The Lancashire Combined County Authority's Audit and Governance Committee met on Wednesday 14 January 2026, approving key policies on financial crime and anti-money laundering, and noting updates on the authority's financial assurance framework and internal audit progress. The committee also approved the Corporate Risk and Opportunity Register and the Audit and Governance Committee Work Programme for 2025/26.

Key Updates for LCCA Committees

Matthew Sidgreaves, Interim Chief Operating Officer for the Lancashire Combined County Authority (LCCA), provided an update on the authority's activities. He highlighted the LCCA's strategic priorities in transport, economy, and skills, and noted that the authority was preparing for the transition of Local Transport Authority functions from the constituent councils of Lancashire County Council, Blackpool Council, and Blackburn with Darwen Council from April 2026. This transition would involve adopting a commissioning and assurance model for transport, which would allow the LCCA to build strategic and technical capacity gradually while retaining local expertise. Significant funding from the Department for Transport would begin to flow through the LCCA from April 2026. Mr. Sidgreaves also mentioned that the LCCA's governance review had concluded, and leaders were willing to engage with the government on further devolution, focusing on investment certainty, public consultation, and the potential for a mayoral proposal. Corporate functions provided by the three constituent councils were detailed, and the committee was informed about the ongoing governance review.

LCCA Financial Assurance Framework

The committee received an overview of the LCCA's initial financial assurance framework. This framework is designed to ensure that the LCCA's governance arrangements are implemented effectively and are fit for purpose. Key financial documents, including Financial Regulations, Contract Procedure Rules, and the Capital Strategy, have been approved. The report detailed the collaborative financial services model, with strategic finance managed by Lancashire County Council and operational finance by Blackpool Council. Challenges regarding VAT recovery were noted, with the authority awaiting Royal Assent for the Finance Bill 2025/26. KPMG was appointed as the external auditor, with an indicative fee of £164,000. The Deputy Section 73 Officer expressed confidence in the existing financial governance foundations and internal controls.

Internal Audit Progress Report

The committee considered a report detailing the internal audit work completed for the 2025/26 audit plan. As of 27 November 2025, 28 days of audit activity had been undertaken, representing 33% of the planned 85 days. Key areas of focus included the assurance framework for support services, grant work, and risk management. The report indicated that the Risk Management review was completed, providing reasonable assurance regarding the effectiveness of the LCCA's risk management framework. The audit universe had been updated to reflect committee requests, and the review of grants issued in 2025/26 would be undertaken in 2026.

Counter Financial Crime and Anti-Money Laundering Governance Framework

The committee was asked to approve three key governance policies: the Whistleblowing Policy, the Counter Financial Crime Policy, and the Anti-Money Laundering Policy. These policies are intended to form part of the LCCA's governance framework to prevent, detect, and respond to misconduct, financial crime, and money laundering risks. The Whistleblowing Policy provides a confidential mechanism for reporting wrongdoing and protects whistleblowers, aligning with the Public Interest Disclosure Act 1998. The Counter Financial Crime Policy establishes procedures to prevent and detect fraud, bribery, and corruption, in line with the Fraud Act 2006 and Bribery Act 2010. The Anti-Money Laundering Policy sets out obligations under the Money Laundering Regulations 2017, requiring due diligence and reporting of suspicious transactions.

Corporate Risk and Opportunity Register - Quarterly Update

The committee reviewed the updated Corporate Risk and Opportunity Register, reflecting progress in Quarter 3 (July-September 2025) and planned activity for Quarter 4 (October-December 2025). The register had been updated to include a new risk concerning Engagement of Third-Party Providers and an increased risk score for Operational Capacity and Resources. The risk score for Local Transport Authority Functions had also increased. The report detailed the risk owners, current and target risk scores, existing controls, and planned actions for each identified risk.

Audit and Governance Committee Work Programme 2025/26

The committee considered the draft work programme for 2025/26. It was noted that the programme included regular reports on internal audit and risk management, as well as updates from the Chief Operating Officer. The work programme was acknowledged as an evolving document, subject to change based on emerging priorities. The committee was asked to consider the programme and make any necessary revisions.

The meeting also included the appointment of Mr. Greg Gottig as the new independent chair of the committee.