Parish councils have two kinds of audit, and they’re often confused. They do different jobs, at different points in the year, by different people — and the AGAR depends on both. Here’s the plain-English version.

Internal audit

Internal audit is the council’s own independent check on its systems and controls during the year. It’s carried out by a competent, independent internal auditor (not a councillor or the clerk) who reviews whether the council’s financial controls, records and procedures are working.

  • It looks at things like: are payments properly authorised? Is the bank reconciled? Is VAT handled correctly? Are risk and budget managed? Are the books kept to proper practices?
  • The internal auditor completes the Annual Internal Audit Report in the AGAR.
  • Internal audit is about assurance and improvement — catching weaknesses before they become problems.

External audit

External audit is an independent, limited-assurance review of the AGAR by the appointed external auditor (for smaller authorities, appointed centrally through SAAA — currently PKF Littlejohn). It checks that the return is in order and consistent, and that the council has responded to any issues.

  • Councils with gross income and expenditure both £25,000 or less can usually certify exemption from the external review — but must still do everything else (internal audit, publish, electors’ rights).
  • External audit is lighter-touch than a company audit — it’s a proportionate assurance review, not a full examination of every transaction.

How they fit together

Internal audit happens through and at the end of the year and feeds the AGAR; external audit happens after the AGAR is approved. The council must act on matters raised by either — one of the governance assertions is exactly that.

Make audit painless

Both auditors are really asking: can you evidence that your controls worked? That’s far easier when every payment, approval, reconciliation note and decision is recorded in one place with an audit trail, instead of being reconstructed from spreadsheets and email.

How Town Desk helps

Both auditors are really asking the same thing: can you evidence that your controls worked? Town Desk records spend requests with their approve / reject / paid steps, receipts, and governance actions, all against an append-only audit log (Settings → Audit) that captures sign-ins, role changes, deletions and settings changes. Each area exports as a branded, print-ready pack — so when the internal or external auditor says “show me”, you can, without digging through email.

See the finance & governance features, or book a demo.

General information for UK town & parish councils, not legal advice. See the JPAG Practitioners’ Guide and your appointed auditors for what applies to your council.