Impartial analysis of Midsomer Norton Town Council is hard to come by. The travails caused by the protracted budget setting process have been well documented. However, as any fan of Sherlock Holmes will tell you; “It is a capital mistake to theorise before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts”. 

At their latest Full Council meeting, the intake of 2023 were asked to note the Internal Audit Report and agree to address any issues raised. The report, compiled by Auditing Solutions Ltd, delivers an examination of accounting records and systems of internal control, as well as meeting minutes, with its findings reported in the Town Councils Annual Governance and Accountability Return (AGAR). Whilst the consultant auditor, Chris Hall, made no formal recommendations, he was clear that “the loss of both the Clerk and Deputy Clerk in early 2023 has caused considerable disruption to the established control systems, which will need to be re-established when permanent staff are appointed to these important positions”.

There was also praise for the Locum Clerk and the Finance Administrator, the only people standing between the Town Council and the local government equivalent of special measures, who managed “to keep the financial system going, especially given the pressures of producing the year-end accounts and the large amount of work due to the Town Hall refurbishment”.

Other than it’s statutory requirement, the internal auditors report should provide “an appropriate level of assurance to the Council on their governance and financial procedures for the whole of the financial year 2022-23”. In this respect it’s mission accomplished, with the auditor concluding that the “level of control established throughout the financial year is sufficient to offer a reasonable assurance on the accuracy of the accounts as presented”. However, the first observation the internal auditor makes is that the Council must “re-establish the former high level of sound governance and financial control practice as soon as possible in 2023-24 by appointing suitably qualified and experienced staff”.

The loss of suitably qualified staff has also impacted the Corporate Governance function of the Council, with the auditor noting that “following the resignation of the former Clerk, the Council will no longer meet the qualification criteria for adopting the General Power of Competence”. This is a subject that warrants an article of its own, but for the purpose of brevity The General Power of Competence (GPC) was introduced by the Localism Act 2011 and took effect in February 2012. In simple terms, it gives Councils the power to do anything an individual can do, provided it is not prohibited by other legislation. An individual can’t imprison somebody, but they could open a community shop or start a business.

The loss of the Clerk and Deputy Clerk has also impacted the Councils management of identified risks, which the auditor observes “will require considerable revision during 2023-24”. Whilst the Locum Clerk’s review of the Councils Asset Register had not been concluded at the time of the audit, meaning the auditor was “unable to give a positive assurance on this aspect of the 2022-23 AGAR”, he did note that “the final figure resulting from this exercise will give a much more accurate valuation of the Council’s asset holdings”, suggesting the current assessment was anything but.

Yet it was the references to the precepts for the 2022/23 and the 2023/24 financial years that caught my eye. The auditor noted that while “reviewing the process for approving the 2022-23 Precept we noticed an anomaly between the amount approved by Council (7 February 2022 meeting, Minute 61), and the amount actually received during 2022-23”. Inconsequential in the context of the auditors analysis and easily remedied this may have been, but in the context of what was to come, this relatively small oversight sets an alarming precedent.

Under Budgetary Controls and Reserves, the auditor noted that “the Council set a 2023-24 Precept of £469,189.93 at its February 2023 meeting, based on the recommendations of the Finance Working Group” and that the Council intends “to review its 2023-24 Budget to accord with the Precept”. However, the recommendation made to the February Full Council meeting, set out in the Agenda paper and recorded in the Minutes of the January Full Council meeting, was for a Precept of £498,961. Far from following the recommendation of the Finance Working Group the Town Council threw it out, opting to “reduce the proposed precept increase to within the current rate of inflation”.

So what? Well, if the audit process is intended to assess the Town Councils ability to “determine its future financial requirements leading to the adoption of an approved budget and formal determination of the amount to be precepted on the Unitary Authority”, then surely it has been found wanting? The evidence produced in both the Councils own Minutes and shown on the YouTube recordings of it’s meetings, clearly shows that the approved budget was not adopted until April, two months after the precept had been determined and even then that budget was not balanced. Does this really demonstrate “that effective arrangements are in place to monitor budgetary performance throughout the financial year”?

Fortunately, one of the first acts of the 2023 intake was to reinstate the Finance and Operations Committee. This committee meets in public, with published Minutes and monitors Council income and expenditure, as well as the annual draft budget. Perhaps the return of this committee, along with the instigation of the Clerk’s recruitment process, is the reason why the auditor has refrained from making any formal recommendations in their report. However, that shouldn’t detract from the need for the independent examination process to be as accurate as it is thorough.

The real benefit of this process is that is shines a light on the workings of the Town Council in a way that rumour, conjecture, post-truth and the letters pages cannot. If Midsomer Norton Town Council is to restore public confidence in its processes, then it needs to first come to terms with the mistakes of the past. The Internal Audit Report is the first objective assessment of where those mistakes have occurred and as such, I would implore all your readers, including the 2023 intake of Town Councillors, to familiarise themselves with its observations, even if it’s conclusions are conspicuous by their absence.

Ian Nockolds