< About in the News Council under fire over finances UPDATED Potto Parish Council The Northern Echo | Posted 5th March 2017 This page was updated in 2022 with a damning Public Interest Report from the appointed auditor of Potto Parish Council for the years ended 31 March 2017, 2018, 2019, 2020 and 2021. This PIR is only the third issued following audit investigations in 5 years for the 10,000 small uk councils. Potto Parish Council under fire over finances A PARISH council has come under fire for hiking its tax precept by more than 30 per cent – the second such tax rise after covering the cost of an audit investigation into its dealings. Potto Parish Council, which covers approximately 115 households in the parish near Stokesley, has been criticised for increasing its precept by 35 per cent for its 2017/18 budget, raising it from £5,000 to £6,750 for the coming year. It comes after the small council voted to impose a 42 per cent increase in its 2015/16 budget following an extensive investigation by auditors into allegations it was failing to comply with its regulatory requirements and legislation. The small council had to spend £5,300 on the audit investigation into its 2014/15 annual return, following a complaint by a local resident. It resulted in an 18 month investigation by auditors PKF Littlejohn, which concluded in a report that the parish council was failing to adhere to local government rules on meetings, meaning decisions made in meetings have been “unlawful”. The auditors’ report stated that the parish council failed to issue agendas on time to councillors on several occasions during 2014/15, breaching rules which require councillors to receive an agenda and papers at least three days before a meeting. It stated: “Potentially this means that electors may have been denied a proper opportunity to input on council business. We also note that the meeting time is generally not shown on the agendas.” It stated that as this did not comply with legislation, any council decisions at meetings may have been “unlawful”. It also noted there had been errors in accounting statements included in the annual return for cancelled cheques, grants received and petty cash balances. One villager, who did not wish to be named, also criticised a decision to increase the parish council clerk’s pay from about £500 per annum in September 2011, to £1,200 this year. He said Potto Parish Council’s precept was £2,500 in 2011, which went up to £5,000 in 2016/17 and this year has been set on £6,750. He said: “The precept for 2017/18 is £6,750 to be paid by approximately 110 households. As a percentage that’s completely out of control.” But the parish council said its budget was spent mostly on improving facilities and the environment in the small village. Chairman of the parish council, Andy Wilde said: “A member of the public put in an objection against the annual accounts when we submitted them. If they do that they have to be investigated by the external auditor and we’re liable to foot the bill. In 2015/16 the precept was increased from £3,500 to £5,000 for that year, but that was for a major project to improve the road to the village hall and improve access. “We have ongoing projects to replace stiles with gates and improve footpaths – we just try and improve the parish for everybody because we’re only volunteers at the end of the day. He added: “We took note of what the auditor said. On one or two occasions the agendas were supposed to be out prior to the meeting taking place, but our internet was down and that threw a spanner in the works.” Potto Parish Council under fire over finances UPDATE (PIR) Public Interest Report Potto Parish Council: Audit of Accounts for the years ended 31 March 2017, 2018, 2019 and 2020. Background Paragraph 1 of Schedule 7 of the Local Audit and Accountability Act 2014 (‘the 2014 Act’) requires us to consider whether, in the public interest, we should make a report on any matter coming to our notice during our audit relating to the Council, so it can be considered by the Council or brought to the public’s attention. Section 27 of the 2014 Act allows a local authority elector for the Council’s area to make an objection to the Council’s accounts concerning a matter in respect of which we could report in the public interest. It requires us to decide whether to consider any such objection and, if so, whether to issue a Public Interest Report. A local government elector (‘the objector’) made a series of objections relating to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and 2020. We decided to consider some, but not all, of those objections. Having considered those accepted objections, we decided to issue a Public Interest Report so that the matters may be considered by the Council and brought to the attention of the public. We decided to issue a Public Interest Report because of the significance of our findings taken together. The same local government elector has also made a series of objections relating to the Council’s accounts for the year ended 31 March 2021. Annual Parish Council meetings Legislation requires the Council to hold an annual meeting within 14 days of the date of elections, or in May in years where there are no elections to the Council. It also requires the Council to appoint a Chair at its annual meeting. We have not identified meetings held specifically for the purposes of Paragraph 7 of Schedule 12 of the Local Government Act 1972, i.e. the annual parish council meeting. In particular, there are no agenda items or minutes relating to the election of a Chair of the Council for the years ended 31 March 2017, 2018, 2019 and 2020 (although we note that in 2020, the Council postponed but did not later hold the ‘annual meeting’ and ‘election of officials’). R1 & R2: We recommend that the Council: holds an annual meeting in accordance with legislation; and at the annual meeting elects a Chair of the Council for the year. Standing Orders As a public body, it is important that the Council is able to demonstrate structured and appropriate arrangements for the conduct of its business. It has a statutory power to adopt Standing Orders and has chosen to do so. Good governance requires: clear processes for the adoption of Standing Orders; and clarity about the Standing Orders in force. In the period covered by our review the Council had two versions of Standing Orders; however: we have not been able to locate a minute authorising the Standing Orders dated 15 January 2016 that we are advised were in place until 15 May 2019; and although we have seen a minute of the Council meeting of 15 May 2019 adopting revised Standing Orders, the version of Standing Orders provided to us was undated. R3 & R4: We recommend that the Council ensures that: it clearly minutes all adoption of Standing Orders; and it clearly specifies on Standing Orders the date of their adoption. Publication of agendas Publication of agendas for Council meetings is an important means by which the Council demonstrates public accountability. Legislation requires that, at least three clear days before a meeting of a parish council, notice of the time and place of the intended meeting shall be fixed in some conspicuous place in the parish. In addition to placing agendas on its notice board, the Council publishes the agendas on its website. The Council maintains a record of the dates on which it submitted agendas to be posted on its website but not of the date on which the agendas were posted. The Council cannot therefore demonstrate whether agendas were available on its website in advance of the meetings to which they relate. R5: We recommend that the Council maintains and reviews a record of the date on which agendas are posted on the Council’s website. Publication of minutes Publication of minutes of Council meetings is a key means by which the Council demonstrates accountability to the public. Legislation prescribes timescales within which Council minutes should be published. The Council publishes minutes both by placing them on the Council’s noticeboard and by posting them on the Council’s website. However, it does not retain a record of the date on which the minutes are posted on the Council’s website, as opposed to the date on which they are forwarded to the Council’s webmaster for posting. As a result it is not possible for the Council to demonstrate that minutes were published on its website promptly. R6: We recommend that the Council maintains and reviews a record of the date on which minutes are posted on the Council’s website. Council Tax precept The Council has a power to raise funds by submitting a Council Tax precept to the District Council. This is an important power and legislation specifies how the precept is to be set, including by determining the reserves that it would be appropriate to raise or prudent to use, having regard to the estimated level of reserves at the end of the financial year. Although the Council considered estimated income and expenditure in setting its Council Tax precept, it did not explicitly consider the level of reserves and reasonableness of that level as it was required to do. R7: We recommend that the Council adopts a more structured approach to setting its Council Tax precept, including setting out in the report to the Council proposing the Council Tax precept and/or minutes of the Council meeting setting the precept, the estimated reserves that it would be appropriate to raise or prudent to use, having regard to the estimated level of reserves at the end of the financial year. Authorisation of payments A key control over the Council’s finance involves the authorisation of payments by the Council. The Council receives and approves schedules of payments. However, the effectiveness of this control is reduced as the schedules exclude certain payments, including payment of salaries. R8: We recommend that the Council explicitly approves all payments made. Compliance with the Freedom of Information Act 2000 The Freedom of Information Act 2000 is designed to allow members of the public to access information held by public bodies except where there is a good reason for the information not to be in the public domain. The legislation establishes an Information Commissioner to whom those who have sought information from public bodies may complain if they believe that a public body has not complied with its duties under the Act. Over the period 2016/17 to 2019/20, the Council received 11 decision notices from the Information Commissioner. In the case of 10 of those, the Information Commissioner found that the Council had not complied with provisions of the Freedom of Information Act 2000 and in three cases required the Council to take further action. Subsequently the Council has received a further three decision notices. In two cases, the Information Commissioner found that the Council had not complied with provisions of the Freedom of Information Act 2000 and in one case required the Council to take further action. We are concerned that the Council has on many occasions failed to comply with requirements of the Freedom of Information Act 2000. Although the Council undertook the specific actions required by the Information Commissioner, we have not seen evidence that the Council has considered the findings of the Information Commissioner as a whole and established the actions needed to minimise the risk of non-compliance with the Freedom of Information Act 2000 going forward. R9 & R10: We recommend that the Council should: undertake a review of its arrangements for handling Freedom of Information requests in light of the findings of the Information Commissioner; and agree steps to minimise the risk of non-compliance going forward. Handling of correspondence By its nature, the Council receives correspondence that requires consideration and, as appropriate, decisions and responses. Effective mechanisms for recording, considering and responding to correspondence in a timely way are therefore valuable. We have identified that the Council has: no formal policies or procedures specifically relating to handling of correspondence; and no formal schedule for logging incoming correspondence and the handling of that correspondence The decisions of the Information Commissioner referred to above include findings that the Council failed to respond to Freedom of Information Act requests within the prescribed timetables. Such findings strengthen our view that current arrangements for the handling of correspondence are inadequate. R11 & R12: We recommend that the Council should: adopt formal policies and procedures for handling of correspondence; and maintain a formal schedule for logging incoming correspondence and the handling of that correspondence. Compliance with the General Data Protection Regulations 2018 The General Data Protection Regulations 2018 require the Council to place a privacy notice on its website. We have identified that it has not done so. R13: We recommend that the Council prepares and places on its website a privacy notice. Preparation of the Annual Governance and Accountability Return (AGAR) The Council has a duty to prepare an AGAR, including an Annual Governance Statement. The Annual Governance Statement comprises a series of assertions about the Council’s system of internal control, including in relation to the arrangements for preparing its accounting statements. To each assertion, the Council is required to respond ‘Yes’ or ‘No’. In the case of ‘No’ responses, the Council is required to describe how the weakness will be addressed. The Annual Governance Statement is an important means by which the Council demonstrates its accountability for the proper management of public funds. It is therefore important that the Council has a robust process for preparing the Annual Governance Statement, including that it has sufficient evidence before answering ‘Yes’ to a question. We have found that no such system was in operation at the Council and the Council cannot demonstrate that it had considered appropriate evidence before preparing its Annual Governance Statements. Indeed, the matters identified in this report would call into question whether it was appropriate to answer ‘Yes’ to some of the assertions. R14: We recommend that the Council adopts a structured and documented approach to the completion of its Annual Governance Statement. Action in respect of previous audit recommendations The Council has both external and internal auditors. Those auditors may make recommendations to improve the internal control and governance of the Council. Effective arrangements for considering and responding to such recommendations are important components of the Council’s governance. The Council has previously received recommendations from its external auditor. In January 2017 the Council adopted an action plan in response to the auditor’s report on its 2014/15 Annual Return. In January 2018 the Council adopted an action plan in response to the auditor’s report on its 2015/16 Annual Return. However, we are concerned that: the action plans did not include clear future actions with dates for completion and responsibilities for implementation; and progress in respect of the action plans was not routinely reported to subsequent meetings of the Council. R15 & R16: We recommend that the Council: prepares action plans in response to this report, including clear actions with dates for completion and responsibilities for implementation; and receives reports on progress in implementation of recommendations at each Council meeting until all agreed recommendations have been implemented. Implementing change We recognise that implementation of necessary change can be demanding, particularly for a small organisation without significant internal resources. R17: We recommend that the Council seeks assistance, possibly from the Yorkshire Local Councils Associations, in implementing the recommendations contained in this Public Interest Report. Next steps In accordance with paragraphs 4, 5, 8 and 9 of Schedule 7 of the Local Audit and Accountability Act 2014, the Council must: publish this report and a notice stating the subject matter of the report and stating that members of the public may inspect the report and make a copy of all or any part of it between the times and at the place(s) specified in the notice. The notice must be published on the Council’s website; send a copy of the report to each of its Members; allow members of the public to inspect the report at all reasonable times without payment; allow members of the public to make a copy of the report or any part of it; supply members of the public with the report or any part of it on payment of a reasonable sum; consider this report at a meeting within one month of today’s date, unless we are satisfied that there are reasonable grounds to extend that period; at least eight clear days before the meeting to consider the report, publish on its website a notice stating the time and place of the meeting at which the report is to be considered, stating that the meeting will consider the report and describing the subject matter of the report; supply a copy of this report with the agenda for the meeting considering the report; not treat this report as exempt information; as soon as reasonably practicable after the meeting, notify us of the decisions made in response to the report; and as soon as reasonably practicable after the meeting, publish on its website a notice, approved by us, summarising those decisions. We have a duty to send a copy of this report to the Secretary of State and the power to send a copy to anybody we think appropriate. Response to Potto Parish Council objections to the accounts We write in connection with your objections to Potto Parish Council’s (‘the Council’ or ‘PPC’) accounts for the years ended 31 March 2017, 2018, 2019, 2020 and 2021. This letter is in two parts: In Part A we set out our decision and provide reasons for our decision in respect of those objections to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and 2020 that we decided to consider; and In Part B we set out our decision in respect of whether to consider your objections to the Council’s accounts for the year ended 31 March 2021. Part A: your objections to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and 2020 Background In our letters dated 8 March 2021 and 19 August 2021, in relation to your objections relating to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and 2020, we: summarised the requirements for an eligible objection; set out with reasons the objections that we have formed the view were not eligible; explained the factors that we have taken into account in deciding which objections to consider; set out the objections that we decided to consider and not to consider and the reasons for those decisions; shared with you documents we believed to be material to deciding the objections. Our consideration of your objections We have carefully considered whether, in respect of the objections that we have considered, to make a public interest report under paragraph 1 of Schedule 7 of the Local Audit and Accountability Act 2014 (‘the 2014 Act’) so that a matter can be considered by the Council in accordance with Schedule 7 or brought to the public’s attention. In considering the objections we have complied with the Code of Audit Practice (‘the 2015 Code’) prepared and published by the Comptroller and Auditor General under paragraphs 1 and 2 of Schedule 6 of the 2014 Act. Paragraph 1.11 of the 2015 Code states that auditors should ‘have regard’ to guidance issued under paragraph 9 of Schedule 6 of the 2014 Act. In February 2018, in exercise of the power in paragraph 9 of Schedule 6 of the 2014 Act, the National Audit Office, on behalf of the Comptroller and Auditor General, issued Auditor Guidance Note 4: Auditors’ Additional Powers and Duties (‘AGN 04’). We have had regard to that guidance. Our decision Having carefully considered the objections and the information we have obtained, we have decided to uphold your request that we issue a report in the public interest. In this letter, we set out the reasons for our decision. We use the grouped heads of objection adopted in our letter of 8 March 2021. Objection A: Precept- and budget-setting The objection relates to the Council’s arrangements for setting its annual budget and determining its annual Council Tax precept. Grounds for the objection Your key contentions were: the budget includes meaningless and/or unquantified items; the process for setting the budget was inadequate; the budget, and the increases to the budget, were not justified; the budget included items that were not ‘value for money’; the budget included inflated estimates. Our consideration of the objection We have reviewed the minutes and agenda papers supporting the setting of the Council’s annual precept. Local government finances are conducted on an annual basis with a conscious decision required either to plan for an increase in or use of reserves. This is reflected in section 49A of the Local Government Finance Act 1992 which specifies the calculations that the Council must perform in order to determine the precept. Essentially, in setting its precept, the Council is required to calculate: its estimated expenditure for the next year plus an allowance for contingencies; the reserves which it is appropriate to raise for meeting estimated future expenditure; its estimated non-precept income for the year; and the reserves held which it is prudent to use in the year. In determining its precept in the years to which the objections relate, the Council has not performed these calculations. Whilst it has estimated expenditure and other income, it has not explicitly determined the reserves that it would be appropriate to raise or prudent to use, having regard to the estimated level of reserves at the end of the financial year. The items specified in legislation are not set out in the relevant agenda papers or minutes. Moreover, we are concerned that the documentation of the budget setting process is not as robust as it should have been: the papers presented to the Council to support the budget setting are rudimentary and lack the explanation that we would have expected; and there are no supplementary working papers to support the derivation of the budget papers presented to the Council. However, on the evidence available to us we are not satisfied that the weaknesses in the budget setting process give rise to unlawful items of account. In Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) (1 KB 223) the court concluded that a public body exercising a discretion would only be unlawful if: in making the decision, it took into account factors that ought not to have been taken into account, or it failed to take into account factors that ought to have been taken into account, or the decision was so unreasonable that no reasonable authority would ever consider making it. The fact that the Council’s precept increased or was higher than the precepts of other bodies would not of themselves lead us to conclude that the decisions of the Council in setting the precepts were so unreasonable that no reasonable authority would ever consider setting the precepts that it did. Objection B: Authorisation of payments The objection relates to the authorisation of payments by the Council. Grounds for the objection Your key contentions were: the Council made payments that were not approved by the Council; and the Council made payments in respect of which there was no provision in its annual budget. Our consideration of the objection The Council has provided us with schedules of payments for the years ended 31 March 2018 to 31 March 2020. Our review of those schedules identifies that there is no explicit authorisation of some payments, including those of salaries. In our view, the making of payments in respect of which there was no provision in the Council’s budget would not of itself render such payments contrary to law. However, we would anticipate subsequent approval of budget ‘virements’ to accommodate such expenditure. Objection C: Internal audit The objection relates to the Council’s arrangements for internal audit. Grounds for the objection Your key contentions were: the internal audit provided was not ‘effective’; the internal auditor failed to identify and report on weaknesses that should have been evident; the Council failed formally to appoint its internal auditor; the Council failed to put in place an engagement letter with its internal auditor; the Council failed to control the fee of its internal auditor; and in view of the weaknesses in internal audit, the Council should not have concluded that it operated an adequate system of internal control. Our consideration of the objection The Council did not put in place formal arrangements for the appointment, agreement of scope and agreement of terms for its internal audit. Notwithstanding the small scale of the Council’s activities and the Council’s view to the contrary, we expect basic documentation relating to these matters to be in place. The internal audit of the Council is by its nature limited and the specific procedures to be performed to support the conclusions on the internal control objectives included in the Annual Internal Audit Report are not specified in proper practices or in any documentation. It is therefore not possible to reach a conclusion as to whether the Council’s internal audit should have identified and reported on weaknesses in the Council’s system of internal control. Objection D: Potto Village Hall Charity The objection relates to the trusteeship of the Potto Village Hall Charity. Grounds for the objection Your key contentions were: that the Council had falsely asserted, including to the Charity Commission, that individuals were the trustees of the Charity when the Council was actually the sole trustee; and that the Council as sole trustee failed to submit accounts of the Charity in a timely fashion to the Charity Commission. Our consideration of the objection By virtue of section 139 of the Local Government Act 1972, the Council may receive and hold gifts for charitable purposes. You have drawn attention to a Council minute of June 2006 that states that the Council is trustee of the Potto Village Hall Charity. The Council has provided us with copies of a conveyance and trust deed dated 12 October 1960 and a supplemental conveyance and trust deed dated 3 October 1967. In both of these documents there are named individual trustees. The Council has not identified any documents subsequently transferring trusteeship to the Council. We are unaware of the support for the assertion in the Council minute dated June 2006 and the documentary evidence available to us does not support this assertion. On the basis of the evidence available to us we are unable to conclude that the Council was the trustee of the Potto Village Hall Charity and failed in that capacity to submit accounts to the Charity Commission. Objection E: Publication of Council minutes The objection relates to the publication of minutes of meetings of the Council. Grounds for the objection Your key contention was that the Council has failed to publish minutes of its meetings and associated background papers within the prescribed statutory timescale. Our consideration of the objection In response to a question we posed, the Council has provided us with a schedule detailing dates of publication of minutes. This would indicate that in most, but not all, cases minutes were published within one month of Council meetings. The Council has, however, stated that the schedule is prepared on the basis of the date on which minutes were submitted to its webmaster as no record is maintained of the date of actual publication. The Council is therefore unable to demonstrate the extent to which draft minutes have been published within one month of the meeting to which they relate. Objection F: Preparation of Annual Return The objection relates to the Council’s Annual Governance Statement, Section 1 of the Annual Governance and Accountability Return. Grounds for the objection Your key contentions were: that the Council falsely completed its Annual Governance Statement asserting compliance in areas where there was non-compliance; that the Council made false statements in the ‘additional sheet Notes’ to its Annual Governance and Accountability Return for the year ended 31 March 2018. Our consideration of the objection The assertions that the Council makes in its Annual Governance Statement are a matter for the Council to make having made its own enquiries, including review of the report of its internal auditor. We have established that the process for the making of such assertions was not developed with no additional information available for consideration by the Council before authorisation of the Annual Governance Statement. Moreover, based on the findings of our work in response in considering these objections we have identified a number of weaknesses in the Council’s system of internal control that would call into question whether the answering of questions in the Annual Governance Statement in the positive was appropriate. Objection G: Compliance with Freedom of Information Act 2000 The objection relates to compliance with the Freedom of Information Act 2000. Grounds for the objection Your key contentions were: that the Council persistently failed to comply with the Freedom of Information Act 2000; that the Council failed to comply with the Code of Practice issued by the Information Commissioner’s Office; and the Council failed to revise its policies and procedures in respect of Freedom of Information in response to audit findings. Our consideration of the objection Over the period covered by the objections the Council received 11 decision notices from the Information Commissioner. In the case of 10 of those, the Information Commissioner found that the Council had not complied with provisions of the Freedom of Information Act 2000 and in three cases required the Council to take further action. Subsequently the Council has received a further three decision notices. In two cases, the Information Commissioner found that the Council had not complied with provisions of the Freedom of Information Act 2000 and in one case required the Council to take further action. The Council has drawn our attention to the National Association of Local Councils/Yorkshire Associations of Local Councils policy on the Freedom of Information Act 2000 with which it complies. However, it is evident that the Council has failed on many occasions to comply with the Freedom of Information Act 2000. We have not seen evidence of structured learning from the findings of the Information Commissioner, including adoption of documented procedures to minimise the risk of non- compliance going forward. Objection H: Conduct of business not on the agenda The objection relates to the conduct of business not included on the published agendas for meetings. Grounds for the objection Your key contentions were: the Council failed to specify in sufficient detail on its agendas the business to be conducted; and the Council conducted business not on the agendas. Our consideration of the objection The Council has provided us with a schedule linking matters detailed in the minutes to items on the agenda. However, until 2020 the description of agenda items is exceptionally brief and it is therefore highly arguable whether items detailed within the minutes fell within the items recorded on the agenda. In particular, the agendas did not specify whether any decision was requested in respect of an item and the nature of such a decision. From 2020, a more extended form of agenda has been adopted giving greater clarity about the nature of matters on the agenda and, in particular, of decisions requested. Objection I: Publication of agendas The objection relates to the publication of agendas for Council meetings. Grounds for the objection Your key contentions were: agendas were not published within the prescribed statutory timeframes; and agendas did not specify in sufficient detail the business to be conducted. Our consideration of the objection Paragraph 10(2) of Schedule 12 of the Local Government Act 1972 requires that, at least three clear days before a meeting of a parish council, notice of the time and place of the intended meeting shall be fixed in some conspicuous place in the parish. The Council had provided us with a schedule of the dates of meetings and posting the agenda for meetings on the Council’s noticeboard. That schedule indicates compliance with the statutory requirements for the periods covered by the objections. To the extent that you have provided examples of alleged non-compliance, the effort to resolve the apparent evidential discrepancies would be disproportionate. Indeed, such efforts might be futile. Given the widespread use of electronic communication, we have also considered whether agendas were posted on the Council’s website at least three clear days before meetings. The Council was able to provide details of the dates on which agendas were sent to the Council’s webmaster but not the dates on which they were published on the Council’s website. We are therefore unable to confirm whether copies of Council agendas were available on the Council’s website at least clear three days before Council meetings. We have considered under Objection H above the contention that agendas do not specify in sufficient detail the business to be conducted. Objection J: Standing Orders The objection relates to the Standing Orders governing the conduct of the Council’s business. Grounds for the objection Your key contention was that the Council failed to prepare or publish Standing Orders. Our consideration of the objection Section 106 of the Local Government Act 1972 provides that: Standing orders may be made as respects any committee of a local authority by that authority or as respects a joint committee of two or more local authorities, whether appointed or established under this Part of this Act or any other enactment, by those authorities with respect to the quorum, proceedings and place of meeting of the committee or joint committee (including any sub-committee) but, subject to any such standing orders, the quorum, proceedings and place of meeting shall be such as the committee, joint committee or sub-committee may determine. Although there is no requirement for the adoption of Standing Orders, they are recognised as an important element of good governance and virtually all local authorities adopt and review Standing Orders. We have been provided with a copy of Standing Orders dated 15 January 2016. However, we have not been provided with a minute adopting these Standing Orders nor have we located such a minute. We are therefore unable to confirm that the Standing Orders dated 15 January 2016 were properly adopted and in place for the period 1 April 2016 to 15 May 2019. We have been provided with a copy of undated Standing Orders and with a minute of the Council dated 15 May 2019 adopting Standing Orders. In our view, for the avoidance of any confusion, Standing Orders should contain a clear statement of their adoption and the date of their adoption. Objection K: Action in response to previous audit recommendations The objection relates to the Council’s response to recommendations previously made by its external auditor. Grounds for the objection Your key contentions were: that the Council failed to prepare an adequate action plan in respect of external audit findings and recommendations; that the Council failed to implement the actions that it agreed; and that the Council failed to monitor implementation of agreed actions. Our consideration of the objection In January 2017 the Council adopted an action plan in response to the auditor’s report on its 2014/15 Annual Return. In January 2018 the Council adopted an action plan in response to the auditor’s 2015/16 Annual Return. We are concerned that: the action plans did not include clear future actions with dates for completion and responsibilities for implementation; and progress in respect of the action plans was not routinely reported to subsequent meetings of the Council. Objection L: Annual Parish Council Meetings The objection relates to the annual meeting of the Council and the annual parish meeting. Grounds for the objection Your key contentions were: that the Council failed to hold an annual meeting of the Council; and that the Council failed to maintain any record of holding the annual parish meeting that it is required to hold. Our consideration of the objection Paragraph 7 of Schedule 12 to the Local Government Act 1972 requires the Council to hold an annual meeting within 14 days of the date elections or in May in year where there are no elections to the Council. Section 15 requires the Council to appoint a Chairman at its annual meeting. Section 9 of the Local Government Act 1972 provides that every parish shall have a parish meeting for the purposes of discussing parish affairs. We have seen agendas for and minutes of an annual ‘Parish Assembly’ for each year to which the objections relate. Notwithstanding the name adopted, these meetings appear to constitute the parish meeting requires by Section 9 of the Local Government Act 1972. We have not identified meetings held specifically for the purposes of Paragraph 7 of Schedule 12 of the Local Government Act 1972. In particular, there is no agenda item or minute relating to the election of a Chairman of the Council for the year. Objection M: Handling of correspondence The objection relates to the Council’s handling of correspondence. Grounds for the objection Your key contentions were: that the Council failed to handle correspondence from you in a fair and timely manner; that the Council has inadequate arrangements in place for the handling of correspondence, including recording correspondence received. Our consideration of the objection By its nature the Council receives correspondence that requires consideration and, as appropriate decisions and responses. Effective mechanisms for recording, considering and responding to correspondence in a timely way are therefore valuable. We have identified that the Council has: no formal policies or procedures specifically relating to handling of correspondence; or no formal schedule for logging incoming correspondence and handling of that correspondence The decisions of the Information Commissioner referred to above include findings that the Council failed to respond to Freedom of Information Act requests within the prescribed timetables. Such findings strengthen our view that current arrangements for the handling of correspondence are inadequate. Objection N: Compliance with the General Data Protection Regulation 2018 This objection relates to the Council’s compliance with the General Data Protection Regulation 2018 (GDPR). Grounds for the objection The key contentions are that: The Council did not adopt a policy on GDPR; The Council ‘adopted’ a policy on document retention at an irregular meeting; and The Council failed to place a privacy notice on its website. Our consideration of the objection We have established that the Council recognised and took measures to address weaknesses in arrangement. On 14 February 2020 it adopted both: a Data Protection Policy; and a Retention of Documents Policy. However, no privacy notice has been placed on its website. Consideration of the request that we issue a Public Interest Report We have identified weaknesses in the governance and accountability of the Council, in particular in respect of heads A, B, E, F, G, I, J, K, L, M and N above. In our view those matters, taken together, are significant, even allowing for the size of the Council. In our view they are of sufficient significance to warrant a Public Interest Report so that the matters can be brought to the attention of the public and the Council and appropriate corrective action taken. Certification of completion of the audit We are today issuing a Public Interest Report, a copy of which we attach. The Council must now consider the report at a meeting of the Council in accordance with Schedule 7 of the Local Audit and Accountability Act 2014. We are today certifying completion of our audits of the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and 2020. Part B: your objections to the Council’s accounts for the year ended 31 March 2021 Background You have given notice of objection to the Council’s accounts for the year ended 31 March 2021 in letters dated 13 and 23 July 2021. The revised letter of 23 July 2021 contained 40 separate objections in sections 2 to 6, eight of which you describe as ‘new’. In our email of 21 July 2021, we gave initial views on why we would not consider those objections. We now give fuller views. Requirements for an eligible objection Section 27 of the Local Audit and Accountability Act 2014 (‘the 2014 Act’) provides that local government electors for an area may object to the Council’s accounts concerning a matter in respect of which the auditor could: make a public interest report under paragraph 1 of Schedule 7 of the 2014 Act. Paragraph 1 of Schedule 7 of the 2014 Act provides that auditor must consider whether, in the public interest, they should make a report on any matter coming to their notice during the audit and relating to the Council or an entity connected with the Council, so it can be considered in accordance with Schedule 7 of the 2014 Act or brought to the public’s attention; and/or make an application to the court for a declaration that an item of account is contrary to law under section 28 of the 2014 Act. Section 27 requires that objections must be made in writing and copied to the Council. Regulation 14 of the Accounts and Audit Regulations 2015 (‘the 2015 Regulations’) provides that objections may only be made in a single 30-day period of which notice has been given under Regulation 15 of the 2015 Regulations. Regulation 17 of the 2015 Regulations provides that a notice of objection under Section 27 of the 2014 Act must specify: the facts on which the local government elector relies; the grounds on which the objection is being made; and so far as is possible, particulars of any item of account which is alleged to be contrary to law; and any matter in respect of which it is proposed that the auditor could make a public interest report under section 24 of and paragraph 1 of Schedule 7 to the 2014 Act. Furthermore: in 2015, in exercise of their duties under paragraphs 1 and 2 of Schedule 6 to the 2014 Act, the Comptroller and Auditor General prepared and published a Code of Audit Practice (‘the 2015 Code’) prescribing the way in which local auditors are to carry out their functions; paragraph 9 of Schedule 6 of the 2014 Act empowers the Comptroller and Auditor General to issue guidance to auditors; paragraph 1.11 of the 2015 Code states that auditors should ‘have regard’ to guidance issued under paragraph 9 of Schedule 6 of the 2014 Act. In February 2018, in exercise of the power in paragraph 9 of Schedule 6 of the 2014 Act, the National Audit Office, on behalf of the Comptroller and Auditor General, issued Auditor Guidance Note 4: Auditors’ Additional Powers and Duties (‘AGN 04’). Paragraphs 20 to 28 of AGN 04 provide guidance on determining whether an objection is eligible. We have had regard to that guidance. Eligibility of objections We have satisfied ourselves that: at the time you objected to the Council’s accounts for the year ended 31 March 2021 you were a local government elector for the Council’s area; your objections have been made in writing; you provided a copy of your objections to the Council; and you gave notice of your objections within the requisite 30-day period. We have formed the view that your notices of objection meet the requirements of Regulation 17 of the 2015 Regulations. Factors taken into account in deciding whether to consider objections Section 27(3) of the 2014 Act requires that we decide whether to consider an objection. Section 27(4) of the 2014 Act provides that we may decide not to consider an objection if, in particular, we think that: the objection is frivolous or vexatious; the cost of the auditor considering the objection would be disproportionate to the sums to which the objection relates, or; the objection repeats an objection already considered by an auditor of the Council’s accounts, whether appointed under the 2014 Act or section 16 of the Audit Commission Act 1998. By virtue of section 27(5) of the 2014 Act, we are not entitled to refuse to consider an objection which we think might disclose serious concerns about how the relevant authority is managed or led. By virtue of section 27(6) of the 2014 Act, if we decide not to consider an objection, we may recommend that the Council should instead take action in response to the objection. Section 28 of the 2014 Act gives a person who has objected to the Council’s accounts asking that the auditor make an application for a declaration that an item of account is contrary to law and who is aggrieved that the auditor decides not to do so: to receive written reasons for that decision; and appeal against that decision to the court. Paragraphs 29 to 38 AGN 04 provides guidance on deciding whether to consider objections. Paragraph 33 emphasises that the grounds set out in section 27(3) of the 2014 Act do not constitute an exhaustive list. Decision not to consider your objections We have carefully considered all the objections you have made and decided which objections we will consider, in particular by reference to the matters detailed in section 27(4) of the 2014 Act. We would emphasise that in so doing we have: considered both the likely individual and aggregate cost of consideration of objections and the sums to which the objections relate in the context of the scale of the Council’s activities; and had regard to the fact that, under section 27(7) of the 2014 Act, our reasonable costs of considering objections fall on the Council. Your objections to the Council’s accounts for the year ended 31 March 2021 fall into three groups. Those that relate to matters on which you have previously made objections to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and/or 2020 and we decided not to consider. We have carefully considered whether it is appropriate to consider these objections in relation to the year ended 31 March 2021. We have formed the view that it remains appropriate not to consider them and that the reasons that we gave for not considering them in our email of 21 July 2021 remain appropriate; Those that relate to matters on which you previously made objections to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and/or 2020 and we decided to consider. We have carefully considered whether it is appropriate to consider these objections separately in relation to the year ended 31 March 2021. We have formed the view that, as the subject matter of those objections has been carefully considered in respect of earlier years, it would be disproportionate to consider them separately. We have, however, had regard to the objections for the year ended 31 March 2021 in deciding the objections to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and 2020; and Those that relate to matters in respect of which you did not make objections to the Council’s accounts for the years ended 31 March 2017, 2018, 2019 and/or 2020. We considered whether it is appropriate to consider these objections. For the reasons given below we have decided not to consider those objections. Ref Description Reasons for not considering 2m Accounting statements not in accordance with ‘proper practice’ The most significant points raised are dependent on the relationship of the Council with the Village Hall Management Committee. These have been considered in Objection D to earlier years of account above. Cost of consideration of other matters raised would in our view be disproportionate to suns involved or the benefit of doing so. 2n Financial controls and safeguarding of assets Cost of consideration of matters raised would in our view be disproportionate to suns involved or the benefit of doing so. 2o Financial Regulations – adequacy and compliance Cost of consideration of matters raised would in our view be disproportionate to suns involved or the benefit of doing so. 4u Unauthorised amendments to published/ resolved records Alleged unauthorised amendment to adopted minutes previously considered and decision made not to consider. No compelling evidence to justify new consideration. Cost of consideration of matters raised would in our view be disproportionate the benefit of doing so. 5y Failure to correct errors in meeting minutes before publishing Cost of consideration of matters raised would in our view be disproportionate the benefit of doing so. 5y Failure to correct errors in meeting minutes before publishing Cost of consideration of matters raised would in our view be disproportionate the benefit of doing so. 5z Council’s claims of vexatious actions Inherently complex to determine whether conduct is vexatious. Cost of consideration of matters raised would in our view be disproportionate the benefit of doing so. 6f Council’s claims of vexatious actions Prima facie no clear rationale for objection as there is in our initial view no obligation on the Council to provide a copy of its response. In any event, the wider question of the Council’s response to objections has been considered above under Objection K to earlier years of account.