What was the issue?

Poor financial administration resulted in incomplete and inaccurate records.

What happened?

Council P did not retain any minutes for its meetings for three years. Therefore, it could not demonstrate that it had approved any payments in that period. The payments made by the council were not supported by adequate documentation.

In addition the Council did not prepare its annual accounts for three years, and had not appointed an internal auditor.

What was/could be the impact?

The Council failed to comply with the Accounts and Audit Regulations 2005 (as amended), which require:

• the annual accounts to be prepared and approved within the statutory timeframe; and
• an adequate system of internal audit to be maintained.

The maintenance of meeting agenda and minutes is required by the Local Government Act 1972. A major fraud at another Council was significantly helped by poor record keeping of minutes and inadequate supporting documentation.

What improvements should be made?

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

• be clear about their legal responsibilities for the maintenance of Council documents;
• be clear about the clerk’s responsibilities;
• ensure that Statements of Accounts are prepared in accordance with legislation;
• ensure that the authorisation of payments is minuted;
• insist on the proper reporting of the council’s financial position and performance at each council meeting; and
• ensure that they have an effective system of internal audit to comply with legislation.