It depends if the reserves are ring-fenced for a specific project or just general reserves...
Ring-fenced - may be the parish council has plans for building a village hall, for example, and therefore needs to build up its pot of money to do so?
General reserves - parish councils are obliged to hold reserves as they are not allowed to go overdrawn. It is up to the parish council to undertake a risk assessment and decide on the amount of reserves required. Normally it is between 3-6 months of general expense as this will cover staff wages, bills etc that would still need to be paid legally.
Most councils will have a mix of both of these and therefore could legitimately be twice the annual precept.
Also, some small parish councils have a precept of say £5000 and hold reserves of £15000 because they maintain a playground - so whilst they have reserves 3 x the precept, this is acceptable - it is all a matter of scale.
But reading between the lines, it would seem that you are concerned that your parish council is holding onto a lot of money with no real reason. At your internal audit, the auditor should examine the reserves and review the reserves policy and satisfy themselves that it is legitimate. However, parish councils have no right to hold onto taxpayers money without spending it on the parish that it collected the money from. Some Councillors have the annoying habit of thinking its their money and its not, its the parishes money and they shouldn't be squirrelling it away without good reason...
