What was the issue?

Council O could not show that it had complied with its standing orders and financial regulations when it awarded contracts. It did not keep proper receipts and had not agreed its’ employees status with HM Revenue and Customs (HMRC).

What happened?

The council could not demonstrate it had met the requirements of its standing orders and financial regulations by asking for quotes or estimates before awarding letting contracts.

Income from hall lettings and burials were not recorded in a duplicate receipt book.

The Council had not deducted PAYE and NI from payments made to employees but had not agreed this with HMRC.

What was/could be the impact? 

By not obtaining quotes or estimates the council was unable to demonstrate it received value for money from the suppliers of goods and services.

The Council was unable to demonstrate that the income it recorded from hall lettings and burials was complete. The lack of proper arrangements including the use of receipt books exposed the council to risk of losses from fraud and theft.

Incorrect deductions of PAYE and NI can lead to penalties being imposed by the HMRC.

What improvements should be made?

To ensure the proper administration of public funds, the members should:

• ensure that quotes or estimates are obtained for all contracts;
• ensure that duplicate receipts are issued for all sources of income;
• ensure that receipts recorded from hall lettings and burials are reconciled to the hall lettings and burials records; and
• ensure that income tax and national insurance contributions are deducted correctly.