The Audit, Risk and Governance Committee of Lancashire County Council met on 12 October 2026 to review external and internal audit progress, discuss the corporate risk register, and examine annual reports on complaints and feedback. Key decisions included noting the external audit progress report and pension fund interim findings, approving the updated corporate risk register, and discussing the annual reports on complaints and feedback across various council services.

External Audit Progress Report and Sector Update

Kelly from Grant Thornton UK LLP presented the external audit progress report, noting that the audit work for the 2025/26 financial year was progressing as expected. The financial statements were provided ahead of the statutory deadline, and substantive testing was well underway. While the audit team was working with officers to resolve queries, they were not yet aware of any matters that would lead to a modification of the audit opinion. The report also included sector updates on local government reorganisation (LGR), highlighting that the proposed reorganisation within Lancashire had been paused by the government. Updates on adult social care and children's social care sectors were also provided, with CQC findings indicating that most local authorities were rated 'good' but at the lower end of that threshold, and Ofsted research highlighting the increasing reliance on unregistered children's homes due to workforce capacity and affordability issues.

External Audit: Lancashire County Pension Fund Interim External Audit Findings

Kelly Jarvis, Audit Manager for the Lancashire County Pension Fund, presented the interim audit findings for the 2025-26 financial year. The audit work was substantially complete, and based on the work performed to date, no matters were identified that would lead to a modification of the audit opinion, anticipating an unmodified (clean) opinion subject to the completion of a small number of items. Key points included a revision to materiality due to changes in gross investment assets, no change to significant risks, and the identification of two adjusted misstatements which were purely classificational and did not affect the net assets statement. Three recommendations were made: to provide the general ledger at the same time as draft accounts, to track audit requests more closely, and for the fund to maintain its own comprehensive register of interest for Pension Fund officers. Prior year recommendations regarding delays in processing member changes were noted as improving, and IT recommendations were still ongoing.

Internal Audit Progress Report

Andrew Dalecki, Head of Internal Audit, presented a positive quarterly update, noting that no limited assurance opinions had been issued for over 12 months. Five reports received reasonable assurance and three received substantial assurance, with findings generally relating to continuous improvement rather than significant control failings. At the halfway point of the year, 25% of the audit plan was completed or nearing completion, with another 25% started and ongoing. Eleven audit assignments and seven follow-up reports had been completed since the last committee meeting, with 19 audits in progress. A referral was suggested for the audit findings on fleet management to the scrutiny committee. Concerns were raised about the procurement strategy remaining in draft for 18 months, and a recommendation was made for a timetable for its issue. The report also highlighted that the team responsible for children missing in education still considered itself understaffed.

Annual Reports on Complaints and Feedback 2025 to 2026

Angela Esslinger, Complaints Manager for Lancashire County Council, presented the annual reports on complaints and feedback. Statutory reports for adult social care, children's social care, and a corporate report covering other council services were provided. While complaints had increased across the board, the number of complaints upheld by the Local Government and Social Care Ombudsman (LGSCO) had decreased, particularly in adult and children's social care. Special Educational Needs and Disabilities (SEND) remained a significant area of complaint, with ongoing work to improve outcomes and responsiveness. A benchmarking table indicated that the council's performance was mid-table compared to other large councils. Concerns were raised about delays in responding to the LGSCO, with steps being taken to improve timeliness and oversight, including the creation of new posts within the SEND team. Judicial reviews were also discussed, with two cases relating to SEND and procedural issues not being taken forward by the court. The cost associated with handling complaints, including financial remedies and independent investigations, was noted as just over £201,000 for the last financial year. A corporate approach to de-escalation was outlined, with officers aiming to acknowledge complaints within five working days and respond within ten. The report also detailed a significant investment in SEND services, with an increase in staffing to address backlogs and a national reform action plan to increase school places.

Corporate Risk and Opportunity Register – Quarterly Update

Hannah Race, Head of Governance and Democratic Services, presented the quarterly update to the Corporate Risk and Opportunity Register. Few changes were noted since the previous quarter, with most risk scores remaining consistent. The risk relating to national policy had been removed from the corporate register due to a low score but would continue to be managed at a directorate level. Members' comments regarding children's homes and SEND were noted for inclusion in future reporting. The committee was asked to note and approve the updated register. Discussions highlighted concerns about the impact of Local Government Reorganisation (LGR) on organisational capacity and the balancing of business-as-usual delivery with transformation programmes. The estimated cost of LGR to Lancashire County Council to date was around £750,000, with a request made to the government for reimbursement. The Southport inquiry's recommendations were reported as completed, with ongoing work on 18 further recommendations. Training on the risk scoring mechanism was planned for members. Concerns were also raised about recruitment and retention, particularly regarding senior posts, and the number of staff lost due to LGR preparations.

The meeting concluded with the date of the next meeting being set for Monday, 30 November 2026, focusing on the Statement of Accounts.