Governance and Accountability for Local Councils - latest edition

The latest edition of the Practitioners’ Guide to the Accounts and Audit Regulations (2014 Edition) is now available on both the NALC (http://www.nalc.gov.uk/About_NALC/Governance_and_Accountability_for_Local_Councils.aspx ) and SLCC websites. The principal changes since the previous edition are:

1. Appendix 10
A detailed framework in order to achieve the safeguarding of public money. This appendix is an essential consequence (as is the recent publication of new Model Financial Regulations) on the repeal of Section 150 (5) of the Local Government Act 1972 (the “two signature rule”).

2. Investments
The rules setting out the distinction between Revenue and Capital investments have been re-written and simplified. In particular paragraph 2.33 now refers only to “interest bearing savings accounts”, omitting reference to banks and building societies. This brings the guidance into line with the Capital Finance Regulations 2003 . It is now clear that all such investments of under 12 months maturity are to be considered Revenue investments. By contrast any investment exceeding 12 months maturity of whatever nature is, by definition, a Capital investment and subject to the Capital Receipts regime upon maturity.

3. Acquired Assets
There are revised rules on the recording of “gifted assets” (i.e. those assets transferred without payment) from other authorities, developers etc. Paragraph 3.76 includes the “strong recommendation” that such assets be recorded (in the recipients’ asset register) at a nominal value of £1 each.

4. Appendix 11
The guide now incorporates a formal Declaration of No Accounts at Appendix 11 for those councils with no transactions during the year (helpfully defined as “less than £1”).

Practitioners are reminded that the Guide represents proper practices for the purposes of Local Council accounting, and are therefore required by law to comply therewith.