The Lincolnshire County Council Audit Committee met on Monday, 21 September 2026, to review the external auditor's value for money risk assessment and discuss internal audit progress. A significant risk was identified concerning adult social care services, stemming from a recent Care Quality Commission (CQC) report that rated the services as 'Requires Improvement'.

External Audit Value for Money Risk Assessment

The committee received a report from KPMG LLP, the external auditors, detailing their value for money risk assessment for Lincolnshire County Council for the 2025/26 financial year. Rashpal Khangura from KPMG presented the findings, highlighting that while no significant risks were identified in financial sustainability or governance, a significant risk was identified in the area of Improving economy, efficiency and effectiveness.

This significant risk is specifically related to the council's adult social care arrangements, following a recent Care Quality Commission (CQC) review which rated the services as 'Requires Improvement'. The CQC report indicated that while governance, performance management, and risk management arrangements were in place, further work was needed to demonstrate their effectiveness and impact on service delivery. Specifically, the CQC noted that governance reporting did not always provide a clear audit trail demonstrating how findings from audits, quality assurance, and stakeholder feedback had informed service improvements.

Councillor Andrew Middleton expressed concern about the flagging of this risk, asking about the further work KPMG would undertake and suggesting the committee should seek deeper understanding on this area in future meetings. Rashpal Khangura explained that KPMG would conduct a detailed review of the CQC report, assess if it brought new information to the council's attention, and examine whether the council's governance reporting provided appropriate indicators of ineffective service delivery. He added that they would also review the council's improvement programme in response to the CQC findings and how these were communicated to those charged with governance.

Councillor Cain Parkinson raised concerns that feedback was not necessarily leading to service improvements, which he felt was obviously quite concerning where audit trails aren't leading to improvement in the services itself. He questioned whether this lack of feedback could impact the service director's ability to put forward a balanced budget, potentially leading to overspends. Amanda Reid, Strategic Finance Manager, stated that this was not a question for her to answer at that moment, but that the audit process was crucial for ensuring the financial requirements for service areas were accurately assessed.

Councillor Philip Roberts defended Councillor Clegg (who was not present), stating that measures had already been put in place to address the issues raised in the CQC report and that it would take time for these measures to show results. He expressed confidence that the situation would improve upon the next review.

The committee also noted a performance improvement observation regarding the re-establishment of formal performance reporting against the Corporate Plan. While the council continued to publish performance data on its website, the report recommended that structured reporting against the revised 2026-31 Corporate Plan be reintroduced and regularly presented to those charged with governance to support effective oversight and accountability. The management response indicated that a new Council Plan Performance Framework had been developed and incorporated into the formal quarterly reporting cycle, with reports now presented to both the Overview and Scrutiny Management Board and the Executive.

Internal Audit Progress Report

Claire Tomlin, Head of Audit and Risk, presented the Internal Audit Progress Report, covering work completed between April and August 2026. The report indicated that the internal audit plan delivery was largely in line with expectations, with 30% of the plan delivered, 17% in progress, and 53% yet to commence. The report highlighted that the audit function remained adequately resourced, with new audit officers recruited to support the team.

The report detailed several 'live' audit reviews, including those on Finance Key Controls: Procurement Cards, LGPS: Contribution Collection & Financial Controls, and Children's School Governance Services. Draft internal audit reports were also issued for Finance Key Controls: Use of Amazon Business Account and F&R: Financial Safeguards & Expectations, both receiving a 'Limited' assurance rating.

Executive summaries from finalised reports included a briefing note on the Grantham High Street Improvement Scheme, which confirmed that the devolution grant was spent in full and that the £2 million allocated for Grantham projects was spent on projects within Grantham. The report also noted that the removal of a non-scoped £2 million project in Grantham for 2026/2027 followed due process. Other finalised reports covered HR: Restructure Efficiency, Adult's Provider Resilience & Response, and Health & Safety: Statutory Obligations for LCC & Landlord Obligations.

The report also provided an update on overdue management actions, noting that 551 management actions were outstanding, with 220 remaining open. A new Microsoft management action tracker was delayed, with implementation expected in April 2026 following training.

Risk Management Progress Report

Kevin Lane, Team Leader - Insurance and Risk, presented the Risk Management Progress Report. The report indicated that the council's strategic risks were being managed proactively, with a strong awareness of current and emerging risks. The Strategic Risk Register contained 12 risks, with four assessed as having limited assurance.

The Market Supply Children's risk was highlighted as the only issue on the strategic risk register that had materialised and was impacting statutory duties. This risk had increased to a 'Major' impact score, also affecting the strategic budget risk. Controls were being developed, including the purchase of a new property to operate as a step-forward children's home, and the Children in Care Transformation Programme focused on increasing family-based placements. Regional Care Cooperative initiatives were also progressing to strengthen collaborative commissioning arrangements.

The Budget risk continued to be influenced by other strategic risks and external factors, with the risk likelihood increasing to 'Likely' and assurance decreasing to 'Limited', with a deteriorating direction of travel. Controls were in place but external influences such as increasing demand, complexity, and costs meant assurance remained limited.

The Working Age Adults risk, encompassing mental health and learning disability elements, was showing stabilising demand and cost for mental health services. However, the learning disability element remained challenging to control.

The report also detailed risk management activity, including the refinement of the risk appetite framework and the relaunch of the Strategic Risk Group. Risk training, including e-learning modules, was also being developed and delivered. External horizon scanning topics included economic conditions, partner dependencies, and weather-related economic impacts.

Strategic Risk - Deep Dive Review

The committee was invited to select a strategic risk for a deep dive review at the November 2026 meeting. Kevin Lane presented proposals for consideration, recommending risks with limited or low assurance, or those with a deteriorating direction of travel. The proposed risks for deep dive were: Market Supply Children's, Budget, and Working Age Adults. The committee was reminded of previous deep dive topics, including Market Supply Adults, IT Infrastructure, LFR Command and Control Centre, Education Travel, High Needs Block, and Artificial Intelligence.

Audit Committee Work Programme

Claire Tomlin, Head of Audit and Risk Management, presented the Audit Committee Work Programme. The programme outlined core assurance activities scheduled for the committee, including the External Audit Value for Money Report, Internal Audit Progress Report, and the Strategic Risk Register updates. The committee was invited to review and amend the work plan to ensure it contained the necessary assurance areas for approving the Annual Governance Statement. The work programme also included a future deep dive topic to be selected by the committee.