INTERNAL AUDIT REPORT – 2022/2023
LAMESLEY PARISH COUNCIL 

1.	Background
1.1.	Local Councils in England and Wales (Parish Councils, Town councils) are expected to complete an Annual Governance and Accountability Return (AGAR) in summarising their annual activities at the completion of each financial year.  When income and expenditure does not exceed £25,000 then a certification of exemption must be completed along with Part 2 of the AGAR.
	
1.2.	One of the parts within the AGAR is to be completed by the Council’s internal auditor, who gives an opinion of the Council’s internal controls.

2.	Objectives of the Audit
2.1.	To examine the system of internal controls with regard to the AGAR and to ensure that the Parish Council may obtain an adequate level of assurance for its activities.

3.	Scope of the Work and the areas of Audit Work examined.
3.1	The Scope of Work covers the control tests identified in in the AGAR and no other internal audit work was carried out.

3.2.	The following areas of activity have been examined and tested by the Internal Auditor:
•	Payroll
•	Creditors
•	Risk Management
•	Income collection and Banking arrangements
•	Assets
•	Debtors
•	Budgetary Control (including year-end procedures)

3.3.	The audit findings of this report have been discussed with the Clerk to the Council and any audit recommendations have been agreed with her.

4.	Findings
4.1.	Payroll
4.1.1	The Parish Council has 1 employee (Clerk) who works standard hours per week and is paid by cheque every month, after submission to the on line HMRC system.  Payroll information is not shown with the accounts payments schedule so as provided for Councillors to confirm the payments. 

4.1.2.  I examined the wages paid to the Clerk(s) from their contract of employment for the 		financial year 2022/23.

4.2.	Creditors
4.2.1.	There is no separation of duties regarding Finance and Administration at Lamesley Parish Council, as the Clerk is the Officer responsible.  However, compensating checks are carried out by Members, who agree the payment of accounts each month.
	
4.2.2.	The Council has Financial Regulations, where all payments are to be signed by 2 	authorized signatories at Council meetings.  
	On examining the payments, it was found that payments were not presented at Council 	meetings. On discussing this with the Current Clerk (who commenced in March 2023) 	she is aware of this and has ensured that this is being carried out.

4.2.3.	I examined all payments for 2022/23 to the statement of accounts and all invoices could be found and recorded cheque number on them.
 
4.3.	Governance including Risk Management
4.3.1.	The Council has Standing Orders which are still fit for purpose and a financial risk assessment and the Council agreed Financial Regulations at a meeting on 8th August 2022.

4.3.2.	The Parish Council has a very small budget with only 1 employee, and therefore its risks 	are considered to be very low.  

4.3.3.	A completed statement of accounts for 2022/23 was completed which reconciled to the 	bank statements.

4.3.4.	Some minutes did not confirm the previous months minutes and were not signed by the Chair.  Again, on discussing this with the current Clerk, she is aware of this procedure and is currently ensuring this is carried out.

4.3.5.  No statement of internal control had been completed, although I understand that a report is to be submitted soon.

4.3.6.	I could not find evidence that the announcement of the public rights for 2021/22 was 	completed.

4.4.	Income collection and Banking arrangements 
4.4.1.	During the year income for the Council was from the precept .and a vat claim.

4.4.4.	The Council has 3 bank accounts:
		- Current account
		- Memorial account
		- Contingency account
	
4.4.5.  I reconciled the bank statemen of the accounts at the end of the year to the Receipts and Payments records.
 
4.5.	Accounting Records 
4.5.1.	The receipts and payments are recorded on a spreadsheet, with  vat.

4.6.	Security/Assets
4.6.1.	The Council does not hold any assets.

4.7.	Debtors
4.7.1.	The Council does not receive any income from debtors.

4.8.	Budgetary Control and Budget Setting
4.8.1.	I could not establish if the budget for 2023/24 had been discussed or if the precept was agreed for the coming year.  
 
4.8.2  I understand that with having a very small budget I understand that no budgetary control is carried out until the budget setting process begins.

5.	Conclusions/Recommendations
5.1.	Improvements had been made from the previous year although governance arrangements can be improved, and the current Clerk is aware of this regarding.

5.2.   Invoices should be presented at each monthly council meeting and 2 coucillors confirm these payments. 

5.3    A proper budget setting process be carried out to determine the budget for the next year  which then determines the precept
5.4.   Minutes should be show the agreement of the previous meeting and be signed by the Chair 
5.5.	The notice of public rights should be agreed by Council and placed on the Councils website.
5.6	I would recommend that a follow up audit is carried out after 6 months to confirm the actions above.

Gordon Fletcher (C.M.I.I.A.)
Internal Auditor,
Date: 16th May 2023