Internal Audit Report Wetherby Town Council and Wetherby Town Hall Charity

Date: June 2020 (End of Year)

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Contents Description Page No.

Internal Audit : FAQ’s 3

Scope and Remit of the Report 4

Assurance Level Definitions 4

Your Internal Auditor 5

Background to this Report 6

Overall Assurance Level 6

Overall Summary and Interim Advice and Support 7

Good Practice Identified 8

Cemetery Administration 9

Findings and Recommendations 11

Priority Level Definitions 11

Wetherby Town Hall Charity Internal Audit Report : Appendix 1 12

Angle Audit Checklist : Appendix 2 14

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Internal Audit: FAQ’s Why does the Council need an Internal Audit?

The Council is required by section 5(1) of the Accounts and Audit Regulations 2015 to 'undertake an effective internal audit to evaluate the effectiveness of its risk management, control and governance processes, taking into account public sector internal auditing standards or guidance' What is the aim of the Internal Auditor? To enhance and protect organisational value by providing risk-based and objective assurance, advice and insight. The Auditor will review and report to the Council on whether its systems of financial and other internal controls over its activities and operating procedures are effective. What are the important factors in your choice of Internal Auditor? Your auditor must be independent of the financial management of the authority. Your auditor must be competent and suitably qualified to carry out the role in a way that meets the business needs of the Council. Is the Internal Audit linked to the External Audit? Yes. The annual External Audit return asks the Council to confirm the following: ‘We maintained throughout the year an adequate and effective system of internal audit of the accounting records and control systems’ In order to give an affirmative response to the above statement an internal audit has to have been carried out. Where can I find out more about Internal Audit?

You can find more detail in the publication called 'Governance and Accountability for Smaller Authorities in England’ (web link below) https://www.nalc.gov.uk/library/our-work/jpag/3223-practitioners-guide-2020/file (web link correct as at 28.06.2020)

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Scope and Remit of this Report Angle Community Development Services have been commissioned to undertake Internal Audit services on behalf of Wetherby Town Council and Wetherby Town Hall Charity. The internal audit services commissioned will consist of an annual interim and end of year audit and subsequent report following each audit. Following our first Internal Audit conducted in January/February 2020 the Council has now engaged our services for a 3 year period as confirmed in the letter of engagement sent to us from the Council and dated 23 June 2020. It should be noted that whilst we have inspected and considered a broad range of the Councils records, accounts, policies and documentation we do not give any warranties that there are no matters of actual risk or potential harm to the Council.

Assurance Level Definitions

High Substantial Our critical review or assessment on the activity gives us a high level of confidence on service delivery arrangements, management of risks, and the operation of controls and / or performance. The risk of the activity not achieving its objectives or outcomes is low. Controls have been evaluated as adequate, appropriate and are operating effectively.

Our critical review or assessment on the activity gives us a substantial level of confidence (assurance) on service delivery arrangements, management of risks, and operation of controls and / or performance. There are some improvements needed in the application of controls to manage risks. However, the controls have been evaluated as adequate, appropriate and operating sufficiently so that the risk of the activity not achieving its objectives is medium to low.

Limited Low

Our critical review or assessment on the activity gives us a limited level of confidence on service delivery arrangements, management of risks, and operation of controls and / or performance. The controls to manage the key risks were found not always to be operating or are inadequate. Therefore, the controls evaluated are unlikely to give a reasonable level of confidence (assurance) that the risks are being managed effectively. It is unlikely that the activity will achieve its objectives.

Our critical review or assessment on the activity identified significant concerns on service delivery arrangements, management of risks, and operation of controls and / or performance. There are either gaps in the control framework managing the key risks or the controls have been evaluated as not adequate, appropriate or are not being effectively operated. Therefore the risk of the activity not achieving its objectives is high.

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Your Internal Auditor Mr. Matthew Gleadell FCILEx Contact Number: 07961 051079 Email: anglecds1@gmail.com Matthew is a Charted Legal Executive and holds the Certificate in Local Council Administration. Matthew is the lead consultant for Angle Community Development Services and the business proprietor. All enquiries in relation to this report should be directed to Matthew.

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Background to this Report To assist in preparing this report, I conducted a visit to the offices of Wetherby Town Council on Tuesday 23rd June 2020. This visit was preceded by a Zoom video with the Clerk which took place on the 9

th June 2020.

This was my second visit to Wetherby as part of my Internal Audit function.

I was again ably assisted in conducting my audit processes by Town Clerk Iona and her colleague Margaret. I also had the opportunity to meet the newly elected Mayor who was kind enough to drop by and say hello. The Internal Audit has been conducted by reference to my own Audit checklist which is included at the end of this report. I give no warranties that every item of the checklist has been fully investigated. It was agreed with the Clerk prior to my visit that I would give particular attention to the Councils cemetery documentation and administration procedures and this is detailed in my report. I would like to offer particular thanks to Margaret who attended the office on the day to offer assistance in relation to this exercise. Information on the Councils website, and documentation inspected during my visit as provided by the Clerk and her colleague has all helped to conduct my internal audit process.

Overall Assurance Level:

Wetherby Town Council: Substantial

Wetherby Town Hall Charity: Substantial

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Overall Summary I continue to be impressed by the work being carried out by Iona and her team and in fact can’t help but feel a somewhat envious over the exceptionally high standards that Iona is achieving. The world has changed dramatically since my last visit to Wetherby in January this year. Covid 19 has forced all of us into living our lives in ways that we could never have imagined and whilst I write this report on a day when many restrictions are being lifted, there remains huge uncertainty for us as individuals and indeed for the Council over what the future holds. Notwithstanding the challenges that Covid 19 has raised I wish to pay particular testament to the work of Wetherby Town Council in responding to those challenges. I have been hugely impressed with the Covid 19 Risk Assessment work, policy response and meeting functions that Wetherby Town Council has delivered through Covid 19. The attention to detail displayed by Iona in handling Covid 19 at the Council is no surprise. That same level of detail is evident in the way Iona manages the day to day financial operations of the Council. Covid 19 has served to change priorities in recent months and it is entirely understandable that elements of work that had been planned by Iona during that period have not been addressed. Some of those works include items in response to my first report. For this reason I do not propose to comment on progress against my previous audit report this time, although I am aware that issues raised have been addressed. I intend to pick up a review of actions against my previous audit report and this one once Iona and the Council have had a more stable period in which to address its usual functions. Of course if Covid 19 continues to compromise ordinary business we will all need to adapt and I will take this into account in future audit assessments. Interim Advice and Support Following my first visit I provided Iona with some template documentation relating to routine internal financial checks and Councillor reports. I am informed by Iona that she has adopted some elements of these documents and that they have proven to be useful on more than one occasion in identifying issues to consider that may otherwise not have been thought about. Shortly before my recent visit I suggested that Iona check the age of the members to ensure that they are all covered under the Councils insurance policy. Many policies do not cover members over the age of 75 for some areas of cover. The exercise proved worthwhile and additional cover for those members over 75 I believe has now been added. Prior to my recent visit Iona sought my opinion on the use of a bank card payment machine. I shared my advice and thoughts around its use and the steps that she should consider taking as part of seeking to introduce such a system into the Councils operations, namely a

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risk assessment and a cost benefit analysis against the current system of receiving payments. An up-date to Financial Regulations may also be necessary to reflect the use of such a system.

Good Practice Identified: Town Council Based on my recent visit I confirm I have seen evidence that all matters which I previously identified in my first report as good practice continue as good practice. I have however made made further comments on some areas below. Annual Review & Financial Statements: This is an excellent document both for the purposes of reporting to members and also in serving as a good public facing transparent document for members of the public to view should they wish to do so. Financial Records: Day to day management of the Councils finances is carried out in a very organised and diligent way. Paper trails and auditable records and clear and organised. There has been no drop in the level of management of the accounts since my first visit. Policy: The Council has undertaken a review of its key policies at its 2020 Annual Meeting. Revisions have been made to some of those policies. Annual reviews of key policies are advisable. Budget: The Councils Annual Review contained an excellent precis of the factors leading to the Councils underspend in the 19/20 financial year. Risk Management: The Council has updated its risk management policy at its annual meeting. Tree Management: I found evidence of a payment to a tree work contractor which had been withheld. The standard of works carried out by the contractor I am informed was found not to be acceptable. Whilst disappointing that the works were sub-standard the positive is that the Council identified the sub-standard works and took action accordingly. This is good prudent management of the contract and the public funds that may otherwise have been incurred had the sub-standard works not been identified. Employees: The Council has adopted a new Staff Handbook and has been working with ELAS in delivering this work. I briefly inspected the handbook and on the face of it, it appears to be comprehensive and covers all necessary areas. Iona reported that she has already identified some areas that would benefit from being amended which indicates that the document is being actively used and considered and is in every sense is and should be a ‘live’ document. Market Authority: The sample of market receipt transactions inspected showed that they had been appropriately recorded and receipts promptly banked. It is proposed that I undertake a more detailed inspection and audit of the market records and administration during my

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next visit.

Cemetery Administration During my visit I inspected the full paperwork trail for half of the internments conducted by the Council in the 19/20 financial year. My approach was to start with the first internment of the financial year and then inspect every other one completed in chronological order as set out in the Burial Register. There were 24 internments in total in the 19/20 financial year. I therefore inspected the records of 12 of those internments. In inspecting the records I was looking to ensure that every part of the administrative process had been correctly concluded and the various records and entries were all completed correctly. I was looking to ensure that each internment had been charged in accordance with the Councils charging policy and all of the statutory registers had been correctly updated. The records inspected (as pictured opposite) included:

1. Burial Register 2. Register of Graves 3. Register of Purchased Graves 4. Internal internment form. 5. Payment receipt book. 6. Green Form or Certificate of Cremated Remains 7. Correspondence with family of deceased/funeral director.

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Cemetery Administration Findings:

1. 9 out of the 12 internments inspected were found to be entirely in order.

2. The entry for Ronald Walton Forster in the Burial Register showed his age at death as 96 however the Green Form (official record of death) showed his age as 93. The Burial Register therefore needs amending to show the correct age.

3. The internment of the cremated remains of John Henry Tatterton had been conducted without a copy of the Certificate of Cremated Remains. RISK LEVEL HIGH – In no circumstances should an interment go ahead without a copy of the Green Form (Full Burials) or Certificate of Cremated Remains. These are official documents that confirm the death of the deceased. Without these documents the Council cannot have any certainty that there is nothing untoward involved in relation to the remains of the individual being interred.

4. It was noted that an entry in the Burial Register had been commenced for an internment that had not taken place. This is due to the family delaying the internment after it was booked in. The consequence is that what is otherwise a chronological list of burials taking place will now not be in chronological order if the entry is completed when the interment does take place. I would suggest that to maintain the Chronological order of the register that this entry abandoned and a note placed on the register to explain the situation.

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Findings and Recommendations: Wetherby Town Council The table below sets out findings and recommendations in relation to matters where we consider there to be an opportunity to make changes that will improve the Councils internal governance, risk and financial management.

No. Finding Recommendation Priority Level

1. There are small omissions in the Cemetery administration highlighted above.

Ensure that all staff clearly understand the importance of the Green Form and ‘Certificate of Cremated Remains’ and understand that no interments should be undertaken without those forms being made available to the Council.

High

2. Outstanding items contained in February 2020 Audit Report. Address outstanding actions from February 2020 Audit Report just as soon as Covid 19 constraints permit.

Medium

Priority Level Definitions

High

Immediate management attention is required - an internal control or risk issue where there is a high certainty of: substantial loss / non-compliance with corporate strategies, policies or values / serious reputational damage / adverse regulatory impact and / or material fines (action taken usually within 3 months).

Medium

Timely management action is warranted - an internal control or risk issue that could lead to financial loss / reputational damage / adverse regulatory impact, public sanction and / or immaterial fines (action taken usually within 6 to 12 months).

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Appendix 1: Town Hall Charity Internal Audit Report Charity Number: 503163 This report should be read in conjunction with the Internal Audit report dated February 2020. Good Practice Identified: Town Hall Charity

The day to day financial management of the Charity continues to be undertaken carefully and diligently. I carried out tests of a number of sample transactions during my visit and found good audit trails at every stage of the financial management process. An organised and structured approach is clearly embedded in the way in which the Council manages the day to day financial affairs of the Charity. Detailed reports are provided to Trustees on a regular basis.

The Charity Annual Return is a clear and well-presented document for use by trustees and members of the public alike. I reviewed the booking system of the Town Hall as referred to in my February 2020 report. The bookings are now recorded using the Councils finance software and provides a robust system to ensure that bookings are correctly recorded, monitored and invoiced as necessary.

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Findings and Recommendations: Wetherby Town Hall Charity The table below sets out findings and recommendations in relation to matters where we consider there to be an opportunity to make changes that will improve the Councils internal governance, risk and financial management.

No. Finding Recommendation Priority Level

1. As per items contained in February 2020 Internal Audit Report.

Address actions from February 2020 Audit Report just as soon as Covid 19 constraints permit.

Medium

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Appendix 2: Angle Internal Audit Checklist

Key Governance Review

1

Standing Orders (Tailored and Reviewed)

2

Financial Regulations (Tailored and Reviewed)

3

Terms of Reference (Committees/Working Groups)

4

Code of Conduct (Elected Members)

5

Complaints Procedure (Tailored and Reviewed)

6

Insurance Cover

Reviewed Annually

Certificate(s) viewed & valid

Employees Liability Cover

Other

Transparency

7

Internal Controls (Statement or Review)

15

8 Investment Strategy

9

Publication Scheme (Reviewed)

10

Risk Assessment (Statement or Review)

11

Pay Policy (Staffing- Reviewed)

12

Spending Authorised

13

Procurement

14

Organisational

15

Land and Assets (Reviewed)

16

Adequate GDPR policy/procedures in place

17

Other

16

Accounting

18

Cashbook maintained and up to Date

19

Arithmetically Correct (checks / balance)

20

Evidence of Internal Control

21

VAT Recorded Reclaimed

22

All Payments Supported by Invoices

23

s.137 Recorded separately within accounts Within legal threshold limits Spend in accordance with legislation

Income Control

24

Income properly recorded and banked promptly

25

Precept demand/calculations receipt

26

Effective security of cash and cash transactions

17

Petty Cash

27

Petty Cash Account used/authorised

28

Petty Cash Spending supported by VAT receipt(s)

29

Petty Cash reported to Council

30

Petty Cash Float reconciled/reimbursed

31

Other

Year End Process

32

Correct Accounting Basis

33

Bank statements reconcile to ledger

34

Robust Audit Trail evident

18

35 Debtors and Creditors Recorded

36

Other

Bank Reconciliation

37

Regular bank statement reconciliation

38

Balancing entries (adjustments) explained

39

Bank mandate up to date

Budget

40 Annual budget in support of precept

41

Earmarked reserves

42

Unexplained budget variances reported to Council

43

Precept Demand properly minuted

19

Asset Control

44

Register of Assets

Reviewed

Up to date

45

Assets Inspected and Health & Safety Issues Considered

Proper Process / Practice

46

Employee posts properly recorded

Proper Officer (Clerk)

RFO

Deputy Clerk

Admin Assistant

Other

47

List of Members Interest recorded / displayed on website

48

Agenda Documents Correct

49

Minutes Correct / Signed

20

50 Purchase Order System used/correct

51

Purchasing Authorised in line with Financial Regs / Limits

52

Council operating within legal powers

53

Delegation Limits

set out in financial regulations

adhered to

Risk Management

54

Evidence of unusual activity

55

Annual Risk Assessment undertaken (as a minimum)

56

Insurance Cover

Reviewed Annually

Public Liability Cover

Employees Fidelity Guarantee

Cllrs age reviewed

57

Financial Controls and procedures documented

21

58

Regular financial reporting to Council (in line with Fin Regs)

59

Reporting of bank balances minuted

60

S.137 (& other grants) ratified / minuted

Charities

61

Accounted for separately

62

Independently Audited

63

Returns filed within legal time limits

Payroll & HR

64

Contracts of employment for all staff

65

Proper procedures for payroll, PAYE & NI

66

PAYE & NI payments verified

22

67

Approval of salaries and increments

68

Approval of expense claims

69

Minimum wage threshold met

70

HR procedures and policies adopted

71

Training policy and record for staff and elected Members

72

Qualified Clerk

73

Annual appraisal undertaken

74

Job description up to date / reviewed

75

H&S review of staff workstation & PC equipment undertaken

General

76

Have previous audit issues been addressed

23

77

Eligible for GPC

78

Back up of files adequate

79

Storage of files adequate

80

Arrangement for inspection of public records adequate

Burial Authority

81

Income for burials/permits balance

82

Fees charged in accordance with approved rates

83

A legible plan of all burials is evident and maintained

84

Statutory records kept / stored safely

85

All interred ashes have certificates of cremation

86

Permits properly documented and stored

24

Allotment Authority

87

Income for allotment rentals balance

88

Fees charged in accordance with approved rates

89

Up to date occupancy details kept and securely retained

90

Agreements/licences issued to all plot holders

91

Other

Market Authority

92

Income for stall hire balances

93

Fees charged in accordance with approved rates

94

Up to date occupancy details kept and securely retained

95

Statutory records kept / stored safely

96

Agreements/licences issued to all stall holders

25

97 Other