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THE SECRET TO
MASTERING YEAR END
FOR TOWN & PARISH COUNCILS
Hannah Driver
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
Preparing for Year End
Preparing for Year End
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
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?
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
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
The AGAR
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)
The AGAR
The AGAR
• Section 2: Accounting Statements
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
The AGAR
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
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
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
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
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
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
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.
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
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
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
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
The 2023/2024 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
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
The Cashbook
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:
Council Clerks’ Mastermind
Thanks for watching!

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The Secret to Mastering Year End for Town & Parish Councils

  • 1. THE SECRET TO MASTERING YEAR END FOR TOWN & PARISH COUNCILS Hannah Driver
  • 2.
  • 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
  • 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?
  • 8.
  • 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
  • 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)
  • 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
  • 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
  • 22.
  • 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
  • 29.
  • 30. The 2023/2024 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
  • 33. 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: Council Clerks’ Mastermind Thanks for watching!