Newtown Parish Council
Internal Audit Report 2024-25
Sally King
For and on behalf of
Auditing Solutions Ltd
Newtown Parish Council 2024-25 11/05/2025 Auditing Solutions Ltd
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Background
Statute requires all town and parish councils to arrange for an independent internal audit
examination of their accounting records and system of internal control and for the conclusions to
be reported each year in the Annual Governance and Accountability Return (AGAR).
We have undertaken our review for the year remotely: we wish to thank the Clerk for assisting in
the process, providing all necessary documentation in electronic format to facilitate completion of
our review for the year and sign off the Internal Audit Certificate in the year’s AGAR.
This report sets out the work undertaken in relation to the 2024-25 financial year and was
concluded at our office on 11th May 2025.
Internal Audit Approach
In undertaking our review for the year, we have again had regard to the materiality of transactions
and their susceptibility to potential misrecording or misrepresentation in the year-end Statement of
Accounts / AGAR. Our programme of cover, as applied to all clients, is designed to afford
appropriate assurance that the Council’s financial systems are robust and operate in a manner to
ensure effective probity of transactions and to afford a reasonable probability of identifying any
material errors or possible abuse of the Council’s own and the national statutory regulatory
framework. The programme is also designed to facilitate our completion of the ‘Internal Audit
Report’ in the Council’s AGAR, which requires independent assurance over several internal
control objectives.
Overall Conclusion
We have concluded that, based on the programme of work undertaken during our audit this year,
the Council maintains more than adequate and effective internal control arrangements. We are
pleased to acknowledge the quality of records maintained by the Clerk and thank her for her
assistance, which has ensured the smooth progress of our review process.
We have completed and signed the ‘Annual Internal Audit Report’ in the year’s AGAR, having
concluded that, in all significant respects, the control objectives set out in that report were being
achieved throughout the financial year to a standard adequate to meet the needs of the Council.
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Detailed Report
Maintenance of Accounting Records & Bank Reconciliations
The Clerk has continued to maintain the Council’s accounting records using an excel spreadsheet
with suitable columnar analysis, which we consider perfectly adequate for the needs of the
Council given the low volume of annual transactions. The Council funds continue to be held in
three bank accounts with Lloyds Bank PLC, reporting on a Receipts & Payments basis.
Our objective here is to ensure that the accounting records are being maintained accurately and
currently and that no anomalous entries appear in cashbooks or financial ledgers. To that end, we
have: –
➢ Agreed the opening balance detailed in the excel spreadsheet with that in the 2023-24
Statement of Accounts and certified AGAR.
➢ Ensured that a full spreadsheet analysis structure is in place and is appropriate for purpose.
➢ Checked and agreed transactions (both receipts and payments) in the Council’s spreadsheet
for all accounts to the relevant bank statements for the full financial year.
➢ Noted that regular bank reconciliations and statements are prepared and presented to
members at all council meetings and initialled by the Chairman.
➢ Verified detail on the combined three bank accounts’ reconciliations as of 31st March 2025
to ensure that no long-standing uncleared cheques or other anomalous entries exist.
➢ Ensured the accurate disclosure of the combined bank account balances as of 31st March
2025 in the year’s AGAR.
Conclusions
We are pleased to report that there are no issues arising in this area of our review warranting
formal comment or recommendation. We have ensured the accuracy of the closing balances
declared in the AGAR.
Review of Corporate Governance
Our objective is to ensure that the Council has a robust regulatory framework in place; that
Council meetings are conducted in accordance with the adopted Standing Orders and that, as far as
we can ascertain (as we do not attend Council or Committee meetings), no actions of a potentially
unlawful nature have been or are being considered for implementation. We have in this regard: –
➢ Noted that Standing Orders and Financial Regulations were adopted by the Council at their
meeting held on 10th March 2025 minute refs. 92 (b) & (d) respectively.
➢ Examined the minutes of meetings of the Full Council for the year to identify whether any
issues arise that may have an adverse effect on the Council’s future financial stability with
no issues arising.
Conclusions
We are pleased to report that there are no issues arising in this area of our review warranting
formal comment or recommendation.
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Review of Payments & VAT
Our aim here is to ensure that: –
➢ Council resources are released in accordance with the Council’s approved procedures and
approved budgets.
➢ Payments are supported by appropriate documentation, either in the form of an original
trade invoice or other appropriate form of document confirming the payment as due and/or
an acknowledgement of receipt, where no other form of invoice is available.
➢ All discounts due on goods and services supplied are identified and appropriate action
taken to secure the discount.
➢ An official order was placed for all goods and services where appropriate when not
covered by contracts or similar agreements, such as utility bills.
➢ The correct expense category has been applied to invoices when processed.
➢ All payments have been reported to Council; and
➢ VAT has been appropriately identified and coded to the control account for periodic
recovery and that reclaims have been submitted accordingly in the year to date.
We have reviewed the procedures in place for the receipt, processing, and approval of payments
for work undertaken on behalf of the Council and supplies received and have examined a sample
of payments totalling £12,352.70 throughout the year for compliance with the above criteria, with
no issues arising.
Conclusions
We are pleased to report that there are no issues arising in this area of our review warranting
formal comment or recommendation.
Assessment and Management of Risk
Our aim here is to ensure that the Council has put in place appropriate arrangements to identify all
potential areas of risk of both a financial and health and safety nature, whilst also ensuring that
appropriate arrangements exist to monitor and manage those risks identified and to minimise the
opportunity for their coming to fruition. We have:
➢ Noted that Council approved their Risk Assessment at their meeting on 10th March 2025
minute ref. 92 (b).
➢ Examined the Council’s current insurance policy with Zurich Insurance with cover being
provided to 31st May 2025, to ensure that appropriate cover is in place, noting that Public
and Employers Liability cover is £12m and £10m respectively and that Fidelity Guarantee
cover is £250k.
Conclusions
We are pleased to report that there are no issues arising in this area of our review process
warranting formal comment or recommendation.
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Budgetary Control and Reserves
We aim in this area of our work to ensure that the Council has appropriate procedures in place to
determine its future financial requirements leading to the adoption of an approved budget and
formal determination of the amount to be precepted on the District Council, that effective
arrangements are in place to monitor budgetary performance throughout the financial year and that
the Council has identified and retains appropriate reserve funds to meet future spending plans. To
meet this objective, we have:
➢ Noted from our review of the minutes that members continue to be provided with regular
management accounting information; income, expenditure, and reserves summaries are
being received at each meeting.
➢ Noted that a detailed budget exercise was undertaken and approved by Council at their
meeting on 11th November 2024; the value of the precept was also approved for 2025-26 at
a level of £6,500 minute ref. 55 (e).
➢ Considered the appropriateness of the level of General Reserves to meet the Council’s
ongoing revenue spending requirements, noting that reserves at the year-end total £43,296.
Of this £40,305 are earmarked leaving a general reserve balance of £2,991.
➢ Reviewed the year-end budget outturn for any significant unexplained variances with none
in evidence.
Conclusions
We are pleased to report that there are no issues arising in this area of our review process
warranting formal comment or recommendation.
Review of Income
The Council receives, in addition to the annual precept, sundry income from the sale of firewood,
and grants, together with bank interest and recoverable VAT. The Council was also in receipt of
CIL funds of £16,595.81 in this financial year.
We have checked and agreed income received, as recorded in the cashbook, to the bank statements
and other supporting documentation. On 31st March 2025 the Council was due a repayment of
VAT from HMRC totalling £1,610.49.
Conclusion
We are pleased to report that there are no issues arising in this area of our review process
warranting formal comment or recommendation.
Petty Cash Account
The Council does not operate a petty cash account, all miscellaneous expenses incurred by the
Clerk being reimbursed periodically on submission of an appropriately supported reclaim.
Conclusion
We are pleased to report that there are no issues arising in this area of our review process
warranting formal comment or recommendation.
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Salaries and Wages
In examining the Council’s payroll function, we aim to confirm that existing legislation is being
appropriately observed as regards adherence to the requirements of HMRC regarding the
deduction and payment over of income tax and NI contributions. To meet this objective, we have:
➢ Reviewed the Council’s payroll preparation procedures noting that salaries are calculated
by the Clerk utilising the HMR&C PAYE Tools software.
➢ Checked and agreed the amounts paid to individuals by reference to the approved pay
rates, examining the payments made in the 2024-25.
➢ Ensured that PAYE & NIC deductions have been made accurately in respect of employee
salaries by reference to the HMRC Basic PAYE Tools software; and,
➢ Ensured that the appropriate month’s deductions and contributions have been paid over to
HMR&C in a timely manner.
Conclusions
We are pleased to report that there are no issues arising in this area of our review process
warranting formal comment or recommendation.
Asset Registers
The Governance and Accountability Manual requires that all Councils develop and maintain a
register of assets identifying detail of all land, buildings, vehicles, furniture, and equipment owned
by the Council.
We are pleased to note that a formal asset register is in place on an excel spreadsheet. There were
no additions or disposals in the 2024-25 financial year.
Conclusions
We are pleased to report that there are no issues arising in this area of our review warranting
formal comment or recommendation. We have ensured the accurate disclosure of Assets in the
AGAR.
Investments and Loans
Our objectives here are to ensure that the Council is “investing” surplus funds, be they held
temporarily or on a longer term basis in appropriate banking and investment accounts; that an
appropriate investment policy is in place; that the Council is obtaining the best rate of return on
any such investments made; that interest earned is brought to account correctly and appropriately
in the accounting records and that any loan repayments due to or payable by the Council are
transacted in accordance with appropriate loan agreements.
We have confirmed that the Council holds no long-term investments requiring disclosure in the
Statement of Accounts, nor are there any loans either to or from external bodies in existence.
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Conclusion
We are pleased to report that no issues have been identified in this area of our review
warranting formal comment or recommendation.
Statement of Accounts and AGAR
The 1996 Accounts and Audit Regulations required all Councils to prepare annually a detailed
Statement of Accounts, together with supporting statements identifying other aspects of the
Council’s financial affairs.
We have reviewed the AGAR detail prepared by the Clerk, as generated from the Excel
spreadsheet and other third party documentation with no obvious errors or anomalies in the
detailed content.
Conclusions
No issues have been identified in relation to the verification of detail in the Statement of
Accounts and AGAR this year.
Based on our detailed work during the year on the Council’s systems of financial control and
content of the detailed Statement of Accounts and that summarised detail set out in the AGAR,
we have signed off the Internal Audit Report of the AGAR assigning positive assurances in
each relevant area.
