The Accounts and Audit (Wales) (Amendment) Regulations 2010

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Accounts and Audit (Wales) Regulations 2005 (“the 2005 Regulations”). The 2005 Regulations make provision with respect to the accounts and audit of local government bodies in Wales whose accounts are required to be audited in accordance with Part 2 of the Public Audit (Wales) Act 2004 Act (“the 2004 Act”) (other than local probation boards).

These Regulations are made under sections 39 and 58 of the 2004 Act.

These Regulations come into force on 31 March 2010 and thus have effect in relation to accounts for the 2009/2010 financial year (except as indicated otherwise in this Note).

Regulation 4 provides for a definition of a minor joint committee and identifies which document describes proper accounting practices, for the purposes of these Regulations, for internal drainage boards.

Regulations 6 and 7 restructure the provisions in the 2005 Regulations concerning (a) which bodies are to prepare statements of accounts and (b) the note of staff remuneration which is to accompany such statements. The 2005 Regulations require that note is to be made of the number of all employees whose total remuneration was more than £60,000 per year, to be listed in brackets of a scale of £10,000. Regulation 7 extends this requirement to police officers, and also changes the brackets in the scale to multiples of £5,000. It excludes officers who are caught by the new requirement for disclosure of individual remuneration details.

These Regulations also introduce a new requirement for the disclosure of the individual remuneration details of senior employees and relevant police officers for each financial year, under the following categories:

(i) salary, fees and allowances;

(ii) bonuses;

(iii) expenses allowance;

(iv) compensation for loss of employment;

(v) pension contribution;

(vi) any other emoluments; and

(vii) in the case of relevant police officers, any other payments made to them.

“Employee” includes an office holder under a local government body (but not an elected councillor). A senior employee is a person whose salary is more than £150,000 per year, or whose salary is at least £60,000 per year (to be calculated pro rata for a part-time employee) and who is:

(a) the designated head of paid service, a statutory chief officer or a non-statutory chief officer of a local government body, those terms having the meaning given by the Local Government and Housing Act 1989;

(b) the head of staff for a local government body which does not have a designated head of paid service; or

(c) any person having responsibility for the management of the local government body to the extent that the person has power to direct or control the major activities of the body.

A ‘relevant police officer’ is a chief constable and any other police officer above the rank of superintendent whose salary is £150,000 or more per year.

The definition given to “contribution to the person’s pension” makes clear that the figure to be disclosed is the proportion of the local government body’s contribution to the relevant contribution scheme which can be related to the senior employee or relevant police officer and does not include any contribution made by the senior employee or relevant police officer.

The obligation to disclose the remuneration of senior employees and relevant police officers does not apply for accounts prepared for the financial year 2009/2010 in cases where the person concerned has the benefit of a confidentiality agreement in respect of the remuneration received.

Internal Drainage Boards, which are responsible for the drainage of land in some parts of the country under the Land Drainage Act 1991 (c. 59), prepare their annual accounts on a basis which fully recognises the future pension liability that has accrued for that year in respect of their employees. In the accounting practices followed by local authorities such liabilities are replaced by the employer contribution they are required to make to the pension fund and other amounts due to be paid in the year. Regulation 8 of these Regulations applies the same principle to drainage boards.

Regulation 9 provides that a minor joint committee will be required to prepare an income and expenditure account and a balance sheet for each financial year. It also increases from £100,000 to £200,000 the threshold for community councils whose gross expenditure is less than £1m. Thus—

• in the case where the community council’s expenditure is £200,000 or more, such a council may choose whether to prepare a statement of accounts or an income and expenditure account and a statement of balances, and

• in the case where the community council’s expenditure is less than £200,000, such a council may choose whether to prepare a record of receipts and payments or an income and expenditure account and a statement of balances.

Regulation 10 re-structures the provisions in the 2005 Regulations which impose obligations on local government bodies to prepare statements of accounts etc in accordance with the 2005 Regulations. It also re-structures and extends the obligations on responsible finance officers to sign and certify the statements etc at appropriate times.

Regulation 11 amends the provision in the 2005 Regulations concerning approval of accounts, so that a local government body must approve the accounts for the previous financial year by 30 September. A second approval must be obtained if the first approval was given before the conclusion of the audit of those accounts.

The local government bodies to whom the 2005 Regulations apply must publish their accounts or publish requisite information. Regulation 13 amends the existing provision so that the relevant date for publication for all bodies is to be 30 September.

Regulation 15 amends the provision in the 2005 Regulations concerning the documents which are to be made available for public inspection after the conclusion of audit. Regulation 18 makes transitional provision for community councils with gross income or expenditure of less than £1m, port health authorities, licensing planning committees and internal drainage boards. The following requirements will not have effect until the accounts for the 2012/2013 financial year—

• the requirement for responsible financial officers to sign and certify accounts by 30 June (in the meantime this will be 30 September) (see regulation 8B(2)(a) of the 2005 Regulations as inserted by these Regulations);

• the requirements for these bodies to approve accounts and publish their accounts (or requisite information) by 30 September (in the meantime this will be 31 December) (see regulations 9(3) and 11 of the 2005 Regulations as amended by these Regulations).

Some minor amendments are made to the 2005 Regulations.