Slides from the Scribe Academy Webinar The Secret to Mastering Year End for Town and Parish Councils.

1. THE SECRET TO
MASTERING YEAR END
FOR TOWN & PARISH COUNCILS
Hannah Driver

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

5. Preparing for Year End

6. 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

7. 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?

9. 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

10. 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

11. The AGAR

12. 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)

13. The AGAR

14. The AGAR
• Section 2: Accounting Statements

15. 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

16. The AGAR

17. 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

18. 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

19. 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 Box 7 if working in R&P

20. The AGAR
• Line 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
• Line 10: Borrowings
○ Update figure to amount owed at Year End
○ Usually loans from PWLB

21. 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
Box 7 is more than twice Line 2
● Full numerical explanations / breakdown of Reserves

23. 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

24. 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 and include the first 10
working days of July.

25. 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

26. 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

27. 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

28. 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

30. The 2024/2025 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

31. 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

32. The Cashbook

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