Lifting the Lid 2: Accounting and Governance

 

Re Risk management and internal control:

Did you know that:

The Parish Council must ensure that it has a sound system of internal control, which delivers effective financial, operational and risk management.  It is unclear if this is the case.  The recent Finance and Audit Committee set up appeared to be unworkable and it is questionable why it was set up at all.  The same could be said for the Planning Committee.      

That at least once a year, the Council must review the effectiveness of its system of internal control, before approving the Annual Governance Statement (ie completing the AGAR Form).  This can only be done by the full council not a working party or a committee.  It is not a tick box exercise and the process demands both scrutiny and honesty.   

Any accounting control systems determined by the RFO must include measures to:  ensure that risk is appropriately managed; ensure the prompt, accurate recording of financial transactions; prevent and detect inaccuracy or fraud; and allow the reconstitution of any lost records; identify the duties of officers dealing with transactions; and ensure division of responsibilities. 

It would also involve ensuring that the Asset Register is accurate and that the Risk Register is also realistic, and that both are kept up to date.  This is especially so, given that the PC now has two bank accounts and intends on opening a third (high interest) for the Reserves (which seems overdue).  Also overdue is a coherent and robust policy for any reserve account.

All requests for money and expenditure should also be accompanied by informative and numerical written records of money spent, on what and when.

At the moment there is much confusion re the accounts.  There should be dates and the correct recipient/invoice name and amount requested and paid attached to each record.  For example: at the moment  and since May 2023 the purchase of gates has not only been confusing but also misleading in terms of precisely how many gates have been purchased by the PC from PC accounts/donated ‘privately’/provided by the SCC.  How much money has been spent on gates provided by the PC/ donated to the PC for gates privately or from the Betley Bonfire Fund.  The number of gates needed/outstanding also needs to be kept up to date and recorded in each working party report.  Such reports should also be appended to the Minutes for reference.

It is also unclear how the regular transfers of £2000 per month between the two existing accounts are accounted for.  Are they recorded as expenditure in one and receipts in another rather than as a transfer?  Clarity is needed.

 Accounts and audit;

The accounting records determined by the RFO must be sufficient to explain the Council’s transactions and to disclose its financial position with reasonable accuracy at any time. In particular, they must contain: • day-to-day entries of all sums of money received and expended by the Council and the matters to which they relate (actual dates would be useful);  an accurate record of the assets and liabilities of the Council is also required.

The Council must ensure that there is an adequate and effective system of internal audit of its accounting records and internal control systems in accordance with proper practices.  It is understood that NALC is trying to standardise the procedure and manner of accounting in order to avoid this confusion. 

If residents (or councillors) request to see documents then these should be forthcoming. It is not for the Clerk to second guess or ’select’ what the information might be for or what might be given. If an FOI request is made then it is not for a Clerk to decide who and if it should be responded to.  The record for Betley Parish Council currently stands at three years to view the invoices and receipts of this council (which should be easily accessible so that the Clerk can comply with the request within 20 days).  Neither should it take yards of emails to get nowhere.

If the above are not complied with then it can be concluded that the council is not working within the remit of best practice and can hardly claim that it is complying with the regulations for completing the AGAR Form (ie ticking all the boxes) correctly.

Significant variances also need to be explained as would items such as the £35 paid to the ICO.