External Auditor Certificate and Opinion 2015/16 (main extracts only)
Matters Reported
Period for the exercise of public rights and late approval of the Annual Governance Statement and the Accounting Statements
Laneast Parish Council approved its Annual Governance Statement and Accounting Statements on 6 September 2016, with a commencement date for the commencement of public rights on 8th September 2016. This means that the Parish Council has not approved and published the Annual Governance Statement and Accounting Statements by June 30th 2016. Section 14(1) of the Regulations stipulates that any rights of objection, inspection and questioning of the external Auditor conferred by Sections 26 and 27 of the Act may only be exercised within a single period of 30 working days and Section 15(1)(b) stipulates that the commencement of the period for the exercise of public rights covers the first 10 working days of July of the financial year immediately following the end of the financial year to which the Statement relates. Due to the late approval of the Accounting Statements, the Parish Council has not met the requirements of the Act and the Regulations although it has allowed 30 working days for any inspection of the accounts. As the External Auditor, this year we have withheld our certification of the Annual Return until the end of the period published by the Parish Council in its Notice to ensure that public rights are not perceived to be denied due to an incorrect Notice and late approval of the accounts.
In the future, the Parish Council must ensure that it complies with the Local Audit and Accountability Act 2014 and the Accounts and Audit Regulations 2015 to ensure that the Annual Governance Statement and Accounting Statements are approved and published by 30th June and the dates for the exercise of public rights are properly calculated and published and cover a single period of 30 working days in line with statute.
In our view, the Parish Council has not complied with the Accounts and Audit Regulations 2015 and the Local Audit and Accountability Act 2014 in respect of approving and publishing the Annual Governance Statement and Accounting Statements by 30 June 2016. The correct response to Assertion 1 on Section 1 of the Annual Return in 2015/16 should be ‘No’.
The Parish Council should also consider the impact of this failure on its disclosures in the 2016/17 Annual Return. The correct response to Assertion 4 on Section 1 should be ‘No’.
Other matters not affecting our opinion which we wish to draw to the attention of Laneast Parish Council for the year ended 31 March 2016
Order of signing the Annual Governance Statement (Section 1) and the Accounting Statements (Section 2)
The Parish Council has considered, approved and signed the Annual Governance Statement (Section1) and the Accounting Statements (Section 2) on the same day and under the same Minute reference. The Accounts and Audit Regulations 2015 stipulate that the Annual Governance Statement must be considered, approved and signed before the Accounting Statements at Section 2 by Resolution of members of the Authority meeting as a whole. In future, the Parish Council should ensure that the Minute references clearly demonstrate that the Annual Governance Statement was considered, approved and signed before the Accounting Statements.
Signing the Annual Return
The Chair has signed Section 2 as the Responsible Financial Officer and Chair. We understand that this is due to last minute circumstances of the Responsible Financial Officer falling ill.
The Clerk to a Local Council is the ‘Proper Officer’ appointed under the Local Government Act 1972. The person appointed has a statutory duty to carry out all the functions of the Council, including to advise councillors, produce all the information required for making effective decisions and implement decisions. He/she is accountable to the Council for the effective management of all its resources and may also be the ‘Responsible Financial Officer’, as required by Section 151 of the Act, responsible for all financial records of the Council and the careful administration of its finances. Councillors are responsible for governance including determining council policy and monitoring and reviewing performance in delivering services and managing resources. In order to maintain the governance role separately from the management role, councillors, and in particular the Chair, should not be appointed, even on a short term basis, as either the ‘Proper Officer’ (the Clerk) or the ‘Responsible Financial Officer’.
The Parish Council has, however, identified this as exceptional circumstances. Where this happens the Council should carry out a full risk assessment, consider actions to mitigate the risks, minute this and seek to fill the post as soon as possible.
Further guidance on the role of officers and councillors can be found in ‘Governance and Accountability for Local Councils – A Practitioner’s Guide’ (England) and at Regulation 4 of the Accounts and Audit Regulations 2015.
Grant Thornton UK LLB dated 21/10/16
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