Internal Auditor S Certification to Cockermouth Town Council

REPORT BY THE INTERNAL AUDITOR FINANCIAL YEAR ENDING 31 MARCH 2016

Internal Auditor’s Certification to Holme Parish Council

Subsequent to the confirmation of my appointment as Internal Auditor to Holme Parish Council the Clerk/RFO made arrangements for the audit. Full access was given to the Council’s financial records and documentation.

As this is the first Internal Audit undertaken for Holme Parish Council a comprehensive and in- depth scrutiny was made of all records in accordance with the Accounts and Audit Regulations 2015 and as detailed in “Governance and Accountability for Local Councils – A Practitioners’ Guide (England) 2016

I confirm I have, on the 23rd March 2016 and 8th June 2016 undertaken the internal audit for the period 1st April 2015 – 31st March 2016

The Council will be required to ensure that the following requirements are undertaken :-

Prior to the submission of the Annual Return to the External Auditor the council must ensure that it has afforded the opportunity for the public to exercise their rights to public inspection of the relevant documents. This requires the public display for a period of 30 days and adherence to the timetable provided by the External Auditor.

The Accounts and Audit Regulations 2015 requires that the Notice of Conclusion of Audit, and the relevant sections of the Annual Return and other documents is published in one or more conspicuous place, on the council’s website or other website, advising the public that the audit has been completed. The council will receive notice of the completion of the External Audit and must respond to any matters brought to its attention.

Further, this and the confirmation that the Clerk has posted the relevant documents in a public place will be recorded in the minutes.

In undertaking the Internal Audit I can report that the Clerk/Responsible Financial Officer (RFO) has maintained a high standard of recordkeeping, which has simplified the audit process. The Council’s control systems are efficient and effective and give the appropriate level of confidence, that the financial statements and reports reflect a true and accurate account of the Council’s finance and governance records.

I report as follows and confirm that the Council, as a result of extensive work undertaken by the current Clerk/RFO to complete audit requirements within a very tight time slot, is almost fully compliant with the Account and Audit Regulations with the exception of undertaking a full Risk Assessment which is being addressed.

1 1. Proper Bookkeeping The Council operates Receipts and Payments Accounts as required by the Regulations. The RFO has established an Excel Cashbook which is maintained and up to date and identifies spend to the Council’s budget. There were no arithmetical errors and there is a clear audit trail and a checking system for data input into the computerised records. RECOMMENDED that the Cashbook be balanced at least quarterly to reconcile with the Bank Statement and to verify any VAT to be claimed.

2. Standing Orders/Financial Regulations. Responsible Financial Officer.Minutes The Council has reviewed and formally adopted Standing Orders, 20th May 2015 Minute No. 73.15 d) Financial Regulations were reviewed and adopted at the meeting held on 16th May 2016 Minute No. 19.1.

The council has complied with its duty (LGA 1972, s 151) to appoint a Responsible Financial Officer (RFO) and the contract of employment outlines the specific duties applicable to the post. Meeting 29th March 2016 the relevant Salary scale Min No. 1.1.

Minutes are a historical record that can be used in a court of law. Loose-leafed minutes should be numbered from the date of the Annual Meeting of the Council, each page being initialled by the Chairman with the final page signed by the chairman and dated. Safeguarding in a fireproof cabinet should ensure security.

3. Invoice procedure There is a clear audit trail from the financial records, supported by invoices and all payments are authorised and duly recorded in the minutes. A random sample of expenditure was checked and all adhere to Financial Regulations and the principle of Best Value.

4. VAT Vat has been recorded and the correct sum of identified for the period 1st.April 2015 to 31st March 2016. - £984.53

5. Sct 137 Payments The Council is fully compliant with the statutory requirement to maintain ‘a separate account’ of expenditure under Local Government Act 1972 section 137 by the inclusion in the cashbook of a separate accounting column. Expenditure under this power has been incurred - £50 British Legion Poppy Appeal.

6. Risk Management The Clerk has carried out a thorough review of all documents. While the Risk Assessment documents were not reviewed in the current financial year, the Council has reviewed and formally reviewed all risks to which the Council is exposed and has adopted and approved the policies at the meeting held on 25th April 2016 Min. No. 13.4

2 7. Internal Financial Controls There is clear evidence by checks, dates and signatures on relevant documents e.g. invoices, financial statements, schedule of payments, bank reconciliations, bank statements and cheque book stubs that the Council is now in control of the use of public monies.

8. Register of Interest Members have duly completed the Register of Interests and fulfilled their obligation to update the details annually.

9. Budgetary Control A correct budget process is in place and the precept request was submitted to the District Council in time to comply with its deadline. It is the responsibility of the Council to manage public money and to address budget under/overspends and if necessary make the relevant virements, which should be recorded in the Minutes. RECOMMENDED that the Clerk ensures that each member has a copy of the publication “The Good Councillor’s Guide – Essential guidance for local councillors” this is available from the Cumbria Association of Local Councils. Particular attention is drawn to section 7 page 25 - 2

10. Cash Balances at the Bank It is a requirement of internal audit to express a view on whether the cash reserves of the council are adequate or excessive. The balances are adequate to meet the future budgeted undertakings of the council.

11. Income Controls All income is properly recorded and promptly banked and adequate measures are in force to ensure security. No cash income

12. Petty Cash The Council does not operate a petty cash system but the Clerk’s expenses are reported to the relevant meeting Sums drawn, where VAT is applicable, may be claimed against the appropriate budget heading e.g. Stationery as the Clerk is acting as agent of the Council in purchasing supplies for the sole use of the Council.

13. Payroll Controls PAYE/NIC records are undertaken internally and are properly operated and up to date.

14. Asset Control There exists an extensive register of all material assets in control of the Council. The register is up to date and was reviewed and adopted at the meeting on 15th January 2016– Minute No 13.5 C) All assets are adequately covered by insurance

15. Bank Reconciliation A reconciliation of the Cashbook to the bank statements is made on receipt of monthly bank statements. The signature of a member on the corresponding bank statement verifies the accuracy of the reconciliation.

Georgina D Airey 16th June 2016 3 SUPPLEMENTARY REPORT BY THE INTERNAL AUDITOR

TO ACCOMPANY THE ANNUAL RETURN FINANCIAL YEAR ENDING 31 MARCH 2016

It is a requirement of the Internal Auditor, should any “No” or “Not Covered” answers be given on the Annual internal audit report section of the Annual Return page 5 be given that an explanation is attached.

Box C This smaller authority assessed the significant risks to achieving its objectives and reviewed the adequacy of arrangements to manage these.

No record existed in the Minutes of the authority for the financial year 2015-2016. There has been a change of Clerk with no handover period and many documents were not accessible. A record exists of a review having been undertaken in the previous year, which is duly minuted. No significant new projects have been undertaken which would expose the council to additional risks. The new Clerk/RFO has carried out a review of all documents and the Council is now compliant having reviewed and adopted a Risk Assessment policy relevant to its operations.

Additionally the Internal Auditor’s report has recommended several measures to ensure the council has in place robust Internal Controls to manage the risks to public money.

Georgina D. Airey – Internal Auditor

8th June 2016