Internal audits are more than a box-ticking exercise—they are a vital part of ensuring public money is properly managed and that your council is acting lawfully. Parish and town councils are subject to the Accounts and Audit Regulations 2015, which require an annual internal audit to provide assurance that financial controls and governance arrangements are sound.

Here are seven key checks that every parish council should ensure are covered in its annual internal audit.

 1.⁠ ⁠Bank reconciliations

Monthly bank reconciliations should be carried out and reviewed. Missing or delayed reconciliations are one of the most common weaknesses found during audits.

 2.⁠ ⁠Income recording

All income - from precepts to hall hire - must be recorded promptly and banked in full. An auditor will check invoices, receipts, and supporting evidence.

 3.⁠ ⁠Payments and procurement

Auditors will look for authorisation controls, supporting invoices, and compliance with Financial Regulations when awarding contracts or making payments.

 4.⁠ ⁠Risk management

Councils should have a risk register that is reviewed at least annually. This includes financial risks (fraud, reserves) and operational risks (health & safety, assets).

 5.⁠ ⁠Asset register

A complete and up-to-date asset register is required. This forms the basis for insurance cover and supports transparency.

 6.⁠ ⁠Reserves and budgeting

Auditors check that reserves are reasonable and supported by earmarked purposes where appropriate, and that budgets have been properly set and monitored.

 7.⁠ ⁠AGAR readiness

Ultimately, the Annual Governance and Accountability Return (AGAR) relies on accurate accounts and proper governance. An auditor ensures the council is well-prepared.

A good internal audit not only identifies areas of improvement but also provides practical recommendations that improve efficiency and resilience. By covering these seven areas, your council can be confident it is meeting both statutory requirements and community expectations.