Whilst paid by the Town or Parish Council the internal auditor is not an employee.

  • The internal auditor must be both competent and independent from the council
  • They have no recourse to the council's insurance
  • The role of the internal auditor is a key part of the council's internal controls
  • This includes both financial and procedural controls

 

Article Contents - Click on a link below

Internal Controls

Internal Audit

Requirement to publish Internal Audit Reports

Legal Requirements for Internal Audit

A Subscription and Login is needed to read the following...

The Independence and Competence of the Internal Auditor

Who can do the parish council internal audit?

Our internal auditor has no professional indemnity insurance

 

Internal Controls

  • Internal controls are those processes which help ensure that the Council follows the law and its Financial Regulations.
  • For example recording the power used in the minutes whenever the Council makes a decision.
  • A good internal auditor will insist that this is done.

 

Internal Audit

  • A good internal audit will comprise 2 parts done at different times of the year.
  • The interim audit is usually done part of the way through the year.
  • The interim audit is mainly an audit of the Council's processes and procedures.
  • It may also include an audit of transactions to ensure the completeness of the Council's records.
  • The final audit is undertaken after the year end so that the balances within the accounts may be verified and that any problems found at the interim audit have been addressed by the Council.
  • The Internal Auditor reports to the Council not the Clerk or RFO (Responsible Financial Officer).
  • A good internal auditor will submit written reports to the Council after both the interim and final audits.
  • These reports should be available on a timely basis to all Councilors so that they can meet their duty to protect the public purse.
  • Attempts to conceal these reports should be viewed with great concern by Councilors.

 

Requirement to publish Internal Audit Reports

  • The signed internal audit report contained in the Annual Return should be published.
  • Where problems are reported within the internal audit report theses should be explained in full.
  • Where parts of the Council's system of internal control have been reported as "not covered" the audit work done should be reported together with a statement as to when the areas not audited are planned to be audited.

Source DCLG (Department for Communities and Local Government)

 

Legal Requirements for Internal Audit

  • Irrespective of the size of your local council it MUST comply with a law which imposes a duty on them. Your local council may end up with a "report in the public interest".
  • The Accounts and Audit Regulations 2003 which imposes a duty on parish councils to maintain an adequate and effective system of internal audit of its accounting records and of its system of internal controls.
  • Your parish council will probably get it's accounts qualified by the external auditors as...
    • "Regulation 6 of the Accounts and Audit Regulations 2003 (as amended) imposes a duty on parish councils to maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control in accordance with the proper practices in relation to internal control."
  • A strong internal audit should check that your parish council has strong processes and controls not only over money but all other areas to help ensure that your parish council operated legally and complies with all relevant legislation.
  • Size is no excuse, if your council gets into trouble it's the residents who ultimately pay the bill.

 

Please Register, Login or Subscribe to read more...