The Audit, Risk & Assurance Committee of the West Midlands Combined Authority (WMCA) met on Tuesday 14 July 2026 to review the authority's financial performance, internal audit progress, and significant ongoing projects. Key decisions included noting the positive outturn for the 2025/26 financial year, approving the internal audit plan for 2026/27, and receiving updates on the transfer of police and fire services and business continuity planning.

Financial Outturn and Treasury Management

The committee received a positive update on the WMCA's financial outturn for the 2025/26 financial year. Claire Nye, Chief Finance Officer, reported that proactive financial decisions had bolstered reserves, resulting in a £7 million underspend that has been transferred to the general fund reserve, bringing it to 3.6% of the budget. Capital expenditure delivery also saw an 11% improvement on previous years.

The Treasury Management Outturn Report for 2025/26, presented by Louise Cowan, Head of Financial Management, and Mark Finnegan, Lead Treasury Accountant, indicated a decrease in net borrowing by £143.7 million, leaving the WMCA in a net investment position of £375.5 million. No new borrowing was undertaken during the year, and the authority repaid £21 million of historic debt at a discount of £3.4 million. Current forecasts suggest no further borrowing will be needed in the next two financial years due to elevated cash balances from government grants. Investment activity in 2025/26 generated £48 million in income at an average rate of return of 4.44%.

Internal Audit Updates and Plans

Matthew Dean, Head of Audit and Information Governance, provided an update on internal audit activities. Four audits were completed to final report status, with only two remaining from the 2025/26 plan, putting the service on track for 100% completion. Audits covered areas including budgetary control, general ledger management, adult skills fund supply chain management, and cyber security strategy. The committee was also presented with the proposed Internal Audit Plan and Proactive Counter Fraud Plan for 2026/27, which were approved. The plan focuses on significant strategic and operational risks, including organisational transformation, financial stewardship, and cyber security.

Transfer of Police and Fire Services

Dominic Mika, Strategic Lead for Police and Fire Transfer, provided a verbal update on the transfer of the Office of Police and Crime Commissioner (OPCC) and the Fire and Rescue Service (FRS) to the WMCA. The transfer of fire functions is currently scheduled for April 2027, with the OPCC functions following in May 2028. Key workstreams include HR, ICT, finance, legal, and asset management. Mika acknowledged the significant scale of the transfer, particularly concerning the large number of staff and the complexities of administering pension schemes and managing trade union relations. He assured the committee that HR and pensions teams have expertise in these areas and that engagement with trade unions is ongoing.

Business Continuity Programme

Kili Thomas, Business Continuity Resilience, Response and Recovery Manager, presented an update on the Business Continuity Programme. Significant progress has been made in improving the WMCA's business continuity management system, with most audit recommendations now complete. Overall programme risk has reduced, and governance and accountability are aligned with the Business Continuity Framework. Improvements have been made to incident communications capability, and an initiative for operational resilience by design is underway. The committee noted the progress and agreed that future reporting would align with the internal audit programme.

Annual Review Letter

Kieran Stockley, Interim Chief Legal & Governance Officer, presented the Local Government and Social Care Ombudsman's annual review letter for 2025/26. The WMCA received 20 complaints, with 7 progressing to stage two of the internal procedure. Reassuringly, none of the complaints referred to the Ombudsman were upheld.

Cyber Security

A verbal update on cyber security was provided by Mike Waters, although details were not fully captured in the public transcript. This was noted as a significant area of risk for the WMCA.

Other Matters

The committee also discussed the Terms of Reference for the committee, noting updates to reflect changes in quorum requirements. The appointment of Councillor Owen Nelson as Vice-Chair was confirmed. The minutes of the previous meeting held on 27 April 2026 were also approved.