Adopted July 2026

Financial risks can be managed by effective internal controls, Standing Orders and Financial Regulations and by Insurance.

Internal Financing Controls

1. Cash Handling

  • No petty cash is held by the Parish Council.

2. Receipts

  • Cheque receipts are banked at least weekly and more frequently if a substantial cheque is received.
  • Receipts are often paid directly by BACS to the Parish Council’s bank accounts and are checked off against the bank statements.

3. Payments

  • All cheques from the main Parish Council accounts require two signatures from two members, one of whom should be a member of the Finance & Operations Committee where possible.
  • All payments are authorised by the Clerk after the invoice or other documentation has been verified against orders/quotations or minutes as appropriate.
  • Members signing the cheque or authorising online payments will have sight of the invoice/documentation and should initial the cheque counterfoils and invoices, or authorise the payment via online access.
  • When Direct Debits are used, two members’ signatures are required on the Direct Debit paperwork, one of whom should be a member of the Finance & Operations Committee where possible. Payments by Direct Debit will appear in the list of payments presented to Council at each monthly meeting.
  • All Direct Debit payments are reviewed by Full Council on an annual basis.
  • Payments over £500 require prior approval of the Full Council, except where the expenditure has previously been approved by a Committee, the invoice is in line with the original estimate, and the expenditure is within that Committee’s budget.
  • All payments should be issued promptly after approval by the Council.
  • Online banking may be used to transfer between accounts or to pay invoices in accordance with the “two members” signature/authorisation policy for Direct Debit or cheque payments.

Unusual payments over £1,000 require the approval of Council at its monthly meeting.

4. Transfer of monies between Parish Council accounts

The Parish Council maintains several bank accounts including:

  1. Current accounts with Lloyds and Unity Trust Bank
  2. Savings accounts with Lloyds, Unity Trust Bank, Nationwide, Redbank and Hampshire Building Societies
  3. Investments in Bonds and higher-rate savings accounts to obtain the best return with low risk

The Parish Council will ensure that adequate training is given to officers of the Council (including library staff) who deal with cash and movement of money.

5. Bank Reconciliations

  • The Finance Officer undertakes regular bank reconciliations under the direction of the Clerk/RFO.
  • A member of the Finance & Operations Committee approves these monthly to verify that the monthly Scribe reconciliations agree with the monthly bank statements received.
  • Nominated Councillors (non-cheque signatories) also check these reconciliations regularly against original bank statements and sign to confirm the checks.

The following monthly management checks are carried out:

  • Payroll Control Account – should show a zero balance
  • Sales Ledger – to ensure the control account balances
  • VAT – to check the control account balances

6. Reporting to members

  • A payment schedule for the previous month is made available to all members at Full Council meetings.
  • A monthly income and expenditure report is made available to all members at Full Council meetings.
  • Quarterly reports from the Clerk/RFO are made available to all members at Full Council meetings.
  • Budget reports relating to each Committee are made available to Committee members each quarter.

7. Income

The risk of non-receipt of anticipated income is managed in the following manner:

  • The Clerk/RFO ensures that committees prepare their budgets in time for the Finance & Operations Committee to make a recommendation to Full Council so that the Parish Council can submit the precept in time.
  • Sufficient funds are held in the General Reserves to ensure that payment of all necessary expenditure can be met for at least 3 months (see General Reserve Policy). This includes rent, rates, utilities and salaries.
  • The precept payment is usually received by BACS on or before 30 April and 30 September each year, and the Clerk/RFO ensures the payment is received as expected.
  • Recovery of VAT: The Finance Officer claims quarterly, against a reconciliation produced by the computerised accounts records, or more frequently if a substantial amount of VAT has been paid. This is checked to ensure it balances as part of the monthly management of accounts by the Clerk/RFO.

8. Expenditure

The largest expenditure item is the payment of salaries.

  • This is administered by the Finance Officer.
  • Data is checked by the Clerk/RFO before submission and a further check is carried out before payments are finalised.

9. Purchases

Risks include non-supply of goods, incorrect charge on invoice and incorrect payment. Risks are covered by checking invoices which are signed off by the officer who ordered the goods and the system of verification of cheque payments.

10. Other Risks

  • Adequate reserves: This is assessed annually as part of the budget setting process.
  • Loss/damage to assets: Assets are regularly inspected. Loss or damage is also included in the Parish Council’s Insurance Policy.
  • Fraud by staff: A member of PPC who is not a cheque signatory verifies totals on original bank statements to Cash Book statements produced by the accounts programme. Fraud is covered by insurance.
  • Office security: The Parish Council office at Ponsmere Valley is protected by a fire alarm, intruder alarm and electric shutters on windows and doors. The library is protected by fire and intruder alarms.
  • Security of documents: Original title deeds are lodged with the Parish Council‘s Solicitors and archived lease information is stored at the Cornwall record archives at Kresen Kernow.

Office staff are also trained on matters concerning FOI and Data Protection, and meeting notes are not held once minutes have been approved.

Protection of computer information

  1. Access to computers is by password only.
  2. Information is remotely backed up on a daily basis and stored on the Cloud with back up to a hard drive.

11. Financial Risk Management by Insurance

  • Fraud by staff: Potential losses from dishonesty by staff (fraud) are covered by the Fidelity Guarantee which forms part of the Parish Council’s Insurance Policy. This figure is reviewed annually.
  • Loss of/damage to assets: Loss of/damage to assets is covered by insurance. The value is reviewed annually.

This Financial Risk Management Policy shall be reviewed every year.