Agenda and minutes

To receive any apologies for absence.

Apologies for absence were received from Cllrs Parry and Eysenck.

To confirm the minutes of the meeting held on 13^th October 2025.

The minutes of the meeting held on 13^th October 2025 were confirmed and signed.

Head of People and Workforce, Christopher Matthews gave an update on the risk identified by Grant Thornton regarding the use of a Debugger role in the SAP system. 

As part of the 2024 audit, Grant Thornton raised a risk regarding a vulnerability associated with people permanently having debugger access to the SAP system, which allowed users to change or delete entries and to change underlying code and to bypass normal authority checks and execute transactions.  This was the first time this issue had been reported as a risk.

In response to the 2024 audit findings, the debugger role was removed from the IT Technical Support Team and can now only be granted temporarily on request and for a specific purpose, after which it is removed.

The role was also removed from the payroll role, however, this impacted on our Payroll Control Centre functionality, which is required to run payrolls, so we had to reinstate it, as clearly there was an operational need for payroll to be run.

We explored whether the role could be granted to payroll colleagues on request in the same way as the Technical Support Team, however, it was deemed that there would be a large number of requests and there would be an almost constant need for the role.

Payroll Control Centre provides a lot of value with running payroll, not least the speed in which we are now able to run it, meaning we can run a payroll during the day rather than overnight as we used to have to. However, it is not widely used by other organisations, which has meant that we are limited in being able to speak to other councils about their setup.

As of the 16th of October 2025, we have now implemented a solution which removes the debugger role from the payroll role.  This looks to be working as expected with no adverse effects.

This has been a very challenging problem to overcome.  The expertise, knowledge and skills required of our IT Technical Support Team to arrive at a solution should not be understated and it should be acknowledged that we have managed to overcome this issue with limited access to technical support or guidance from outside of the Council.

To disclose any pecuniary, other registrable or non-registrable interest as set out in the adopted Code of Conduct.  In making their decision councillors are asked to state the agenda item, the nature of the interest and any action they propose to take as part of their declaration.

If required, further advice should be sought from the Monitoring Officer in advance of the meeting.

No declarations of disclosable pecuniary interests were made at the meeting.

Representatives of town or parish councils and members of the public who live, work, or represent an organisation within the Dorset Council area are welcome to submit either 1 question or 1 statement for each meeting.  You are welcome to attend the meeting in person or via MS Teams to read out your question and to receive the response. If you submit a statement for the committee this will be circulated to all members of the committee in advance of the meeting as a supplement to the agenda and appended to the minutes for the formal record but will not be read out at the meeting. The first 8 questions and the first 8 statements received from members of the public or organisations for each meeting will be accepted on a first come first served basis in accordance with the deadline set out below.

All submissions must be emailed in full to [email protected] by 8.30 am on 19^th November 2025.

When submitting your question or statement please note that:

· You can submit 1 question or 1 statement.

· A question may include a short pre-amble to set the context.

· It must be a single question and any sub-divided questions will not be permitted.

· Each question will consist of no more than 450 words, and you will be given up to 3 minutes to present your question.

· When submitting a question please indicate who the question is for (e.g., the name of the committee or Portfolio Holder)

· Include your name, address, and contact details.  Only your name will be published but we may need your other details to contact you about your question or statement in advance of the meeting.

· Questions and statements received in line with the council’s rules for public participation will be published as a supplement to the agenda.

· All questions, statements and responses will be published in full within the minutes of the meeting. 

Cllr Suttle responded to Torsten Mills.

Thank you for raising these concerns. I want to start by acknowledging the seriousness of the issues which are highlighted by Grant Thornton. Governance is not just a procedural matter—it is the foundation of public trust, and when it falls short, we must act decisively. 

First, on the timeline: You are absolutely right that progress has been slower than anyone would have liked.   

When these issues began to emerge the Council’s Monitoring Officer commissioned an independent investigation by South West Audit Partnership. The investigation took time, and this was necessary but the response to the investigation and the updates provided to this committee has created a perception of insufficient urgency.  The papers tonight though show that there has been progress with the overwhelming majority of the actions being marked as complete.  

Before moving away from the timeline, it must also be noted that the external auditors set out the position as it was at a point in time. This means that the report tonight from Grant Thornton appears to set out these issues as outstanding items, but the written report later on this agenda shows the progress that has been made since the SWAP report was presented. Audit and Governance forward plan will follow the progress being made with the SWAP investigation actions, and wider organisational learning which will come back to Committee regularly during 2026.  

On accountability and leadership: The Committee must set the tone for improvement.  Which is why tonight we have a written update on the situation, regular follow up on audit action plans, and ensuring that when risks are identified, they are addressed promptly and transparently.   Where addressing the risks is delayed, we will also seek clarification as to how any risk is being mitigated in the interim.  

So what happens now? 

I will introduce a standing agenda item for audit actions and risk mitigation, with Directors required to report progress at every meeting.  This will include written reports, so that members and the public can see what has been done and what remains outstanding.  

To note the minutes of the Audit & Governance Hearing Sub-committee (if any meetings have been held).

No meetings held.

To receive a report by Sean Cremer, Corporate Director Finance and Commercial.

The Corporate Director Finance and Commercial, Sean Cremer introduced the report. He highlighted that the forecast outturn was £5.3 million overspend on the revenue budget and this was an improvement since the period 4 report, so an improved position moving through the year. Within capital a program of £142.9 million profiled for delivery but slightly slower than anticipated spend at this point in the year. Some work was being done to reprofile and to understand what was going on with some of the major projects and would be brought back in a future report. There were pressures predominately for the people-based services and an increasing complexity of need. These were services that could not be switched off because they were oversubscribed and were statutory duties for some of Dorset’s most vulnerable people. As a result, there were some overspends through Children’s, Adults and Housing Directorates. Looking ahead, one of the key risks remained around the DSG position and since the last meeting, the promised SEND reform had been delayed and would come out in early 2026. This would be a key risk to the Council until there was a clear way forward.

Cllr Holloway referenced 1.1 in pg 16 of the report and asked about transformation and savings forecast which was revised to deliver £6.7 million of the £10 million savings target. He asked if the portfolio holder was still confident that the savings would be delivered in the time frame considering all of the budget pressures.

In response Cllr Clifford explained that transformation and savings was challenging, and the target had been reprofiled. Much of the £6.7 million savings was solid and secure. The program would continue to save as much as possible. The remaining of the savings was reprofiled across future years.

Noted.

To receive a report by David Wilkes, Service Manager Treasury and Investments.

The Service Manager Treasury and Investments, David Wilkes introduced the report. The report was a mid-year update on the Council’s treasury management activities for the 6 months to the end of September. All treasury management activity in the year complied with limits and parameters included in the strategy approved by Full Council. The biggest external factor in treasury management was interest rates. Capital financing requirement was expected to increase from just over £430 million at the end of the last financial year. At the year end, it was expected to rise to £465 million, just under what was set in the budget £470 million. For external borrowing there had been a slight dip halfway through the year, as a number of loans had matured in the first 6 months of the year. Loans were not always refinanced straight away and there was a gap between replacing loans. External borrowing was expected to increase to £325 million by the end of the year. Which was about £35 million less than when the budget was set. Internal borrowing by the end of the year, would increase by £30 million more than what was budgeted. Cash and investments would be £30 million less. To minimise risk, cash and investments would be reduced and using the Council’s reserves less to fund cash and investments and to offset the need to use external borrowing.

Cllr Suttle commented that there was a low number of cash and investments projected in comparison to previous years. 

David Wilkes was confident that the projected year end outturn of £30m would provide sufficient head room to fund liabilities as they fall due. When Dorset Council was formed, it inherited the different balance sheets of its predecessor councils, which included a number of long-term investment portfolios. Over time he had looked to redeem from these investments to reduce the Council’s need for external borrowing to fund its capital programme.

Noted.

To receive a report by Julie Masci, The Engagement Leader, Grant Thornton.

The Engagement Leader Grant Thornton, Julie Masci introduced the report. She highlighted key messages; there had been a considerable amount of audit work conducted on the 24-25 financial statements since the work had started in July. A number of recommendations had been raised arising from the first year of audit. She referenced the action plan in the report and officers had taken onboard the findings from the previous year and were working to address those findings. There were a couple of areas of work that were still ongoing, and the report reflected the ongoing position. The main areas in which work was ongoing was work around the valuation of land and buildings. The Council had changed valuer during the Audit year that Grant Thornton was looking at currently and there had been a number of changes and movements in valuation, compared to the values that were carried in the balance sheet last year. Grant Thornton needed to look in some detail in terms of those changes and assumptions and had to make a number of enquiries with the Council valuers and were coming to conclusion of those enquires but had been a significant amount of work given the size of changes that had occurred in the accounts this year. In terms of the overall findings to date, the were only a small number of disclosure errors that had been identified within the Council audit. There were no amendments identified that change the financial position reported previously in the draft financial statements.

 Noted.

To receive a report by Julie Masci, The Engagement Leader, Grant Thornton.

The Engagement Leader Grant Thornton, Julie Masci introduced the report. There was a similar picture in terms of the audit which was substantially complete. There were some areas outstanding highlighted in the report when the papers went out but those had progressed further since the paper had been issued. In terms of findings, Grant Thornton had not identified any adjustments impacting the results of the fund. One of the items, in the unadjusted items that was reported in the appendix of the report, reflected timing differences and were not considered as errors of management. Council officers must put together a set of accounts very early for the year end date and particularly in the context of a Pension Fund, which determined a value of investments and was dependent on third party information provided by the Pension Fund investment managers and other parties that helped inform the valuation and went into the accounts. By the time the accounts were put together the year information was not all available, so officers put together a best estimate which may be based on a quarter end position. There were a number of disclosure updates asked to be made to the Pension Fund accounts.   

Grant Thornton Audit Manager for Pension Fund, Chrissa Viente gave an update on the latest position on the audit of the fund.

• Page 7 of AFR/Page 169 of report pack – completed the review of the basis of valuation of Level 2 and 3 investments. A classification change from Level 2 to Level 3 amounting to £31.03m was identified and this is reported under disclosure changes on page 36 of our report/198 of report pack (item 2 – Note 17). This was marked in the report as TBC but we have confirmed that this is now updated.
• Page 7 of AFR/Page 169 of report pack – Grant Thornton have also completed our benefits payable testing subject to final quality review. No issues identified.
• Page 36 of our report/198 of report pack – Note 17 (2^nd item – cash and cash equivalents omitted from disclosure) and Note 18 (Classification of financial instruments) also resulted in material amendments in comparative figures (i.e 23/24 figures) and therefore would require prior period restatement. This is contained within this note disclosure. A proposed prior period adjustment is prepared by management which will be reviewed by our financial reporting colleagues. An update in relation to this will be reflected in the final AFR.
• Management was currently in the process of updating Note 5 ‘Assumptions made about the future and other major sources of uncertainty’ as details of some material investment values have been omitted from the estimation uncertainty disclosure. An update disclosure amendment will be reflected in the final AFR.
• An additional misclassification error in the Net Asset Statement amounting to £5.2m would be reported as an unadjusted misstatement. This was in relation to the distinction between the cash used in day-to-day operations and cash investments held with fund managers, to be separately disclosed as  ...  view the full minutes text for item 166.

To receive a report by Julie Masci, The Engagement Leader, Grant Thornton.

The Engagement Leader Grant Thornton, Julie Masci introduced the report.

The assessment that Grant Thornton gave the Council last year in the first year of Audit, two significant weaknesses were identified. One was in relation to the funding position and the outturn position in relation to the dedicated school grant. The second area was in relation to some of the emerging findings in relation to the building health safety issue. There were some fundamental issues that needed to be addressed, but at that point the detailed reports had not been finalised. In 2024-25, Grant Thornton followed up that work this year, the DSG significant weakness from the previous year, was retained this year. Particularly, in terms of the position of the DSG. The in-year position had deteriorated quite significantly, in terms of the in-year position for the Council and indeed where the projection was going. The trend was showing a challenging trajectory, and this was a national issue but the scale of change and how big the overspend had increased within the current period was a cause for concern. The previous years weakness in relation to the investigation that had been broken into two key recommendations this year. One specifically, of the failures identified in terms of the governance aspects, lack of budgetary control, lack of governance and oversight, and the procurement aspects fall under the 3 E’s part of the value for money assessment. There was a key recommendation, that had been reported within the 3E section of the VFM findings.

Co-opted member Simon Roach commented that in the Value for Money section of the report assessment of arrangements for 2023, 24 and 25, financial sustainability was red, governance - red, improving the economy efficiency - red. He referenced the follow up to 23,24 recommendations, two of the key recommendations – no progress, one with limited progress. For improvement recommendations, six were outstanding, one limited progress, and four had been completed. He explained that this was a damning indictment of value for money as an assessment for the last two years. As discussed previously, about having the right processes, controls and governance, he linked to item 12 of the agenda. One of the key things was about the cultural and attitudinal approach in the organisation to value for money the Council gets from that activity. If the Council does not have very specific actions, around cultural change in the organisation to focus on value for money. He only saw system changes, process changes, organisation responsibility changes but he did not see anything about culture.

Sean Cremer responded that this was a backwards looking opinion and opinion as of 31^st March this year. Over 8 months ago, the paper on the agenda showed that the actions identified had been addressed. The starting point was systems closing down the ability for officers to act in a particular way and once the systems and processes had been changed, then going through that training and learning process. He did not want members  ...  view the full minutes text for item 167.

To receive a report by Graham Duggan, Head of Community and Public Protection.

The Head of Community and Public Protection, Graham Duggan introduced the report. He clarified that this item was for approval and recommendation to Full Council. Dorchester Markets operated under a rule of charter since 1630. The governance arrangements compromise of a market panel made up of from representatives from Dorchester Town Council and Dorset Council. The market has been operated for the past 25 years, under a contract with a third party. That arrangement comes to an end next April and the parties have agreed that from next April, Dorchester Town Council will manage the markets in Dorchester directly. For that to happen, there needs to be some minor amendments to the terms of reference for the market panel.  The approved terms of reference would accompany a report to General Licensing Committee on 28 January 2026. The report would seek approval to enter into an agreement with Dorchester Town Council for them to operate Fairfield and Cornhill Markets from 2 April 2026. The Market Panel would oversee this new arrangement.

Propose by Cllr Flower, seconded by Cllr Haynes.

Carried.

Decision: that the Audit and Governance Committee approve the revised Terms of Reference for Dorchester Markets Informal Joint Panel and recommended approval by Full Council.

To receive a report by Sam Crowe, Director of Public Health and Prevention.

The Director for Public Health and Prevention, Sam Crowe introduced the report. Substantial progress had been made in completing the most important actions identified by internal audit that posed serious gaps and weaknesses in the Council’s controls. There were two significant reports that were being considered as part of the Council’s response. The audit by SWAP contract and expenditure compliance with the Council scheme of delegation and a more detailed investigation which was commissioned by SWAP into exactly what happened during the period that the health and safety compliance work was being carried out. In June this year, the Committee agreed to an officer working group overseen by a cross-party members group to oversee the initial work responding to the actions set out in the SWAP audit. In July the Committee held a workshop to consider the investigation findings which recommended the development of the consolidated plan and this was to include wider organisational learning. Following the recommendation, he had been leading an officer group in Dorset Council to construct that plan. He set out where the Council was in the process and it had been quite complex work and went quite wide and deep initially to collect all of the potential actions and followed a rigorous process to ensure that the wording, the priority and duplicate actions had been removed as far as possible. There was much more to do in embedding the wider learning and it was vital that trust was regained through this work.

Cllr Flower commented that the failures that were mentioned in the report were process failures and process mapping should become a part of how to go about the gateways and approvals. There should be something that enables not just members but also the public and the internal auditors to understand where the critical aspects of that processing lay. A lot of good work had been done and had got around a lot of the issues faced but work was not fully complete yet. He was happy to support the recommendations set out in the report.

Simon Roach commented that he was really encouraged by what he heard by the organisational learning activity. There was a clear focus on providing quality services to the residents of Dorset Council. He was not fully convinced on the value for money which was an important element.

Cllr Bawden asked for reassurance that as part of the work on the organisation learning and the culture and that relationships with members were included. Cllrs were raising concerns about wider aspects and members felt they were not being listened to.

Cllr Clifford responded that there was a cross-party member group overseeing the work that was going on. He responded to Simon Roach’s comments earlier, culture change was very hard, and it would take time and would be embedded. Culture change must be accepted and driven throughout the organisation.

Noted.

To receive a verbal update by Lisa Cotton, Corporate Director Transformation Customer and Cultural Services.

Corporate Director, Transformation, Customer and Cultural Services, Lisa Cotton introduced the report. There was a supplementary paper published that supported the verbal update. The service was implementing our customer business support and transformation functions as a key part of our new organisational design and operating model. The Council was unifying and bringing together all of our change and transformation as one Council. Part of the new was bringing together transformation activity under a single one Council model. This ensured the Councils change in the future was strategically coordinated and to secure the resources and the delivery plans. This was supported by the Council’s governance structures and with support from members there had been strengthening those governance structures. The new Chief executive was looking at how to strengthen and make decisions about our change and transformation. One of the new areas of governance introduced was the design authority which had been established to oversee that change and those decisions so that there is a focus on organisational and technical design. So that the right technological choices and the right changes that align to our strategic priorities. Our One Council Transformation office launches next week and will provide a central point for planning and managing change and embedding organisation learning. Governance and oversight had been strengthened, with regular oversight with member steering group on a monthly basis, six monthly with Cabinet, Audit and Governance and regular oversight from the Scrutiny Committee.

Cllr Haynes referenced 3.3 of the report - governance put out with a program board and design authority and did not tell the public who was involved in what. The program board said senior leadership, was that the leader of the Council? Who was involved in the design authority? How were we showing that this was member led? Push how transformation was making savings? She asked if this came as a regular report, could we show how we were making those savings and by a certain date.

Cllr Todd commented that he would like to see more numbers in the report.

Cllr Wilson responded that the purpose of the report was to cover the topic of governance.

Simon Roach encouraged that as the Council looked at processes - to do it in the light of technical solutions that you have chosen and do not try to optimise your processes first. He requested for the paper to be focused around risk.

Cllr Suttle commented that there were some high risks in the report particularly, for changes around payroll and IT. He asked for an emphasis on IT risk in the report.

Cllr Wilson responded that a fit to standard approach would be adopted. An oracle solution would be opted for and would come with some functionality. There would be minimal customisation and more configuring.

Noted.

To consider the work programme for the Committee.

No comments.

To consider any items of business which the Chairman has had prior notification and considers to be urgent pursuant to section 100B (4) b) of the Local Government Act 1972. The reason for the urgency shall be recorded in the minutes.

There were no urgent items.

There is no exempt business.

There was no exempt business.