Internal Controls Policy
GOSBERTON PARISH COUNCIL
Internal Controls Policy
1. SCOPE OF RESPONSIBILITY
Gosberton 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, the Council is also responsible for ensuring that there is a sound system of internal control which facilitates the effective exercise of the Council’s functions and which includes arrangements for the management of risk.
2. 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 identity and prioritise the risks accordingly.
Internal Controls are set up by the Clerk who is the Responsible Financial Officer but the Council Members must ensure that they have an understanding of those controls and that they are operated effectively.
3. THE INTERNAL CONTROL ENVIRONMENT
The Council:
• Appoints a chairman to be responsible for the smooth running of meetings and for ensuring that all Council decisions are made in accordance with the Standing Orders and the Financial Regulations approved by the Council.
• Considers a draft budget for the following year produced by the Clerk/RFO at the December meeting; and approves the final budget and sets the level of precept for the following financial year at its January meeting.
• Meets 9 times per year and monitors progress against its aims and objectives by receiving notes from Committee meetings, updates from the Clerk and councillors and relevant reports from the Clerk.
• Carries out regular reviews of its internal controls, systems and policies/procedures.
• Receives a financial report quarterly which includes a budget report and a copy of the latest bank reconciliation.
• Appoints 2 councillors to be signatories on the Council’s bank accounts, and regularly reviews this.
• Approves the list of payments and receipts at each Council meeting.
The 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 the 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 systems and policies are adhered to
• Retains all relevant documents, relating to finances for 6 years (Annual Return, VAT Returns, PAYE/NIC information, public notices, Fixed Asset register, Risk assessments, accounts and supporting information)
• Produces the end of year accounts
• Drafts the budget for consideration by the Council
• Submits all requested information to the Internal and External Auditor by the required date
• Arranges for the public notices to be displayed
4. 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.
The effectiveness of the internal audit is reviewed annually, and the appointment of the Internal Auditor is approved.
& 2 of the Annual Governance & Accountability Return (AGAR) and completes the Internal Audit report page.
The findings of the Internal Auditor are copied to all members of the Council and considered at the next Council meeting.
5. STANDING ORDERS AND FINANCIAL REGULATIONS
The Council has adopted standing orders and financial regulations, based on model versions 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 Council.
All financial transactions must adhere to financial regulations, and if not, the Council will explain in the minutes of the meeting why financial regulations have been suspended.
6. CASH BOOK/BANK RECONCILIATIONS
The cash book is kept online using EasyPCAccounts, maintained up to date from original documents (such as invoices, payments and cheques) and bank transactions.
The cash book is reconciled to the bank statements monthly and checked and signed by a councillor.
7. PAYMENT CONTROLS
All payments must be presented to full council for approval and the list of payments and resolution to pay must be minuted.
Any payments made prior to full council approval must be presented for retrospective approval at the next council meeting.
Payments are made by BACS, Cheque, Standing Order and Direct Debit. All instructions for payment are authorised by two councillors or one councillor and the Clerk prior to being paid.
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 authorising the payment.
Any additional payments not included on the list for approval which is included in the meeting report pack will be emailed to councillors on the morning of the re.
Petty cash in no longer used.
All payments are entered onto the cashbook.
8. INCOME CONTROLS
The Clerk/RFO ensures that amount of the precept received is correct and in accordance with the precept request send to the district council.
The Clerk/RFO ensures invoices are sent on time to collect income.
The Clerk/RFO ensures that the other receipts (e.g., Bank interest, rents, cemetery fees etc) are received when due and correctly calculated.
Receipts are issued for cash received.
Income is banked promptly.
9. PAYMENT CONTROLS
All Staff member’s salaries are set as per contract and reviewed annually by the Staffing Committee.
The payroll is managed by Salway and Wright accountants.
The Clerk’s overtime is authorised by the Chairman of the Staffing Committee prior to being paid.
The Clerk’s payslip is emailed to the Clerk and Chairman for review prior to being paid by BACS.
The Clerk/RFO ensures that all necessary payments are made to HMRC/NIC.
10. ASSET CONTROL
The Clerk/RFO maintains a full Asset Register which is reviewed annually by the full Council.
The existence and condition of assets are checked on an annual basis by the Council.
The adequacy of insurance of the Parish Council’s assets is considered by the council, annually in advance of the insurance renewal.
11. VAT REPAYMENT CLAIMS
The Clerk/RFO ensures that all invoices are addressed to the Council
The Clerk/RFO ensures that proper VAT invoices are received where VAT is payable.
VAT is calculated and processed by reclaim quarterly and submitted electronically.
This document is to be submitted to Council for approval on 22nd August 2022
Reviewed 21st August 2023
Next review date; August 2024