Oakham Town Council Receives Qualified Audit Opinion

Oakham Town Council Receives Qualified Audit Opinion

Oakham Town Council's financial management practices for the year ending March 31, 2024, received a qualified audit opinion. While the auditors found the council's financial statements to be generally in accordance with proper practices, they raised several concerns.

The internal audit report identified weaknesses in control objectives, These weaknesses indicate a need for the council to strengthen its internal controls to ensure proper financial management.

The council did not provide evidence of actively monitoring actual performance against its budget. Implementing a system to track progress towards goals is crucial for effective resource allocation.

The council failed to publish the Notice of Conclusion of Audit on its website alongside the external audit report. This transparency measure informs the public about the audit's completion.

There was a significant delay between approving the Annual Governance and Accountability Return (AGAR) and starting the Public Rights Period. This period allows residents to review the council's financial statements.

The council initially submitted incomplete supporting data for significant variances in its financial statements. Timely and complete information is vital for a smooth audit process.

The audit report recommends that the council address all points raised in both the internal and external audits before the end of the 2024/25 financial year. This includes implementing stronger internal controls, establishing a performance monitoring system, and ensuring proper public notifications and document submissions.

While the audit found no major financial discrepancies, the identified weaknesses require attention. By implementing the recommended improvements, Oakham Town Council can strengthen its financial management practices and increase transparency for its residents.

Oakham Town Council Published on its website.

Section 3 - External Auditor Report and Certificate 2023/24

In respect of Oakham Town Council

1 Respective responsibilities of the auditor and the authority

Our responsibility as auditors to complete a limited assurance review is set out by the National Audit Office (NAO). A limited assurance review is not a full statutory audit, it does not constitute an audit carried out in accordance with International Standards on Auditing (UK & Ireland) and hence it does not provide the same level of assurance that such an audit would. The UK Government has determined that a lower level of assurance than that provided by a full statutory audit is appropriate for those local public bodies with the lowest levels of spending.   

Under a limited assurance review, the auditor is responsible for reviewing Sections 1 and 2 of the Annual Governance and Accountability Return in accordance with NAO Auditor Guidance Note 02 (AGN 02) as issued by the NAO on behalf of the Comptroller and Auditor General. AGN 02 is available from the NAO website https://www.nao.org.uk/code-audit-practice/guidance-and-information-for-auditors/   

This authority is responsible for ensuring that its financial management is adequate and effective and that it has a sound system of internal control. The authority prepares an Annual Governance and Accountability Return in accordance with Proper Practices which:   

• summarizes the accounting records for the year ended 31 March 2024; and
• confirms and provides assurance on those matters that are relevant to our duties and responsibilities as external auditors

2 External auditor limited assurance opinion 2023/24   

Except for the matters reported below on the basis of our review of Sections 1 and 2 of the Annual Governance and Accountability Return, in our opinion the information in Sections 1 and 2 of the Annual Governance and Accountability Return is in accordance with the Proper Practices and no other matters have come to our attention giving cause for concern that relevant legislation and regulatory requirements have not been met.   

The council has recorded a 'Yes' response at Assertion 1 effectively reporting that it has put in place arrangements for effective financial management during the year, and for the preparation of the accounting statements in accordance with the Accounts and Audit Regulations. Since control objectives A, B and I of the Annual Internal Auditor's Report have been answered 'No' we would have expected Assertion 1 to be consistent with the Annual Internal Auditor's Report. The Council should look to action all points raised on both the internal and external audit reports before the end of the 2024/25 financial year.   

The council has not provided details demonstrating that the council actively monitors actual performance compared to budgeted performance. The council should ensure arrangements for monitoring actual performance against the budget are in place going forward in accordance with the second part of paragraph 1.8 of JPAG Practitioners Guide 2023.

Section 16(1) of the Audit and Accounts Regulations 2015 requires the Notice of Conclusion of Audit to be published on the authority's website. In future, the Council should ensure that this notice is available on their website alongside the signed external audit report and the audited AGAR.

The Council has answered 'Yes' to Assertion 4 of Section 1 of the Annual Governance and Accountability Return which relates to how the Notice of Public Rights was advertised within the financial year 2023-24. Therefore, it relates to the Notice announcing the public right to review the 2022-23 return which was published during 2023-24. As noted in the Auditor Report last year, this notice was not correctly advertised therefore this Assertion should have been answered 'No'.

Other matters not affecting our opinion which we draw to the attention of the authority

The Council left a significant time period between approval of the Annual Governance and Accountability Return and the commencement of the Public Rights Period. The Audit and Accounts Regulations 2015, section 12 (3)(a) and proper practices require that following approval of the Return, the Public Rights Period should commence as soon as is reasonably practicable when taking into consideration the mandatory inclusion of the first 10 working days of July.

Incomplete information was provided with the initial supporting data submitted for review with regards to significant variances, which was later provided on request. The Parish Council should in future ensure that all the necessary supporting information is provided with their annual submission.

Last year the External Audit Report noted that the Notice of Public Rights was set for a period of 31 working days instead of the mandatory 30 working days as set out in the Accounts and Audit Regulations 2015, Paragraph 14(1). Therefore, we expected a 'No' response to control objective M on the Annual Internal Audit Report.

3 External auditor certificate 2023/24

We certify that we have completed our review of Sections 1 and 2 of the Annual Governance and Accountability Return, and discharged our responsibilities under the Local Audit and Accountability Act 2014, for the year ended 31 March 2024.   

External Auditor Name     

Moore 29/09/24      

In a letter from the External Auditors,              

The council is reminded to publish specific documents online, including:

Audited financial statements

External auditor's report and opinion

Notice of Conclusion of Annual Audit

Pointed out areas for Improvement in Annual Governance and Accountability Return:

The approval process for Sections 1 and 2 needs clearer documentation reflecting the specific order of approval.

Bank reconciliations require listing accounts by name or reference, not generic labels.

Supporting data for external audit follow-up should be complete in future submissions.

If the council doesn't use a petty cash system, remove references to it in the bank reconciliation.

Notice of Conclusion of Audit:

The letter provides a link to a template for the Notice of Conclusion of Audit.

This notice must inform residents of their right to inspect the audit documents at reasonable times and free of charge. The location and inspection hours should be included.

Action Required:

The council should address the identified issues in their future submissions and ensure proper publication of audit documents.