The Lincolnshire County Council Audit Committee met on Monday 22 June 2026 to review the council's risk profile, internal audit strategy, and external audit plans. Key discussions included the adequacy of governance, risk, and control environments, with an overall assurance level of adequate noted for the council. The committee also addressed changes to legislation regarding the publication of members' home addresses in their registers of interest.

Combined Risk Report

The committee received an overview of Lincolnshire County Council's risk profile, with the Corporate Leadership Team providing assurance on the organisation's ability to identify and manage risks. The overall assurance level for the council was assessed as adequate, a decrease from previous years, reflecting increasing pressures and uncertainty within local authorities. Key risk themes identified across directorates included Local Government Re-organisation (LGR), increased demand for services, budget and funding challenges, and organisational stability.

Councillor Andrew Crookham, Chief Executive, highlighted LGR as the most significant change facing the organisation, with potential disaggregation of countywide services posing risks to service delivery, economies of scale, and expertise. He also noted increasing demand across all services, particularly in adult care, children's services, and public health, alongside ongoing budget and funding pressures. Organisational stability was also a concern due to recent political and management changes, and the implementation of a new council plan and budget savings.

Michelle Grady, Section 151 Officer, expressed adequate assurance regarding the council's financial stability but noted risks related to increased demand exceeding forecasts, inflation impacting contracted services, failure to deliver savings, and resource diversion due to LGR.

Heather Sandy, Executive Director of Children's Services, also reported adequate assurance, acknowledging external risks such as LGR, SEND reform, and market sufficiency. Despite these challenges, Children's Services maintained an outstanding Ofsted rating. Key risks included market supply for children's services, budget and funding pressures, the potential disaggregation of services due to LGR, and the high needs block budget.

Mark Baxter, Chief Fire Officer, stated adequate assurance for Lincolnshire Fire and Rescue (LFR), with risks managed at an acceptable level. New risk themes included pension changes due to the Sargeant and McCloud remedy, and the future response model.

Andy Gutherson, Executive Director for Place, reported adequate assurance for the Place Directorate, noting increased demand in waste, planning, highways, and transport. Extreme weather events and the establishment of the Greater Lincolnshire Combined County Authority (GLCCA) were also identified as emerging risks.

Andrew McLean, Interim Executive Director - Resources, also reported adequate assurance for the Resources Directorate. Key risks included LGR, budget and funding pressures, increased demand, recruitment and retention of qualified professionals, and IT infrastructure and cyber security.

The committee also discussed horizon scanning risks, including the ongoing impact of LGR, extreme weather events, societal and demographic changes, artificial intelligence, and geopolitical instability.

Annual Audit Report & Opinion

Claire Goodenough, Head of Audit and Risk, presented the annual audit report and opinion for the financial year 2025-26. The report concluded that the frameworks of governance, risk, and internal controls were adequate, and audit testing demonstrated that controls were working in practice. Improvements in control design and application were noted as necessary to reduce reliance on employee diligence. Weaknesses in the control environment for maintained schools were identified as being outside the direct control of council officers due to delegations to Governing Bodies.

The report highlighted that 18 limited assurance awards were issued, with six for council audits and 12 for maintained schools. Root causes for these limited assurances included systemic factors such as failures to apply policies and procedures, and human factors like a lack of training and knowledge. Specific council audits with limited assurance included HR policy implementation, members' allowances, LCC wholly owned companies, financial management and support for maintained schools, exceptional payments to foster carers, and the governance and financial management of LCC wholly owned companies.

Internal Audit Strategy

Claire Goodenough also presented the internal audit strategy for the three-year period from 2026 to 2029. The strategy aims to integrate data analysis into audits, future-proof the team's skills and competencies, and improve transparency for productivity. Key initiatives include developing data analysis capabilities, implementing a mentorship programme for succession planning, and refining productivity metrics. The strategy also focuses on improving root cause analysis and equipping staff for LGR and future assurance work.

External Audit Plans

Amanda Reid, Strategic Finance Manager, introduced the external audit plans for Lincolnshire County Council and the Lincolnshire Pension Fund for 2025/26, presented by KPMG. The plans outlined the planned scope, materiality levels, significant risks, and audit approaches. For Lincolnshire County Council, materiality was set at £32 million. Significant risks included the valuation of land and buildings, the valuation of post-retirement benefit obligations, and management override of controls. For the Lincolnshire Pension Fund, materiality was set at £35.6 million, with significant risks including management override of controls, the valuation of investments, and the accurate recording of contributions. The plans also detailed the audit timeline, fees, and KPMG's audit quality framework.

Elected and Co-opted Members Register of Interests - Home Address

Will Bell, Monitoring Officer, informed the committee of changes to legislation under the Localism Act 2011, effective from 29 June 2026. These changes mean that members' home addresses will no longer be automatically published in their registers of interest unless they specifically request it. Other sensitive interests, such as secondary home addresses or employment, can still be redacted if disclosure could lead to violence or intimidation, subject to the Monitoring Officer's agreement.

Strategic Risk - Deep Dive Review

Kevin Lane, Team Leader - Insurance and Risk, presented options for a strategic risk deep dive review. The committee debated potential topics, with a focus on Artificial Intelligence (AI) usage and implementation, and its associated risks, being a strong contender. Other suggested areas included the new IT contract, property management, and strategic contract management. Ultimately, the committee proposed a deep dive into the current and future use of AI, with a particular focus on its application across different services and the associated risks.

Audit Committee Work Programme

Mark Harrison presented the Audit Committee's work programme for the upcoming year. The committee reviewed the proposed activities, ensuring they aligned with the terms of reference and best practice. Councillor Cain Parkinson enquired about the inclusion of the Grantham High Street audit and any ongoing investigations into the leader, with confirmation that these would be addressed through the appropriate reporting cycles. The committee noted the work programme.

The meeting concluded with the committee noting the work programme and expressing thanks to the executive and staff for their contributions during a period of significant change and uncertainty.