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Financial pressure changes how councils operate. Decision-making slows, senior staff move on, transformation programmes accelerate and basic controls begin to weaken.For internal audit, the challenge is how to provide meaningful assurance in organisations already struggling to maintain capacity and stability.When the basics start to slipInternal audit often has the earliest view of emerging weaknesses in governance, control and organisational resilience. To tackle weakness, what matters is getting the basics right. Budget monitoring, HR processes and governance clarity are often treated as routine systems, but they are what hold the organisation together.In practice, this is where many councils begin to struggle. Over time, the organisation drifts into a position where it is responding to events rather than shaping them. Any organisation undergoing transformation is often where the consequences further become visible. If core processes are unclear or inconsistently applied, even well-designed change programmes lose traction quickly.A point I often return to is that councils cannot transform their way out of weak fundamentals. Without stable governance and reliable controls, transformation tends to amplify existing problems rather than resolve them.How pressure changes behaviourFinancial strain also affects behaviour. People become more risk averse, and professional judgement is applied less confidently. In some cases, there is increased reliance on interim capacity to fill gaps in leadership and delivery. Taken together, this creates a sense of drift. The organisation is still active, but it is less clearly in control of direction and pace.This matters for internal audit because it changes how assurance work is received and acted upon. Recommendations may be acknowledged but not always implemented quickly, not necessarily due to resistance, but because capacity is limited and priorities are constantly shifting.Adapting the internal audit approachIn this context, traditional long-cycle audit work can feel out of step with organisational reality. What tends to be more effective is shorter, more focused work that concentrates on core controls and immediate risks.That often means ‘temperature checks' or targeted reviews rather than detailed deep dives across extended cycles. The objective is not to reduce depth, but to ensure the work is usable in the conditions the organisation is operating in. Indeed, this is not about scaling back ambition. It is about matching approach to organisational capacity and maturity.Internal audit influence is not driven by reporting aloneIn many cases, audit messages compete with urgent priorities or are absorbed into wider recovery activity. This is where relationships become critical. Regular engagement with chief executives, section 151 officers and audit committee chairs makes a tangible difference to whether audit insight lands at the right level and at the right time.Tone also matters. There is a risk in pressured environments that internal audit is seen primarily as a source of problems. The most effective approach is balanced: clear and honest about risk, but also fair about progress and context.Using audit opinions constructivelyWhere governance and control weaken, ‘no assurance' opinions are also important tools, but they need careful handling.Used well, they can focus attention and prompt action. Used poorly, they can create defensiveness. Where assurance is limited, it is important to explain what has improved, what remains insufficient and why the opinion has not changed.That transparency helps maintain credibility and avoids the impression that audit is disconnected from progress.Governance, culture and leadership stabilityLeadership stability also plays a major role. Frequent turnover reduces continuity and weakens accountability. Likewise, for the member-officer relationships, the way challenge is exercised, and whether difficult issues are addressed openly, can either support recovery or slow it down.Audit committees sit at the centre of this governance environment. Where they are effective, they provide challenge, focus and continuity. Where they are less effective, gaps in understanding can emerge when oversight is most needed. Investing time in briefing and relationship-building is therefore essential.Seeing what really holds councils togetherFinancial pressure quickly exposes the strength – or fragility – of systems. Councils rarely fail because of a single issue; it is usually the accumulation of weaknesses in governance, control and capacity that becomes difficult to sustain.Internal audit has a role in making those weaknesses visible. But its value comes from timing, judgement and relationships. The most effective work is not necessarily the most detailed or critical, but the work that helps organisations see clearly enough to act while there is still time to make a difference.Diana Melville is CIPFA governance adviser

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FINANCE

The role of internal audit for councils under pressure

By Diana Melville | 16 June 2026

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