The Local Authority Accounts (Scotland) Regulations 2014

CitationSSI 2014/200

2014No. 200


The Local Authority Accounts (Scotland) Regulations 2014




The Scottish Ministers make the following Regulations in exercise of the powers conferred by section 105(1) of the Local Government (Scotland) Act 1973( 1) and all other powers enabling them to do so.

In accordance with section 105(2) of that Act, they have consulted with such associations of local authorities as appear to them to be concerned.



Citation and commencement

1. These Regulations may be cited as the Local Authority Accounts (Scotland) Regulations 2014 and come into force on 10th October 2014.

Saving provision

2. Nothing in these Regulations applies to any accounts, or any Annual Accounts, that relate to a financial year that began prior to 1st April 2014.


3. In these Regulations-

"the 1973 Act" means the Local Government (Scotland) Act 1973;

"Annual Accounts" means the abstract of accounts which requires to be produced under section 96(3) of the 1973 Act;

"auditor" means the person appointed to audit a local authority's accounts as required by section 96(4) (accounts and audit)( 2) of the 1973 Act;

"Chief Executive", in relation to a local authority, means the person designated by it as the head of its paid service by virtue of section 4 (designation and reports of head of paid service)( 3) of the Local Government and Housing Act 1989;

"Leader of the Council" means the convener of a local authority elected in terms of section 4(1) (election of convener)( 4) of the Local Government etc. (Scotland) Act 1994 or such other councillor as that local authority decides has the title of Leader of the Council for the purposes of payment of remuneration;

"local authority subsidiary body" means any entity, including an unincorporated entity, that is controlled by a local authority;

"proper accounting practices" are those practices set out in section 12 (proper accounting practices)( 5) of the Local Government in Scotland Act 2003;

"proper officer" means-

(a) the proper officer having responsibility for the administration of the financial affairs of the local authority by virtue of section 95 (financial administration) of the 1973 Act; or(b) where that officer is unable to act owing to absence or illness, such officer as is appointed by, or under arrangements made by, that local authority for the purposes of these Regulations;

"working day" means any day other than a Saturday, Sunday, Christmas Eve or a day which is a bank holiday in Scotland under the Banking and Financial Dealings Act 1971( 6).


4. The following instruments are revoked-

(a) the Local Authority Accounts (Scotland) Regulations 1985( 7);(b) the Local Authority Accounts (Scotland) Amendment Regulations 1997( 8);(c) the Local Authority Accounts (Scotland) Amendment Regulations 2011( 9); and(d) paragraph 22 of schedule 1 to the Police and Fire Reform (Scotland) Act 2012 (Consequential Modifications and Savings) Order 2013( 10).


Financial management and internal control

Responsibility for financial management

5. (1) A local authority is responsible for ensuring that the financial management of the authority is adequate and effective and that the authority has a sound system of internal control which-

(a) facilitates the effective exercise of the authority's functions; and(b) includes arrangements for the management of risk.

(2) The local authority must conduct a review at least once in each financial year of the effectiveness of its system of internal control.

(3) The findings of the review referred to in paragraph (2) must be considered at a meeting either of the local authority or of a committee of the local authority whose remit includes audit or governance functions.

(4) Following consideration of the findings of the review referred to in paragraph (3) that authority or committee must approve an annual governance statement, prepared in accordance with proper practices in relation to internal control.

(5) The annual governance statement must be signed by the Chief Executive and the Leader of the Council.

Accounting records and control systems

6. (1) A local authority must keep adequate accounting records.

(2) Adequate accounting records means records that are sufficient-

(a) to show and explain the local authority's transactions;(b) to disclose with reasonable accuracy, at any time, a summary of the financial position of the authority; and(c) to enable members of the local authority to ensure that any accounts that require to be prepared comply with the requirements of these Regulations.

(3) The accounting records must in particular contain-

(a) entries from day to day of all sums of money received and expended by the local authority and the matters in respect of which the receipt and expenditure takes place; and(b) a record of the assets and liabilities of the authority.

(4) If the local authority deals in goods, the accounting records must contain-

(a) statements of stock held by the authority at the end of each financial year;(b) all statements of stocktakings from which any statement of stock as is mentioned in sub-paragraph (a) has been or is to be prepared; and(c) except in the case of goods sold by way of ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.

(5) Where a local authority has a local authority subsidiary body that is not subject to the requirements of this regulation, the local authority must ensure that the body takes such reasonable steps as are necessary to secure that the body's accounting records enable the authority to fulfil its duties under the 1973 Act and these Regulations.

(6) The proper officer is responsible, on behalf of the local authority, and subject to any instructions given to that officer by that authority, for determining the form of, and maintaining, the authority's-

(a) accounting control systems; and(b) accounting records and supporting accounting records.

(7) The proper officer must ensure that the accounting control systems are observed and that the accounting records of the local authority are kept up to date.

Internal auditing

7. (1) A local authority must operate a professional and objective internal auditing service in accordance with recognised standards and practices in relation to internal auditing.

(2) Any officer or member of a local authority must, as required by those undertaking internal auditing-

(a) make available such documents of that authority which relate to its accounting and other records for the purpose of internal auditing; and(b) supply such information and explanation as those undertaking internal auditing consider necessary for that purpose.

(3) A local authority must from time to time assess the efficiency and effectiveness of its internal auditing, in accordance with the standards and practices referred to in paragraph (1).

(4) The findings of the assessments referred to in paragraph (3) must be considered, as part of the consideration of the system of internal control referred to in regulation 5(2), at the meeting referred to in regulation 5(3).


Published accounts and audit

Annual Accounts

8. (1) A local authority must ensure that its Annual Accounts are prepared in accordance with these Regulations and, so far as compatible with these Regulations, in accordance with proper accounting practices.

(2) The Annual Accounts must include, in addition to the financial statements required by proper accounting practices, the following statements, which are to be prepared in accordance with proper accounting practices and recognised guidance-

(a) a management commentary;(b) a statement of responsibilities;(c) an annual governance statement;(d) either-(i) a remuneration report in the style set out in the Schedule to these Regulations, or(ii) a statement that no remuneration report has been prepared because no persons have received remuneration that requires to be included in such a report.

(3) The Annual Accounts must also include such of the following statements and disclosures as are relevant to the functions of the local authority-

(a) a housing revenue account;(b) a non-domestic rate account;(c) a council tax account;(d) any other statement relating to statutory funds which...

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