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The Accounts and Audit (Wales) Regulations 2014

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PART 3Financial Management and Internal Control

Responsibility for internal control and financial management

5.—(1) The relevant body must ensure that there is a sound system of internal control which facilitates the effective exercise of that body’s functions and which includes—

(a)arrangements for the management of risk, and

(b)adequate and effective financial management.

(2) The relevant body must conduct a review at least once in a year of the effectiveness of its system of internal control.

(3) The findings of the review referred to in paragraph (2) must be considered—

(a)in the case of a larger relevant body, by the members of the body meeting as a whole or by a committee, and

(b)in the case of a smaller relevant body, by the members of the body meeting as a whole.

(4) Following the review, the body or committee must approve a statement on internal control prepared in accordance with proper practices.

(5) The relevant body must ensure that the statement referred to in paragraph (4) accompanies—

(a)any statement of accounts which it is obliged to prepare in accordance with regulation 8; or

(b)any accounting statement which it is obliged to prepared in accordance with regulation 14.

Accounting records and control systems

6.—(1) The responsible financial officer of a relevant body must determine on behalf of the body, after consideration, when relevant, of proper practices, its—

(a)accounting records, including the form of accounts and supporting accounting records, and

(b)accounting control systems,

and that officer must ensure that the accounting control systems determined by that officer are observed and that the accounting records of the body are kept up to date and maintained in accordance with the requirements of any enactment and proper practices.

(2) The accounting records determined in accordance with paragraph (1)(a) must—

(a)be sufficient to show and explain a relevant body’s transactions and to enable the responsible financial officer to ensure that any statement of accounts or accounting statement which is prepared under these Regulations complies with these Regulations; and

(b)contain—

(i)entries from day to day of all sums of money received and expended by the body and the matters to which the income and expenditure or receipts and payments accounts relate;

(ii)a record of the assets and liabilities of the body; and

(iii)a record of income and expenditure of the body in relation to claims made, or to be made, by it for contribution, grant or subsidy from the Welsh Ministers, any Minister of the Crown or a body to whom the Welsh Ministers or such a Minister may pay sums of monies.

(3) The accounting control systems determined in accordance with paragraph (1)(b) must include—

(a)measures to ensure that the financial transactions of the body are recorded as soon as reasonably practicable and as accurately as reasonably possible, measures to enable the prevention and detection of inaccuracies and fraud, and the ability to reconstitute any lost records;

(b)identification of the duties of officers dealing with financial transactions and division of responsibilities of those officers in relation to significant transactions;

(c)procedures to ensure that uncollectable amounts, including bad debts, are not written off except with the approval of the responsible financial officer, or such member of that person’s staff as is nominated for this purpose, and that the approval is shown in the accounting records; and

(d)measures to ensure that risk is appropriately managed.

Internal audit

7.—(1) A relevant body must maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control.

(2) Any officer or member of that body must, if the body requires—

(a)make available such documents of the body which relate to its accounting and other records as appear to that body to be necessary for the purpose of the audit; and

(b)supply the body with such information and explanation as that body considers necessary for that purpose.

(3) A larger relevant body must, at least once in each year, conduct a review of the effectiveness of its internal audit.

(4) The findings of the review referred to in paragraph (3) must be considered, as part of the consideration of the system of internal control referred to in regulation 5(3), by the committee or body referred to in that paragraph.

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