Chard TC Final update report 2023-24

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Chard Town Council
Internal Audit Report 2023-24 (Final update)

Stuart J Pollard
Director
Auditing Solutions Ltd

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Background and Scope
Statute requires all town and parish councils to arrange for an independent Internal Audit (IA)
examination of their accounting records and systems of internal control and for the conclusions
to be reported each year in the Annual Governance and Accountability Return (AGAR).
This report sets out the work undertaken in relation to the 2023-24 financial year, during our
two onsite visits to the Council, which took place on 6th October 2023 and 6th February 2024,
plus our final remote review on 22nd May 2024 following closedown of the year’s Omega
accounts.

Internal Audit Approach
In conducting our review for 2023-24 and in accordance with the requirements of the IA
Certificate in the AGAR and the requirements of the “Practitioner’s Guide”, we have again paid
due regard to the materiality of transactions and their susceptibility to potential
misrepresentation in the Accounts / AGAR, together with examining the overall governance
framework. Our aim is to ensure that the Council continues to operate robust control systems
and that transactions are, as far as we are reasonably able to ascertain, processed in accordance
with national and locally approved legislation and controls.

Overall Conclusion
We are pleased to record that no significant concerns have been identified from the review work
undertaken this year, although we identified one or two relatively minor errors in relation to a
couple of staff member’s salaries during the year which we discussed with the RFO during our
interim visits, noting that appropriate corrections had been actioned.
We thank the RFO and Finance Officer (FO) for providing all necessary documentation to assist
our review and for the quality of records being maintained.
No further issues have been identified during our final remote review warranting formal
comment or recommendation and we have duly signed off the IA Certificate in the year’s
AGAR assigning positive assurances in each relevant area.
We take this opportunity to remind the Council of the requirements of the guidance notes in the
preface to the year’s AGAR in relation to the documentation that should be displayed on the
Council’s website and the timing requirements for publication of the Notice of Public Rights to
examine the Council’s documentation for the financial year.

This report has been prepared for the sole use of Chard Town Council. To the fullest extent permitted by law, no responsibility or
liability is accepted by Auditing Solutions Ltd to any third party who purports to use or rely, for any reason whatsoever, on this report,
its contents, or conclusions.

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Detailed Report
Review of Accounting Arrangements & Bank Reconciliations
Our objective here is to ensure that the Council’s accounting records are being maintained accurately
and currently and that no anomalous entries appear in cashbooks or financial ledgers: we also aim to
ensure the integrity of the data and that appropriate arrangements are in place for its security. The
Council has closed the previously in operation Co-op bank accounts transferring funds to two accounts
with Lloyd’s bank. Surplus funds are also currently held in two Nationwide Building Society accounts,
although we understand that the Council has agreed to place a proportion of the surplus funds in the
CCLA Public Sector Deposit Fund, although action remains to be expedited in this respect.
Consequently, we have to date: ➢ Ensured the accurate carry forward of the prior year closing balances as reported in the
certified 2022-23 AGAR to the current year’s accounting records;
➢ Ensured that a comprehensive, meaningful and appropriate nominal coding and cost centre
structure remains in place;
➢ Checked and agreed transactions in the two Lloyds Current account to the supporting bank
statements for four months (April and September 2023, plus January & March 2024);
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Checked and agreed, due to their low volume, the full financial year transactions on the
Business account to the supporting bank statements;

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Verified the reconciliation of the Lloyds bank accounts between the cash books and the
relevant bank statements at 30th April and September 2023, plus 31st January and March
2024; and

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Ensured the accurate disclosure of the combined account balances in the AGAR at Section
2, Box 8.

Conclusions
We are pleased to record that no issues arise in this area having noted that bank reconciliations are
being reviewed by a nominated councillor, as required by the adopted Financial Regulations (FRs Para 2.2 refers), with an email certificate confirming their review and agreement of detail being
provided and retained in electronic format, together with the Omega reconciliation statement.

Review of Corporate Governance
Our objective here is to ensure that the Council has a robust regulatory framework in place, that
Council and Committee meetings are conducted in accordance with the adopted Standing Orders (SOs)
and that, as far as we may reasonably be expected to ascertain, as we do not attend meetings, no
actions of a potentially unlawful nature have been or are being considered for implementation. To meet
that objective, we have:
➢ Noted that both SOs and Financial Regulations (FRs) have been reviewed, updated and adopted
in line with the latest NALC model documents;
➢ Noted that payments continue to be reviewed and approved at Council meetings, together with
budgetary performance reports; and

Chard TC: 2023-24 (Final update)

22nd May 2024

Auditing Solutions Ltd

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Continued our review of Council and standing committee (excluding Planning) minutes
reading those covering the financial year as posted on the Council’s website to ensure that no
issues affecting the Council’s financial stability either in the short, medium, or long term exist.

We are also pleased to note that the external auditors issued their certificate on the 2022-23 AGAR
with only one issue relating to the value of assets recorded thereon.
Conclusions
We are pleased to record that no matters have been identified in this area warranting formal
comment or recommendation.
We note that both SOs and FRs refer to a value of £25,000 for advertising contracts on the
Governments Contract Finder website and take this opportunity to remind officers’ and Council’s
attention to a relatively recent revision to the Public Contract Regulations clarifying the value at
which contracts must be published on the above website: the value has been clarified and should
now be recorded as £30,000 including VAT.
We also take this opportunity to advise the Council that NALC have recently issued the long-awaited
updated model FRs and urge the Council to review and update its existing document in line with the
revised version as soon as practicable.

Review of Expenditure
Our aim here is to ensure that: ➢ Council resources are released in accordance with the Council’s approved procedures and
budgets;
➢ Suitable documentation supports the payments, either in the form of an original trade invoice or
other appropriate form of document confirming the payment as due and/or an
acknowledgement of receipt, where no other form of invoice is available;
➢ All discounts due on goods and services supplied are identified and appropriate action taken to
secure the discount;
➢ An official order has been raised on each occasion that one would be anticipated; and
➢ VAT has been identified accordingly for recovery.
We have now selected an extended test sample of 45 individual payments processed in the financial
year for compliance with the above criteria. Our test sample includes all payments individually in
excess of £2,500, plus a more random selection of every 30th payment as listed in the Omega accounts:
the test sample totals £271,100 equating to 64% by value of non-pay related payments in the year. We
are also pleased to note that two members continue to check and sign off the certification stamp
affixed to each invoice.
We have also ensured the accurate recovery of expended VAT each month during the year by
reference to the underlying control account in the financial ledger.
Conclusions
We are pleased to record that no matters have been identified in this area of our review process.

Chard TC: 2023-24 (Final update)

22nd May 2024

Auditing Solutions Ltd

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Assessment and Management of Risk
Our aim here is to ensure that the Council has put in place appropriate arrangements to identify all
potential areas of risk of both a financial and health and safety nature, whilst also ensuring that
appropriate arrangements exist to monitor and manage those risks to minimise the opportunity for their
coming to fruition.
We note that the Risk Register had been reviewed and re-adopted by the Council in March 2024 and
have reviewed the resultant document and consider that it is appropriate for the Council’s present
requirements.
We have examined the current year’s insurance schedule with Aviva and consider that the level of
cover in place remains appropriate for the Council’s present requirements with both Employer’s and
Public Liability in place at £10 million, together with Fidelity Guarantee cover at £700,000 and
Business Interruption “Loss of Revenue” cover in place at £100,000.
Conclusions
No issues arise in this area warranting formal comment or recommendation.

Budgetary Control & Reserves
In considering the Council’s approach to budget determination and precept setting, we aim to ensure
that decisions are made based on sound information and that an appropriate level of precept is
determined to meet the Council’s future planned expenditure.
We are pleased to note that, following due deliberation, the Council discussed and approved its budget
and precept requirements for 2024-25 at the February 2024 full Council meeting, setting the latter at
£1,151,765.
We are also pleased to note that members continue to be provided with detailed budget performance
information based on the Omega accounting software at meetings throughout the financial year and
have reviewed the year-end budget outturn report seeking and obtaining appropriate explanations for
the few significant variances existing with none requiring further examination or action.
We have reviewed the level of retained reserves at the financial year-end noting that funds have
increased to £678,479 (£533,597 at 31st March 2023), comprising the increased General Reserve
balance of £373,008 (£114,242 at the prior year-end), together with “ring fenced capital receipts” of
£5,862 and further total earmarked reserves of £299,609 (£413,493 at 31st March 2023). The General
Fund balance equates to approximately 6 months’ revenue spending at the present level and is in line
with the generally accepted target level of between three and twelve months’ revenue spending at the
2023-24 level.
Conclusions
We are pleased to record that no issues arise in this area warranting formal comment or
recommendation this year.

Chard TC: 2023-24 (Final update)

22nd May 2024

Auditing Solutions Ltd

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Review of Income
In examining the Council’s sources of income, we aim to establish that robust procedures are in place
to ensure that income due to the Council is identified and invoiced accordingly (where appropriate);
that arrangements for the secure handling and banking of any cash income are in place and that income
due to the Council is recovered within a reasonable time span. Income arises from a variety of sources
during the course of each financial year including the following specific areas examined at our two
review visits.
Allotment rents: These fees fall due on 1st October annually and are recorded in the Rialtas Allotment
software, although invoices are raised through the Rialtas Omega accounts, but not linked directly to
the allotment software package. We are pleased to note that all rental fees have been duly paid by the
occupying tenants.
Burial and associated fees: A detailed spreadsheet register of interments, memorial headstones, etc.,
applications is maintained. We have examined the supporting documentation held by the Council
relating to a sample of 11 burials taking place in August and September 2023, ensuring that the
appropriate fees have been invoiced, that each interment was supported by an undertaker’s application
and that the legally required burial / cremation certificates are held in each case with no issues arising.
Hire of The Guildhall
The Council uses the Rialtas booking software to manage bookings at the Guildhall with invoices
raised at the start of the month following the booking. We have acquired detail of the various
chargeable bookings for the first two weeks of October 2023 ensuring that invoices have been raised in
accordance with the approved scale of fees and charges and that all invoices have been settled in an
appropriate time scale with no issues arising.
Outstanding debt: We have examined the Omega Sales Ledger “Unpaid accounts by date” report as
at 31st March 2024 and are pleased to note that there are no long-standing unpaid accounts in existence
at the year-end.
Conclusions
We are pleased to record that no issues arise in this area warranting formal comment or
recommendation.

Petty Cash Account
We are required, as part of the annual IA reporting process, to provide assurance on the satisfactory (or
otherwise) operation of any petty cash accounts at the Council. A relatively small account is in place
within the admin office, being operated on an imprest basis with a cash float of £300, which is
“topped-up” monthly by withdrawal from the current bank account.
We checked the physical cash holding at our first review visit, which was actually “topped-up” on the
morning of that visit. We also reviewed the documentation (till receipts, etc) supporting expenditure
incurred in September 2023 and, as above, reimbursed on the day of that visit.
Conclusions
We are pleased to record that no issues arise in this area warranting formal comment or
recommendation.
Chard TC: 2023-24 (Final update)

22nd May 2024

Auditing Solutions Ltd

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Review of Staff Salaries
In examining the Council’s payroll function, we aim to confirm that extant legislation is being
appropriately observed as regards adherence to the Employee Rights Act 1998 and the requirements of
HMRC legislation in relation to the deduction and payment over of income tax and NI contributions,
together with meeting the requirements of the local government pension scheme in relation to
employee contribution percentages. We note that the Council continues to use an external agent to
prepare the monthly payroll and provide the Council with full supporting documentation, including
copy payslips. Consequently, at our first visit for the year, we: ➢ Obtained a copy of the staff establishment detailing staff in post, their spinal point on the
national pay scale and contracted working hours;
➢ Checked all staff gross salaries paid in September 2023 to ensure that they were in line with
that establishment record;
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Checked and verified the September 2023 NI & tax deductions by reference to the relevant
HMRC tables; and

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Checked to ensure that the appropriate percentage pension deductions have been applied to all
those staff contributing to the pension scheme.

Following agreement of the national 2023-24 pay award, the Council approved its application and staff
were duly paid the new salary rate, together with arrears from 1st April 2023, with the November 2023
salaries. Consequently, we have checked that month’s payslips at our interim update visit agreeing the
gross salary and arrears payable to the RFO’s working papers, together with checking detail of the tax,
NI and pension contribution deductions applied, with no issues arising in that respect other than noting
that two employees’ pension contributions were calculated at the incorrect percentage rate, one being
over-deducted and one under-deducted. We have discussed these with the RFO, who had identified
one of the errors and arranged a correction to be made in the December 2023 salary by the payroll
service provider. The RFO has referred the other to the payroll provider’s attention for appropriate
amendment with the February 2024 salary.
Conclusions
We are pleased to record that no issues arise in this area warranting formal comment or
recommendation following the RFO’s agreement to ensure that the one residual error was
appropriately corrected by the payroll service provider.

Fixed Asset Registers
We acknowledge that the Council’s Accounts, previously prepared by the former external contract
accountants, had included detail of new acquisitions each year, that detail forming the basis of the asset
value recorded in each year’s AGAR at Section 2, Box 9. We have also noted previously the
acquisition of the Pear Technology Asset Register software with data initially entered based on the
asset register detail maintained by the former contract accountants.
The RFO has provided us with the updated asset register as at 31st March 2024 with a revised total
value of £3,541,993 reflecting the net cost of new assets acquired during 2023-24, less the previously
recorded value of the two disposals in the year.
Conclusions
We are pleased to record that no matters arise in this area this year.
Chard TC: 2023-24 (Final update)

22nd May 2024

Auditing Solutions Ltd

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Investments and Loans
We are pleased to note the preparation and adoption of an Investment Strategy at the September 2023
Council meeting and have reviewed the document considering it appropriate for the Council’s present
requirements, also noting the intention to further diversify the placement of surplus funds with a
deposit in the CCLA Public Sector Deposit Fund to ensure that interest earning potential is maximised,
although action to expedite that deposit has yet to occur.
The Council has no outstanding loans repayable to itself or PWLB having repaid the residual PWLB
balance during 2022-23.
Conclusions
No matters arise in this area warranting formal comment or recommendation this year.

Statement of Accounts and AGAR
The AGAR forms the Council’s statutory annual Statement of Accounts subject to external audit
review and certification. We note the satisfactory closedown of the Omega accounts for the year with
financial detail for inclusion in the AGAR Section 2 generated automatically by the software apart
from the entries relating to loan repayments /year-end balance and asset values at 31st March.
Conclusions
We are pleased to record that no issues arise in this area this year and, based on the generally
satisfactory conclusions drawn in each review area covered by the IA Certificate in the year’s
AGAR, we have duly signed-off that certificate assigning positive assurances in each relevant area.

Chard TC: 2023-24 (Final update)

22nd May 2024

Auditing Solutions Ltd