A.1 Financial management covers all financial accountabilities in relation to the running of the Authority, including the policy framework and budget.
A.2 The Authority is responsible for approving the policy framework and budget within which the Authority operates. It is also responsible for approving and monitoring compliance with the Authority’s overall framework of accountability and control. The framework is set out in its Standing Orders. The Authority is also responsible for monitoring compliance with the agreed policy and related decisions.
A.3 The Authority is responsible for approving procedures for the delegation of powers to committees and officers and recording and reporting decisions taken. These delegations and details of who has responsibility for which decisions are set out in the scheme of delegation and powers and duties of committees contained with the Authority’s Procedural Standing Orders/Committee Terms of Reference.
A.4 The Authority is ultimately responsible for ensuring that the financial management arrangements and systems of internal controls are adequate and effective, and will amongst other things:
Appoint a responsible financial officer (Treasurer).
Approve the financial control framework, including financial regulations.
Set a budget and agree a precept.
Review spending against budget, and take appropriate action where required.
Monitor financial outcomes.
Determine an affordable borrowing limit having regard to the Prudential code for Capital Finance in Local Authorities.
Approve the Statement of Accounts and publish it with an Annual Governance Statement.
Maintain an adequate and effective system of internal audit of its accounting records and systems of internal control.
Adopt a member code of conduct.
A.5 The Chief Fire Officer is responsible for the corporate and overall strategic management of the Authority as a whole. He or she must report to and provide information for the Authority and its committees. He or she is responsible for establishing a framework for management direction, style and standards and for monitoring the performance of the organisation.
A.6 The Clerk/Monitoring Officer and is responsible for promoting and maintaining high standards of member conduct and therefore provides support to the Standards Committee. The Monitoring Officer is also responsible for reporting any actual or potential breaches of the law or maladministration to the Authority, and for ensuring that procedures for recording and reporting key decisions are operating effectively.
A.7 The Monitoring Officer must ensure that Authority decisions and the reasons for them are made public. He or she must also ensure that members are aware of decisions made by the Authority, its committees and of those made by officers who have delegated responsibility.
A.8 The Monitoring Officer is responsible for advising all councillors and officers about who has authority to take a particular decision.
A.9 The Monitoring Officer is responsible for advising the Authority about whether a decision is likely to be considered contrary or not wholly in accordance with the policy framework.
A.10 The Monitoring Officer (together with the Treasurer/Director of Corporate Services) is responsible for advising the Authority about whether a decision is likely to be considered contrary or not wholly in accordance with the budget. Actions that may be ‘contrary to the budget’ include:
Initiating a new policy.
Committing expenditure in future years to above the budget level.
Incurring interdepartmental transfers above virement limits.
Causing the total expenditure financed from council tax, grants and Corporately held reserves to increase, or to increase by more than a specified amount.
A.11 The Treasurer/Director of Corporate Services has statutory duties in relation to the financial administration and stewardship of the Authority. This statutory responsibility cannot be overridden. The statutory duties arise from:
Section 73 and 105(1) of the Local Government Act 1985
The Local Government Finance Act 1988
The Local Government and Housing Act 1989
The Accounts and Audit Regulations 2015
A.12 The Treasurer/Director of Corporate Services has a statutory responsibility to:
Ensure the proper administration of the Authority’s financial affairs.
Nominate a properly qualified member of staff to deputise should he or she be unable to perform the duties.
Ensure that adequate systems and procedures exist to account for all income due and expenditure made and that controls operate to protect the Authorities assets form loss, waste, fraud or other impropriety.
Report to the Authority and/or external auditor if it appears that the Authorities expenditure is likely to exceed available resources.
Report to the Authority and/or external auditor any decisions or actions made or taken (or about to be made or taken) which involves incurring unlawful expenditure.
Produce the Statement of Accounts in accordance with appropriate codes of practice and reporting standards.
Report to the Authority on the robustness of the estimates produced for the purpose of budget calculations and the adequacy of reserves.
Report to the Authority where reserves are likely to be inadequate, outlining the reasons and the actions to be taken.
Ensure that all matters required to be taken into account in respect of the Prudential Code for Capital Finance in Local Authorities are reported to the Authority for consideration.
Establish procedures to monitor and report performance against all prudential indicators.
A.13 The Treasurer/Director of Corporate Services has delegated responsibility, under the Accounts and Audit Regulations, to maintain a continuous adequate and effective internal audit of the Authorities accounting, financial and other processes, including the approval of the strategic and annual audit plans.
A.14 The Treasurer/Director of Corporate Services is the Authorities professional adviser on financial matters, which involves a responsibility to:
Provide financial advice to the Authority on all aspects of its activity, including the budget, strategic planning and policy making process.
Advise the Authority on financial propriety.
Ensure that accurate financial is provided to the Authority.
Prepare statutory and other accounts.
Make all banking arrangement.
Provide a treasury management function.
Advise on security of assets including risk management and insurance.
Determine issue and receive the precept.
A15 Officers on the SMT are responsible for ensuring that Authority members are advised of the financial implications of all proposals and that the financial implications have been agreed by the Treasurer/Director of Corporate Services.
A16 It is the responsibility of SMT Officers to consult with the Treasurer/Director of Corporate Services and seek approval on any matter liable to affect the Authority’s finances materially, before any commitments are incurred.
A.17 The Authority is responsible for agreeing procedures for virement of expenditure between budget headings.
A.18 SMT Officers are responsible for agreeing in-year virements within delegated limits, in consultation with the Treasurer/Director of Corporate Services where required. They must notify the Treasurer/Director of Corporate Services of all virements.
A.19 The Authority is responsible for agreeing procedures for carrying forward under and overspendings on budget headings.
A.20 The Treasurer/Director of Corporate Services is responsible for selecting accounting policies and ensuring that they are applied consistently.
A.21 The Treasurer/Director of Corporate Services is responsible for determining the accounting procedures and records for the Authority.
A.22 The Treasurer/Director of Corporate Services is responsible for ensuring that the annual statement of accounts is prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom (the Code) (CIPFA/LASAAC). The Authority is responsible for approving the annual statement of accounts.
B.1 The Authority is responsible for agreeing the policy framework and budget. In terms of financial planning, the key elements are:
The corporate plan/IRMP (Integrated Risk Management Plan).
The budget.
The capital programme.
B.2 The Authority is responsible for approving the policy framework and budget. The policy framework comprises the following plans and strategies:
Revenue budget (incorporating the Medium term financial strategy).
Capital programme.
Treasury management policy statement and strategy.
Integrated risk management plan (IRMP).
B.3 The Authority is also responsible for approving procedures for agreeing variations to approved budgets, plans and strategies forming the policy framework and for determining the circumstances in which a decision will be deemed to be contrary to the budget or policy framework. Decisions should be referred to the Authority by the Monitoring Officer.
B.4 The Authority is responsible for setting the level at which officers may reallocate budget funds from one service to another. SMT Officers are responsible for taking in-year decisions on resources and priorities in order to deliver the budget policy framework within the financial limits set by the Authority.
B.5 The Chief Fire Officer is responsible for proposing the corporate plan/IRMP to the Authority for approval.
B.7 The general format of the budget will be approved by the Authority on the advice of the Treasurer/Director of Corporate Services. The draft budget should include allocation to different services and projects, proposed precept and business rates charges and contingency funds.
B.8 The Treasurer/Director of Corporate Services is responsible for ensuring that a revenue budget is prepared on an annual basis and a three-year medium term financial strategy is incorporated into this for consideration by the Authority. The Authority may amend the budget before approving it.
B.9 The Treasurer/Director of Corporate Services is responsible for issuing guidance on the general content of the budget in consultation with the Chief Fire Officer as soon as possible following approval by the Authority.
B.10 It is the responsibility of SMT Officers to ensure that budget estimates reflecting agreed service plans are submitted and that these estimates are prepared in line with guidance issued.
B.11 The Treasurer/Director of Corporate Services is responsible for providing appropriate financial information to enable budgets to be monitored effectively. He or she must monitor and control expenditure against budget allocations and report to the Authority on the overall position on a regular basis.
B.12 It is the responsibility of SMT Officers to control income and expenditure within their area and to monitor performance, taking account of financial information provided by the Treasurer/Director of Corporate Services. They should report on variances within their own areas. They should also take any action necessary to avoid exceeding their budget allocation and alert the Treasurer/Director of Corporate Services to any problems.
B.13 The Treasurer/Director of Corporate Services is responsible for regularly reporting to the Authority on expenditure against budget allocations and in the event that expenditure cannot be contained within the overall budget allocation.
B.14 The Treasurer/Director of Corporate Services is responsible for developing and maintaining a resource allocation process that ensures due consideration of the Authority’s policy framework.
B.15 The Treasurer/Director of Corporate Services is responsible for ensuring that a capital programme is prepared on an annual basis for consideration by the Authority.
B.16 The Treasurer/Director of Corporate Services must assess the affordability of the proposed capital programme and advise the authority in setting an affordable borrowing limit in accordance with the Prudential Code for Capital Finance in Local Authorities.
B.17 The Treasurer/Director of Corporate Services is responsible for regularly reporting to the Authority on expenditure compare to the approved capital programme.
B.18 It is the responsibility of the Treasurer/Director of Corporate Services to advise the Authority on prudent levels of reserves for the Authority.
C.1 It is essential that robust, integrated systems are developed and maintained for identifying and evaluating all significant operational risks to the Authority. This should include the proactive participation of all those associated with planning and delivering services.
C.2 The Authority is responsible for approving the Authority’s risk management policy statement and strategy and for reviewing the effectiveness of risk management.
C.3 The Treasurer/Director of Corporate Services is responsible for preparing the Authority’s risk management policy statement, for promoting it throughout the Authority.
C.4 SMT members are responsible for reviewing risks, developing appropriate risk management controls in their own areas of responsibility.
C.5 The Treasurer/Director of Corporate Services is responsible for maintaining a corporate risk register, and reporting this to the Audit Committee at least annually.
C.6 The Treasurer/Director of Corporate Services is responsible for advising the Authority on insurance matters and is responsible for ensuring that proper insurance cover exists and that adequate resources are available to fund uninsured risks.
C.7 Internal control refers to the systems of control devised by management to help ensure 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.
C.8 The Treasurer/Director of Corporate Services is responsible for advising on effective systems of internal control. These arrangements need to ensure compliance with all applicable statutes and regulations, and other relevant statements of best practice. They should ensure that public funds are properly safeguarded and used economically, efficiently, and in accordance with the statutory and other authorities that govern their use.
C.9 It is the responsibility of SMT Officers to establish sound arrangements for planning, appraising, authorising and controlling their operations in order to achieve continuous improvement, economy, efficiency and effectiveness and for achieving their financial performance targets.
C.10 The Treasurer/Director of Corporate Services and Chief Fire Officer must ensure that the system of internal control is reviewed at least annually and that an Annual Governance Statement is submitted to the Authority for approval and inclusion in the Statement of Accounts.
C.11 The Accounts and Audit Regulations 2015 issued by the Secretary of State require every local authority to maintain an adequate and effective internal audit.
C.12 Public Sector Audit Appointments Ltd is responsible for appointing external auditors to each local Authority. The basic duties of the external auditor are governed by the Local Audit and Accountability Act 2014.
C.13 The Authority may, from time to time, be subject to audit, inspection or investigation by external bodies such as HM Revenue and Customs (HMRC), who have statutory rights of access.
C.14 The Clerk/Monitoring Officer (in consultation with the Treasurer/Director of Corporate Services) is responsible for the development and maintenance of an anti-fraud and whistle-blowing policy.
C.15 SMT Officers must ensure that disposals and write-offs of redundant/surplus assets, stock and inventory are actioned in accordance with financial procedures.
C.16 SMT Officers should ensure that records and assets are properly maintained and securely held. They should also ensure that contingency plans for the security of assets and continuity of service in the event of disaster or system failure are in place.
C.17 The Authority has adopted CIPFA’s Code of Practice for Treasury Management in Local Authorities.
C.18 The Authority is responsible for approving the treasury management policy statement setting out the matters detailed in paragraph 15 of CIPFA’s Code of Practice for Treasury Management in Local Authorities. The Treasurer/Director of Corporate Services has delegated responsibility for implementing and monitoring the statement.
C.19 All money in the hands of the Authority is controlled by the officer designated for the purposes of section 73 and 105(1) of the Local Government Act 1985, referred to in the code as the Director of Corporate Services.
C.20 The Treasurer/Director of Corporate Services is responsible for reporting to the Authority a proposed treasury management strategy for the coming financial year at or before the start of each financial year.
C.21 All executive decisions on borrowing, investment or financing shall be delegated to the Treasurer/Director of Corporate Services, who is required to act in accordance with CIPFA’s Code of Practice for Treasury Management in Local Authorities.
C.22 The Treasurer/Director of Corporate Services is responsible for reporting to the Authority on the activities of the treasury management operation; one such report will comprise an annual report on treasury management for presentation by 30 June of the succeeding financial year.
C.23 The Authority is responsible for determining how officer support for executive and non-executive roles within the Authority will be organised.
C.24 The Chief Fire Officer is responsible for providing overall management to staff. He or she is also responsible for ensuring that there is proper use of the evaluation or other agreed systems for determining the remuneration of a job.
C.25 SMT Officers are responsible for controlling total staff numbers by:
Advising the Authority on the budget necessary in any given year to cover estimated staffing levels.
Adjusting the staffing to a level that can be funded within approved budget provision, varying the provision as necessary within that constraint in order to meet changing operational needs.
The proper use of appointment procedures.
D.1 Sound systems and procedures are essential to an effective framework of accountability and control.
D.2 The Treasurer/Director of Corporate Services is responsible for the operation of the Authority’s accounting systems, the form of accounts and the supporting financial records. Any changes made by SMT Officers to the existing financial systems or the establishment of new systems must be approved by the Treasurer/Director of Corporate Services. However, SMT Officers are responsible for the proper operation of financial processes in their own departments.
D.3 Any changes to agreed procedures by SMT Officers to meet their own specific service needs should be agreed with the Treasurer/Director of Corporate Services.
D.4 SMT Officers should ensure that their staff receive relevant financial training that has been approved by the Treasurer/Director of Corporate Services.
D.5 SMT Officers must ensure that, where appropriate, computer and other systems are registered in accordance with data protection legislation. SMT Officers must ensure that staff are aware of their responsibilities under freedom of information legislation.
D.6 It is the responsibility of SMT Officers to ensure that a proper scheme of delegation has been established within their area and is operating effectively. The scheme of delegation should identify staff authorised to act on the SMT officer’s behalf in respect of payments, income collection and placing orders, together with the limits of their Authority. The Authority is responsible for approving procedures for writing off debts as part of the overall control framework of accountability and control.
D.7 The Director of People and Development is responsible for all payments of salaries and wages to all staff, including payments for overtime, and for payment of allowances to members. He or she is also responsible for the payment of pensions to retired firefighters.
D.8 The Treasurer/Director of Corporate Services is responsible for advising SMT Officers, in the light of guidance issued by appropriate bodies and relevant legislation as it applies, on all taxation issues that affect the Authority.
D.9 The Treasurer/Director of Corporate Services is responsible for maintaining the Authority’s tax records, making all tax payments, receiving tax credits and submitting tax returns by their due date as appropriate.
D.10 It is the responsibility of the Treasurer/Director of Corporate Services to advise on the establishment and operation of trading accounts and business units.
E.1 The Authority provides a distinctive leadership role for the community and brings together the contributions of the various stakeholders. It must also act to achieve the promotion or improvement of the economic, social or environmental well being of its area.
E.2 The Authority is responsible for approving delegations, including a Partnership Protocol for partnerships. The Authority is the focus for forming partnerships with other local public, private, voluntary and community sector organisations to address local needs.
E.3 The Authority can delegate functions – including those relating to partnerships – to officers. These are set out in the Authority scheme of delegation. Where functions are delegated, the responsible officer remains accountable for them to the Authority.
E.4 The Monitoring Officer and Treasurer/Director of Corporate Services are responsible for promoting and maintaining the same high standards of conduct with regard to financial administration in partnerships that apply throughout the Authority.
E.5 The Treasurer/Director of Corporate Services must ensure that the accounting arrangements to be adopted relating to partnerships and joint ventures are satisfactory. He or she must also consider the overall corporate governance arrangements and legal issues when arranging contracts with external bodies. He or she must ensure that the risks have been fully appraised before agreements are entered into with external bodies.
E.6 SMT Officers are responsible for ensuring that risks relating to significant partnership working has been properly assessed and that appropriate approvals are obtained before any negotiations are concluded in relation to work with external bodies.
E.7 SMT Officers are responsible for evaluating the contribution of partnership working to the achievement of the Authority objectives.
E.8 The Treasurer/Director of Corporate Services is responsible for ensuring that all funding notified by external bodies is received and properly recorded in the Authority’s accounts.
E.9 SMT Officers are responsible for approving the contractual arrangements for any work for third parties or external bodies, subject to any advice provided by the Treasurer/Director of Corporate Services following advice.
1.01 All staff and members have a duty to abide by the highest standards of probity in dealing with financial issues. This is facilitated by ensuring everyone is clear about the standards to which they are working and the controls that are in place to ensure that these standards are met.
1.02 The key controls and control objectives for financial management standards are:
a) Their promotion throughout the Authority
b) A monitoring system to review compliance with financial standards, and regular comparisons of performance indicators and benchmark standards that are reported to the Authority.
1.03 To ensure the proper administration of the financial affairs of the Authority.
1.04 To act as the Authority’s professional advisor on financial matters, including the budget, financial planning, strategy and policy making.
1.05 To ensure that all reports to the Authority have full and clear financial implications identified.
1.06 To set the financial management standards and to monitor compliance with them.
1.07 To ensure proper professional practices are adhered to and to act as head of profession in relation to the standards, performance and development of finance staff throughout the Authority.
1.08 To advise on the key strategic controls necessary to secure sound financial management.
1.09 To ensure that financial information is available to enable accurate and timely monitoring and reporting of comparisons of national and local financial performance indicators.
1.10 To promote the financial management standards set by the Treasurer/Director of Corporate Services in their departments and to monitor adherence to the standards and practices, liaising as necessary with the Treasurer/Director of Corporate Services.
1.11 To promote sound financial practices in relation to the standards, performance and development of staff in their departments.
1.12 The scheme of virement is intended to enable the SMT Officers and their staff to manage budgets with a degree of flexibility within the overall policy framework determined by the Authority, and therefore to optimise the use of resources.
1.13 Key controls for the scheme of virement are:
a) It is administered by the Treasurer/Director of Corporate Services within guidelines set by the Authority. Any variation from this scheme requires the approval of the Authority.
b) The overall budget is approved by the Authority. SMT Officers and budget managers are therefore authorised to incur expenditure in accordance with the estimates that make up the budget. The rules below cover virement; that is, switching resources between approved estimates or heads of expenditure. For the purposes of this scheme, a budget head is considered to be a line in the approved estimates report.
c) Virement does not create additional overall budget liability. SMT Officers are expected to exercise their discretion in managing their budgets responsibly and prudently. For example, they should aim to avoid supporting recurring expenditure from one-off sources of savings or additional income, or creating future commitments, including full-year effects of decisions made part way through a year, for which they have not identified future resources. SMT Officers must plan to fund such commitments from within their own budgets.
1.14 To issue instructions and guidelines to all budget managers in order that the scheme of virement can operate within the policies set by the Authority.
1.15 To issue documentation for completion by budget holders for the satisfactory management control of the virement process.
1.16 To prepare jointly with the SMT Officer a report to the Authority where virements in excess of £150,000 are proposed.
1.17 Virements can be exercised within the limits shown below, subject to the provisions in paragraphs 1.18 to 1.20 below:
Limit | Department head | Director | Chief fire officer | Treasurer/Director of corporate services | Authority |
Up to £50,000 | Y | ||||
£50,000 to £100,000 | Y | Y | |||
£100,000 to £150,000 | Y | Y | Y | Y | |
Over £150,000 | Y | Y | Y | Y | Y |
1.18 The prior approval of the Authority is required for any virement, of whatever amount, where it is proposed to change Authority policy.
1.19 Virement that is likely to impact on the level of service activity of another SMT Officer should be implemented only after agreement with the relevant SMT Officer.
1.20 No virement relating to a specific financial year should be made after 31 March in that year.
1.21 Where an approved budget is a lump-sum budget or contingency intended for allocation during the year, its allocation will not be treated as a virement, provided that the amount is used in accordance with the purposes for which it has been established.
1.22 The rules below cover arrangements for the transfer of resources between accounting years, i.e. a carry-forward.
1.23 These are administered by the Treasurer/Director of Corporate Services within guidelines set by the Authority. Any variation from the scheme requires the approval of the Authority.
1.24 Appropriate accounting procedures are in operation to ensure that carried-forward totals are correct.
1.25 To approve carry forward requests of up to £100,000 in respect of specific items of expenditure. Such sums to be included in specific earmarked reserves and included in the Statement of Accounts.
1.26 To administer the scheme of carry-forward within the guidelines approved by the Authority.
1.27 To report all overspendings and under spendings on service estimates carried forward to the executive and to the Authority.
1.28 Any overspending on service estimates in total on budgets must be carried forward to the following year, and will constitute the first call on service estimates in the following year. The Treasurer/Director of Corporate Services will report the extent of overspendings carried forward to the Authority.
1.29 Net under spendings on service estimates under the control of the SMT Officer may be carried forward, subject to:
a) 50% of the underspend being transferred to general reserves.
b) A maximum limit of £25,000, any carry forward in excess of this requires approval of Treasurer/Director of Corporate Services.
c) An annual review of the reasonableness of individual balances created this way.
1.30 The Treasurer/Director of Corporate Services is responsible for the preparation of the Authority’s statement of accounts, in accordance with proper practices as set out in the format required by the Code of Practice on Local Authority Accounting in the United Kingdom (CIPFA/LASAAC), for each financial year ending 31 March.
1.31 The key controls for accounting policies are:
a) Systems of internal control are in place that ensure that financial transactions are lawful.
b) Suitable accounting policies are selected and applied consistently.
c) Proper accounting records are maintained.
d) Financial statements are prepared which present fairly the financial position of the Authority and its expenditure and income.
1.32 To select suitable accounting policies and to ensure that they are applied consistently. The accounting policies are set out in the statement of accounts, which is prepared at 31 March each year, and covers such items as:
a) Separate accounts for capital and revenue transactions.
b) The basis on which debtors and creditors at year end are included in the accounts.
c) Details on substantial provisions and reserves.
d) Non-current assets.
e) Depreciation.
f) Capital charges.
g) Work in progress.
h) Stocks and stores.
i) Deferred charges.
j) Government grants.
k) Leasing.
l) Pensions.
1.33 To adhere to the accounting policies and guidelines approved by the Treasurer/Director of Corporate Services.
1.34 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. 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 quality arrangements have been made for securing economy, efficiency and effectiveness in the use of the Authority’s resources.
1.35 The key controls for accounting records and returns are:
a) All members, finance staff and budget managers operate within the required accounting standards and timetables.
b) All the Authority’s transactions, material commitments and contracts and other essential accounting information are recorded completely, accurately and on a timely basis.
c) Procedures are in place to enable accounting records to be reconstituted in the event of systems failure.
d) Reconciliation procedures are carried out to ensure transactions are correctly recorded.
e) Prime documents are retained in accordance with legislative and other requirements.
1.36 To determine the accounting procedures and records for the Authority. Where these are maintained outside the finance department, the Treasurer/Director of Corporate Services should consult the SMT Officer concerned.
1.37 To arrange for the compilation of all accounts and accounting records under his or her direction, including statistical and government returns.
1.38 To comply, as far as practicable, with the following principles when allocating accounting duties:
a) 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.
b) Employees with the duty of examining or checking the accounts of cash transactions must not themselves be engaged in these transactions.
c) Where such arrangements are not practical alternative controls must be agreed with the Treasurer/Director of Corporate Services.
1.39 To make proper arrangements for the audit of the Authority’s accounts in accordance with the Accounts and Audit Regulations 2015.
1.40 To ensure that all claims for funds including grants are made by the due date.
1.41 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 Authority to approve the statement of accounts in line with statutory deadlines.
1.42 To administer the Authority’s arrangements for under- and overspendings to be carried forward to the following financial year.
1.43 To ensure the proper retention of financial documents in accordance with all legal requirements and as set out in the Authority’s document retention schedule.
1.44 To consult and obtain the approval of the Treasurer/Director of Corporate Services before making any changes to accounting records and procedures.
1.45 To comply with the principles outlined in paragraph 1.38 above when allocating accounting duties.
1.46 To maintain adequate records to provide a management trail leading from the source of income/expenditure through to the accounting statements.
1.47 To supply information required to enable the statement of accounts to be completed in accordance with guidelines issued by the Treasurer/Director of Corporate Services.
1.48 To ensure that all claims for funds, including grant funds, are made by the due date.
1.49 The Authority has a statutory responsibility to prepare its own accounts to present fairly its operations during the year. The Authority is responsible for approving the statutory annual statement of accounts.
1.50 The key controls for the annual statement of accounts are:
a) The Authority is required to make arrangements for the proper administration of its financial affairs and to secure that one of its officers has the responsibility for the administration of these affairs. In this Authority, that officer is the Treasurer/Director of Corporate Services.
b) 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 (CIPFA/LASAAC).
1.51 To select suitable accounting policies and to apply them consistently.
1.52 To make judgements and estimates that are reasonable and prudent.
1.53 To comply with the Code, financial reporting standards and Accounts and Audit Regulations.
1.54 To sign and date the statement of accounts, stating that it presents fairly the financial position of the Authority at the accounting date and its income and expenditure for the year ended 31 March 20xx.
1.55 To draw up the timetable for final accounts preparation and to advise staff and external auditors accordingly.
1.56 To liaise with external auditors during the audit of accounts.
1.57 To comply with accounting guidance provided by the Treasurer/ Director of Corporate Services and to supply the Treasurer/Director of Corporate Services with information when required.
2.01 The Authority has a statutory responsibility to publish various performance plans such as the risk management plans. The purpose of performance plans is to explain overall priorities and objectives, current performance, and proposals for further improvement.
2.02 The key controls for performance plans are:
a) To ensure that all relevant plans are produced and that they are consistent.
b) To produce plans in accordance with statutory requirements to meet the timetables set.
c) To ensure that all performance information is accurate, complete and up to date.
d) To provide improvement targets which are meaningful, realistic and challenging.
2.03 To advise and supply the financial information that needs to be included in performance plans in accordance with statutory requirements and agreed timetables.
2.04 To contribute to the development of corporate and service targets and objectives and performance information.
2.05 To ensure that systems are in place to measure information for use as performance indicators. activity and collect accurate.
2.06 To ensure that performance information is monitored sufficiently frequently to allow corrective action to be taken if targets are not likely to be met.
2.07 To contribute to the development of performance plans in line with statutory requirements.
2.08 To contribute to the development of corporate and service targets and objectives and performance information.
2.09 The format of the budget determines the level of detail to which financial control and management will be exercised. The format shapes how the rules around virement operate, the operation of cash limits and sets the level at which funds may be reallocated within budgets.
2.10 The key controls for the budget format are:
a) The format complies with all legal requirements.
b) The format complies with CIPFA’s Service Reporting Code of Practice (SeRCOP).
c) The format reflects the accountabilities of service delivery.
2.11 To advise the Authority on the format of the budget that is approved.
2.12 To comply with accounting guidance provided by the Treasurer/Director of Corporate Services.
2.13 Budget management ensures that once the budget has been approved by the Authority, 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 targets during the financial year. It also provides the mechanism that calls to account managers responsible for defined elements of the budget.
2.14 By continuously identifying and explaining variances against budgetary targets, the Authority can identify changes in trends and resource requirements at the earliest opportunity. The Authority itself operates within an annual cash limit, approved when setting the overall budget. To ensure that the Authority in total does not overspend, each service is required to manage its own expenditure within the cash-limited budget allocated to it.
2.15 For the purposes of budgetary control by managers, a budget will normally be the planned income and expenditure for a service area or cost centre. However, budgetary control may take place at a more detailed level if this is required by the SMT Officer’s scheme of delegation.
2.16 The key controls for managing and controlling the revenue budget are:
a) Budget managers should be responsible only for income and expenditure that they can influence.
b) There is a nominated budget manager for each cost centre heading.
c) Budget managers accept accountability for their budgets and the level of service to be delivered and understand their financial responsibilities.
d) Budget managers follow an approved certification process for all expenditure.
e) Income and expenditure are properly recorded and accounted for.
f) Performance levels/levels of service are monitored in conjunction with the budget and necessary action is taken to align service outputs and budget, e.g. by budgetary virement.
2.17 To establish an appropriate framework of budgetary management and control that ensures that:
a) Budget management is exercised within annual cash limits unless the Authority agrees otherwise.
b) Each SMT Officer has available timely information on receipts and payments on each budget which is sufficiently detailed to enable managers to fulfil their budgetary responsibilities.
c) Expenditure is committed only against an approved budget head.
d) All officers responsible for committing expenditure comply with relevant guidance, Contract Standing Orders and the Financial Regulations.
e) Each cost centre has a single named manager, determined by the relevant SMT Officer. As a general principle, budget responsibility should be aligned as closely as possible to the decision-making processes that commits expenditure.
f) Significant variances from approved budgets are investigated and reported by budget managers regularly.
2.18 To administer the Authority’s scheme of virement.
2.19 To submit reports to the Authority, in consultation with the relevant SMT Officer, where a SMT Officer is unable to balance expenditure and resources within existing approved budgets under his or her control.
2.20 To prepare and submit reports on the Authority’s projected income and expenditure compared with the budget on a regular basis.
2.21 To maintain budgetary control within their departments, in adherence to the principles in 2.17, and to ensure that all income and expenditure are properly recorded and accounted for.
2.22 To ensure that an accountable budget manager is identified for each item of income and expenditure under the control of the SMT Officer (grouped together in a series of cost centres). As a general principle, budget responsibility should be aligned as closely as possible to the decision-making that commits expenditure.
2.23 To ensure that spending remains within the Service’s overall cash limit, and that individual budget heads are not overspent, by monitoring the budget and taking appropriate corrective action where significant variations from the approved budget are forecast.
2.24 To ensure that a monitoring process is in place to review performance levels/levels of service in conjunction with the budget and is operating effectively.
2.25 To prepare and submit to the Authority reports on projected expenditure compared with its budget, in consultation with the Treasurer/Director of Corporate Services.
2.26 To ensure prior approval by the Authority for new proposals* of whatever amount, that:
a) Create financial commitments in future years.
b) Change existing policies, initiate new policies or cease existing policies.
c) Materially extend or reduce the Authority’s services.
*A report on new proposals should explain the full financial implications, following consultation with the Treasurer/Director of Corporate Services. Unless the Authority has agreed otherwise, SMT Officers must plan to contain the financial implications of such proposals within their cash limit.
2.27 To ensure compliance with the scheme of virement.
2.28 To agree with the relevant SMT Officer where it appears that a budget proposal, including a virement proposal may impact materially on another service area or SMT Officer’s level of service activity.
2.29 The Authority is a complex organisation responsible for delivering a wide variety of services. It needs to plan effectively and to develop systems to enable scarce resources to be allocated in accordance with carefully weighed priorities. The budget is the financial expression of the Authority’s plans and policies.
2.30 The revenue budget must be constructed so as to ensure that resource allocation properly reflects the service plans and priorities of the Authority. Budgets (spending plans) are needed so that the Authority can plan, authorise, monitor and control the way money is allocated and spent. It is illegal for an Authority to budget for a deficit.
2.31 Medium-term planning (the Authority has adopted a five-year planning system) involves a planning cycle in which managers develop their own plans. As each year passes, another future year will be added to the medium-term plan. This ensures that the Authority is always preparing for events in advance.
2.32 The key controls for budgets and medium-term planning are:
a) Specific budget approval for all expenditure.
b) Budget managers are consulted in the preparation of the budgets for which they will be held responsible and accept accountability within delegations set by the Authority for their budgets and the level of service to be delivered.
c) A monitoring process is in place to review regularly the effectiveness and operation of budget preparation and to ensure that any corrective action is taken.
2.33 To prepare and submit reports on budget prospects for the executive, including resource constraints set by the Government. Reports should take account of medium-term prospects, where appropriate.
2.34 To determine the detailed form of revenue estimates and the methods for their preparation, consistent with the budget approved by the Authority, and after consultation with SMT Officers.
2.35 To prepare and submit reports to the Authority on the aggregate spending plans of departments and on the resources available to fund them, identifying, where appropriate, the implications for the level of council tax to be levied.
2.36 To advise on the medium-term implications of spending decisions.
2.37 To encourage the best use of resources and value for money by working with SMT Officers to identify opportunities to improve economy, efficiency and effectiveness, and by encouraging good practice in conducting financial appraisals of development or savings options, and in developing financial aspects of service planning.
2.38 To advise the Authority on proposals in accordance with his or her responsibilities under section 73 of the Local Government Act 1985.
2.39 To prepare estimates of income and expenditure, in consultation with the Treasurer/Director of Corporate Services, to be submitted to the Authority.
2.40 To prepare budgets that are consistent with any relevant cash limits, with the Authority’s annual budget cycle and with guidelines issued by the Authority. The format should be prescribed by the Treasurer/Director of Corporate Services in accordance with the Authority’s general directions.
2.41 To integrate financial and budget plans into service planning, so that budget plans can be supported by financial and non-financial performance measures.
2.42 In consultation with the Treasurer/Director of Corporate Services and in accordance with the laid-down guidance and timetable, to prepare detailed draft revenue and capital budgets for consideration by the appropriate committee.
2.43 When drawing up draft budget requirements, to have regard to:
a) Spending patterns and pressures revealed through the budget monitoring process.
b) Legal requirements.
c) Policy requirements as defined by the Authority in the approved policy framework. d) Initiatives already under way.
2.44 A mismatch often exists between available resources and required resources. A common scenario is that available resources are not adequate to fulfil need/desire. It is therefore imperative that needs/desires are carefully prioritised and that resources are fairly allocated, in order to fulfil all legal responsibilities. Resources may include staff, money, equipment, goods and materials.
2.45 The key controls for resource allocation are:
a) Resources are acquired in accordance with the law and using an approved authorisation process.
b) Resources are used only for the purpose intended, to achieve the approved policies and objectives, and are properly accounted for.
c) Resources are securely held for use when required.
d) Resources are used with the minimum level of waste, inefficiency or loss for other reasons.
2.46 To advise on methods available for the funding of resources, such as grants from central government and borrowing requirements.
2.47 To assist in the allocation of resources to budget managers.
2.48 To work within budget limits and to utilise resources allocated, and further allocate resources, in the most efficient, effective and economic way.
2.49 To identify opportunities to minimise or eliminate resource requirements or consumption without having a detrimental effect on service delivery.
2.50 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.
2.51 The Government places strict controls on the financing capacity of the Authority. This means that capital expenditure should form part of an investment strategy and should be carefully prioritised in order to maximise the benefit of scarce resources.
2.52 The key controls for capital programmes are:
a) Specific approval by the Authority for the programme of capital expenditure.
b) Expenditure on capital schemes is subject to the approval of the Treasurer/Director of Corporate Services.
c) A capital scheme appraisal, including links to Authority objectives, associated risks, cost estimates including associated revenue expenditure, is prepared for each capital project prior to inclusion in the programme, this requires the approval of the relevant Director.
d) Approval by the Authority where capital schemes are to be financed from the revenue budget.
e) Proposals for improvements and alterations to buildings must be approved by the appropriate SMT Officer.
f) Schedules for individual schemes within the overall capital programme approved by the Authority must be submitted to the Executive Board for approval, or under other arrangements approved by the Authority.
g) The development and implementation of asset management plans.
h) Accountability for each proposal is accepted by a named manager.
i) Monitoring of progress in conjunction with expenditure and comparison with approved budget.
2.53 To prepare capital estimates jointly with SMT Officers and to report them to the Authority for approval. The Treasurer/Director of Corporate Services will make recommendations on the capital estimates and on any associated financing requirements to the Authority. Authority approval is required where a SMT Officer proposes to bid for or exercise additional borrowing approval not anticipated in the capital programme. This is because the extra borrowing may create future commitments to financing costs.
2.54 To prepare and submit reports to the executive on the projected income, expenditure and resources compared with the approved estimates.
2.55 To issue guidance concerning capital schemes and controls, for example, on project appraisal techniques. The definition of ‘capital’ will be determined by the Treasurer/Director of Corporate Services, having regard to Government regulations and accounting requirements.
2.56 To provide advice to allow responsible officers to obtain authorisation from the Authority for individual schemes where the estimated expenditure exceeds the capital programme provision by more than the agreed criteria set out in section 2.63.
2.57 To report progress on capital contracts valued in excess of £100,000 to Resources Committee (this only relates to the capital element of any contract not any on-going revenue costs associated with-it, such as ICT licenses and support).
2.58 To comply with guidance concerning capital schemes and controls issued by the Treasurer/Director of Corporate Services.
2.59 To ensure that, where appropriate, all capital proposals have undergone a project appraisal in accordance with guidance issued by the Treasurer/Director of Corporate Services.
2.60 To prepare a quarterly return of progress to date and estimated final costs of schemes in the approved capital programme for submission to the Treasurer/Director of Corporate Services and relevant Director.
2.61 To ensure that adequate records are maintained for all capital contracts.
2.62 To proceed with projects only when there is adequate provision in the capital programme and with the agreement of the Treasurer/Director of Corporate Services, where required.
2.63 Where variations in estimated/contract costs occur the following shall apply:
Cumulative variance | Action |
Less than £10,000 or 5%, whichever is the greater. | Retrospective notification to Treasurer/Director of Corporate Services and relevant Director. No requirement to report to the Authority. (Where costs cannot be contained within overall capital programme or through an additional revenue contribution to the capital programme prior approval of the Authority is required). |
Between £10,000 and £25,000 or 5% and 10%, whichever is the greater. | Report to Treasurer/Director of Corporate Services and relevant Director to seek approval, before any cost increases incurred. (Where costs cannot be contained within overall capital programme or through an additional revenue contribution to the capital programme prior approval of the Authority is required). |
Between £25,000 and £50,000 or 10% and 15%, whichever is the greater. | Report to the Executive Board to seek approval, before any cost increases incurred. (Where costs cannot be contained within overall capital programme or through an additional revenue contribution to the capital programme prior approval of the Authority is required). |
Over £50,000 or 15, whichever is the greater. | Approval required from the Authority before any cost increases incurred, other than in exceptional circumstances when the delay incurred would, in the option of the CFO and Treasurer/Director of Corporate Services, be impractical in which case this must be reported retrospectively to the Authority. |
(Note, the approval by either Executive Board or the Authority means that all variations to date are incorporated into the revised contract sum. For the purpose of monitoring/reporting of future variations the cumulative value of variations begins again at zero).
2.64 To ensure that credit arrangements, such as leasing agreements, are not entered into without the prior approval of the Treasurer/Director of Corporate Services and, if applicable, approval of the scheme through the capital programme.
2.65 The Authority must decide the level of general reserves it wishes to maintain before it can decide the level of council tax. Reserves are maintained as a matter of prudence. They enable the Authority to provide for unexpected events and thereby protect it from overspending, should such events occur. Reserves for specific purposes may also be maintained, such as the purchase or renewal of capital items.
2.66 To maintain reserves in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom (CIPFA/LASAAC) and agreed accounting policies.
2.67 For each reserve established, the purpose, usage and basis of transactions should be clearly identified.
2.68 Authorisation and expenditure from reserves by the appropriate SMT Officer in consultation with the Treasurer/Director of Corporate Services.
2.69 To advise the Authority on prudent levels of reserves for the Authority, and to take account of the advice of the external auditor in this matter.
2.70 To ensure that resources are used only for the purposes for which they were intended.
3.01 All organisations, whether private or public sector, face risks to people, property and continued operations. Risk is the chance or possibility of loss, damage, injury or failure to achieve objectives caused by an unwanted or uncertain action or event. Risk management is the planned and systematic approach to the identification, evaluation and control of risk. Its objectives are to secure the assets of the organisation and to ensure the continued financial and organisational well being of the organisation. In essence it is, therefore, an integral part of good business practice. Risk management is concerned with evaluating the measures an organisation already has in place to manage identified risks and then recommending the action the organisation needs to take to control these risks effectively.
3.02 It is the overall responsibility of the Authority to approve the risk management strategy, and to promote a culture of risk management awareness throughout the Authority.
3.03 The key controls for risk management are:
a) Procedures are in place to identify, assess, prevent or contain material known risks, and these procedures are operating effectively throughout the Authority.
b) A monitoring process is in place to review regularly the effectiveness of risk reduction strategies and the operation of these controls. The risk management process should be conducted on a continuing basis.
c) Managers know that they are responsible for managing relevant risks and are provided with relevant information on risk management initiatives.
d) Provision is made for losses that might result from the risks that remain.
e) Procedures are in place to investigate claims within required timescales.
f) Acceptable levels of risk are determined and insured against where appropriate.
g) The Authority has identified business continuity plans for implementation in the event of disaster that results in significant loss or damage to its resources.
3.04 To prepare and promote the Authority’s risk management policy statement/strategy.
3.05 To develop risk management controls in conjunction with other SMT Officers.
3.06 To effect corporate insurance cover, through external insurance and internal funding, and to negotiate all claims in consultation with other officers, where necessary.
3.07 To notify the Treasurer/Director of Corporate Services immediately of any loss, liability or damage that may lead to a claim against the Authority, together with any information or explanation required by those officers or the Authority’s insurers.
3.08 To take responsibility for risk management, having regard to advice from the Treasurer/Director of Corporate Services and other specialist officers (e.g. crime prevention, fire prevention, health and safety).
3.09 To ensure that there are regular reviews of risk within their departments.
3.10 To notify the Treasurer/Director of Corporate Services promptly of all new risks, properties or vehicles that require insurance and of any alterations affecting existing insurance’s.
3.11 To consult the Treasurer/Director of Corporate Services and the Clerk on the terms of any indemnity that the Authority is requested to give.
3.12 To ensure that employees, or anyone covered by the Authority’s insurance’s, do not admit liability or make any offer to pay compensation that may prejudice the assessment of liability in respect of any insurance claim.
3.13 The Authority is complex and beyond the direct control of individuals. It therefore requires internal controls to manage and monitor progress towards strategic objectives.
3.14 The Authority has statutory obligations, and, therefore, requires internal controls to identify, meet and monitor compliance with these obligations.
3.15 The Authority faces a wide range of financial, administrative and commercial risks, both from internal and external factors, which threaten the achievement of its objectives. Internal controls are necessary to manage these risks.
3.16 The system of internal controls is established in order to provide measurable achievement of:
a) Efficient and effective operations.
b) Reliable financial information and reporting.
c) Compliance with laws and regulations.
d) Risk management.
3.17 The key controls and control objectives for internal control systems are:
a) 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.
b) Managerial control systems, including defining policies, setting objectives and plans, monitoring financial and other performance and taking appropriate anticipatory and remedial action. The key objective of these systems is to promote ownership of the control environment by defining roles and responsibilities.
c) Financial and operational control systems and procedures, which include physical safeguards for assets, segregation of duties, authorisation and approval procedures and information systems.
d) An effective internal audit function that is properly resourced. It should operate in accordance with the principles contained in CIPFA’s Public Sector Internal Audit Standards and with any other statutory obligations and regulations.
3.18 To assist the Authority 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.
3.19 To prepare the Annual Governance Statement for approval by the Authority.
3.20 To manage processes 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.
3.21 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 Treasurer/Director of Corporate Services. SMT Officers should also be responsible for removing controls that are unnecessary or not cost or risk effective – for example, because of duplication.
3.22 To ensure staff have a clear understanding of the consequences of lack of control.
3.23 The requirement for an internal audit function for local authorities is implied by section 151 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 2015, more specifically require that a “relevant Authority shall maintain an adequate and effective system of internal audit of their accounting records and financial control systems”.
3.24 Accordingly, internal audit is an independent and objective appraisal function established by the Authority for reviewing the system of internal control. It examines, evaluates and reports on the adequacy of internal control as a contribution to the proper, economic, efficient and effective use of resources.
3.25 The key controls for internal audit are:
a) That it is independent in its planning and operation.
b) The internal audit service has direct access to the Chief Fire Officer, all levels of management and directly to elected members.
c) The internal auditors comply with CIPFA’s Public Sector Internal Audit Standards.
3.26 To ensure that internal auditors have the authority to:
a) Access Authority premises at reasonable times.
b) Access all assets, records, documents, correspondence and control systems.
c) Receive any information and explanation considered necessary concerning any matter under consideration.
d) Require any employee of the Authority to account for cash, stores or any other Authority asset under his or her control.
e) Access records belonging to third parties, such as contractors, when required.
f) Directly access the Chief Fire Officer, the Authority and its members.
3.27 To submit to the Authority for approval the strategic and annual audit plans, which take account of the characteristics and relative risks of the activities involved.
3.28 To ensure that effective procedures are in place to investigate promptly any fraud or irregularity.
3.29 To ensure that internal auditors are given access at all reasonable times to premises, personnel, documents and assets that the auditors consider necessary for the purposes of their work.
3.30 To ensure that auditors are provided with any information and explanations that they seek in the course of their work.
3.31 To consider and respond promptly to recommendations in audit reports.
3.32 To ensure that any agreed actions arising from audit recommendations are carried out in a timely and efficient fashion.
3.33 To notify the Treasurer/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, the SMT Officer should take all necessary steps to prevent further loss and to secure records and documentation against removal or alteration.
3.34 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 head of internal audit prior to implementation.
3.35 The Local Audit and Accountability Act 2014 set up Public Sector Audit Appointments Ltd, which is responsible for appointing external auditors to each local authority in England and Wales. The external auditor has rights of access to all documents and information necessary for audit purposes.
3.36 The basic duties of the external auditor are defined in the Local Audit and Accountability Act 2014. In particular, part 5 of the 2014 Act requires the Comptroller and Auditor General of the National Audit Office to prepare a code of audit practice, which external auditors follow when carrying out their duties. The code of audit practice sets out the auditor’s objectives to review and report upon:
a) The financial aspects of the audited body’s corporate governance arrangements.
b) The audited body’s financial statements.
c) Aspects of the audited body’s arrangements to manage its performance.
3.37 The Authority’s accounts are scrutinised by external auditors, who 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 the legal requirements.
3.38 External auditors are appointed by Public Sector Audit Appointments Ltd. The National Audit Office prepares a code of audit practise, which external auditors follow when undertaking their audit.
3.39 To ensure that 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.
3.40 To ensure there is effective liaison between external and internal audit.
3.41 To work with the external auditor and advise the Authority and SMT Officers on their responsibilities in relation to external audit.
3.42 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.
3.43 To ensure that all records and systems are up to date and available for inspection.
3.44 The Authority will not tolerate fraud and corruption in the administration of its responsibilities, whether from inside or outside the Authority.
3.45 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.
3.46 The Authority also expects that individuals and organisations (e.g. suppliers, contractors, service providers) with whom it comes into contact will act towards the Authority with integrity and without thought or actions involving fraud and corruption.
3.47 The key controls regarding the prevention of financial irregularities are that:
a) The Authority has an effective anti-fraud and whistle-blowing policy and maintains a culture that will not tolerate fraud or corruption.
b) All members and staff act with integrity and lead by example.
c) Senior managers are required to deal swiftly and firmly with those who defraud or attempt to defraud the Authority or who are corrupt.
d) High standards of conduct are promoted amongst members as required in the Member Code of Conduct.
e) The maintenance of a register of interests in which any hospitality or gifts accepted must be recorded.
f) Whistle blowing procedures are in place and operate effectively legislation including the Public Interest Disclosure Act 1998 is adhered to.
3.48 To develop and maintain an anti-fraud and whistle-blowing policy.
3.49 To maintain adequate and effective internal control arrangements.
3.50 To ensure that all suspected irregularities are reported to the Head of Internal Audit, the Chief Fire Officer, the Clerk and the Authority as appropriate.
3.51 To ensure that all suspected irregularities are reported to the Treasurer/Director of Corporate Services or the Clerk.
3.52 To instigate the Authority’s disciplinary procedures where the outcome of an audit investigation indicates improper behaviour.
3.53 To ensure that where financial impropriety is discovered, the Treasurer/Director of Corporate Services is informed, and, in consultation with the Head of Internal Audit, where sufficient evidence exists to believe that a criminal offence may have been committed, the police are called in to determine with the Crown Prosecution Service whether any prosecution will take place.
3.54 To ensure compliance with the Employee Code of Conduct and maintain a departmental register of both financial and non-financial interests declared by the employees which they consider could bring them into conflict with the Authority’s interests.
3.55 To retain a record of gifts and hospitality received in accordance with the Code of Conduct and the relevant service order.
3.56 To ensure that the register of interests is kept up to date.
3.57 The Authority holds assets in the form of property, vehicles, equipment, furniture and other items worth many millions of pounds. 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. An up-to-date asset register is a prerequisite for proper accounting and sound asset management.
3.58 The key controls for the security of resources such as land, buildings, fixed plant machinery, equipment, software and information are:
a) Resources are used only for the purposes of the Authority and are properly accounted for.
b) Resources are available for use when required.
c) Resources no longer required are disposed of in accordance with the law and the regulations of the Authority so as to maximise benefits.
d) An asset register is maintained for the Authority, assets are recorded when they are acquired by the Authority and this record is updated as changes occur with respect to the location and condition of the asset.
e) 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.
f) All staff are aware of their responsibilities with regard to safeguarding the security of the Authority’s computer systems, including maintaining restricted access to the information held on them and compliance with the Authority’s computer and internet security policies.
3.59 To ensure that an asset register is maintained in accordance with good practice for all non-current assets. The function of the asset register is to provide the Authority with information about non-current assets so that they are:
a) Safeguarded.
b) Used efficiently and effectively.
c) Adequately maintained.
3.60 To receive the information required for accounting, costing and financial records from each SMT Officer.
3.61 To ensure that assets are valued in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom (CIPFA/LASAAC).
3.62 The appropriate SMT Officer shall maintain a property database for all land and property currently owned or used by the Authority. Any use of property by a department or establishment other than for direct service delivery should be supported by documentation identifying terms, responsibilities and duration of use.
3.63 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 SMT Officer in consultation with the Treasurer/Director of Corporate Services and legal services, has been established as appropriate.
3.64 To ensure the proper security of all buildings and other assets under their control.
3.65 Where land or buildings are surplus to requirements, a recommendation for sale should be the subject of a joint report by the SMT Officer and the Treasurer/Director of Corporate Services.
3.66 To pass title deeds to the appropriate officer, who is responsible for custody of all title deeds.
3.67 To ensure that no Authority asset is subject to personal use by an employee without proper Authority.
3.68 To ensure the safe custody of vehicles, equipment, furniture, stock, stores and other property belonging to the Authority.
3.69 To ensure accordance Services. that with the department maintains arrangements defined by a register of moveable the Treasurer/Director of assets in Corporate.
3.70 To ensure that assets are identified, their location recorded and that they are appropriately marked and insured.
3.71 To consult the Treasurer/Director of Corporate Services in any case where security is thought to be defective or where it is considered that special security arrangements may be needed.
3.72 To ensure cash holdings on premises are kept to a minimum.
3.73 To ensure that keys to safes and similar receptacles are held securely, loss of any such keys must be reported to the Treasurer/Director of Corporate Services as soon as possible.
3.74 To record all disposal or part exchange of assets that should normally be by competitive tender or public auction, unless, following consultation with the Treasurer/Director of Corporate Services, the SMT agrees otherwise.
3.75 To arrange for the valuation of assets for accounting purposes to meet requirements specified by the Treasurer/Director of Corporate Services.
3.76 To ensure that all employees are aware that they have a personal responsibility with regard to the protection and confidentiality of information, whether held in manual or computerised records. Information may be sensitive or privileged, or may possess some intrinsic value, and its disclosure or loss could result in a cost to the Authority in some way.
3.77 To maintain inventories and record an adequate description of furniture, fittings and equipment valued at £1,000 or more.
3.78 To carry out an annual check of all items on the inventory in order to verify location, review, and condition and to take action in relation to surpluses or deficiencies, annotating the inventory accordingly.
3.79 To make sure that property is only used in the course of the Authority’s business, unless the SMT Officer concerned has given permission otherwise.
3.80 To make arrangements for the care and custody of stocks and stores in the department.
3.81 To ensure stocks are maintained at reasonable levels and are subject to a regular independent physical check. All discrepancies should be investigated and pursued to a satisfactory conclusion.
3.82 To investigate and seek approval to remove from the Authority’s records (i.e. write off) discrepancies as necessary from the Treasurer/Director of Corporate Services, or to obtain Authority approval if they are in excess of £10,000.
3.83 To authorise or write off disposal of redundant stocks and equipment (following approval by the Treasurer/Director of Corporate Services). Procedures for disposal of such stocks and equipment, valued in excess of £1,000, should be by competitive quotations or auction, unless, following consultation with the Treasurer/Director of Corporate Services, the officer decides otherwise in a particular case. The most appropriate means of disposal should be used for stocks and equipment valued at less than £1,000, as determined by the Head of Procurement.
3.84 To seek the approval of the Authority to the write-off of redundant stocks and equipment in excess of £10,000.
3.85 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.
3.86 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.
3.87 In the event that the Authority decides to become involved in the commercial exploitation of inventions, the matter should proceed in accordance with the Authority’s approved intellectual property procedures. Guidance may be sought from the Head of Procurement.
3.88 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.
3.89 To develop and disseminate good practice through the Authority’s intellectual property procedures.
3.90 It would be uneconomic and inefficient for the cost of assets to outweigh their benefits. Obsolete, non-repairable or unnecessary resources should be disposed of in accordance with the law and the regulations of the Authority.
3.91 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 or reputational issues. For items of significant value, disposal should be by competitive tender or public auction.
3.92 Fire appliances will be disposed of for humanitarian purposes, linked to the organisational objectives, priorities and values of the Service, at, or below, market value, or crushed and sold as scrappage (subject to the appliance having a market value of less than £10,000.
3.93 Procedures protect staff involved in the disposal from accusations of personal gain.
3.94 To provide guidance on best practice for disposal of assets.
3.95 To ensure appropriate accounting entries are made to remove the value of disposed assets from the Authority’s records and to include the sale proceeds if appropriate.
3.96 To seek advice from procurement on the disposal of surplus or obsolete materials, stores or equipment.
3.97 To ensure that income received for the disposal of an asset is properly banked and coded.
3.98 Many millions of pounds pass through the Authority’s books each year. This led to the establishment of codes of practice. These aim to provide assurances that the Authority’s money is properly managed in a way that balances risk with return, but with the overriding consideration being given to the security of the Authority’s capital sum.
3.99 That the Authority’s borrowings and investments comply with the CIPFA Code of Practice on Treasury Management and with the Authority’s treasury management strategy.
3.100 To arrange the borrowing and investments of the Authority in such a manner as to comply with the CIPFA Code of Practice on Treasury Management and the Authority’s treasury management strategy.
3.101 To report the following to the Authority, as a minimum:
a) An annual treasury management strategy, before the commencement of the new financial year.
b) A mid-year update on treasury management activity.
c) An annual report on treasury management activity in the preceding year, before 30 June.
d) The outcome of any debt restructuring undertaken.
3.102 To operate bank accounts as are considered necessary – opening or closing any bank account shall require the approval of the Treasurer/Director of Corporate Services. All arrangements for the opening of bank accounts in the name of the Authority and for the ordering and issue of cheques shall be made by the Treasurer/Director of Corporate Services. All cheques drawn on behalf of the Authority shall be signed by the Treasurer/Director of Corporate Services or by such officers as may be nominated by him for that purpose. Any indemnity required by the Authority’s bankers regarding the signature of cheques by a computer or mechanical means, or where the services of a security firm are used for the deposit or receipt of cash at the bank shall be given by the Treasurer/Director of Corporate Services on behalf of the Authority.
3.103 To follow guidance provided by the Treasurer/Director of Corporate Services on banking arrangements.
3.104 To ensure that all investments of money are made in the name of the Authority or in the name of nominees approved by the Authority.
3.105 To ensure that all securities that are the property of the Authority or its nominees and the title deeds of all property in the Authority’s ownership are held in the custody of the appropriate SMT Officer.
3.106 To effect all borrowings in the name of the Authority.
3.107 To act as the Authority’s registrar of stocks, bonds and mortgages and to maintain records of all borrowing of money by the Authority.
3.108 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 Authority, following consultation with the Treasurer/Director of Corporate Services.
3.109 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 Treasurer/Director of Corporate Services, unless the deed otherwise provides.
3.110 To arrange, where funds are held on behalf of third parties, for their secure administration, approved by the Treasurer/Director of Corporate Services, and to maintain written records of all transactions.
3.111 To ensure that trust funds are operated within any relevant legislation and the specific requirements for each trust.
3.112 To provide employees of the Authority with cash or bank imprest accounts to meet minor expenditure on behalf of the Authority and to prescribe rules for operating these accounts. Minor items of expenditure should not exceed the prescribed amount of £50 per transaction, other than in circumstance agreed by the Treasurer/Director of Corporate Services.
3.113 To determine the petty cash limit and to maintain a record of all transactions and petty cash advances made, and periodically to review the arrangements for the safe custody and control of these advances.
3.114 To reimburse imprest holders as often as necessary to restore the imprests, but normally not more than monthly.
3.115 To ensure that employees operating an imprest account:
a) Obtain and retain vouchers to support each payment from the imprest account. Where appropriate, an official receipted VAT invoice must be obtained.
b) Make adequate arrangements for the safe custody of the account.
c) Produce upon demand by the Treasurer/Director of Corporate Services cash and all vouchers to the total value of the imprest amount.
d) Record transactions promptly.
e) Reconcile and balance the account at least monthly; reconciliation sheets to be signed and retained by the imprest holder.
f) Provide the Treasurer/Director of Corporate Services with a certificate of the value of the account held at 31 March each year.
g) 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.
h) On leaving the Authority’s employment or otherwise ceasing to be entitled to hold an imprest advance, an employee shall account to the Treasurer/Director of Corporate Services for the amount advanced to him or her.
3.116 In order to provide the highest level of service, it is crucial that the Authority recruits and retains high calibre, knowledgeable staff, qualified to an appropriate level.
3.117 The key controls for staffing are:
a) An appropriate staffing strategy and policy exists, in which staffing requirements and budget allocation are matched.
b) Procedures are in place for forecasting staffing requirements and cost.
c) Controls are implemented that ensure that staff time is used efficiently and to the benefit of the Authority.
d) Checks are undertaken prior to employing new staff to ensure that they are appropriately qualified, experienced and trustworthy.
3.118 To ensure that budget provision exists for all existing and new employees.
3.119 To act as an advisor to SMT Officers on areas such as National Insurance and pension contributions, as appropriate.
3.120 To produce an annual staffing budget.
3.121 To ensure that the staffing budget is an accurate forecast of staffing levels and is equated to an appropriate revenue budget provision (including on-costs and overheads).
3.122 To monitor staff activity to ensure adequate control over such costs as sickness, overtime, training and temporary staff.
3.123 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.
3.124 To ensure that the Treasurer/Director of Corporate Services is immediately informed if the staffing budget is likely to be materially over - or underspent.
4.01 Departments have many systems and procedures relating to the control of the Authority’s assets, including purchasing, costing and management systems. Departments are increasingly reliant on computers 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.
4.02 The Treasurer/Director of Corporate Services 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.
4.03 The key controls for systems and procedures are:
a) Basic data exists to enable the Authority’s objectives, targets, budgets and plans to be formulated.
b) Performance is communicated to the appropriate managers on an accurate, complete and timely basis.
c) Early warning is provided of deviations from target, plans and budgets that require management attention.
d) Operating systems and procedures are secure. e) Appropriate segregation of duties.
4.04 To make arrangements for the proper administration of the Authority’s financial affairs, including to:
a) Issue advice, guidance and procedures for officers and others acting on the Authority’s behalf.
b) Determine the accounting systems, form of accounts and supporting financial records.
c) Establish arrangements for audit of the Authority’s financial affairs.
d) Approve any new financial systems to be introduced.
e) Approve any changes to be made to existing financial systems.
4.05 To ensure that accounting records are properly maintained and held securely.
4.06 To ensure that vouchers and documents with financial implications are not destroyed, except in accordance with arrangements approved by the Treasurer/Director of Corporate Services.
4.07 To ensure that a complete management trail, allowing financial transactions to be traced from the accounting records to the original document, and vice versa, is maintained.
4.08 To incorporate appropriate controls to ensure that, where relevant:
a) All input is genuine, complete, accurate, timely and not previously processed.
b) All processing is carried out in an accurate, complete and timely manner.
c) Output from the system is complete, accurate and timely.
4.09 To ensure that the organisational structure provides an appropriate segregation of duties to provide adequate internal controls and to minimise the risk of fraud or other malpractice.
4.10 To ensure there is a documented and tested disaster recovery plan to allow information system processing to resume quickly in the event of an interruption.
4.11 To ensure that systems are documented and staff trained in operations.
4.12 To consult with the Treasurer/Director of Corporate Services before changing any existing financial system or introducing new systems.
4.13 To establish a scheme of delegation identifying officers authorised to act upon the SMT Officer’s behalf in respect of payments, income collection and placing orders, including variations, and showing the limits of their authority.
4.14 To maintain an appropriate finance system approval hierarchy and supply lists of authorised officers, with specimen signatures and delegated limits, to the Treasurer/Director of Corporate Services, together with any subsequent variations.
4.15 To ensure that effective contingency arrangements, including back-up procedures, exist for computer systems. Wherever possible, back-up information should be securely retained in a fireproof location, preferably off site or at an alternative location within the building.
4.16 To ensure that, where appropriate, computer systems are registered in accordance with data protection legislation and that staff are aware of their responsibilities under the legislation.
4.17 To ensure that relevant standards and guidelines for computer systems issued by the SMT Officer are observed.
4.18 To ensure that computer equipment and software are protected from loss and damage through theft, vandalism, etc.
4.19 To comply with the copyright, designs and patents legislation and, in particular, to ensure that:
a) Only software legally acquired and installed by the Authority is used on its computers.
b) Staff are aware of legislative provisions.
c) In developing systems, due regard is given to the issue of intellectual property rights.
4.20 Income can be a vulnerable asset and effective income collection systems are necessary to ensure that all income due is identified, collected, receipted and banked properly. It is preferable to obtain income in advance of supplying goods or services as this improves the Authority’s cashflow and also avoids the time and cost of administering debts.
4.21 The key controls for income are:
a) All income due to the Authority is identified and charged correctly, in accordance with an approved charging policy, which is regularly reviewed.
b) All income is collected from the correct person, at the right time, using the correct procedures and the appropriate stationery.
c) All money received by an employee on behalf of the Authority is paid without delay to the Treasurer/Director of Corporate Services or, as he or she directs, to the Authority’s bank account, and properly recorded. The responsibility for cash collection should be separated from that:
For identifying the amount due.
For reconciling the amount due to the amount received.
d) Effective action is taken to pursue non-payment within defined timescales.
e) Formal approval for debt write-off is obtained.
f) Appropriate write-off action is taken within defined timescales.
g) Appropriate accounting adjustments are made following write-off action.
h) All appropriate income documents are retained and stored for the defined period in accordance with the document retention schedule.
i) Money collected and deposited is reconciled to the bank account by a person who is not involved in the collection or banking process.
4.22 To agree arrangements for the collection of all income due to the Authority and to approve the procedures, systems and documentation for its collection.
4.23 To satisfy himself or herself regarding the arrangements for the control of all receipt forms, books or tickets and similar items.
4.24 To establish and initiate appropriate recovery procedures, including legal action where necessary, for debts that are not paid promptly.
4.25 To approve all debts to be written off, up to £10,000, in consultation with the relevant SMT Officer and to keep a record of all sums written off up to the approved limit and to adhere to the requirements of the Accounts and Audit Regulations 2015.
4.26 To obtain the approval of the Authority in consultation with the relevant SMT Officer for writing off debts in excess of the approved limit of £10,000.
4.27 To ensure that appropriate accounting adjustments are made following write-off action.
4.28 To establish a charging policy for the supply of goods or services, including the appropriate charging of VAT, and to review it regularly, in line with corporate policies.
4.29 To separate the responsibility for identifying amounts due and the responsibility for collection, as far as is practicable.
4.30 To issue official receipts or to maintain other documentation for income collection.
4.31 To ensure that when post is opened that money received by post is properly identified and recorded.
4.32 To hold securely receipts, tickets and other records of income for the appropriate period.
4.33 To lock away all income to safeguard against loss or theft, and to ensure the security of cash handling.
4.34 To ensure that income is paid fully and promptly into the appropriate Authority bank account in the form in which it is received. Appropriate details should be recorded on to paying-in slips to provide an audit trail. Money collected and deposited must be reconciled to the bank account on a regular basis.
4.35 To ensure income is not used to cash personal cheques or other payments.
4.36 To supply the Treasurer/Director of Corporate Services with details relating to work done, goods supplied, services rendered or other amounts due, to enable the Treasurer/Director of Corporate Services to record correctly the sums due to the Authority and to ensure accounts are sent out promptly. SMT Officers have a responsibility to assist the Treasurer/Director of Corporate Services in collecting debts that they have originated, by providing any further information requested by the debtor, and in pursuing the matter on the Authority’s behalf.
4.37 Levels of cash held on the premises must be minimised.
4.38 To recommend to the Treasurer/Director of Corporate Services all debts to be written off and to keep a record of all sums written off up to the approved limit. Once raised, no bona fide debt may be cancelled, except by full payment or by its formal writing off. A credit note to replace a debt can only be issued to correct a factual inaccuracy or administrative error in the calculation and/or billing of the original debt.
4.39 To obtain the approval of the Treasurer/Director of Corporate Services when writing off debts, and the approval of the Authority where required.
4.40 To notify the Treasurer/Director of Corporate Services of outstanding income relating to the previous financial year as soon as possible after 31 March in line with the timetable determined by the Treasurer/Director of Corporate Services.
4.41 Public money should be spent with demonstrable probity and in accordance with the Authority’s policies. Authorities have a statutory duty to achieve best value in part through economy and efficiency. The Authority’s procedures should help to ensure that services obtain value for money from their purchasing arrangements. These procedures should be read in conjunction with the Authority’s Contract Standing Orders.
4.42 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.
4.43 Official orders must be in a form approved by the Treasurer/Director of Corporate Services. Official orders must be issued for all work, goods or services to be supplied to the Authority, except for supplies of utilities, periodic payments such as rent or rates, petty cash purchases or other exceptions specified by the Treasurer/Director of Corporate Services. Telephone orders should not be placed in advance of the official order.
4.44 Each order must conform to the guidelines set by the Head of Procurement (in consultation with the Treasurer/Director of Corporate Services). Standard terms and conditions must not be varied without the prior approval of the Head of Procurement.
4.45 The normal method of payment from the Authority shall be by automated electronic payments (BACS), cheque or other instrument or approved method, drawn on the Authority’s bank account by the Treasurer/Director of Corporate Services. The use of direct debit shall require the prior agreement of the Treasurer/Director of Corporate Services.
4.46 Official orders must not be raised for any personal or private purchases, nor must personal or private use be made of Authority contracts.
4.47 The key controls for ordering and paying for work, goods and services are:
a) All goods and services are ordered only by appropriate persons and are correctly recorded.
b) All goods and services shall be ordered in accordance with the Authority’s Contract Standing Orders unless they are purchased from sources within the Authority.
c) Goods and services received are checked to ensure they are in accordance with the order. Goods should not be received by the person who placed the order.
d) Payments are not made unless goods have been received by the Authority to the correct price, quantity and quality standards, apart from under exceptional circumstances (such as examples listed in 4.60 (i)).
e) All payments are made to the correct person, for the correct amount and are properly recorded, regardless of the payment method.
f) All appropriate evidence of the transaction and payment documents are retained and stored for the defined period, in accordance with the document retention schedule.
g) All expenditure, including VAT, is accurately recorded against the right budget and any exceptions are corrected.
h) In addition, the effect of e-business/e-commerce and electronic purchasing requires that processes are in place to maintain the security and integrity of data for transacting business electronically.
4.48 To ensure that all the Authority’s financial systems and procedures are sound and properly administered.
4.49 To approve any changes to existing financial systems and to approve any new systems before they are introduced.
4.50 To approve the form of official orders and associated terms and conditions.
4.51 To make payments from the Authority’s funds on the SMT Officer’s authorisation that the expenditure has been duly incurred in accordance with financial regulations.
4.52 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.
4.53 To make payments to contractors on the certificate of the appropriate SMT Officer, which must include details of the value of work, retention money, amounts previously certified and amounts now certified.
4.54 To provide advice and encouragement on making payments by the most economical means.
4.55 To report progress on contracts valued in excess of £100,000 to Resources Committee.
4.56 To ensure that unique pre-numbered official orders are used for all goods and services, other than the exceptions specified in 4.43.
4.57 To ensure that orders are only used for goods and services provided to the department or directorate. Individuals must not use official orders to obtain goods or services for their private use.
4.58 To ensure that only those staff authorised by him or her approve orders and to maintain an up-to-date record of such authorised staff, and in each case, the limits of their Authority. The authoriser of the order should be satisfied that the goods and services ordered are appropriate and needed, that there is adequate budgetary provision and that quotations or tenders have been obtained if necessary. Best value principles should underpin the Authority’s approach to procurement. Value for money should always be achieved.
4.59 To ensure that goods and services are checked on receipt to verify that they are in accordance with the order. This check should, where possible, be carried out by a different officer from the person who authorised the order. Appropriate entries should then be made in the finance system or stores system records.
4.60 To ensure that payment is not made unless an official VAT invoice has been received, checked, coded and certified for payment, confirming:
a) Receipt of goods or services.
b) That the invoice has not previously been paid.
c) That expenditure has been properly incurred and is within budget provision.
d) That prices and arithmetic are correct and accord with quotations, tenders, contracts or catalogue prices.
e) Correct accounting treatment of tax.
f) That the invoice is correctly coded.
g) That discounts have been taken where available.
h) That appropriate entries will be made in accounting records.
i) Note, prepayments should only be made where there are no alternatives, i.e. purchases on the internet, travel and accommodation, software/hardware support and maintenance, rates, utilities etc If in doubt the Treasurer/Director of Corporate Services should be consulted.
4.61 To ensure that two authorised members of staff are involved in the ordering, receiving and payment process. Whenever possible, a different officer from the person who approved the order, and in every case, a different officer from the person checking a written invoice, should authorise the invoice.
4.62 To ensure that the department maintains and reviews periodically a list of staff approved to authorise invoices. Names of authorising officers together with specimen signatures and details of the limits of their authority shall be forwarded to the Treasurer/Director of Corporate Services.
4.63 To ensure that payments are not normally made on a photocopied or faxed invoice, statement or other document other than the formal invoice. Electronically submitted invoices can be accepted if submitted in a form agreed by the Treasurer/Director of Corporate Services. Copy invoices should only be kept where required and must be marked as “COPY”.
4.64 To encourage suppliers of goods and services to receive payment by the most economical means for the Authority, usually by BACS. It is essential, however, that payments made by direct debit have the prior approval of the Treasurer/Director of Corporate Services.
4.65 To ensure that the department obtains best value from purchases by taking appropriate steps to obtain competitive prices for goods and services of the appropriate quality, with regard to the best practice guidelines issued by the Treasurer/Director of Corporate Services, which are in line with best value principles and contained in the Authority’s Contract Standing Orders.
4.66 To utilise corporate contracts, where applicable.
4.67 Where contracts exceed £25,000 the procurement department must be consulted.
4.68 The financial limits for entering into contracts are set out below:
Limit | Department Head | Relevant Director | Treasurer/Director of Corporate Services | Authority |
Up to £50,000 | Y | |||
£50,001 to £100,000 | Y | Y | ||
Over £100,000 | Y | Y | Y | Y* |
*N.B. For all contracts over £100,000 approval is sought from the Authority yet authorisation to sign is delegated to the Treasurer / Director of Corporate Services . For all contracts valued at over £50,000 the completed Procurement Project Initiation document must be passed to the relevant authorising officer(s) and a copy of this and the contract must be retained by procurement.
4.69 To ensure that adequate records are maintained for all contracts.
4.70 To prepare a quarterly return of progress to date and estimated final costs for all contracts where the initial one-off purchase is valued at over £100,000, for submission to the Treasurer/Director of Corporate Services and relevant Director (this does not apply to contracts for on-going services such as energy, or outsourcing).
4.71 Where contracts have been entered into with a value in excess of £100,000 any variations in estimated/contract costs shall be dealt with as follows:
Cumulative Variance | Action |
Less than £10,000 or 5%, whichever is the greater. | Department Head to approve Retrospective notification to Treasurer/Director of Corporate Services and relevant Director No requirement to report to the Authority. (Where costs cannot be contained within budget prior approval of the Executive Board is required). |
Between £10,000 and £25,000 or 10% and 15%, whichever is the greater. | Report to Treasurer/Director of Corporate Services and relevant Director to seek approval, before any cost increases incurred. (Where costs cannot be contained within budget prior approval of the Executive Board is required). |
Between £25,000 and £50,000 or 10% and 15%, whichever is the greater. | Report to Executive Board to seek approval, before any cost increases incurred. |
Over £50,000 or 15%, whichever is the greater. | Approval required from the Authority before any cost increases incurred, other than in exceptional circumstances when the delay incurred would, in the option of the CFO and Treasurer/Director of Corporate Services, be impractical in which case this must be reported retrospectively to the Authority. |
(Note, the approval by either Executive Board or the Authority means that all variations to date are incorporated into the revised contract sum. For the purpose of monitoring/reporting of future variations the cumulative value of variations begins again at zero).
4.72 To ensure that employees are aware of the Employee code of conduct.
4.73 To ensure that loans, leasing or rental arrangements are not entered into without prior agreement from the Treasurer/Director of Corporate Services. This is because of the potential impact on the Authority’s borrowing powers, to protect the Authority against entering into unapproved credit arrangements and to ensure that value for money is being obtained.
4.74 To notify the Treasurer/Director of Corporate Services of outstanding expenditure relating to the previous financial year as soon as possible after 31 March in line with the timetable determined by the Treasurer/Director of Corporate Services.
4.75 With regard to contracts for construction and alterations to buildings and for civil engineering works, to document and agree with the Treasurer/Director of Corporate Services the systems and procedures to be adopted in relation to financial aspects, including certification of interim and final payments, checking, recording and authorising payments, the system for monitoring and controlling capital schemes and the procedures for validation of subcontractors’ tax status. Under no circumstances should a pre-payment be agreed without prior consent of the Treasurer/Director of Corporate Services.
4.76 To notify the Treasurer/Director of Corporate Services immediately of any expenditure to be incurred as a result of statute/court order where there is no budgetary provision.
4.77 To ensure that all appropriate payment records are retained and stored for the defined period, in accordance with the document retention schedule.
4.78 Staff costs are the largest item of expenditure for Authority services. It is therefore important that payments are accurate, timely, made only where they are due for services to the Authority and that payments accord with individuals’ conditions of employment. It is also important that all payments are accurately and completely recorded and accounted for and that members’ allowances are authorised in accordance with the scheme adopted by the Authority.
4.79 The key controls for payments to employees and members are:
a) Proper authorisation procedures are in place and that there is adherence to corporate timetables in relation to:
Starters
Leavers
Variations
Enhancements
b) and that payments are made on the basis of time records or claims.
c) Frequent reconciliation of payroll expenditure against approved budget and bank account.
d) All appropriate payroll documents are retained and stored for the defined period in accordance with the document retention schedule.
e) That HMRC Regulations are complied with.
4.80 To arrange and control secure and reliable payment of salaries, wages, compensation or other emoluments to existing and former employees, in accordance with procedures prescribed by him or her, on the due date.
4.81 To record and make arrangements for the accurate and timely payment of tax, superannuation (pension) and other deductions.
4.82 To make arrangements for payment of all travel and subsistence claims or financial loss allowance.
4.83 To make arrangements for paying members travel or other allowances upon receiving the prescribed form, duly completed and authorised.
4.84 To provide advice and encouragement to secure payment of salaries and wages by the most economical means.
4.85 To ensure appointments are made in accordance with the regulations of the Authority and approved establishments, grades and scale of pay and that adequate budget provision is available.
4.86 To notify the Director of People and Development of all appointments, terminations or variations which may affect the pay or pension of an employee or former employee, in the form and to the timescale required by the Director of People and Development.
4.87 To ensure that adequate and effective systems and procedures are operated, so that:
Payments are only authorised to bona fide employees.
Payments are only made 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.
4.88 To maintain an up-to-date list of the names of officers authorised to submit electronic records to the Human Resources Department for payment. Appropriate checks are carried out by the officers whilst compiling the electronic records for submission.
4.89 To ensure that payroll transactions are processed only through the payroll system. SMT Officers should give careful consideration to the employment status of individuals employed on a self-employed consultant or subcontract basis. The HMRC applies a tight definition for employee status, and in cases of doubt, advice should be sought from the Director of People and Development.
4.90 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, ensuring that cost-effective use of travel arrangements is achieved. Due consideration should be given to tax implications and that the Treasurer/Director of Corporate Services is informed where appropriate.
4.91 To ensure that the Treasurer/Director of Corporate Services is notified of the details of any employee benefits in kind, to enable full and complete reporting within the income tax self-assessment system and HMRC regulations.
4.92 To ensure that all appropriate payroll documents are retained and stored for the defined period in accordance with the document retention schedule.
4.93 To ensure that there are adequate arrangements for administering superannuation matters on a day-to-day basis.
4.94 To submit claims for members’ travel and subsistence allowances on a monthly basis and, in any event, within one month of the year end.
4.95 Like all organisations, 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 their role.
4.96 The key controls for taxation are:
a) Budget managers are provided with relevant information and kept up to date on tax issues.
b) Budget managers are instructed on required record keeping.
c) All taxable transactions are identified, properly carried out and accounted for within stipulated timescales.
d) Records are maintained in accordance with instructions.
e) Returns are made to the appropriate authorities within the stipulated timescale.
4.97 To complete all HMRC returns regarding PAYE.
4.98 To complete a monthly return of VAT inputs and outputs to HMRC.
4.99 To provide details to the HMRC regarding the construction industry tax deduction scheme.
4.100 To provide guidance for Authority employees on taxation issues.
4.101 To maintain and monitor the Authorities partial exemption position.
4.102 To ensure that the correct VAT liability is attached to all income due and that all VAT recoverable on purchases complies with HMRC regulations.
4.103 To ensure that, where construction and maintenance works are undertaken, the contractor fulfils the necessary construction industry tax deduction requirements.
4.104 To ensure that all persons employed by the Authority are added to the Authority’s payroll and tax deducted from any payments, except where the individuals are bona fide self-employed or are employed by a recognised staff agency.
4.105 To follow guidance on taxation issued by the Treasurer/Director of Corporate Services
4.106 Trading accounts and business units have become more important as local authorities have developed a more commercial culture. Under best value, authorities are required to keep trading accounts for services provided on a basis other than straightforward recharge of cost. They are also required to disclose the results of significant trading operations in the Statement of Accounts. The Authority no longer has a trading account.
4.107 To advise on the establishment and operation of trading accounts and business units.
4.108 To observe all statutory requirements in relation to business units, including the maintenance of a separate revenue account to which all relevant income is credited and all relevant expenditure, including overhead costs, is charged, and to produce an annual report in support of the final accounts.
4.109 To ensure that the same accounting principles are applied in relation to trading accounts as for other services or business units.
4.110 To ensure that each business unit prepares an annual business plan.
5.01 Partnerships are likely to play a key role in delivering community strategies and in helping to promote and improve the well being of the area. Local authorities are working in partnership with others – public agencies, private companies, community groups and voluntary organisations. Local authorities still deliver some services, but their distinctive leadership role is to bring together the contributions of the various stakeholders. They therefore need to deliver a shared vision of services based on user wishes.
5.02 Local authorities will mobilise investment, bid for funds, champion the needs of their areas and harness the energies of local people and community organisations. Local authorities will be measured by what they achieve in partnership with others.
5.03 The main reasons for entering into a partnership are:
a) The desire to find new ways to share risk.
b) The ability to access new resources.
c) To provide new and better ways of delivering services.
d) To forge new relationships.
5.04 A partner is defined as either:
a) An organisation (private or public) undertaking, part funding or participating as a beneficiary in a project; or
b) A body whose nature or status give it a right or obligation to support the project.
5.05 Partners participate in projects by:
a) Acting as a project deliverer or sponsor, solely or in concert with others.
b) Acting as a project funder or part funder.
c) Being the beneficiary group of the activity undertaken in a project.
5.06 Partners have common responsibilities:
a) To be willing to take on a role in the broader programme appropriate to the skills and resources of the partner organisation.
b) To act in good faith at all times and in the best interests of the partnership’s aims and objectives.
c) Be open about any conflict of interests that might arise.
d) To encourage joint working and promote the sharing of information, resources and skills between public, private and community sectors.
e) To hold confidentially any information received as a result of partnership activities or duties that is of a confidential or commercially sensitive nature.
f) To act wherever possible as ambassadors for the project.
5.07 The key controls for Authority partners are:
a) If appropriate, to be aware of their responsibilities under the Authority’s Financial Regulations and Contract Standing Orders.
b) To ensure that risk management processes are in place to identify and assess all known risks.
c) To ensure that project appraisal processes are in place to assess the viability of the project in terms of resources, staffing and expertise.
d) To agree and accept formally the roles and responsibilities of each of the partners involved in the project before the project commences.
e) To communicate regularly with other partners throughout the project so that problems can be identified and shared to achieve their successful resolution.
5.08 To advise on effective controls that will ensure that resources are not wasted.
5.09 To advise on the key elements of funding a project. They include:
a) A scheme appraisal for financial viability in both the current and future years.
b) Risk appraisal and management.
c) Resourcing, including taxation issues.
d) Audit, security and control requirements.
e) Carry-forward arrangements.
5.10 To ensure that the accounting arrangements are satisfactory.
5.11 To maintain a register of all significant partnerships.
5.12 To maintain a register of all contracts entered into with external bodies in accordance with procedures specified by the Treasurer/Director of Corporate Services.
5.13 To ensure all partnerships entered into contribute to the achievement of the Authority’s objectives.
5.14 To ensure that, before entering into significant agreements with external bodies, a risk management appraisal has been prepared for the Treasurer/Director of Corporate Services.
5.15 To ensure that such agreements and arrangements do not impact adversely upon the services provided by the Authority.
5.16 To ensure that all agreements and arrangements are properly documented.
5.17 To provide appropriate information to the Treasurer/Director of Corporate Services to enable a note to be entered into the Authority’s statement of accounts concerning material items.
5.18 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. Local authorities are increasingly encouraged to provide seamless service delivery through working closely with other agencies and private service providers. Funds from external agencies provide additional resources to enable the Authority to deliver services to the local community. However, in some instances, although the scope for external funding has increased, such funding is linked to tight specifications and may not be flexible enough to link to the Authority’s overall plan.
5.19 The key controls for external funding are:
a) 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.
b) Arrangements are in place to ensure that all relevant grant claims are identified, accurate and prepared on a timely basis.
c) To ensure that funds are acquired only to meet the priorities approved in the policy framework by the Authority.
d) 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.
e) To ensure that the consequences of withdrawal of funding at the end of the period is given appropriate consideration.
5.20 To ensure that all funding notified by external bodies is received and properly recorded in the Authority’s accounts.
5.21 To ensure that the match-funding requirements are considered prior to entering into the agreements and that future revenue budgets reflect these requirements.
5.22 To ensure that audit requirements are met.
5.23 To ensure that the consequences of withdrawal of funding at the end of the period are considered and plans are in place to ensure that this does not affect future service provision.
5.24 In respect of external funding bids valued in excess of £25,000, to submit details of proposals to SMT/Executive Board prior to bidding, such reports to state how the proposed funding will contribute towards achievement of the Authorities objectives.
5.25 To ensure that all claims for funds are made by the due date.
5.26 To ensure that the project progresses in accordance with the agreed project and that all expenditure is properly incurred and recorded.
5.27 Current legislation enables the Authority to provide a range of services to other bodies. Such work may enable a unit to maintain economies of scale and existing expertise. Arrangements should be in place to ensure that any risks associated with this work is minimised and that such work is intra vires.
5.28 The key controls for working with third parties are:
a) To ensure that proposals are costed properly in accordance with guidance provided by the Treasurer/Director of Corporate Services.
b) To ensure that contracts are drawn up using guidance provided by the Treasurer/Director of Corporate Services and that, where required, the formal approvals process is adhered to.
c) To issue guidance with regard to the financial aspects of third party contracts and the maintenance of the contract register.
5.29 To issue guidance with regard to the financial aspects of third party contracts and the maintenance of the contract register.
5.30 To ensure that appropriate approvals are obtained before any negotiations are concluded to work for third parties.
5.31 To maintain a register of all contracts entered into with third parties in accordance with procedures specified by the Treasurer/Director of Corporate Services.
5.32 To ensure that appropriate insurance arrangements are made.
5.33 To ensure that the Authority is not put at risk from any bad debts.
5.34 To ensure that no contract is subsidised by the Authority.
5.35 To ensure that, wherever possible, payment is received in advance of the delivery of the service.
5.36 To ensure that the department/unit has the appropriate expertise to undertake the contract.
5.37 To ensure that such contracts do not impact adversely upon the services provided for the Authority.
5.38 To ensure that all contracts are properly documented.
5.39 To provide appropriate information to the Treasurer/Director of Corporate Services to enable a note to be entered into the Statement of Accounts.
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