These Financial Regulations were adopted by the Council at its meeting held on 7th September 2015.
These financial regulations govern the conduct of financial management by the council and may only be amended or varied by resolution of the council.
The council’s accounting control systems must include measures:
for the timely production of accounts;
that provide for the safe and efficient safeguarding of public money;
to prevent and detect inaccuracy and fraud; and
identifying the duties of officers.
These financial regulations demonstrate how the council meets these responsibilities and requirements.
At least once a year, prior to approving the Annual Governance Statement, the council must review the effectiveness of its system of internal control which shall be in accordance with proper practices.
A breach of these Regulations by an employee is gross misconduct.
The Responsible Financial Officer (RFO) holds a statutory office to be appointed by the council. The Clerk has been appointed as RFO for this council and these regulations will apply accordingly.
acts under the policy direction of the council;
administers the council's financial affairs in accordance with all Acts, Regulations and proper practices;
ensures the accounting control systems are observed;
maintains the accounting records of the council up to date in accordance with proper practices;
assists the council to secure economy, efficiency and effectiveness in the use of its resources; and
produces financial management information as required by the council.
The accounting records determined by the RFO shall be sufficient to show and explain the council’s transactions and to enable the RFO to ensure that any income and expenditure account and statement of balances, or record of receipts and payments and additional information comply with the Accounts and Audit Regulations.*1
The accounting records determined by the RFO shall in particular contain:
entries from day to day of all sums of money received and expended by the council and the matters to which the income and expenditure or receipts and payments account relate;
a record of the assets and liabilities of the council; and
The accounting control systems determined by the RFO shall include:
procedures to ensure that the financial transactions of the council are recorded as soon as reasonably practicable and as accurately and reasonably as possible;
procedures to enable the prevention and detection of inaccuracies and fraud and the ability to reconstruct any lost records;
identification of the duties of officers dealing with financial transactions and division of responsibilities of those officers in relation to significant transactions;
measures to ensure that risk is properly managed.
The council is not empowered by these Regulations or otherwise to delegate certain specified decisions. In particular any decision regarding:
setting the final budget or the precept (council tax requirement);
approving accounting statements;
approving an annual governance statement;
writing off bad debts;
declaring eligibility for the General Power of Competence; and
addressing recommendations in any report from the internal or external auditors,;
shall be a matter for the full council only.
In addition the council must:
determine and keep under regular review the bank mandate for all council bank accounts;
approve any grant or a single commitment in excess of £500
In these financial regulations, references to the Accounts and Audit Regulations or ‘the regulations’ shall mean the regulations issued under the provisions of section 27 of the Audit Commission Act 1998, or any superseding legislation, and then in force unless otherwise specified.
In these financial regulations the term ‘proper practice’ or ‘proper practices’ shall refer to guidance issued in Governance and Accountability for Local Councils - a Practitioners’ Guide (England) issued by the Joint Practitioners Advisory Group (JPAG), available from the websites of NALC and the Society for Local Council Clerks (SLCC).
2. ACCOUNTING AND AUDIT (INTERNAL AND EXTERNAL)
All accounting procedures and financial records of the council shall be determined by the RFO in accordance with the Accounts and Audit Regulations, appropriate guidance and proper practices.
On a regular basis, at least once in each quarter, and at each financial year end, a member other than the Chairman or a cheque signatory shall be appointed to verify bank reconciliations produced by the RFO. The member shall sign the reconciliations and the original bank statements (or similar document) as evidence of verification. This activity shall on conclusion be reported, including any exceptions, to and noted by the council.
The RFO shall complete the annual statement of accounts, annual report, and any related documents of the council contained in the Annual Return (as specified in proper practices) as soon as practicable after the end of the financial year and having certified the accounts shall submit them and report thereon to the council within the timescales set by the Accounts and Audit Regulations.
The council shall ensure that there is an adequate and effective system of internal audit of its accounting records, and of its system of internal control in accordance with proper practices
The internal auditor shall be appointed by and shall carry out the work in relation to internal controls required by the council in accordance with proper practices.
The internal auditor shall:
be competent and independent of the financial operations of the council;
have no involvement in the financial decision making, management or control of the council.;
Internal or external auditors may not under any circumstances:
perform any operational duties for the council;
initiate or approve accounting transactions; or
The RFO shall make arrangements for the exercise of electors’ rights in relation to the accounts including the opportunity to inspect the accounts, books, and vouchers and display or publish any notices and statements of account required by Audit Commission Act 1998, or any superseding legislation, and the Accounts and Audit Regulations.
3. ANNUAL ESTIMATES (BUDGET) AND FORWARD PLANNING
The RFO must each year, prepare detailed estimates of all receipts and payments including the use of reserves and all sources of funding for the following financial year in the form of a budget to be considered by the council.
The council shall fix the precept (council tax requirement), and relevant basic amount of council tax to be levied for the ensuing financial year not later than by the end of January each year. The RFO shall issue the precept to the billing authority and shall supply each member with a copy of the approved annual budget.
The approved annual budget shall form the basis of financial control for the ensuing year.
4. BUDGETARY CONTROL AND AUTHORITY TO SPEND
Expenditure on revenue items may be authorised by:
the council for all items over £500
the Clerk, for any items below £500.
Such authority is to be evidenced by a minute
The salary budgets are to be reviewed at least annually
In cases of extreme risk to the delivery of council services, the clerk may authorise revenue expenditure on behalf of the council which in the clerk’s judgement it is necessary to carry out. Such expenditure includes repair, replacement or other work, whether or not there is any budgetary provision for the expenditure, subject to a limit of £1000. The Clerk shall report such action to the chairman as soon as possible and to the council as soon as practicable thereafter.
All capital works shall be administered in accordance with the council's standing orders and financial regulations relating to contracts.
The RFO shall every 3 months provide the council with a statement comparing actual receipts and expenditure to the appropriate date against that planned as shown in the budget.
5. BANKING ARRANGEMENTS AND AUTHORISATION OF PAYMENTS
The council's banking arrangements, including the bank mandate, shall be made by the RFO and approved by the council
The RFO shall prepare a schedule of payments requiring authorisation, forming part of the Agenda for the Meeting and, together with the relevant invoices, present the schedule to council
Members are subject to the Code of Conduct that has been adopted by the council and shall comply with the Code and Standing Orders when a decision to authorise or instruct payment is made in respect of a matter in which they have a disclosable pecuniary or other interest, unless a dispensation has been granted.
6. INSTRUCTIONS FOR THE MAKING OF PAYMENTS PAYMENTS
All payments shall be effected by cheque or other instructions to the council's bankers, or otherwise, in accordance with a resolution of council.
Cheques or orders for payment drawn on the bank account in accordance with the schedule as presented to council or committee shall be signed by two member[s] of council in accordance with a resolution instructing that payment. If a member who is also a bank signatory has declared a disclosable pecuniary interest, or has any other interest, in the matter in respect of which the payment is being made, that councillor shall be required to consider Standing Orders, and thereby determine whether it is appropriate and / or permissible to be a signatory to the transaction in question.
To indicate agreement of the details shown on the cheque or order for payment with the counterfoil and the invoice or similar documentation, the signatories shall each also initial the cheque counterfoil.
Cheques or orders for payment shall not normally be presented for signature other than at a council (including immediately before or after such a meeting). Any signatures obtained away from such meetings shall be reported to the council at the next convenient meeting.
If thought appropriate by the council, payment for utility supplies (energy, telephone and water) and any National Non-Domestic Rates may be made by variable direct debit provided that the instructions are signed by two members and any payments are reported to council as made. The approval of the use of a variable direct debit shall be renewed by resolution of the council at least every two years.
If thought appropriate by the council, payment for certain items (principally salaries) may be made by banker’s standing order provided that the instructions are signed, or otherwise evidenced by two members are retained and any payments are reported to council as made. The approval of the use of a banker’s standing order shall be renewed by resolution of the council at least every two years.
If thought appropriate by the council, payment for certain items may be made by BACS or CHAPS methods provided that the instructions for each payment are signed, or otherwise evidenced, by two authorised bank signatories are retained and any payments are reported to council as made. The approval of the use of BACS or CHAPS shall be renewed by resolution of the council at least every two years
If thought appropriate by the council payment for certain items may be made by internet banking transfer provided evidence is retained showing approved authorisation for the payment.
Where a computer requires use of a personal identification number (PIN) or other password(s), for access to the council’s records on that computer, a note shall be made of the PIN and Passwords and shall be handed to and retained by the Chairman of Council in a sealed dated envelope. No employee or councillor shall disclose any PIN or password, relevant to the working of the council or its bank accounts, to any person not authorised in writing by the council.
Regular back-up copies of the records on any computer shall be made and shall be stored securely away from the computer in question, and preferably off site.
The council, and any members using computers for the council’s financial business, shall ensure that anti-virus, anti-spyware and firewall, software with automatic updates, together with a high level of security, is used.
Where internet banking arrangements are made with any bank, the RFO shall be appointed as the Service Administrator. The bank mandate approved by the council shall identify a number of councillors who will be authorised to approve transactions on those accounts. The bank mandate will state clearly the amounts of payments that can be instructed by the use of the Service Administrator alone, or by the Service Administrator with a stated number of approvals.
Access to any internet banking accounts will be directly to the access page
Any Debit Card issued for use will be specifically restricted to the Clerk and will also be restricted to a single transaction maximum value of £500 unless authorised by council.
Any corporate credit card or trade card account opened by the council will be specifically restricted to use by the Clerk and Chairman shall be subject to automatic payment in full at each month-end. .
Access to any internet banking accounts will be directly to the access page (which may be saved under “favourites”), and not through a search engine or e-mail link. Remembered or saved passwords facilities must not be used on any computer used for council banking work. Breach of this Regulation will be treated as a very serious matter under these regulations.
Payments in respect of short term or long term investments, including transfers between bank accounts held in the same bank, or branch, shall be made in accordance with Regulation 5 (Authorisation of payments) and Regulation 6 (Instructions for payments).
7. PAYMENT OF SALARIES
As an employer, the council shall make arrangements to meet fully the statutory requirements placed on all employers by PAYE and National Insurance legislation. The payment of all salaries shall be made in accordance with payroll records and the rules of PAYE and National Insurance currently operating, and salary rates shall be as agreed by council, or duly delegated committee.
No changes shall be made to any employee’s pay, emoluments, or terms and conditions of employment without the prior consent of the council
The collection of all sums due to the council shall be the responsibility of and under the supervision of the RFO.
Particulars of all charges to be made for work done, services rendered or goods supplied shall be agreed annually by the council, notified to the RFO and the RFO shall be responsible for the collection of all accounts due to the council.
The council will review all fees and charges at least annually, following a report of the Clerk
The RFO shall promptly complete any VAT Return that is required. Any repayment claim due in accordance with VAT Act 1994 section 33 shall be made at least annually coinciding with the financial year end.
Any income arising which is the property of a charitable trust shall be paid into a charitable bank account. Instructions for the payment of funds due from the charitable trust to the council (to meet expenditure already incurred by the authority) will be given by the Managing Trustees of the charity meeting separately from any council meeting(see also Regulation 16 below) ].
9. ORDERS FOR WORK, GOODS AND SERVICES
An official order or letter shall be issued for all work, goods and services unless a formal contract is to be prepared or an official order would be inappropriate. Copies of orders shall be retained.is generally understood to include all fixed assets.
All members and officers are responsible for obtaining value for money at all times. An officer issuing an official order shall ensure as far as reasonable and practicable that the best available terms are obtained in respect of each transaction.
A member may not issue an official order or make any contract on behalf of the council.
Procedures as to contracts are laid down as follows:
Every contract shall comply with these financial regulations, and no exceptions shall be made otherwise than in an emergency provided that this regulation need not apply to contracts which relate to items (i) to (vi) below:
for the supply of gas, electricity, water, sewerage and telephone services;
for specialist services such as are provided by solicitors, accountants, surveyors and planning consultants;
for work to be executed or goods or materials to be supplied which consist of repairs to or parts for existing machinery or equipment or plant;
for work to be executed or goods or materials to be supplied which constitute an extension of an existing contract by the council;
for additional audit work of the external auditor up to an estimated value of £500
for goods or materials proposed to be purchased which are proprietary articles and / or are only sold at a fixed price.
When it is to enter into a contract of less than £60,000 but more than £2000 in value for the supply of goods or materials or for the execution of works or specialist services other than such goods, materials, works or specialist services as are excepted as set out in paragraph (a) the Clerk or RFO shall present 3 quotations to the council (priced descriptions of the proposed supply); where the value is below £2,000 and above £100 the Clerk or RFO shall strive to obtain 2 estimates.
The council shall not be obliged to accept the lowest or any tender, quote or estimate.
When it is to enter into a contract of more than £60,000 in value the council shall seek specialist procurement and legal advice before proceeding.
11. ASSETS, PROPERTIES AND ESTATES
The Clerk shall make appropriate arrangements for the custody of all title deeds and Land Registry Certificates of properties held by the council. The RFO shall ensure a record is maintained of all properties held by the council, recording the location, extent, plan, reference, purchase details, nature of the interest, tenancies granted, rents payable and purpose for which held in accordance with Accounts and Audit Regulations.
No tangible moveable property shall be purchased or otherwise acquired, sold, leased or otherwise disposed of, without the authority of the council, together with any other consents required by law, save where the estimated value of any one item of tangible movable property does not exceed £500 the Clerk may then authorise the transaction.
No real property (interests in land) shall be sold, leased or otherwise disposed of without the authority of the council, together with any other consents required by law, In each case a report in writing shall be provided to council in respect of valuation and surveyed condition of the property (including matters such as planning permissions and covenants) together with a proper business case (including an adequate level of consultation with the electorate).
No real property (interests in land) shall be purchased or acquired without the authority of the full council. In each case a report in writing shall be provided to council in respect of valuation and surveyed condition of the property (including matters such as planning permissions and covenants) together with a proper business case (including an adequate level of consultation with the electorate).
The RFO shall ensure that an appropriate and accurate Register of Assets is kept up to date. The continued existence of tangible assets shown in the Register shall be verified at least annually, possibly in conjunction with a Health and Wellbeing inspection of assets.
Following the annual risk assessment the RFO shall effect all insurances and negotiate all claims on the council's insurers
The RFO shall keep a record of all insurances effected by the council and the property and risks covered thereby and annually review it.
The RFO shall be notified of any loss liability or damage or of any event likely to lead to a claim, and shall report these to council at the next available meeting.
12.4. All appropriate members and employees of the council shall be included in a suitable form of security or fidelity guarantee insurance which shall cover the maximum risk exposure as determined [annually] by the council, or duly delegated committee.
Where the council is sole managing trustee of a charitable body the Clerk - RFO shall ensure that separate accounts are kept of the funds held on charitable trusts and separate financial reports made in such form as shall be appropriate, in accordance with Charity Law and legislation, or as determined by the Charity Commission. The Clerk- RFO shall arrange for any audit or independent examination as may be required by Charity Law or any Governing Document.
14. RISK MANAGEMENT
The council is responsible for putting in place arrangements for the management of risk. The Clerk – RFO shall prepare, for approval by the council, risk management policy statements in respect of all activities of the council. Risk policy statements and consequential risk management arrangements shall be reviewed by the council at least annually.
When considering any new activity, the Clerk- RFO shall prepare a draft risk assessment including risk management proposals for consideration and adoption by the council.
15. SUSPENSION AND REVISION OF FINANCIAL REGULATIONS
It shall be the duty of the council to review the Financial Regulations of the council from time to time. The Clerk shall make arrangements to monitor changes in legislation or proper practices and shall advise the council of any requirement for a consequential amendment to these financial regulations.
The council may, by resolution of the council duly notified prior to the relevant meeting of council, suspend any part of these Financial Regulations provided that reasons for the suspension are recorded and that an assessment of the risks arising has been drawn up and presented in advance to all members of council.
* Accounts and Audit (England) Regulations 2011/817