The Audit, Risk and Governance Committee of Lancashire County Council met on Monday 27 April 2026 to review the council's financial health, risk management, and governance frameworks. Key discussions included the external and internal audit progress reports, the annual audit plan, and updates on the Local Member Grants Scheme and the Lancashire Culture and Sport Fund. The committee also considered the council's Annual Governance Statement and Code of Corporate Governance, the Corporate Risk and Opportunity Register, and the committee's own self-assessment of good practice.

External Audit Progress Report and Sector Update

Ian Pinches from Grant Thornton UK LLP presented the audit progress report, noting that the audit of the 2025/26 financial statements for both the Lancashire County Pension Fund and Lancashire County Council was in its initial planning and interim fieldwork stages. No significant issues had been identified to date. Grant Thornton confirmed they have a team in place with sufficient resources to complete the audit by November 2026. The report also highlighted upcoming audit deliverables, including the Audit Plan, Audit Findings Report, and Auditor's Annual Report, all scheduled for November 2026. Sector updates covered topics such as changes to the CIPFA Code regarding the accounting for non-investment assets, audit readiness training, the finance settlement for 2026/27 to 2028/29, SEND reform plans, and local government reorganisation.

Internal Audit Progress Report

Andrew Dalecki, Head of Internal Audit, reported that the Internal Audit Service is now fully staffed, a positive development after a challenging year with staffing pressures. 56% of the internal audit plan for 2025/26 had been completed and reported, with a further 26% progressing, bringing the total to 82%. Assurance levels for completed audits, including the Pension System Automation Change Management and the Ofsted & CQC Improvement Plan for SEND, were rated as Reasonable . Follow-up audits indicated that 11 out of 12 management actions had been implemented. Several additional audit assignments had been added to the plan, including work on budget planning, risk management support, and payroll controls.

Internal Audit Annual Plan 2026/27

The committee was asked to approve the Internal Audit Annual Plan for 2026/27. The plan was developed using a risk-based approach, aligned with the council's corporate priorities, and in compliance with the Global Internal Audit Standards (GIAS). The plan includes a broad range of audits across directorates, focusing on areas such as SEND financial decision-making, highway safety inspections, corporate landlording, procurement, and digital governance. A significant focus is also placed on supporting the council's preparation for Local Government Reorganisation (LGR).

Local Member Grants Scheme Annual Report 2025/26

Hannah Race, Head of Governance Services, presented the annual report on the Local Member Grants Scheme. For the 2024/25 financial year, £162,333.29 was awarded across 456 grants, with satisfactory evidence of expenditure received for 75% of grants. For the 2025/26 financial year, £127,861.95 had been awarded across 325 grants by March 2026. The report noted a delay in evidence submission from organisations, often due to project delays, but Democratic Services actively contacts organisations to obtain outstanding evidence. Councillors expressed concerns about the amount of unspent grant money and the £200 carry-forward limit, with a recommendation to be taken to the Political Governance Working Group to consider increasing this.

Lancashire Culture and Sport Fund Annual Report

Janie Moran, Cultural Development Manager, and Heather Fox, Libraries and Heritage Manager, presented the annual report for the Lancashire Culture and Sport Fund. Since its inception, £1,432,880.80 has been pledged by the fund, contributing to a total of over £3.5 million raised by community projects. The fund has achieved a 94% success rate for projects reaching their crowdfunding targets, earning Lancashire County Council a 'Gold standard rating' from Spacehive, the platform provider. The report detailed the funding strands, eligibility criteria, and provided a breakdown of projects funded across different rounds. Discussions touched upon the all or nothing funding model and the regulation of organisations receiving funds.

The Council's Annual Governance Statement 2025/26 and Code of Corporate Governance 2026/27

Hannah Race presented the draft Annual Governance Statement (AGS) for 2025/26 and the proposed Code of Corporate Governance for 2026/27. The AGS summarises the annual review of the council's governance arrangements, providing satisfactory assurance that they are fit for purpose. The Code of Corporate Governance reaffirms the council's commitment to effective governance, aligning with CIPFA/Solace best practice. The committee was asked to approve the draft AGS for inclusion in the Statement of Accounts and recommend the refreshed Code of Corporate Governance to Full Council. Councillor Rick Edwards raised a question regarding the scrutiny and action taken on upheld Ombudsman complaints, particularly those related to SEND, and the reasons for financial compensation. Hannah Race confirmed that these complaints were primarily due to delays in the EHCP process and that the detail of payments would be added to the AGS.

Corporate Risk and Opportunity Register – Quarterly Update

Hannah Race presented the quarterly update on the Corporate Risk and Opportunity Register. It was noted that risk scores had decreased in key areas such as adult social care demand, SEND, and school places, reflecting the effectiveness of mitigating actions. The risk relating to the Southport inquiry had moved from the confidential to the public register following the publication of Phase One of the report. Deep dive reports on Adult Social Care Demand and School Places were also provided. The committee was asked to consider and approve the updated register.

Audit, Risk and Governance Committee Self-Assessment of Good Practice Summary Report

Laura Ricks, Audit Manager, and Hannah Race presented the summary report of the committee's self-assessment. The assessment indicated strong governance arrangements, effective chairing, good member engagement, and positive working relationships with officers and auditors. However, areas for improvement were identified, including skills development, demonstrating added value, and alignment with emerging best practice. Three actions were agreed: developing a structured training plan, undertaking a further review of committee member skills after six months, and strengthening the Chair's annual report. The committee also discussed the formatting of reports and the potential for an additional co-opted member.

Urgent Business

There was no urgent business raised at the meeting.

Date of Next Meeting

The next meeting of the committee was scheduled for Monday 27 July 2026 at 2:00 pm.

Exclusion of Press and Public

The committee considered and agreed to exclude the press and public from the meeting for the remaining agenda items, which were understood to contain exempt information.