Alan Walters Rutland County Councillors Thoughts on Oakham Town Council's Accounts Situation
Hi Martin,
I wish to clarify some thoughts on the OTC accounts situation.
These comments are made in a purely personal unqualified manner and do not reflect the
opinions of any other person or organisation.
I do understand that organisations tend to morph from cash accounting to accruals accounting
as they grow larger/ more complex or when they become involved in VAT returns.
I also understand that small organisations may have a complex hybrid as most of their income/expenditure items may be cash, but larger infrequent items may be invoiced either way.
It may therefore be reasonable to say that the previous methods used (provided they were recorded accurately and fully understood) were accepted practice and custom.
Nonetheless I have concerns that “sales” invoices raised up to and including 2014/2015 appear to have been entered on to an accounting system as “cash not banked”.
This means that when I was (for extremely short periods) a town councillor I might have been asked to approve accounts on a monthly basis which showed “sales” income as cash not banked which may (or may not|) on occasion have been simply a debtor with all the risk that entailed. If (and I do say “if” ) this was the case – then I am not content that this was reasonable in the circumstances.
In regard to the end of year accounts 2014/2015 the report you have obtained clarifies the question I had asked initially which was “how can a bank entry be made in error and then the bank account still balance?” The answer appears simply that the erroneous entry was not reconciled. It is absolutely not for me to comment on that issue, and I will not do so.
Looking at this all in the round, it appears to me that the accounting system may have been appropriate when introduced, but that it has been left a little too late to change to a more appropriate system as the situation has become more complex, and as the Council has drifted inexorably towards an accruals basis without formally making the change.
I would not find it in my heart to point the finger at any one person or group of persons for this difficulty, as I cannot recall anyone at any time saying that the accounting system needs to be changed to a more appropriate accruals basis with new software. If this had been raised but then ignored (or fought against) then the situation may be different.
I do hope an appropriate system can be introduced at an early stage to help members understand the accounts better.
Again all in my humble personal unqualified opinion.
Best wishes
Alan
An interesting communication from Cllr Alan Walters.
I will point out one thing he says he can not remember anyone saying the accounting system needs
to change. Well a lot of my troubles started back in 2010 when I showed the account to a friend
who is a professional and highly qualified accountant. He responded he had never before seen
such a pile of crap. I relayed his comments to the Clerk and he was a little unhappy. Not
much has changed since. We have a town council made up of members who are content
with the current situation which has boiled over since simmering for over five years.
I can not understand why not one Councillor is not slightly embarrassed by the conclusion
of Street Accountants report.
The Clerk is to now taking up some accounts training.
Hi Martin,
I wish to clarify some thoughts on the OTC accounts situation.
These comments are made in a purely personal unqualified manner and do not reflect the
opinions of any other person or organisation.
I do understand that organisations tend to morph from cash accounting to accruals accounting
as they grow larger/ more complex or when they become involved in VAT returns.
I also understand that small organisations may have a complex hybrid as most of their income/expenditure items may be cash, but larger infrequent items may be invoiced either way.
It may therefore be reasonable to say that the previous methods used (provided they were recorded accurately and fully understood) were accepted practice and custom.
Nonetheless I have concerns that “sales” invoices raised up to and including 2014/2015 appear to have been entered on to an accounting system as “cash not banked”.
This means that when I was (for extremely short periods) a town councillor I might have been asked to approve accounts on a monthly basis which showed “sales” income as cash not banked which may (or may not|) on occasion have been simply a debtor with all the risk that entailed. If (and I do say “if” ) this was the case – then I am not content that this was reasonable in the circumstances.
In regard to the end of year accounts 2014/2015 the report you have obtained clarifies the question I had asked initially which was “how can a bank entry be made in error and then the bank account still balance?” The answer appears simply that the erroneous entry was not reconciled. It is absolutely not for me to comment on that issue, and I will not do so.
Looking at this all in the round, it appears to me that the accounting system may have been appropriate when introduced, but that it has been left a little too late to change to a more appropriate system as the situation has become more complex, and as the Council has drifted inexorably towards an accruals basis without formally making the change.
I would not find it in my heart to point the finger at any one person or group of persons for this difficulty, as I cannot recall anyone at any time saying that the accounting system needs to be changed to a more appropriate accruals basis with new software. If this had been raised but then ignored (or fought against) then the situation may be different.
I do hope an appropriate system can be introduced at an early stage to help members understand the accounts better.
Again all in my humble personal unqualified opinion.
Best wishes
Alan
An interesting communication from Cllr Alan Walters.
I will point out one thing he says he can not remember anyone saying the accounting system needs
to change. Well a lot of my troubles started back in 2010 when I showed the account to a friend
who is a professional and highly qualified accountant. He responded he had never before seen
such a pile of crap. I relayed his comments to the Clerk and he was a little unhappy. Not
much has changed since. We have a town council made up of members who are content
with the current situation which has boiled over since simmering for over five years.
I can not understand why not one Councillor is not slightly embarrassed by the conclusion
of Street Accountants report.
The Clerk is to now taking up some accounts training.
