AGAR for Parish Councils: Deadlines, Requirements, and Preparation Guide

The Annual Governance and Accountability Return — AGAR — is the document your parish council must complete and submit every year. It proves to the external auditor (and the public) that the council has managed its finances properly and met its governance obligations.

If you are a parish clerk preparing for the 2025–26 AGAR cycle, this guide covers what each section requires, the deadlines you must meet, and how to prepare efficiently.

What is the AGAR?

The AGAR is the annual return for smaller authorities (parish councils, town councils, internal drainage boards, and charter trustees) in England. It replaced the old Annual Return in 2017 and is governed by the Local Audit and Accountability Act 2014.

The AGAR has three main sections that must be completed in a specific order:

1. Section 1 — Annual Governance Statement: A set of governance assertions the council must answer "yes", "no", or "not applicable" to
2. Section 2 — Accounting Statements: The financial figures for the year
3. Section 3 — Internal Audit Report: Completed by the council's independent internal auditor

Section 1 must be approved by the council before Section 2. This is a common error — if you approve them in the wrong order, your external auditor will raise it.

Which form does your council use?

Your form depends on your annual turnover (the higher of gross income or gross expenditure):

• Turnover ≤ £25,000: Use AGAR Form 2 and submit a Certificate of Exemption (no external audit required unless requested)
• Turnover £25,000–£6.5 million: Use AGAR Form 3 (limited assurance review by the external auditor)
• Turnover > £6.5 million: Full external audit — different process entirely

Most parish councils fall into the first two categories. The AGAR forms are available from your external auditor — currently PKF Littlejohn for most smaller authorities, appointed by Smaller Authorities' Audit Appointments (SAAA).

Section 1: Annual Governance Statement

The governance statement is a series of assertions about how the council has operated during the year. For each assertion, the council answers "yes" (we complied), "no" (we did not comply), or "not applicable".

The assertions cover:

• Financial management — effective arrangements for managing money and preparing accounts
• Budgets and precept — budget supports the precept and spending is monitored
• Standing orders and financial regulations — adopted and followed
• Risk management — risks assessed and managed, including adequate insurance
• Internal controls — adequate controls exist (segregation of duties, regular reconciliations)
• Compliance with laws and proper practices — statutory obligations met
• Exercise of public rights — inspection period properly advertised and facilitated
• Trust funds — separate accounts where required (if applicable)
• Assertion 9 — additional requirements for larger councils (Section 2 accounting)
• Assertion 10 (new 2025) — digital and data compliance (council domain, email, website accessibility, IT policy)

If you answer "no" to any assertion, you must explain the reason and what the council is doing to address it. The explanation must be included with the AGAR submission.

For detailed guidance on Assertion 10, read our Assertion 10 compliance guide.

Section 2: Accounting Statements

The accounting figures for the financial year. You need:

• Box 1 — Balances brought forward (must match last year's carried-forward figure)
• Box 2 — Precept received (the amount demanded from the billing authority)
• Box 3 — Total other receipts (all income except the precept)
• Box 4 — Staff costs (salaries, employer NI, employer pension)
• Box 5 — Loan interest/capital repayments
• Box 6 — All other payments (everything not in boxes 4 or 5)
• Box 7 — Balances carried forward (box 1 + 2 + 3 - 4 - 5 - 6)
• Box 8 — Total cash and short-term investments at year-end
• Box 9 — Total fixed assets at asset cost or valuation
• Box 10 — Total borrowings

Box 7 must equal Box 8 minus any debtors plus any creditors. If it does not balance, check your bank reconciliation.

Variance explanations: If any box differs from the prior year by more than 10–15%, the external auditor will expect an explanation. Prepare these before submitting.

Section 3: Internal Audit Report

Completed by your independent internal auditor — not by the clerk or a councillor. The auditor answers yes/no/not covered to a series of questions about the council's internal controls.

For what the internal auditor checks and how to prepare, see our internal audit checklist guide.

Key deadlines for the 2025–26 cycle

Deadline	What	Notes
31 March 2026	Financial year ends	Close accounts, reconcile bank
April–May 2026	Arrange and complete internal audit	Internal auditor must be independent of the council
May 2026	Annual meeting of the council	Review standing orders, financial regs, code of conduct. Between 1–30 May
By 30 June 2026	Submit Certificate of Exemption (if turnover ≤ £25k)	Only if your council qualifies for audit exemption
By 30 June 2026	Council approves AGAR at full council meeting	Section 1 approved BEFORE Section 2. Signed by chairman and clerk
1 July 2026	Publish AGAR + Transparency Code information	Accounts, governance statement, audit report, expenditure, councillor list, asset register
1 July 2026 onwards	Public rights period begins (30 working days)	Must include the first 10 working days of July. Advertise on website and noticeboard
By 1 October 2026	External auditor report published (if applicable)	For councils undergoing limited assurance review

Start early. Most problems arise from leaving preparation to the last minute. Begin your year-end work in January by reviewing standing orders, financial regulations, and risk assessments.

Common AGAR errors

These are the issues that external auditors flag most often:

1. Section 1 approved after Section 2 — the governance statement must be approved first
2. Brought-forward balance doesn't match prior year — Box 1 this year must equal Box 7 last year
3. Unexplained variances — significant differences between years without explanation
4. Missing signatures — both the chairman and clerk/RFO must sign
5. Public rights period not properly advertised — notice must appear on the website, not just the noticeboard
6. Internal auditor not independent — the auditor cannot be a councillor, employee, or close relation
7. Exemption certificate submitted late — must be received before 30 June

Preparation checklist

Use this to track your AGAR preparation progress:

• Financial year-end bank reconciliation completed and balances agree
• All payments for the year authorised and recorded in minutes
• Budget vs. actual comparison prepared with variance explanations
• VAT reclaims submitted
• Fixed asset register updated (additions, disposals, current values)
• Standing orders and financial regulations reviewed
• Risk assessment reviewed and approved
• Insurance cover checked against current assets
• Internal auditor appointed and audit date arranged
• Section 1 governance statement prepared (all assertions reviewed)
• Section 2 accounting statements prepared and balanced
• Assertion 10 evidence assembled (domain, email, IT policy, accessibility)
• Council meeting scheduled to approve AGAR
• Public rights period notice prepared
• Transparency Code publication materials ready

Use our free audit deadline calculator to see all key dates for your council's AGAR cycle, and the compliance checklist to self-assess against every governance assertion.

Sources

• Smaller Authorities' Audit Appointments — AGAR process
• Local Audit and Accountability Act 2014
• PKF Littlejohn — External auditor for smaller authorities

The definitive source for AGAR requirements is the SAPPP Practitioners' Guide, published annually by JPAG through NALC and SLCC. This article is for general guidance only.