The AGAR for internal drainage boards

Internal drainage boards sit in an odd position. They are public bodies with statutory functions under land drainage legislation, they raise their own income, and many of them manage infrastructure worth several million pounds. Yet for audit purposes most fall within the smaller authorities regime — the same Annual Governance and Accountability Return, the same limited assurance review, the same external auditor appointment arrangements as a village parish council with a bus shelter and a noticeboard.

Nearly all the published guidance on the AGAR is written with parish councils in mind. The form is the same; the way a board's finances land on it is not. These are the places where the difference shows.

Income: two streams, not a precept

A parish council has one obvious income line — the precept — and it moves for one reason, recorded in one minute. A board's income is split between drainage rates raised on agricultural and other occupied land within the district, and special levies issued to the billing authorities whose areas fall within it.

That matters for the return because the two move for different reasons and often in different years. The rate in the pound may be unchanged while the levy rises because the underlying apportionment shifted; or the board may hold both steady and still see income move because of changes in the rateable value base. An explanation that says only "rates increased" will come back as a query.

The workable approach is to explain the two components separately and name the driver for each: the rate in the pound set by the board and minuted, the change in the assessed value base, and the levy calculation for each billing authority. Anyone who has had to reconstruct that after the event knows it is far easier written down at the time the board resolves it.

Box 3 collects the things that move most

Other receipts is the most queried line on any AGAR, and for boards it is where the genuinely lumpy money sits: highland water contributions, Environment Agency precepts and contributions where applicable, grant funding for capital schemes, developer contributions, income from third parties for works, and receipts relating to shared or consortium arrangements.

These are exactly the receipts that appear in one year and not the next, which is what triggers a variance. List the components with amounts rather than describing the category, and say explicitly where a prior-year comparable does not exist.

Fixed assets: the box that is genuinely harder

This is the biggest practical difference. A parish council's Box 9 is a list of benches, play equipment and perhaps a building. A board's asset base is pumping stations, sluices, penstocks, embankments, watercourses and plant — assets that are old, expensive, sometimes transferred in from predecessor bodies decades ago, and frequently improved rather than replaced.

Three things follow. Capital improvement has to be distinguished from maintenance, and for watercourse and embankment works that line is a matter of judgement that should be applied consistently and documented. Assets acquired long ago may have no traceable acquisition cost, so the register carries evidenced estimates that must then be left alone rather than revisited each year. And a scheme funded by grant still goes on the register at cost — the funding source is recorded, not netted off.

The consequence is that when Box 9 moves on a board's return, the explanation needs the additions itemised by scheme, with the capital-versus-maintenance treatment stated. The general principles are the same as for any smaller authority — the register conventions are set out here — but the volume and the judgement involved are on a different scale.

Borrowing, and the boxes councils leave blank

Boards borrow for capital schemes rather more often than parish councils do, so the borrowings box and the loan interest and capital repayment line are frequently in use. Both need to reconcile to the loan schedule, and the movement explanation should distinguish new borrowing, scheduled repayment and any refinancing rather than presenting a single net figure.

Shared administration

Many boards are administered jointly — a shared clerk, a shared engineering function, or a consortium providing administration to several boards at once. That is efficient, and it creates a specific AGAR risk: each board remains a separate authority filing its own return, so shared costs must be apportioned on a consistent, documented basis, and the governance statement answered for that board rather than for the group.

Where an officer prepares several boards' returns in the same fortnight, the practical failure is rarely arithmetic. It is a figure or an explanation from one board's return finding its way onto another's.

The same discipline, at a bigger scale

Everything else applies as it does to any smaller authority. Balances carried forward must agree to cash and short-term investments, or the difference must be stated as debtors and creditors precisely. Variance explanations need cause, amount and reconciliation — the same test set out in our guide to variance explanations. The exercise of public rights has to be advertised correctly and evidenced.

The difference is simply that the numbers are larger, the asset base is more complex, and there are usually fewer people in the office to check the work.

Follow the current year's AGAR instructions from your appointed external auditor and the relevant guidance for drainage authorities, as requirements are reviewed annually and boards differ in size and circumstance.