The Lancashire Combined County Authority's Audit and Governance Committee met on 14 January 2026, approving key policies on financial crime and anti-money laundering, and reviewing the authority's corporate risk register. The committee also noted updates on the financial assurance framework and internal audit progress, and approved the work programme for the upcoming year.

Key Updates for LCCA Committees

The committee received an update on the Lancashire Combined County Authority's (LCCA) activities, focusing on its strategic priorities in transport, economy, and skills. The report highlighted progress on the Lancashire Growth Plan, the Growing Places Fund, and the development of a pan-Lancashire Inward Investment service. In transport, work is underway to embed a Commissioning and Assurance Local Transport Authority function by April 2026, including staff transfers and governance arrangements. For skills, preparatory work is progressing for the devolution of the Adult Skills Fund (ASF) from September 2026, alongside the implementation of the Get Lancashire Working plan. The LCCA also noted the completion of its governance review, with leaders willing to engage on further devolution, investment certainty, and public consultation. The report also detailed the corporate services provided by the three constituent councils: Lancashire County Council (LCC), Blackburn with Darwen Council, and Blackpool Council.

LCCA Financial Assurance Framework

The committee was provided with an overview of the LCCA's initial financial assurance framework, designed to ensure confidence in the authority's governance arrangements. This framework is built upon key approved documents including Financial Regulations, Financial Procedure Rules, and Contract Procedure Rules. The report detailed the separation of strategic finance functions with LCC and operational finance with Blackpool Council, supported by service level agreements. A complication noted was the ongoing delay in securing VAT recovery, which is awaiting ratification in the Finance Bill 2025/26. The committee was informed that KPMG has been appointed as the external auditor with an indicative fee of £164,000. The Deputy Section 73 Officer expressed professional opinion that the foundations of financial governance and internal controls were robust, with transactional activity allowing for refinement before the integration of transport, skills, and economic development services.

Internal Audit Progress Report

The committee received an update on the internal audit work completed for the 2025/26 audit plan. As of 27 November 2025, 28 days of the planned 85 days had been spent, equating to 33% of the total planned activity. Work had commenced on key areas, including the assurance framework for support services and grant work, with risk management reported as completed. The audit universe had been updated based on committee requests. The review of grants issued in 2025/26 would be undertaken in 2026, with annual grants signed off in Q1 2026/27 and quarterly grants in the following quarter. The Treasury Management Strategy, Investment Strategy, and Capital Programme, approved in March 2025, were noted as publicly available.

Counter Financial Crime and Anti-Money Laundering Governance Framework

The committee was asked to approve three key governance policies: the Whistleblowing Policy, the Counter Financial Crime Policy, and the Anti-Money Laundering Policy. These policies are designed to prevent, detect, and respond to misconduct, financial crime, and money laundering risks, aligning with legislation such as the Public Interest Disclosure Act 1998, the Fraud Act 2006, the Bribery Act 2010, and the Money Laundering and Terrorist Financing Regulations 2019. The Whistleblowing Policy provides a confidential mechanism for reporting wrongdoing and protects whistleblowers. The Counter Financial Crime Policy establishes procedures to prevent and detect fraud, bribery, and corruption, while the Anti-Money Laundering Policy outlines obligations for due diligence and reporting suspicious transactions.

Corporate Risk and Opportunity Register - Quarterly Update

The committee reviewed the updated LCCA Corporate Risk and Opportunity Register, reflecting progress in Quarter 3 (October-December 2025) and planned actions for Quarter 4 (January-March 2026). The risk score for 'Local Transport Authority Functions' increased from 9 to 12. A new risk, 'Engagement of Third-Party Providers', has been added to the corporate register due to its score of 12. The register aims to identify and manage strategic risks that could threaten the LCCA's core business. The committee was asked to consider the accuracy and effectiveness of the information provided to ensure the register adequately reflects the LCCA's key challenges.

Audit and Governance Committee Work Programme 2025/26

The committee considered its work programme for 2025/26, which includes regular reports on internal audit and risk management, as well as updates from the Chief Operating Officer. The programme is an evolving document, subject to changes based on emerging priorities. The draft programme was presented for review and revision. The committee noted that consultation with the newly appointed Independent Chair would be necessary regarding the future work programme.

The meeting also noted the appointment of Mr Greg Gottig as the new independent chair of the committee.