The Audit and Governance Committee of Chorley Council is scheduled to meet on Wednesday 24 September 2025. The committee is expected to discuss the external audit update report, the strategic risk register, and internal audit reports. Also to be discussed are waivers of contract procedure rules, and the committee's work programme.

External Audit Update

The committee is scheduled to receive a report from Grant Thornton, the council's external auditor. The Audit Progress Report and Sector Updates document includes updates on:

• Financial Statements Audit: Grant Thornton reportedly received the council's draft financial statements on 2 July 2025, and have shared initial observations with management. Work is in progress across all identified areas of risk, including management override of controls, valuation of land and buildings, valuation of the defined benefit net pension liability, and implementation of IFRS 16 leases[^2].
• Value for Money (VFM): Grant Thornton is undertaking work to ensure that the authority has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.
• Certification of claims and returns: Work on the Housing Benefit Subsidy 2023/24 is complete, and work on the 2024/25 return will commence shortly.
• Audit Fees: The scale fees for 2024/25 for Chorley Borough Council are £159,440.

The report also includes sector updates and recommended reading for Audit and Governance Committees, including:

• Lessons from 2023/24 auditors' annual reports: A review of 100 Auditors' Annual Reports (AARs) produced by Grant Thornton for their local government audited bodies across England showed that financial sustainability remains the major challenge for the majority of councils.
• Financial Instruments in Local Government Accounts: Financial instruments are contracts that give rise to a financial asset for one party and a financial liability or equity instrument for another. The report includes insight about some of the potential pitfalls relating to financial instruments that can occur in local authority accounts.
• The Local Authority Backstop: The National Audit Office published Local Audit Reset and Recovery Implementation Guidance. The LARRIG provides principles as well as indicative procedures which enable the auditor to regain assurance in respect of opening balances.
• Other structural changes: Multi-year allocations through the upcoming 2026/27 Local Government Finance Settlement, councils with a committee system will be required to transition to a leader and cabinet model, and seven Council pension funds announced plans to join the Border to Coast pool.
• Local government financial sustainability: The Committee of Public Accounts reported that the Ministry of Housing, Communities and Local Government (MHCLG) has implemented short-term and unsustainable approaches to keep local government afloat.
• The Spending Review: The Spending Review on 12th February 2025 provided an additional £3.3 billion of grant funding in real terms for local authorities in 2028/29 compared with 2023/24.
• Fair Funding Review 2.0: Between June and August 2025, the government ran a public Fair Funding Review consultation on how it should implement Fair Funding Review 2, including on how the local government grant system should be made fairer and how transitional arrangements should work.
• Public procurement: Between June and September 2025, the government consulted on public procurement. Proposals that are being consulted on include mandating large contracting authorities with procurement spend over £100 million per annum to publish their own 3-year target for direct spend with small and medium-sized enterprises and voluntary, community and social enterprises.
• Keeping fit for the future: On 3rd July 2025, the government outlined the new ten-year NHS plan Fit for the future. The plan points to a closer working partnership between local government and Integrated Care Board (I(CBs).
• Keeping the leisure estate fit for the future: Some £400 million was announced in Fit for the future for grassroots sports facilities, but it is not yet clear how much of that will be directed to local authorities.
• Asylum seekers update: On 29th August 2025, the Court of Appeal ruled that The Bell Hotel in Epping Forest can continue to house asylum seekers.

Strategic Risk Register

The Director of Change and Delivery is expected to present a report updating the committee on the council's approach to strategic risk management.

The Strategic Risk Register is a key part of the council's risk management strategy, outlining the key risks that could impact the achievement of corporate priorities. Proposed changes include:

• Rewording of R9 'Failure to adapt to New Ways of Working and Changing Service Demand' to 'R9 Failure to Realise the Benefits of New Ways of Working'.
• To reflect national proposals to move to a single tier of government across Lancashire by 2028, a new risk (R17) has been added to the risk register titled 'Local Government Reorganisation' (LGR).
• The inherent risk score for 'R1 Incidents Impacting Service Delivery' has increased from 9 (medium) to 12 (high).
• The residual risk score for 'R7 Failure of ICT Security and Data Protection' has increased from 9 (medium) to 12 (high).
• The residual risk score for 'R4 Failure to Realise the Benefit of Major Investments' has reduced from 12 (high) to 9 (medium).

The highest scoring risks, with an inherent risk score of 16, are:

• R3 Poor Financial Sustainability
• R4 Failure to Realise the Benefit of Major Investments
• R6 Lack of Staff Capacity and Skills
• R7 Failure of ICT Security and Data Protection
• R17 Local Government Reorganisation

Internal Audit Progress

The Head of Audit and Risk is scheduled to present a report to advise members of the work undertaken in respect of the Internal Audit Plan from April 2025 to August 2025.

Appendix A of the Internal Audit Progress Report indicates the overall progress made in relation to the six-month Internal Audit Plan, indicating which audits have been completed and their assurance rating, those that are in progress and those that have yet to start.

The committee is also being asked to approve the deferral of the review of Key Strategic Partnerships and Contracts until 2026/2027.

During the first two quarters of 2025-2026, significant efforts have been made to ensure that agreed actions are implemented as expected. Consequently, as at the 31 August, only a small number of actions have required revised implementation dates, as detailed in Appendix C Overdue Agreed Audit Actions.

Following a request to complete the CIPFA skills and knowledge selfassessment at the July meeting, the results have been analysed. Democratic Services are reportedly developing a training plan to address any areas where skills and knowledge require strengthening.

Internal Audit Plan

The Head of Audit and Risk is also scheduled to present the Internal Audit Plan October 2025 to March 2026. The plan has been constructed after taking into consideration the council's priorities, a review of corporate strategies, the corporate risk register, information taken from other assurance processes, direct engagement with directors, the skills and knowledge of audit staff, professional judgement on the risk of fraud and error, and the Annual Governance Statement and Service Assurance Statements.

Successful delivery of the agreed Plan will reportedly result in the production of 17 audit reports with an assurance rating. The Plan will be completed largely by the in-house team with external support procured for specialist ICT reviews.

Waivers of Contract Procedure Rules

The Deputy Chief Executive is expected to present a report summarising the number of waivers of the Contract Procedure Rules granted during the period March – August 2025.

During the period March to August 2025, a total of 8 waivers of the Contract Procedure Rules were granted.

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| Month | Department OF THE COUNCIL'S ESTATE.