The role of the Accounting Officer in Regularity

The Accounting Officer is ultimately responsible for how funding is used, and needs to be accountable both to trustees and to the government for this.

There is therefore a need to be clear on:

a) what funding can, and equally cannot, be used for

b) that it has only been used in practice for “allowable” expenditure (or rather, expenditure in the spirit of / for the purposes intended).

In a similar way to the MUSTs in the AFH/ATH, the Accounting Officer needs to be able to articulate to the board that this is the case. But to be in a position to make this assertion, they need to be sure themselves. Furthermore, trustees really need to understand how the Accounting officer has reached the conclusion that all expenditure has been regular and proper. In other words, how have they been assured.

To be reliable, assurance should ideally be evidence based. Evidence can take many forms though, but ultimately should inform you whether something is happening in practice as effectively as you had envisaged on paper.

In other words, clearly provides an answer to the question:

“How do I know (rather than just think) that all our funding has been used for reasonable and justifiable purposes?"

Compiling or maintaining an evidence file is therefore recommended, and helps in the event of future challenge - "how DID you know, or what did you rely on" – be that challenge from Trustees or auditors!

Assurance is available both internally and externally. The Accounting Officer should first look to what assurance / evidence is provided internally. This can include management checks and related reporting for example. But there will also likely to be assurance from external sources – external and internal audit as obvious sources, but there may be others as well.

Indeed, your internal auditors may well have looked at general financial controls and compliance as part of an internal audit review, and/or reviewed other aspects of your regularity compliance.

They may even have conducted an assurance-focused review examining how the trust overall knows it is both compliant with key aspects of the funding requirements and has used funds for the purposes and in the spirit of that intended. (We have issued a separate blog on how trustees can be assured regarding regularity).

The best use of internal audit is to help plug gaps in your existing (internally generated) assurance – to aid you in “completing your assurance jigsaw” by identifying (and using/relying on) assurances against all of your key risks.

This is a good way to help focus the areas for inclusion in the internal audit plan – ask your auditors to look at and report back on areas that you need some confirmation on, to complement rather than duplicate what your own internal reporting is already telling you.

In this way, as Accounting Officer you will be able to collate a robust evidence pack comprising both internally and externally generated assurance, and therefore properly conclude (and report to trustees) that you have dealt with income and expenditure in accordance with legislation, the funding agreement, the handbook, and the trust’s internal procedures, and have (only) spent public money for the purposes intended by Parliament.

If you would like any more guidance, please contact a member of the team.