Scribe Academy™ Presents 📺 LOCAL COUNCIL ACCOUNTS - FROM ZERO TO HERO! ** YOU WILL DISCOVER: • Super easy procedures to make sure your books balance. • How VAT returns work and what scheme you should be using. • The secrets to a straight forward year-end and getting the AGAR right. Join our Head Accountant Hannah and learn how master your Council's accounts and go from zero to hero! This session is suitable for Clerks of all abilities regardless of council size and how the accounts are currently managed. 🗣️ Introducing Hannah Driver Hannah Driver is the Head Accountant at Scribe. She has been with Scribe for 5 years and helped the company grow from 1 customer to over 750 customers. She has been training and supporting both small and large councils across England and Wales for the last 5 years. As you can imagine, Hannah has managed and solved all manner of accounting issues, we are lucky enough to have her in our team. ⚖️ Introducing Scribe Accounts Scribe products are super easy to use, and purpose-built for parish, town and community councils. It's a cloud application accessible via a web browser on your desktop, laptop, iPad or mobile device. Key Features Include: ✅ Transaction input and editing ✅ Bank Reconciliations ✅ VAT Returns to Making Tax Digital portal ✅ Invoicing & Purchase Orders ✅ Budgeting & Forecasting ✅ Annual Return/ Year-End All Scribe products come with: 👩🏻‍🎓 Free Training 👐 Unlimited Support 🧑🏻‍🤝‍🧑🏻 Unlimited Users 👩‍💻 Unlimited Software upgrades What to find out more? 💬 Just type “yes” in the zoom chat or 🌐 https://www.scribeaccounts.com/features 📧 hello@scribeaccounts.com ☎️ 01603 856521 🚀 https://www.scribeaccounts.com/demo-request

1. Local Council Accounts:
From Zero to Hero!
Hannah Driver

2. Introduction to Local
Council Accounting

3. Local Council Accounting
• What is a parish (town) council?
○ Elected body at the first level of local government. Makes
decisions on behalf of the parish and has a wide range of
powers relating to local matters
• Considerations:
○ Transparency
○ Efficient provision of services
○ Setting of Precept
○ Management of reserves

4. Local Council Accounting
• Every local authority is required to appoint an officer to be
responsible for the administration of their council’s financial
affairs (RFO) who should be a paid employee of the council
• Responsibilities of the RFO:
• Follow proper financial procedures
• Have internal control/audit systems
• Report to the council on spending and the current position
• Complete the AGAR for the year 1st April - 31st March

5. Which Accounting Approach?
Receipts & Payments
● Receipts and Payments accounts is a simple form of accounts
in that it records the receipts and payments at the time at
which they were received/paid.
Income & Expenditure
● Income & Expenditure accounts records transactions on
the date to which it relates rather then when it was paid

6. Which Accounting Approach?
● Councils less than £200k = Receipts & Payments accounts
● Councils £200k - £6.5million = Income & Expenditure accounts
● Smaller councils can opt to use I&E
● If moving between approaches beware requirement to
restate the prior year

7. Good Procedures to
keep on top of your
Accounts

8. The Cashbook
• The cashbook is the most important accounting record for local
councils
• Considerations when Collating your Accounts:
○ Regularly record payments and receipts (split out VAT)
○ Full audit trail
○ Regular bank recs to confirm data is correct
○ Can you produce timely & useful information
easily?
• Is your accounting system fit for purpose? Do you need
training on it? Does it suit the needs of your council?

9. The Cashbook
• How to Structure your Cashbook:
○ Base it on your council budget/precept breakdown
○ Allocate payments and receipts out to budget codes
○ Group codes together that require reporting on e.g. Village
Hall
• Could it be Improved upon?
○ Consider adding additional codes to analyse the data further
○ Record more information to make it easier to refer to

10. Summary
• Set aside time regularly to keep the cashbook up to date and
ensure it records all the information you may need to analyse
the data and produce your reports
• Complete regular bank reconciliations (ideally monthly) to
limit scope for errors
• Consider linking up with other Clerks for advice & support

11. VAT

12. VAT
• VAT Registered Councils
○ Will have additional regular sources of income besides the
precept e.g. running a car park
○ Must submit VAT Returns, normally quarterly but could be
on a monthly basis
○ Making Tax Digital requires submisson of VAT returns
directly to HMRC using accounts software and is
intended to increase accuracy
○ MTD is now mandatory for all VAT registered councils

13. VAT
• Non VAT Registered Councils
○ Can claim back VAT using Form 126 on the HMRC website
○ No specific timing for claims but must be for complete
calendar months
○ If the claim is for less than £100 it must be a full year
○ Claims can be made going back 3 years - worth looking
into if you have inherited a position where VAT claims
are not up to date.
○ We recommend claiming at least annually, ideally up
to 31st March to keep in line with Year End

14. VAT
• Ensure you record VAT separately in your cashbook
• Councils can only claim VAT back if:
○ The invoice shows the percentage or amount of VAT being
charged
○ The VAT number of the supplier is clearly shown on the
invoice
• If it is a long or onerous process to produce returns/claims
this should be addressed
• Take specialist advice if you have a complicated VAT position

15. Year End & The AGAR

16. The AGAR
• Internal Audit Report
○ Summarised conclusions from the internal audit report
• Section 1: Annual Governance Statement
○ Confirmation of Internal Controls
• Section 2: Accounting Statements
○ The numbers bit!

17. The AGAR: Section 2

18. The AGAR
Receipts & Payments or Income & Expenditure?
● Receipts & Payments
○ take figures directly from the cashbook
● Income & Expenditure
● Exclude VAT (will constitute a debtor or creditor)
● Add adjustments - Creditors & Debtors
■ Consider materiality & regularity
■ Ensure last year’s adjustments are reversed

19. The AGAR
• Line 1: Balances Brought Forward
○ Ensure equal to Box 7 of previous year
• Line 2: Precept or Rates & Levies
○ Precept only for councils (rates/levies refers to drainage boards)
• Line 3: Total Other Receipts
○ All other receipts. Do not include any bank transfers /
movements of money
○ Exclude VAT if working in I&E

20. The AGAR
• Line 4: Staff Costs
○ Be aware of guidance as to what can be included
• Line 5: Loan Interest / Capital Repayments
○ Record separately from other payments
• Line 6: All other payments
○ All payments excluding staff costs & loan repayments. Do not
include any bank transfers / movements of money
○ Exclude VAT if working in I&E

21. The AGAR
• Line 7: Balances carried forward
○ Ensure this is equal to (Boxes 1 + 2 + 3) - (Boxes 4 + 5 + 6)
• Line 8: Total value of cash and short term investments
○ Total cash position to equal bank rec as at 31st March
○ Will be the same as Line 7 if working in R&P

22. The AGAR
• Line 9: Fixed Assets plus Long Term Investments
○ Update for new assets/disposal
○ Ensure consistency in reporting of total
○ Ensure supporting Asset Register holds all relevant information
○ Ignore depreciation
• Line 10: Borrowings
○ Update figure to amount owed at Year End
○ Usually loans from PWLB

23. The AGAR
Other Documents to be Submitted
Bank Reconciliation
● As at 31st March (to agree to Line 8)
Reconciliation between Line 7 & 8 (I&E)
● Summary of debtors & creditors
Explanation of Variances
● For variances over 15% for Lines 2, 3, 4, 5, 6, 9 and 10 or if
Line 7 is more than twice Line 2
● Full numerical explanations / breakdown of Reserves
●

24. Find Out More!
If you would like more detail about Scribe please visit our website:
www.scribeaccounts.com
If you would like a free 20 minute demonstration of our accounts
package in action you can call us on 01603 856505
Please join our Facebook group:
Local Council Clerks’ Community
Thanks for watching!