust’s accounts. Should any issues arise it is expected that these would be identified through review and approvals processes. Current and emerging risks are identified from a number of sources including the National Anti-Fraud Network (NAFN) and other law enforcement agencies. These are disseminated to relevant teams to raise awareness. 10) Is the Trust aware of any organisational, or management pressure to meet financial or operating targets? Please provide details. • Is the Trust aware of any inappropriate organisational or management pressure being applied, or incentives offered, to you or colleagues to meet financial or operating targets? Please provide details. Response The Trustees are not aware of any inappropriate organisational or management pressure to meet financial or operating targets and there is no evidence of any incentive ever being offered to do so. International Standard for Auditing 250 – Consideration of laws and regulations in an audit of financial statements 11) How does the Trust gain assurance that all relevant laws and regulations have been complied with. For example: • Is the Trust aware of the process management has in place for identifying and responding to changes in laws and regulations? Please provide details. • What arrangements are in place for the Trust to oversee this process? • Is the Trust aware of the arrangements management have in place, for communicating with employees, non-executive directors, partners and stakeholders regarding the relevant laws and regulations that need to be followed? Please provide details. • Does the Trust have knowledge of actual or suspected instances where appropriate laws and regulations have not been complied with, and if so is it aware of what actions management is taking to address it? Please provide details. Response WDC is subject to a range of legal and regulatory frameworks. The Council has a Local Code of Good Governance and has appointed a Monitoring Officer (Chief Officer Regulatory and Regeneration) to ensure that the Council acts lawfully. All Trustee reports are subject to legal review and comment to ensure key issues are identified. The Council’s Chief Officer Regulatory and Regeneration is a member of the Senior Management Team and is sighted on any new strategic projects or initiatives with the Page 120
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Appendix 2 Council’s Legal Services having specialist officers who provide legal advice and support to particular service areas. As required, training is provided to officers on particular legal issues, some of it being mandatory, for example around data protection and equalities. Accepting that there will be minor operational instances of non-compliance, we are not aware of any instances of significant non-compliance during the financial year. This is supported by the annual review of the Local Code of Good Governance. International Standard for Auditing 501 – Specific consideration of the potential for, and actual, litigation and claims affecting the financial statements 12) Is the Trust aware of any actual or potential litigation or claims that would affect the financial statements? Please provide details. Response Given the size and the nature of the transactions of the Trust there are no known litigations or claims that would affect the financial statements. International Standard for Auditing 570 – Consideration of the going concern assumption in an audit of financial statements 13) How has the Trust assessed and satisfied itself that it is appropriate to adopt the going concern basis in preparing the financial statements? Response No issues in relation to going concern were highlighted to the Trustees. 14) Has the Trust identified any events or conditions since the assessment was undertaken which may cast significant doubt on the organisation’s ability to continue as a going concern? Please provide details. Response The Trustees are not aware of any events or concerns since the assessment was undertaken that would cast doubt on the Trusts ability to continue as a going concern. Page 121
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West Dunbartonshire Council Report by the Chief Officer - Resources Audit Committee 02 September 2026 Subject: 2025/26 Treasury Management Annual Report 1. Purpose 1.1 The purpose of this report is to advise the Committee of the operation of the treasury function and its activities in 2025/26 and request that the Committee remits the report to the full Council for their approval. 2. Recommendations 2.1 Committee to note the contents of the 2025/26 Annual Treasury Management Report. 2.2 Committee to remit the 2025/26 Annual Treasury Management Report. to full Council for approval. 3. Background 3.1 In accordance with the Treasury Policy governing the Council’s treasury management activities the Chief Officer - Resources is required to provide an Annual Report to Members regarding the Treasury function. 3.2 One of the key clauses is that a responsible body is required to ensure effective scrutiny of the treasury management strategy and polices. Within West Dunbartonshire Council the body identified to fulfil this role is the Audit Committee. 4. Main Issues 2025/26 Treasury Management Annual Report 4.1 A copy of the 2025/26 Treasury Management Annual Report is attached (Appendix 1) with it based upon the Council’s unaudited 2025/26 Financial Statements. 4.2 The report details the loans borrowed and repaid during the course of the year, associated interest rates and debt rescheduling undertaken. 4.3 External borrowing (excluding Public Private Partnership (PPP) borrowing and leases) has increased during the year from £789.860m at the beginning of the year to £858.677m at the end of the year. This was mainly due to capital expenditure and the repayment of temporary loans. Over the year as new debt has been borrowed and maturing debt replaced, the average interest rate on loans held has decreased from 4.35% at 31 March 2025 to 4.09% at 31 March 2026. ITEM 9 Page 123
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4.4 Consideration was given to available interest rates, and mainly short-term borrowing has been utilised to finance the current capital programme to take advantage of slightly lower interest rates. 4.5 Investments have increased as at the 31 March 2026 from £13.820m at the beginning of the year to £28.584m at the year-end. The average interest rate on these investments held as at 31 March 2026 decreased from 4.51% to 2.85%. 4.6 As at 31 March 2026 fixed rate borrowing under 12 months was 28%%. This is below the maximum allowable limit for short term debt and is as a result of action taken to reprofile the debt from short term to long loans. We will continue to take action with a longer term target to bring short term borrowing toward a figure less than 30% of the overall debt portfolio however this needs to be done prudently whilst monitoring projected future interest rates. All other year end indicators advised within Appendix 1 of this report are within the limits previously agreed by Council. 5. Option Appraisal 5.1 No option appraisal was required for this report. 6. People Implications 6.1 There are no personnel issues. 7. Financial and Procurement Implications 7.1 There are no financial or procurement implications. 8. Risk Analysis 8.1 There are three main risks associated with the formulation of prudential indicators. These are noted below. However the Council has robust monitoring processes in place and provides regular reports to Council and ensures further scrutiny by elected Members at the Audit Committee: (a) The risk of Counterparties default (i.e. loss of principal sum invested) however, the Council has robust controls included within its treasury management and investment strategies that will assist in mitigating this risk. (b) Capital inflation may increase capital expenditure levels, which in turn may affect the capital financing and borrowing requirement leading to an increase in borrowing, assuming no additional capital receipts or other funding are available. (c) Capital receipts which affect the capital financing and borrowing requirement may not materialise which would require additional borrowing to fund the financing requirement. Page 124
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9. Equalities Impact Assessment 9.1 No equalities impact assessment was required in relation to this report. 10. Environmental Sustainability 10.1 No assessment of environmental sustainability was required in relation to this report 11. Consultation 11.1 The views of Legal Services have been requested on this report and have advised there are neither any issues nor concerns. 12. Strategic Assessment 12.1 Proper budgetary control and sound financial practice are cornerstones of good governance and support Council and officers to pursue the 5 strategic priorities of the Council’s Strategic Plan. 12.2 Treasury management contributes to the Financial Strategy via the interdependency that exists between pro-active treasury management and the formulation of long term financial plans. Laurence Slavin Chief Officer - Resources Date: 17 August 2026 Person to Contact: Carol Alderson, Finance Manager Email: carol.alderson@west-dunbarton.gov.uk Lynsey Dickson Finance Business Partner Email: lynsey.dickson@west-dunbarton.gov.uk Appendix: Annual Report 2025/26 -Treasury Management and Actual Prudential Indicators Background Papers: Loans register and portfolio; Debt rescheduling schedules; Prudential Indicators 2025/26 to 2034/35 and Treasury Management Strategy 2025/26 to 2034/35 (Council 25 March 2026); Page 125
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Mid-Year Monitoring Report 2025/26 - Treasury Management and Prudential Indicators (Council 17 December 2025); and Treasury Management Annual Report 2024/25 (Council 29 October 2025) Wards Affected: No wards directly affected. Page 126
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Appendix 1 Annual Report 2025/26 Treasury Management and Actual Prudential Indicators 1. Introduction 1.1 The Council’s treasury management activities are regulated by a variety of professional codes and statutes and guidance: • The Local Government in Scotland Act 2003 (the Act), provides the statutory framework for local authority borrowing and investment activity, including the requirement for authorities to determine and review the amount they can afford to borrow. The Act also permits Scottish Ministers to impose borrowing limits either on the Council or nationally on all local authorities restricting the amount of borrowing which may be undertaken (although no restrictions were made in 2025/26). • The Council undertakes its treasury management and capital finance activities with regard to the CIPFA Prudential Code for Capital Finance in Local Authorities and the CIPFA Code of Practice for Treasury Management in the Public Services: Code of Practice and Cross-Sectoral guidance Notes. • The Local Authority (Capital Finance and Accounting) (Scotland) Regulations 2016, as amended, require the Council to document its policy on the prudent repayment of loans fund advances, having regard to statutory guidance issued by Scottish Ministers. 1.2 The Council has adopted the CIPFA Treasury Management in the Public Services: Code of Practice and Cross-Sectoral Guidance Notes and the CIPFA Prudential Code for Capital Finance in Local Authorities. It operates its treasury management service and capital programme in accordance with these Codes and the statutory and regulatory requirements set out above. These requirements provide that the prime objective of treasury management activity is the effective management of risk, and that borrowing activity is undertaken on a prudent, affordable and sustainable basis. 1.3 During 2025/26 the minimum reporting requirements were that the Council should receive the following reports: • an annual treasury strategy in advance of the new financial year (Council 26 March 2025) • a mid-year treasury update report (Council 17 December 2025) • an annual report following the financial year-end describing the activity compared to the strategy (this report). 1.4 This report sets out: • A summary of the 2025/26 strategy. • The Council’s treasury position as at 31 March 2026. • The main Prudential Indicators and compliance with limits. • A summary of the economic factors affecting the strategy over 2025/26. • The 2025/26 Treasury activity. Page 127
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Appendix 1 • Performance indicators set for 2025/26. • Disclosure regarding the repayment of loan fund advances for 2025/26. • Risk and Performance. 2. A Summary of the 2025/26 Strategy 2.1 Borrowing – it is forecast that the capital borrowing need (the Capital Financing Requirement) will be almost fully funded by external borrowing which is a mixture of short term and long term debt. Against this background and the risk within the economic forecast, caution will be adopted with the 2026/27 treasury operations. The Section 95 Officer will monitor interest rates in financial markets and adopt a pragmatic approach to changing circumstances. 2.2 Investments - with the economic background at the time, the investment climate had one over-riding risk consideration - counterparty security risk. As a result of the underlying concerns, officers maintained an operational investment strategy which tightened the controls already in place in the approved investment strategy. The Council’s investment strategy primary objectives are safeguarding the re- payment of the principal and interest of its investments on time first and ensuring adequate liquidity second – the investment return being a third objective. 2.3 Based on the above, the treasury strategy was to defer borrowing where appropriate, by avoiding borrowing in advance of need, and to minimise longer- term borrowing in order to avoid the cost of holding higher levels of investments while also reducing counterparty risk. 3. The Council’s Treasury Position at 31 March 2026 3.1 During 2025/26, the Chief Officer – Resources, in line with the Treasury Strategy, managed the debt position with the use of internal funds as well as a mix of short-term and long-term external borrowing, and the treasury position at 31 March 2026 compared with the previous year was: Table 1 Treasury position – excluding PPP 31 March 2025 31 March 2026 Principal Average Rate Principal Average Rate Fixed Interest Rate Debt £789.860m 4.35% £858.677m 4.09% Variable Interest Rate Debt £0.000m 0.00% £0.000m 0.00% Total Debt £789.860m 4.35% £858.677m 4.09% Total Investments £13.820m 4.51% £28.584m 2.85% Net borrowing position £776.040m £830.093m 3.2 From the above table, it can be seen that the average interest rate on the debt held as at 31 March has decreased from 4.35% in 2025 to 4.09% as at 31 March 2026. At the same time the average rate has decreased on the investments held as at 31 March from 4.51% in 2025 to 2.85% as at 31 March 2026. long term debt. 3.3 The external debt figure included within Table 1 includes both short term and Page 128
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Appendix 1 3.4 There are four treasury prudential indicators which cover the activity of the treasury function. Complying with these indicators reduces the risk of an adverse movement in interest rates impacting negatively on the Council’s overall position: • Upper limits on variable rate exposure. • Upper limits on fixed rate exposure. • Maturity structures of borrowing. • Total principal funds invested for greater than 365 days. 3.5 Table 2 shows the actual upper limits set per debt type and maturity as at 31 March 2026. Table 2 2025/26 Actual 2025/26 Revised Indicator Upper Limits on Fixed Interest Rates 100.00% 100.00% (Against maximum position) Upper Limits on Variable Interest Rates 0.00% 50.00% (Against maximum position) Maturity Structure Fixed Rate Year End Max Min Borrowing (%) Under 12 months 39.29% 50.00% 0% 12 months to 2 years 0.64% 50.00% 0% 2 years to 5 years 27.65% 50.00% 0% 5 years to 10 years 2.12% 50.00% 0% 10 years to 20 years 2.10% 50.00% 0% 20 years to 30 years 4.29% 50.00% 0% 30 years to 40 years 4.26% 50.00% 0% 40 years to 50 years 15.69% 100.00% 0% 50 years to 60 years 3.97% 100.00% 0% 60 years to 70 years 0.00% 100.00% 0% Maximum Principal Funds Invested £0.470m £1m Nil > 364 Days 4. The Main Prudential Indicators and Compliance with Limits 4.1 The Council is required by the Prudential Code to report the actual prudential indicators after the year end. 4.1.1 Capital Expenditure and its Financing Page 129
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Appendix 1 This indicator shows total capital expenditure for the year and how this was financed. The decrease in capital expenditure between revised estimate and actual as noted below in Table 3 is due to expenditure which has been reprofiled from 2025/26 into the 2026/27 capital programme, together with resources. The indicators for 2025/26 will be revised in line with this. Table 3 2025/26 2025/26 Revised Actual Estimate* Capital expenditure: £97.269m £109.911m Resourced by: Capital receipts and grants £35.738m £51.890m Revenue £2.247m £0.000m Capital expenditure - additional need to borrow for in-year capital spend £59.284m £58.021m * From the Treasury Strategy Report 4.1.2 IFRS 16 Leases IFRS 16 Leases was adopted within the Local Authority Accounting Code of Practice from 2024/25. It requires most leases to be recognised on the balance sheet, with a corresponding right of use asset and lease liability. The capital element is applied to reduce the outstanding obligation and the interest element is charged to revenue on a straight-line basis over the terms of the lease. It is important to note that although these technical accounting changes will impact the CFR, they do not impact the borrowing required to finance capital plans. 4.1.3 Gross Borrowing and the Capital Financing Requirement (CFR) In order to ensure that borrowing levels are prudent, over the medium term the Council’s gross borrowing must only be used for capital purposes. Gross borrowing should not therefore, except in the short term, exceed the total of the capital financing requirement in the preceding year (2025/26) plus the estimates of any additional capital financing requirement for the current (2026/27) and next two financial years. This essentially means that the Council is not borrowing to support revenue expenditure. This indicator allows the Council some flexibility to borrow in advance of its immediate capital needs in 2025/26. Table 4 shows that in 2025/26 the council was in a temporary overborrowed position at year end due to timing differences of repayments of borrowings taking advantage of available funds. Any overborrowed funds were invested in line with the Treasury Strategy until required for repayment of borrowings in early 2026/27. 4.1.3 The Chief Officer Resources can confirm the Council has complied with this indicator over the medium term (as can be seen by comparing the gross debt Page 130
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Appendix 1 figure at 31 March 2026 with the anticipated CFR at 31 March 2029 as detailed in Table 4 below), and in the short term, the adjusted gross borrowing position also under the CFR as at 31 March 2026. Table 4 2025/26 Actual 2025/26 Revised Indicator* Gross borrowing position per Table1 £858.877m £833.120m PPP Liability £78,508m £78.755m IFRS 16 Liability £2.026m £2.462m Adjusted gross borrowing position £939.411m £914.337m Capital Financing Requirement £923.501m £922.200m 2025/26 Actual CFR at 31 March 2026 2025/26 Actual £923.501m Estimated Movement in CFR* 2026/27 £75.455m 2027/28 £48.073m 2028/29 £29.374m Anticipated CFR at 31 March 2029 £1,076,403m Gross Debt at 31 March 2026 £939.411m * Estimated movements from Treasury Management Strategy 2026/27 – March 2026 4.1.4 The Authorised Limit The Authorised Limit is the “Affordable Borrowing Limit” required by Section 35 of the Local Government in Scotland Act 2003. The Council does not have the power to borrow above this level. The information in Table 5 demonstrates that during 2025/26 the Council has maintained gross borrowing within its Authorised Limit. 4.1.5 The Operational Boundary The operational boundary is an indicator against which the Council monitors its external debt position. It is based on the Council’s estimate of the most likely (i.e. prudent but not worst case) scenario for external debt. Periods where the actual position is either below or over the Operational Boundary are acceptable subject to the Authorised Limit not being breached. The information in Table 5 demonstrates that during 2025/26 the Council has maintained gross borrowing within its Operational Boundary. 4.1.6 Actual financing costs as a proportion of net revenue stream Page 131
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Appendix 1 This indicator shows the actual impact of capital expenditure in 2025/26 compared to the projected impact of the General Services Capital Plan Refresh and the HRA Capital Plan Update as approved by Members on 4 March 2026. The cost of capital is described as loan charges within the revenue budgets. Table 5 * 2025/26 Revised Indicator - Authorised Limit £1,024,252m Revised Indicator - Operational Boundary £938.898m Maximum gross borrowing position during 2025/26 £870.083m Minimum gross borrowing position during 2025/26 £771.458m Estimated Actual Financing Costs as a proportion of net revenue stream General Fund 9.43% 7.27% Housing (HRA) 51.01% 48.13% * From Mid Year Report 17 December 2025 5. Summary of the Economic Factors affecting the Strategy during 2025/26 5.1 The Economy and Interest Rates 2025/26 – to March 2026 (Source: Link Treasury Management Annual Report Template 2025/26 Scotland April 2026) UK Economy As with 2024/25, UK inflation has proved somewhat stubborn throughout 2025/26. Having started the financial year at 3.5% y/y (April), the CPI measure of inflation peaked at 3.8% from July to September, before dipping to 3% in January and February. Core inflation picked up t o 3.2% in February, from 3.1%, and the recent upward pressure on energy costs could see CPI inflation breach 4.5% later this year. Against this backdrop, the continued lack of progress in ending the Russian invasion of Ukraine, and the potentially negative implications for global growth as a consequence of the implementation of US tariff policies, Bank Rate reductions look limited for the remainder of 2026 (as they do in the euro-zone). Bank Rate currently stands at 3.75%. Moreover, borrowing has becoming more expensive in 2025/26. Gilt yields have risen materially in March 2026, more than reversing the falls earlier in the financia l year. Additionally, the public finances have remained under pressure. The higher- than-expected public net sector borrowing of £14.3bn in February was £2.2bn above last February’s outturn. But that borrowing overshoot was mainly due to timing effects relating to the £13.0bn government debt interest payment. That came in as the highest payment si Page 132
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Appendix 1 nce June 2025, causing a 12.3% y/y jump in spending. On the flip side, sitting at £8.1bn, tax revenues were also higher than last February, largely on the back of solid growth in self-employment incomes in 2024/25, boosting self-assessment income tax receipts and stronger capital gains tax receipts. However, the combination of some energy price support and pressures from higher inflation amid the ongoing energy price shock, higher interest rates and a weaker economy will ultimately put borrowing on an upward trend. With the rise in energy prices possibly pushing the Retail Prices Index inflation up to a peak of 5.7%, debt interest repayments will increase by about £ 10bn. A weaker growth profile, higher inflation, higher interest rates and gilt yields could erode about £11bn of the Chancellor’s £23.6bn headroom. The loosening in the labour market continues to bear down on wage growth. The 3myy growth rate of average earnings including bonuses slowed from 4.2% in December to 3.9% in January. Meanwhile, excluding bonuses, private earnings growth continued to fall from 3.4% to 3.3%. The table below provides a snapshot of the conundrum facing central banks: inflation pressures remain, labour markets are still relatively tight by historical comparisons, and central banks are also having to react to a fundamental re-ordering of economic and defence policies driven largely by the US administration. UK Eurozone US Bank Rate 3.75% 2.0% 3.5%-3.75% GDP 0.1%q/q Q4 (1.0%y/y) +0.2%q/q Q4 (1.2%y/y) 0.7% Q4 Annualised Inflation 3.0%y/y (Feb) 1.9%y/y (Feb) 2.4%y/y (Feb) Unemployment Rate 5.2% (Jan) 6.2% (Jan) 4.4% (Feb) The Bank of England sprung no surprises in their March meeting, leaving Bank Rate unchanged at 3.75% by a vote of 9-0, but suggesting rates may need to rise if inflation picks up markedly. The vote could best be described as moderately hawkish. The MPC stated it “stands ready to act as necessary” and “is alert to the increased risk of domestic inflationary pressures through second-round effects in wage and price-setting”. Even so, we suspect the committee is likely to put equal weight on higher inflation and weaker growth, particularly the poor macroeconomic backdrop prior to the energy shock, keeping interest rates at 3.75% this year. 10-year Gilt yields have been exceptionally volatile in the final weeks of 2025/26, troughing at around 4.23% in late February before shooting up to 5.00% (and well through that on an intraday basis). That spike was driven by the outbreak of war in the Middle East, which prompted a dramatic reassessment of investors’ Bank of En gland policy rate expectations. Having been pricing in rate cuts in late-February, Page 133
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Appendix 1 as many as four rate hikes were discounted by late-March. The 10-year yield ended the quarter at 4.92% with around 65bp of rate hikes priced in over the coming year. In addition to more hawkish monetary policy expectations, part of this increase in yields probably reflected an increase in term premia amid concerns that the government may react by loosening the fiscal purse strings. As for equity markets, the FTSE 100 experienced another volatile quarter, surging to an all-time high of around 10,900 in late February, leaving it up 10% from the start of 2026, before giving back most of those gains in March after the outbreak of the Middle East conflict. That pullback leaves the index at around 10,176 at the end of the quarter. For context it was at 8,582 at the start of April. The £ has stayed relatively resilient also at $1.33, strengthening from $1.29 back in April. USA Economy Despite a weak finish to 2025, the US economy has generally been the strongest among the developed economies, but with uncertainties growing surrounding President Trump’s central economic tenet of being able to apply tariffs on an ad-hoc basis, and bend the FOMC Fed Funds rate decision-making to his will, there is something of a sta lemate in place at present over when, and if, rates will be cut further in 2026. Inflation is currently stuck at around 2.5%, unemployment is only a little above 4%, and tax refunds are in the process of being facilitated for many households. But will those refunds be – at least partially – offset by higher gasoline prices? The S&P500 started April 2025 at 5,633 and finished March 2026 at 6,528 having peaked at just over 7,000. The 10-year Treasury yield finished March at 4.30% having been 4.17% back at the start of April, and during the year has been both above 4.50% and below 4.00%. EZ Economy The Eurozone economy has run pretty much in parallel with that of the UK. A slightly stronger finish to 2025 (GDP of 0.2% q/q) than that of the UK cannot hide the fact that the economy has been negatively impacted by German economic stagnation until late in 2025. France has also struggled against a difficult political backdrop, but managed to post GDP growth of 0.3% q/q for October to December. With Eurozone headline inflation close to 2%, the ECB has been able to reduce its Deposit Rate to 2%. Whether i t rises from that low point will very much be driven by how energy prices trend over the coming months. The Euro has appreciated against the dollar from 1.08 at the start of April 2025 to 1.16 at the end of March. 5.2 Borrowing Rates in 2024/25 The graph for Public Works Loan Board (PWLB) interest rates below shows that interest rates continued to increase until October 2025 before easing slightly. Rates continued to Page 134
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Appendix 1 rise towards the end of the financial year and into 2026/27, reflecting renewed market volatility and wider economic uncertainty. 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% PWLB Rates 01.04.25 - 31.03.26 1 Year 5 Year 10 Year 25 Year 50 Year 50 year target % Source: Link Treasury Management Annual Report Template 2025/26 (Scotland) 6. 2024/25 Treasury Activity 6.1 Borrowing – The Council raised new short term loans of £240.500m during 2025/26 for the replacement of naturally maturing debt and to finance the Council’s capital programme. 6.2 Rescheduling – Debt rescheduling was carried out in 2025/26 to replace £33.1m of Barclays Market loans with PWLB borrowing. 6.3 Repayment – The Council repaid naturally maturing debt of £259.300m. 6.4 Summary of Debt Transactions – The overall position of the debt activity resulted in the average annual interest rate paid throughout the year, year on year decreasing from 4.35% (2024/25) to 4.35% (2024/25) 6.5 Investment Policy – The Scottish Government issued The Local Government Investments (Scotland) Regulations 2010 on 1 April 2010. 6.6 The investment activity during the year conformed to the approved strategy, and the Council had no liquidity difficulties. 6.7 The Council’s short term cash investments decreased from £29.087m at the beginning of the year to £13.881m at the end of the year with an average balance of £10.693m and received an average return of 4.77% over the year. In addition to the short term cash investments the Council also had 2 long term investments in Clydebank Property Company and Hub West Scotland Page 135
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Appendix 1 with a total value of £0.470m as at 31 March 2025 as identified in table 2 above (investments over 364 days). 7. Performance Indicators set for 2024/25 7.1 The treasury strategy defined a set of performance indicators covering the following areas: 7.1.1 Security - In the context of benchmarking, assessing security is a very subjective area. Security is currently evidenced by the application of minimum quality criteria to financial institutions that the Council may choose to invest in, primarily through the use of credit ratings supplied by the three main credit rating agencies (Fitch, Moody’s and Standard & Poors). The Council has benchmarked security risk by assessing the historical likelihood of default for investments placed with any institution with a long term credit rating of A- (this is the minimum long term credit rating used in the Council’s investment strategy). The Council’s maximum security risk is that 0.05% of investments placed with financial institutions could theoretically default based on global historical data. During the year all investments within the Council’s portfolio were repaid on their due dates with no defaults of the principal sums recorded. 7.1.2 Liquidity – As required by the CIPFA Treasury Management Code of Practice the Council has stated that it will “ensure that it has adequate, though not excessive, cash resources, borrowing arrangements, overdrafts or standby facilities to enable it at all times to have the level of funds available to it which are necessary for the achievement of its business/service objectives”. In respect to liquidity as defined above the liquidity arrangements during the year were maintained in line with the facilities and benchmarks previously set by the Council as follows: o Bank overdraft - £1.000m o Liquid short term deposits of at least £5.000m available overnight. 7.1.3 Return – For the financial year the investment return averaged 4.100% which is a decrease of 0.67% from the previous year. Table 6 illustrates that the Council’s average return identified of 4.10% was higher than the average return from the Council’s bankers investment account (3.96%) and less than the Money Market Funds rate (noted in table 6) which are the local measures of return investment benchmarks approved in March 2012. The Council’s bankers (and therefore the bank with which the investment account is held) are currently Virgin money (formerly Clydesdale Bank plc) which falls within the Category 3 Investment Category approved in the investment strategy approved in February 2017. Due to the credit rating of this bank this category specified a maximum limit £5.000m which may be held on an overnight basis only thus limiting the ability to attract interest on this account. Page 136
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Appendix 1 Table 6 Benchmark Benchmar k Return Average Return Compound 12 month SONIA* 5.02% 4.10% * SONIA is Sterling Overnight Index Average and has replaced LIBOR & LIBID 8. Disclosure regarding the repayment of loans fund advances for 2025/26 8.1 The policy on the prudent repayment of loans fund advances was detailed in the Mid-Year Monitoring Report 2025/26 - Treasury Management and Prudential Indicators reported to Council on 18 December 2025. 8.2 Table 7 shows the movement in the level of loan fund advances between 1 April 2025 and 31 March 2026 (excluding PPP and other leases). Table 7 General Fund Housing Opening Balance at 1 April 2025 £412.328m £373.242m New Advances in 2025/26 £8.607m £59.286m Repayments in 2025/26 (£5.949m) (£11.187m) Closing Balance at 31 March 2026 £414.986m £421.341m 8.3 Table 8 details the anticipated repayment profile of the balance on the loans fund advances (excluding debt interest and expenses) for both General Services and Housing held at 31 March 2026 (note, this is not external debt). Table 8 Future Repayment Profile at 31 March 2026 General Fund Housing Total £m £m £m Under 12 months 7.087 11.790 18.878 2 years to 5 years 21.446 39.463 60.909 6 years to 10 years 35.635 59.952 95.587 11 years to 15 years 35.964 60.829 96.793 16 years to 20 years 27.051 63.945 90.995 21 years to 25 years 19.634 51.295 70.929 26 years to 30 years 15.158 25.242 40.400 31 years to 35 years 14.751 12.283 27.034 36 years to 40 years 16.035 11.609 27.645 41 years to 45 years 17.282 7.902 25.184 46 years to 50 years 20.611 8.979 29.590 51 years to 55 years 26.726 11.985 38.711 56 years to 60 years 30.864 5.694 36.559 61 year + 126.743 50.371 177.114 Total 414.986 421.341 836.327 Page 137
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Appendix 1 9. Risk and Performance 9.1 The Council has complied with all relevant statutory and regulatory requirements which require the Council to identify and, where possible, quantify the levels of risk associated with its treasury management activities. In particular its adoption and implementation of both the Prudential Code and the Code of Practice for Treasury Management means both that its capital expenditure is prudent, affordable and sustainable, and its treasury practices demonstrate a low risk approach. Ongoing consideration of future affordability and sustainability are reported and considered by Members each year when setting the Council’s General Fund and HRA capital and revenue budgets. 9.2 The Council is aware of the risks of passive management of the treasury portfolio and, with the support of the Council’s treasury advisers, has proactively managed its treasury position within the current economic climate taking advantage of lower interest rates where it is deemed appropriate. The Council has complied with its internal and external procedural requirements. There is little risk of volatility of costs in the current debt portfolio as the interest rates are predominantly fixed, with the majority of debt comprised of long-term loans. 9.3 Shorter-term rates and likely future movements in these rates predominantly determine the Council’s investment return. These returns can therefore be volatile and, whilst the risk of loss of principal is minimised through the annual investment strategy, accurately forecasting future returns can be difficult. Page 138