Update on PC Year End Audits and Accounts

I have received some emails regarding the post on the issue of the year end account of the Parish Council and how the system is changing at government level and at the level of the parish council.  

It is understood that the Parish Council has now received this year's precept.  The Clerk has set up an Audit and Accounts Committee  which will now deal with most things financial.  This is why it might be important to have some individuals on this Committee who are not linked to Betley in order to ensure objectivity.

There are a set of stringent rules to follow outlined in the Practitioner's Guide of the Joint Panel of  Accountability and Governance (JPAG) produced by the National Association of Local Councils (NALC).  This has just been updated.  It is a clear and helpful guide for Clerks on how to handle, especially, the year end accounts which are no mean feat to deal with.  

The two sections which are the most practically helpful are sections 4 and 5.  The Internal Auditor Forum (IAF) was selected to draw up these two sections with a view to ensure that local councils adopt good practice with regard to compliance with legislation.  The Forum itself  is attempting to drive up standards and to offer support to its member Auditors (£15 per annum to join).    The Forum, I am told, also suggests improvements to the system where necessary.  Every Member  agrees to abide by the  IAF  standard practices and procedures and that the Auditor has understood the requirements of the current JPAG guide which seems to be updated regularly.

The job of the Internal Auditor is to check that PCs have followed proper practices in the drawing up of their accounts and that the figures provided at the end of the year on the official document (the AGAR) can be relied upon to be accurate.  The Annual Governance Statement of Accounts (AGAR) is the opportunity for the PCs to report publicly on their arrangements for ensuring that its business has been conducted in accordance with the law, regulations, and proper practices, and that public money has been safeguarded and properly accounted for. 

There are some things that only the full council can do and not just the committee - eg to verify that a full council has considered and approved and adopted the annual precept for the coming year within the set time limit, and verify that the full council has reviewed the level of the general reserves and that these levels of reserve are adequate and not excessive.  

 Having understood the rules, regulations, and proper procedures, and having examined those of the local council  the Auditor produces a management report which, if necessary, will guide them towards improvements and better compliance.  This document should be published.  

The Internal Auditor should look at all the bank statements, cash receipt books, any petty cash books, invoices and Minutes, insurances, declarations of interest, tenders, quotes received for work that has been carried out, the payroll and and anything else they require to ensure that the PC is complying with legislation, although only a sample is submitted to both the Internal and External Auditors.  Both can ask for further information, however if they so choose.

Public data should be as accurate as possible at the first publication and mistakes should be quickly rectified so that publication should not be delayed.

There is a small window of opportunity for the public to inspect all the financial records mentioned above.  The dates for this year's public inspection have not yet been decided by the Clerk for  this PC but should cover, at least, the first 10 working days of July.

If the PC income is over £25,000 then an External Audit is necessary, which is a much more rigorous exercise.  

The Internal Auditor checks the system and the controls not the accounts (which might be an inherent weakness of the system)  and PCs are only obliged to submit a 'snapshot' of their accounts to the Internal Auditor.  The PC contact with the Internal Auditor should be face to face and not remote.          

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