EAST BERGHOLT PARISH COUNCIL

Statement of Internal Controls

INTRODUCTION
East Bergholt Parish Council (the Council) is a local authority funded by public
money and is responsible for ensuring its financial business is conducted in
accordance with the law and proper standards, and that public money is
safeguarded, properly accounted for, and used economically, efficiently and
effectively.
In discharging this overall responsibility, the Council is also responsible for ensuring
that there is a sound system of internal control which facilitates the effective exercise
of the Council’s functions and which includes arrangements for the management of
risk.
The Council is required to review at least annually the effectiveness of its system of
financial control. The review is based on the comments of the internal auditor and
the Strategy, Policy and Finance Committee, which has responsibility for the
development and maintenance of the internal audit environment, and also any
comments made by the external auditors in their annual report.
The Purpose of the System of Internal Control
The Council’s system of internal control is designed to manage risk to a reasonable
level rather than to eliminate all risk of failure. It cannot provide an absolute
assurance of effectiveness. The system of internal control is based on an ongoing
process designed to identify and prioritise the risks to policies, aims and objectives,
to evaluate the likelihood of those risks being realised, and the impact should they be
realised, and to manage them effectively and economically.
Internal controls are set up by the Responsible Financial Officer (RFO) but it falls on
the Council members to ensure that they have a degree of control and
understanding of those controls. Controls will include the checking of routine
financial procedures, examination of financial comparisons and the recording of
assets and liabilities. It will also include identification and evaluation of risks, to
enable risk to be managed efficiently, effectively and economically.
THE INTERNAL CONTROL ENVIRONMENT
The Council has adopted Financial Regulations which set parameters for the
Council’s financial operations. These are reviewed and approved annually.

The Council
The Council is responsible for:
Establishing and monitoring the achievements of the authority’s objectives
The facilitation of policy and decision making
Ensuring compliance with established policies, procedures, laws and regulations
Identification and management of risk
Ensuring that best value and value for money are achieved in all purchases
Ensuring all committees and working groups receive regular and up to date reports
on financial activities under their direction
Ensuring performance is regularly monitored against financial and operational
budgets
Control and reports on the financial management of the Council
Clerk to the Council / Responsible Financial Officer
The Council has appointed a Clerk to the Council who acts as the Council’s advisor
and administrator. The Clerk is also the Council’s Responsible Financial Officer and
is responsible for implementing the Council’s financial systems and control. The
Clerk is responsible for advising on the day to day compliance with laws and
financial regulations to which the Council is subject. The Clerk also provides advice
to help the Council ensure that its financial procedures, control systems and policies
are adhered to.
The Clerk reports to Council
Strategy, Policy and Finance Committee
This committee, comprising Chairs of all parish council committees, meets every
other month to oversee the current budget and to recommend the following year’s
budget and precept to Council.
Internal Financial Control
The Clerk provides a monthly income/expenditure statement to each Parish Council
meeting which is approved by members and subsequently minuted. All expenditure
is via cheques or electronic transfer and there is no petty cash. The Clerk is
authorised annually to make regular payments. Other payments must be authorised
by Council or a committee. Two authorised councillors have to sign each invoice.
Staff salaries and expenses are prepared by Suffolk Association of Local Councils
payroll division which issues payslips noting Tax and NI deductions.
The Clerk also conducts a monthly budget monitor and reports to Council quarterly,
highlighting any causes for concern.

Internal Audit
The Council has appointed an independent internal auditor to audit the Council for
the adequacy of its records, procedures, systems, internal control and risk
management. The independent internal auditor will inspect the accounts at the half
year and at the year end and will complete the Annual Return for the External
Auditor. The independent internal auditor will write a separate report to the Council
detailing any findings they might have.
The annual report of the independent internal auditor submitted to Council by the
Clerk. Recommendations from the report are acted upon and recorded in the
minutes.
External Audit
The Council’s External Auditors, appointed by the Audit Commission, will submit an
External Auditor’s Report, which will be presented to the Council. Recommendations
from the report are acted upon and recorded in the minutes.
REVIEW OF EFFECTIVENESS
The Council has responsibility for conducting an annual review of the effectiveness
of the system of internal control, which should also include a review of the
effectiveness of internal audit.
Recommendations from the annual review are acted upon, the Statement of Internal
Controls approved and recorded in the minutes.