The LCR Audit & Governance Committee met on Thursday 26 March 2026 to review internal audit updates and planning, discuss risk management, approve accounting policies, and consider the committee's own effectiveness. Key decisions included noting the progress on implementing internal audit recommendations, approving the internal audit plan for 2026-27, and endorsing the risk management annual report.

Internal Audit Update

Laura Williams, Head of Internal Audit and Risk, presented an update on internal audit work completed in the fourth quarter of 2025-26. Four audits were completed, with one receiving a moderate opinion due to identified control weaknesses in the long-running SIF Scheme – Littlewoods Refurbishment Project audit. This project highlighted issues with project governance, risk management, documentation, and compliance with the Local Assurance Framework. Recommendations included developing and maintaining project risk registers, ensuring clear justification for multiple commissions, and establishing robust systems for retaining project documentation. Other audits, including Bus Franchising – Governance and MyHR Officer Interface, received minor opinions, while the Woodside Ferry Terminal Landing Stage audit was assessed as negligible .

The committee noted that 182 high and medium priority recommendations had been implemented since April 2025. However, concerns were raised about 6 high-priority and 30 medium-priority recommendations that were overdue or had had their implementation dates extended more than twice. A panel is being convened to provide support and challenge to officers in implementing these outstanding recommendations. Councillor Graham Morgan suggested that officers responsible for overdue recommendations should be required to present to the committee to explain the delays, a proposal supported by Councillor Desmond.

Internal Audit Planning 2026-27

Laura Williams also presented the Internal Audit Plan, Charter, and Strategy for 2026-27. The plan, developed through extensive consultation and risk assessment, focuses on areas of significant organisational risk, including corporate governance, key financial systems, human resources, cyber risk assurance, integrated settlement implementation, and major schemes such as bus franchising and housing development. The strategy outlines the medium-term development of the Internal Audit service to meet the organisation's evolving assurance needs. The committee was asked to approve these documents.

Councillor Chris Cooke raised concerns about several corporate risks, particularly in the areas of environment and transport, which had residual scores of 20, indicating a high level of risk. Laura Williams explained that residual scores represent the risk remaining after controls have been applied, and that the Corporate Risk Register provides further detail on actions being taken to reduce these scores.

Risk Management Annual Report 2025-26

The committee received the Risk Management Annual Report for 2025-26, which detailed the progress made in embedding an effective system of risk management. Key developments included the introduction of a risk appetite approach in the updated Risk Management Policy and Handbook, and the completion of fraud risk assessments by most service areas. The report highlighted the six corporate risks: Accountability, Resilience, Environment, Transport, Economic Prosperity, and Financial Sustainability. Progress on actions to mitigate these risks was noted, including the upcoming consideration of a governance model for devolved responsibilities and the completion of an external review of business continuity arrangements.

Councillor Graham Morgan enquired about support for individuals not covered by the new Connects to Work programme and transition arrangements for those part-way through their journey, particularly concerning funding for the voluntary, community, and social enterprise sector. Laura Williams stated she would find out the answer. The committee was asked to note the report.

Accounting Policies 2025/26

Claire Hall, Director of Finance, presented the accounting policies for 2025/26. A minor adjustment has been made to reflect updated guidance from the Chartered Institute of Public Finance and Accountancy (CIPFA) regarding the valuation of non-investment assets. Moving forward, assets will be annually indexed between full revaluations every five years to keep pace with inflation. The committee was asked to note and approve the proposed accounting policies.

Effectiveness Review 2026

Louise Outram, Chief Legal and Monitoring Officer, presented the findings of the effectiveness review of the Audit and Governance Committee. The review, based on CIPFA guidance, concluded that the committee's Terms of Reference are largely reflective of best practice. Members felt the committee had been effective, highlighting the consolidated Procurement Strategy and improved processes for the skills agenda as key achievements. The review identified a desire for more support from independent advisors, with a suggestion to have at least two on the committee. The committee also discussed the volume and complexity of reports, acknowledging the need for procedural matters while seeking clearer, high-level summaries. An action plan was presented to inform the committee's workplan for 2026/27, including recruiting two new independent members and revisiting the review process on a six-monthly basis. Councillor Mike Desmond, Chair of the Audit and Governance Committee, was praised for his engagement and collegiate approach.