Chard TC Final update report 2019-20 (002)

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Full Town Council meeting 13th July 2020

Chard Town Council
Internal Audit Report 2019-20 (Final update)

Stuart J Pollard
Director
Auditing Solutions Ltd

Agenda item 2020/

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Background and Scope
Statute requires all town and parish councils to arrange for an independent internal audit
examination of their accounting records and system 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 2019-20 financial year, during our
two interim visits to the Council, which took place on 18th November 2019 and 12th February
2020. Due to the impact of the Covid-19 pandemic, we have of necessity undertaken our final
review for the year remotely: we wish to thank the Responsible Financial Officer (RFO) in
assisting the process, providing all necessary additional (to that examined at our interim visits)
documentation in electronic format to facilitate completion of our review for the year and sign
off of the Internal Audit Certificate in the year’s AGAR. We have also, as in prior years, been
provided with copies of the contracted accountants (DCK Accounting) year-end detailed
Statement of Accounts and supporting working papers.

Internal Audit Approach
In conducting our review for 2019-20 in accordance with the requirements of the Internal Audit
Certificate in the Annual Governance and Accountability Return (AGAR) and the latest edition
of the Governance and Accountability Manual, 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.

Overall Conclusion
Whilst we are pleased to acknowledge the actions taken by officers to address issues raised in
previous reports, there remain a number of areas where action remains to be taken: this is most
notable in relation to the absence of any action to review and formally adopt a financial and
health / safety register of the potential risks facing the Council. The Governance and
Accountability Manual – “The Practitioner’s Guide” requires that all such potential risks are
assesses, reviewed and re-adopted by the Council at least once annually: consequently, we shall
of necessity again have to record a negative response at Box C of the year’s IA Certificate and
members will similarly have to give a negative response in the Governance Statement at Section
1, Box 5.
Based on the generally satisfactory conclusions drawn from our programme of work for the
year, we have signed off the IA Certificate in the year’s AGAR assigning positive assurances in
each relevant area other than in relation to the assessment of risks.

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. Three bank accounts are in operation with the Co-op bank with the current and
deposit account transactions recorded in a single cashbook with a daily sweep operating
between the two accounts to retain a £2,000 balance in the former. The third account holds a
small proportion of the Council’s surplus funds attracting minimal interest payable at halfyearly intervals with detail recorded in a separate cashbook in the accounting software. We
have: ➢ Ensured the accurate carry forward of the prior year closing balances as reported in
the certified 2018-19 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 combined current and deposit account
cashbook to the supporting Co-op Bank statements for four months (April and
October 2019, plus January and March 2020)
➢

Verified the reconciliation of the Co-op bank accounts between the cash book and the
relevant bank statements as at 30th April and 31st October 2019, plus 31st January and
March 2020

➢

Reviewed the procedures for raising and checking of journals on the accounting
software, and

➢

Ensured the accurate disclosure of the combined cash and bank balances in the year’s
AGAR at Section 2, Box 8.

Conclusions and recommendation
We noted at our first visit for the year that the 31st October 2019 bank reconciliation included
a few long-standing uncleared cheques, 3 of which were issued before 31st March 2019 with
one in April 2019: we are pleased to record that these have been cleared from the accounts.
We noted at our interim update visit that the independent scrutiny of bank reconciliations had
been reinstated, also noting that the new Clerk was reviewing and signing off journals.
Also, at that interim update review, we noted that the 31st January 2020 reconciliation showed
three uncleared deposits dated 12/7/19: 16/8/19 & 6/12/19. Whilst two have now been cleared,
the earliest remains as an uncleared item on the year-end bank reconciliation.
R1. Action should be taken to ensure that the recipients of all long-standing uncleared
cheques are contacted to determine whether they still hold the cheques or require
replacements, with the original entries reversed in the cashbooks where appropriate.
R2. The nature of the uncleared deposit dating back to July 2019 should be examined and
appropriate action be taken to ensure its clearance through the bank (if appropriate) or
from the accounting records.
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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) were reviewed and re-adopted at
the May 2019 full Council meeting, with the SOs further updated and adopted at the
meeting on 2nd March 2020
➢ Noted that payments continue to be reviewed and approved at Council meetings,
together with budgets
➢ Continued our review of Council and standing committee (excluding Planning) minutes
for the financial year reading those to date in 2020-21 as are posted on the website to
ensure that no issues affecting the Council’s financial stability either in the short,
medium or long term exist, and
➢ Noted that the external auditors issued a clean report on the 2018-19 AGAR, excepting
the reference to the need to address issues in our report for the year, specifically the
absence of any formal review and adoption of a risk register.
Conclusions and recommendation
We were again concerned to note at our interim visits that the extant SOs referred to an
earlier version of the Public Contracts Regulations, which were subsequently updated in
2015. In our previous reports, we urged that the existing document be amended accordingly,
together with a review of the extant FRs to ensure compliance with extant legislation and best
working practice (due to the Covid-19 situation, we have not had an opportunity to examine
the updated document adopted by the Council in February 2020).
We understood at the time of our interim update visit that NALC was undertaking a further
review of both SOs and FRs to reflect the impact of our exit from the EU and, consequently,
suggested that any further review of the Council’s documents be deferred until such time as
the revised NALC documents are available. Obviously, the Covid-19 situation has delayed
completion and promulgation of the revised documents by NALC.
Examination of the website indicates that, whilst the final external audit certificate has been
posted we have seen no indication that Sections 1 & 2 of the 2018-19 AGAR, nor the Internal
Audit Report / Certificate have been posted, contrary to the requirements of the Accounts and
Audit Regulations 2015.
We shall continue to review minutes and consider the Council’s approach to governance
issues at future visits.
R3.

The Standing Orders and Financial Regulations should be subjected to further review and
update to ensure compliance with extant legislation (e.g. reference to the 2015 Public

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Contracts Regulations), best working practice and the impact of the UK’s departure from
the EU.
R4. The Council should ensure that in line with best practice and the Accounts and Audit
Regulations 2015 it publishes all required and as much relevant information on its
website as practicable: this should include all minutes, excepting those of a confidential
nature.

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, and
➢ An official order has been raised on each occasion that one would be anticipated.
We have at previous visits for the year reviewed the control procedures in place over ordering of
goods and services, together with the payment approval and release procedures, all of which we
consider generally sound and appropriate for the Council’s present requirements.
We have again extended our test sample of payments to cover the full financial year. The test
sample includes 63 individual transactions, together with the half-yearly paid NNDR in respect
of the Guildhall and Cemetery and comprises all payments individually in excess of £1,750,
plus a more random selection of every 25th payment as listed in the cashbook totalling £330,400
and equating to 63% by value of non-pay related payments in the year.
We have checked and agreed detail of the year’s reclaims, generally submitted each month, to
the underlying detail in the Omega control account up to that to the end of February 2020 with
no issues arising: we also note that the outstanding balance as at 31st March 2020 is correctly
disclosed as a debtor in the year-end detailed Accounts and AGAR.
Conclusions
We are pleased to record that no issues have been identified in this area of our review process
warranting formal comment or recommendation.

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

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that appropriate arrangements exist to monitor and manage those risks to minimise the
opportunity for their coming to fruition.
We remain concerned to note that, despite the actions of the RFO to produce appropriate
documentation for formal approval by the Council during the year, consideration and formal
approval / adoption has again been deferred. Consequently, we shall have to give a negative
assertion in Box C of the year’s IA Certificate and members will similarly have to give a
negative response in the Governance Section at Section 1, Box 5 of the year’s AGAR.
We have examined the year’s insurance schedule, now with WPS, and consider that the level of
cover in place is appropriate for the Council’s present requirements with Employer’s and Public
Liability standing at £10 million and £15 million respectively, together with Fidelity Guarantee
cover at £700,000 and Business Interruption “Loss of Revenue” cover in place at £125,554.
We have discussed the Council’s arrangements for the review of play / sports equipment and
grounds safety noting that, following significant weaknesses identified by the independent
external contractor’s review, urgent action and significant expenditure has been incurred in the
current year to ensure the equipment is brought back to an appropriate and “safe” condition or
been replaced where deemed necessary. We also note that the Council’s own operative
undertaking frequent inspections has completed a refresher training course, but due to his
sickness absence South Somerset DC have been undertaking the routine inspections and are
likely to continue doing so for the foreseeable future.
Conclusions and recommendation
As indicated previously and in our certificate on the year’s AGAR, urgent action is required
to ensure that the Council complies with the requirements of the G&AM reviewing and
formally adopting an appropriate financial risk register at least once each financial year. The
Council should either use / review and update the LCRS software already in place or develop
an appropriate alternative register: we have provided a suitable document as used by some of
our other clients, which the Council may consider a more appropriate form of financial risk
register for day-to-day use.
R5.

The Council must ensure compliance with the requirements of the Governance and
Accountability Manual ensuring that an appropriate financial risk register is in place, is
reviewed and, where appropriate, updated and formally re-adopted at least once in every
financial year.

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 the Council has discussed and approved its budget and precept
requirements for 2020-21 at the January 2020 full Council meeting, setting the latter at
£645,663.

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We are also pleased to note that members continue to be provided with detailed budget
performance information based on the Omega accounting software at regular intervals
throughout the financial year. We have reviewed the final budget outturn seeking explanations
for any significant variances existing by reference to the relevant nominal account codes in the
Omega software with no residual or unexplained variances noted warranting further explanation
or enquiry.
We have reviewed the level of retained reserves at the financial year-end noting that funds
totalling £824,406 are held at 31st March 2020 (£937,388 as at 31st March 2019), comprising the
General Reserve balance of £243,406 (£380,384 at the prior year-end), together with “ring
fenced capital receipts” of £5,862 and total earmarked reserves of £575,305 (£591,142 at 31st
March 2019). The General Fund balance equates to between 3 and 4 months’ revenue spending
at the present level and is considered appropriate for the Council’s ongoing revenue spending
and development plans, but should not be allowed to diminish further.
Conclusions
We are pleased to record that no issues arise in this area warranting formal comment or
recommendation at present and will continue to monitor the level of retained reserves at
future visits.

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 of any cash income are in place and that
income due to the Council is recovered within a reasonable time span.
We have re-examined the Omega Sales Ledgers “All unpaid invoices” reports as at 31st March
2020 noting that on ledger 1, one long standing overpayment of £5.00 (Chard United –
16/11/2017) and on Ledger 2 (Bookings) one long standing debt exists (CAB – 15/1/19). The
apparent £5.00 overpayment should now be written off as miscellaneous income as it seems
unlikely that the club will seek recovery of the overpayment. We understand that, as the Council
is providing financial support to the CAB, the outstanding debt is due to be presented to the
Council in March for probable write-off action: whilst the minutes confirm approval for the
write-off of two bad debts, we have been unable to determine who they related to and will
revisit this area at our interim 2020-21 visit .
We have examined a sample of 11 burials since 1st January 2020, ensuring that the appropriate
fees were invoiced, noting that invoices had yet to be raised for the three interments in February
2020. We also ensured that an appropriate undertaker’s application form was held for these
interments although documentation for some of the latest interments had not been received from
the undertakers at the time of our review. Similarly, we examined a sample of income in relation
to 10 memorial fees dating from 1st December 2019 ensuring that the appropriate fees were
charged and recovered, with 2 invoices awaiting issue at the time of our review.
We obtained a current print of the RBS allotments register for the year commencing 1st October
2019 checking to ensure that, for each occupied plot and incumbent tenant recorded thereon, an
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appropriate invoice had been raised and fees recovered accordingly. We have calculated the
total income due based on the fee chargeable for full and half plots for the year ensuring that the
Omega nominal income code for the year reflects the appropriate income as having been
received: a de minimus shortfall appears to exist due to the repayment of a few fees where
tenants have relinquished their plots, whilst total income received, excluding these refunds,
exceeds that budgeted for the year.
The RBS allotments software includes provision for full detail of allotment plots, the tenant’s
name, rent due and date paid, the latter requiring manual data entry. This element of the package
did not appear to have been applied fully and we suggested that, in order to provide a
comprehensive audit trail, this element of the software package should be routinely applied with
the date of receipt recorded.
We reviewed the procedures for recording bookings of rooms at the Guildhall at our interim
update visit, selecting a two-week period at the start of November 2019. The Council uses the
RBS bookings package to manage the bookings with invoices raised automatically by the
software. Consequently, we ensured that appropriate invoices were raised for the bookings in
the selected period and also checked to ensure that payment was received in a reasonable time
frame noting that only one cancellation fee charge remained unpaid at that time.
We have, as part of this final review examined a sample of market rental income collection
sheets for five weeks in June 2019 ensuring that the register of attendees has been completed
appropriately, also ensuring that the total funds collected have been banked and brought to
account accordingly in the Council accounts. We have also ensured that income received from
“sponsorship” of flower baskets in the town has been received and brought to account
appropriately by reference to the underlying spreadsheet control record.
Conclusions and recommendation
Whilst no significant issues arise in this area, as indicated above, detail of receipt dates of
allotment income should be manually entered to the software.
R6.

Detail of the receipt dates of allotment income should be entered into the RBS allotments
package in order to provide a clear and comprehensive audit tail confirming receipt of the
rents due.

Petty Cash Account
We are required, as part of the Annual Internal Audit Report 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, the balance being topped-up generally at each month-end during the year from the
Current account.
We examined transactions for two months in the year (November and December 2019) at our
interim visit ensuring that the detail on the spreadsheet summary record maintained was
appropriately supported by trade invoices or till receipts.
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We noted a number of instances in the period examined where, albeit only small amounts were
involved, VAT had not been identified on a number of till receipts bearing VAT registration
numbers and had, consequently, not been coded to the VAT control account for recovery.
We also checked the physical cash held on the date of our interim update visit and were pleased
to record that the combined cash and un-reimbursed expenses tallied with the £300 imprest cash
holding. We did, however note that the Omega control account balance as at 31st January 2020
totalled £262.46, an apparent shortfall / error of £37.54.
Conclusions and recommendation
We drew the above two relatively insignificant matters to the attention of the Deputy Town
Clerk / RFO, who agreed to examine the position and ensure that the apparent Omega
control account imbalance was corrected and that VAT was identified for recovery in future.
R7.
R8.

The Omega petty cash control account should be reviewed and corrected to ensure that
the true petty cash holding of £300 is identified thereon.
Where till receipts bear a VAT registration number and vatable supplies are obtained, the
VAT expended should be calculated and coded appropriately in Omega for recovery.

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 (Lentells) to prepare the monthly payroll, who also process the monthly
payments through the Council’s Co-op bank account and provide the Council with full
supporting documentation, including copy payslips. At our interim update visit, we: ➢ Obtained a copy of the staff establishment ensuring that all staff salaries paid in October
2019 were in line with the RFO’s record of NJC scale points and basic working hours, as
applying from 1st April 2019, following the significant revisions to the national NJC
scales effective from that date
➢ Checked the October 2019 NI / tax and pension deduction calculations by reference to
the relevant HMRC and Pension Fund Administrator’s detailed tables
➢ Duly agreed the amounts paid to individuals in October 2019 by reference to their
payslips, and
➢ Agreed the HMRC analysis in the Lentells reports to HMRC payment recorded on the
Omega control account.
Conclusions
We are pleased to record that no issues arise in this area.

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We wish to draw the Clerk’s attention to the changed rules as regards recording of Staff Cost
expenditure in Box 4 of the AGAR which come into effect from the 2020-21 financial year:
the JPAG Practitioner’s Guide 2020 refers at Page 17.

Asset Registers
We have noted previously that DCK Accounting (the Council’s externally contracted
accountants) provide the Council with detail of assets and their values in the Statement of
Accounts prepared by them as at 31st March annually taking account of asset movements in the
year.
We have similarly noted acquisition of the Pear Technology Asset Register software and that
data had been duly entered based on the asset register detail maintained by the contract
accountants. We understand that, due to staff shortages during the year, the Pear software has
not been fully updated, but that the contract accountants have been provided with appropriate
detail of new acquisitions during the year, detail of which has been recorded in their detailed
Statement of Accounts and forms the foundation of the value reported in the year’s AGAR at
Section 2, Box 9.

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Conclusions
No issues arise in this area warranting formal comment or recommendation, although we
urge that officers ensure that the asset register detail is brought fully up to date and provides
a mirror image of the summarised detail in the Statement of Accounts prepared on behalf of
the Council by DCK Accounting.

Investments and Loans
As indicated earlier in this report the Council holds surplus funds in three accounts with the Coop bank together with two term deposits with Nationwide Building Society. Whilst we are
pleased to note the increased interest received in 2019-20 (over prior years) we remain
concerned that, with such significant sums held in only two banking institutions, the Council is
potentially at a high degree of risk of loss should either bank “fail” and suggest that the Council
considers a greater degree of diversification of its surplus funds.
Whilst we cannot act as financial advisors, several of our clients have placed surplus funds with
CCLA in their Deposit Fund Account which offered a better rate of interest than most High
Street banks and suggest that consideration be given by members to this as one option for the
future placement of a degree of the Council’s surplus funds.
As advised last year, Central Government legislation changed with effect from 1st Aril 2018
requiring all councils with balances in excess of £100,000 to develop an appropriate Investment
Policy / Strategy (this previously only applied to councils with funds in excess of £500,000). We
note that the Council’s Treasury Management Policy has been examined with the Council
resolving , at its meeting in February 2020, to move surplus funds to an “instant access account”
with the further intention of re-examining the Treasury Management Policy in the near future.
This has, obviously, been put on hold in the present Covid-19 circumstances.
The Council has one outstanding loan repayable half-yearly to PWLB: we have verified the two
repayment instalments for the financial year by reference to the PWLB demand advices also
now confirming the value of the outstanding loan liability as at 31st March 2020 by reference to
the PWLB website where all local government loan detail is published as at each financial yearend.
Conclusions and recommendations
The Council should ensure that surplus funds are appropriately “invested” to maximise
interest earning potential, whilst ensuring, as far as they are reasonably able, that public
funds are securely invested.
R9.

The Council should ensure compliance with current regulations reviewing the existing
Treasury Management Policy and / or developing an appropriate Investment Policy /
Strategy.

R10. Consideration should be given to the diversification of surplus funds in other banking
institutions to minimise the risk of loss should, albeit probably unlikely, the existing banks
should ever “fail”, also ensuring that interest earning opportunities are maximised.
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Statement of Accounts and AGAR
The AGAR forms the Council’s statutory annual Statement of Accounts subject to external audit
review and certification. However, as at many councils, DCK Accounting are contracted to
prepare a more detailed Statement of Accounts, which provides members and the electorate with
more informative detail of the Council’s financial standing and activities.
We have reviewed the content of the detailed Statements ensuring consistency with the
underlying financial and other supporting records and are pleased to report that no significant
errors or anomalies have been identified therein or in the financial data to be reported at Section
2 of the AGAR. We noted one minor typographical error in the detailed Accounts where the
“Balance Sheet” title actually refers to it as the “Income and Expenditure Account”, which the
Council may wish to ask DCK Accounting to amend before adopting the Accounts.
Conclusions
No additional issues arise to those previously referred to in this report warranting further
comment or recommendation and, based on the work undertaken during the course of our
two visits to the Council and this remotely conducted year-end review for 2019-20, we have
duly signed off the Internal Audit Certificate in the AGAR assigning positive assurances in
each relevant area, with the exception of that relating to risk management where we have had
to give a negative assertion, as will the Council in the Governance Statement at Section 2,
Box 5.

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Rec.
No.

Recommendation

Response

Review of Accounting Arrangements and Bank Reconciliations

Comments in red : RFO

R1

Action should be taken to ensure that the recipients of all long-standing uncleared cheques are
contacted to determine whether they still hold the cheques or require replacements, with the original
entries reversed in the cashbooks where appropriate.

These have been resolved and cleared appropriately.

R2

The nature of the uncleared deposit dating back to July 2019 should be examined and appropriate
action be taken to ensure its clearance through the bank (if appropriate) or from the accounting
records

The bank have credited a different amount to that banked
via the post office. Awaiting correction/reply

Review of Corporate Governance
R3

The Standing Orders and Financial Regulations should be subjected to further review and update to
ensure compliance with extant legislation (e.g. reference to the 2015 Public Contracts Regulations),
best working practice and the impact of the UK’s departure from the EU.

Standing orders were adopted at the Council meeting on
2nd March but these do not include - Changes to reporting
meetings, FOI and Public Contracts Regulations so still
must be reviewed again. Financial Regulations are
awaiting the scheme of delegation/terms of reference for
committees.

R4

The Council should ensure that in line with best practice and the Accounts and Audit Regulations
2015 it publishes all required and as much relevant information on its website as practicable: this
should include all minutes, excepting those of a confidential nature.

The local government Act includes :
As soon as reasonably practicable after a meeting of a principal
council to which this subsection applies, and in any event
before the end of the period of five working days beginning with
the day on which the meeting is held, the council must publish
electronically a note setting out—
(a)the names of the members who attended the meeting, and
any apologies for absence;
(b)any declarations of interests;
(c)any decisions taken at the meeting, including the outcomes
of any votes, but excluding anything relating to a decision taken
when the meeting was not open to the public as discloses
exempt information.

It also includes
Any document which is required by subsection (1) above to be
open to inspection shall be so open at least [F3five clear days]
before the meeting

Assessment and Management of Risk
R5

The Council must ensure compliance with the requirements of the Governance and Accountability
Manual ensuring that an appropriate financial risk register is in place, is reviewed and, where
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There has been no progress in this area and, as indicated,
a negative response will need to be given in Box 5 of the
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appropriate, updated and formally re-adopted at least once in every financial year.

year’s Governance Statement.

Review of Income
R6

Detail of the receipt dates of allotment income should be entered into the RBS allotments package in
order to provide a clear and comprehensive audit tail confirming receipt of the rents due.

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Receipt dates are entered on the RBS allotment package
as payments are received throughout the year. A full
audit by the RFO has accounted for a payment for every
current plot. Non-payments have all been dealt with by
way of notices to quit as per standard procedure.

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Rec.
No.

Recommendation

Response

Review of Petty Cash
R7

The Omega petty cash control account should be reviewed and corrected to ensure that the true petty
cash holding of £300 is identified thereon.

R8

Where till receipts bear a VAT registration number and vatable supplies are obtained, the VAT
expended should be calculated and coded appropriately in Omega for recovery.

Petty cash has been balanced correctly at the end of each
month. The control account was showing a slight
difference due to entries being shown in gross rather than
net figures. Re-training has been provided by the RFO
and this has now been corrected.
Noted for future entries.

Investments and Loans
R9

The Council should ensure compliance with current regulations reviewing the existing Treasury
Management Policy and / or developing an appropriate Investment Policy / Strategy.

The reserves aspect of the policy is now dealt with under
the Councils Reserves policy. On 17th February Full
Town Council resolved to move all funds currently held
with the Nationwide to an instant access account. The
Treasury management policy will be amended accordingly
but will need further review.

R10

Consideration should be given to the diversification of surplus funds in other banking institutions to
minimise the risk of loss should, albeit probably unlikely, the existing banks should ever “fail”, also
ensuring that interest earning opportunities are maximised.

the FSCS (Financial Services Compensation scheme
provides cover automatically compensate up to £85,000
per eligible person, per bank, building society or credit
union. The funds in 3 of the Council’s accounts total in
excess of £840,000 which, were the Council to totally
protect the funds would require the spread of funds over
10 banks.

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