Is 'Governance and Accountability' a legal requirement?

Question

After weeks of attempting to obtain a copy of the parish councils annual accounts it transpires that they do not exist.

Instead the RFO submits to the auditor a copy of the cash book spreadsheet; minutes; bank statements; invoices; cheque books; insurance certificate; and receipts including VAT. The auditor completes his audit and signs them off on the Annual Internal Audit Report. The Clerk / RFO then presents them to the parish council to be approved before being forwarded to the external auditor.

Appendix 9 of Governance and Accountability states the need for an audit trail from underlying financial records to the Accounts, and that the Accounts should agree with the cash book. There seems to be a vital link missing, as the year end Accounting Statement for external audit does not have the required audit trail.

Are parish councils required to meet the minimum tests of Appendix 9?

Answer 1

A council may need outside assistance in the preparation of accounts, depending on the skills and inclinations of the RFO.

However, the procedure as outlined seems inadequate. The council must approve the accounts before the internal auditor can act, and this is evidently not happening. Also, if the internal auditor is preparing the accounts, I would doubt whether they could then be counted as independent of the council. Their involvement in accounts preparation would seem to prevent them from acting as internal auditor.

There is also a duty on councillors to ensure that there are adequate financial controls in place, and it could certainly be argued that the process described does not meet that requirement.