The Audit, Risk and Governance Committee of Lancashire Council met on Monday 27 April 2026, discussing a range of important governance, audit, and financial matters. Key decisions included the approval of the draft Annual Governance Statement for 2025/26 and the refreshed Code of Corporate Governance for 2026/27, alongside the quarterly update of the Corporate Risk and Opportunity Register.

External Audit Progress Report and Sector Update

Ian Pinches from Grant Thornton presented the audit progress report, noting that Michael Green has replaced Sarah Ironmonger as the key auditor for the year. The audit team is committed to signing off the accounts by the end of November 2026, ahead of the government's backstop deadline of January 2027. Discussions also touched upon changes to accounting for non-investment assets, with a focus on the use of indices for valuation. Concerns were raised about workforce shortages impacting the pace of transformation, and the potential impact of local government reorganisation. The committee was also informed about the council's reform plan for Special Educational Needs and Disabilities (SEND) services, which is crucial for potentially writing off a significant portion of the cumulative SEND deficit.

Internal Audit Progress Report

Andy Dalecki, Head of Internal Audit, reported that the Internal Audit Service is now fully staffed, a positive development after a challenging year with staffing issues. 56% of the audit plan was completed and reported on, with a further 26% in draft or progressing, putting the service in a good position for the annual report. Assurance levels have remained consistent, with controls generally in place and operating, though consistency across the board requires improvement. The committee discussed the SEND reform plan, the use of the IIA five-level risk assessment model, and the definition of reasonable assurance. The report also highlighted that audit services are provided to several other organisations, and the impact of this on completing the full plan was discussed.

Internal Audit Annual Plan 2026/27

Andy Dalecki presented the Internal Audit Annual Plan for 2026/27, which is developed by reviewing risk registers, consulting with directors, and considering change programmes. The plan is flexible and links to corporate priorities. Suggestions were made to include reactive gully cleaning within the highways area for audit, and to consider the capacity of internal audit to maintain core services during Local Government Reorganisation (LGR). The procurement of passenger transport and the impact of increased fuel costs were also raised as areas for consideration. The committee also discussed the potential for including audit work around SEND financial sustainability within the education and inclusion directorate.

Local Member Grants Scheme Annual Report 2025/26

Hannah Race, Head of Governance Services, presented the annual report on the Local Member Grant Scheme. The report detailed the monitoring activity for grants awarded in 2024/25 and 2025/26. While there was a noticeable decrease in applications and awards in 2025/26, potentially due to a new cohort of councillors, the underspend from the budget would be apportioned to support care leavers and a new community fund. Concerns were raised about the amount of outstanding evidence for grant usage, but assurances were given that this was due to project delays rather than unspent funds. Discussions also covered the possibility of increasing the £200 carry-over limit per councillor and the mechanism for notifying councillors of outstanding evidence from re-applying organisations. A recommendation was made to consider increasing the carry-over amount to £400 or 20% of the allocation.

Lancashire Culture and Sport Fund Annual Report

Jamie Moran, Cultural Development Manager, and Heather Fox, Libraries and Heritage Manager, presented the annual report for the Lancashire Culture and Sport Fund. This crowdfunding initiative, which began in 2022, has a high success rate of 94% for projects reaching their targets. The fund supports community well-being through physical activity and culture, with applications received from across the county. Discussions included the all or nothing crowdfunding model, the verification process for projects, and the regulation of organisations receiving funding. The cost of Spacehive, the platform provider, was also discussed, with a reduction in the annual fee noted.

The Council's Annual Governance Statement 2025/26 and Code of Corporate Governance 2026/27

Hannah Race presented the draft Annual Governance Statement (AGS) for 2025/26 and the refreshed Code of Corporate Governance for 2026/27. The AGS highlighted positive progress in strengthening governance arrangements and provided overall assurance that these continue to operate effectively. An action plan was included for areas to be strengthened further. The Code of Corporate Governance reaffirms the council's commitment to effective governance and aligns with CIPFA/Solace standards. The committee was asked to approve the draft AGS and recommend the refreshed Code to Full Council. A question was raised regarding the number of upheld complaints, primarily related to SEND, and the reasons behind the recommended payments.

Corporate Risk and Opportunity Register – Quarterly Update

Hannah Race presented the quarterly update to the Corporate Risk and Opportunity Register. It was noted that several risk scores had decreased, including those related to Adult Social Care demand, the Council Improvement Plan, SEND, and school places. The risk concerning the Southport Inquiry has moved from the confidential to the public register following the publication of Phase 1 findings. Deep dive reports on Adult Social Care Demand and School Places were also presented. The committee was asked to approve the updated register.

Audit, Risk and Governance Committee Self-Assessment of Good Practice Summary Report

Laura Ricks, Audit Manager, and Hannah Race presented the summary report of the committee's self-assessment. The assessment found the committee largely in line with CIPFA good practice, highlighting strong governance, effective chairing, good member engagement, and positive working relationships. Areas identified for strengthening included skills development, demonstrating added value, and alignment with emerging best practice. Agreed actions include developing a structured training plan, reviewing committee members' skills and knowledge, and strengthening the Chair's annual report. A minor point was raised regarding the formatting of the report for printing.

Date of Next Meeting

The date of the next meeting was confirmed as Monday 27 July 2026 at 2 p.m.

Exclusion of Press and Public

The committee considered and approved the exclusion of the press and public for specific items of business, as detailed in Part II of the agenda.