The Lancashire Combined County Authority (LCCA) Audit and Governance Committee met on Monday 22 September 2025 to review the progress of internal audits, the corporate risk register, and the committee's work programme. Key decisions included the approval of the Internal Audit Progress Report, the Corporate Risk and Opportunity Register, and the Audit and Governance Committee Work Programme for 2025/26.

Interim Chief Operating Officer's Update

Matthew Sidgreaves, Interim Chief Operating Officer for the LCCA, provided an update on the authority's progress. He highlighted the approval of several key strategies by the LCCA board, including the Lancashire Growth Plan, the Get Lancashire Working Plan, and the Lancashire Local Transport Plan, which is now open for consultation. Organisational governance updates included the approval of core employment terms and conditions and the establishment of a new employee relations framework. The CCA board also endorsed the authority's overarching vision and objectives. Mr. Sidgreaves noted that the CCA is now in a position to directly employ staff, with foundations laid for this from April 2026. He also detailed the upcoming transfer of significant funds to the LCCA from April 2026, including the £19 million Growing Places Fund, £45 million for the Local Transport Grant, and substantial funding for skills initiatives. The update also provided a RAG rating (Red, Amber, Green) assessment of the LCCA's readiness to deliver on its transport, skills, and economy priorities.

Overview of KPMG's Role as External Auditors

Deborah Chamberlain, Director at KPMG, presented an overview of the role of external auditors for the LCCA. She explained KPMG's responsibilities, which include auditing the financial statements to ensure they present a true and fair view, and assessing value for money arrangements. Ms. Chamberlain outlined the differences between internal and external audit, with external audit focusing on financial statements and reporting to stakeholders, while internal audit provides assurance within the organisation to management. She detailed the audit process for financial statements, including the concept of materiality and significant risks such as management override of controls. For value for money, KPMG will assess arrangements for financial sustainability, governance, and the economy, efficiency, and effectiveness of service delivery. Ms. Chamberlain also touched upon KPMG's additional powers and duties, such as responding to public objections to accounts, and outlined the reporting cycle to the Audit and Governance Committee, including the audit plan, findings report, and auditor's annual report.

Internal Audit Progress Report

Andy Milroy, Head of Internal Audit, presented the first quarterly update on internal audit work. He reported that 25% of the planned audit activity for the year had been completed, with work commencing on risk management and understanding grant requirements. Mr. Milroy also provided an updated audit universe, detailing potential auditable areas, with a focus on local growth plans, the Connect to Work programme, the Adult Skills Fund, and local transport initiatives. The committee discussed the pace of grant work, noting that much of it would be completed in the following financial year. There was also a discussion regarding the inclusion of Treasury Management, the Investment Strategy, and the Capital Programme on the agenda for future meetings, with a commitment to provide relevant documents and potentially officer input.

Corporate Risk and Opportunity Register – Quarterly Update

Hannah Race, Head of Governance, presented the updated Corporate Risk and Opportunity Register. She noted that the four key strategic risks remained the same as the previous quarter, with progress made on identified actions. Ms. Race explained that the register is communicated to the authority's advisory boards and published on the agenda, and that the register is expected to expand as the LCCA's work progresses. The committee discussed the correlation between the readiness RAG ratings presented by Matthew Sidgreaves and the numerical ratings on the risk register, agreeing to improve alignment in future reports.

Audit and Governance Committee Work Programme 2025/26

Gary Halsall, Senior Democratic Services Officer, presented the draft work programme for the Audit and Governance Committee. The programme includes regular reports on internal audit and risk management, as well as updates from the Chief Operating Officer. The committee discussed the possibility of incorporating training sessions and deep-dive reviews into the work programme, with a particular focus on transport transition and financial support services. The potential for calling in specific topics for separate meetings was also raised. The work programme was approved, with the understanding that it is an evolving document that will be updated as new priorities emerge.