Financial Risk Assessment
Version No. |
Date Change Made |
New Version No. |
Changes Made By (initial) |
Comment |
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0.011 |
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Approved at MTC 10 11 15 Agenda Item 8.7 |
02.00 |
19/10/17 |
2 |
PT |
For consideration/approval at MTC 27 10 17 |
03.00 |
27/09/17 |
3 |
PT |
For consideration/approval at MTC 08/10/18 |
04.00 |
26/2/2020 |
3 |
PT |
For consideration/approval at MTC 16/03/20 |
05.00 |
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LS |
Approved at Full Council 29/03/21 Agenda Item 10.3 |
06.00 |
Dec 2021 |
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HW |
Replaced references from EU GDPR to Data Protection Act 2018/UK GDPR as approved at Full Council 06/12/21 |
Risk Identified |
Mitigation |
Notes |
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The risk of legislative change which will have an impact on the Town Council’s powers, duties and funding |
Town Clerk & staff keep appraised of developments |
Cyber Training arranged for all Officers and Members 2020. Training database is now being maintained. |
The protection of physical assets owned by the Town Council including buildings and equipment (loss or damage) |
All physical assets insured All assets checked regularly Management Systems being put in place |
Concern raised about inherited assets as descriptions do not meet known items |
The risk of damage to third party property or individuals as a consequence of the Town council providing services (public liability) |
Public liability Insurance renewed annually |
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Insufficient staff or other resources to deliver the service needs |
Staff have good awareness of other team members’ essential tasks and can provide cover when required. Team meets regularly to keep each other updated. Structure was changed in 2020 to reflect changes and increased work load. Town Clerk to formally monitor and review staff and work levels. Any concerns regarding this to then be brought to Council |
New Communication and Events Officer employed 2020 |
Risk Identified |
Mitigation |
Notes |
---|---|---|
Employees contravene H & S Regs |
H & S & First Aid training, insurance, Risk Assessments regularly checked and updated |
Staff briefing on H and S in Nov 2020 |
Potential legal proceedings up to corporate manslaughter |
Employers Liability insurance Employee training and awareness |
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Staff retention issues |
Staff training where appropriate, regular staff meetings. Staff receive informal regular positive feedback and also formal appraisals. Staff are supported by Town Clerk, Chair of Personnel, Mayor and Chair of all Committees. Commitment to staff wellbeing – Town Clerk ensures an open approach to discussing any issues that arise and solving them. Staff have been encouraged to purchase equipment they need to effectively work from home. |
Ongoing process – formal Hand S briefing with Chair of Personnel in Nov 2020 to ensure staff wellbeing working from home.
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Risk Identified |
Mitigation |
Notes |
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Adverse audit reports, legal action and loss of confidence in Town Council |
Clerk keeps up to date with legislative changes, discusses latest requirements with internal and external auditors Member of Chalc which send regular briefings. |
Internal audit review recommendations actioned |
Loss of income through error or fraud |
Fidelity Guarantee Insurance
Town Clerk continually review controls and current procedures. Checks are in place to minimize this risk. 2 Councillors must authorise all payments and sign cheques. |
Online Banking procedure agreed at Full Council 14.12.20 |
Risk Identified |
Mitigation |
Notes |
---|---|---|
Non-compliance with legislation or practice Council being ‘Ultra Vires’ |
Town Clerk to keep up to date with changes in legislation, seek advice from SLCC, ChALC, NALC and others as necessary |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
Compensation claims from employee for contractual employment defects (including statutory failure) |
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Compensation claim from employee for contractual employment defects (including statutory failure) |
Supported and underwritten by Wirehouse Employer Services |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
Loss of services of employee |
By distributing knowledge and roles ensure, so far as reasonably practical, that loss of any one employee does not cause unrecoverable damage to business |
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Loss of key staff trained in financial systems, process or rules |
Staffing arrange so that knowledge is distributed between RFO and at least one other staff. Admin and Governance Manager can carry out the day to day payments and accounts if necessary. |
External Accountancy support in place |
Risk Identified |
Mitigation |
Notes |
---|---|---|
Inappropriate expenditure made |
Procedure and controls in place to minimise this risk of inappropriate expenditure. Payments reported to Finance committee for review and corrective action if necessary |
Online Banking Procedure approved Full Council 14.12.20 |
Financial Regulations become out of date with change in technology, regulation or business |
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Lack of budgetary overview/overspend against budget
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Lack of finance to meet unbudgeted, urgent commitments ( with safety or other critical implications) |
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Risk of fraudulent VAT numbers from new suppliers |
VAT numbers for all new suppliers with an expected supplies/services value of £1,000 or more in a financial year will be checked with HMRC register |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
Accounts The RBS Omega accounts system is used which is an accepted accounts package |
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Vat The RBS Omega system incorporates a Vat schedule which is an accepted package which allows differentiation between tax rates etc. which is itemised in a full report relating back to the original item within the accounts |
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Payroll
Shires payroll services in place for complete payroll function |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
Barclays Bank is used
Accounts |
one bank account used on a daily basis
Reviewing how much is placed into a higher rate deposit account |
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Cheques |
Each cheque from the main account must be signed by 2 Councillors and the Town Clerk as detailed on the bank mandates (which are amended when required to ensure that sufficient signatories are available at all times) |
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Transfers |
Monies may be transferred between the Councils accounts by the Clerk |
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Bank Reconciliation |
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Separation of Duties |
The Town Clerk is responsible for the cash security in the Town Council offices |
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Access to the main bank accounts |
As detailed under Banking arrangements & Procedures above, no one person has access to monies held in the main accounts |
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Cheques |
All invoices are checked by the Clerk in advance of payment and if related to an order, this has passed through the ordering procedure. |
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Access to petty cash accounts |
The Financial Regulations specify maximum balances to ensure that individuals do not have access to large amounts of money |
No petty cash system in operation |
Cheques |
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Petty Cash – Cash Payments |
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No petty cash system in operation |
Hire Charges |
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Hire charges received within the office |
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Cash collected from community events |
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Processing and banking |
This is a strict routine that ensures that any booked hire cannot proceed without receiving the payments and guarantees that all monies are accounted for |
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Risk Identified |
Mitigation |
Notes |
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Records non-compliant or inadequate |
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Expenditure/income coded incorrectly |
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Standing Orders
Standing orders are reviewed and approved by Town Council on an annual basis at the AGM |
The Clerk reacts to any changes in legislation, requests from Town Council or other areas in order to ensure the regulations are fully compliant and also provide a strong framework compatible with Council practices |
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Non-compliance with statutory deadlines for the completion/approval/submission of accounts and other financial returns |
Programme of meetings to meet statutory deadlines |
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Invoice payment without authority |
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Incoming cash and cheque misappropriation |
Individual receipts to be issued for all cash payments and for cheque payments on request |
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Theft of funds |
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Incorrect entries by bank |
Bank statements reconciled monthly |
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Risk Identified |
Mitigation |
Notes |
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The annual budget and precept calculations |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
Comprehensive budgets |
Comprehensive budgets are set for each committee & these are loaded onto RBS Omega accounts system at the start of the new financial year |
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Monitoring |
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Reporting |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
Public Liability |
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Limit of cover £12,000,000 |
Employers Liability |
Insurance cover |
Limit cover £10,000,000 |
Theft of money by third party |
Insurance cover |
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Theft of money by employee or member |
Fidelity Guarantee cover |
Limit of cover £2,000,000 |
Property |
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Officials Indemnity |
Continue with existing cover (£250k) |
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Libel and Slander |
Continued existing cover (£250k) |
Limit of cover £250,000 |
Personal Accident |
Continue with existing cover (scale benefits) |
£2,000,000 |
Legal disputes |
Cover for specified legal disputes |
Limit of cover £100,000 |
Long term sickness of employee |
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Business interruption |
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Limit of cover £50,000 |
Loss/destruction of financial records |
Key financial data held electronically and backed up off site All electronic documents backed up daily offsite |
Residual risk considered acceptable |
Risk Identified |
Mitigation |
Notes |
---|---|---|
Loss of documentation |
Deeds and other legal documents relating to real estate stored in the office |
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Risk Identified |
Mitigation |
Notes |
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Purchased |
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Risk Identified |
Mitigation |
Notes |
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Internal Audit |
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Risk Identified |
Mitigation |
Notes |
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Annual Audit |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
Fidelity Insurance |
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£2,000,000 |
Insurance |
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Risk Identified |
Mitigation |
Notes |
---|---|---|
IT Security, safety of information/risk of loss of data |
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As of October 2018. Also supports compliant UK GDPR/DPA 2018 operation and Cyber Security Training has been incorporated 2020 |
Reviews will take place yearly unless clearly stated differently within each section.