Explantion of reasons for stating No position on Annual Governance Statement 25-26

Explanation of reasons for stating ‘No’ position on Annual
Governance Statement and how the Parish Council intends to
address those weaknesses.
General response:
The Council accepts the findings of the internal auditor in full and has taken positive
steps to address the weaknesses identified in the report. At the Extraordinary Full
Council meeting held on 23 June 2026, the Council agreed to establish a working
group to examine the reasons for the identified failures in detail and to determine the
actions required to prevent recurrence in future years. The Council also recognises
the significant work undertaken by the Clerk since his appointment in January 2026
to embed improvements to existing practices.
These improvements have been further supported by the introduction of a new
accounting and management software system, recommended by the Clerk, which is
intended to strengthen financial administration, accessibility and resilience. Staffing
resilience has also been improved through the appointment of a Deputy Clerk, who
has been proactive and diligent in undertaking training on the new system.
The Council acknowledges that further work remains necessary to strengthen
resilience and ensure that the new arrangements are fully embedded. This will
continue as additional software functions are implemented over the coming months,
alongside ongoing review, training and procedural improvements.

1. We have put in place arrangements for effective financial management during
the year, and for the preparation of the accounting statements.

Explanation:
The Council answered “No” to this assertion due to a period of significant staffing
disruption during the year. The previous Clerk left in March 2025, taking with them the
primary knowledge of the Council’s financial system (Rialtas).
Subsequent staff, including the Clerk and Deputy Clerk, did not have sufficient
experience of this system, and the Council was reliant on a locum Clerk for limited
hours to undertake financial processing. As a result, financial management processes
were not fully effective, including a lack of invoicing activity from October 2025 and
incomplete accounting records.
Upon the appointment of a new Clerk in January 2026, work was undertaken to
reconstruct the accounts for the period from 31 December 2025 to 31 March 2026 to
ensure the accounting statements could be properly prepared. The Council has since
transitioned to a new financial system (Scribe), with improved accessibility and
resilience in financial management processes.
The Council has taken steps to strengthen its financial arrangements, including
improved procedures, system training, and reduced reliance on single officers, and is
satisfied that appropriate arrangements are now in place going forward.
2. We maintained an adequate system of internal control including measures
designed to prevent and detect fraud and corruption and reviewed its
effectiveness.
Explanation:
The Council answered “No” to this assertion because, during the year, weaknesses
were identified in the operation and review of internal controls. These weaknesses
arose principally from staffing disruption, loss of key system knowledge, and the
Council’s reliance on limited locum support for financial administration.
Although controls were in place, they were not applied consistently throughout the
year and their effectiveness was not reviewed to the standard required to support a
“Yes” response. In particular, delays and gaps in financial processing, incomplete
accounting records, and reduced oversight meant that the Council could not be fully
satisfied that its arrangements to prevent and detect error, fraud or corruption had
operated effectively for the whole period.
The Council has since taken corrective action to strengthen internal control
arrangements. This includes reconstructing and reviewing the accounting records,
moving to a more accessible financial system (Scribe), improving officer training,
reducing reliance on a single individual, and introducing clearer procedures for
financial administration and oversight.
The Council is satisfied that the reasons for the “No” response have been identified
and that appropriate measures are now being implemented to ensure internal controls
are more robust, regularly reviewed, and effective going forward.

4. We provided proper opportunity during the year for the exercise of electors’ rights
in accordance with the requirements of the Accounts and Audit Regulations.
Explanation:
The Council answered “No” to this assertion because it could not evidence that the
statutory requirements for the exercise of public rights had been fully met during the
year. Under the Accounts and Audit Regulations, the Council is required to publish the
required notice and make the relevant accounting records available for inspection for a
period of 30 working days, including the first 10 working days of July. The Council are
aware it published its notice dates before the Annual Governance Accountability
Return had been signed off by the Parish Council. This was due to training
weaknesses due to the staffing disruption.

Weaknesses in year-end financial administration identified elsewhere in the Annual
Governance Statement, the Council was not satisfied that the notice of public rights
and supporting unaudited accounting documents had been published, retained, and
evidenced in the correct manner and within the required timescales. As a result, the
Council could not properly confirm that electors had been given the full opportunity
required by the Regulations.

The Council recognises that this is an important transparency requirement. Corrective
action has therefore been taken to ensure that future notices are prepared in advance,
approved alongside the AGAR timetable, published on the Council’s website and
noticeboards within the required period, and retained with clear evidence of
 publication.
Going forward, the Council will maintain a year-end compliance checklist and
publication record so that the exercise of electors’ rights can be clearly demonstrated
and verified by the Internal Auditor.

5. We carried out an assessment of the risks facing this authority and took
appropriate steps to manage those risks, including the introduction of internal
controls and/or external insurance cover where required.
Explanation
The Council answered “No” to this assertion because it could not demonstrate that a full
and effective assessment of the risks facing the authority had been carried out and
reviewed during the year. While the Council had some controls and insurance
arrangements in place, the risk management process was not sufficiently complete, up
to date, or evidenced to support a “Yes” response.
This weakness arose in the context of the staffing disruption and financial administration
issues already identified elsewhere in the Annual Governance Statement. As a result,
the Council could not be satisfied that all relevant risks including financial, operational,
governance, staffing, asset, legal and compliance risks, had been formally assessed,
recorded, monitored, and managed throughout the year.
The Council recognises that risk management is an important part of effective
governance. Corrective action is now being taken, including the preparation and
adoption of an updated risk register, a review of insurance cover, clearer allocation of
responsibility for monitoring risks, and regular reporting to Council. The Council will
ensure that the risk assessment is reviewed at least annually and whenever significant
changes arise. The Council may use external consultants to help them manage risk
effectively.
Going forward, the Council will maintain clear evidence of risk reviews, insurance
checks, and any actions taken to manage identified risks, so that compliance with this
assertion can be demonstrated ongoingly.

10. We have put in place arrangements full the effective IT and data management in
accordance with proper practices during the year under review.

Explanation
The Council answered “No” to this assertion because, during the year under review, it
could not demonstrate that fully effective arrangements for IT and data management
were in place in accordance with proper practices. In particular, the Council had not
completed and evidenced all required arrangements relating to IT policy, data protection,
secure use of systems, website accessibility, publication requirements, and
management of Council-controlled digital records.

This weakness arose in the context of the wider staffing disruption and loss of key
system knowledge (Rialtas) already identified elsewhere in the Annual Governance
Statement. As a result, the Council could not be satisfied that its digital systems, data
handling arrangements, access controls, and related policies had been reviewed,
maintained, and applied consistently throughout the year.
 Corrective action is now being taken, including the review and adoption of appropriate IT
and data protection policies, improved management of Council digital records, checks
on website accessibility and publication compliance, and further training for staff and
councillors. The Council already owns and uses a .gov.uk domain, with councillors
provided with .gov.uk email addresses, and will build on this by ensuring that access
controls, records management, cyber security arrangements, and policy reviews are
clearly documented and reviewed regularly going forward.

Please also see attached draft action plan that identified failings within the existing
regulations which will be examined in greater detail by the working group established.
Action Plan relating to Internal Auditor’s Report for 2025/26
A. Accounting Records & Audit Trail

IA Finding Financial Regulation Requirement

Unable to evidence ledger entries (Oct–       Fin Reg 3: Accounting records must be
Mar) due to lack of system knowledge          sufficient, accurate, and explain transactions

Missing nominal ledger evidence during        Fin Reg 3: Records must disclose financial
audit                                         position with reasonable accuracy

Fin Reg 3: requirement for proper records &
Lack of audit trail for second half of year
audit support

Action required
1. Council administration staff need to be more resilient and flexible to be able to
cover aspects of administration and finance, particularly where knowledge of
software is essential for these services to proceed.
2. The move to Scribe from 1 April 2026 had formed part of the resilience response.
The Clerk and Deputy Clerk are fully conversant with Scribe, however all admin
staff will be trained on Scribe and a training schedule is being worked through to
ensure adequate cover is achieved.
3. The process of importing the last three years of accounting data into Scribe has
began. This work is being undertaken by Scribe themselves. The six year
requirement for the retention of data will be achieved as Rialtas back files have
been produced monthly which can be viewed by the Council maintaining a read
only access with Rialtas software. Temporary remote access can also be
granted in Scribe, so that the Internal Auditor can view Council records before
any scheduled visit.
4. Individuals will have their own training assessments and detailed records of
training, achievements and completion/valuation will be recorded within the
employee’s CPD record.
5. For longer period of absences (i.e. 2 weeks annual leave) cover will be in place to
ensure all processes, including finances are covered. This form part of the job
description.
6. In the unlikely event that no staff member is available for input into Scribe, cover
can be provided by external sources such as NPTS and NALC. Scribe support
team also would be able to assist.
7. Up to date training is provided through Scribe’s own seminars. Software updates
are signaled in advance to ensure training can be undertaken both
implementation.
8. Scribe also has its own academy (Scribe Academy) which staff members are
encourage to join and seek help and support for training needs. The Academy
has a wide range of “how to” videos and guides with step by step instructions as
well as master classes and forums for more advanced users.
Action Plan relating to Internal Auditor’s Report for 2025/26

B. Payments, Approvals & VAT

IA Finding Financial Regulation Requirement

 2 of 12 invoices lacked councillor     Fin Reg 6: Payments will be authorised and
 approval evidence                      supported by invoices

 Could not link payments to bank        Fin Reg 6: Payments must be verified and
 reconciliation                         reconciled before authorisation

Fin Reg 5: Procurement rules require evidence of
No central record of quotes obtained
quotes/tenders

Fin Reg 13: VAT must be correctly recorded and
VAT return submitted late (Q2)
submitted on time

Barclaycard statements not signed Fin Reg 6 and 9 / internal control expectations

Action required

1. A Standard Operating Procedure (SOP) will be written to detail the process of
how payments are authorised and processed through the system. This will
include what checks take place and the level of authorization required at each
stage. The SOP will also reference the relevant financial regulation. This SOP will
be available to all Councillors and will be used to train new Councillors who are
appointed signatories. The SOP will have an contents page at the front of the
document, bullet pointing each area and process for ease of reference. A link to
the document will be provided for Councillors.

2. All staff will be trained on the SOP for awareness. Links for training for
Councillors will also be produced.

3. All invoices will continue to pass through the RFO for checking before payment
is authorised.

4. VAT returns are prepared automatically in Scribe and are submitted by
interaction with HMRC RTI portal. Once this has been set up no passwords are
required to ensure submission. The Financial Regulation referring to password
retention needs to be amended to reflect the modern working practices of a
digital Real Time Information portal issued by HMRC.

5. Some suppliers had retained the Council’s Barclaycard payment details for
ongoing payments, mainly food retailers which supplies the café on a weekly
basis. 90% of recurring card payments, have now been stopped and moved to
account arrangements instead.

6. Within the Barclaycard online portal, a request to move to paperless statements
and forwarded statements to the Clerk’s email address will be made.

7. The RFO will ensure Councillors (currently two councillors) with responsibility
of Barclaycards are signing each statement once checked and verified by the
RFO.
Action Plan relating to Internal Auditor’s Report for 2025/26
8. The Council has agendaed an item for September 2026 to moving to the Unity
Trust multicard, which offers the benefits and acceptance of Mastercard/Visa
while operating more like a debit card, as the balance is swept to the Council’s
current account every 30 days.

9. The Standing Orders and Financial Regulations approved in May 2026 will be
reviewed at the Full Council meeting in August 2026 to ensure the 2025 updates
are included. Once approved the amendment versions will be added to the
website. The amended versions will also include adoption and review dates.
10. A new folder has been established to retain records of decisions, pricing
information, and quotes to support future audit requirements. The register will
also record the relevant Financial Regulation / Standing Order / Scheme of
Delegation item for transparency.
11. Where procurement rules are required as directed by Financial Regulations /
Standing Order a register of decisions and pricing/ quotes has been
established.

C. Risk Management

IA Finding Financial Regulation Requirement

Risk register not updated or      Fin Reg 2: Annual review of risk management and
reviewed in 2025/26               internal controls required

Actions required
1. Ensure the Internal Controls document is reviewed before AGAR
procedures start in 2027.
2. The Clerk to will use an external agency/ consultancy / for control of risks. A
meeting will take place with various providers.
3. A list of policies will be included on the agenda for PP&R for meeting
scheduled on Monday 28 September 2026. Primary policies have been
reviewed in May 2026.

D. Budget & Precept

IA Finding Financial Regulation Requirement

Budget and precept properly set   Fin Regs 4: Budget must be prepared and approved
and approved                      before setting precept

Actions required
1. New cost centres and cost codes have only been added to Scribe. When the
council moved across from Rialtas. These are simpler and easier to understand
and help with ensuring the correct code is applied when processing.
2. Revised Earmarked reserves have been established following PP&R meetings
and Full Council approval in 2026.
3. Procedures for budgeting are established within Fin Reg 4. All members of
Action Plan relating to Internal Auditor’s Report for 2025/26
committees to be reminded / trained on procedure before 27/28 budget
preparation.
4. Budget process to be written and circulated to all councillors to aid budget
discussion and understanding.
5. All committees will review their budget position at every scheduled meeting.

E. Non precept Income

IA Finding Financial Regulation Requirement

Missing bank reconciliations (Oct– Fin Regs 2 & 3: internal control & accurate records
Mar) required

Unable to verify income            Fin Regs 13: income must be recorded and controlled
completeness                       properly

Fin Regs 13: income must be banked intact and
Delayed banking of café income
promptly

Actions Required
1. All controls are operating successfully since new Deputy Clerk in place from
March 2026.
2. The bank reconciliation process will be undertaking at Full Council each month
removing the need for the Council to appoint an internal scrutineer. Process to
be written and issued for Councillors to follow process which includes
presentation of the bank statements for initialing by the Chair once approved.
3. Financial Regulation 13. Councillors to be made aware of process of the
operating procedure. A standard operating procedure will be produced for
members to view.
4. Internal Financial procedures: Produce simplified record of Financial
Regulations implementation and internal controls document.

F. Petty Cash

IA Finding Financial Regulation Requirement

Could not verify some petty cash against Fin Reg 10: petty cash must be recorded and
reconciliations supported with receipts.

Actions Required
1. All procedures now being followed correctly for bank reconciliation.
2. All bank reconciliations since March proves that procedures are working
correctly. The process can get captured in the written documentation detailed
above B1.
Action Plan relating to Internal Auditor’s Report for 2025/26
G. Payroll

IA Finding Financial Regulation Requirement

PAYE, NI and payroll correctly managed Fin Reg 11: statutory payroll compliance required

Actions Required
1. Operational procedure to be written to demonstrate process for payroll.
2. Payroll supplier to provide employee change form. Use of form to be included with
SOP.

H. Assets Register

IA Finding Financial Regulation Requirement

 Asset register incomplete and       Fin Reg 16: must maintain accurate asset register and
 inconsistent                        verify annually

Missing additions / inconsistent
Fin Reg 16 requirement for accurate records
valuation

Action Required

A forensic approach is required to rebuild the register and reinstate the position at
the next AGAR review in 2027. It is not uncommon for a Town / Parish Council to
undertake this approach.

I. Bank Reconciliation

IA Finding Financial Regulation Requirement

Missing detailed reconciliations for half Fin Reg 2: internal controls must ensure accuracy
year and fraud prevention

Reconciliations not consistently
Fin Reg 2: verification expectation
performed monthly

Action Required
All actions regarding bank reconciliations will be picked up in B1

J. Accounting Statements

IA Finding Financial Regulation Requirement

Inadequate audit trail supporting Fin Regs 3: accounting records must support
accounts statements fully
Action Plan relating to Internal Auditor’s Report for 2025/26
Action Required
1. Work needs to be undertaken to establish whether debtors and creditors lists
are correct. It is likely that most of the entries are double booking and does not
reflect the fact that monies are owned or due. This work can continue in 2026
and will then be correctly reflected in 2027 AGAR.

Items raised but not directly related to Financial Regulations
These are important but fall outside Financial Regulations but are referenced in other
governance documents such as Transparency Code, Practitioners’ Guide, or governance
best practice.

IA Issue Reason

Website missing expenditure >£500 and             Transparency Code / web accessibility
accessibility statement                           law

Data protection / governance (AGAR
Lack of formal data audit & training
assertion 10)

Staffing shortages and knowledge gaps Operational issues

Policies not regularly updated Governance best practice

Inconsistency between Standing Orders and
Governance/document control issue
Financial Regulations

Website: missing expenditure above £500 and accessibility statement

Actions required
1. Financial reports for the last quarter of 2025/6 have been seen and approved by
Full Council.
2. Discussions have already been held with the Council’s website provider to
include accessibility statement and upgrades required for Web Content
Accessibility Guidelines (WCAG) published by the W3C (World Wide Web
Consortium). Councils are expected to meet Level AA compliance. The latest
version being adopted is WCAG 2.2 (AA)

Lack of formal data audit & training

All council training (including staff and members) on the requirements of Assertion 10 needs
to be undertaken.
Actions Required
1. The Clerk’s job description should be checked to see if the role of DPO is
included.
2. The Parish Council should minute that the Clerk is the DPO
3. The Clerk will locate a training supplier and arrange training on Assertion 10.
Action Plan relating to Internal Auditor’s Report for 2025/26
Staffing shortages and knowledge gaps

Action Required

1. Produce training matrix to identify skill gaps and produce plan to ensure the team is
more resilient to ensure essential admin tasks can be maintained. Training matrix to
be reviewed by the staffing committee at the next meeting.

Policies not regularly updated

Action Required
1. Produce policy schedule for review for September 2026 meeting of Property, Policy
and Resources committee.
2. Staffing policies written by Council HR and Governance Support Ltd will be adopted
as part of the outcome of the HR Governance review. The HR Governance Review is
an item on the agenda for 11 August 2026 Full Council meeting.

Inconsistency between Standing Orders and Financial Regulations
Action Required

1. Actions will be picked up in action B9

Clerk
5 August 2026