Accounts and Audit Regulations 2003
| Jurisdiction | UK Non-devolved |
| Citation | SI 2003/533 |
| Year | 2003 |
2003 No. 533
LOCAL GOVERNMENT, ENGLAND
The Accounts and Audit Regulations 2003
Made 6th March 2003
Laid before Parliament 11th March 2003
Coming into force 1st April 2003
The First Secretary of State in exercise of the powers conferred on him under section 27 of the Audit Commission Act 19981(“the 1998 Act”), section 134(6) of the Greater London Authority Act2, and of all other powers enabling him in that behalf, and after consulting in accordance with section 27(3) of the 1998 Act, the Commission, such associations of local authorities as appear to him to be concerned and such bodies of accountants as appear to him to be appropriate, hereby makes the following Regulations—
Citation and commencement
1.—(1) These Regulations may be cited as the Accounts and Audit Regulations 2003 and shall come into force on 1st April 2003.
(2) These Regulations apply in England only3.
Interpretation and application
2.—(1) In these Regulations—
“the 1972 Act” means the Local Government Act 19724;
“the 1989 Act” means the Local Government and Housing Act 19895;
“the 1996 Regulations” means the Accounts and Audit Regulations 19966;
“the 1998 Act” means the Audit Commission Act 1998;
“notice by advertisement” means a notice published in one or more local newspapers circulating in the area of the relevant body;
“parish meeting” means a parish meeting of a parish not having a separate parish council;
“relevant body” means a body whose accounts are required to be audited in accordance with section 2 of the 1998 Act other than a body specified in section 98(1) of the National Health Service Act 19777, a local probation board or a Passenger Transport Executive8;
“working day” means any day other than a Saturday or Sunday or a day which is a bank holiday in England; and
“year” means the 12 months ending with 31st March.
(2) Any reference in these Regulations to the “responsible financial officer ” means—
(a)
(a) the person who, by virtue of section 151 of the 1972 Act9, is responsible for the administration of the financial affairs of a relevant body or, if no person is so responsible, the person who is responsible for keeping the accounts of such a body, or
(b)
(b) if the person referred to in paragraph (a) is unable to act owing to absence or illness, such member of his staff as is nominated by him for the purposes of section 114 of the Local Government Finance Act 198810or, if no nomination is made under that section, the person nominated by him for the purposes of these Regulations.
(3) These Regulations shall apply to all relevant bodies.
(4) Regulations 11(1), 13 to 16 and 18(1) shall, with all necessary modifications, apply to the accounts of an officer whose accounts are required to be audited by section 26 of the 1998 Act.
Revocation of instruments
3. The following instruments are hereby revoked—
(a) the Accounts and Audit Regulations 199611; and
(b) the Accounts and Audit (Amendment) (England) Regulations 200112.
Responsibility for financial management
4.—(1) The relevant body shall be responsible for ensuring that the financial management of the body is adequate and effective and that the body has a sound system of internal control which facilitates the effective exercise of that body’s functions and which includes arrangements for the management of risk.
(2) The relevant body shall conduct a review at least once in a year of the effectiveness of its system of internal control and shall include a statement on internal control, prepared in accordance with proper practices, with—
(a)
(a) any statement of accounts it is obliged to publish in accordance with regulation 11, or
(b)
(b) any income and expenditure account, statement of balances or record of receipts and payments it is obliged to publish or display in accordance with regulation 12.
Accounting records and control systems
5.—(1) Subject to paragraphs (3) and (4) and in so far as they are not in conflict with this paragraph or to any instructions given by a relevant body to its responsible financial officer, that officer shall determine on behalf of the body, its—
(a)
(a) accounting records, including the form of accounts and supporting accounting records; and
(b)
(b) accounting control systems,
and such an officer shall ensure that the accounting control systems determined by him are observed and that the accounting records of the body are maintained in accordance with proper practices and kept up to date.
(2) The accounting records determined by the responsible financial officer on behalf of a relevant body in accordance with paragraph (1)(a) shall be sufficient to show the body’s transactions and to enable the responsible financial officer to ensure that any statement of accounts, income and expenditure account, statement of balances or record of receipts and payments and additional information to be provided by way of notes to the accounts, as the case may be, which are prepared under these Regulations, comply with these Regulations.
(3) The accounting records determined by the responsible financial officer on behalf of a relevant body in accordance with paragraph (1)(a) shall in particular contain—
(a)
(a) entries from day to day of all sums of money received and expended by the body and the matters to which the income and expenditure or receipts and payments account relate;
(b)
(b) a record of the assets and liabilities of the body; and
(c)
(c) a record of income and expenditure of the body in relation to claims made, or to be made, by them for contribution, grant or subsidy from any Minister of the Crown, a body to whom such a Minister may pay sums out of moneys provided by Parliament or a Community institution.
(4) The accounting control systems determined by the responsible financial officer on behalf of a relevant body in accordance with paragraph (1)(b) shall include—
(a)
(a) measures to ensure that the financial transactions of the body are recorded as soon as reasonably practicable and as accurately as reasonably possible, measures to enable the prevention and detection of inaccuracies and fraud, and the ability to reconstitute any lost records;
(b)
(b) identification of the duties of officers dealing with financial transactions and division of responsibilities of those officers in relation to significant transactions;
(c)
(c) procedures to ensure that uncollectable amounts, including bad debts, are not written off except with the approval of the responsible financial officer, or such member of his staff as is nominated by him for this purpose, and that the approval is shown in the accounting records; and
(d)
(d) measures to ensure that risk is appropriately managed.
Internal audit
6. A relevant body shall maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control in accordance with the proper internal audit practices, and any officer or member of that body shall, if the body requires—
(a) make available such documents of the body which relate to its accounting and other records as appear to that body to be necessary for the purpose of the audit; and
(b) supply the body with such information and explanation as that body considers necessary for that purpose.
Statement of accounts
7.—(1) A body to which paragraphs (3) and (4) apply shall prepare in accordance with proper practices a statement of accounts for each year, which shall include the following—
(a)
(a) an explanatory foreword;
(b)
(b) a statement of accounting policies;
(c)
(c) a statement of responsibilities for the statement of accounts;
(d)
(d) such of the following accounting statements as are relevant to the functions of the relevant body—
(i) consolidated revenue account;
(ii) housing revenue account;
(iii) collection fund;
(iv) consolidated balance sheet;
(v) statement of total movements in reserves;
(vi) cash flow statement;
(vii) group accounts;
(viii) any other statements relating to each and every other fund in relation to which the body is required by any statutory provision to keep a separate account;
(e)
(e) notes to the accounts.
(2) The statement required by paragraph (1) above shall be accompanied by a note of the number of employees in the year to which the accounts relate whose remuneration fell in each bracket of a scale in multiples of £10,000 starting with £50,000; and, for such purposes, “remuneration” means all amounts paid to or receivable by an employee, and includes sums due by way of expenses allowance (so far as those sums are chargeable to United Kingdom income tax), and the estimated money value of any other benefits received by an employee otherwise than in cash.
(3) This paragraph applies to the following bodies—
(a)
(a) a London borough council, a county council or a district council in England;
(b)
(b) a joint authority13;
(c)
(c) the Greater London Authority;
(d)
(d) a functional body14;
(e)
(e) the London Pensions Fund Authority15;
(f)
(f) a committee of an authority mentioned in sub-paragraph (a), including a joint committee of two or more such authorities;
(g)
(g) the Council of the Isles of Scilly;
(h)
(h) the Broads Authority16;
(i)
(i) a National Park authority17;
(j)
(j) a police authority18;
(k)
(k) any fire authority constituted by a combination scheme19; and
(l)
(l) the Greater London Magistrates' Courts Authority20.
(4) Where in relation to a parish council or a parish meeting, the gross income or expenditure (whichever is the higher) for the year is, and for each of the two immediately preceding years was, £500,000 or more, the requirements of paragraphs (1) and (2) above shall apply to that council or the chairman of the meeting, as the case may be, in respect of that period.
(5) In the case of a local authority which is required by section 74 of the 1989 Act21...
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