Part 4 - Finance Rules
Financial Rules for NEDDC
1. INTRODUCTION
1.1 The Section 151 Officer has statutory duties in relation to the financial administration and stewardship of the Council. This statutory responsibility cannot be overridden. The statutory duties arise from:
1.2 The Section 151 Officer is therefore responsible for:
(a) the proper administration of the Council’s financial affairs(b) setting, and monitoring compliance with, financial management standards(c) advising on the corporate financial position and on the key financial controls necessary to secure sound financial management(d) providing financial information(e) preparing the Revenue Budget and Capital Programme(f) treasury management
1.3 The management of the Council’s financial affairs will be conducted in accordance with the financial rules set out in Part 4 of the Constitution of the Council which includes the following Financial Regulations.
2. FINANCIAL REGULATIONS
2.1 General
2.2 Financial Regulations provide the framework for managing the authority’s financial affairs. They apply to every member and officer of the Council and anyone acting on its behalf.
2.3 The regulations, in conjunction with the Constitution of the Council, identify the financial responsibilities of the Council Meeting, Cabinet and Audit and Corporate Governance Scrutiny Committee members, the Head of the Paid Service (the Chief Executive), the Monitoring Officer, the Section 151 Officer and Senior Officers.
2.4 The Section 151 Officer is responsible for maintaining a continuous review of the Financial Regulations and submitting any additions or changes necessary to the Council Meeting for approval.
2.5 The Senior Officers are responsible for ensuring that all staff areas are aware of the existence and content of the authority’s Financial Regulations, and other internal regulatory documents, and that they comply with them.
2.6 The Senior Officers are also responsible for consulting the Section 151 Officer to seek approval on any matter liable to affect the authority’s finances materially, before any commitments are incurred.
3. Accounting
3.1 Accounting Policies
The Section 151 Officer is responsible for selecting the accounting policies and ensuring that they are applied consistently.
3.2 Accounting Records and Returns
The Section 151 Officer is responsible for the operation of the Council’s accounting systems, the form of accounts and the supporting financial records. Any changes made by Senior Officers to the existing financial systems or the establishment of new systems must be approved by the Section 151 Officer. However, Senior Officers are responsible for the proper operation of financial processes in their own directorates.
3.3 Any changes to agreed procedures by Senior Officers to meet their own specific service needs should be agreed with the Section 151 Officer.
3.4 Senior Officers should ensure that their staff receives relevant financial training that has been approved by the Section 151 Officer.
3.5 Accounting Principles
The following principles shall be observed in the allocation of accounting duties:
(a) the duties of providing information about sums due to or from the Council and of calculating, checking and recording these sums, shall be separated as completely as possible from the duty of collecting or disbursing them.(b) officers charged with the duty of examining and checking the accounts of cash transactions shall not themselves be engaged in any of these transactions.(c) the Accounting Code of Practice (ACOP’s) standards must be adhered to at all times.
3.6 Treatment of Year-end Balances
The Council Meeting is responsible for agreeing procedures for carrying forward under and over spending on budget heads.
3.7 The Annual Statement of Accounts
The Section 151 Officer is responsible for ensuring that the Annual Statement of Accounts is prepared in accordance with the ‘Code of Practice on Local Authority Accounting in the United Kingdom: A Statement of Recommended Practice (CIPFA/LASAAC). The Audit and Corporate Governance Scrutiny Committee is responsible for approving the Annual Statement of Accounts.
4.0 Advance Accounts
4.1 The Section 151 Officer shall provide such advance accounts (Imprests) as he/she considers appropriate, for such officers of the Council as may need them, to meet minor expenditure on behalf of the Council, and prescribe rules for the operating of these accounts.
4.2 No income received on behalf of the Council may be paid into an advance account but must be banked or paid to the Council as provided elsewhere in these regulations.
4.3 Payments shall be limited to minor items of expenditure and to such other items as the Section 151 Officer may approve, and shall be supported by a receipted voucher, to the extent that Section 151 Officer may require. Where appropriate a VAT receipt must be obtained but it must comply with the VAT regulations.
4.4 An officer responsible for an advance account shall, if so requested, give to the Section 151 Officer a certificate showing the state of his/her Imprest account.
4.5 On leaving the employment of the Council or otherwise ceasing to be entitled to hold an Imprest advance, an officer shall account to the Section 151 Officer for the amount advanced to him/her. Any transfers of Imprests between staff should be evidenced in writing and the Section 151 Officer shall be informed, also in writing, of the change in Imprest holder.
5. Assets
5.1 General
The Council holds assets in the form of property, vehicles, equipment, furniture and other items worth many millions of pounds. These assets must be safeguarded and used efficiently in service delivery, and arrangements must be made for the security of both assets and information concerning them required for service operations.
5.2 No employee shall make personal use of Council assets unless given authorisation to do so.
5.3 Asset Register
In 1993 CIPFA introduced a new Code of Practice on Local Authority Accounting in Great Britain. This included a Statement on Capital Accounting by Local Authorities and set out a new system of accounting for capital assets. An up-to-date asset register is a prerequisite for proper fixed asset accounting and sound asset management.
5.4 The Section 151 Officer will ensure that an Asset Register for all fixed assets, of and above an agreed value, is maintained for the Authority; that it is updated as and when changes occur and that the assets are valued in accordance with the above Code of Practice: A Statement of Recommended Practice (CIPFA/LASAAC).
5.5 Senior Officers shall provide the Section 151 Officer with details of, all property, plant and machinery, and movable assets currently owned by or used by the Authority and under their control, and of any additions or changes to those assets.
5.6 A complete list of leased equipment held must be maintained by Senior Officers, a copy of which should be forwarded to the Section 151 Officer at the end of each financial year.
5.7 Disposals of Fixed Assets
The disposal or sale of all Fixed Assets must be in accordance with legislation, the Constitution of the Council and the Asset Management Plan.
5.8 Land Database
The Principal Solicitor, Estates and Valuation Manager and the GIS Officer shall maintain a database of all property owned by the Council (except dwellings provided under the Housing Acts) recording the statutory powers under which it is held, location, extent and plan reference, purchase details, particulars of nature of interest and rents payable and particulars of tenancies granted.
5.9 Inventories
Senior Officers will be responsible for maintaining up-to-date inventories of all furniture, fittings and equipment purchased, or given to the Council, under their control. The details recorded for each item should be sufficient to enable easy identification and facilitate the valuation of the Council’s assets.
5.10 Senior Officers shall ensure that an annual check is carried out on their inventories in order to verify the location and condition of all items, that they are still required, and to take action in relation to any disposals, transfers and losses in accordance with the procedures laid down by the Section 151 Officer. All attractive and portable items, e.g. computers, cameras, video recorders, should be identified with security markings as belonging to the Council.
5.11 Senior Officers should ensure that all of the Council’s property under their control is only used in the course of the Council’s business, unless they have given permission otherwise.
5.12 At the end of each financial year Senior Officers shall submit a copy of their complete inventory to Section 151 Officer.
5.13 Inventory items that become obsolete or surplus to requirements can, with authorisation from the relevant Officer, be sold or disposed of in accordance with Council Policy.
5.14 Stocks and Stores
Senior Officers shall be responsible for the care and custody of the stocks and stores in his/her area.
5.15 Stocks shall not be in excess of normal requirements, except in special circumstances and with the approval of the committee concerned.
5.16 Senior Officers shall arrange for a regular, independent, physical check of all stocks, ensuring that all stock items are checked at least once per year. Any surpluses or deficiencies should be investigated to a satisfactory conclusion. The Council’s records shall be corrected for minor discrepancies but major discrepancies must be reported to Section 151 Officer promptly.
5.17 The Section 151 Officer shall be entitled to receive from each Senior Officer such information as he/she requires in relation to stores for the accounting, costing and financial records. At each year-end Senior Officers shall provide details of their Stock holdings in the form of balances on Year End Stock Certificates.
5.18 Surplus materials, stores or equipment shall be disposed of by competitive tender or public auction unless a decision is taken by our appropriate body.
5.19 Intellectual Property
Intellectual property is a generic term that includes inventions and writing. If these are created by an employee, during the course of their employment, then, as a general rule, they belong to the employer, not the employee.
5.20 Certain activities undertaken within the authority may give rise to items that are patentable, e.g. equipment and computer software. These items are known as intellectual property.
5.21 Senior Officers must ensure that controls are in place to prevent staff from carrying out private work in Council time, and must make staff aware of the Council’s rights with regard to intellectual property.
6 Audit
6.1 General
The requirement for an internal audit function for local authorities is implied by Section 151 of the Local Government Act 1972, which simply requires that authorities “make arrangements for the proper administration of their financial affairs and shall secure that one of their officers has responsibility for the administration of those affairs”.
6.2 The Accounts and Audit Regulations 2006 issued by the Secretary of State for the Environment require every local authority to maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control in accordance with the proper internal audit practices.
6.3 The Audit Commission is responsible for appointing external auditors to each local authority. The basic duties of the external auditor are governed by Section 15 of the Local Government Act 1982, as amended by Section 5 of the Audit Commission Act 1998.
6.4 Local authorities can also be subject to audit, inspection, or investigation by external bodies such as HM Customs and Excise and the Inland Revenue, who have statutory rights of access.
6.5 Internal Audit
Internal Audit is dealt with by a Joint Consortium with Chesterfield Borough Council and Bolsover District Council operating under the following terms of reference:-
INTRODUCTION
The Internal Audit Consortium Terms of Reference describe the purpose, authority and principal responsibilities of the Internal Audit Consortium that has been established to provide the internal audit service to the three Councils’.
SCOPE AND OBJECTIVES OF INTERNAL AUDIT
Internal Audit is an assurance function that provides an independent and objective opinion to the organisation on the control environment, by evaluating its effectiveness in achieving the organisation’s objectives. It objectively examines, evaluates and reports on the adequacy of the control environment as a contribution to the proper, economic, efficient and effective use of resources.
The scope of Internal Audit allows for unrestricted access at each partner authority to all records and assets deemed necessary in the course of the audit. This right of access is included in the agreement signed by the three authorities establishing the internal audit consortium and in each authority's Financial Regulations. In addition, where necessary, the Head of the Internal Audit Consortium will have unrestricted access at each authority to:
- The Chief
- The Chief Financial Officer
- The Chair and Members of the Audit Committee
- Individual Directors / Assistant Directors
- All Other Employees
- The External Auditor
INDEPENDENCE
In order to achieve its objectives effectively, Internal Audit must be seen to be independent.
This is achieved by:
- Organisational status of the Internal Audit Consortium and the objectivity of Internal Audit
- Ability of internal audit to report in its own name to all senior management and to members at the relevant authority.
- Not being part of system and procedures being audited.
- Where the Internal Audit Consortium is asked to provide any services in a consultancy role, this should be made clear in the project brief
- The independence and reporting arrangements for the Head of the Internal Audit Consortium being detailed in the Consortium legal agreement.
AUTHORITY
There are two principal pieces of legislation that impact upon internal audit at local authorities.
- S151 of the Local Government Act 1972 – requires a Local Authority to ensure that one of the officers has responsibility for the proper administration of its financial affairs.
- Section 6 of the Accounts and Audit Regulations 2006 – states that ‘a relevant body shall maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control in accordance with the proper practices in relation to internal control’.
In addition, the Consortium legal agreement details how the Consortium will operate in terms of finance, staffing, reporting and independence.
Internal Audit is also governed by policies, procedures, rules and regulations established by the host Council. These include financial regulations, conditions of service, codes of conduct and anti-fraud and corruption strategies.
Where key services are to be provided to one of the partner Councils’ by other contractors or through a partnership, in order for internal audit to form an opinion on the controls operating, a right of access to relevant information and documents should be included in contracts or agreements concerned.
STANDARDS
The Internal Audit Consortium adopts standards established by CIPFA (The Chartered Institute of Public Finance and Accountancy) in undertaking its work. In particular, CIPFA has issued two documents that set out the duties and responsibilities of internal auditors in local authorities. These documents are:-
- The Code of Practice for Internal Audit in Local Government in the U.K (2006).
- The CIPFA Internal Audit Manual (Revised December 2004).
The Internal Audit Consortium will follow the guidance in these documents as ‘proper practice’ in the provision of the Internal Audit Service to the partner Councils’.
The Internal Audit Consortium will seek to achieve continuous improvement in the provision of the internal audit service and will establish a performance management and quality assurance framework to assist in this process.
The Head of the Internal Audit Consortium will develop, maintain and manage a Risk Assessment in relation to the functions of the Consortium.
INTERNAL AUDIT RESPONSIBILITY
The areas of Internal Audit responsibility are detailed in the Consortium Legal Agreement as follows (paragraph numbers below refer to the Consortium Legal agreement):
The Statutory Internal Audit Functions and Other Internal Audit-related Functions carried out for the Councils
6.1.1 Each Council hereby empowers The Consortium to discharge on its behalf the Internal Audit Functions in accordance with this Agreement and at such level as may be agreed from time to time in the Audit Plan for each Council
The Councils agree that references to their respective separate internal audit units in their respective constitutions or Financial Regulations or procedures shall be read as references to the Consortium where appropriate
Top of the Page
In particular the Consortium will, for each Council:
6.1.2 Prepare each year in advance an Audit Plan for discussion and agreement by each Council's Client Officer. The Audit Plan shall then be submitted for approval by the Councils' respective Audit Committees. Any in-year significant changes to the Audit Plan shall be agreed by the respective Client Officers and Audit Committees6.1.3 Prepare audit reports following discussions between Consortium staff and relevant service managers. The HIAC shall send final audit reports to the relevant Client Officer for circulation within the relevant Council. The relevant Client Officer will follow up audit reports to ensure that implementation plans in those audit reports are completed received by the HIAC and actioned6.1.4 Carry out Corporate Activities as agreed in the Audit Plan for each Council by way of internal audit input to appropriate corporate issues6.1.5 Liaise as needed with the Audit Commission's nominated External Auditor for each Council and with other regulators6.1.6 Contribute as agreed in the Audit Plan to the Statement of Internal Control and Local Code of Corporate Governance6.1.7 Contribute to reviews of financial regulations6.1.8 Carry out such Other Internal Audit-related Functions for the Councils as may be proposed from time to time by the HIAC and the Client Officer in each Council and agreed in the approved Audit Plan. Such Other Internal Audit-related Functions may include contributing to the confidential reporting policies ("whistle-blowing" policies) of the Councils
6.2 The Public Body Functions
The Consortium will also carry out such
Statutory Internal Audit Functions andOther Internal Audit-related Functions,
For such public sector bodies (other than the Councils) as may be approved from time to time by the Joint Board within legal and operational limits
Other responsibilities of internal audit are:
To provide a written annual report to the Audit Committee (or equivalent) at each partner authority.
The report will include:
- An overall opinion on the adequacy and effectiveness of the organisation’s control environment (including any qualifications to that opinion)
- Present a summary of the audit work from which the opinion is derived, including reliance placed on the work by other assurance bodies
- Draw attention to any issues the Head of Internal Audit judges particularly relevant to the preparation of the Statement on Internal Control
- Compare work actually undertaken with work that was planned and to report relevant performance measures and targets
- Comment on compliance with Standards and report on the results of quality assurance reviews
Where either:
(a) Key systems are being operated, or key systems provided by other organisations on behalf of the Council
(b) Key systems are being operated , or key systems provided, on behalf of other organisations by the Council
The Head of Internal Audit will decide, in consultation with all parties, whether Internal Audit conduct the work to derive the required opinions on the reliability of systems and controls or should rely on the opinion provided by other auditors.
FRAUD AND CORRUPTION
Managing the risk of fraud and corruption is the responsibility of management.
The Head of the Internal Audit Consortium should be notified of all suspected or detected fraud, corruption or impropriety in accordance with each Council’s Financial Regulations and Anti Fraud and Corruption Strategies, in order to inform their opinion of the internal control environment.
Subject to availability of resources with the Internal Audit Plan, internal audit may assist management in the investigation of suspected fraud and corruption.
AUDIT STYLE AND CONTENT
The primary task of the Internal Audit Consortium is to review systems of internal control operating throughout each of the partner authorities, and in this will adopt a predominantly systems based approach to the audit.
The Head of Internal Audit will manage the provision of the Internal Audit service to each Council by:
Preparing a risk based annual audit plan for discussion and agreement by each Council’s Client Officer.
Reporting to each Council’s Audit Committee for approval the agreed annual audit plan.
Ensuring audit work is supervised, recorded and reported.
AUDIT REPORTING
All audits will be subject of formal written reports. Reports will be issued to the relevant Assistant Director and Client (Section 151) Officer concerned. If the Head of the Internal Audit Consortium considers necessary, copies of reports may also be issued to the Chief Executive and to members at the relevant authority. The Head of the Internal Audit Consortium will make periodic reports to each Audit Committee summarising all internal audit reports issued.
AUDIT RESOURCES
The staffing and budget of the Internal Audit Consortium will be kept under review by the Head of Internal Audit, bearing in mind the resource requirements identified in the audit plan process. Where resources available do not match the resource requirements identified by the annual audit plans, the Head of the Internal Audit Consortium will report to the Joint Board.
REVIEW OF TERMS OF REFERENCE
These Terms of Reference will be reviewed every 2 years by the Head of the Internal Audit Consortium and will be reported to each Council’s Audit Committee for approval.
6.6 Fraud and Corruption.
The Council will not tolerate fraud and corruption in the administration of its responsibilities, whether from inside or outside the authority.
6.7 The Council has issued a booklet to all staff entitled ‘Steps to Prevent Fraud and Corruption’ and staff are expected to abide by the rules laid down in that document. It also contains details of the ‘whistle-blowing’ arrangements in place and all staff are expected to use them if they suspect any impropriety, breaches of procedure or acts of fraud or corruption by other members of staff, Council Members, occupants of Council properties and recipients of Housing or Council Tax Benefits. These are also detailed in the Council’s Confidential Reporting Policy, a copy of which has been issued to all Members and Officers of the Council.
6.8 All Officers and staff will notify the Section 151 Officer immediately, of any suspected fraud, theft, irregularity, improper use or misappropriation of the Council’s property or resources, who shall jointly and severally take such steps as they consider necessary to investigate promptly and report in accordance with the procedure in place.
7. Banking Arrangements and Cheques
7.1 All arrangements with the Council’s bankers shall be made by or under arrangements approved by the Section 151 Officer, who shall be authorised to operate such banking accounts, including Girobank accounts, as he/she may consider necessary.
7.2 Cheques
All cheques, including Girobank cheques, shall be ordered only on the authority of the Section 151 Officer, who shall make proper arrangements for their safe custody.
7.3 All computer produced cheques raised on the Council’s main banking accounts shall bear the facsimile signature of the Section 151 Officer. All manually produced cheques must be signed by the Section 151 Officer or an other officer authorised by the Council to do so.
7.4 Any cheques for more than £25,000 must be countersigned by the Section 151 Officer or one of the other officers authorised to sign cheques.
Similarly any cheque for more than £100,000, which can only be a manual cheque, must be signed by 2 of the authorised officers.
7.5 BACS
The payment of creditors will, wherever possible, be made by BACS transfer, the schedule of payments being made will be authorised by the Section 151 Officer or other officer authorised by the Council to do so. As with cheques, all payments over £25,000 must be countersigned by the Section 151 Officer or one of the other authorised officers and all payments over £100,000 must be signed by 2 of the authorised officers.
7.6 CHAPS
The repayment of monies borrowed by the Council as part of its Treasury Management shall be made by CHAPS to facilitate the cash flow position. All payments must be authorised by the Section 151 Officer or another authorised officer.
8. Budgeting
8.1 Budget format
The budget and policy framework will be approved by the Council Meeting and will be implemented by the Cabinet. The Rules of Procedure are set out in Part 4 of the Constitution of the Council.
8.2 Budget preparation
The Section 151 Officer shall determine the detailed form of Capital and Revenue estimates subject to the general directions of the Audit and Corporate Governance Scrutiny Committee, the Cabinet and after consultation with Senior Officers.
8.3 It is the responsibility of Senior Officers to ensure that budget estimates reflecting the agreed Corporate Plan are submitted to the Section 151 Officer, in accordance with the guidance issued by the Audit and Corporate Governance Scrutiny Committee and in line with the agreed timetable.
8.4 The Section 151 Officer will collate the estimates and report to the Audit and Corporate Governance Scrutiny Committee and the Cabinet. The draft budget should include allocation to different services and projects, proposed taxation levels and contingency funds. Once it is accepted by the Audit and Corporate Governance Scrutiny Committee and the Cabinet it will be put before the Council Meeting.
8.5 Budget monitoring and control
The Section 151 Officer is responsible for providing appropriate financial information to enable budgets to be monitored effectively. Reports detailing expenditure against the budget for every budget head are to be sent to the Audit and Corporate Governance Scrutiny Committee and to the relevant Senior Officers on a quarterly basis.
8.6 It is the responsibility of Senior Officers and Senior Managers to control income and expenditure within their area and to monitor performance, taking account of financial information provided by Section 151 Officer. They should report to him/her on variances within their own areas. They should also take any action necessary to avoid exceeding their budget allocation and alert the Section 151 Officer to any problems.
8.7 Virements
The Cabinet or Senior Officers shall be entitled to vire across budget heads on 3 occasions in any one year, where each individual virement does not exceed £50,000 in total, and the aggregated total virement must not exceed £150,000. Beyond that limit, approval for any virement across budget heads shall require the approval of the Council Meeting.
8.8 Resource allocation
The Section 151 Officer is responsible for developing and maintaining a resource allocation process that ensures due consideration of the Council’s policy framework.
8.9 Preparation of the Capital Programme
The Section 151 Officer is responsible for ensuring that a Capital Programme is prepared on an annual basis for consideration by the Audit and Corporate Governance Scrutiny Committee and the Cabinet before submission to the Council Meeting.
8.10 Upon the approval by the Council Meeting of the Capital Programme the Senior Officers concerned shall be authorised to:
(a) take steps to enable land required for the Capital Programme to be acquired.
(b) prepare a scheme and estimate of costs for approval by the Cabinet.
8.11 Guidelines
Guidelines on budget preparation are issued to Members and Senior Officers by the Section 151 Officer following agreement with the Audit and Corporate Governance Scrutiny Committee. The guidelines will take account of:
(a) medium-term planning prospects(b) the corporate plan(c) available resources(d) spending pressures(e) relevant government guidelines(f) other internal policy documents(g) cross-cutting issues (where relevant).
9. Contracts for Building, Constructional or Engineering Works
9.1 All contracts will be let strictly in accordance with the Council’s Procurement Strategy and Contract Rules with respect to Contracts and will be entered into the Contracts Register held by Procurement.
9.2 Where contracts provide for payment to be made by instalments the Section 151 Officer shall arrange for the keeping of a Contract Register or Registers. This will be held by the Financial Services Manager, to show the state of account on each contract between the Council and the Contractor, together with any other payments, and the related professional fees.
9.3 Payments to Contractors for work under contracts shall only be made on a certificate issued by a Senior Officer or other officer nominated by him/her in writing.
9.4 Subject to the provisions of the contract in each case, every extra or variation, shall, unless otherwise evidenced to his/her satisfaction, be authorised in writing by the appropriate Senior Officer, or other officer nominated by him/her in writing, and by the appropriate Cabinet Member, (or, in his/her absence, the Leader of the Council).
9.5 The final certificate of completion of any contract shall not be issued until the appropriate Senior Officer has produced to the Section 151 Officer a detailed statement of account, and all relevant documents as required.
9.6 The Section 151 Officer shall, to the extent he/she considers necessary, examine final accounts for contracts and he/she shall be entitled to make all such enquiries and receive such information and explanations as he/she may require in order to satisfy himself/herself as to the accuracy of the accounts.
9.7 Claims from contractors in respect of matters not clearly within the terms of any existing contract shall be referred to the Principal Solicitor for consideration of the Council’s legal liability and, where necessary, to the Section 151 Officer for financial consideration before a settlement is reached.
9.8 Where completion of a contract is delayed, it shall be the duty of the supervising officer concerned to take appropriate action in respect of any claim for liquidated damages and, if the delay is by more than one-sixth of the contract period, to report his/her action to the Cabinet.
9.9 In any case, where the total cost of any work carried out under a contract exceeds the approved contract sum by more than 10%, a report of the cost shall, after agreement of the final account, be submitted to the Cabinet.
9.10 A Senior Officer regularly undertaking, by direct labour, work which contractors are able and willing to undertake, shall periodically compare the cost of a representative selection of such work with the cost of the same work performed by contractors.
10. Corporate Governance
10.1 All staff and members must comply with good Corporate Governance as agreed by the Council in their Corporate Governance Policy Statement.
11. Corporate Plan
11.1 The Chief Executive is responsible for proposing the Corporate Plan to the Cabinet for consideration before its submission to the Council Meeting for approval.
12. Expenditure
12.1 General
The Section 151 Officer is responsible for the operation of the Council’s accounting systems, the form of accounts and the supporting financial records. In this capacity he/she shall, with the agreement of the Audit and Corporate Governance Scrutiny Committee decide the method(s) and procedures required for the ordering and payment of all work carried out for, and all goods and services supplied to, the Council.
12.2 Every officer and member of the Council has a responsibility to declare any links or personal interests that they have with purchasers, suppliers and/or contractors if they are engaged in contractual or purchasing decisions on behalf of the Council, in accordance with appropriate codes of conduct.
12.3 Each Senior Officer shall supply the Section 151 Officer with a list of his/her officers designated as Authorised Signatories for the purpose of authorising orders, invoices, timesheets and other types of expenditure, together with those authorised to sign other forms of documentation e.g. legal documents and correspondence. The limits of each signatory’s authorisation must also be stated. Changes to the list must be notified to the Section 151 Officer promptly.
12.4 Each Senior Officer shall ensure that a proper division of duties is exercised throughout the procedures involved in the ordering and payment for work, goods and services wherever possible.
12.5 A monetary value will be set by the Council Meeting, below which 3 quotations must be obtained and orders can be raised, and above which tenders must be sought and contracts or agreements entered into. The value will be amended from time to time in line with inflation.
12.6 All contracts entered into, whatever their nature, should be entered into the Contracts Register held by Procurement.
12.7 Orders for Work, Goods and Services
All orders for work, goods or services must be in a form approved by the Council and the Section 151 Officer and are only to be authorised in manuscript, or, where applicable, electronically, by officers designated by each Senior Officer.
12.8 Official orders must be issued for all work to be carried out, and all goods or services to be supplied to the Council, unless an alternative method is specified by the Section 151 Officer. This does not include the supplies of utilities, periodic payments such as rent or rates, petty cash purchases or other exceptions specified by the Section 151 Officer. A copy of each order shall, if required, be supplied to the Section 151 Officer.
12.9 Where a Purchasing Card is used all orders placed must be detailed, on the Transaction Log provided, by each Card Holder. A detailed receipt MUST be obtained, for every purchase made using this method, to support each order placed.
12.10 All purchases, of materials or services, must be contained within the annual budget agreed by Council Meeting, or agreed by the Cabinet prior to the order being placed.
12.11 All orders must conform with the Council’s Procurement Strategy. Standard terms and conditions must not be varied without the prior approval of the Section 151 Officer. Value for money should always be achieved.
12.12 No orders, in any format, must be raised for any personal or private purchases, nor must personal or private use be made of Council contracts.
12.13 Payment of Accounts
The methods of payment, other than from Advance Accounts shall be as decided by the Section 151 Officer after agreement by the Council Meeting. Electronic means will be used wherever possible.
12.14 When a Purchasing Card has been used there will be no invoice to pay. Statements of purchases will be provided on a monthly basis and must be checked thoroughly. Senior Officers must ensure that all charges, recorded against Cards held by officers within their area, have been properly incurred. Orders should be recorded on the Card Holders Transaction Log; proper, detailed receipts should have been obtained; the goods or services should have been necessary, received and of good quality and price. Any charges which cannot be supported must be investigated and reported to the Councils Bank and the Financial Services Section.
12.15 Card Holders will be responsible for the security of the card issued to them, at all times. All rules applying to the use of them must be complied with fully. The loss of a card MUST be reported immediately to the Councils Bank and Section 151 Officer.
12.16 A Senior Officer issuing electronically authorised orders a, re responsible for examining, and verifying the related invoices. For any other payment, or for vouchers and accounts , arising from source, s within their areas, each Senior Officer will be responsible for examining, verifying and certifying these for payment.
12.17 Before certifying or approving an account for payment, the authorising officer shall, save to the extent that the Section 151 Officer may otherwise determine, have satisfied himself/herself that:
(a) the work, goods or services to which the account relates have been carried out, received, or examined and approved.(b) the price(s), extension(s), calculation(s), trade discount(s), other allowance(s), credit(s) and tax are correct, and that the price(s) comply with the quotation(s), tender, contract or catalogue price(s).(c) the invoice is correctly coded, the expenditure has been properly incurred and is within the budget provision.(d) the appropriate entries have been made in the relevant accounting records, e.g. inventories, stores or stock records.(e) the account has not been previously passed for payment and is a proper liability of the Council.
12.18 All approved invoices, vouchers and certified accounts shall be passed, without delay, to the Section 151 Officer, who shall examine them to the extent that he/she considers necessary, for which purpose he/she shall be entitled to make such enquiries and to receive such information and explanation as he/she may require.
12.19 Any amendment to an account shall be made in ink and initialled by the officer making it, stating briefly the reasons where they are not self-evident.
12.20 Each Senior Officer shall, on request, as soon after 31 March and not later than 15 April in each year, notify the Section 151 Officer of all outstanding expenditure relating to the previous year (Sundry Creditors).
12.21 Salaries, Wages, Pensions and Other Emoluments
The payment of all salaries, wages, pensions, allowances, compensation and any other emoluments to all employees, former employees and members of the Council shall be made by the Section 151 Officer or under arrangements approved and controlled by him/her.
12.22 Each Senior Officer shall notify the Section 151 Officer as soon as possible, and in the form prescribed by him/her, of all matters affecting the payment of such emoluments, and in particular:
(a) appointments, resignations, dismissals, suspensions, secondments, and transfers;(b) absences from duty for sickness or other reason, apart from approved leave;(c) changes in remuneration, other than normal increments, pay awards and agreements of general application;(d) information necessary to maintain records of service for superannuation, income tax, national insurance and the like.
12.23 Appointments of all employees shall be made in accordance with the regulations of the Council and the approved establishments, grades and rates of pay.
12.24 All time records, other pay documents and claims for allowances shall be in a form prescribed or approved by the Section 151 Officer and shall be certified in manuscript by or on behalf of the appropriate Senior Officer In the case of claims for travelling, subsistence and incidental expenses each member of Senior Officer shall satisfy himself/herself that the journeys were authorised, the expenses properly and necessarily incurred and that the allowances are properly payable by the Council.
12.25 Such claims should be made within 3 months of the relevant event(s) taking place. Those submitted more than 6 months after the expenses were incurred will only be paid with the express approval of the Section 151 Officer. All claims for a financial year are to be submitted within 1 month of 31 March.
13. Income
13.1 General
Income can be a vulnerable asset and effective income collection systems are necessary to ensure that all income due is identified, collected, receipted and banked properly. It is preferable to obtain income in advance of supplying goods or services as this improves the authority’s cash flow and also avoids the time and cost of administering debts.
13.2 External Funding
The Section 151 Officer is responsible for ensuring that all funding notified by external bodies, , is received and properly recorded in the Council’s accounts.
13.3 Collection of Income
The Section 151 Officer shall agree arrangements for the collection of all income due to the Council and shall approve the procedures, systems and documentation for its collection.
13.4 Each Senior officer shall ensure that all income due to the Council, for work carried out, goods supplied and/or services rendered, is identified, and charged correctly (in accordance with an approved charging policy which is reviewed regularly). Particulars of all sums due will be passed to the Section 151 Officer to ensure the prompt rendering of accounts for the recovery of income due and for accounting purposes.
13.5 The Section 151 Officer shall be notified promptly of all contracts, leases and other agreements and arrangements entered into, which involve the receipt of money by the Council. The Section 151 Officer shall have the right to inspect any documents or other evidence in this connection as he/she may decide.
13.6 All receipting forms will be ordered and supplied to service areas by the Section 151 Officer or, where they are used by one area only, by an officer nominated by the relevant Senior Officer in accordance with the procedure laid down by the Section 151 Officer.
13.7 All money received by an officer on behalf of the Council shall be paid fully and promptly to the Section 151 Officer, or as he/she may direct, into the appropriate bank account, in the form that it was received. No deduction may be made from such monies save to the extent that the Section 151 Officer may specifically authorise. Each officer who so banks money shall enter on the paying-in slip the name of his/her office or establishment, the nature of the receipt and a reference to the payer. On the reverse of each cheque paid in they should enter a reference to the related debt, e.g. Rent/Council Tax/Sundry Debtor Account number and a receipt number.
13.8 Personal cheques shall not be cashed from income or any other monies held on behalf of the Council.
13.9 The duty of identifying debts and raising charges, the collection of those charges, and the control and reconciliation of the resulting income shall be separated as far as is practicable.
13.10 Every transfer of official money from one member of staff to another will be evidenced in the records of the service areas concerned by the signature of the receiving officer.
13.11 Debt Recovery
The Section 151 Officer shall establish and initiate, where appropriate, recovery procedures, and the Principal Solicitor will take legal action, where necessary, for debts that are not promptly paid.
13.12 The Section 151 Officer shall, after consultation with the relevant Senior Officer authorise the write-off of bad debts up to an approved limit in each case and refer larger debts to the Audit and Corporate Governance Scrutiny Committee. A record of all debts written off will be maintained and the requirements of the Accounts and Audit Regulations will be complied with.
14. Insurances
14.1 The Section 151 Officer shall effect all insurance cover and negotiate all claims in consultation with other officers where necessary.
14.2 A Senior Officer shall notify the Section 151 Officer promptly of all new risks, properties or vehicles that require insurance cover and of any alterations affecting existing insurance policies.
14.3 A Senior Officer shall notify the Section 151 Officer and Internal Audit Consortium, immediately, of any loss, liability or damage that may lead to a claim against the Council, and provide any information or explanation required by the Section 151 Officer or the Council’s insurers. Internal Audit Consortium should also notify the police if they consider it necessary.
14.4 All appropriate employees of the Council shall be included in a suitable fidelity guarantee insurance policy.
14.5 The Section 151 Officer shall, annually, or at such other period as he/she may consider necessary, review all insurances in consultation with other Senior Officers as appropriate for necessity and adequacy.
14.6 Senior Officers shall consult the Section 151 Officer about the terms of any indemnity which the Council is requested to give.
14.7 No employee, or anyone covered by the Council’s insurances, shall admit liability or make any offer to pay compensation that may prejudice the assessment of liability in respect of any insurance claim.
14.8 The Section 151 Officer shall, in consultation with the appropriate Senior Officer ensure that adequate insurance cover is maintained on all contracts let.
15. Partnerships
15.1 The Council Meeting or the Cabinet, in order to promote the economic, social or environmental well-being of its area, may (as stated in Article 9 of the Constitution):
(a) enter into arrangements or agreements with any person or body;(b) co-operate with, or facilitate or co-ordinate the functions of that person or body; and(c) exercise on behalf of that person or body any functions of that person or body.
15.2 The Section 151 Officer shall ensure that suitable accounting arrangements are adopted relating to partnerships and/or joint ventures; that the overall corporate governance arrangements and legal issues have been properly considered and that all risks have been fully appraised.
16. Risk Management
16.1 Risk Management is a process of identifying significant risks to the achievement of an Council’s strategic and operational objectives, evaluating their potential consequences and determining and implementing the most effective way of responding to, controlling and monitoring them.
16.2 The Audit and Corporate Governance Scrutiny Committee is responsible for approving the Council’s Risk Management Policy Statement and Strategy, for promoting a culture of risk management awareness throughout the Council, and for reviewing the effectiveness of risk management. The Audit and Corporate Governance Scrutiny Committee is responsible for ensuring that proper insurance cover exists where appropriate.
16.3 The Section 151 Officer is responsible for the Council’s Risk Management Policy, for promoting it throughout the Council and for advising the Audit and Corporate Governance Scrutiny Committee on proper insurance cover where appropriate.
16.4 Internal Control
Internal control refers to the systems of control devised by management to help ensure the Council’s objectives are achieved in a manner that promotes economical, efficient and effective use of resources and that the Council’s assets and interests are safeguarded.
16.5 The Section 151 Officer is responsible for advising on effective systems of internal control.
16.6 It is the responsibility of each Senior Officer to establish sound arrangements for planning, appraising, authorising and controlling their operations in order to achieve continuous improvement, economy, efficiency and effectiveness and for achieving their financial and operational performance targets.
17. Security
17.1 Senior Officers should ensure that records and assets are properly maintained and securely held at all times. They should also ensure that contingency plans for the security of assets and continuity of service in the event of disaster or system failure are in place.
17.2 Senior officers shall consult the Section 151 Officer in any case where he/she considers security to be defective or where it is considered that special security arrangements may be needed.
17.3 Maximum limits for cash holdings shall be agreed with the Section 151 Officer and shall not be exceeded without his/her agreement.
17.4 Keys to safes and similar receptacles are to be kept in a secure place separate from the safe or receptacle at all times; the loss of any such keys must be reported to the Section 151 Officer immediately.
17.5 In relation to IT systems, copies of all VME and Administration Level security passwords should be held by the Section 151 Officer and the Technology Services Manager in case any emergency situation arises.
17.6 Each Senior Officer shall be responsible for maintaining proper security and privacy as respects information held in his/her area which is in a form in which it can be processed by equipment automatically.
18. Taxation
18.1 It is the responsibility of the Section 151 Officer to advise all Senior Officers in the light of guidance issued by the appropriate bodies and relevant legislation as it applies, on all taxation issues that affect the Council.
18.2 The Section 151 Officer is responsible for maintaining the Council’s tax records, making all tax payments, receiving tax credits and submitting tax returns by their due date as appropriate.
19. Treasury Management/Investments, Borrowings and Trust Funds
19.1 Treasury Management
The Council adopts the key recommendations of CIPFA’s Treasury Management in the Public Services: Code of Practice (the Code), as described in Section 4 of that Code.
19.2 Accordingly, the Council will create and maintain, as the cornerstones for effective treasury management:
(a) A treasury management policy statement, stating the policies and objectives of its treasury management activities(b) Suitable treasury management practices (TMPs), setting out the manner in which the Council will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities.
19.3 The Council through the Audit and Corporate Governance Scrutiny Committee will receive reports on its treasury management policies, practices and activities, including, as a minimum, an annual strategy and plan in advance of the year, and an annual report after its close, in the form prescribed in its TMPs.
19.4 The Council delegates responsibility for the implementation and monitoring of its treasury management policies and practices to the Audit and Corporate Governance Scrutiny Committee , and for the execution and administration of treasury management decisions to the Section 151 Officer, who will act in accordance with the organisation’s policy statement and TMPs and, CIPFA’s Standard of Professional Practice on Treasury Management.
19.5 Investments, Borrowings and Trust Funds
All investments of money under its control shall be in the name of the Council or in the name of nominees approved by the Cabinet bearer securities shall be reported to the Cabinet.
19.6 All securities, the property of, or in the name of, the Council or its nominees, will be held by the Section 151 Officer and the title deeds of all property in its ownership shall be held in the custody of H M Land Registry.
19.7 All borrowings shall be effected in the name of the Council.
19.8 The Section 151 Officer shall be the Council’s registrar of stocks, bonds and mortgages and shall maintain records of all borrowing of money by the Council.
19.9 All Trust Funds shall be, wherever possible, in the name of the Council.
19.10 All officers acting as trustees by virtue of their official position shall deposit all securities, etc, relating to the Trust, with the Section 151 Officer unless the deed otherwise provides.
20. Work for Third Parties
20.1 Current legislation enables the authority to provide a range of services to other bodies. Such work may enable a unit to maintain economies of scale and existing expertise. Arrangements should therefore be in place to ensure that any risks associated with this work is minimised and that such work is intra vires.
20.2 The Cabinet is responsible for approving the contractual arrangements for any work carried out for third parties or external bodies after consultation has taken place with the appropriate Senior Officer, the Section 151 Officer and the Procure to Pay Manager.
| |||||||||
Advertisements
Advertising Policy - The inclusion of an advertisement on this site does not imply a recommendation or endorsement by NEDDC.
