The Audit, Risk and Governance Committee of Lancashire County Council met on Monday 27 April 2026 to discuss a range of important governance 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. The committee also reviewed progress on external and internal audits, the council's risk register, and the annual reports for the Local Member Grant Scheme and the Lancashire Culture and Sport Fund.

External Audit Progress Report and Sector Update

Ian Pinches from Grant Thornton presented the external audit progress report, confirming that planning and interim fieldwork for the 2025/26 audit of both the Pension Fund and the Council's financial statements were well underway. Michael Green has replaced Sarah Ironmunger as the key auditor for the Council. The backstop deadline for publishing financial statements has been brought forward to January 2027, but Grant Thornton is working with officers to aim for sign-off by the end of November 2026. The report also highlighted changes to the accounting for non-investment assets, which will involve using indices for valuations, shifting the focus of audit work rather than necessarily increasing it. Discussions also touched upon workforce shortages impacting transformation delivery and the potential impact of Local Government Reorganisation. The committee was informed about the SEND deficit and the council's reform plan, which is crucial for potential government write-off of 90% of the deficit.

Internal Audit Progress Report

Andy Dolesky, Head of Internal Audit, reported that the service is now fully staffed, a positive development after earlier challenges. 56% of the audit plan was completed and reported on, with a further 26% in progress, bringing the total to 82%. The focus is now on upskilling new staff and retaining experienced personnel. Assurance levels have remained consistent, with themes often relating to the need for greater consistency in controls across the board. The report also detailed the work done on LCCA pensions, providing reasonable assurance. Discussions included the SEND Priority Action Plan, with a red action on recording meeting minutes to ensure consistency and clarity of decisions. The committee also explored the use of the IIA five-level risk assessment model and the definition of reasonable assurance. The audit services provided to other organisations were discussed, with a mix of full and partial plan delivery.

Internal Audit Annual Plan 2026/27

Andy Dolesky presented the proposed Internal Audit Annual Plan for 2026/27. The plan is developed by reviewing risk registers, meeting with directors, and considering ongoing change programmes. It is designed to be flexible and linked to corporate priorities. A suggestion was made to include reactive gully cleaning within the highways area, given the significant actual reduction in reactive cleaning compared to the planned reduction. Concerns were raised about internal audit's capacity to maintain core services and governance assurance during Local Government Reorganisation (LGR) and the SEND reform programme. The plan includes allocated days for LGR work and aims to add value by assessing coordination and governance arrangements. The impact of rising fuel costs on passenger transport procurement was also noted as a factor to consider. The committee also discussed the potential for a missed opportunity to include audit work around SEND financial sustainability within the Education and Inclusion directorate's audit work.

Local Member Grant Scheme Annual Report 2024/25

Hannah Whalley presented the annual report on the Local Member Grant Scheme. The report summarises the monitoring activity for grants awarded in 2024/25 and 2025/26. A proportionate approach is taken when requesting evidence from the often small, volunteer-led groups. A previous recommendation from the committee has been implemented, whereby the decision-making councillor is notified if an organisation fails to provide evidence and reapplies for a grant. There was a noticeable decrease in applications and awards in 2025/26 compared to the previous year, which may be partly attributed to the number of new councillors. Underspent budget from the scheme will be apportioned to support care leavers' activities and events, and potentially contribute to a new community fund, subject to cabinet approval. Discussions also covered the £52,000 in outstanding evidence for grants, with confidence that this will be recovered. The possibility of providing councillors with a list of outstanding grant evidence was raised to aid in follow-up discussions. A recommendation was made to consider increasing the £200 carry-over limit per councillor to £400, or to allow rollovers while a councillor is in position, to provide more flexibility.

Lancashire Culture and Sport Fund Annual Report

Janey Moran and Heather Fox presented the annual report for the Lancashire Culture and Sport Fund. This fund, established in 2022, operates as a crowdfunding project to ensure community support for initiatives. Projects must have a minimum number of backers to be considered for council pledges. The fund supports community wellbeing through physical activity and culture. The team works with district councils and local organisations to promote the fund, which has consistently seen oversubscribed applications. A high success rate of 94% of projects reaching their target was reported, with Lancashire County Council being the second-largest funding local authority on the Spacehive platform. Discussions addressed concerns about potential system manipulation in crowdfunding, with assurances given about the verification process for project costs and the all or nothing funding model. The council's procurement of Spacehive's services was also discussed, with the annual fee dropping from £55,000 to £45,000.

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

Hannah Whalley presented the draft Annual Governance Statement (AGS) for 2025/26 and the refreshed Code of Corporate Governance for 2026/27. The AGS summarises the outcome of the annual review of governance arrangements and will form part of the Statement of Accounts. It highlights progress made in strengthening governance and provides positive assurance that arrangements are operating effectively. The Code of Corporate Governance reaffirms the council's commitment to robust governance and aligns with best practice standards. The committee was asked to agree the draft AGS and recommend the refreshed Code to Full Council for adoption. Discussions included the number of upheld complaints, primarily relating to SEND, which were noted as being at a similar level to the previous year. The committee agreed to approve the draft AGS and recommend the refreshed Code to Full Council.

Corporate Risk and Opportunity Register – Quarterly Update

Hannah Whalley presented the quarterly update to the Corporate Risk and Opportunity Register. It was noted that risk scores have decreased in several key areas, including adult social care demand, SEND, and school places, reflecting the effectiveness of mitigating actions. The risk relating to the Southport Inquiry has moved from the confidential part two of the register to the public register following the publication of the Phase One report. Two deep dive reports, requested by the committee, on adult social care demand and school places were also presented. The committee was asked to approve the updated register and comment on the deep dive reports.

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

Laura Ricks, Audit Manager, presented the summary report of the committee's self-assessment of good practice. The assessment found the committee to be largely in line with CIPFA good practice, with strong governance, effective chairing, good member engagement, and positive relationships with officers and auditors. Areas identified for strengthening included skills development, demonstrating added value, and alignment with emerging best practice. Agreed actions include developing a structured training plan, undertaking a further review of committee members' skills after six months, and strengthening the Chair's annual value report. The formatting of the report was noted as illegible when printed, and a suggestion was made to use Excel tables for future reports.

The meeting concluded with the confirmation of the date for the next meeting on Monday 27 July 2026 at 2 p.m. and the exclusion of the press and public for the final item.