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Agenda Item 10 Report 8/14 Appendix 2
F I N A N C I A L P R O C E D U R E S
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FINANCIAL PROCEDURES
Contents Page
(Hold ‘Ctrl’ button and Click on content headings below to go to the relevant page)
FINANCIAL PROCEDURES MANUAL ........................................................................................................... 1
INTRODUCTION ................................................................................................................................................ 1
A FINANCIAL MANAGEMENT .................................................................................................................. 2
A.1 FINANCIAL MANAGEMENT STANDARDS .............................................................................. 2
A.2 MANAGING EXPENDITURE.......................................................................................................... 3
A.2.1 Scheme of Revenue Virement (Budget Transfer) ............................................................... 3
A.2.2 Treatment of year-end balances ............................................................................................. 4
A.3 ACCOUNTING RECORDS AND RETURNS ............................................................................ 5
A.4 THE ANNUAL STATEMENT OF ACCOUNTS ......................................................................... 6
B FINANCIAL PLANNING ........................................................................................................................... 8
B.1 PERFORMANCE AND STATUTORY PLANS ............................................................................ 8
B.2 BUDGETING ....................................................................................................................................... 8
B.2.1 Medium Term Planning ............................................................................................................. 8
B.2.2 Format of the Overall Budget .............................................................................................. 10
B.2.3 Revenue budget monitoring and control ........................................................................... 10
B.2.4 Capital Programmes ............................................................................................................... 12
B.3 MAINTENANCE OF RESERVES .................................................................................................. 14
C RISK MANAGEMENT & CONTROL OF RESOURCES ................................................................. 15
C.1 RISK MANAGEMENT .................................................................................................................... 15
C.2 INTERNAL CONTROLS ............................................................................................................... 16
C.3 AUDIT REQUIREMENTS .............................................................................................................. 17
C.3.1 Internal Audit ........................................................................................................................... 17
C.3.2 External Audit .......................................................................................................................... 19
C.4 PREVENTING FRAUD AND CORRUPTION ......................................................................... 20
C.4.1 Money laundering .................................................................................................................... 20
C.4.2 Bribery Act 2010 ..................................................................................................................... 20
C.5 ASSETS ............................................................................................................................................... 21
C.5.1 Security and Inventories ........................................................................................................ 21
C.5.2 Intellectual Property ............................................................................................................... 23
C.5.3 Disposal of Assets ................................................................................................................... 23
C.6 TREASURY MANAGEMENT ........................................................................................................ 24
C.7 TRUSTS, FUNDS HELD FOR THIRD PARTIES & OTHER VOLUNTARY FUNDS ....... 25
C.8 STAFFING ......................................................................................................................................... 26
D SYSTEMS AND PROCEDURES............................................................................................................. 28
D.1 IT SYSTEMS AND RELATED PROCEDURES .......................................................................... 28
D.2 INCOME AND EXPENDITURE .................................................................................................. 29
D.2.1 Income ....................................................................................................................................... 29
D.2.2 Ordering and Paying for Work, Goods and Services ..................................................... 31
D.2.3 Payments to Employees and Members .............................................................................. 34
D.2.4 Purchasing Cards ..................................................................................................................... 36
D.2.5 Imprest and Petty Cash Accounts ....................................................................................... 37
D.3 VAT & TAXATION ........................................................................................................................ 38
D.4 CONTROL OF CONTRACTS .................................................................................................... 39
D.5 BANKING ARRANGEMENTS ..................................................................................................... 39
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D.6 FINANCIAL LIMITS ........................................................................................................................ 40
Why is this important? ................................................................................................................................. 40
D.6.1 Virements - Revenue Budget ................................................................................................ 40
D.6.2 Virements - Capital Programme .......................................................................................... 40
D.6.3 Carry Forwards ....................................................................................................................... 40
D.6.4 Authorisation Limits to minimise budget pressures ....................................................... 40
D.6.5 Ex-Gratia Payments ................................................................................................................ 40
D.6.6 Write Off of Debts ................................................................................................................. 40
D.6.7 Write Off of Stocks and Stores ........................................................................................... 41
D.6.8 Retention of Records ............................................................................................................. 41
E EXTERNAL ARRANGEMENTS ............................................................................................................ 43
E.1 PARTNERSHIPS ............................................................................................................................... 43
E.2 EXTERNAL FUNDING .................................................................................................................. 44
E.3 MATCHED FUNDING .................................................................................................................. 45
E.4 FORWARD FUNDING ................................................................................................................. 45
E.5 FUNDING AGREEMENTS ............................................................................................................ 46
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FINANCIAL PROCEDURES MANUAL
INTRODUCTION
The framework of control, responsibility and accountability for the proper
administration of the Authority's financial affairs, enabling Members and officers to fulfil
their duties is set out in Financial Regulations. Within that framework there needs to be
a set of detailed financial procedures to ensure that everything the Authority does is
consistent with that framework.
These procedures set out the responsibilities incumbent upon all Members and staff,
but especially Directors and the Chief Finance Officer. The Financial Procedures Manual
therefore supplements Financial Regulations, detailing how they are to be applied in
practice.
Each section of the Manual follows a standard format:
Why is this important? – this sets the context for the financial procedure;
Key controls – this explains the key internal controls for ensuring Financial
Regulations are operating effectively;
Responsibilities of the Chief Finance Officer
Responsibilities of Chief Executive and other Directors.
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A FINANCIAL MANAGEMENT
A.1 FINANCIAL MANAGEMENT STANDARDS
Why is this important?
A.1.1 All staff and Members have a duty to demonstrate the highest standards of probity in all
of the Authority’s financial dealings. This is facilitated by ensuring that everyone is clear
about the standards to which they are working and the controls that are in place to
ensure that those standards are met.
A.1.2 Each year the Authority’s external auditor provides an opinion in the Financial
Statements on the Authority’s arrangements for securing economy, efficiency and
effectiveness (i.e. value for money) in its use of resources. The auditor will consider
how well the Authority’s plans and manages its finances, how well its assets and other
resources are managed, and the effectiveness of its arrangements for financial
governance and internal control.
Key Controls
A.1.3 The key controls and control objectives for financial management standards are:
the promotion of the agreed standards throughout the Authority;
a monitoring system to review compliance with financial management standards,
and regular comparisons of performance indicators and benchmark standards.
Responsibilities of the Chief Finance Officer
A.1.4 To maintain an appropriate set of Financial Regulations and Procedures taking into
account best practice and statutory requirements.
A.1.5 To maintain strong financial management and administration, underpinned by effective
systems of internal financial controls.
A.1.6 To ensure a prudential financial framework is in place.
A.1.7 To ensure proper professional practices are adhered to and act as head of profession in
relation to the standards, performance and development of finance staff throughout the
Authority.
A.1.8 To advise on the key strategic controls necessary to secure sound financial
management.
A.1.9 To ensure that financial management information is available to enable accurate and
timely monitoring within the budget management framework, and reporting of
comparisons of national and local financial performance indicators.
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Responsibilities of Directors
A.1.10 To promote the Financial Regulations and Procedures throughout the Authority and to
monitor adherence to the standards and practices, liaising as necessary with the Chief
Finance Officer.
A.1.11 To endorse and promote any corporate organisation and development programme
designed to increase awareness, knowledge and skills in respect of financial
management.
A.2 MANAGING EXPENDITURE
A.2.1 Scheme of Revenue Virement (Budget Transfer)
Why is this important?
A.2.1.1 The scheme of virement is intended to enable the Authority, Directors and their staff
to manage budgets with a degree of flexibility within the overall policy framework
determined, and therefore to optimise the use of resources.
Key controls
A.2.1.2 Key controls for the scheme of virement are that:
It is administered by the Chief Finance Officer within guidelines set by the full
Authority. Any variation from this scheme requires the approval of the full
Authority.
The overall budget is recommended by the Policy and Programme Committee and
approved by the full Authority. Directors and budget holders are therefore
authorised to incur expenditure in accordance with the budget. The rules below
cover virements; that is, switching resources between approved budgets.
The virement does not create additional overall budget liability. For example,
recurring expenditure cannot be generated from one-off sources of savings or
additional income.
Virement on a scale that implies a change of policy must be referred to the
Authority usually via the Policy and Programme Committee.
Creation of expenditure budgets in anticipation of income, for example, as the
result of expanding a trading activity, must be approved by the Chief Finance
Officer.
Virements are not designed to disguise under/overspends, but it may be appropriate
to use them to achieve an element of budget realignment.
Detailed reasons for virements must be recorded in writing.
No virement relating to a specific financial year should be made after 31 March in
that year.
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Responsibilities of the Chief Finance Officer
A.2.1.3 To prepare jointly with the relevant Director a report to the full Authority where any
revenue virement is in excess of £250,000 is proposed.
A.2.1.4 To prepare jointly with the relevant Director a report to Policy and Programme
Committee where any revenue virement in excess of £100,000 but less than £250,000
is proposed. The joint report must specify the proposed expenditure and the source of
funding, and must explain the implications in the current and future financial year
A.2.1.5 To authorise jointly with the Chief Executive any revenue virement between £25,000
and £100,000.
A.2.1.6 To action virements to reflect Authority decisions including restructuring of
Directorates and other technical virements to maintain the effectiveness of budget
management.
Responsibilities of Directors
A.2.1.7 A Director may exercise virements on budgets under his or her control for amounts
up to £25,000 on any budget during the year. Below £5,000 budget holders can
approve virements within their area without Director approval.
A.2.1.8 Amounts greater than £25,000 but less than £100,000 may be authorised by the Chief
Executive, in consultation with the Chief Finance Officer.
A.2.1.9 Virements that are likely to impact on the level of service activity of another Director
should be implemented only with their agreement.
A.2.2 Treatment of year-end balances
Why is this important?
A.2.2.1 Overspends or underspends in relation to the approved budgets may occur for a
variety of reasons. There is no automatic right to carry forward underspends from one
financial year to another. Decisions on carry forward of overspending or underspending
will be made by the Authority in the context of the financial position as a whole and not
any one particular service area.
Key controls
A.2.2.2 Appropriate accounting procedures are in operation to ensure that carried forward
totals are correct.
Responsibilities of the Chief Finance Officer
A.2.2.3 To agree carry forward of underspends of up to £25,000 per Directorate where
appropriate. To seek approval from the Policy and Programme Committee for carry
forward of underspends over £25,000. To advise the Governance Committee on the
financial position of the Authority and the implications for overspends, which may need
to be carried forward in exceptional circumstances.
Responsibilities of Directors
A.2.2.4 Underspendings cannot be carried forward without consultation with the Chief Finance
Officer, who will determine if specific approval is required by the Policy and Programme
Committee.
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A.3 ACCOUNTING RECORDS AND RETURNS
Why is this important?
A.3.1 Maintaining proper accounting records is one of the ways in which the Authority
discharges its responsibility for stewardship of public resources. The Authority has a
statutory responsibility to prepare its annual accounts to present fairly its operations
during the year.
A.3.2 These are subject to external audit. This audit provides assurance that the accounts are
prepared properly, that proper accounting practices have been followed and that
appropriate arrangements have been made for securing economy, efficiency and
effectiveness in the use of the Authority’s resources.
Key controls
A.3.3 The key controls for accounting records and returns are:
all Members, staff and budget holders operate within the required accounting
standards and timetables
all the Authority’s transactions, material commitments and contracts and other
essential accounting information are recorded completely, accurately and on a
timely basis
procedures are in place to enable accounting records to be reconstituted in the
event of systems failure
reconciliation procedures are carried out in a timely manner to ensure transactions
are correctly recorded
prime documents are retained in accordance with legislative and other
requirements.
Responsibilities of the Chief Finance Officer
A.3.4 To determine the accounting procedures and records for the Authority. Where these
are likely to be maintained outside of the finance service, the Director concerned
should consult the Chief Finance Officer.
A.3.5 To arrange for the compilation of all accounts and accounting records under his or her
direction, and to ensure that adequate records are maintained by Directors to provide
an audit trail to the prime financial system and the accounting statements.
A.3.6 To ensure compliance with the following principles in the allocation of accounting
duties:
separating the duties of providing information about sums due to or from the
Authority and calculating, checking and recording these sums from the duty of
collecting or disbursing them
employees with the duty of examining or checking the accounts of cash transactions
must not be engaged in these transactions.
A.3.7 To prepare and publish the audited accounts of the Authority for each financial year, in
accordance with the statutory timetable and with the requirement for the Audit
Committee to approve the Statement of Accounts in accordance with that timetable.
A.3.8 To ensure the proper retention of financial documents and to provide statutory
information to the government as required.
Responsibilities of Directors
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A.3.9 To consult and obtain approval of the Chief Finance Officer before introducing or
making any changes to accounting records and procedures.
A.3.10 To comply with the principles outlined at paragraph A.3.6 above when allocating
accounting duties.
A.3.11 To maintain adequate records to provide an audit trail leading from the source of
income/expenditure through to the accounting statements.
A.3.12 To ensure that all claims for funds including grants are made by the due date and to
ensure reconciliation with the prime financial system.
A.3.13 To supply information required to enable the Statement of Accounts to be completed
in accordance with guidelines issued by the Chief Finance Officer.
A.4 THE ANNUAL STATEMENT OF ACCOUNTS
Why is this important?
A.4.1 The Authority has a statutory responsibility to prepare its accounts to present fairly its
operations during the year. The Governance Committee is responsible for approving
the statutory annual Statement of Accounts.
Key Controls
A.4.2 The key controls for the annual Statement of Accounts are:
The Authority is required to make arrangements for the proper administration of
its financial affairs and the Chief Finance Officer has the responsibility for the
administration of these affairs.
The Authority’s Statement of Accounts must be prepared in accordance with
proper practices as set out in the Code of Practice on Local Authority Accounting
in the United Kingdom issued by the CIPFA/LASAAC Joint Committee.
To select suitable accounting policies and to ensure that they are applied
consistently
To provide suitable systems of internal control to ensure that financial transactions
are lawful
Responsibilities of the Chief Finance Officer
A.4.3 To select suitable accounting policies, and ensure that they are applied consistently. The
accounting policies are set out in the Statement of Accounts, which is prepared as at 31
March each year, and covers such items as: separate accounts for capital and revenue
transactions, fixed assets, deferred charges, charging for capital, capital receipts, debtors
and creditors, stocks and work in progress, provisions, reserves, charging for support
services, investments, pensions, single entity and group accounts.
A.4.4 To make judgements and estimates that are reasonable and prudent.
A.4.5 To sign the Statement of Accounts, stating that it presents fairly the financial position of
the Authority and its income and expenditure for the year ended 31 March.
A.4.6 To draw up the timetable for final accounts preparation and to advise staff and external
auditors accordingly and submit statutory financial information to the government as
required.
Responsibilities of Directors
A.4.7 To comply with accounting guidance provided by the Chief Finance Officer and to
supply appropriate information when required.
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B FINANCIAL PLANNING
B.1 PERFORMANCE AND STATUTORY PLANS
Why is this important?
B.1.1 The Authority has statutory responsibility to publish various plans. The purpose of
these statutory plans is to explain overall priorities and objectives, current
performance, and proposals for further improvement. The Authority is required to
publish a Corporate Plan and a Management Plan for the National Park.
B.1.2 The Authority will need to demonstrate that it plans and manages its finances linked to
its priorities.
Key controls
B.1.3 The key controls for statutory plans are:
to ensure that all relevant plans are produced and are consistent;
to produce plans in accordance with statutory requirements and timetables;
to ensure that all performance information is accurate, complete and up to date;
to provide improvement targets which are meaningful, realistic and challenging.
Responsibilities of the Chief Finance Officer
B.1.4 To ensure the provision of the financial information that needs to be included in
statutory plans is in accordance with statutory requirements and agreed timetables.
B.1.5 To contribute to the development of Authority targets, objectives and performance
information.
B.1.6 To ensure that systems are in place to collect accurate financial information for use as
performance indicators.
B.1.7 To ensure that financial performance information is monitored sufficiently frequently to
allow corrective action to be taken if targets are not likely to be met.
Responsibilities of Directors
B.1.8 To contribute to the development of Authority targets, objectives and performance
information.
B.1.9 To ensure that systems are in place to collect accurate information for use as
performance indicators.
B.1.10 To ensure that non-financial performance information is monitored sufficiently
frequently to allow corrective action to be taken if targets are not likely to be met.
B.2 BUDGETING
B.2.1 Medium Term Planning
Why is this important?
B.2.1.1 It is good practice for the Authority to produce a Medium Term Financial Strategy
(MTFS), including a 3-year forecast of capital and revenue plans. The key aim of the
MTFS is to provide financial stability over the medium term to support delivery of the
Authority’s key service priorities.
B.2.1.2 The revenue budget must be constructed to ensure that resource allocation reflects the
service plans and priorities of the full Authority. Budgets are needed so that the
Authority can plan, authorise, monitor and control the way money is allocated and
spent. It is illegal for the Authority to budget for a deficit.
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B.2.1.3 Medium term planning involves managers developing their own plans over a rolling
three-year period. This ensures that the Authority is able to make policy decisions
taking account of potential changes in its financial circumstances and liabilities.
Key Controls
B.2.1.4 The key controls for medium term planning are:
specific budget approval for all expenditure;
budget holders are consulted in the preparation of the budgets for which they will
be held responsible and accept accountability within delegations set by the
Authority and the level of service to be delivered;
a monitoring process is in place regularly to review the effectiveness and operation
of budget preparation and to ensure that any corrective action is taken.
Responsibilities of the Chief Finance Officer
B.2.1.5 To prepare and submit reports on budget prospects to the full Authority, including
resource constraints set by the Government, especially dealing with the robustness of
the budget and the adequacy of reserves.
B.2.1.6 To determine the detailed form of revenue budgets and the methods for their
preparation, consistent with the budget approved by the full Authority, and after
consultation with the Policy and Programme Committee and Directors.
B.2.1.7 To prepare and submit reports to the full Authority on an overall financial strategy to
meet its policy and service objectives, showing aggregate spending plans of Directorates
and the resources available to fund them.
B.2.1.8 To ensure there is a MTFS and provide detailed financial forecasts to assist in the
development of the Authority’s plans and strategies.
B.2.1.9 To encourage the best use of resources and value for money by working with Directors
to identify opportunities to improve economy, efficiency and effectiveness, and by
encouraging good practice in conducting financial appraisals.
Responsibilities of Directors
B.2.1.10 To prepare estimates of income and expenditure, in consultation with the Chief Finance
Officer, to be submitted to the full Authority.
B.2.1.11 To integrate financial plans into service planning, so that the budget can be supported by
financial and non-financial performance measures.
B.2.1.12 When drawing up draft budgets, to have regard to:
guidance issued by the Chief Finance Officer;
spending patterns and pressures revealed through the budget monitoring process;
legal requirements;
policy requirements as defined by the full Authority;
initiatives already under way and Authority priorities;
B.2.1.13 To encourage the best use of resources and value for money by working with the Chief
Finance Officer to identify opportunities to improve economy, efficiency and
effectiveness.
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B.2.2 Format of the Overall Budget
Why is this important?
B.2.2.1 The format of the budget determines the level of detail to which financial control and
management will be exercised. The format shapes how any rules around virement
operate and sets the level at which funds may be reallocated within budgets.
Key Controls
B.2.2.2 The key controls for the budget format are:
the format complies with all legal requirements and CIPFA’s Accounting Code of
Practice for local authority accounting;
the format reflects the accountabilities of service delivery.
Responsibilities of the Chief Finance Officer
B.2.2.3 To advise the Policy and Programme Committee on the format of the overall budget
that is approved by the full Authority.
Responsibilities of Directors
B.2.2.4 To comply with accounting guidance provided by the Chief Finance Officer.
B.2.3 Revenue budget monitoring and control
Why is this Important?
B.2.3.1 Budget management ensures that once the overall budget has been approved by the
Authority, any resources allocated are used for their intended purposes and are
properly accounted for. Budgetary control is a continuous process, enabling the
Authority to review and adjust its budget during the financial year. It also provides the
mechanism that holds designated managers to account for defined elements of the
budget and for performance.
B.2.3.2 Budget monitoring is also linked to performance monitoring. It requires action plans to
mitigate variances from budgets, particularly for those budgets that could have a critical
impact, in order to ensure the Authority does not overspend.
B.2.3.3 By continuously identifying and explaining variances against budgets, the Authority can
identify changes and new resource requirements at the earliest opportunity. The
Authority itself operates within the overall budget. To ensure that the Authority in
total does not overspend, each service is required to manage its own expenditure
within the defined budgets allocated to it, produce robust action plans to eliminate
overspends.
B.2.3.4 For the purposes of budgetary control by managers, a budget will normally be the
planned income and expenditure for a cost centre. However, budgetary control may
take place at a more detailed level if this is required by the Director’s scheme of
delegation.
Key controls
B.2.3.5 The key controls for managing and controlling the revenue budget are:
budget holders should be responsible only for income and expenditure that they
can influence;
there is a nominated budget holder for each cost centre budget;
budget holders accept accountability for their budgets and the level of service to be
delivered and understand their financial responsibilities;
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budget holders follow an approved certification process for all expenditure;
income and expenditure is properly recorded against the correct budget even if no
or insufficient budget exists;
performance levels/levels of service are monitored in conjunction with the budget
and necessary action is taken to align service outputs and budget;
budget holders must not charge goods and services against the budgets of other
managers without obtaining prior agreement;
financial management training and support is available across the Authority.
Responsibilities of the Chief Finance Officer
B.2.3.6 To establish an appropriate framework of budget management and control, together
with guidance and training, which ensures that:
budget management is exercised in accordance with the framework of budget
monitoring and within annual budgets unless the full Authority determines
otherwise;
each Director and budget holder has available timely and up-to-date information on
receipts and payments on each budget which is sufficiently detailed to enable budget
holders to fulfil their budgetary responsibilities;
significant variances from approved budgets are investigated and reported by budget
holders regularly to the relevant Director, together with action plans to bring the
budget back in line;
all officers responsible for committing expenditure comply with relevant guidance
and Financial Regulations.
B.2.3.7 To administer the Authority’s scheme of virement.
B.2.3.8 To submit reports to the Policy and Programme Committee and to the full Authority, in
consultation with the relevant Director, where a Director is unable to contain
expenditure within existing approved budgets under his or her control.
B.2.3.9 To prepare and submit reports on the Authority’s projected income and expenditure
compared with the budget, monthly to the Senior Management Team (SMT) and at
least quarterly to the Governance Committee.
Responsibilities of Directors
B.2.3.10 To maintain budgetary control within their Directorates and to ensure that all income
and expenditure is properly recorded and accounted for.
B.2.3.11 To ensure that an accountable budget holder is identified for each item of income and
expenditure under the control of the Director and that the budget holder monitors the
relevant budgets in accordance with the Authority’s framework.
B.2.3.12 To ensure that budget holders do not charge goods and services against the budgets of
other managers without obtaining prior agreement.
B.2.3.13 To ensure that spending remains within the service’s overall cash limit, and to monitor
the budget and take appropriate corrective action where significant variations from the
approved budget are forecast.
B.2.3.14 In conjunction with the Chief Finance Officer, to ensure prior approval by the full
Authority for significant new proposals that:
create new financial commitments in the current year and future years;
change existing policies, initiate new policies or cease existing policies;
materially extend or reduce the Authority’s services.
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B.2.3.15 To ensure compliance with the scheme of virement.
B.2.4 Capital Programmes
Why is this important?
B.2.4.1 Capital expenditure involves acquiring or enhancing fixed assets with a long term value
to the Authority, such as land, buildings, and major items of plant, equipment or
vehicles. Capital assets shape the way services are delivered in the long term and create
financial commitments for the future in the form of financing costs and revenue running
costs.
B.2.4.2 The Local Government Act 2003 permits local authorities to borrow to finance capital
expenditure provided that the plans are affordable, prudent and sustainable in the long
term. This means that capital expenditure should form part of an investment strategy
and should be carefully prioritised to maximise the benefit.
B.2.4.3 All capital expenditure, as defined in the 2003 Act or subsequent regulations, will be
included within the approved capital programme, with the exception of expenditure on
the acquisition of equipment, vehicles or plant not exceeding £20,000, which is for
operational purposes only. This does not preclude such items being treated as capital
items (i.e. fixed assets or enhancements to fixed assets) for accounting purposes.
Key Controls
B.2.4.4 The key controls for capital programmes are:
specific approval by the full Authority for the programme of capital expenditure, in
conjunction with the annual revenue budget, outlining the phasing of expenditure
and the sources of funding;
a scheme and estimate, including options appraisal, project plan, progress targets
and associated revenue expenditure are prepared for each capital project, for
approval by the full Authority;
no new capital scheme proceeds unless all required finance and other necessary
approvals have been obtained;
proposals for improvements and alterations to buildings must be approved by the
appropriate Director in consultation with the Director of Corporate Services;
major rolling programmes of capital expenditure will require a detailed report to be
considered by the Policy and Programme Committee and approved by the full
Authority covering all the schemes within each programme of works and will
include the purpose, benefits, risks, total projected cost, expenditure profile and
the full financial implications, both capital and revenue;
the development and implementation of an Asset Management Plan;
a nominated, accountable budget holder for each capital budget.
monitoring of progress on capital schemes and comparison with approved budget
and remedial action taken to address overspends, reporting monthly to SMT, and at
least quarterly to the Governance Committee;
compliance with the Authority’s Financial Regulations, Contract Standing Orders
and Procurement Policy, for example, when inviting competitive quotes or tenders.
Responsibilities of the Chief Finance Officer
B.2.4.5 To prepare capital estimates jointly with Directors and to report them via Policy and
Programme Committee to the full Authority for approval, together with the revenue
implications and prudential indicators as prescribed in the Prudential Code to
demonstrate the affordability of the plans. The Policy and Programme Committee will
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make recommendations on the capital estimates and on any associated financing
requirements to the full Authority.
B.2.4.6 The approval of the full Authority is required where a Director proposes to bid for or
exercise additional borrowing not anticipated in the capital programme. This is because
extra borrowing will create future commitments to financing costs which will need to
be demonstrated to be affordable.
B.2.4.7 To prepare and submit at least quarterly reports to the Governance Committee on the
projected expenditure and resources compared with the approved estimates and to
obtain authorisation from the Policy and Programme Committee for any variations or
virements above £25,000 or 10%, of the original budget
B.2.4.8 Capital schemes which vary by more than £100,000 require approval from the full
Authority.
Responsibilities of Directors
B.2.4.9 Prior to the commencement of any capital project, Directors shall produce and submit
for approval a detailed report to the Policy and Programme Committee. This will
include the purpose, benefits, risks, total projected cost, expenditure profile and full
financial implications, both capital and revenue, of the proposed project.
B.2.4.10 Where provision is made within the Capital Programme for advance feasibility design
and works, each Director may incur expenditure associated with the feasibility and
initial design of future capital schemes with the approval of the Chief Finance Officer.
Any expenditure incurred where a scheme does not proceed will be recharged to the
Directorate’s revenue budget.
B.2.4.11 To ensure that all capital proposals have undergone a project appraisal in accordance
with guidance issued by the Chief Finance Officer.
B.2.4.12 To ensure that tenders and/or quotations are obtained and adequate records kept for
all contracts in accordance with the Authority’s Contract Standing Orders and
Procurement Guide.
B.2.4.13 To ensure that all necessary approvals have been received from the Planning Authority
or Government Departments where appropriate.
B.2.4.14 To prepare regular reports reviewing the capital programme provisions for their
services. They should also prepare monthly monitoring reports for consideration by
SMT and at least quarterly reports to the Governance Committee together with the
Chief Finance Officer. These reports should include any variation in contract costs
greater than the amount approved within the Capital Programme. Directors may meet
cost increases of up to the lesser of £25,000 or 10% of original estimate by virement
from savings elsewhere within their capital programme or revenue budget, subject to
the agreement of the Chief Finance Officer.
B.2.4.15 To prepare and submit jointly with the Chief Finance Officer a report to the
Governance Committee where expenditure on a capital scheme varies by more than
£25,000 or 10% of the original estimate or where a scheme of £25,000 or more is
substituted for another.
B.2.4.16 To obtain Chief Finance Officer approval for carry forwards of year-end capital
underspends, other than when funded from scheme specific resources. Where projects
are overspent, this will be the first call on the Directorate’s capital allocation in the
subsequent year’s programme.
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B.2.4.17 To ensure that credit arrangements, such as leasing agreements, are not entered into
without the prior consultation with and the approval of the Chief Finance Officer and, if
applicable, approval of the scheme through the capital programme.
B.2.4.18 To consult with the Chief Finance Officer and to obtain Authority approval where the
Director proposes to bid for supported borrowing or other external funding to
support expenditure that has not already been included in the approved Capital
Programme.
B.3 MAINTENANCE OF RESERVES
Why is this important?
B.3.1 The Authority must determine the level of general and specific reserves it wishes to
maintain before it can decide the level of its annual revenue budget and capital
programme. Reserves enable the Authority to provide for unexpected events and
thereby protect it from overspending, should such events occur. The adequacy of the
level of reserves will be subject to review as part of the annual external audit.
Key Controls
B.3.2 To maintain reserves in accordance with the Code of Practice on Local Authority
Accounting in the United Kingdom and agreed accounting policies.
B.3.3 For each reserve established, the purpose, usage and basis of transactions should be
clearly identified.
B.3.4 Authorisation of expenditure from specific reserves by the appropriate Director should
only be actioned with the approval of the Chief Finance Officer. Allocations from the
Authority’s general reserves will be determined by the full Authority.
Responsibilities of the Chief Finance Officer
B.3.5 To annually review the levels of reserves and advise the Policy and Programme
Committee and the full Authority on prudent levels of general and specific reserves for
the Authority.
Responsibilities of Directors
B.3.6 To consult the Chief Finance Officer as soon as it becomes apparent that budget
pressures or external circumstances may require the use of reserves to support
expenditure.
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C RISK MANAGEMENT & CONTROL OF RESOURCES
C.1 RISK MANAGEMENT
Why is this important?
C.1.1 Every organisation needs to manage the risks that can affect achievement of their
objectives. Risk management is defined as “the culture, processes and structure, which
come together to optimise the management of potential opportunities and adverse
effects”.
C.1.2 Risk management is concerned with evaluating the probability of an event and its
consequences, identifying the measures the Authority already has in place to mitigate
those risks, and then taking any further action necessary to manage them and minimise
their impact. The adequacy of the control measures should be monitored and the
control measures reviewed as necessary.
C.1.3 Risk management should be at the core of decision-making, business planning, managing
change and innovation and needs to be practised at service delivery level. It enables the
effective use of resources, securing the assets of the Authority and its continued
financial and organisational well-being.
Key controls
C.1.4 The key controls for risk management are:
The risk management strategy is agreed and adhered to across the Authority.
Procedures are in place to identify, assess and manage the risks that may hinder the
Authority from reaching its objectives.
Risk management is a formalised stage of the business planning process, project
management, major changes initiatives and financial management processes.
A monitoring process is in place to review regularly the effectiveness of risk
reduction strategies and the operation of these controls.
Risk management training and support is available across the Authority.
Managers know that they are responsible for managing risks and are provided with
information on risk management initiatives and incidence levels.
Responsibilities of Governance Committee
C.1.5 The Governance is responsible for approving the Authority’s risk management strategy
and for reviewing the effectiveness of risk management within the Authority.
Responsibilities of the Chief Finance Officer
C.1.6 The Chief Finance Officer is required to:
arrange cost effective and appropriate insurance cover and deal with insurance
claims and resultant risk actions to reduce the incidence and severity of similar
losses;
ensure procedures are in place to investigate claims within required timescales;
develop risk management controls for insurable risks;
effect corporate insurance cover through external insurance and internal funding,
and to oversee the negotiation of all claims in consultation with other officers and
relevant bodies where necessary;
maintain a continuous review of claims experience and to effect the optimum
balance of internal and external insurance cover over time.
Responsibilities of the Director of Corporate Services
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C.1.7 The Director of Corporate Services is required to prepare the Authority’s risk
management strategy for approval by the Governance Committee and issue and
maintain procedures relating to risk management.
Responsibilities of Directors
C.1.8 Directors are required to:
ensure that there is a continuous review of exposure to risk within their
Directorates, and act at all times to minimise risks;
produce risk registers and risk management actions when undertaking strategic
business planning, major change initiatives, large projects (for example, capital
projects), new partnership and external funding arrangements and improvement
reviews;
monitor the progress of identified risks and subsequent risk management actions;
notify the Chief Finance Officer immediately of any major risks that are identified
and cannot be managed within the resource levels of the service;
raise the awareness and understanding of risk management throughout the
Authority through training and regular use of risk management techniques in
decision-making and planning;
notify the Chief Finance Officer immediately of any loss, liability or damage that may
lead to a claim against the Authority, together with any information or explanation
required by the Chief Finance Officer or the Authority’s insurers;
co-operate at all times with any insurance investigations and supply all information
within required timescales;
notify the Chief Finance Officer promptly of all new risks, properties or vehicles
that require insurance and of any alterations affecting existing insurances, and supply
the Chief Finance Officer with asset valuations for insurance purposes as required;
consult the Chief Finance Officer on the terms of any indemnity that the Authority
is requested to give and to ensure no indemnities are given on behalf of the
Authority without the agreement of the Chief Finance Officer and the Monitoring
Officer;
ensure that no-one covered by the Authority’s insurances admits liability or makes
any offer to pay compensation that may prejudice the assessment of any claim;
ensure that all companies or individuals contracted to carry out construction work
have adequate Public Liability insurance cover;
provide all relevant information and documentation in accordance with the Pre-
Action Protocols detailed by the Woolf Reforms to the Chief Finance Officer when
requested;
to fund from their Directorate budget the total cost of any claim which has been
lost due to the Directorate’s failure to meet the protocol time limits.
C.2 INTERNAL CONTROLS
Why is this important?
C.2.1 The Authority requires internal controls to manage and monitor progress towards
strategic objectives. The Authority is required to publish an Annual Governance
Statement in its Statement of Accounts.
C.2.2 The Authority has statutory obligations, and, therefore, requires internal controls to
identify, meet and monitor compliance with these obligations. It also faces a wide range
of financial, administrative and commercial risks, both from internal and external
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factors, which threaten the achievement of its objectives. Internal controls are
necessary to manage these risks.
C.2.3 Internal Controls will be devised by management to ensure that the Authority’s
objectives are achieved in a manner that promotes economical, efficient and effective
use of resources and that the Authority’s assets and interests are safeguarded.
Key Controls
C.2.4 The key controls and control objectives for internal control systems are:
key controls should be reviewed on a regular basis and the Authority should make
a formal statement annually to the effect that it is satisfied that the systems of
internal control are operating effectively;
the existence of managerial control systems, including defining policies, setting
objectives and plans, monitoring financial and other performance and taking
appropriate anticipatory and remedial action;
the existence of financial and operational control systems and procedures, which
include physical safeguards for assets, separation of duties, authorisation and
approval procedures and information systems;
an effective internal audit function that is properly resourced and operates in
accordance with the Public Sector Internal Audit Standards, and any statutory
obligations and regulations.
Responsibilities of the Chief Finance Officer
C.2.5 To put in place an appropriate control environment and effective internal controls
which provide reasonable assurance of effective and efficient operations, financial
stewardship, probity and compliance with laws and regulations.
Responsibilities of Directors
C.2.6 To check that established controls are being adhered to and to evaluate their
effectiveness, in order to be confident in the proper use of resources, achievement of
objectives and management of risks.
C.2.7 To review existing controls in the light of changes affecting the Authority and to
establish and implement new ones in line with guidance from the Chief Finance Officer.
To ensure staff have a clear understanding of their responsibility to identify and manage
risk on a continuous basis.
C.3 AUDIT REQUIREMENTS
C.3.1 Internal Audit
Why is this important?
C.3.1.1 The requirement for an internal audit function for the Authority is implied by s151 of
the Local Government Act 1972, which requires that authorities “make arrangements
for the proper administration of their financial affairs”. The Accounts and Audit
Regulations 2003 (as amended) require the Authority to maintain an adequate and
effective internal audit service.
C.3.1.2 Accordingly, internal audit is an assurance function that primarily provides an
independent and objective opinion to the Authority on the control environment
comprising risk management, control and governance by evaluating its effectiveness in
achieving the Authority’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.
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Key Controls
C.3.1.3 The key controls for internal audit are:
that it is independent of day-to-day service operation in its planning and operation;
the Head of Internal Audit has direct access to the Chief Executive, all levels of
management, and to elected Members as appropriate;
that internal auditors comply with the Public Sector Internal Audit Standards.
Responsibilities of the Chief Finance Officer
C.3.1.4 To ensure there is an effective internal audit function and assist with management in
providing effective arrangements for financial scrutiny.
C.3.1.5 To ensure that internal auditors have the authority to:
access Authority premises at reasonable times;
access all assets, records, documents, correspondence and control systems;
receive any information and explanation considered necessary concerning any
matter under consideration;
require any employee of the Authority to account for cash, stores or any other
Authority asset under his or her control;
access records belonging to third parties, such as contractors, when required;
directly access the Chief Executive, Policy and Programme Committee and
Governance Committee where appropriate.
C.3.1.6 To ensure that Internal Audit staff at all times respect the confidentiality of operations
or management information in the areas subject to audit activity.
C.3.1.7 To prepare the strategic and annual audit plans which take account of the
characteristics and relative risks of the activities involved for approval by the
Governance Committee.
C.3.1.8 To prepare counter fraud strategies and measures, and ensure that effective procedures
are in place to investigate promptly any fraud or irregularity.
C.3.1.9 To ensure the provision of advice on the nature and extent of any further investigation
to be conducted following the discovery or report of any irregularity involving cash,
stores or other assets. Where there is the possibility of criminal action being brought,
to ensure that any further interviewing is conducted to meet the requirements of the
Police and Criminal Evidence Act 1984 and other relevant legislation.
C.3.1.10 To refer any matter to the Police following consultation with the relevant Director and
the Monitoring Officer.
C.3.1.11 To ensure that at the conclusion of each internal audit, a report including any
recommendations is promptly issued to the Director of the service concerned.
Responsibilities of Directors
C.3.1.12 To ensure that internal auditors are given access at all reasonable times to premises,
personnel, documents and assets and are provided with any information and
explanations, that auditors consider necessary for the purpose of their work.
C.3.1.13 To ensure that any agreed actions arising from audit recommendations are carried out
in a timely and efficient way in line with the timescale agreed with the Head of Internal
Audit.
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C.3.1.14 To notify the Director of Corporate Services immediately of any suspected fraud, theft,
irregularity, improper use or misappropriation of the Authority’s property or
resources. Pending investigation and reporting, Directors should take all necessary
steps to prevent further loss and to secure records and documentation against removal
or alteration.
C.3.1.15 To ensure that new systems for maintaining financial records, or records of assets, or
changes to such systems, are discussed with and agreed by the Chief Finance Officer
prior to implementation.
C.3.2 External Audit
Why is this important?
C.3.2.1 Local authorities are statutorily required to be audited externally. External auditors
have rights of access to all documents and information necessary for audit purposes.
C.3.2.2 The basic duties of the external auditor are defined in statute and codes of practice.
The code of audit practice issued in March 2000 sets out the auditor’s objectives to
review and report upon:
the financial aspects of the audited body’s corporate governance arrangements;
the audited body’s financial statements;
aspects of the audited body’s arrangements to manage its performance, including
the preparation and publication of specified performance information and
compliance in respect of the preparation and publication of the Performance Plan.
C.3.2.3 The Authority’s external auditor must be satisfied that the Statement of Accounts
“presents fairly” the financial position of the Authority and its income and expenditure
for the year in question and complies with legal requirements. Under the Code of Audit
Practice 2005, external auditors are also required to certify that they believe the
Authority has spent money effectively and obtained value for money.
Key Controls
C.3.2.4 External auditors are normally appointed for a minimum period of five years. The
conduct of the external audit is governed by a code of audit practice backed by statute.
Responsibilities of the Chief Finance Officer
C.3.2.5 To ensure that the external auditors are given access at all reasonable times to
premises, personnel, documents and assets that the external auditors consider
necessary for the purposes of their work.
C.3.2.6 To ensure there is effective liaison between external and internal audit.
C.3.2.7 To work with the external auditor and advise the full Authority, the Policy and
Performance Committee, Governance Committee and Directors on their
responsibilities in relation to external audit.
Responsibilities of Directors
C.3.2.8 To ensure that external auditors are given access at all reasonable times to premises,
personnel, documents and assets which the external auditors consider necessary for
the purposes of their work.
C.3.2.9 To ensure that all records and systems are up to date and available for inspection.
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C.4 PREVENTING FRAUD AND CORRUPTION
C.4.1 Money laundering
C.4.1.1 Money laundering is the term used for a number of offences involving the proceeds of
crime or terrorist funds. It also includes the processing, or in any way dealing with, or
concealing, the proceeds of crime.
C.4.1.2 The Proceeds of Crime Act 2002 and Money Laundering Regulations 2007 place some
important obligations on all staff. Staff are required to inform the Chief Finance Officer
of any known or suspected money laundering activities. Staff should not normally
accept a single cash transaction in excess of £2,000 without the approval of the Chief
Finance Officer.
C.4.2 Bribery Act 2010
C.4.2.1 Bribery is a criminal offence. To use a third party as a conduit to channel bribes to
others is a criminal offence. Officers and Members must not engage indirectly in or
otherwise encourage bribery.
Why is this important?
C.4.2.2 The Authority will not tolerate fraud or corruption in the administration of its
responsibilities, whether from inside or outside the Authority.
C.4.2.3 The Authority’s expectation of propriety and accountability is that Members and staff at
all levels will lead by example in ensuring adherence to legal requirements, rules,
procedures and practices.
C.4.2.4 The Authority also expects that individuals and organisations with whom it comes into
contact will act towards the Authority with integrity and without thought or actions
involving fraud or corruption.
Key Controls
C.4.2.5 The key controls regarding the prevention of financial irregularities are that:
the Authority has an effective anti-fraud and corruption policy and maintains a
culture that will not tolerate fraud or corruption;
all Members and staff act with integrity and lead by example;
senior managers are required to deal swiftly and firmly with those who defraud or
attempt to defraud the Authority or who are corrupt;
high standards of conduct are promoted amongst members by the Governance
Committee, and compliance with the Code of Conduct for Members;
the maintenance of a register of interests in which any hospitality or gifts accepted
by staff must be recorded;
whistle blowing procedures are in place and operate effectively;
legislation including the Public Interest Disclosure Act 1998 is adhered to;
the maintenance of a register of Members' financial and other interests and a
register of gifts and hospitality, over the value of £50, that Members have received
in connection with their official duties.
Responsibilities of the Chief Finance Officer
C.4.2.6 To develop and maintain an anti-fraud and corruption policy.
C.4.2.7 To maintain adequate and effective internal control arrangements.
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C.4.2.8 To ensure that all suspected irregularities are reported to the Director of Corporate
Services and, if appropriate, to the Chief Executive, Governance Committee, the full
Authority and the external auditor.
Responsibilities of Directors
C.4.2.9 To ensure that all suspected irregularities are reported to the Head of Internal Audit
and the external auditor.
C.4.2.10 To invoke the Authority’s disciplinary procedures where the outcome of an audit
investigation indicates financial impropriety.
C.4.2.11 To ensure that where financial impropriety is discovered, the Chief Finance Officer is
informed. Where sufficient evidence exists to believe that a criminal offence may have
been committed, the police may be called in, following consultation with the Chief
Finance Officer and/or Monitoring Officer.
C.4.2.12 To maintain a register of staff interests, so that potential conflicts of interest are
identified and avoided wherever possible.
C.4.2.13 The Director of Corporate Services must maintain a register of staff and Members'
financial and other interests and a register of gifts and hospitality over the value of £50.
C.5 ASSETS
C.5.1 Security and Inventories
Why is this important?
C.5.1.1 The Authority holds assets in the form of property, vehicles, equipment, furniture and
other items. It is important that assets are safeguarded and used efficiently in service
delivery, and that there are arrangements for the security of both assets and
information required for service operations. Up-to-date asset registers are a
prerequisite for proper fixed asset accounting and sound asset management.
Key Controls
C.5.1.2 The key controls for the security of resources such as land, buildings, fixed plant
machinery, equipment, software and information are:
resources are used only for the purposes of the Authority and are properly
accounted for;
resources no longer required are disposed of in accordance with the law and the
regulations of the Authority so as to maximise benefits;
asset registers are maintained for the Authority, assets are recorded when they are
acquired and the records are updated as changes occur with respect to the location
and condition of the asset;
all staff are aware of their responsibilities with regard to safeguarding the
Authority’s assets and information, including the requirements of the Data
Protection Act and software copyright legislation;
all staff are aware of their responsibilities with regard to safeguarding the security of
the Authority’s ICT systems, including maintaining restricted access to the
information held on them and compliance with the Authority’s ICT and internet
security policies;
Responsibilities of the Chief Finance Officer
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C.5.1.3 To ensure that in accordance with good practice an asset register is maintained in the
Authority’s financial records for all fixed assets with a value in excess of £20,000 (this
value to be kept under review).
C.5.1.4 To ensure that assets are valued in accordance with the Code of Practice on Local
Authority Accounting in the United Kingdom (CIPFA/LASAAC), and valued to the Royal
Institution of Chartered Surveyors (RICS) Appraisal & Valuation Standards.
C.5.1.5 To provide guidance on the form of records to be kept for stocks and stores.
Responsibilities of Directors
C.5.1.6 To prepare the Authority’s Asset Management Plan.
C.5.1.7 The appropriate Director shall ensure that adequate inventories are maintained in a
form approved by the Chief Finance Officer for all properties, plant and machinery,
furniture, fittings equipment and any movable assets of significant value currently owned
or used by the Authority. Periodic checks of inventories should be undertaken. Where
appropriate, security marking shall be used. The value of items to be included in an
inventory shall be prescribed by the Chief Finance Officer.
C.5.1.8 To submit information to the Chief Finance Officer as required for the purpose of
updating accounting, costing and financial records in respect of fixed assets, including
property and vehicles, etc.
C.5.1.9 To ensure that lessees and other prospective occupiers of Authority land are not
allowed to take possession or enter the land until a lease or agreement, in a form
approved by the Chief Finance Officer has been established.
C.5.1.10 To ensure the proper security of all buildings and other assets under their control.
Directors are responsible for the receipt, care, safe custody and issue of stocks and
stores. Stores records shall be kept in a form agreed by the Chief Finance Officer.
Leased vehicles, plant or equipment may not be disposed of without the prior approval
of the Chief Finance Officer.
C.5.1.11 Where land or buildings are surplus to requirements, to notify the Chief Finance
Officer in order that alternative uses or disposal may be considered. No disposal of
land and/or buildings shall take place except with the approval of the Policy and
Programme Committee.
C.5.1.12 To pass title deeds to the Director of Corporate Services who is responsible for
custody of all title deeds.
C.5.1.13 To ensure that no Authority asset is subject to personal use by an employee without
proper permission. Where property is removed for an authorised purpose, and only if
appropriate insurance cover has been obtained, full details and authorisation should be
properly recorded (e.g. in a loans book) to enable its identification. Authorised
purposes might include the use of portable computer equipment away from the office
and also equipment used for home-based working.
C.5.1.14 To ensure the safe custody of vehicles, equipment, furniture, stock, stores, uniforms,
keys, staff identity cards and other property belonging to the Authority and to maintain
an effective system of stock control where appropriate. A certificate of the value of
stocks held as at 31 March each year should be provided to the Chief Finance Officer.
Stocks should be maintained at reasonable levels and are subject to a regular
independent physical check.
C.5.1.15 To consult the Chief Finance Officer in any case where security is thought to be
defective or where it is considered that special security arrangements may be needed.
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C.5.1.16 To ensure cash holdings on premises are kept to a minimum and within insured limits.
C.5.1.17 To ensure that keys to safes and similar receptacles are carried on the person of those
responsible at all times; loss of any such keys must be reported to the Chief Finance
Officer as soon as possible.
C.5.1.18 To record all disposal or part exchange of assets that should normally be by
competitive tender or public auction, unless, following consultation with the Chief
Finance Officer, the Policy and Programme Committee agrees otherwise.
C.5.1.19 To investigate and remove from the Authority’s records (that is, write off)
discrepancies as necessary, in accordance with approved procedures, or following
consultation with the Chief Finance Officer, to obtain Policy and Programme
Committee approval if they are of significant value. Where equipment or materials
become unusable or obsolete, the Chief Finance Officer may arrange for it to be
written off in accordance with instructions issued by him/her. Where equipment or
materials have a scrap or resale value, disposal shall be at the best price obtainable
following the procedure for disposal issued by the Chief Finance Officer.
C.5.2 Intellectual Property
Why is this important?
C.5.2.1 Intellectual property is a generic term that includes inventions and writing. If these are
created by the employee during the course of employment, then, as a general rule, they
belong to the employer, not the employee. Various Acts of Parliament cover different
types of intellectual property.
C.5.2.2 Certain activities undertaken within the Authority may give rise to items that may be
patentable, for example, software development. These items are collectively known as
intellectual property.
Key Controls
C.5.2.3 In the event that the Authority decides to become involved in the commercial
exploitation of inventions, the matter should only proceed following consultation with
and on the advice of the Chief Finance Officer.
Responsibilities of the Chief Finance Officer
C.5.2.4 To develop and disseminate good practice through the Authority’s intellectual property
procedures.
Responsibilities of Directors
C.5.2.5 To ensure that controls are in place to ensure that staff do not carry out private work
in Authority time and that staff are aware of an employer’s rights with regard to
intellectual property.
C.5.2.6 To consult the Chief Finance Officer on any proposals to exploit intellectual property
commercially.
C.5.3 Disposal of Assets
Why is this important?
C.5.3.1 Obsolete, non-repairable or redundant assets should be disposed of in accordance with
the law and the documented procedures for the sale of land and buildings set out in the
Authority’s Asset Management Plan. S123 Local Government Act 1972 generally
requires Authorities to obtain the best consideration that can reasonably be obtained
when disposing of such assets. However, disposal at less than best consideration is
South Downs National Park Authority, March 2014 Page
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possible under the legislation, for example, when other benefits are to be gained,
including social housing and regeneration, but the circumstances need to be checked
carefully in each case to ensure that the detailed requirements for a disposal at less
than the best consideration can be satisfied.
Key Controls
C.5.3.2 Assets for disposal are identified and are disposed of at the most appropriate time, and
only when it is in the best interests of the Authority, and best price is obtained, bearing
in mind other factors, such as environmental issues. For items of significant value,
disposal should be by competitive tender or public auction.
C.5.3.3 Procedures protect staff involved in the disposal from accusations of personal gain.
Responsibilities of the Chief Finance Officer
C.5.3.4 To issue guidelines representing best practice for disposal of assets.
C.5.3.5 To ensure proper accounting entries are made to remove the value of disposed assets
from the Authority’s records and to include the sale proceeds if appropriate.
Responsibilities of Directors
C.5.3.6 To ensure that the guidelines on the disposal of surplus or obsolete materials, stores or
equipment are followed.
C.6 TREASURY MANAGEMENT
Why is this important?
C.6.1 It is important that money passing through the Authority’s accounts should be managed
properly to optimise the return on it, subject to ensuring the security of the
Authority’s resources.
Key Controls
C.6.2 All monies in the hands of the Authority shall be aggregated for the purposes of
Treasury Management and shall be under the control of the Chief Finance Officer or
the Authority’s appointed agent.
C.6.3 That the Authority adopts the key recommendations of CIPFA’s latest Code of Practice
on Treasury Management.
C.6.4 Accordingly the Authority will create and maintain, as the cornerstones for effective
treasury management:
a treasury management policy statement, stating the policies and objectives of its
treasury management activities;
suitable treasury management practices (TMPs), setting out the manner in which
the Authority will seek to achieve those policies and objectives, and prescribing
how it will manage and control those activities;
an Annual Investment Strategy (AIS).
C.6.5 The content of the policy statement and TMPs will follow the recommendations
contained in the CIPFA Code, subject only to amendment where necessary to reflect
the particular circumstances of the Authority. Such amendments will not result in the
Authority materially deviating from the Code’s key recommendations.
C.6.6 The content of the AIS will follow guidance issued by the government. The Authority
via the Policy and Programme Committee will approve the AIS prior to the
commencement of the year, and any subsequent changes or revisions.
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C.6.7 The Authority delegates responsibility for the implementation and monitoring of its
treasury management policies, practices and AIS to the Governance Committee, and
for the execution and administration of all treasury management decision to the
Authority’s Chief Finance Officer. Day to day treasury management activity will be
managed by the Financial Services provider, who will act in accordance with the
Authority’s treasury management policy statement, TMPs and AIS.
C.6.8 The Policy and Programme Committee will receive reports on its treasury management
policies, practices and activities (including the AIS). These reports will include an annual
strategy and plan in advance of the year. Quarterly update reports and an annual report
after its close, in the form prescribed in the TMPs will be submitted to the Governance
Committee
Responsibilities of the Chief Finance Officer
C.6.9 To arrange the borrowing and investments of the Authority in such a manner as to
comply with the CIPFA Code and the Authority’s Treasury Management Policy and
Annual Investment Strategy.
C.6.10 To report at least three times a year on treasury management activities to the
Governance Committee.
C.6.11 To ensure that all investments of money are made in the name of the Authority and to
maintain records of such investments in accordance with the CIPFA Code and the
Authority’s Treasury Management Policy.
C.6.12 To affect all borrowings in the name of the Authority and to maintain records of such
borrowing in accordance with the CIPFA Code and the Authority’s Treasury
Management Policy.
C.6.13 To act as, or to appoint the Authority’s bankers to act as, the Authority’s registrar of
stocks, bonds, mortgages, etc.
Responsibilities of Directors
C.6.14 To follow the instructions on banking issued by the Chief Finance Officer.
C.6.15 To ensure that loans are not made to third parties and that interests are not acquired
in companies, joint ventures or other enterprises without the approval of the Chief
Finance Officer who will be responsible for seeking approval of the Policy and
Programme Committee and/or full Authority where appropriate.
C.7 TRUSTS, FUNDS HELD FOR THIRD PARTIES & OTHER VOLUNTARY
FUNDS
Why is this Important?
C.7.2 Trust and other voluntary funds frequently provide service areas with additional
sources of finance to provide services to their customers. Such funds are administered
by employees of the Authority in normal work time and therefore minimum standards
must be met. In addition, customers, clients and benefactors who contribute to the
fund are entitled to expect minimum levels of financial stewardship and accountability.
C.7.3 It is important that an effective audit is carried out by a person with experience
appropriate to the level of turnover of the fund. Where the turnover (greater of
receipts or payments in the year) of the fund exceeds £10,000, a qualified accountant
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should be appointed by the Financial Services provider as the auditor/independent
examiner.
C.7.4 The auditor must be totally independent from and have no indirect connection with the
administration of the fund as this might inhibit the impartial conduct of the audit. This
precludes:
any member of staff involved in the administration of the fund;
a relative of any member of staff responsible for administering the fund.
Key Controls
C.7.5 The key controls for trust funds, funds held for third parties and other voluntary funds
are:
Funds are only used for the purposes for which they are intended.
All funds with income or expenditure over £10,000 are inspected or audited on an
annual basis by an appropriately qualified auditor.
All monies are accounted for and kept separate from Authority funds.
Responsibilities of the Chief Finance Officer
C.7.6 To ensure that all trust funds held in the name of the Authority are audited in line with
any statutory requirements.
C.7.7 To provide guidance on accounting arrangements.
Responsibilities of Directors
C.7.8 To arrange for all trust funds to be held, wherever possible, in the name of the
Authority. All officers acting as trustees by virtue of their official position shall deposit
securities, etc. relating to the trust with the Chief Finance Officer, unless the deed
otherwise provides.
C.7.9 To arrange, where funds are held on behalf of third parties, for their secure
administration, approved by the Chief Finance Officer, and to maintain written records
of all transactions.
C.7.10 To ensure that trust funds are operated within any relevant legislation and the specific
requirements for each trust.
C.7.11 To follow all guidance issued by the Chief Finance Officer.
C.8 STAFFING
Why is this Important?
C.8.1 In order to provide good quality services, it is crucial that the Authority recruits and
retains high calibre, knowledgeable staff, qualified to an appropriate level. There must
be adherence to the Authority’s policies and procedures on staff recruitment and
security of confidential information.
Key Controls
C.8.2 The key controls for staffing are:
an appropriate workforce strategy and policy exists, in which staffing requirements
and budget allocation are matched within agreed limits/tolerances;
procedures are in place for forecasting staffing requirements and cost;
controls are implemented that ensure that staff time is used efficiently and to the
benefit of the Authority;
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checks are undertaken prior to employing new staff to ensure that they are
appropriately skilled, experienced and trustworthy;
before any recruitment process is begun, proper authority, including confirmation
of available budget and office accommodation must be obtained;
Responsibilities of the Chief Finance Officer
C.8.3 To advise on the availability of budget to fund any existing establishment vacancy or the
alteration of the staffing establishment and on the additional costs of employment, such
as National Insurance, employer’s superannuation contributions, and IT and office
accommodation costs, as appropriate.
Responsibilities of Directors
C.8.4 The Director of Corporate Services has overall responsibility for ensuring that human
resources strategies, policies and procedures are developed and implemented across
the Authority. These should include detailed recruitment procedures.
C.8.5 To ensure that the staffing budget is an accurate forecast of staffing levels and is
matched by appropriate budget provision (including on-costs and overheads).
C.8.6 To monitor staff activity to ensure adequate control over such costs as sickness,
overtime, training and temporary staff.
C.8.7 To ensure that the staffing budget is not exceeded without due authority and that it is
managed to enable the agreed level of service to be provided.
C.8.8 To comply with any direction set by the Authority, Policy & Programme Committee or
SMT regarding recruitment and the management of vacancies.
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D SYSTEMS AND PROCEDURES
D.1 IT SYSTEMS AND RELATED PROCEDURES
Why is this important?
D.1.1 Service areas have many systems and procedures relating to the control of the
Authority’s assets, including purchasing, costing and management systems. Directorates
are increasingly reliant on Information & Communication Technology (ICT) for their
financial management information. The information must therefore be accurate and the
systems and procedures sound and well administered. They should contain controls to
ensure that transactions are properly processed and errors detected promptly.
D.1.2 The Chief Finance Officer has a professional responsibility to ensure that the
Authority’s financial systems are sound and should therefore be notified of any new
developments or changes.
D.1.3 The Director of Corporate Services is responsible for the procurement, development,
implementation and maintenance of all ICT systems to the standards required by the
business functions of the Authority and its infrastructure.
Key Controls
D.1.4 The key controls for systems and procedures are:
basic data exists to enable the Authority’s objectives, targets, budgets and plans to
be formulated;
performance is communicated to the appropriate managers on an accurate,
complete and timely basis;
early warning is provided of deviations from target, plans and budgets that require
management attention;
operating systems and procedures are secure.
Responsibilities of the Chief Finance Officer
D.1.5 To make arrangements for the proper administration of the Authority’s financial affairs,
including,
issuing advice, guidance and procedures for officers and others acting on the
Authority’s behalf;
determining the financial systems form of accounts and supporting financial records;
establishing arrangements for audit of the Authority’s financial and ICT systems;
approve any new ICT based financial systems to be introduced, including systems
linked to or interfaced with the corporate financial information system;
approve any changes to be made to existing ICT based financial systems or related
feeder systems;
ensure output from ICT based financial systems are complete, accurate and timely;
Responsibilities of Directors
D.1.6 To ensure that accounting records are properly maintained and held securely in
accordance with arrangements approved by the Chief Finance Officer.
D.1.7 To ensure that a complete audit trail is maintained, allowing financial transactions to be
traced between the accounting records and the original document.
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D.1.8 To ensure that only officers authorised to act on their behalf process payments, collect
income and place orders, including variations; this should be evidenced through either:
local procedure/practice notes, job descriptions/organisational structure, a record of
authorised signatories or a scheme of financial delegation.
D.1.9 To supply lists of authorised officers, with specimen signatures and delegated.
D.1.10 To incorporate appropriate controls to ensure that, where relevant all input is genuine
and all processing is carried out in an accurate, complete and timely manner.
D.1.11 To ensure compliance with all guidance and relevant legislation in relation to HM
Revenue & Customs requirements.
D.1.12 To ensure that the organisational structure provides an appropriate separation of
duties to provide adequate internal controls and to minimise the risk of fraud or other
malpractice.
D.1.13 To ensure that systems are documented and staff trained in operations.
D.1.14 To consult with the Chief Finance Officer before changing any existing system or
introducing new systems.
D.1.15 To ensure that effective contingency and Disaster Recovery arrangements, including
back-up procedures, exist for ICT systems to ensure business continuity. Wherever
possible, back-up information should be securely retained in a fireproof container at an
off-site location.
D.1.16 To ensure that, where appropriate, ICT systems are registered in accordance with data
protection legislation and that staff are aware of their responsibilities under the
legislation.
D.1.17 To comply with relevant standards and guidelines for computer systems issued by the
Director of Corporate Services.
D.1.18 To ensure that ICT equipment, infrastructure and software are protected from loss and
damage through theft, vandalism, etc.
D.1.19 To comply with the copyright, designs and patents legislation.
D.2 INCOME AND EXPENDITURE
D.2.1 Income
Why Is this Important?
D.2.1.1 Income collection is a potential area of risk to the security of the Authority’s funds and
effective income collection systems are necessary to ensure that all income due is
identified, collected, receipted and banked properly.
Key Controls
D.2.1.2 The key controls for income are:
all income due to the Authority is identified and charged correctly, in accordance
with an approved charging policy, which is reviewed at least annually;
all money received by an employee on behalf of the Authority is properly recorded
and paid without delay to the Authority’s bank account. Responsibility for cash
collection should, ideally, be separated from:
i) responsibility for identifying the amount due;
ii) responsibility for reconciling the amount due to the amount received.
income received is not used to meet expenditure;
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effective action is taken to pursue non-payment within defined timescales;
formal approval for debt write-off is obtained;
appropriate accounting adjustments are made following write-off action;
all appropriate income documents are retained and stored for the defined period in
accordance with the document retention schedule;
money collected and deposited is reconciled to the bank account by a person who
is not involved in the collection or banking process;
to guard against fraud and money laundering, the maximum cash deposit accepted
will be £2,000.
Responsibilities of the Chief Finance Officer
D.2.1.3 To agree arrangements and promote best practice for the collection of all income due
to the Authority.
D.2.1.4 To collect income due in all cases where formal invoices are raised.
D.2.1.5 To ensure that all income received is kept securely and banked properly.
D.2.1.6 To order and supply to Directorates all receipt forms, books or tickets and similar
items and to approve the arrangements for their control.
D.2.1.7 To approve the form of all cash collection facilities and associated procedures. This
includes safes, automated cash collection machines and other cash collection facilities.
D.2.1.8 To agree the write-off of bad debts and to report to the Policy and Programme
Committee if this is material to the accounts of the Authority (see section D.6.6
below).
D.2.1.9 To approve all debts to be written off in consultation with the relevant Director, keep a
record of all sums written off and comply with the requirements of the Accounts and
Audit Regulations 2003 (as amended).
D.2.1.10 To establish and initiate appropriate recovery procedures, including legal action where
necessary, for debts that are not paid promptly.
Responsibilities of Directors
D.2.1.11 To ensure that all income is accounted for.
D.2.1.12 Directors to maintain a record of authorised officers, and their signatures, able to raise,
amend or cancel invoices on their behalf in a form acceptable to the Chief Finance
Officer. NB officers authorised to raise invoices shall not be permitted to amend or
cancel invoices they have raised themselves.
D.2.1.13 To notify the Chief Finance Officer promptly of all money due to the Authority,
including details of contracts, leases or agreements and arrangements which involve the
receipt of money by the Authority.
D.2.1.14 To notify the Chief Finance Officer of new leases, or variations to rents or other
periodic income to ensure that the periodic income register is accurately maintained.
D.2.1.15 To establish a charging framework for the supply of goods or services, including the
appropriate charging of VAT, which accords with the Authority’s charging policy and to
review charges at least annually.
D.2.1.16 To issue official receipts and maintain other documentation for income collection in a
form approved by the Chief Finance Officer.
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D.2.1.17 To ensure that whenever possible, goods, services or supplies provided by the
Authority with a value of less than £100 are paid for at the point of sale to avoid the
need to invoice.
D.2.1.18 To ensure that where possible at least two employees are present when post is opened
so that money received by post is properly identified and recorded.
D.2.1.19 To hold securely receipts, tickets and other records of income for the appropriate
period.
D.2.1.20 To lock away all income to safeguard against loss or theft, and to ensure the security of
cash handling. Maximum limits for cash held shall be agreed with the Chief Finance
Officer, having regard to the Authority's insurance cover, and must not be exceeded.
D.2.1.21 To ensure that all relevant cash collection procedures issued by the Chief Finance
Officer are complied with including the requirements of the corporate banking contract
and security carrier contracts.
D.2.1.22 To ensure that income is paid fully and promptly into the appropriate Authority bank
account in the form in which it is received. There must be sufficient information to
identify the transaction. Money collected and deposited must be reconciled to the bank
account on a regular basis. All cheques, money orders and postal orders received in
any service area shall be crossed “South Downs National Park Authority”.
D.2.1.23 To ensure income is not used to cash personal cheques or make other payments.
D.2.1.24 To ensure that debtor invoices are raised and despatched promptly following any work
done, goods supplied or services rendered where payment has not been received at the
point of sale.
D.2.1.25 To record every transfer of custody of money between employees. The receiving
officer must sign for the transfer and the transferor must retain a copy.
D.2.1.26 To recommend to the Chief Finance Officer debts to be written off and to keep a
record of all sums written off up to the approved limit.
D.2.1.27 To notify the Chief Finance Officer of any contracts, leases or other arrangements
which involve the payment of money to the Authority.
D.2.2 Ordering and Paying for Work, Goods and Services
Why is this important?
D.2.2.1 The Authority is funded by public money and must be able to demonstrate that these
funds have been dispensed with due probity and in accordance with the Authority’s
policies. The Authority’s procedures should help to ensure that services obtain value
for money from their purchasing arrangements and these procedures should be read in
conjunction with the Authority’s Procurement Guide.
D.2.2.2 Every officer and member of the Authority has a responsibility to declare any links or
personal interests that they may have with purchasers, suppliers and/or contractors if
they are engaged in contractual or purchasing decisions on behalf of the Authority, in
accordance with appropriate codes of conduct.
Key Controls
D.2.2.3 The key controls for ordering and paying for work, goods and services are:
all goods and services are ordered only by appropriate persons and are correctly
recorded;
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all goods and services shall be ordered in accordance with the Authority’s
Procurement guidance, and all contracts for goods, services and works shall be
subject to the Authority's Contract Standing Orders;
goods and services received are checked to ensure they are in accordance with the
order, certification of receipt being completed by someone other than the person
who placed the order;
payments are not made unless goods have been received by the Authority to the
correct price, quantity and quality standards;
all payments are made within the payment terms or otherwise within 30 days to the
correct person, for the correct amount and are properly recorded, regardless of
the payment method;
all appropriate evidence of the transaction and payment documents are retained
and stored for the defined period, in accordance with the current document
retention schedule;
all expenditure, including VAT, is accurately recorded against the right budget or
accounting code and any exceptions are corrected.
in addition, the effect of e-business/e-commerce and electronic purchasing (e-
Procurement) requires that processes are in place to maintain the security and
integrity of data for transacting business electronically.
D.2.2.4 Official orders, including e-purchasing orders, must be in a form approved by the Chief
Finance Officer.
D.2.2.5 Apart from petty cash, the normal method of payment from the Authority shall be by
BACS, cheque or other instrument or approved method, drawn on the Authority’s
bank account. Payment by direct debit requires the prior agreement of the Chief
Finance Officer.
D.2.2.6 Official orders must not be raised for any personal or private purchases, nor must
personal or private use be made of Authority contracts.
Responsibilities of the Chief Finance Officer
D.2.2.7 To maintain an up-to-date list of staff authorised to raise orders or certify payments
identifying in each case the financial limits of their authority.
D.2.2.8 To approve the form of official orders and associated terms and conditions, and ensure
there is a back-up of orders that have been generated on the system, as part of the
back-up/disaster recovery plan.
D.2.2.9 To make payments from the Authority’s funds upon proper authorisation that the
expenditure has been incurred.
D.2.2.10 To make payments, whether or not provision exists within the estimates, where the
payment is specifically required by statute or is made under a Court Order.
D.2.2.11 To make payments to contractors upon appropriate certification, which must include
details of the value of work, retention money, amounts previously certified and
amounts now certified.
D.2.2.12 To advise on the minimum payment terms which can reasonably be met.
D.2.2.13 To ensure that invoices are retained (either in secure file storage or electronically) for
the defined period in accordance with the document retention schedule.
D.2.2.14 To ensure that invoices are readily available for inspection as required, for example, by
internal and external audit, HM Revenue & Customs, or EU auditors.
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Responsibilities of Directors
D.2.2.15 To comply with guidance issued by the Director of Corporate Services, to ensure that
the most favourable terms for price, delivery and quality have been obtained.
D.2.2.16 To ensure the safe custody and proper use of official orders, including e-purchasing
orders.
D.2.2.17 To ensure all orders clearly show the originator, the nature and quantity of the goods,
supplies and services to be supplied and details of agreed or estimated prices, relevant
discounts and delivery terms and are properly authorised.
D.2.2.18 To ensure no contract or arrangement is entered into on shorter payment terms than
the minimum advised by the Chief Finance Officer.
D.2.2.19 To ensure that orders are only used for goods and services provided to and for the use
of the Authority and not for the personal benefit of individual employees.
D.2.2.20 To ensure that those authorising orders are satisfied that the goods and services are
appropriate and needed, that there is adequate budgetary provision and that quotations
or tenders have been obtained in accordance with Contract Standing Orders and the
Procurement Policy.
D.2.2.21 To ensure that copy orders are retained where non-computerised records are used,
and that they are held securely.
D.2.2.22 To ensure that goods and services are checked on receipt to verify that they are in
accordance with the order.
D.2.2.23 To pay invoices promptly in accordance with contract terms; the Authority target is
payment within agreed terms or 30 days from the date an undisputed invoice is
received.
D.2.2.24 To ensure that payment is not made unless a proper VAT invoice (excluding any
balance brought forward) in the name of the Authority has been received, checked,
coded and certified for payment, confirming:
i) receipt of goods;
ii) that the invoice has not previously been paid;
iii) that expenditure has been properly incurred and is within budget;
iv) that prices are correct, including discounts; and
v) that tax is deducted where appropriate.
D.2.2.25 Directors are responsible for obtaining necessary VAT receipts. Failure to obtain
adequate receipts could result in charges levied by H M Revenue & Customs.
D.2.2.26 To ensure appropriate separation of duties are involved in requisitioning, ordering,
receiving and paying for goods and services.
D.2.2.27 To ensure that payments are made are only made on receipt of a formal invoice, not on
a photocopied or faxed copy, statement or other document.
D.2.2.28 To ensure that, in cases of payments being made on receipt of copy invoices (for
example because the original has gone missing), appropriate checks are completed to
minimise the risk of duplicate payments being made, and that, once authenticated, copy
invoices are clearly marked “not previously passed for payment” and properly certified.
D.2.2.29 To notify the Chief Finance Officer of outstanding expenditure relating to the previous
financial year as soon as possible after 31 March in line with the published timetable for
the year-end closure of accounts.
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D.2.2.30 To ensure that procurement records are retained (either in secure file storage or
electronically) for the defined period in accordance with the document retention
schedule and readily available for inspection.
D.2.3 Payments to Employees and Members
Why is this important?
D.2.3.1 Staff costs form a significant element of the Authority’s spending. It is therefore
important that payments of both salaries and expenses are accurate, timely, made only
where they are properly due and that payments accord with individuals’ conditions of
employment.
D.2.3.2 It is equally important that Members’ allowances and expenses are paid accurately and
on a timely basis in accordance with the scheme adopted by the full Authority. All
payments to staff and Members are made through payroll.
Key Controls
D.2.3.3 The key controls for payments to employees and Members are:
proper authorisation procedures are in place and that there is adherence to
corporate timetables in relation to starters, leavers, variations, and enhancements;
and that payments are made on the basis of timesheets or claims;
frequent reconciliation of payroll expenditure against approved budget and bank
account;
all appropriate payroll documents are retained and stored for the defined period in
accordance with the document retention schedule;
that HM Revenue & Customs regulations are met.
Responsibilities of the Chief Finance Officer
D.2.3.4 To arrange and control secure and reliable payment of salaries, wages, compensation or
other emoluments to existing and former employees on the due date.
D.2.3.5 To make arrangements for the accurate and timely recording and payment of tax,
superannuation and other deductions.
D.2.3.6 To make arrangements for payment of all travel and subsistence claims or financial loss
allowances.
D.2.3.7 To make arrangements for paying Members’ travel or other allowances upon receiving
the prescribed form, duly completed and authorised.
D.2.3.8 To provide advice to secure payment of salaries and wages by the most economical
means.
Responsibilities of Directors
D.2.3.9 The Chief Executive holds ultimate responsibility for compliance with statutory rules
relating to employee matters and through the Director of Corporate Services shall
issue appropriate advice, guidance and training to all staff to ensure that the
requirements of law and of the Authority's Human Resources Policies and Practices are
met.
D.2.3.10 Directors are responsible for ensuring that staff within their respective Directorates are
properly inducted into the Authority and attend any mandatory training courses.
Directors are also responsible for ensuring that their staff act follow any advice,
guidance or instruction issued by the Director of Corporate Services, including those
relating to appointment procedures, the use of job evaluation or other agreed system
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for determining remuneration, acceptable behaviour standards, grievance and
disciplinary processes, contract variation, and the security and privacy of associated
data.
D.2.3.11 To ensure appointments are made in accordance with the regulations of the Authority
and approved establishments, grades, scales of pay and approved budget levels.
D.2.3.12 To maintain personnel information in a format specified by the Director of Corporate
Services and notify him or her promptly of all appointments, terminations, increments,
timesheets, or variations which may affect the pay or pension of an employee or former
employee, in the form and to the timescale required.
D.2.3.13 To ensure that adequate and effective systems and procedures are operated, so that:
payments are only authorised to bona fide employees and where there is a valid
entitlement;
conditions and contracts of employment are correctly applied;
employees’ names listed on the payroll are checked at regular intervals to verify
accuracy and completeness;
any systems used to process personnel data or remunerations are properly
maintained in compliance with these Financial Regulations, and that arrangements
for paying salaries, compensation and other emoluments also comply.
D.2.3.14 To maintain an up-to-date list of the names of officers authorised to sign staffing
records, including starters, leavers and amendment forms, timesheets and expenses
claims together with specimen signatures and to supply a copy of this list to the
Financial Services provider (Payroll).
D.2.3.15 To ensure that payroll transactions are processed only through the payroll system, to
ensure compliance with HM Revenue & Customs requirements. Directors should give
careful consideration to the employment status of individuals engaged on a self-
employed or subcontract basis, as HMRC applies strict rules on employee status; in
cases of doubt, early advice should be sought from the Director of Corporate Services.
D.2.3.16 Certification of timesheets by authorised officers means that:-
the expenditure has been properly incurred, is legal, and that there is relevant
estimate provision or other Authority to spend;
the payment is in accordance with the Authority's HR policies and practices, and
other regulations;
the calculations of hours, pay rates and other allowances are correct and the
timesheet is arithmetically correct,
the timesheet has not previously been paid. In cases of copy timesheets, careful
checks need to be carried out to prevent duplicate payments. When authenticated,
any copy should be marked clearly "not previously passed for payment" and
properly certified.
D.2.3.17 Ex-gratia payments shall be paid through the payroll system in accordance with these
Financial Procedures and the Financial Limits they prescribe.
D.2.3.18 To certify travel and subsistence claims and other allowances. Certification is taken to
mean that journeys were authorised and expenses properly and necessarily incurred,
and that allowances are properly payable by the Authority in accordance agreed rates,
ensuring that cost-effective use of travel arrangements is achieved.
D.2.3.19 To ensure that the Financial Services provider (Payroll) is notified of the details of any
employee benefits in kind, to enable full and complete tax reporting.
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D.2.3.20 To ensure that all appropriate payroll documents are retained and stored for the
defined statutory period.
Responsibilities of Members
D.2.3.21 To submit claims for Members’ travel and subsistence allowances on a monthly basis
and, in any event, within one month of the financial year-end.
D.2.4 Purchasing Cards
Why is this important?
D.2.4.1 Corporate Procurement Cards are issued when:
There is an operational requirement for the flexibility which the card would offer;
There is an ongoing need that cannot be met effectively or efficiently by other
arrangements;
There is a pattern of low value, high volume purchases where a purchase order is
not appropriate.
Key Controls
D.2.4.2 All applications for corporate procurement cards should be made on the appropriate
form, meeting the specific criteria, appropriately authorised and supported by a
business case approved by the budget holder;
A condition of usage agreement is issued to the cardholder upon approval, which
must be signed and returned;
There is an individual transaction and monthly spend limit issued for each card
holder which cannot be exceeded. Card limits will be reviewed at regular intervals
and if necessary revised;
Finance will monitor the use of corporate procurement cards. If inappropriate
expenditure occurs, then it can be deducted from accrued salary and may result in
the cancellation of the card;
D.2.4.3 Cardholders are required to keep a copy of all documentation that relates to the
purchases, including the monthly procurement card statement that will be received by
all purchasing cardholders.
Responsibilities of Chief Finance Officer
D.2.4.4 To establish a corporate procurement card system that can be operated securely within
the Authority.
D.2.4.5 To ensure that procurement card expenditure is accounted for and correctly presented
in the Authority’s accounts
Responsibilities of Directors
D.2.4.6 To ensure that officers holding a corporate procurement card:
Obtain and retain receipts to support each payment made against the procurement
card. Where appropriate, an official receipted VAT invoice must be obtained;
Submit records as required by the Chief Finance Officer at regular intervals for
uploading into the finance system;
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Make adequate arrangements for the safe custody of the card; reconcile the
expenditure monthly; reconciliation sheets to be verified in accordance with the
notified procedure;
Lost or stolen cards must be reported immediately to the Co-op Bank and Finance;
Return the card to Finance upon leaving the Authority or at the request of the Chief
Finance Officer;
D.2.4.7 The Chief Finance Officer may require the return of the card at any time and may
suspend or cancel its use in the event that the cardholder fails to comply with the
conditions of use of the card.
D.2.5 Imprest and Petty Cash Accounts
Why is this important?
D.2.5.1 Imprest and petty cash accounts allow:
Urgent purchases where officers are unable to obtain goods or services in a timely
manner to allow the continued delivery of the service.
Minor items of expenditure, when it would not be cost effective to purchase the
item through the creditor payments system.
D.2.5.2 Imprest and petty cash accounts must not be used as methods of avoiding normal
purchasing/payment arrangements.
Key Controls
D.2.5.3 The key controls for imprest and petty cash accounts are:
all transactions are properly accounted for and proper authorisation procedures
are in place;
there is appropriate supporting documentation for all purchases;
purchases are appropriate and could not be made through the Authority’s normal
purchase ordering system;
accounts are kept in balance and reconciled on a regular basis;
cash, cheque books and accounting records are held securely, and transfers of
custody are properly documented.
Responsibilities of the Chief Finance Officer
D.2.5.4 To establish a petty cash/imprest system to be operated by the Authority.
D.2.5.5 To ensure that petty cash is accounted for and correctly presented in the Authority’s
accounts.
Responsibilities of Directors
D.2.5.6 To ensure that employees operating an imprest account:
obtain and retain vouchers to support each payment from the imprest account.
Where appropriate, an official receipted VAT invoice must be obtained;
maintain the account in balance and submit records as required by the Chief
Finance Officer at regular intervals for examination and the reimbursement of
expenditure;
make adequate arrangements for the safe custody of the account;
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produce upon demand by the Chief Finance Officer cash and all vouchers to the
total value of the imprest amount;
reconcile and balance the account at least monthly; reconciliation sheets to be
signed and retained by the imprest holder;
provide the Chief Finance Officer with a certificate of the value of the account held
on request (normally once a year);
ensure that the float is never used to cash personal cheques or to make personal
loans and that the only payments into the account are the reimbursement of the
float and change relating to purchases where an advance has been made;
ensure that no income received on behalf of the Authority may be paid into a petty
cash/imprest account but must be banked or paid into the Authority;
D.2.5.7 No officer shall certify a petty cash/imprest bank account claim for reimbursement of
expenditure to him/herself.
D.2.5.8 No payments or reimbursements shall be made for values over £100.
D.2.5.9 In no circumstances shall imprest accounts be allowed to go overdrawn.
D.3 VAT & TAXATION
Why is this Important?
D.3.1 The Authority is responsible for ensuring its tax affairs are in order. Tax issues are
often very complex and the penalties for incorrectly accounting for tax are severe. It is
therefore very important for all officers to be aware of the potential tax implications of
any transaction and to seek appropriate advice early.
Key Controls
D.3.2 The key controls for taxation are:
budget holders are provided with relevant information and kept up to date on tax
issues;
budget holders are instructed on required record keeping
staff seek advice on the potential tax implications of new initiatives as soon as
possible;
all taxable transactions are identified, properly carried out and accounted for within
stipulated timescales;
returns are made to the appropriate authorities within the stipulated timescale.
Responsibilities of the Chief Finance Officer
D.3.3 To arrange for the proper deduction of Pay As You Earn (PAYE) and National
Insurance, and the timely completion of associated HM Revenue & Customs returns.
D.3.4 To complete a monthly return of VAT inputs and outputs to HM Revenue & Customs.
D.3.5 To maintain up-to-date guidance for Authority Members and employees on taxation
issues.
D.3.6 To provide details to the HM Revenue & Customs and account for all taxes and
contributions deducted from payments made by the Authority.
Responsibilities of Directors
D.3.7 To ensure that the correct VAT liability is attached to all income due and that all VAT
recoverable on purchases complies with HM Revenue & Customs regulations.
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D.3.8 To ensure that, where construction and maintenance works are undertaken, the
contractor fulfils the necessary construction industry tax deduction requirements.
D.3.9 To ensure that any person employed by the Authority is added to the Authority’s
payroll and tax deducted from any payments, except where the individual is genuinely
self-employed or employed by a recognised staff agency.
D.3.10 To follow all guidance on taxation issued by the Chief Finance Officer.
D.4 CONTROL OF CONTRACTS
Why is this important?
D.4.1 The achievement of value for money when procuring goods and services is a key task
to ensure that public money is well spent. The Authority needs to be able to
demonstrate that it achieves good value for money and how it seeks to improve the
value it gets.
D.4.2 There needs to be a strong commitment from Members and staff to manage costs
alongside quality of services and respond to local needs. The impact on users should be
tracked to ensure that cost savings are not simply cuts without regard to outcomes.
Responsibilities of Directors
D.4.3 The Director of Corporate Services will issue and review regularly Contract Standing
Orders and the Procurement Policy, to ensure that procurement efficiencies and value
for money are a key objective across the Authority.
D.4.4 To comply with national and EU legislation on procurement, Financial Regulations,
Contract Standing Order and the Procurement Policy.
D.5 BANKING ARRANGEMENTS
Why is this important?
D.5.1 It is essential that the Authority operates cost effective and sound banking systems to
ensure its financial transactions are documented with the utmost accuracy, with the
avoidance of fraud and corruption.
Responsibilities of the Chief Finance Officer
D.5.2 To make or approve all arrangements with the Authority's bankers and to operate such
accounts as necessary.
D.5.3 To authorise the ordering all cheques and ensure proper arrangements for their safe
custody.
D.5.4 To authorise the issue of Authority procurement cards.
D.5.5 To ensure cheques drawn on the Authority's main bank accounts bear the facsimile
signature of the Chief Finance Officer.
D.5.6 To approve the necessary arrangements to safeguard the interests of the Authority
where payments are made either electronically or automatically.
D.5.7 To ensure all Authority funds are banked to the account of the Authority.
Responsibilities of Directors
D.5.8 To manage bank accounts, imprest accounts and credit cards in accordance with
guidance issued by the Chief Finance Officer, and ensure that all Authority funds are
banked to the account of the Authority.
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D.6 FINANCIAL LIMITS
Why is this important?
Financial limits need to be set in the interests of good governance and financial
management. Directors are responsible for delegating financial limits of authority and
incorporating them in their directorate scheme of financial delegation.
D.6.1 Virements - Revenue Budget
D.6.1.1 Directors are responsible for ensuring that virements are actioned in accordance with
the requirement specified in Standard Financial Procedures paragraph A.2.1.
D.6.1.2 In keeping with budget monitoring procedures, Directors shall maintain a list of officers
who are authorised to action virements together with their financial limits.
D.6.2 Virements - Capital Programme
D.6.2.1 Directors shall consult with the Chief Finance Officer on planned virements within the
Capital Programme as outlined in paragraph B.2.4.
D.6.3 Carry Forwards
D.6.3.1 The policy in respect of the carry forward of directorate revenue underspendings and
overspendings is set out in Standard Financial Procedures paragraph A.2.2.
D.6.4 Authorisation Limits to minimise budget pressures
D.6.4.1 In exceptional circumstances, the Senior Management Team may occasionally place
authorisation limits so that no expenditure can be incurred over a certain limit without
Director approval to safeguard the Authority’s budget position.
D.6.5 Ex-Gratia Payments
D.6.5.1 Directors may authorise ex-gratia payments in respect of minor items of loss or
damage to personal property and clothing of employees and customers in respect of
services delivered by their directorate.
D.6.5.2 No ex-gratia payments in excess of £2,000 shall be made without the approval of the
Chief Executive, in consultation with the Director of Corporate Services.
D.6.5.3 A complete record of ex-gratia payments made by Directors shall be maintained and
shall be available to the Chief Finance Officer on request.
D.6.6 Write Off of Debts
D.6.6.1 No debts due to the Authority shall be written off except with the consent of the Chief
Finance Officer.
D.6.6.2 The Chief Finance Officer shall be authorised to write off any debt due to the authority
subject to the following:-
A full explanation of the circumstances to the satisfaction of the Chief Finance
Officer having been provided by the appropriate Director;
For individual debts under £5,000, amounts to be authorised by relevant Director
and Chief Finance Officer unless in the view of the CFO the total debt being
written off has wider financial implications in which case a report should be written
for consideration by Policy and Programme Committee;
For debts over £5,000, amounts to be authorised by relevant Director and Chief
Finance Officer, in consultation with the Chair of Policy and Programme
Committee, unless in the view of the CFO the total debt being written off has
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wider financial implications in which case a report should be written for
consideration by Policy and Programme Committee
D.6.7 Write Off of Stocks and Stores
D.6.7.1 No deficiency, which occurs in excess of £5,000, shall be written off by a Director
without the prior approval of the Policy and Programme Committee.
D.6.7.2 Variations below this figure may be written off by the Director with the agreement of
the Chief Finance Officer.
D.6.7.3 A complete record of stocks and stores written off shall be maintained by the
appropriate Director and retained.
D.6.8 Retention of Records
Why is this important?
D.6.8.1 It is essential that the Authority maintains complete and accurate records of all its
activity to ensure a full audit trail for legal and funding purposes.
Responsibilities of the Chief Finance Officer
D.6.8.2 To maintain and issue to all staff a schedule of record retention requirements.
Responsibilities of Directors
D.6.8.3 To ensure that all records (electronic and physical) records are carefully and
systematically filed and readily recoverable for inspection by Internal and External
Audit, HM Revenue & Customs, EU auditors, etc.
D.6.8.4 To retain records in accordance with the advised minimum periods issued by the Chief
Finance Officer and to seek advice from the Chief Finance Officer in any case of
uncertainty.
D.6.8.5 Schedule for the Retention of Records:
Record
Period (plus
current year)
Published Accounts/Annual Reports
Permanently
Taxation Returns
Permanently
Pension Scheme Records
Permanently
Property Deeds of landholdings
Permanently
Loans and investment records
12 years
Bank Statements, Bank credits
7 years
Cheques
7 years
Creditors Invoices
6 years
VAT receipts
6 years
Creditor payment records
6 years
Copy Orders
3 years
Prime Salaries & Wages notifications
3 years
Copy payslips
7 years
Record of ex gratia payments
5 years
Construction contracts and drawings
Permanently
Contracts and Supporting Documents - under seal
12 years*
Contracts let in accordance with Standing Orders
6 years*
Stock/Stores Records
6 years
Stock Write Off and Debt Write Off records
5 years
Bank Paying-in books
3 years
Till Rolls & Receipt Books
3 years
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Audit Trails of IT system security related events
3 years
Application control, error and exception reports
3 years
Budget Working papers
3 years
Final Accounts working papers
3 years after the
accounts have been
signed
*(after contract ends)
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E EXTERNAL ARRANGEMENTS
E.1 PARTNERSHIPS
Why is this important?
E.1.1 Partnerships have the potential to play a key role in delivering the Authority’s
objectives. The Authority is already working in partnership with others – public
agencies, private companies, community groups and voluntary organisations. While the
Authority delivers some services directly, it has a distinct leadership role in bringing
together the contributions of the various stakeholders for the wider benefit of the
National Park.
E.1.2 It is important, however, that any partners of the Authority should subscribe to the
Authority’s vision for the National Park and have an ethos which is consistent with the
values of the Authority.
Key Controls
E.1.3 The key controls for the Authority are:
to be aware of their responsibilities under the Authority’s Financial Regulations and
Financial Procedures Manual, including record retention requirements;
to ensure that risk management processes are in place to identify and assess all
known risks;
to ensure that project appraisal processes are in place to assess the viability of a
project in terms of resources, staffing and expertise;
to agree and accept formally the roles and responsibilities of each of the partners
involved in the project or services before commencement;
to communicate regularly with other partners so that problems can be identified
and shared to achieve their successful resolution.
Responsibilities of the Chief Finance Officer
E.1.4 To ensure that any partnership arrangements are underpinned by clear and well
documented internal financial controls.
E.1.5 To advise on the key elements of funding a project or service. They include:
a scheme appraisal for financial viability in both the current and future years;
risk appraisal and management;
resourcing, including taxation issues;
administration, accounting and reporting arrangements;
audit, security and control requirements;
management of underspends and overspends and carry-forward arrangements;
recovery of overheads
exit arrangements.
E.1.6 To ensure that the accounting arrangements are satisfactory and that statutory and
other accounts and associated claims and returns in respect of grants are prepared.
E.1.7 To maintain a corporate register of partnerships.
Responsibilities of Directors
E.1.8 To maintain a register of all contracts entered into with external bodies in accordance
with procedures specified by the Chief Finance Officer.
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E.1.9 To consult with the Chief Finance Officer before entering into any understanding or
agreement with an external body.
E.1.10 To ensure that, before entering into agreements with external bodies, a risk
management appraisal has been prepared.
E.1.11 To ensure that such agreements and arrangements do not impact adversely upon the
services provided by the Authority or compromise the Authority in any way.
E.1.12 To provide appropriate information to the Chief Finance Officer to enable a note to be
entered into, or a memorandum account added to, the Authority’s Statement of
Accounts, and possible consolidation under group accounts, concerning material items.
E.2 EXTERNAL FUNDING
Why is this important?
E.2.1 External funding is potentially a very important source of income, but funding
conditions need to be carefully considered to ensure that they are compatible with the
aims and objectives of the Authority. Funds from external agencies can provide
additional resources to enable or enhance service delivery.
E.2.2 The Authority’s intention is to optimise rather than maximise external funding – i.e. to
seek external funding where it results in a substantial net benefit to the Authority
relative to the resources required to achieve that benefit.
Key Controls
E.2.3 The key controls for external funding are:
to ensure that key conditions of funding and any statutory requirements are
complied with and that the responsibilities of the accountable body are clearly
understood;
to ensure that funds are acquired only to meet the priorities approved by the full
Authority, although other organisations may bid for these funds, rather than the
Authority;
to ensure that any match-funding requirements are given due consideration prior to
entering into long-term agreements and that future revenue budgets reflect these
requirements.
to ensure that any potential ongoing commitments from projects or partnerships
are properly identified and considered at the outset.
E.2.4 Numerous external funding sources exist which may be accessed by the Authority or
local partnerships. Advice should be sought from the Chief Finance Officer.
E.2.5 The Authority may act as the Accountable Body for externally funded programmes.
The function of the Authority as Accountable Body is to take financial responsibility for
the funding programme, irrespective of the Authority’s level of involvement in the
individual projects within the programme. Included within the financial responsibility of
the Accountable Body is the requirement to repay to the grant funding Authority all
sums of grant aid advanced to any project which;
fails,
expends funding outside the terms of its grant agreement,
has inadequate records to verify its expenditure,
has inadequate records to verify its outputs,
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disposes of capital assets acquired with grant funding,
in any material respect contravenes its funding agreement.
E.2.6 Given that some projects involve considerable sums of money, the potential impact
upon the Authority is self-evident. Hence the need for these specific financial
regulations applicable to external funding.
E.3 MATCHED FUNDING
E.3.1 External funding rarely covers the entire project cost and grant aid is normally provided
on a “matched funding” basis whereby the grant funder provides an agreed percentage
of funds and the balance must be “matched” by other funding provided by the applicant.
Matched funding may be either in cash or in kind. When matched funding is provided by
the Authority, it affords the opportunity for increased service provision. However,
many projects have a lifetime of 3 to 5 years, but can be as long as 7 years.
E.3.2 Consequently, when supporting a project, directorates must consider the long-term
impact this will have on their capital and revenue budgets. There is a danger of entering
into commitments that cannot be met through Authority funds. For this reason it is a
requirement that at the inception of any project proposal involving external funding,
either capital or revenue, the Chief Finance Officer must be notified immediately.
E.3.3 Before any contractual obligations are entered into, for any externally or internally
managed project to which Authority funds are being contributed, a report must be
submitted to Policy and Programme Committee for approval of the project if there is
any match funding and/or the Authority’s contribution is in excess of £50,000 but not
more than £100,000 and the budgetary provision has not previously been approved.
Where the Authority’s contribution is in excess of £100,000, approval must be
obtained from the National Park Authority following recommendation from Policy and
Programme Committee.
E.3.4 When a report is sent to Policy and Programme Committee requesting the approval of
a project the funding for that project must have been agreed amongst partners and
written confirmation must be obtained from all external partners of their financial
commitment, signed by an appropriate officer of the organisation. The exception to this
is where European funding is involved. Since EU funding is regarded as funding of last
resort, confirmation of funding will be dependent upon all other contributions
(including those of the Authority) to be in place.
E.3.5 The Committee report must also contain a summary of internal funding with an
Appendix which provides a detailed budget of the intended project, showing the
estimated cost by each expenditure heading and the total cost of the project. The
financing of that total cost must equal the funds to be made available internally, from
external partners and from the external funding agency.
E.4 FORWARD FUNDING
E.4.1 Where the Authority makes an advance or grant to finance revenue or capital
expenditure pending receipt of the external grant, the amount of funding is limited to
the forecast value of the quarter’s claim which is being advanced. No further forward
funding will be made available until a project sponsor organisation has provided
satisfactory evidence to enable the Authority to make a grant claim to the grant funding
authority. Forward funding will only be considered where the project has had formal
approval and is supported by an appraisal.
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E.4.2 In the exceptional circumstances of programmes funded by European Union funds, this
rule is varied to allow forward funding over a longer duration. Under European Union
grant rules the final payment of grant cannot usually be made until all projects in a
programme have submitted their final audited grant claim.
E.4.3 Any external programme that requires forward funding pending the receipt of grant
income is subject to approval by the Policy and Programme Committee. The approval
will set the maximum limit for the forward funding. Directors would then have
delegated authority to approve forward funding requests for individual projects up to
that maximum limit for the programme.
E.4.4 The forward funding of voluntary and community-based organisations that seek to
implement projects for the Authority must comply with the funding agreement.
E.5 FUNDING AGREEMENTS
E.5.1 A partnership deed must be signed by the project sponsor organisation and the
Authority, for each project undertaken within any grant funding programme.
Responsibilities of the Chief Finance Officer
E.5.2 To ensure that all funding notified by external bodies is received and properly recorded
in the Authority’s accounts.
E.5.3 To ensure that the match-funding requirements are considered prior to entering into
the agreements and that future revenue budgets reflect these requirements.
E.5.4 To issue grant claims procedures to ensure that grant claims are submitted on time to
the appropriate funding body and to ensure that audit requirements are met.
Responsibilities of Directors
E.5.5 To comply with corporate guidance or protocols in respect of bidding activity for
external funds. This is designed to ensure that:
i) the quality of bids is improved, increasing the chance of success;
ii) bids are linked with partners wherever possible, thereby avoiding duplicated
or conflicting bids likely to be rejected by funders due to the lack of a
joined-up approach;
iii) management and staff are supported to navigate complex bidding processes;
iv) where possible, information on external funding is collated across the
Authority.
E.5.6 To comply fully with Financial Regulations including Financial Procedures and to ensure
that Policy and Programme Committee approves reports for externally funded projects
after full consultation with the Chief Finance Officer.
E.5.7 To ensure that all claims for funds are made by the due date in accordance with
procedures issued by the Chief Finance Officer. All Government grant claims or claims
for externally funded schemes must be examined and certified by the Chief Finance
Officer. All grant claims should be accompanied by a Grant Claim header sheet where
applicable and a detailed reconciliation to the Authority’s main financial system.
E.5.8 To ensure that the project progresses in accordance with the agreed timetable and
proposals and that all expenditure is properly incurred and recorded.
E.5.9 To forward to the Chief Finance Officer immediately any notifications from
Government Departments including consents, approvals, regulations, circulars and
letters relating to any external funding project or proposal.
