1.1 The Accounts and Audit Regulations 2003 together with the Accounts and Audit (Amendment) (England) Regulations 2006 require a Statement of Internal Control, prepared in accordance with proper practices in relation to internal control to be
included with the annual accounts. The statement will be revised and updated on an annual basis.
1.2 Rock Parish Council are responsible for ensuring that its business is conducted in accordance with the law and proper standards and that public money is safeguarded, properly accounted for, and used economically, efficiently and effectively.
1.3 In discharging this overall responsibility, the Parish Council are also responsible for ensuring that there is a sound system of internal control which facilitates the effective exercise of its functions and which includes arrangements for the management of risk.
1.4 Rock Parish Council have a Finance Committee that looks at all Financial Matters, reviews banking arrangements and prepares a Draft Budget for approval by the Parish Council.
2. The Purpose of the System of Internal Control
2.1 The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness.
The system of internal control is based on an ongoing process designed to:
- identify and prioritise the risks to the achievement of the Parish Council policies, aims and objectives;
- to evaluate the likelihood of those risks being realised and the impact should they be realised, and
- to manage them efficiently, effectively and economically.
2.2 The system of internal control will be adopted by the Parish Council for implementation from 1st January 2018.
3. The System of Internal Control
3.1 The system of internal control is based on:-
- Standing orders governing the conduct of meetings of the Parish Council;
- Financial Regulations governing financial conduct;
- Management information and instruction disseminated from the Parish Council /Chairman through the Clerk & RFO;
- Administrative procedures (including segregation of duties) as stipulated in the Financial Regulations and
- Management supervision with a system of delegation and accountability.
3.2 The development and maintenance of the system is undertaken by Clerk & RFO of the Parish Council. In particular the system includes:-
- Comprehensive budgeting and accounting systems;
- Regular reports to the Parish Council on Accounts Paid, and
- The preparation of financial reports which indicate estimated and actual expenditure against forecasts.
4. Internal Audit
4.1 The Parish Council have appointed Mr. Peter Phillips CPFA, as Internal Auditor. Mr. Phillips is a qualified accountant with a Local Government background who works independently of the Parish Council within a clearly defined remit which meets the requirement of External Audit.
4.2 The remit is to audit accounting records and the system of internal control in accordance with the Accounts and Audit Regulations 2003/2006 and the CIPFA Code of Practice for Internal Audit in Local Government.
4.3 The reporting arrangements are through the Clerk & RFO to the Parish Council. The Internal Auditor gives a written report and is available to attend meetings if required.
5. External Audit
5.1 The Audit Commission have appointed Grant Thornton as the Parish Council External Auditors for 2016/2017 although this will be their last year and we await the announcement of who our new External Auditors for 2017/2018 will be.
5.2 The Parish Council are required to submit an Annual Return to include Annual Accounts, Statement on Internal Control and Internal Auditors report by a stipulated date.
5.3 Following completion of the audit, the Auditor will provide the Parish Council with an Audit Opinion.
6. Review of the Effectiveness of the system of Internal Control
6.1 The review is informed by:-
- Reports from the Clerk & RFO
- The Work of the Internal Auditor
- The External Auditors Opinion