Agenda item

The Monitoring Officer presented the report to members.

Chartered Institute of Public Finance and Accountancy (CIPFA) guidance recommended the appointment of an Independent Person (IP) to Audit Committees to increase its level of expertise. This report sought permission to recruit such an IP.

The Audit Committee met four times per year and had seven politically balanced members drawn from the Combined Fire Authority (CFA). The Audit Committee’s purpose was to provide those responsible for governance with independent assurance on the adequacy of the risk management framework, internal and external governance processes and the internal control environment. The documents that the committee considers were frequently complicated and technical in nature referring to accounting practices. In order to perform their role providing oversight and assurance, it was essential for the Audit Committee members to have sufficient knowledge and understanding of the material so that they could challenge it where necessary. CIPFA stressed that Audit Committees need members who could:

• understand complex financial reporting 
• scrutinise risk, control, and assurance frameworks
• challenge internal and external audit effectively
• appreciate accounting judgments and governance implications

Lancashire CFA already had two Independent Persons formally engaged to support it. These were contracted pursuant to section 28 of the Localism Act 2011 which required the views of an Independent Person to be taken in relation to allegation against members in relation to their code of conduct (the role had been expanded to encompass involvement in the disciplinary procedure against statutory officers as agreed at the February 2026 CFA meeting (resolution 68-25/26 refers)).

This paper sought approval for a further Independent Person, not under the Localism Act, but specifically to sit on the Audit Committee as a specialist advisor (although they would also chair any hearings under the members complaints procedure under new draft terms of reference for that committee). The members’ constitution working group had approved new Audit Committee terms of reference that allowed for the appointment of this IP as an advisor and as chair of any member complaints hearings. The committee would also be renamed the Audit, Risk and Governance Committee.

What was sought was technical expertise and independence, not political independence. Most Fire Authority members did not have a background in audit, risk, finance, or governance. An IP would bring:

• professional-level scrutiny of accounts, governance structures and control frameworks
• continuity of knowledge despite political membership turnover
• confidence for external auditors and the public that scrutiny includes specialist input

It had proved to be difficult to find a ‘rate’ that was being paid to independent audit members that were already active for other public bodies. The sums that were found varied considerably from organisation to organisation. Some organisations were paying a sum per meeting (one as low as £50 per meeting) and some organisations were paying an annual sum (a few as high as £2,500, for four or five meetings). In view of this, officers felt that there was sense in considering the sums paid within the Members’ Allowances Scheme.

The service paid its current Independent Persons £1,143.24 per annum which was index linked on an annual basis in line with the annual local government pay percentage increase at new spinal column point 43. In terms of workload, the current IPs in reality were not utilised often, whereas the Audit Committee IP would as a minimum prepare for and attend the 4 Audit Committee meetings every year. They would also be required to chair any member complaint procedure hearings (although it is accepted these may be few and far between). So the Audit Committee IP role was likely to require more time and would require more specialist knowledge than the current IP roles.

Recruitment process

A job description was being drafted and it was recommended that shortlisting and interviewing of candidates was delegated to an interview panel. It was also recommended that the actual appointment of the IP was delegated to the interview panel. The make-up of the interview panel was likely to be the Monitoring Officer; the Treasurer and the Chair of the Audit Committee. If this needed to change at short notice due to unavoidable lack of availability, either the vice-chair of the Audit Committee, Chair or vice-Chair of the full Authority or a member of the LFRS Executive Board would be substituted.

It was recommended that the appointment would be for a period of two years with the option to extend for a further two years before a new recruitment exercise was undertaken. Any such proposal for an extension of the original two years would be brought to the full Authority for approval.

Once the interview panel had made an appointment, a report for information would be brought to the next meeting of the full Authority.

County Councillor M Clifford remarked that the appointment of an IP for Audit Committees was good practice.

The report was proposed by County Councillor M Clifford and seconded by County Councillor J Ash with all members voting in favour of the recommendation.

Resolved: That the authority;

1. approved the appointment of an IP to the Audit, Risk and Governance Committee.

2. delegated responsibility for organising the recruitment process including selecting the interviewing panel to the Monitoring Officer.

3. delegated power of appointment of the most suitable candidate to the interviewing panel.

4. authorised amendment of the Members’ Allowance Scheme to create a new allowance for the Audit IP at an annual rate of £1,500 (subject to increases on the same basis as other similar allowances).