JPAG Practitioners' Guide

The Practitioners' Guide is issued by the Joint Panel on Accountability and Governance (JPAG) to support the preparation by smaller authorities in England of statutory annual accounting and governance statements found in the Annual Governance and Accountability Return (AGAR).

This 2022 edition of the Guide applies in respect of financial years commencing on or after 1 April 2022. Thus the ‘proper practices’ laid down in Sections 1 and 2 of this edition of the Guide must be applied in the financial year ending 31 March 2023 and the Annual Governance and Accountability Return (‘AGAR’) for the year ending 31 March 2023 (‘the 2023 AGAR’) must be prepared in accordance with Sections 1 and 2 of this edition of the Guide. Note that the comparative figures (the figures for the year ended 31 March 2022 included in the 2023 AGAR) must be stated on the same basis as the figures for the year ending 31 March 2023.

The ‘proper practices’ in this edition of the guide may be applied in preparing the AGAR for the year ending 31 March 2022 but this is not mandatory. Again, comparative figures must be stated on the same basis.

In accordance with Section 6 of the Local Audit and Accountability Act 2014, an authority is a ‘smaller authority’ if the higher of the authority's gross income for the year and its gross expenditure for the year does not exceed £6.5m. For the purposes of the Accounts and Audit Regulations 2015, a smaller authority may also be referred to as a ‘Category 2 authority’. This guide uses the term ‘authority’ to refer to all types of smaller authority. For the purposes of the Practitioners’ Guide, this will include local councils (parish and town councils), parish meetings, internal drainage boards and ‘other’ authorities (including charter trustees, conservation bodies, port health authorities, harbour boards and crematorium boards).

Smaller authorities with no financial transactions meet their responsibility to produce accounts by completing Form 1 of the Annual Governance and Accountability Return.

Smaller authorities where the higher of gross income or gross expenditure was £25,000 or less, that meet the eligibility criteria set out in Regulation 9(3) of the Local Audit (Smaller Authorities) Regulations 2015, and that wish to certify themselves as exempt from a limited assurance review should complete Form 2 of the Annual Governance and Accountability Return.

All remaining smaller authorities should complete Form 3 of the Annual Governance and Accountability Return.

It is important to complete these returns on time and in line with the requirements set out here and in the AGAR.

Section 1, 2 and 3 of this guide represents the proper accounting and governance practices (‘proper practices’) referred to in statute. They set out for responsible financial officers the appropriate standard of financial and governance reporting for smaller authorities and are mandatory. Although a parish meeting is a relevant authority, there are some circumstances where legislative requirements differ. As a result, JPAG has agreed on the way in which proper practices set out in this Practitioners’ Guide apply differently to parish meetings, and separate AGARs (suffixed PM) have been produced for this purpose:

a) The chair of the parish meeting should sign the Annual Governance and Accountability Return and Exemption Certificate where appropriate

b) It will be acceptable for parish meetings with no website to publish their notices on a noticeboard for a period of 14 days, as required by 22(5)(b)(ii) of the Accounts and Audit Regulations 2015, in relation to public rights and exemption from a limited assurance review.

Section 4 of the guide sets out the non-statutory best practice guidance relating to internal audit which authorities are required to consider.

Section 5 of the guide provides supporting information and practical examples to assist smaller authority officers to manage their governance and financial affairs and is not mandatory.

The guide is intended as a working tool for smaller authorities, providing not only the common ‘rules’ for completing an Annual Governance and Accountability Return for use by responsible financial officers, but also as a reference work for auditors, both internal and external, councillors, other officers, and the public to aid understanding of the Annual Governance and Accountability Return and the reporting on the smaller authority’s governance and finances within it.

For this reason, the guide is written with the intention to be as widely accessible as possible to all users within the constraints of it also representing the appropriate standards for public reporting by smaller authorities.

JPAG is committed to a regular review of the guide to ensure that it remains fit for purpose for all smaller authorities in England. The guide is supported by the technical support teams at NALC, SLCC and ADA where you may address any questions about the content of the guide or suggestions for its improvement.