< Governance and Accountability Proper practices in relation to accounts For a smaller authority that has decided to prepare accounts and be audited as a full audit authority Introduction Proper practices – Statement of accounts Proper practices – Annual governance statement Introduction Regulation 8(1) of the Local Audit (Smaller Authorities) Regulations 2015 allows smaller authorities with annual turnover exceeding £25,000 to decide to prepare a statement of accounts and be audited as if it were a relevant authority that is not a smaller authority. This is defined in the Regulations as a ‘full audit authority’. For the purposes of the Accounts and Audit Regulations 2015, a full audit authority is treated as a Category 1 authority. Regulation 7 of the Accounts and Audit Regulations 2015, requires a Category 1 authority to prepare a statement of accounts in accordance with the regulations and proper practices in relation to accounts. Regulation 5 requires a Category 1 authority to prepare an annual governance statement in accordance with proper practices in relation to accounts. The proper practices in relation to accounts for a full audit authority are set out in this guidance issued by JPAG. Proper practices – Statement of accounts JPAG recommends that, for financial years commencing on or after 1 April 2016, a full audit authority should follow the proper accounting practices found in UK GAAP (FRS 102) issued by the Financial Reporting Council 2. Alternatively, a full audit authority may adopt as proper practices the Code of Practice on Local Authority Accounting in the UK issued by CIPFA/LASAAC. Proper practices – Annual governance statement JPAG recommends that a full audit authority should follow Delivering Good Governance in Local Government: Framework, published by CIPFA and SOLACE in 2007 and its subsequent addendum, published in 2012, which provides an updated example annual governance statement. A full audit authority may also wish to refer to Delivering good governance in local government: A guidance note for English authorities, published by CIPFA/SOLACE in 2012, which is intended to assist authorities in reviewing their governance arrangements and can be used in conjunction with the Framework and the addendum. Alternatively, a full audit authority may use the annual governance statement in Section 1 of the annual return (see Section 1 of this guide and the pro-forma annual return available alongside this guide). 2 The Financial Reporting Standard for Smaller Entities (the FRSSE) has been withdrawn for financial years commencing on or after 1 January 2016. TOP < Governance and Accountability