Internal Audit - Anstey · Web viewInternal Audit Procedure (section 1) is unchanged from the previous year’s report. An abridged version is therefore included in this report for

Internal Audit

ANSTEY Parish Council

Year ending 31st March 2015

DOCUMENTATION:

• SECTION 1 - INTERNAL AUDIT PROCEDURE (Abridged)

• SECTION 2 - INTERNAL AUDIT SUMMARY REPORT

• SECTION 3 - INTERNAL AUDIT COMPLIANCE TESTING REPORT

NB: The current Internal Audit Procedure (section 1) is unchanged from the previous year’s report. An abridged version is therefore included in this report for brevity purposes and which details the key procedures from the full version previously provided. The unabridged (full) version of the Internal Audit Procedure can be provided separately on request.

16/05/2023 18:19

INTERNAL AUDITOR

Richard Willcocks FCMA MiP

Director

Redwood Pryor Ltd

10 Pryor Road

Sileby

Loughborough

Leics

LE12 7NS

M: 07787 738181

E: [email protected]

document.docx

Section One: Internal Audit Procedure for ANSTEY Parish CouncilYear Ending: 31 March 2015

SECTION 1 - INTERNAL AUDIT PROCEDURE (abridged)1. Introduction & PurposeThe purpose of this procedure is to define Redwood Pryor’s process for undertaking internal audits in order to assess the effectiveness of the ANSTEY Parish Council’s internal controls and also to define the responsibilities for planning and conducting audits, reporting results and retaining associated records.

2. Terms & Definitions of Internal Audit Assurance

Audit Opinion Explanation

GOOD There is a sound system of internal control designed to achieve the Council’s objectives.

The internal control processes tested are being consistently applied.

ADEQUATE While there is a basically sound system of internal control, there are weaknesses, which may put some of the Council’s objectives at risk.

LIMITED Weaknesses in the system of internal controls are such as to put the Council’s objectives at risk.

The level of non-compliance puts the Council’s objectives at risk.

UNSATISFACTORY Control processes are generally weak, leaving the processes/systems open to significant error or abuse.

Significant non-compliance with basic control processes leaves the processes/systems open to error or abuse.

3. Application & ScopeThe scope of this internal audit is focused on assessing the effectiveness of the Council’s internal controls. Where any such controls are found to be deficient, the internal audit will help lead to improvement in those processes.

By applying the principles of internal auditing, outlined in the current Accounts and Audit Regulations and applying the approach to internal audit testing in the Governance and Accountability for Local Councils, A Practitioners’ Guide, Redwood Pryor Ltd makes every effort to ensure that all internal audits are conducted with due professional care, integrity and independence. All conclusions derived from the audit are based upon objective and traceable evidence.

NB: It would be incorrect to view internal audit as the detailed inspection of all records and transactions of the Council in order to detect error or fraud. It is the periodic independent review of a Council’s internal controls resulting in an assurance report designed to improve effectiveness and efficiency of the activities and operating procedures under the Council ’s control. Managing the Council’s internal controls should be a day-to-day function of the staff and management and not left for internal audit. (Source: Governance and Accountability for Local Councils-A Practitioners ’ Guide-2010).

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4. RequirementsAn internal audit of the internal controls is conducted annually to: • Determine whether the internal controls conform to planned arrangements• Determine whether the internal controls are properly implemented and maintained• Provide information on the results of the internal audit to the parish Council, the Clerk to the Council and the Responsible Financial Officer (where the latter is a separate position within the

Council).Essential competencies for an internal auditor are:• Understanding of basic accounting processes• Understanding of the role of internal audit in reviewing systems.• Awareness of risk management issues• Understanding of accounting requirements of the legal framework and powers of local CouncilsTo ensure impartiality and objectivity, the internal auditor must not have any involvement in the financial decision making, management or control of the Council.

5. ProcessRegulation 6 of the Accounts and Audit Regulations 2003 as amended imposes a duty on local Councils to ‘maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control in accordance with the proper practices in relation to internal control. Internal audit is a key component of the system of internal control. The purpose of internal audit is to review whether the systems of financial and other controls over a Councils activities and operating procedures are effective. Internal audit is an on-going function reporting to the Council at least once a year and undertaken at least once annually. Internal audits may be completed with a greater frequency if determined by the Council or as determined by:

• Corrective actions from previous internal audits• Statutory/legal requirements• Audit Commission guidance• Council decisions• Council objectives and policy• Council internal review concerns • Concerns and recommendations raised by external auditors• Parishioner complaints• Employee concerns

6. The Audit6.1 Audit PlanningThe internal auditor should:• Establish and communicate an internal audit schedule• Establish and implement internal audit plan



6.2 Audit PreparationThe internal auditor should:• Review and prepare the internal audit checklist• Arrange an audit appointment with the Clerk to the Council (Clerk) and/or the Responsible Financial Officer (RFO)• Issue the audit checklist to the Clerk and/or the RFO6.3 The AuditThe internal auditor should:• Undertake an initial meeting with the Clerk and/or the RFO to:

o Review the previous internal audit report:▪ Check progress made against recommendations made▪ Identify and review any changes to internal controls

o Ensure documentation listed on the audit checklist is available for review• Sample and observe process inputs/outputs e.g. review invoices, expenditure reports etc.• Record objective evidence to verify process compliance or non-compliance• Generate audit findings i.e. a draft internal audit report• Forward a copy of the draft internal audit to the Clerk and/or the RFO for review6.4 Wrap-up Meeting The internal auditor and the Clerk and/or the RFO should meet again to: • Review audit conclusions and discuss recommendations for improvement contained in the draft internal audit report• Decide whether any non-compliances observed should be included in the final internal audit report or resolved immediately• Address immediately any minor areas of non-compliance• Agree on corrective actions for other areas of non-compliance and/or recommendations for improvement.

The internal auditor then prepares and signs off the final version of the internal audit report and forwards to the Clerk and/or the RFO6.5 Follow-upThe Clerk and/or the RFO is expected to:• Ensure corrective actions are implemented and are closed-out within the agreed timeframe• Ensure non-compliances are closed-out within the agreed timeframe6.6 ReviewThe Council is expected to:• Receive the internal report at a meeting of the Council to review • Consider, agree and minute actions required to address any audit findings• Use the internal audit report to promote best practice

• Ensure internal controls and records are maintained.


Section Two: Internal Audit Summary Report for ANSTEY Parish Council

Year Ending: March 2015

SECTION 2 – INTERNAL AUDIT SUMMARY REPORT

Internal Audit Report Number Date Issued Prepared by

APC.IAR.2015 25 May 2015 Richard Willcocks

Aims & Objectives

ANSTEY Parish Council has a statutory duty to complete an Annual return at the end of each financial year. As part of the Annual Return the Parish Council’s internal audit function is required to provide assurance that relevant procedures and controls were operating effectively for the financial year ending 31 March 2015. The purpose of this exercise is to meet those statutory requirements and provide the Council with an appropriate level of assurance in support of the 2015 Annual Return.

Scope of Audit

The internal audit exercise involves such testing of the evidence of and evidence of compliance with the 11 statements contained in Section 4 of the Annual Return, as applicable to the range and financial materiality of the Councils’ activities. The statements refer to:

Maintenance of proper financial records Compliance with the Council’s Standing Orders, Financial Regulations and proper accounting for VAT Adequacy of risk management arrangements Effective budgeting and budgetary control Identification of income due and timely collection and banking of such monies Proper administration of petty cash Proper administration of salaries of employees and expenses paid Maintenance of an accurate and reliable asset register The completion of regular bank reconciliations The correct basis and accurate preparation of year-end accounts Whether the Council has met its responsibilities as a trustee.

The outcomes of the recommended testing required for assurance purposes is shown in the Internal Audit Compliance Testing Report.


Section One: Internal Audit Procedure for QUORN Parish CouncilYear Ending: 31 March 2014

ResultsOverall the Council has good controls in place, covering the key financial systems, with appropriate books of account being kept throughout the year. Expenditure payments were supported by invoices, approved and VAT properly applied. Expected income was fully received, properly recorded and promptly banked. The payroll was operated correctly and statutory deductions and returns made on time to HMRC.

As in previous years I can report that the accounts and other records of the council are maintained to a very satisfactory level. It is pleasing to report that all of the recommendations made in the previous year’s internal audit report have been addressed and action taken to implement. Of the new recommendations, 5.3 and 2.3 below should each be considered as an ‘Opportunity For Improvement’ (OFI’s), rather than addressing areas of non-compliance. The other recommendation, 2.5, is a minor non-compliance issue relating to VAT, which will be corrected as part of the June 2015 VAT quarter return. In addition, the transition to the REBS Omega accounts system appears to have been a successful, which should enhance the existing accounting controls and reporting.

In summary, this report again reflects very positively on the quality and standard of work of the Clerk to the Council.

Overall Internal Audit Assurance Rating: GOODRecommendations (NB: Recommendations from the previous year’s internal audit report will be repeated below, together with a note of action taken to comply).

Compliance Testing Ref It is recommended that: Priority Responsibility

3.1

From 2014 Internal Audit reportMinutes of Council uploaded onto the Anstey Parish Council’s website are brought up to date. The last minutes uploaded were for the November 2012 Council meeting.

ACTIONED AS RECOMMENDED

3.4

From 2014 Internal Audit reportthe Council considers introducing a Statement of Internal Control, which outlines the Council’s responsibilities to ensure the effectiveness of its internal control is maintained. A template has been provided which could be adapted to provide a Statement of Internal Control specific to Anstey Parish Council.


Statement of internal control prepared and

approved by Council in April 2015



5.3

From 2014 Internal Audit reportthat the bank mandate is reviewed on a regular basis to ensure that it is accurate and up to date in respect of the authorised signatories. This is now much more relevant following the switch to Nat West Bank from HSBC during 2013-14 as a result of which all current councillors are now authorised signatories. For HSBC there were 8 nominated signatories, whereas for Nat West there are 14 authorised signatories on the mandate forwarded to Nat West on 11/12/13.Now that the local council elections have been completed the bank mandate should be amended to remove the three authorised signatories, who are no longer members of the Council (Rowe, Bradshaw, Parker).

High Clerk

6.1

From 2014 Internal Audit reportthat when the Financial Regulations are next reviewed that section 6.4 is amended to note that the petty cash float maintained by the RFO is £200 and not £100 as per the current Financial Regulations.


7.3

From 2014 Internal Audit reportthe Council recognises that the introduction of pension’s auto enrolment may give rise to contractual issues with some members of staff and possible increased employment costs for the Council. This situation could arise because of the agreement to enhance some staff salaries in lieu of a pension contribution by the Council as the employer. Pension’s auto enrolment is aimed at ensuring as many employees as possible are in a recognised pension scheme. Under auto enrolment the salary enhancement is likely to be seen as just that and not as a substitute for contributions to a pension’s scheme i.e. the Council may have to ‘auto enrol’ these staff into a pension scheme to which both employer and employee would make contributions, yet still be contractually bound to continue paying the salary enhancement. As the staging date for the Council is still some way off, it gives the Council time to consider this matter fully, which may require taking some legal/HR advice.


See section 7.3 of this report below. The

Council has now made arrangements for all

council employees to join the Local Government Pension Scheme and is

therefore compliant with the requirements of the

pensions auto enrolment scheme.

2.3

the Council considers amending the de-minimus limits in the Financial Regulations to clarify the levels at which different types of competitive purchase are required e.g.

From £1,000 to £4,999 = 3 estimates From £5,000 to £9,999 = 3 quotes From £10,000 = 3 tenders

Medium Council

2.5 the June 2015 VAT return is manually adjusted to include the VAT under claimed in the December 2014 VAT quarter. High Clerk

5.3 that the bank mandate is amended to remove the three authorised signatories, who are no longer members of the Council (Rowe, Bradshaw, Parker). Medium



Acknowledgments

The help and co-operation of Liz Hawkes, Clerk to the Council/Responsible Financial Officer is much appreciated by the internal auditor.


Report Prepared By

Signature Position Date

Internal Auditor

Report Reviewed By


Responsible Financial Officer

Report Received By Council


Section Three: Internal Audit Compliance Testing Report for ANSTEY Parish Council

Year Ending: 31 March 2015

SECTION 3 - INTERNAL AUDIT COMPLIANCE TESTING REPORTLegend

Compliant: Adherence with the requirements of the audit question. No major or minor non-conformances found

Opportunity for Improvement (OFI):

A situation or condition of internal control that may be weak, cumbersome, redundant, overly complex, or in some other manner, may, in the opinion of the internal auditor, offer an opportunity for the Council to improve its current status.

OFI’s do not necessitate any immediate remedial action on the part of the Council; however, the Council should give them serious consideration in view of the internal auditor’s knowledge and exposure to similar controls and processes.

An OFI may be an improvement to the internal control system or could prevent future problems.Minor Non-compliance:

A non-compliance that, based on the judgment and experience of the internal auditor, is not likely to result in the failure of the internal control system or reduce its ability to ensure effective control is maintained.

It may be either:

A failure in some part of the Council’s internal control and assurance relative to a specified requirement.

A single observed lapse in following one item of testing of the Council’s internal controls.Major Non-compliance:

The absence or total breakdown of an internal control process necessary to meet a specified requirement.

A number of minor non-compliances against one requirement can represent a total breakdown of an internal control process and thus be considered a major non-conformity.

Any non-compliance that would result in the probable delivery of a non-conforming service or action by the Council. Conditions that may result in the failure of or materially reduce the usability of the Council’s services for their intended purpose.

A non-compliance that, in the judgment and experience of the internal auditor, is likely to either to result in the failure of an internal control process or to materially reduce its ability to assure effective internal control.

NB: ALL REFERENCES TO PERIODS IN THE SECTIONS BELOW REFER TO THE FINANCIAL YEAR ENDING 31 MARCH 2015, BEING REVIEWED, UNLESS OTHERWISE STATED.


A = Opportunity for Improvement B = Minor Non-compliance C = Major Non-compliance



1. Proper Book Keeping

Question No. `Compliant

Audit Evidence Comments

YESOFI NO

A B C N.B. Provide references to documentation where necessary

1.1 Is the cashbook maintained and up to date? The year end and

monthly accounts summaries provided from the Omega Financial Director accounts system. Current version no. 6.3.4.15.

The Clerk to the Council (Clerk) is responsible for the day-to day accounts functions. The accounts are balanced monthly and are up to date to the financial year end.2014-15 was the 2nd full year of operating the Omega Financial Director (OFD) accounts system.RBS, the software authors were commissioned to undertake running of the end year accounts process for 2014-15.Support for the OFD system is provided direct by the software authors RBS, with an annual support contract.The OFD system is not hosted on-line (installed and updated via disc).

1.2 Is the cashbook arithmetic correct?. Arithmetic checks of the

year end and monthly accounts summaries provided from the OFD accounts system.

Checks of the computerised accounting system confirmed that the cashbook and other accounts arithmetic were correct.

1.3 Is the cashbook regularly balanced? Cashbook/accounts reports review.

The accounts are balanced monthly and are up to date to the financial year end.




2. Standing Orders, Financial Regulations & Payment Controls

Question No. Audit Question

CompliantAudit Evidence Comments

YESOFI NO

A B CN.B. Provide references to

documentation reviewed where necessary

2.1 Has the Council formally adopted standing orders and financial regulations?

Latest version of Standing Orders and Financial Regulations provided by the Clerk and also available on the Parish Council website.These are based on the NALC model Standing Orders and Financial Regulations, adapted to suit the specific needs of the Council.

Standing Orders and Financial Regulations are maintained by the Clerk and reviewed annually. The Council is directly responsible for reviewing and approving Standing Orders and Financial Regulations.Standing orders and Financial Regulations were last updated, approved by the Council at the Annual Meeting on 20/05/14, since when no further changes have been considered necessary.

2.2 Has a Responsible Financial Officer been appointed with specific duties?

The current job description for the Clerk, which recognises the specific Responsible Financial Officer (RFO) duties.

Liz Hawkes was appointed as Clerk to the Council (Clerk) on 01/03/12, which included responsibility as the RFO.The combined Clerk/RFO job description was approved by the Council on 01/03/12, since when there have been no amendments.The Clerk is supported by Judith Geary, Admin Officer, and Kirsty Frost, Admin Assistant. The Admin Officer is the principal assistant to the Clerk, with responsibility for general admin, room hire bookings, burials admin and finance checking. During 2014-15 responsibility for payroll administration was added.The Admin Assistant is responsible for financial transaction input into the accounts system.






YESOFI NO



2.3 Have items or services above a de-minimis amount been competitively purchased?

Financial Regulations.Purchase invoice filesQuotes for mowing and verge cutting contracts renewal.Tender documentation for Mitchells Field Project Manager.

The de-minimis limit recorded in the Financial Regulations for the competitive purchase of items and services is £1,000.3 estimates are required for purchases between £1,000 and £5,000.For procurement over £5,000 a minimum of 3 tenders are to be invited, following which the Clerk presents a report to Council which recommends a preferred supplier. See Recommendation.There is no formal purchase order system, but all orders placed are confirmed in writing to the supplier.

2.4 Are payments in the cashbook supported by invoices, authorised & minuted?

Invoice files reviewed and checked through to entry into the accounts.Payment listing to Council.Minutes.

A full Council meeting is held every 3 weeks and all expenditure payments are presented to a Council meeting in each calendar month for verification by resolution i.e. the last meeting in any month.The expenditure listing details staff salaries to be paid by BACS and other payments by direct debit and standing order.The final agreed cheque listing and relevant cheques are then signed off by 2 approved Council signatories and the expenditure listing filed with the relevant meeting minutes.






YESOFI NO



2.5 Has VAT on payments been identified, recorded and reclaimed?

Invoice files reviewed to check VAT entered correctly.

The Council is able to recover VAT through the Local Authorities and Similar Bodies Scheme (VAT section 33).A claim for repayment of VAT is made quarterly to HMRC.Testing indicated that VAT on income and expenditure had been correctly applied.It is not known if there has previously been a VAT inspection.It was noted that the Clerk had determined that VAT had been charged in error on invoices to hirers of Jubilee Hall. When the Jubilee Hall was built/refurbished, prior to the appointment of the present Clerk and internal auditor, the ‘option to tax’ was not taken up and therefore output tax on charges related to use of the building should not have been applied. A review by the clerk during 2014-15 indicated the amount of VAT charged in error could amount £10k. The Clerk has taken advice and reported this matter to HMRC and also reported to Council. The latter agreed that Output VAT on hall hire fees should stop with effect from 01/09/14 and no further action should be taken e.g. repayment of the VAT to the hirers, because of the difficulties in accurately determining how much is owed and to whom. HMRC have not raised an objection to this approach.It was also noted that the December 2014 VAT quarter return had been prepared and submitted incorrectly i.e. under claimed. The reason for the error is related to experience of the new accounts system and is considered a one–off. See Recommendation.

2.6 Is S137 expenditure separately recorded and within statutory limits?

Accounts records. During 2013-14 the Council replaced the Power of Wellbeing with the Power of General Competency, for which the Clerk has the required qualification to administer. Under the Power of General Competency, as for the Power of Wellbeing, the statutory spending limits and restrictions do not apply.




3. Risk Management Arrangements

Question No. Audit QuestionCompliant

Audit Evidence CommentsYES

OFI NO


3.1 Does a review of the minutes identify any unusual financial activity?

Scan of the Council minutes on-line via the village web site (located in the Meetings Calendar).

Minutes are prepared for all meetings of the Council and its committees i.e.

Full Council; meets every 3 weeks Staffing & Grievance Committees; meets as when necessary

There are also a number of working parties and groups which meets as and when necessary to cover specific tasks e.g. the Footpaths Project, Christmas Lights and Centre Stage (Nott’s CC touring theatre). NB: The Footpaths working party was wound up at the 2015 Annual Meeting).Only the full Council has spending powers.No unusual financial activity was found in the minutes reviewed.Only the Council meeting minutes are uploaded onto the village website.An assurance was given that there were no confidential minutes, other than those which related to staffing matters.

3.2 Do the minutes record the Council carrying out an annual risk assessment?

Review of current risk assessment policy documentation.

The Council has risk assessment policies in place covering health & safety management and a summary document covering all main areas of risk.Ellis Whittam, a specialist external organisation, are contracted to implement and maintain best practice in respect of health & safety and report regularly to the Council. The contract was renewed for a further 3 years from 25/03/14.The summary risk assessment policy is normally reviewed annually by the Clerk, with input from members of Council.This particular risk assessment document was last reviewed, updated and approved by Council at the Annual Meeting on 20/05/14 and uploaded onto the village website, since when no changes have been considered necessary. The current risk assessment policies meet the requirements of the Council and cover the main areas of risk that could be faced.






OFI NO


3.3 Is insurance cover appropriate and adequate?

Review of detailed insurance schedule

The current insurance policies run annually from 1st August.Insurance cover is currently placed with specialist brokers Came & Co through a 3 year contract which expires on 31/07/17.The policies are placed through Aviva for all insurances including motor.The level and range of insurance cover appears to be adequate for the size of the Council.

3.4 Are internal financial controls documented and regularly reviewed?

Standing Orders & Financial Regulations.

Following a recommendation in the 2014 internal audit report an initial statement of internal control was prepared and approved by the Council in April 2015, which will be reviewed and approved annually by the Council. In addition, effective and acceptable financial control procedures are operative as stipulated in the Financial Regulations.The procedure manuals for the accounts, fixed assets and payroll systems are adhered to.

4. Budgetary controls



OFI NO


4.1 Has the Council prepared an annual budget in support of its precept?

Copy of detailed budget.

The annual budget for the financial year under review was prepared by the Clerk and approved by the Council in January 2012, with a precept of £208,581, excluding the Council Tax Support Grant.

4.2 Is actual expenditure against budget regularly reported to the Council?

Copies of financial statements.

Financial statements are presented to Council quarterly for review and discussion. These include income v expenditure reports and bank reconciliations.






OFI NO


4.3 Are there any significant unexplained variances from budget?

Copies of financial statements.

This financial statements referred to in 4.2 above are supported by the Clerk’s Report, which includes comments and explanations on significant variances.All significant variances to budget were explained satisfactorily. The Council’s on-going strategy is to increase free reserves by an increase in the precept over and above the anticipated expenditure. This strategy is aimed at funding (either part or in whole) future projects on sports and recreational facilities in the village as well as giving consideration to subsidising services within the parish which are being cut by the County Council.

5. Income Controls



OFI NO


5.1 Is income properly recorded and promptly banked?

Receipts File reviewed and checked through to entry into the accounts.

The Admin officer is responsible for raising income invoices and issuing receipts.The Clerk is responsible for authorising income invoices and receipts.Receipts are issued for cash payments received.Cash and cheques are banked on a regular weekly basis.Outside of the precept most of the income received is for the hire of the Jubilee Hall and for one off grants.Income invoices are prepared using Microsoft Publisher software and data entered manually into OFD.Income invoice copies are retained online for a minimum of 3 years.Invoices and receipts reviewed were correctly authorised.






OFI NO


5.2 Does the precept recorded agree to the Council Tax authority’s notification?

Precept notification from Borough of Charnwood Council.Bank statements and accounts entries.

The total precept of £208,581 and the total Council Tax Support Grant (CTSG) of £15,570 were received in instalments as follows:April 2015 £119,860.58 (50% precept & 100% CTSG) September 2015 £104,290.58 (precept balance).The total precept and CTSG received in 2014-15 was £224,151.16

5.3 Are security controls over cash and near-cash adequate and effective?

Copies of paying in sheets.Bank mandate.

The Admin Officer is responsible for receiving and balancing all cash and cheques received. The Clerk is responsible for reconciling and authorising all cash and cheques received. Cash and cheques received are kept in a locked tin in a locked safe in the parish office within an alarmed building and banked weekly.Security controls for cash appeared to be adequate and effective.

Following the change of banks during 2013/14 (see 9.1) a new Nat West Bank mandate was prepared and approved by the Council, which came into force on 19/11/13. This new mandate authorised all current Council members as signatories i.e. as at 19/11/13.Any 2 of the nominated signatories are required to sign cheques.The Clerk is not a cheque signatory but is recognised by the bank for administrative and communication purposes.The bank mandate is normally reviewed and amended by the Council as and when required e.g. a change of Councillor. At the Annual Meeting on 12/05/15, the Council agreed to remove the following councillors, who are no longer Council members: Row, Bradshaw and Parker. This left 10 authorised signatories, which the Council felt sufficient going forward. See Recommendation.




6. Petty Cash Procedures



OFI NO


6.1 Is all petty cash spent recorded and supported by VAT invoices/receipts?

Petty cash transactions file.

One petty cash float is operated by the Council, with a maximum float held of £200.The petty cash float is used for small value expenditure transactions.The Clerk is the designated, approved float holder.Approved petty cash requisitions and VAT receipts are required for all petty cash expenditure and is authorised by the Clerk.The cash float is kept in a locked tin in a locked safe in the parish office, within an alarmed buildingThe Clerk and the Admin Officer are the only key holders for the safe.Council have instructed that all safe keys are to be left in the council offices overnight.

6.2 Is petty cash expenditure reported to each Council meeting?

Payment listing to Council.Minutes.

Petty cash expenditure is presented monthly to a Council meeting for approval, as per 2.4 above.Petty cash expenditure is itemised separately on the Cheque Listing report.The petty cash reimbursement cheque is signed by 2 approved signatories.

6.3 Is petty cash reimbursement carried out regularly?

Petty cash transactions file.Payment listing to Council.

The petty cash float is reconciled and reimbursed (topped up) on a monthly basis.




7. Payroll Controls






OFI NO


7.1 Do all employees have contracts of employment, with clear terms and conditions?

Contract of employment (Admin Assistant).

All Council employees are issued at the commencement of employment with a contract of employment by the Council and signed by both the Council chairman and the employee.New employees are normally reviewed as after a 6 month probationary period.All employees in post at the financial year end have an up to date contract of employment.The contract of employment and job description reviewed is a comprehensive clear document, covering relevant and current employee legislation.The contract of employment is based on the NALC guidelines.There were employees on the payroll at the financial year end:

Clerk Admin Officer Admin Assistant Groundstaff *2 Caretaker Cleaner Toilet Operative

All employees are employed on a permanent basis, work to set hours per week and are paid monthly at an agreed rate per hour, based on a fixed weekly hours or time sheets submitted and approved by either the Clerk or a member of the Council.All staff except the Caretaker and the Toilet Operative submit time sheets.






OFI NO


7.2 Do salaries paid agree with those approved by the Council?

Payroll file.Salary data.

The monthly payroll is prepared using the HMRC’s Basic PAYE Tools payroll software.The Clerk is responsible for preparing the payroll, with assistance from the Admin Officer.Salary payments are included on the monthly cheque payment list presented to Council for approval (see 2.4 above).Salaries for each employee are approved within the setting of the annual budget. Salaries are aligned to the NJC pay scales.All Council employees are paid through the payroll for all Council work undertaken. No employees are paid separately for any other Council work undertaken.Pay increases are either performance related based on an annual appraisal or a fixed % e.g. an annual cost of living increase and an incremental scale increase, where applicable.Pay increases, when applicable are applied annually on either the anniversary of joining or the anniversary of the contract of employment being signed. The cost of living increase applied in the financial year reviewed was 2.2% over 2 years, backdated to 2014 and applied from January 2015.No employee has any link to, or interest in suppliers of goods or services to the Council






OFI NO


7.3 Are other payments to employees reasonable and approved by the Council?

Contracts of Employment.Payroll fileCouncil minutes.Payments listing.

Business mileage and out of pocket expenses are reimbursed to relevant employees, primarily the Clerk.Expenses are claimed bi-monthly on an expense claim form, which is approved by the Clerk or a member of Council.Other than for the Clerk, additional hours undertaken by staff are submitted on a claim form for approval by the Clerk and the Council and then paid through the payroll at the employees’ standard rate. Additional hours undertaken by the Clerk is claimed as time off in lieu (TOIL).All additional payments are included on the monthly expenditure payment listing presented to Council for approval. See 2.4 above;Business mileage is reimbursed at the current HMRC tax free limit of 45p per mile.Annual P11D’s and P9D’s are prepared for each employee as applicable.At the end of the current financial year 4 members of staff were members of the Local Government Pension Scheme, to which both employer and employee made contributions i.e.

Clerk Groundstaff*2 Cleaner

Council determined that the annual 6% additional salary increase payable to 4 other members of staff to compensate for not receiving an employers’ pension scheme contribution, was no longer justifiable following the introduction of Pension Auto Enrolment. Consequently this additional salary enhancement ceased as from 31/03/15.All parish council staff now have the opportunity to join the Local Government Pension Scheme on equal terms, conditions and contributions.These revised pension arrangement should satisfy the requirements of the Pensions Auto Enrolment scheme when the staging date is triggered in June 2015






OFI NO


7.4 Has PAYE/NIC been properly operated by the Council as an employer?

Payroll file.Payments listing.

The Council’s payroll reference number is 267/A619.The Clerk is responsible for preparing the payroll deductions and submitting the monthly returns to HMRC.Monthly and year-end PAYE and NI deductions and returns have been submitted online, on time to HMRC. The Clerk is responsible for the on-line payment of monthly PAYE and NI deductions to HMRC. There were no errors recorded or late payments to HMRC during the financial year under review.From April 2013 the Clerk has been responsible for the monthly online submission of Real Time Information (RTI) to HMRC.

8. Asset Controls



OFI NO


8.1 Does the Council maintain a register of all material assets owned or in its care?

Asset register (Excel) The Clerk is responsible for maintaining the asset register.From 2013-14 the asset register has been maintained in an Excel spreadsheet (previously an Advantedge module).The Council does not hold any long term investments i.e. over 1 year.Any addition to the asset register is normally with a cost value greater than £200.

8.2 Are the assets and investment registers up to date?

Asset register The asset register is updated as assets (above £200) are purchased or disposed.The asset register was up to date with all relevant assets as at the current financial year end.






OFI NO


8.3 Do asset insurance valuations agree with those in the asset register?

Asset register.Insurance schedule

For each asset listed in the asset register both the original cost and the current insurance value is listed.The insurance valuations of assets are updated annually to reconcile to the agreed overall insurance value.The original cost or acquisition value of the asset is entered into section 1 of the Annual Return.

9. Bank Reconciliation



OFI NO


9.1 Is there a bank reconciliation for each account?

Bank statements.Bank reconciliations.

Following the closure of the HSBC branch in Anstey during 2013-14 the Council approved the move to the Nat West Bank and the following bank accounts were opened:, all of which were operating at the end of the financial year;

Nat West Current account: 560055/39648036. Bank statements received monthly. The main account for cheque DD’s and salary payments.

Nat West Business Reserve account; 560055/39648044. Bank statements received monthly. Used for cash deposits.

Reconciliations are undertaken for all the above accounts.The Clerk reviews the bank balances weekly and makes transfers between the two accounts as necessary to maximise cash resources.The Anstey Nat West Branch closed on 9th March 2015 and currently cash receipts are being paid in to the local post office on a trial basis.






OFI NO


9.2 Is a bank reconciliation carried out regularly and in a timely fashion?


All bank accounts are reconciled individually on receipt of the statement.The Clerk is responsible for preparing the bank reconciliations from either online or hard copy statements.The Council sign off the bank reconciliations monthly.All accounts were fully reconciled as at the year end.

9.3 Are there any unexplained balancing entries in any reconciliation?


No unexplained balancing entries were identified on the reconciliation

9.4 Is the value of investments held summarised on the reconciliation?

Not applicable. No long term (over 1 year) investments held.

10.Year-end Procedures



OFI NO


10.1 Are year-end accounts prepared on the correct accounting basis?

Monthly and Year End Accounts summaries and detailed listings.

Day to day and year end accounts are prepared on an Income and Expenditure basis.

10.2 Do accounts agree with the cashbook?

Monthly and Year End Accounts Annual Return section 1.

The Clerk is responsible for preparing and reconciling the monthly and year end accounts.The data entered onto section 1 of the Annual Return agreed to the year-end Income and Expenditure Account and Balance Sheet

10.3 Is there an audit trail from underlying financial records to the accounts?

Accounts summaries and detailed listings.

The OFD accounting system provides a satisfactory audit trail to the underlying financial records.






OFI NO


10.4 Where appropriate, have debtors and creditors been properly recorded?

Year-end Closing Debtors and Closing Creditors reports.

Debtors and creditors are recorded separately and correctly in the accounts.Default payment terms for debtors are 30 days.Default payment terms for creditors are 30 days.There were no overdue debtors or creditors at the financial year end.

11.Other Matters



OFI NO


11.1 Is the Council a trustee, or involved in the administration of any charity.

Annual Return from Charities Commission website http://apps.charitycommission.gov.uk/Showcharity/RegisterOfCharities/CharityWithoutPartB.aspx?RegisteredCharityNumber=521380&SubsidiaryNumber=0

Anstey Memorial Grounds and Recreation charity changed its name to Anstey Jubilee Hall and Grounds on 01/11/11.Registered charity no. 521380.The charity owns part of the freehold of Anstey recreation ground as its only asset.Anstey Parish Council is the only registered trustee i.e. all current councillors.The Clerk is responsible for the administration of the charity and the submission of the Annual Return to the Charity CommissionThe last Annual Return submitted was on 10/11/14 for the period ended 31/03/14, for which there was nil income and expenditure. The charity does not have a bank account, nor does it hold any cash.The Council would prefer to dissolve the charity because is effectively dormant. However the Charity Commission will not permit this because of the intrinsic value of the land the charity holds in title.


http://apps.charitycommission.gov.uk/Showcharity/RegisterOfCharities/CharityWithoutPartB.aspx?RegisteredCharityNumber=521380&SubsidiaryNumber=0







OFI NO


11.2 Other points of note

Public Works Loan Board (PWLB) online statement of balances at 31st March

The Council has held a lease agreement since 2009 with LRALC for the exclusive hire of part of The Jubilee Hall for the latter’s office. The current lease expired on 01/04/15 and the next lease is currently being drawn up by the Council’s solicitors. A lease at nil cost was agreed with Leics. Constabulary in March 2011 for the non-exclusive use of an office at the Jubilee Hall for the local police team. The current lease expired in March 2014 and the next lease is also currently being drawn up by the Council’s solicitor.In February 2012 the Council signed a 25 year way leaves agreement with Vodaphone at £2,500 per anum.In 2013-14 Charnwood Borough Council agreed to extend the lease on Millfield Playing Field for a further 20 years from 2015.At the financial year end the Council had the following loans, totalling £77,797.74 were outstanding with the PWLB as per the PWLB online statement: Loan number 486485; £64,107.89 Loan number: 495700: £13,689.85

NB: This total balance should be recorded on Section 1 of the Annual Return




12.Safeguarding Public Money (as per JPAG guidance 20120725)



OFI NO


12.1 Does the Council have safe and efficient arrangements to safeguard public money?

Internal audit.Financial Regulations.Minutes.

See section 9 above.See Financial Regulations, section 5-Banking Arrangements, section 6-Payment of Accounts 7-Payment of Salaries.Financial Regulations currently do not permit online payments. Salaries will continue to be paid by cheque, signed by 2 members of the Council, pending the introduction of online payments.

12.2 Does the Council review regularly the effectiveness of their arrangements to protect money?

Bank reconciliation statements.Cheque signing rota list (viewed in Parish Office).

A Councillor reviews the bank reconciliations at the monthly Council meeting.In addition a cheque signing rota has been introduced by the Clerk which ensures as many Councillors as possible sign cheques, rather than just a regular few Councillors.

12.3 Are controls over money embedded in Standing Orders and Financial Statements?

Financial Regulations. See Financial Regulations, all sections.

12.4 Are 2 Council member signatures required for cheques and other orders for payment?

Financial regulations.Internal audit review.

As per section 2.4 of this report, the final agreed cheque listing and the relevant cheques are signed off by 2 approved Council members. Financial Regulations include an instruction that 2 Council members are required to sign cheques or related instruments (see section 5.2)

12.5 Does the Council approve the setting up and any changes to accounts with banks and other financial institutions?

Internal audit review.Financial Regulations.

See section 5.3 above. Section 5.1 of the Financial Regulations states that ‘the Council’s banking arrangements shall be made by the RFO and approved by the Council’.






OFI NO


12.6 If corporate credit cards are held are they operated within defined limits and cleared monthly by direct debit from the main bank account?

The corporate card held by the card.Card transactions on the Nat West current account.

The Clerk may on occasions use a personal credit card to make small value purchases in lieu of a petty cash float. See section 6.1 above.A corporate Nat West credit card is held by the Clerk to make higher value purchases for the Council.The card has a spend limit of £500 and is cleared monthly by direct debit from the Nat West current account.


Documents

Internal Audit - Anstey · Web viewInternal Audit Procedure (section 1) is unchanged from the previous year’s report. An abridged version is therefore included in this report for