19 July 2016

Letter to New Mills Town Council from the council's internal auditor

Following requests to HPT from members of the New Mills public, we publish here the letter that accompanied the report on the Internal Audit of New Mills Town Council’s accounts for 2015-16.

The letter was read out during the council's 11 July 2016 meeting.

The letter is from the council’s internal auditors, Butler Cook of Codnor in Derbyshire and is dated 24 June 2016:

'We write to confirm that the internal Audit process has now been completed and again we are pleased to report that the accounting system under the Sage program continues to improve and strengthen, albeit with some notable lapses that should not be happening if the periodic results are subject to a reasonable analytical review.  We also note that changes in administration staff have not helped the situation this year.  This is discussed in more detail further on in this report.

'It is pleasing to see that the NALC Model Operating Standing Orders and Financial Regulations have been adopted but we would recommend that they are personalised to a much greater extent (e.g. Reference to Welsh Regulations are not appropriate).  Both these documents should be brought to the attention of all Council Members on at least an annual basis.

'However, we need to explain why it has been necessary to make some negative observations on the Internal Audit Report a follows:

'B:  We note that whilst minutes of the council meetings have been published the Financial Regulations have not been met in that NO MINUTES have been signed off at the following meeting by the Chairman of the Meeting and as such gives no authority to any decisions made during any of the meetings.

'It is also evident that on a number of occasions the technical advice of the Clerk has not been adopted or due regard taken of it.  It will follow that if the Clerk is advising on fact then that advice should be followed as it will be founded on your own Standing Orders and potentially Councillors could be leaving themselves open to personal liability or even a possible Constructive Dismissal Claim by the Clerk.

'E:  We identified an issue over VAT which, a mentioned above, could have been avoided with a more robust analytical review.  A large VAT input claim was coded to the wrong part of the Sage system resulting in an underclaim of over £3,600.  this has now been amended but could have been avoided if the balance on the VAT Control Account had been properly reconciled.

'In all other respects all other E objectives have been met.

'We trust the above comments will be useful to you.  If at a later stage you would wish me to address the Council on any of these matters that can be arranged.

'Yours sincerely etc…'

Note from HPT Editor:  the references to 'B' and 'E' refer to sections in the standard Annual Report for town and parish councils.