Interim internal audit report – Year ended 31 March 2021

The Accounts and Audit (England) Regulations 2015 (as amended) require all Town and Parish Councils to undertake an effective internal audit to evaluate the effectiveness of their risk management, control and governance processes, taking into account public sector internal auditing standards or guidance.

I am bound by the ethical guidelines of the Institute of Chartered Accountants of England and Wales. I confirm that I am independent of the Council.

The internal audit work I have carried out has been planned to enable me to give my opinion on the control objectives set out in the Annual Internal Auditor’s Report on the 2020-21 Annual Governance and Accounts Return.

I have complied with the legal requirements and proper practices set out in:

‘Governance and Accountability for Local Councils – A Practitioners’ Guide (England)’ 2020
The Accounts and Audit (England) Regulations 2015 (as amended).

I was appointed as internal auditor to the Parish Council for 2019-20 on 12 June 2019.

My interim internal audit review was carried out on 15 January 2021.

Background

The current Clerk commenced employment with the Council on 1 December 2019. There was a short period in October and November when the Council had no clerk. He is currently studying for the CiLCA qualification.

Temple Cloud with Cameley Parish Council has income and expenditure of between £50,000 and £100,000 and is subject to review by the external auditor, PKF Littlejohn. The Council had a clean annual report from the external auditor for 2019-20.

The Council is a sole managing trustee of Cameley Playing Field Charity.

The Council is not required to comply with either Transparency Code as it’s income and expenditure falls between the thresholds for which either of the Transparency Codes apply.

The Council’s accounting records are maintained on Excel.

Internal audit checks

I have undertaken a series of audit tests on the Council’s financial records, vouchers, documents, minutes, policies, procedures and insurance documentation to ascertain the efficiency and effectiveness of the Parish Council’s internal control framework. This internal audit report is based on the audit testing carried out at the visit.

During this visit I checked the following:

Minutes of Council Meetings
Policies and procedures
Bank and cash
Income and expenditure
Budgets and reserves
Sole managing trustee
Action taken on the recommendations in prior reports

Findings

Details of good practice noted, my recommendations and other matters to be brought to the Council’s attention are set out below.

Good practice

The Clerk is studying for the CiLCA qualification
The Council maintains an accounting system on Excel
All records were up to date and easy to follow
The Council’s Standing Orders and Financial Regulations are reviewed regularly and are tailored appropriately for the Council
The Council has appropriate policies in place
The Clerk is aware of the requirements of GDPR and the Council is registered with the ICO
Bank reconciliations are prepared regularly
The payroll is operated by an independent external payroll provider
All eligible employees have either been auto-enrolled in a pension scheme or have opted out in writing
All employees have contracts of employment
The budgeting process is detailed and thorough and monitored throughout the year
VAT claims are made regularly
Action has been taken on all of the recommendations made
The Council has taken appropriate action to enable it to continue to meet and function during the Covid-19 pandemic

Recommendations

Investments

The Council reviews and documents its investment strategy as from 1 April 2018 this is a statutory requirement under s15 (1) (a) para 14 of the Local Government Act 2003 for local authorities with investments (which includes any amounts held in any bank accounts) of over £100,000

Policy has been added to Feb meeting for approval

Income and expenditure

Councillors currently have sight of supporting documentation for all payments before authorising them for approval, however this is not always evidenced. Evidence of approval of invoices should be obtained, either by physical or electronic initialling of invoices, confirmation by email or some other method if more practical.

This has been implemented. Phil Warden has checked and signed the batch of invoices for the Feb meeting, and councillors will take it in turns each month to do these checks

Risk assessment

The Council should review, update and adopt the risk assessment before 31 March 2021. Further guidance on risk assessments is available in the Practitioners Guide.

Policy has been added to Feb meeting for review

Other matters to be brought to the Council’s attention

There are no other matters to bring to the Council’s attention.

Conclusion

Based on the tests I have carried out at this interim internal audit visit, in my view, the internal control procedures in operation are, in all significant respects, adequate to meet the needs of Temple Cloud with Cameley Parish Council.

Next visit

The next internal audit review will be done remotely on 9 April 2021.

At this visit detailed checks will be carried out on:

Minutes of Council Meetings
Bank and cash
Income and expenditure
VAT claims
Payroll
Risk assessment and insurance
Asset register
Year end checks

Next Steps

This report should be noted and taken to the next meeting of the Parish Council. The Council should decide what action will be taken on the recommendations I have made.

Kind regards

Yours sincerely

Bridget Bowen FCA

Internal auditor

Posted: 3rd February 2021