AGAR stands for Annual Governance and Accountability Return. The AGAR is a set of documents and financial statements that local councils are required to prepare and submit each year. It is an essential part of the external audit process and serves several purposes:
- Accountability: The AGAR provides a transparent and accountable overview of a council's financial activities, governance procedures, and decision-making processes. It allows the council to demonstrate its stewardship of public funds and adherence to legal and financial regulations.
- Compliance: The AGAR helps ensure that local councils comply with statutory requirements and regulations. It includes information on the council's financial management, internal control procedures, and adherence to relevant laws and regulations.
- Transparency: By making the AGAR publicly available, local councils provide transparency and openness to their constituents. It allows residents and other stakeholders to review the council's financial performance, budgeting decisions, and governance arrangements.
- External Audit: The AGAR serves as a basis for the external audit of a local council's financial statements. Once the council completes the AGAR, it is submitted to an external auditor appointed by the Audit Commission or another approved auditor. The auditor reviews the AGAR and issues an audit opinion, assessing the council's compliance and the accuracy of its financial statements.
- Financial Assurance: The AGAR helps provide assurance to the council and its stakeholders that the financial operations are conducted in a responsible and proper manner. It ensures that the council's accounts are accurate, complete, and reflective of the council's financial position.
The AGAR typically consists of various sections, including the Annual Governance Statement, Accounting Statements, and an Internal Audit Report. Each section requires specific information related to the council's governance arrangements, financial transactions, assets and liabilities, income and expenditure, and other relevant details.
It's important for local councils to prepare and submit the AGAR in a timely manner to comply with legal obligations and maintain transparency and accountability with their communities.
As a busy Council Clerk/RFO, there is nothing you want more than a smooth sailing Year End.
The run up to 31st March can be a daunting time, especially if this is your first Year End, so it's important to make sure you have all your ducks in a row well before then.
Our MAAT Qualified Accountant, Hannah, and CiLCA Clerk, Jo, have put together a useful 5-part series on the Year End process.
👀 Let's take a look...
Part 1 - Preparing Your Accounts for Year End
We all know there is a lot of preparation that goes into Year End, and it's important to expect the extra hours/workload involved, but you wouldn't believe the amount of Councils that leave everything right up until the last minute.
This is not a good idea, as you're setting yourself up for more work, and even more stress, at an already busy time - that regular to-do list isn't getting any smaller either!
There are many tasks you can complete now to ensure your accounts are up to date, and your future self will thank you for it! Have a watch below.
Part 2 - The Internal Audit
An annual review of the Council’s accounts and internal controls, also known as the internal audit, is required before the AGAR can be submitted.
Some Clerks & RFO's may find this stage particularly daunting, as you're putting yourself under scrutiny. But remember, your auditor wants you to pass just as much as you do!
Watch below to find out more about the internal audit, appointing an IA, requirements and timeframes.
Part 3 - AGAR Section 2, The Accounting Statements
When completing the accounting statements, sometimes referred to as the annual return, it is important to know which accounting approach you are using and what each line should include.
This is particularly important if you are compiling these figures manually.
Watch below for an overview on completing the AGAR and considerations to think about.
Part 4 - Signing & Publication of Documents
Once you have completed the AGAR, a Council meeting must be held to approve and sign off the documents before submitting to the External Auditor.
The 22/23 External Audit appointments can be viewed here.
As a Council managing public money, you must also hold a 30-day period for the Exercise of Public Rights and publish your accounting records to your website so that it can be viewed by any interested person.
Watch below for more information on the signing and publication of documents and the Exercise of Public Rights.
Part 5 - The New Financial Year
It’s very easy to become bogged down in the workload associated with the current year AGAR. However, if you can set aside some time, it is a good idea to set up your next financial year cashbook.
Watch below for tips on how to structure your cashbook and considerations you should be thinking about.
🧘🏽 Hello to spare time
If you really want to save some time, and lots of stress, then join Scribe. Our dedicated accounts software, purpose-built for Parish and Town Councils.
You can use Scribe to
- Produce your Annual Return
- Claim VAT back or submit VAT returns
- Reconcile and report on bank accounts
- Manage and report on budgets
- Save time and wow councillors with its many reports that can be produced in just a click of a button.
We have a team of qualified and part qualified accountants, a CiLCA clerk, expert trainers and problem solvers. All our calls, emails and messages are responded to within minutes.
Like the sound of Scribe. To find out more visit www.scribeaccounts.com