Angus Community Councillors' Information Handbook

1. Financial Guidelines

1.1 Introduction

The purpose of this guidance is to provide community councils with simple instructions on the minimum level of documentation and records, which should be maintained.

1.2 Recording of receipts and payments

As a bare minimum, the Treasurer should maintain records of all receipts and payments in a cash book using separate pages for each. Ideally this should be extended to include separate identifying columns for cash and bank. Depending on the detail required this could be further expanded to provide a fully analysed cash book, detailing the main categories of receipts and payments, e.g. grant income, postages, photocopying etc.

Good practice when bookkeeping is to record all transactions as quickly as possible and in as much detail as necessary. Wherever possible an invoice or till receipt should be received for every payment made, numbered sequentially and carefully filed. Where an invoice or till receipt is not available, a pro-forma voucher should be raised by the Treasurer detailing what the payment was for and signed by the person receiving payment.

As with payments, receipts should be supported by appropriate documentation, which should be numbered sequentially and carefully filed. All cash/cheques should be given to the Treasurer as soon as possible. The Treasurer should issue a receipt (keeping a copy) detailing the amount of the receipt, what it relates to and who it has been received from. This is particularly important where cash (as opposed to cheque) is involved.

Additionally, a list should be prepared of any assets held by the Community Council, such as laptops etc. This should be retained by the Treasurer and updated at least annually or as required.

Annual accounts

Annual accounts should be prepared at the end of each financial year (ending 31st March) summarising the receipts and payments made during that year. The use of receipts and payments accounts is recommended. By definition, this will only include physical receipts and payments made during the period, not transactions which have still to be concluded. Any transactions not concluded by close-of-business on the final day of the financial period must be accounted for in the following financial year.

Ideally, every effort should be made to make all payments and receive all income before close of business on the last day of the relevant accounting year. If exceptionally there was a significant payment due but not made by the financial year-end then an appropriate note should be made to the accounts.

The annual accounts should show opening bank and cash balances, summarised details of receipts and payments for the year and the closing bank and cash balances. Appropriate vouchers should be retained as evidence for each transaction.

Audit of annual accounts

These accounts require to be audited by someone who is suitably experienced in accountancy (preferably a qualified accountant). They must not be a member of the community council or related to a community councillor in any way.

The auditor should confirm the bank and cash balances and examine all documents for authenticity, propriety, etc. to verify the accounts and sign and date them with a statement saying: “I have examined the books and records of the XXX Community Council for the period April XXX to March XXX and have found the above statement to be correctly stated and sufficiently vouched.”

Bank accounts and cash

Each community council should open a bank account in the name of the community council. Community councils are encouraged to select a bank account which is the best available to them. The account should be operated with two signatories required for each cheque, with a minimum of three persons designated as signatories for ease of operating the account. This should always be the Treasurer and two other designated officers of the community council.

Signatories should not sign blank cheques but the cheque should be prepared by the Treasurer and presented to another signatory along with appropriate documentary evidence relating to the payment. The signatory should sign the cheque and endorse the documentation with the cheque number and the payment date to show the payment has been made.

Cash held by the community council should be kept to a minimum and always held in a lockable container.

Example of a basic layout for a cash book

Example of preferred layout for annual accounts

XXX Community Council

Statement of income and expenditure of XXX Community Council for the period 1 April XXX to 31 March XXX.

Prepared by……………………………………. Date…………….......

Auditor’s certificate

I have examined the books and records of the XX Community Council for the period April XXX to March XXX and have found the above statement to be correctly stated and sufficiently vouched.

Signed by………………………………………. Date…………………

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