The Lancashire Combined County Authority Audit and Governance Committee met on Monday 13 July 2026 to review the authority's governance, risk management, and financial performance. Key discussions included the draft Code of Corporate Governance, the draft Annual Governance Statement for 2025/26, and the LCCA's 2025/26 Statement of Accounts. The committee also received updates on internal and external audit progress, the corporate risk register, and the committee's work programme.

Constitution, Membership and Terms of Reference

The committee noted the constitution, membership, and terms of reference for the Lancashire Combined County Authority Audit and Governance Committee for the 2026/27 period. These documents outline the committee's roles and responsibilities, including the scrutiny of the authority's accounting framework, risk management, internal control, and corporate governance arrangements.

Key Updates for Lancashire Combined County Authority Committees

Matthew Sidgreaves, Chief Operating Officer, provided an update on the authority's progress. He highlighted the establishment of LCCA offices, the adoption of the Lancashire Growth Plan, and progress in transport, skills, and economy. New work is emerging in spatial development strategy, and the authority is transitioning from setup to delivery, framed by its strategic priorities. The appointment of Karen Kassar as Director of Transport was announced, starting the following week. The committee was informed that the UK Shared Prosperity Fund (UK SPF) allocation was made to the combined authority and passported to districts, with programme completion expected at the end of September. There is no direct replacement for the UK SPF. Updates were also provided on the Milburn Review regarding young people not in employment, education, or training (NEETs), with the Skills Advisory Board to consider detailed recommendations at its next meeting. Consultation on the Local Transport Plan (LTP) implementation plan had closed, with more responses than the main LTP consultation, and an interim update would go to the transport advisory board. Discussions with district councils on the LTP implementation plan were confirmed as ongoing.

Draft LCCA Code of Corporate Governance

The committee considered the draft LCCA Code of Corporate Governance, which sets out how the authority will be directed and controlled, and how it will account for its actions. The code is based on the CIPFA/SOLACE Delivering Good Governance in Local Government Framework. A councillor raised concerns about the clarity of the employee code of conduct and its equivalence to the member code of conduct, questioning whether officers were expected to implement the political vision. Concerns were also raised about the interpretation of equality, diversity, and inclusion, with a desire for clarity that it does not equate to equality of outcomes (equity), which the councillor opposed. Andy, presenting the code, clarified that member and employee codes of conduct are similar in principle, based on Nolan Principles, though employees must also follow employment legislation. He stated that officers are expected to implement the organisation's policies and strategies and offered to make wording more explicit if needed. Regarding equality, he referred to the Equalities Act and treating everyone fairly, not a political view. Matthew Thomas added that the code development considered existing codes from three authorities and that it focuses on principles rather than outcomes. The committee agreed to delegate authority to the monitoring officer and chair of the Audit and Governance Committee to make minor amendments.

Draft Annual Governance Statement 2025/26

County Councillor Hannah Whalley presented the draft Annual Governance Statement (AGS) for the LCCA's inaugural year. The AGS provides assurance that governance arrangements are fit for purpose but acknowledges the need for continuous review and strengthening. The review was informed by LCCA officers, support services from Blackpool, Blackburn, and Lancashire councils, and external auditors. The committee was asked to approve the recommendations related to the draft AGS for 2025/26 for inclusion in the Statement of Accounts. A query was raised about the timeline for approving lead officers for improvement plan items (Principles F, D, and C), with an undertaking to provide an update via email. Questions were also raised about the plan for complete separation of LCCA from existing authorities and the inclusion of LCCA reports on county council agendas. It was confirmed that the county council's full council agenda now includes an LCCA report. Regarding support services, existing arrangements with constituent councils are planned to continue for the financial year 2026/27, with work underway to establish more dedicated LCCA resources. The committee approved the recommendations, delegating authority for minor amendments to the monitoring officer and chair of the Audit and Governance Committee.

LCCA 2025/26 Statement of Accounts

Gary Fielding, Section 151 Officer for Lancashire County Council, presented the draft 2025/26 Statement of Accounts. He noted that the accounts had been published by the statutory deadline of the end of June. The committee was asked to note the accounts, as they are a statutory requirement. A question was raised about the date for the Audit Committee's approval of the accounts, with an estimation that it would be before the end of the calendar year. It was clarified that the current document is a draft statement and will be replaced with final accounts once approved by the Audit Committee and external audit report. The committee noted the draft 2025/26 Statement of Accounts.

Internal Audit Annual Report for the Year Ended 31 March 2026

Laura Rix, Audit Manager, presented the Internal Audit Annual Report. She provided a reasonable assurance opinion on the adequacy and effectiveness of the authority's governance, risk management, and internal control arrangements. The report highlighted that core frameworks, policies, and processes are in place, supported by constituent authorities during the establishment phase. No significant control weaknesses, fraud issues, or AGS-disclosed items were identified. The committee was asked to consider and comment on the report.

Lancashire Combined County Authority External Audit Plan and Strategy for the Year Ending 31 March 2026

Debra Chamberlain from KPMG presented the external audit plan and strategy. The plan includes an assessment of financial statement risks and value for money risks. Key areas of focus for the value for money assessment include financial sustainability, governance, and improving economy, efficiency, and effectiveness. Two significant risks were identified: one related to governance, specifically the delayed approval of key policies like Financial Procedure Rules and Contract Procedure Rules, and another concerning capacity and resources, particularly the reliance on in-kind services from constituent councils and the lack of a formal workforce strategy. The audit plan will involve further work to assess these risks. The committee was asked to consider and comment on the plan.

Corporate Risk and Opportunity Register - Quarterly Update

County Councillor Hannah Whalley presented the quarterly update to the LCCA's Risk and Opportunity Register. No new corporate risks had been escalated, but the scores for Operational Capacity and Resources and Strategic Planning and Financial Sustainability had increased. This reflects ongoing challenges related to limited core capacity funding, uncertainty about future governance models, and reliance on constituent councils for support services amidst competing priorities and Local Government Reorganisation (LGR). The risk related to LGR had also been broadened in scope. The committee was asked to review and approve the updated register. A discussion ensued about the possibility of monthly updates for the two key risks, which was agreed upon. An interim update on these two risks was also proposed for the end of August.

Whistleblowing Policy Update

Andy presented a six-monthly update on the whistleblowing policy. He reported that no whistleblowing allegations had been received in the past six months, which was considered expected for a young authority. The committee noted and commented on the report.

Audit and Governance Committee Work Programme 2026/27

Dave Gorman presented the Audit and Governance Committee's work programme for 2026/27, which includes regular reports on internal and external audit, finance, and risk management. An action log was also provided to track previously agreed actions. A suggestion was made to adopt a colour-coded system for the action log to indicate the status of items, which was agreed upon, confirming that the VAT recovery item was closed. The committee considered the work programme and action log.

Urgent Business

There was no urgent business to discuss.

Date of Next Meeting

The next meeting of the Audit and Governance Committee was scheduled for Monday 28 September 2026 at 3:00 pm in Committee Room 'C', County Hall, Preston.

Key Decisions Made:

• The committee agreed to delegate authority to the monitoring officer and chair of the Audit and Governance Committee to make minor amendments to the draft LCCA Code of Corporate Governance.
• The committee approved the recommendations related to the draft Annual Governance Statement 2025/26.
• The committee noted the draft 2025/26 Statement of Accounts.
• The committee agreed to consider and comment on the Lancashire Combined County Authority External Audit Plan and Strategy for the Year Ending 31 March 2026.
• The committee agreed to review and approve the updated Corporate Risk and Opportunity Register.
• The committee agreed to receive monthly email updates on the two key risks identified in the Corporate Risk and Opportunity Register.
• The committee agreed to receive an interim update on the two key risks at the end of August.
• The committee noted and commented on the Whistleblowing Policy update.
• The committee considered the Audit and Governance Committee Work Programme 2026/27 and action log.
• The committee agreed to adopt a colour-coded system for the action log to indicate item status.

Topics Discussed:

• Governance and Policy Development: The committee focused on establishing and refining the authority's governance framework. This included reviewing the draft Code of Corporate Governance, the Annual Governance Statement, and the Whistleblowing Policy. Discussions highlighted the importance of clear codes of conduct, ethical values, and robust internal controls.
• Financial Management and Audit: The LCCA's 2025/26 Statement of Accounts were presented, detailing the authority's financial performance and position. Updates on internal and external audit progress provided assurance on the effectiveness of governance, risk management, and internal controls. The external audit plan identified significant risks related to grant recognition, management override of controls, and services in kind.
• Risk Management: The Corporate Risk and Opportunity Register was updated, with particular attention paid to risks concerning operational capacity, financial sustainability, and the impact of Local Government Reorganisation. The committee agreed to more frequent updates on key risks to ensure closer oversight.
• Operational and Strategic Updates: Key updates on the authority's progress in transport, skills, and economy were provided. The appointment of a new Director of Transport was announced, and progress on the UK Shared Prosperity Fund and Local Transport Plan implementation was discussed. The emerging spatial development strategy was also mentioned.
• Committee Operations: The committee reviewed its work programme for the upcoming year and discussed improvements to the action log for better tracking of agreed actions.

People Mentioned:

• Greg Gottig: Independent Chair of the Audit and Governance Committee.
• Councillor Mustafa Desai: Mentioned in apologies for absence.
• County Councillor David Whittington: Mentioned in apologies for absence.
• County Councillor Gina Dowding: Attended as a replacement.
• County Councillor Dr Lorenzo More: Attended as a replacement.
• Dave Gorman: Presented the constitution, membership, and terms of reference.
• Matthew Thomas: Provided key updates on the authority's progress.
• Karen Kassar: Appointed as the new Director of Transport.
• Andy: Presented the draft LCCA Code of Corporate Governance and the whistleblowing policy update.
• County Councillor Hannah Whalley: Presented the draft Annual Governance Statement and the Corporate Risk and Opportunity Register update.
• Councillor Atkinson: Mentioned as having reviewed the draft Code of Corporate Governance.
• Councillor Riley: Mentioned as having reviewed the draft Code of Corporate Governance.
• Councillor Williams: Mentioned as having reviewed the draft Code of Corporate Governance.
• Councillor Park: Raised queries regarding the draft Code of Corporate Governance.
• Gary Fielding: Presented the LCCA 2025/26 Statement of Accounts.
• Mark Wynn: Mentioned as the Section 73 Officer for the Combined Authority.
• Kate Lee: Mentioned as substituting for Mark Wynn.
• Laura Rix: Presented the Internal Audit Annual Report and Progress Report.
• Deborah Chamberlain: Presented the External Audit Plan and Strategy.
• Councillor Neal Brookes: Asked a question regarding capacity funding and suggested monthly updates for key risks.
• Councillor Hall: Asked a question about capacity funding.
• Councillor Hall: Suggested monthly updates for key risks.
• Councillor Neal Brookes: Answered a question about capacity funding discussions.
• Councillor Atkinson: Mentioned as having responded favourably regarding the draft Code of Corporate Governance.
• Councillor Hore: Mentioned in the list of attendees.
• Councillor Johnson: Mentioned in the list of attendees.
• Councillor Galley: Mentioned in the list of attendees.
• Councillor Humphrys: Mentioned in the list of attendees.
• Councillor Buckley: Mentioned in the list of attendees.
• Councillor Parker: Mentioned in the list of attendees.
• Councillor Shaw: Mentioned in the list of attendees.
• Councillor Whalley: Mentioned in the list of attendees.
• Councillor Brookes: Mentioned in the list of attendees.
• Councillor Desai: Mentioned in the list of attendees.
• Councillor Thomas: Mentioned in the list of attendees.
• Councillor Whittington: Mentioned in the list of attendees.
• Councillor Hore: Mentioned in the list of attendees.
• Councillor Johnson: Mentioned in the list of attendees.
• Councillor More: Mentioned in the list of attendees.
• Councillor Dowding: Mentioned in the list of attendees.
• Heloise MacAndrew: Contact for further information on the draft LCCA Code of Corporate Governance and draft Annual Governance Statement.
• Matthew Sidgreaves: Contact for further information on Key Updates.
• Mark Golden: Contact for further information on the LCCA 2025/26 Statement of Accounts.
• Laura Rix: Contact for further information on the Internal Audit Annual Report and Progress Report.
• Debra Chamberlain: Contact for further information on the External Audit Plan and Strategy.
• Emma Trood: Contact for further information on the External Audit Plan and Strategy.
• Faye Kennah: Mentioned as part of the audit team.
• Hannah Race: Contact for further information on the Corporate Risk and Opportunity Register.
• Andrew Dalecki: Contact for further information on the Whistleblowing Policy Update.
• Denise Park: Head of Paid Service.
• County Councillor Stephen Atkinson: Chair of the LCCA Transport Advisory Board and Chair of the LCCA.
• Councillor Lynn Williams: Vice Chair of the LCCA.
• Matthew Sidgreaves: Chief Operating Officer.
• Andy Walker: Economic Development Lead.
• Matt Townsend: Director of Highways and Transport.