By Caroline Newman FCPFA MBA (Exec), Finance Advisor, CIPFA
When I was asked to write an article on ‘the most common problems with collection fund accounting in 2019/20’ I realised that I could pretty much recycle a similar article I wrote three years ago. The same issues seem to come up time and time again for authorities when I help them complete their collection fund accounts or review their approach, either in their own working papers or having used the CIPFA Collection Fund Excel models.
The problems are also very similar for both council tax and non domestic rates (NDR). Despite the added complexities of NDR, the fundamental principles of the two schemes are the same and the same issues befall both.
Hopefully you have finalised your collection fund for 2019/20 now. In producing those accounts, were you happy with your approach to the following?
Are you treating court cost income, write-offs, impairment allowance and arrears correctly in relation to the council tax and NDR income, write-offs, impairment allowance and arrears balance?
Are you undertaking cash and refund reconciliations so that you can account for your collection fund balances on a proper accounting practice accruals basis? Are any issues identified on the reconciliations being corrected if necessary?
Are you reconciling your council tax and NDR arrears, creditors and collection fund to your revenues system control reports and to your ledger? For NNDR do these also reconcile back to your NNDR 3 form?
Are finance and revenues working together to ensure the revenues system reports are run at the right time and that they balance, from opening to closing position and across different revenues system reports?
Are you allocating the balance sheet balances correctly for the principal and agent approach of billing and precepting authorities, especially the council tax collection fund surplus/deficit?
Have you identified and treated correctly any council tax discounts awarded under S13A 1(c) of the Local Government Finance Act 1992 (as amended)?
Do you have a process for calculating and accruing any necessary section 31 grants, safety net or levy amounts in your ledger?
- Do you have a working paper trail that will satisfy your auditors?
If you are not sure you can answer yes to all of the above questions then CIPFA can provide support. This can be to help you produce your collection fund at the year end, remotely or onsite. Alternatively, we can review the approach you have taken using your own working papers or CIPFA Collection Fund Model to inform your draft or final accounts. Or, we can review at any time of year to give you reassurance on the approach for the year just gone – or to ready yourself for the year ahead.
How CIPFA can help
- If you would like to find out more about how we can help you, and your local authority, then visit our Collection Fund Support page. To discuss directly your collection fund issues and how CIPFA can help then please contact firstname.lastname@example.org.