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The First Secretary of State makes the following Regulations in exercise of the powers conferred by section 27 of the Audit Commission Act 1998[1] ("the 1998 Act") and section 134(6) of the Greater London Authority Act 1999[2]. In accordance with section 27(3) of the 1998 Act, he has consulted the Commission, such associations of local authorities as appear to him to be concerned and such bodies of accountants as appear to him to be appropriate. Citation, commencement and application 1. —(1) These Regulations may be cited as the Accounts and Audit (Amendment)(England) Regulations 2006 and shall come into force on 1st April 2006. (2) These Regulations apply to relevant bodies in England only. Amendment of the Accounts and Audit Regulations 2003 2. The Accounts and Audit Regulations 2003[3] are amended as set out in regulations 3 to 21. Interpretation and application 3. In regulation 2 (interpretation and application)—
(ii) section 17 of the Norfolk and Suffolk Broads Act 1988;[a] (iii) section 112 of the Local Government Finance Act 1988; (iv) section 6 of the Local Government and Housing Act 1989; (v) paragraph 13(6) of Schedule 7 to the Environment Act 1995; or (vi) section 127 of the Greater London Authority Act 1999;
as the case may be, is responsible for the administration of the financial affairs of a relevant body or, if no person is so responsible, the person who is responsible for the keeping the accounts of such a body, or"; and
(e) after paragraph (2), insert—
Responsibility for financial management
(b) after paragraph (2), add—
(4) The relevant body shall include the statement referred to in paragraph (3) with—
(b) any income and expenditure account, statement of balances or record of receipts and payments it is obliged to publish or display in accordance with regulation 12.".
Accounting records and control systems
(b) in paragraph (1), for "this paragraph or" substitute "this paragraph,"; and (c) in paragraph (1), omit from "maintained" to "proper practices and".
Internal audit
(ii) omit from ", and any officer" to "for that purpose"; and
(b) after that paragraph, insert—
(b) supply the body with such information and explanation as that body considers necessary for that purpose.
(3) The relevant body shall, at least once in each year, conduct a review of the effectiveness of its system of internal audit.
Statement of accounts
(b) collection fund; (c) firefighters' pension fund; (d) any other statements relating to each and every other fund in relation to which the body is required by any statutory provision to keep a separate account;";
(b) in paragraph (2)—
(c) omit paragraphs (3) and (4);
Passenger Transport Executives
7A. —(1) A statement of accounts of a Passenger Transport Executive shall be prepared so as to be no less informative than if the disclosure requirements of the Companies Act 1985 were, so far as appropriate, applicable to Executives. (2) For each year ending on or after 31st March 2006, a Passenger Transport Executive shall charge to a revenue account an amount equal to the retirement benefits payments and contributions to pension funds which are payable for that year in accordance with—
(b) the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000.".
Summary statement of accounts - Greater London Authority
(c) for paragraph (3) substitute—
(b) an income and expenditure account and a statement of balances of the body in relation to that year.".
Signing and approval of statement of accounts etc
(ii) for "referred to in regulations 7(1) and 7(6)" substitute "which are not smaller relevant bodies"; (iii) for "approved by a resolution of a committee of the relevant body or otherwise by a resolution of the members of the body meeting as a whole," substitute "considered by a committee of the relevant body or the members of the body meeting as a whole, and following that consideration, shall be approved by a resolution of that committee or meeting,";
(b) in paragraph (4)—
(ii) for "all relevant bodies referred to in regulation 9(2) and (3)" substitute "smaller relevant bodies"; (iii) for "balance sheet" substitute "statement of balances"; (iv) for "regulation 9(1),", substitute "regulation 9(1) or"; (v) omit "or the income and expenditure account and statement of balances as required by regulation 9(3)(b)"; (vi) for "approved by a resolution of a committee of the relevant body or otherwise by a resolution of the members of the body meeting as a whole," substitute "considered by a committee of the relevant body or the members of the body meeting as a whole, and following that consideration, shall be approved by a resolution of that committee or meeting,"; and (vii) for "before the 30th September" substitute ", subject to paragraph (5), before the 30th June";
(c) in paragraph (5)—
(ii) for "2003" substitute "2006"; (iii) for "2004" substitute "2007"; and (iv) for "2005" substitute "2008"; and
(d) after paragraph (5) insert—
(b) where the meeting referred to in sub-paragraph (a) does not resolve to approve the accounting document, the relevant body shall, as soon as reasonably practicable, publish a statement as to the reasons why it cannot approve the accounting document.".
Publication of statement of accounts etc
(ii) for "sections 9(1)(a) and 19A" substitute "section 9(1)(a)"; and
(b) omit paragraphs (2) and (3).
Publication of income and expenditure account and receipts and payments
(ii) for "to which paragraph (2) below applies, or, in the case of a parish meeting, the chairman," substitute "which is a smaller relevant body"; and (iii) for sub-paragraph (a), substitute—
(ii) display a notice containing the requisite information in a conspicuous place or places in the area of the body for a period of at least 14 days; and";
(b) omit paragraphs (2) and (3);
(b) the income and expenditure account and statement of balances prepared in accordance with regulation 9(1), (c) the record of receipts and payments, and, (d) the income and expenditure account and statement of balances prepared in accordance with regulation 9(3)(a),
together with any certificate, opinion, or report issued, given or made by the auditor under section 9(1)(a) of the 1998 Act, or, if no such opinion has been given, together with a statement that the auditor has given no opinion and setting out the reasons why no opinion has been given.
(b) in respect of the year ending with 31st March 2007, as a reference to the 30th November; and (c) in respect of the year ending with 31st March 2008, as a reference to the 31st October.".
Appointment of date for the exercise of rights of electors
(b) in paragraph (2), for "The council of a parish, or the chairman of a parish meeting of a parish not having a separate council, notified under regulation 13" substitute "A relevant body notified under regulation 13, which is a smaller relevant body".
Notice of public rights
(b) in paragraph (3), for "A relevant body to which regulation 12(2) applies or which is referred to in regulation 12(3) or, in the case of a parish meeting, the chairman of the meeting," substitute "A smaller relevant body".
Notice of conclusion of audit
(b) in paragraph (2), for "a body to which regulation 12(2) applies or which is referred to in regulation 12(3) or, in the case of a parish meeting, the chairman of the meeting," substitute "a smaller relevant body"; (c) for paragraph (3) substitute—
(b) be accompanied by an explanation of the amendment."; and
(d) in paragraph (4), for the words from the beginning to "required", substitute "Where any material amendment is made".
Publication of annual audit letter
(ii) for ", and" substitute "and the income and expenditure account and the statement of balances, or the record of receipts and payments, as the case may be, and"; and
(b) in sub-paragraph (b)—
(ii) after "a copy of the" insert "auditor's report and".
Extraordinary audit
(b) for "body to which regulation 11(2) applies" substitute "relevant body which is not a smaller relevant body"; and (c) for "body to which regulation 12(2) applies or which is referred to in regulation 12(3)" substitute "a smaller relevant body".
Offences (This note is not part of the Regulations) These Regulations amend the Accounts and Audit Regulations 2003 ("the 2003 Regulations"). Regulation 3 amends regulation 2 of the 2003 Regulations by the substitution of a new definition of "working day". A new definition of "relevant body" has also been substituted which has the effect of bringing passenger transport executives within the 2003 Regulations. A new definition of "smaller relevant body" has been inserted and, together with the amendments to regulations 7 and 9 of the 2003 Regulations, provides that bodies with income or expenditure below £1 million usually need only produce an annual return. Those with an income or expenditure of £1million or more must prepare a full statement of accounts. Regulation 3 also amends the definition of "responsible financial officer" in paragraph (2) of regulation 2 of the 2003 Regulations to add further relevant statutory provisions. A new paragraph (2A) is inserted into that regulation. It provides that any reference to a relevant body is to be read, in relation to a parish meeting, as a reference to the chairman of that meeting. Regulation 4 amends regulation 4 of the 2003 Regulations to require the findings of reviews of the system of internal control (referred to in regulation 4(2) of those Regulations) to be considered by a committee of the relevant body, or by members of the body meeting as a whole. In regulation 4 of the 2003 Regulations (and regulations 6, 7, 8 and 9) references to "proper practices" have been changed to "proper practices in relation to accounts" and "proper practices in relation to internal control", as appropriate to each case. Regulation 5 corrects typographical errors in regulation 5 of the 2003 Regulations. Regulation 6 amends regulation 6 of the 2003 Regulations to require bodies to review their system of internal audit once a year and for the findings of the review to be considered by a committee of the body, or by the body as a whole, as part of the consideration of the system of internal control referred to in regulation 4(3). Regulation 7 deletes some of the provisions listed in regulation 7(1) of the 2003 Regulations and adds a reference to the firefighters' pension fund. A requirement to provide a note on the Dedicated Schools Grant is inserted into paragraph (2). Regulation 8 inserts regulation 7A into the 2003 Regulations. Paragraph (1) of the inserted regulation provides for the statement of accounts of passenger transport executives to be no less informative than statements prepared under the Companies Act 1985 (this rule was previously included as regulation 5(3) of the Accounts and Audit (Passenger Transport Executives and the London Transport Executive) Regulations 1983). Paragraph (2) of the inserted regulation requires passenger transport executives to charge retirement benefits to a revenue account. Regulation 10 amends regulation 9 of the 2003 Regulations so that smaller relevant bodies are required to prepare statement of accounts. Regulation 11 amends regulation 10 of the 2003 Regulations to require the approval of the statement of accounts of smaller relevant bodies by June rather than September. This change is phased in over three years. A new paragraph (6) is added, specifying the procedure to be followed where a body does not approve its accounts. Regulation 12 makes minor amendments to regulation 11 of the 2003 Regulations. Regulation 13 amends regulation 12 of the 2003 Regulations so as to apply provisions equivalent to those in the amended regulation 11 to smaller relevant bodies. In particular it requires the publication of the statement of accounts of smaller relevant bodies by September rather December, but this change is phased in over three years. Regulation 17 makes minor amendments to regulation 18 of the 2003 Regulations. Regulation 18 makes a minor amendment to regulation 19 of the 2003 Regulations in relation to the reference to the annual letter to local government bodies. Regulation 19 makes a minor amendment to regulation 20 of the 2003 Regulations in relation to joint committees. Regulation 21 amends paragraph (2) of regulation 22 of the 2003 Regulations. Substituted regulation 6(2) to (4) has been included in the list of provisions. Failure to comply with any requirement of regulation 4(1) of the 2003 Regulations does not now give rise to the commission of an offence. Regulation 22 revokes the Accounts and Audit (Passenger Transport Executives and the London Transport Executive) Regulations 1983. Notes: [1] 1998 c. 18.back [3] S.I. 2003/533, amended by S.I. 2004/556 and S.I. 2004/3168.back
[a] Amended by Correction Slip. Page 2, regulation 3(d), in the substituted regulation 2(2)(a)(ii); "the Norfolk and Suffolk Boards Act 1988;" should read "the Norfolk and Suffolk Broads Act 1988;". back
ISBN 0 11 074169 2
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