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Need to get your AGAR plan in order? Not sure where to start? Are you dreading April? You will LOVE this.
Our MAAT qualified Accountant Hannah has revealed her secret process to ensure your AGAR is a breeze.
Hannah has pinpointed the 3 main components which will jeopardise your year end and will ultimately end up leaving you feeling overwhelmed whilst working extra unpaid hours.
By implementing these processes now you can immediately slash your year end hours in half, your future self will thank you.
Say goodbye to overtime and hello to spare time.
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Check Hannah’s video out below:
Key Take-aways
Promise: A simple process to ensure a laid-back year end
Helpful Principles
- Learning to take back control of your data
- How setting aside the time to learn will pay dividends
- Understand how to manage your own expectations
Video Transcript
Firstly I want to talk about the end of the financial year which is rapidly approaching. I have spoken to many Clerks over the last few months who have told me that they have find the year end process stressful and difficult.
Broadly speaking there seems to be 3 main reasons for this: Difficulty collating the accounts data, lack of knowledge of the process and lack of time. Let's look at each of these in turn.
Difficulties collating the accounts data:
Wherever you put your be it written in a book, on a spreadsheet or on an accounts software. It clearly needs to be up to date and accurate. This means where possible regularly entering your payment and receipts so you don’t end up with a backlog of data to do at key times.
As well as this, carrying out regular bank reconciliations will help you confirm that your records are correct and that the reports you are providing to your councils are based on accurate data. If you can do this on a monthly basis then if you do come across a reconciliation difference the amount of data you need to check back through is limited to one month. Equally there ideally needs to be enough information held that will enable you to complete the annual return without having to keep referring to paperwork or missing information not entered in your cashbook.
For example, staff costs need to be listed separately to payments on the accounting statement. So clearly it makes sense to have a separate code for this or an easy way to filter to get the total you need without having to trawl through 12 months of data adding it all back up.
You also need to be certain that as well as completing the AGAR itself that you provide all the additional data required by the Auditor. This is obviously best done as part of the year end and this is preferable to not to have to come back to this as a result of a query from the Auditor, not least as it will likely incur an additional fee.
The information required by the Auditor will depend on the level of review your Council requires but it is good practice to make sure you are fully aware of all the information that you will need to submit and in what format. For example, I have seen particular notes from the Auditor regarding variances which require explanation. It is not acceptable to purely provide an extract from your cashbook. The Auditor wants to confirm that you as the RFO fully understand the variance and equally to ensure that you do not provide information which is not required. Further details of all of this will be available on your Auditors website or in the correspondence you will receive directly from them towards the end of the year.
Lack of knowledge of the process:
There have been a few changes over the last few years the way the AGAR is completed which can often be frustrating particularly when you are used to a certain process that is then changed. If you are not already aware you will be pleased to know there are only minor amendments to the Practitioner's Guide to completing to 2018/19 year and no change to how the AGAR is set up and needs to be completed.
One of the biggest changes in recent years is the option for local councils to exempt themselves from external audit. It is only available to councils with both income and expenditure of less than £25,000 providing they have been in existence since the 1st April 2014 and have no issues with the previous audit. The option has been available since the previous financial year and means if the council has not exceeded the £25,000 threshold they can certify themselves as exempt from audit. Although there is still a requirement to complete the AGAR the only paperwork that needs to be sent to the Auditor is a certificate of exemption and their contact details.
The Audit firm PKF Littlejohn have reported a misunderstanding that a completed annual return and associated paperwork will still be submitted by many councils who have declared themselves exempt. So be aware of this if you declare your council exempt from next year's audit. If your council is too large to exempt themselves then they will be subject to an external audit in the normal way. It is also really important to be aware of the timetable you are working towards and what you need to achieve by when. Section 1 the Annual Governance Statement and section 2, the accounting statements of the AGAR must be approved by the first working day of July which this year will be Monday 1st. So clearly all the accounts prep will need to be completed well before then to enable it to be signed off before this date. As you will be aware there also needs to be a 30 day period for the exercise of public rights which must include the first 10 working days of July. The earliest date that this can commence is Monday 3rd June. Finally, don’t forget your accounts need to be published on your website as soon as possible after the completion of the Audit but no later than the 30th September. Alongside accounts there are other requirements of documents to be published so it is worth making sure you are aware of what is required. Many Clerks who I have spoken to were not aware of more documentation other than the accounts and the minutes of the council meetings as required. For example, if your council has exempted itself from external audit, they will be bound by their transparency code that requires further information to be published. This includes a list of items of expenditure over £100.
Lack of time:
Lack of time is a real issue for Clerks and RFO, many I speak to fit being Clerk around a ‘proper job’ as they call it and many are working more jobs than they are contracted to, particularly at year end. This is not only due to the increased workload due to submitting the AGAR but because the other tasks involved in the role still have to be done. There are Clerks who are employed by more than 1 council further exacerbating the pressure they find themselves under to complete multiple year ends.
I think there has to be an expectation of an increased time factor to complete the AGAR simply because there is additional work involved in comparison to a normal month. However, if you have been able to set aside time to tidy up your data and get it to its most usable state then this should present time saving at year end. Also, being fully aware of the process and the associated timetable should enable you to understand the deadlines you are working towards. Having said that I am aware of some Clerks who have found themselves with a reduced amount of time to complete the year end process simply down to the date of their meeting. One particular council only meets every other month and in order to get the account filed off in time for the inspection period this had to be done at the main meeting seriously limiting the amount of time the RFO had to prepare the accounts. This therefore relates to my previous points in being fully aware of the timetable and working to match the time the Clerk or RFO has and the date of the relevant meetings to provide the best use of time.
I hope you found this short video relevant and interesting, if you would like any further information or to ask any questions please feel free to contact me at hello@scribeaccounts.com
