Parish councils are subject to various Accounts and Audit Regulations made pursuant to the Local Audit and Accountability Act 2014.

Financial control arrangements for local authorities are normally given the title ‘financial 

regulations’. Whatever the size of a parish council’s budget and annual expenditure, it is 

essential that robust financial controls and checks are built in to its governing arrangements. 

A parish council’s financial control arrangements should include:

• The formulation of spending plans, budget and precept, and provide for the approval of them;
• Monitoring expenditure;
• Transferring money between budget heads;
• Authorising expenditure and payment, and making payment;
• Internal and external audit of accounts;
• Approving borrowing and capital expenditure;
• Banking;
• Payroll and pensions;
• Receipt of Income;
• Credit facilities;
• Reviewing fees and charges;
• VAT;
• Register or inventory of assets (with review and update);
• Insurance;
• Use of IT facilities and records for accounting;
• Reviewing and reporting on the integrity of these arrangements.

The nature and extent of the checks necessary will largely depend on the scale of a parish council’s activity and financial turnover. All financial control arrangements should identify which person or body is responsible for each aspect, what arrangements apply and when they apply.

For any receipt of income or expenditure incurred, a clear audit trail of responsibility and 

decision making will demonstrate a robust and transparent financial system of control.

Annual review is essential in order to keep abreast of changing needs and developments.

For detailed and practical information, parish councils refer to “Governance and Accountability for Smaller Authorities in England” , (the “Practitioners’ Guide”) published jointly by the Joint Panel on Accountability & Governance (JPAG).  The Guide represents “proper practices” for local council accounting.

Standing Orders for entering into contracts

Parish councils may make Standing Orders with respect to the making of all contracts. They must make Standing Orders in respect of contracts for the supply of goods or materials or for the execution of works. Section 135 Local Government Act 1972 is aimed at securing 

competition and at regulating the way tenders are invited. Section 135 permits Standing Orders to stipulate a financial limit or special circumstances (such as emergency repairs to council office premises) when the normal tendering arrangements do not apply.