Reed PC Internal Audit procedure

Reed Village

The website of Reed Parish Council

Reed Parish Council Financial Risk Assessment

Reviewed 6 March 2024 Downloadable/printable version (opens as PDF file)

Risk

Procedures to address

Reassess/carry out

Lack of general financial control

Lack of responsible officer

Appointment of responsible finance officer (RFO)

When Clerk resigns or when separate RFO necessary due to workload

Lack of financial Standing Orders

Produce Financial Standing Orders for Council to review and adopt

Annually

Lack of overview

Chairman’s responsibility to check periodically Internal Auditor’s report Regular reporting of Budget v. Actual to Council

Ongoing Annually Each meeting

Lack of Power to spend

Clerk to check Council spending within powers

Ongoing

Loss/destruction of financial documentation

RFO & Clerk or assistant to hold RFO to lock away cheque book

Ongoing Ongoing

Loss of computerised records

Backup of computerised systems

Continually backed up to Cloud - Onedrive

Lack of skill in systems

Training for clerk

As needed

Accounting errors

Incorrect data entry

Clerk or Assistant to enter on spreadsheet or computer software RFO to examine entries on schedule before submission to Council

Ongoing Monthly

Incorrect entries by Bank/RFO

Clerk to do bank reconciliation through software or manually

Monthly

Discrepancies in report to Council

Statement of payments reported checked. Chairman signatory

Bi-monthly

VAT discrepancies

VAT reconciled to financial schedule VAT reclaimed annually

Monthly Ongoing

Budget overspend

Overspend against budget

RFO to check sufficient funds available when expenditure incurred Budget v actual examined

Bi-monthly

Misappropriation of public funds

Expenditure without authority

Prior approval for spending authorised by Council .

Ongoing

Invoice payment without authority

All cheques to be listed on a schedule and authorised for payment by Council

Bi-monthly

New cheque book misappropriation

Cheque books to be stored securely with clerk

Ongoing

Cheque misuse

Cheques agreed against the approved schedule to be signed by two councillors. All signatories must initial the cheque stubs.

Ongoing

Incoming cash and cheque misappropriation

All cash and cheques to be stored securely and banked within 2 working days.

Ongoing

Theft of funds

Bank statements to be reconciled and signed off by Clerk. Ensure Fidelity Insurance in place against theft of funds by staff, councillors and other persons.

Monthly Reviewed annually

Electronic Payments (BACS/CHAPS) made without Council approval Incorrect electronic payment or amount made / No monitor on actual electronic entry

All BACS/CHAPS payments to be approved by Council prior to the payment being made. If a payment needs to be made outside of the meeting, then approval is to be sought from the Chair, with the decision and payment ratified at the next available Council meeting. Council uses the Barclays Bank’s online “Dual Authorisation” facility, which requires that payments made from the account must be authorised by a second approver before being released to the payee. The inputter and the approver both check the electronic entry to ensure that it matches the approval list from the meeting.

Reviewed bi-annually

Under-insurance of Council assets

Level of cover inadequate

Reviewed by RFO in association with Council

Annually and as necessary

Inadequate record of possessions

Asset Register maintained by Clerk and listed in Notes to the Accounts at Audit. Deeds and other legal documents relating to assets stored securely by Council’s Solicitor.

Annually Ongoing

Chairman’s signature Ken Langley 1 March 2023

Clerk’s signature Catharine Toms 1 March 2023