Local government is regularly in the news, often for all the wrong reasons. Most of those headlines are about larger local authorities such as county, district and unitary councils, but sometimes smaller authorities such as parishes make the news, as with the now infamous story of Handforth parish council and Jackie Weaver.

Civil parishes are the most local tier of government and a substantial 40% of the population of England live in one of the 10,000-plus parished areas. They can range in size from sometimes dormant rural parishes with only a few hundred residents up to multi-million pound town councils representing thousands of residents and employing dozens of people. They are smaller and cover fewer core services than ‘principal local authorities’, but are nonetheless often essential to residents, with the power to levy additional council tax precepts from local residents.

For the past 20 years, non-dormant parish, village and town councils have been required to have an internal auditor. For smaller councils, that person is the only independent, professional reviewer of a council’s accounts, controls and systems. Every parish, village and town council – from £650 to £6,500,000 turnover – is required to have their internal auditor certify by 30 June that basic financial procedures (such as keeping appropriate accounting records and carrying out bank reconciliations) have been undertaken during the recently completed financial year ending on 31 March.

Many argue an external audit should be a statutory requirement, given the sums that can be involved – and yet it isn’t. Instead, since 2001, smaller authorities have been inspected under the Light-Touch Audit Regime and it is only the largest of parish councils that are required to request a Limited Assurance Review by an external auditor from a centrally appointed top 20 firm.

Eleanor Greene, who is a founder member of the Internal Audit Forum and has been involved with parish, village and town council audits since 1998, says: “Internal audit for smaller authorities is the only proper independent oversight received by a sector that spends £655m of taxpayers’ money every year.”

In the land of parish councils, there are no practising restrictions on this work; you do not even need to be qualified in any way – but it helps. Many internal auditors appointed to carry out this work are sole practitioners and/or semi-retired accountants who discovered this line of business many years ago and stayed.

“However,” Greene says, “we always need more professionally competent people joining the sector due to retirement, relocations and general changes in circumstances. If you are an accountant looking for a career change or a new and interesting portfolio, look at the guidance documentation, particularly Section 4 of the Practitioners Guide.”

In between council work, Greene has a tax practice and inspects small charities. “If you live in a town or parish area, have a look at their website, attend a meeting, familiarise yourself with the decision-making and publication progress and you may find yourself wanting to make things work even better,” Greene says.

The smallest councils are required to comply with the Transparency code and all authorities are required to comply with the Freedom of Information Act. Parish, village and town councils are very different from private sector companies in that all the decision-making is meant to be in the public domain.

“Transparency leads to better accountability and governance, again reinforcing the usefulness of town and parish internal auditors. The only required published accounts of these authorities are recorded on the AGAR (Annual Governance and Accountability Return) Form. For town and parish councils, when the internal audit function acts as a critical friend to the officers and members, that works better. It is deeply satisfying work with waves of frustration – but then so is all compliance practice,” Greene says.

This sector of local government shouldn’t be overlooked or neglected, especially when you consider the very substantial sums of public monies involved – and then we can avoid any future Jackie Weaver scenarios.

Alison Ring, ICAEW Director of Public Sector and Taxation, adds: “Many of us might find it surprising that sometimes quite substantial local councils are not subject to external audit. This makes the role of the parish council internal auditor even more important in ensuring that adequate financial procedures are in place over how public money is being spent and invested.

“ICAEW Chartered Accountants with a practising certificate are ideally placed to undertake this important role in the most local of our democratic institutions.”

• More information is available from the body charged with overseeing the requirements, SAAA or Audit Wales.
• See what is going on in your local county at NALC County Associations or One Voice Wales.
• If you would like to be part of the team that makes the parish and town council sector work better for residents and electors, visit the Internal Audit Forum.