We were pleased to welcome Eleanor Greene to Scribe Academy™ this week. Eleanor is Chief Accountant at Do the Numbers Limited as well as Secretary at the Parish Council Internal Auditors Forum and SLCC Hampshire and has been auditing accounts since 1997. 

She joined us to provide some top tips to 120+ attendees on how to keep your internal auditor happy!

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✅ Firstly, what is an internal audit?

The internal audit provides an independent assessment of the council's internal systems and operations and helps to ensure accountability, transparency, and good governance. The internal audit is carried out by an internal auditor appointed by the council and should be carried out at least annually (the scope and extent will largely depend on the size of the council). The results of the internal audit are used to make recommendations for improvement and to help ensure the effective and efficient use of resources.

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🧹 Tidy Records

Keeping your records organised and tidy is crucial for a happy auditor! The following tips will help you maintain your records in an orderly fashion.

1. Tidy it up: Make sure all your records are either in plastic wallets or hole-punched and kept in one coherent file. This will prevent any scatter or loss of important documents.
2. Date and Label: Always keep the newest records on top and label each file appropriately. This will make it easier to locate the files you need, especially during an audit.
3. Filing Systems: There are two approaches to filing systems – either file a whole year's worth of records in one lever-arch file or categorize the files according to topics (e.g. bank statements, minutes, invoices). Both approaches are correct as long as they are kept tidy.
4. Categorised Filing: If you choose to file your records according to categories, it will be easier to discard the invoices after 7 years. However, if you choose the year-filing approach, make sure to keep the minutes and supporting payment listings while discarding the other materials.

The most important aspect of record keeping is to keep it tidy and organised. Whether you choose to file your records by year or by category, the key is to make sure everything is labeled and easily accessible for your auditor.

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📂 Archiving

As a clerk, you may have faced the daunting task of going through countless archive boxes left behind by a former colleague. This can be overwhelming, but the good news is that the Society of Local Council Clerks (SLCC) has clear guidelines on what to keep and what to get rid of (although you must be a member to access this).

• Minutes are a key document that must be kept forever, but once they are no longer needed in the office, they can be sent to the county archives.
• Bank statements, payment listings, and AGAR submissions can also be useful to keep indefinitely.
• Sales invoices and purchase orders older than 7 years can be discarded.
• Planning permissions are no longer confidential and can even be recycled as they are all available on the planning portal.

Take advantage of the next 6 weeks to get your records in order before auditors start visiting. Making it easy for others to find what they need will not only make your auditor happy, but it will also make your job easier in the long run.

Top tip: The JPAG Practitioner's Guide Section 4 includes an audit checklist and provides guidance on what auditors will ask for. If your auditor is not asking for the items on the list, it may be time to change auditors!

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🗓️ Book a date

Now is a great time to book your internal audit date, if your auditor has not already nudged you to do so. Here are some tips for booking an internal audit:

• The internal auditor must be 1) independent from the council and 2) have good knowledge and understanding of local government finance.
• The internal auditor must be appointed by the council, not the Clerk.
• There is no specific requirement to rotate internal auditors - they may see you for 3 days a year, which means they're pretty independent from the council.
• If you do not yet have an auditor, it may be worth taking a look at the Internal Audit Forum's Directory of Internal Auditors.

Psst: the updated External Auditor appointments by area for 22/23 - 26/27 can now also be viewed at the Smaller Authorities Audit Appointments.

Top tip: If you are using the same internal auditor as you used last year they have, by definition, seen your records during this financial year. So it doesn't matter if they can only come later - you can sign the AGAR beforehand to meet 30th June deadline. If you are changing internal auditor, you can only sign the AGAR once the internal auditor has been.

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👀 Freedom of Information Publication Scheme

The Freedom of Information Act requires all local councils to produce a Publication Scheme that specifies the classes of information which the public authority publishes or intends to publish.

You are required to publish details under 7 main categories:

• Who you are & what you do
• What you spend & how you spend it
• Your priorities & how you are doing
• How you make decisions
• Policies & procedures
• Lists & registers
• The services you offer

The ICO provides a model Publication Scheme and further guidance. It is important to state not only what information is covered by this scheme, but how it can be obtained by the public. Try adding links to your scheme that take the public directly to the information stated.

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🎤 Guest Speaker

📧 EleanorGreene@DoTheNumbers.uk

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⏯️Watch now

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❓Eleanor's Q&A's

Q: Is it ok to only keep digital records of sales and purchase invoices? Or do we need hardcopies?

A: Oh yes! Internal auditors love PDF's, no scrabbling through dusty cabinets! As long as you can generate an accurate image of the document (e.g. sales invoice), it can be stored digitally. Keep on paper what is useful or legally required. If you have received an invoice electronically as an example, do you really need to print this out?

Q: What about the requirement to initial invoices if only stored electronically?

A: There has never been a requirement to initial invoices, what needs to be signed is the authorisation of the payment.

Q: I have been putting a separate listing on the website of all payments over £100, can I stop doing that as these are already on the minutes?

A: If your payments list is a part of your minutes and signed off, you do not need to duplicate this.

Q: Can you list the total sum of payments to be approved?

A: No, you are required to list each individual payment that needs approval.

Q: Should the payments to be authorised be listed on Agendas or just as an appendix document which is then included in the minutes?

A: The agenda pack should include what is going to be decided, as a decision will be made as to whether payments are authorised, this should be in your agenda pack.

Q: We have a Finance Committee that authorises the payments. Do we need to put it on Full Council as well?

A: If the finance committee minutes are properly recorded with the full list of payments you don't need to do this again at full council, they can just sign off the committee minutes.

Q: On my bank reconciliations a parish councillors reports to the meeting that they have checked it and it is OK or not. I this OK as it is minuted?

A: The councillors should be seeing the original bank statements and the bank reconciliation should be a matter of public record.

Q: Should the bank statement be attached to the bank reconciliation?

A: No, your bank statements may show bank details of payments into the account which is a GDPR breach.

Q: Our Asset register is years out of date. I am trying to put together a new one but don't know where to start re valuation of things?

A: Start with what you've got. The most common valuation method for asset registers is historic cost, so the purchase price of the asset 10 years ago will be the valuation you should on the asset register today. Ask your councillors to take a copy of your asset register and go round the village to check what you have or have no longer got.

Q: My Council leases a community hall from the Borough Council (for £1 a year). This is a Cheshire East Council asset; should I also be adding it as a PC asset?

A: No, if the Borough Council own it, it's theirs's. You do not need to record this on your asset register.

Q: Does the agenda pack need to be made public? I send it to all Councillors, but haven't been putting it on the website.

A: I would recommend making it public - the more transparent you are on public spending, the happier the public will be!

Q: I don't get the salary pay slip sometimes until the morning of the meeting so the payments list is seen at the meeting.

A: Salaries are contractual and budgeted, there is no obligation to wait until the meeting to pay your salary. It would be a breach of your employment rights if they did not pay you in a timely manner.

Q: Do we have to state the Clerks salary paid in the minutes/agenda as I always understood that this was confidential.

A: This is down to personal preference, but if the Clerk is the only employee their salary will be on the AGAR anyway.

Q: Valuation required for insurance purposes?

A: It's a good idea to do this every few years for buildings.

Q: We have low value assets which it would be daft to insure because. Should these items be on the asset register?

A: Community assets can be added to the asset register at £1. When you replace it you'll then put it in at cost.

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