Asterby and Goulceby Parish Council
Internal Financial Control
Date of next review: December 2023
- Scope of Responsibility
Asterby and Goulceby Parish Council (the Council) is a local authority funded by public money and is responsible for ensuring its business is conducted in accordance with the law and proper standards and that public money is safeguarded, properly accounted for, used economically, efficiently and effectively.
In meeting this responsibility assurance is required that there is a sound system of internal control and that the Council’s accountability framework is ‘risk’ based; proportionate to that risk and to the amounts of public money involved and to the stakeholders’ need for assurance.
- The Purpose of the System of Internal Control.
The system of internal control is designed to ensure that risks are managed to a reasonable and acceptable level forming part of an ongoing process designed to identify and prioritise the risks to the authority’s policies, aims and objectives and to evaluate and manage those risks accordingly.
- The Internal Control Environment
- Appoints a Chairman to be responsible for the smooth running of meetings and for ensuring that all Council decisions are lawful with the clerk’s advice.
- Reviews its obligations and objectives and approves budgets for the following year at its January meeting. This meeting also approves the level of precept for the following financial year.
- Meets at least 4 times each year and monitors progress against its aims and objectives.
- Reviews the effectiveness of its internal controls at least once a year.
The Council Clerk to the Council/Responsible Financial Officer:
- Is appointed by the Council to act as the Council’s advisor and administrator
- Is the Council’s Responsible Financial Officer and is responsible for administering the council’s finances in accordance with all relevant legislation
- Is responsible for the day to day compliance with laws and regulations that the Council is subject to and for managing risks
- Ensures that the council’s procedures, control system and policies are adhered to.
- Standing Orders:
The Council has adopted the Model Standing Orders as recommended by N.A.L.C.
- Internal Audit:
An annual audit is carried out by an independent Internal Auditor who reports to the Council on the adequacy of its records, procedures, systems, internal controls, regulations and risk management reviews.
- Financial Regulations
6.1 The Council has adopted financial regulations, based on the model version prepared by NALC/SLCC. The regulations are reviewed annually for continued relevance and amended where necessary by the Clerk/RFO with any proposed amendments subject to approval by the Parish Council order/tender control processes.
6.2. The Financial Regulations of the Council specify the number of estimates, quotes or full tenders that must be invited depending on the value and nature of the work.
6.3. Official orders/letters are sent to suppliers for services which are not regular in nature.
- Financial Reporting
7.1 A Budget control, comparing actual receipts and payments to the planned budget is prepared on a quarterly basis, presented to the council in advance of the meeting and is included as an appendix in the minutes.
7.2 The budget is prepared in consultation with the Councillors, as evidenced by reports and
minutes in advance of the start of the year.
7.3 The precept is set on the basis of the budget by the deadline set by the district council.
8.1 The cash book is kept electronically using a spreadsheet, maintained up to date from original documents (such as invoices, payments and cheques) and bank transactions.
8.2. The cash book is reconciled to the bank statement quarterly in preparation for every meeting by the RFO.
8.3. At each council meeting, the cash book, payments and receipts and bank reconciliation
are reviewed and approved by one member of the Council who is not a signatory, with reference to the underlying records (bank statements, minutes, copies of relevant accounting papers etc.).
8.4. The bank reconciliation is included in the minutes as an appendix.
- Banking Arrangements
9.1. The council has one current account with the Lloyds Bank.
9.2. The Clerk/RFO maintains control of the cheque book, but is not a bank signatory.
9.3. At least 3 councillors are bank signatories.
9.4. Two signatures are required to authorise all payments.
9.5. The Clerk/RFO has access to the bank account as an administrator only.
9.6. Any changes to bank mandates will require two signatories.
- Payment Controls
10.1. All payments must be presented to full council for approval and the list of payments and resolution to pay must be minuted.
10.2. Any payments made prior to full council approval must be presented for approval at the next council meeting.
10.3. With the exception of the Clerks salary, (which is made by standing order) all payments are made by cheque which is signed by 2 councillors.
10.4. All payment requests must be presented with a receipt or invoice which corresponds to the amount of the payment, and must be checked and signed by the councillors signing the cheque.
10.5. The cheque stub must be initialled by the councillors who sign the cheque.
10.6. No petty cash is held.
10.7. All payments will be entered onto the financial control spreadsheet.
10.8. Arrangements for emergency payments not exceeding £100 may be approved by the Chairman at the request of the Clerk, and must be presented for approval at the next meeting of the council.
11.1. The Clerk/RFO ensures that the amount of the precept received is correct in accordance
with the precept request sent to the district council.
11.2. The Clerk/RFO ensures that the precept instalments are received when due.
11.3. The Clerk/RFO ensures that other receipts (e.g.deposit interest, rents etc) are received when due and correctly calculated.
11.4. Receipts are issued for cash received. Receipt numbers are recorded against payments
11.5. Income is banked promptly.
- Payroll Controls
12.1. The Clerk/RFO’s salary is set, as per contract and reviewed annually by full council in December.
12.2. The Clerk/RFO Salary, Pension and PAYE is calculated by the RFO.
12.3. PAYE submission is completed using HMRC PAYE tools and a salary slip printed from the PAYE site.
12.4. Two members of the council sign the salary slips to ensure payment and tax calculations are correct.
12.5. The Clerk/RFO ensures that all the necessary payroll returns are made to HMRC and retains evidences that this has been done.
- Asset Control
13.1. The Clerk/RFO maintains a full Asset Register.
13.2. The existence and condition of assets is checked on an annual basis by members of the
13.3. The adequacy of insurance of the Parish Council’s assets is considered by the council, annually in advance of the insurance renewal.
- VAT Repayment Claims
14.1. The Clerk/RFO ensures that all invoices are addressed to the Parish Council.
14.2. The Clerk/RFO ensures that proper VAT invoices are received where VAT is payable.
14.3. VAT is calculated and processed for reclaim annually and submitted electronically.
This document was formally agreed by Full Council on 06.12.2021