Overview: This checklist is concerned with the management of Risk. Councils must be aware of the risks that they face and take reasonable steps to address them. This is also covered in Assertion 5 of the Annual Governance Statement so the Council themselves also have to make a formal declaration that they have done this.
1 & 2 The Council must Minute that it has reviewed Risk. This should be recorded in the Minutes of Full Council. It may be that the review is carried out in detail in a sub-committee (usually Finance) but, if so, the sub-committee should recommend to Full Council and Full Council approve it.
3 & 4 The Council needs to maintain a Risk Register (if not, how can review risk?). This may be called various things, such as a Financial Risk Assessment etc, but as a long as it list the various risks the Council may face that’s OK. Typically the Risk register will consider loss of staff, loss of income etc. NOTE we won’t review the details of the Risk Register, we just want to see that they have one.
5&6 we will review Minutes (normally of Full Council and the Finance Committee). We are looking here for any matters that may indicate that there is something amiss or unusual. This might include the Council considering a large purchase (and not being aware of the procurement rules). There is no specific guide to what constitutes ‘unusual’ but if it seems odd, flag it up here.
7. A council should document its internal controls, for example the requirement that all payment require two authorises, or all orders over £1,000 must have prior approval by Council. At present we are not picking this up in reports, but we will do so in earnest in the 2022-23 audits. For 2021-22 you can leave this as ‘Not Checked’.
8. As with 7 we are not actively picking this up. We will do so in the 2022-23 audit year. For 2021-22 you can leave this as ‘Not Checked’.
9. This should be recorded in the Minutes. Some Councils take out three year polices so it is possible that this review was done in a previous year. In any case the Council should be able to provide a Minute showing that this has been done.
10. If you look at the asset register you should be able to identify any large assets. These may not have a large value (because they were purchase many years ago or they were gifted or transferred to the Council) but any buildings the Council owns should normally be recorded in the asset register. Other common items to check are War Memorials. If they are on the asset register check that they are on the insurance policy.
11. Easiest way to do this is ‘Control F’ to find “Fidelity” and see what value is stated in the insurance policy. This value should exceed the value stated in Box 8 of the accounting statements. If the bank balances are higher than the insured value we need to raise an Observation.