LOCAL GOVERNMENT, ENGLAND 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 are amended as set out in regulations 3 to 21. Interpretation and application 3 In regulation 2 (interpretation and application)— a in paragraph (1), for the definition of “relevant body”, substitute— “relevant body” means a body whose accounts are required to be audited in accordance with section 2 of the 1998 Act other than a body specified in section 98(1) of the National Health Service Act 1977 or a local probation board; ; b in paragraph (1), after the definition of “relevant body”, insert— “smaller relevant body” means a relevant body, other than parish councils subject to any of the duties under Part 1 of the Local Government Act 1999 (best value authorities), whose gross income or expenditure (whichever is the higher) for the year concerned is, or for either of the two immediately preceding years was, less than £1 million; ; c in paragraph (1), for the definition of “working day”, substitute— “working day” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday, or a day which is a bank holiday in England under the Banking and Financial Dealings Act 1971; ; d in paragraph (2), for sub-paragraph (a), substitute— a the person who, by virtue of— i section 151 of the 1972 Act; ii section 17 of the Norfolk and Suffolk Broards Act 1988; 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— 2A Any reference in regulations 4 to 22 to a relevant body or a smaller relevant body, shall, in the case of a parish meeting, be construed as a reference to the chairman of that meeting. . Responsibility for financial management 4 In regulation 4 (responsibility for financial management)— a in paragraph (2), omit from “and shall include” to “regulation 12”; and b after paragraph (2), add— 3 The findings of the review referred to in paragraph (2) shall be considered by a committee of the relevant body, or by the members of the relevant body meeting as a whole, and following that consideration, shall approve a statement on internal control, prepared in accordance with proper practices in relation to internal control. 4 The relevant body shall include the statement referred to in paragraph (3) with— a any statement of accounts it is obliged to publish in accordance with regulation 11, or 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 5 In regulation 5 (accounting records and control systems)— a in paragraph (1), for “and (4) and” substitute “and (4), and,”; 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 6 In regulation 6 (internal audit), the existing provision becomes paragraph (1) and— a in that paragraph— i for “proper internal audit practices” substitute “proper practices in relation to internal control”; and ii omit from “, and any officer” to “for that purpose”; and b after that paragraph, insert— 2 Any officer or member of a relevant body shall, if the body requires— a make available such documents of the body which relate to its accounting and other records as appear to that body to be necessary for the purpose of the audit; and 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. 4 The findings of the review referred to in paragraph (3) shall be considered, as part of the consideration of the system of internal control referred to in paragraph (3) of regulation 4, by the committee or meeting referred to in that paragraph. . Statement of accounts 7 In regulation 7 (statement of accounts)— a for paragraph (1), substitute— 1 A relevant body which is not a smaller relevant body shall prepare, in accordance with proper practices in relation to accounts, a statement of accounts for each year, which shall include such of the following accounting statements as are relevant to the functions of the relevant body— a housing revenue account; 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)— i after “a note of” insert a hyphen and insert— a demonstrates whether the Dedicated Schools Grant (made under section 14 of the Education Act 2002) has been deployed in accordance with regulations made under sections 45A, 45AA, 47, 48(1) and (2) and 138(7) of, and paragraph 1(7)(b) of Schedule 14 to, the School Standards and Framework Act 1998; and ; and ii the words from “the number of employees” to the end become sub-paragraph (b); c omit paragraphs (3) and (4); d in paragraph (5)(d), for “proper practices” substitute “proper practices in relation to accounts”; and e in paragraph (6)(a), for “defrayed” substitute “incurred”. Passenger Transport Executives 8 After regulation 7, insert— 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— a the Local Government Pension Scheme Regulations 1997; and b the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000. . Summary statement of accounts - Greater London Authority 9 In regulation 8 (summary statement of accounts - Greater London Authority), for “proper practices” substitute “proper practices in relation to accounts”. Other accounting statements 10 In regulation 9 (other accounting statements)— a for paragraph (1) substitute— 1 Subject to paragraph (3), a smaller relevant body shall prepare for each year an income and expenditure account and a statement of balances, in accordance with, and in the form specified in any Annual Return required by, proper practices in relation to accounts. ; b omit paragraph (2); and c for paragraph (3) substitute— 3 Where in relation to a relevant body, the gross income or expenditure (whichever is the higher) was less than £200,000 for the year or for either of the two immediately preceding years, the body shall prepare in accordance with, and in the form specified in any Annual Return required by, proper practices in relation to accounts— a a record of receipts and payments of the body in relation to that year; or 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 11 In regulation 10 (signing and approval of statement of accounts etc)— a in paragraph (3)— i for “paragraph (5)” substitute “paragraph (6)”; 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)— i before “in respect of all” insert “Subject to paragraph (6),”; 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)— i for “(3)(a)” substitute “(4)(a)”; ii for “2003” substitute “2006”; iii for “2004” substitute “2007”; and iv for “2005” substitute “2008”; and d after paragraph (5) insert— 6 Where a relevant body does not approve the statement of accounts, the record of receipts and payments or the income and expenditure account and statement of balances, as the case may be, (“the accounting document”) by the date required by paragraph (3), (4) or (5) it shall— a within twenty working days of that date, hold a further meeting of the members of the relevant body as a whole, at which the accounting document shall be considered; and 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 12 In regulation 11 (publication of statement of accounts etc)— a in paragraph (1)— i for “to which paragraph (2) below applies, or, in the case of a parish meeting, the chairman,” substitute “which is not a smaller relevant body”; and 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 13 In regulation 12 (publication of income and expenditure account and receipts and payments)— a in paragraph (1)— i for “before the 31st December” substitute “, subject to paragraph (5), before the 30th September”; 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— a either— i publish the requisite information by means other than solely by reference in the minutes of meetings, committees or sub-committees of the body, or; 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); c for paragraph (4) substitute— 4 For the purposes of paragraph (1) “requisite information” means— a the statement on internal control prepared in accordance with regulation 4(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. 5 The reference in paragraph (1) to the 30th September shall be read— a in respect of the year ending with 31st March 2006, as a reference to the 31st December; 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 14 In regulation 13 (appointment of date for the exercise of rights of electors), omit “, or in the case of a parish meeting the chairman of the meeting,”. Public inspection of accounts 15 In regulation 14 (public inspection of accounts)— a in paragraph (1), omit “or, as the case may be, the chairman,”; and 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 16 In regulation 16 (notice of public rights)— a in paragraph (1), for “to which regulation 11(2) applies, or in the case of a parish meeting, the chairman of the meeting,” substitute “which is not a smaller relevant body”; and 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 17 In regulation 18 (notice of conclusion of audit) — a in paragraph (1), for “a body to which regulation 11(2) applies, or in the case of a parish meeting, the chairman of the meeting,” substitute “a relevant body which is not a smaller relevant body”; 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— 3 Where any material amendment is made to the statement of accounts, income and expenditure account or the statement of balances, or record of receipts and payments after the notice under paragraph (1) or (2) is given or displayed, the documents made available for inspection under that paragraph shall— a either be revised to take account of the amendment or be accompanied by a copy of the amendment; and 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 18 In regulation 19 (publication of annual audit letter) for “it is received, a relevant body” substitute “receipt of the annual letter from the auditor or the Commission, a committee of the relevant body or the members of the relevant body meeting as a whole, shall meet to consider it and following that consideration”. Joint committees etc 19 In regulation 20 (joint committees etc), in paragraph (1)— a in sub-paragraph (a)— i at the beginning insert “where the committee, board or authority is a smaller relevant body,”; and 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)— i for “body to which regulation 7(3) applies” substitute “relevant body which is not a smaller relevant body”; and ii after “a copy of the” insert “auditor’s report and”. Extraordinary audit 20 In regulation 21 (extraordinary audit)— a delete “, or, in the case of a parish meeting, the chairman of the meeting,”; 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 21 In regulation 22 (offences), in paragraph (2), for “4” substitute “4(2) to (4), 6(2) to (4)”. Revocation 22 The Accounts and Audit (Passenger Transport Executives and the London Transport Executive) Regulations 1983 are revoked. Signed by authority of the First Secretary of State Phil Woolas Minister of State Office of the Deputy Prime Minister 3rd March 2006