This document provides guidance for town and parish councils on preparing for their year-end processes. It outlines key steps like ensuring accurate record keeping and monthly bank reconciliations. It explains the different accounting approaches of receipts and payments or income and expenditure based on council size. The Annual Governance and Accountability Return (AGAR) is discussed, including the internal audit report, annual governance statement, and accounting statements sections. Guidance is provided on signing off documents, publication requirements, and setting up accounts for the new financial year.

1. The Secret to Mastering Year End for
Town & Parish Councils
Hannah Driver

2. Preparing for Year End

3. Preparing for Year End
• Expect the additional work involved and factor this in to the
workload/schedule
• Up to date and accurate data is key
○ Ensure all data is accurately recorded in the cashbook
○ Complete monthly bank reconciliations up to date to
reduce workload at Year End
○ Collate data for your VAT Return/Claim if possible

4. Preparing for Year End: R&P or I&E?
• Understand the accounting approach you need to take:
○ Councils less than £200k = Receipts & Payments
○ Councils £200k - £6.5million = Income & Expenditure (3
consecutive years)
● Smaller councils can opt to use I&E
● If moving between approaches beware requirement to
restate the prior year

5. Preparing for Year End
• Familiarise yourself with instructions from the Auditor and
understand what level of Audit is required and what this entails
e.g. could your council be exempt from audit (if under £25k)?
• Refer to the JPAG Practitioner's Guide - supports the
preparation of the AGAR
● Do you need to restate the prior year?

6. The AGAR

7. The AGAR
• The Annual Governance & Accountability Return
• For the period 1st April - 31st March
Sections
• Internal Audit Report
• Section 1: The Annual Governance Statement
• Section 2: The Accounting Statements
•

8. The AGAR
• Internal Audit Report
○ The summarised conclusions from the Internal Auditor’s
report
○ To consider adequacy and effectiveness of the Council’s
procedures & internal controls e.g. Calculation of the
Precept, maintenance of the Asset Register
○ Carried out at least annually
○ Scope and extent will depend on the Council’s size and
circumstances
•

9. The AGAR

10. The AGAR
• Section 1: Annual Governance Statement
○ To review effectiveness of the system of internal controls
○ ‘Yes’ or ‘No’ Response to each Statement
○ There must be appropriate evidence to support a ‘Yes’
answer
○ ‘No’ answers must be accompanied by a separate sheet
identifying weaknesses and how they will be addressed
○ The response to assertions 2 and 6 will come from the
Internal Audit Report (adequate system of internal
control and internal audit)

11. The AGAR

12. The AGAR
• Section 2: Accounting Statements

13. 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

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

15. The AGAR
• Box 4: Staff Costs
○ Be aware of guidance as to what can be included
• Box 5: Loan Interest / Capital Repayments
○ Record separately from other payments
• Box 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

16. The AGAR
• Box 7: Balances carried forward
○ Ensure this is equal to (Boxes 1 + 2 + 3) - (Boxes 4 + 5 + 6)
• Box 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 Box 7 if working in R&P

17. The AGAR
• Box 9: Fixed Assets plus Long Term Investments
○ Update for new assets/disposal
○ Ensure consistency in reporting of total (e.g. original purchase value
or current value)
○ Ensure supporting Asset Register holds all relevant information
○ Ignore depreciation
• Box 10: Borrowings
○ Update figure to amount owed at Year End
○ Usually loans from PWLB

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

19. Signing of Documents &
Publication Requirements

20. Signing of Year End Documents
• Complete the Accounting Statements - RFO to sign
• Meeting of the Council:
○ Internal Audit Report - received and noted
○ Annual Governance Statement - approved
○ Accounting Statements - approved
○ Certificate of Exemption (if relevant) - approved
• Chairman & Clerk sign the Annual Governance Statement
• Chairman signs the Accounting Statements

21. Signing of Year End Documents
• RFO sets Commencement Date for Exercise of Public Rights
○ Accounting records must be made available to view by any
interested person
○ Electors can also raise questions or make objections
○ The AGAR must be approved and published before the
inspection period starts
○ The period must be 30 working days

22. Signing of Year End Documents
● If exempt from Audit the RFO and Chairman sign the
Certificate of Exemption and send to the External Auditor
• If not exempt from Audit the following documents need to be
sent to the External Auditor:
○ The AGAR
○ Explanation of Variances
○ Bank Reconciliation as at 31st March
○ Details of the Exercise of Public Rights
○ Any other information specifically requested

23. Publication of Documents
● Documents to be published (if Exempt from Audit):
○ The Annual Internal Audit Report
○ The Annual Governance Statement
○ The Accounting Statements
○ An analysis of Variances
○ Bank Reconciliation as at 31 March
○ Copy of the Certificate of Exemption
○ Arrangements for the exercise of public rights
○ The name and address of the External Auditor

24. Publication of Documents
● Documents to be published (not Exempt from Audit):
○ The Annual Internal Audit Report (recommended)
○ The Annual Governance Statement
○ The Accounting Statements
○ Declaration that the accounts are as yet unaudited
○ Details of the arrangements for the exercise of public rights
○ The name and address of the External Auditor

25. Publication of Documents
● Documents to be published following the External Audit:
○ Notice of the conclusion of Audit
○ Annual Governance Statement and the Accounting
Statements including any amendments
○ External Auditor Report & Certificate

26. Looking ahead to the
new Financial Year

27. The 2022/2023 Financial Year
● Set up the cashbook for the new Financial Year
● Objectively review your accounts records/cashbook
○ Is your accounting system fit for purpose?
○ Do you need training on it?
○ Does it suit the needs of your council?
○ How could improvements be made?
● Consider change of medium or coding structure

28. 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
○ Or is it too detailed?
○ Record more information to make it easier to refer to

29. Find Out More!
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www.scribeaccounts.com
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package in action you can call us on 01603 856505
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