1.1 Section 151 of the Local Government Act 1972 requires local authorities to plan for the proper administration of their financial affairs and appoint a Chief Finance Officer (Section 151 Officer) to have responsibility for those arrangements.
1.2 Whilst responsibility for the administration of the Council’s financial affairs lies with the Section 151 Officer, all individuals engaged in Council activities are responsible for financial governance, ensuring that their actions comply with Financial Procedure Rules.
1.3 Financial Procedure Rules are part of the Council’s Constitution. The relevant parts of the Constitution are Part TBC (Finance, Contracts and Legal Matters), Part TBC (Responsibility for Functions and Scheme of Delegation), and Part TBC (Standing Orders). Financial Procedure Rules may only be amended by Full Council.
1.4 Financial Procedure Rules provide a framework within which all staff can carry out their responsibilities in an open and consistent manner. They outline the financial responsibilities of all officers and members of the Council, and have been designed to promote and maintain the high standards expected of the public sector in dealing with financial and other resources financed from taxation by:
· placing clear accountability with officers appointed to manage resources and;
· establishing key principles and processes which they should follow, supported by detailed operating arrangements approved by the Section 151 Officer.
1.5 The Financial Procedure Rules are binding on all Council officers, including contractors, agency staff, and anyone acting on behalf of the Council, including elected members.
1.6 All officers with responsibility for undertaking financial duties are required to comply with these rules. The Section 151 Officer is, in turn, accountable to Council. The Financial Procedure Rules and supporting documents are reviewed annually and will be developed further in line with any cultural changes and transformation plans the Council is working towards.
1.7 Locally managed schools have their own financial governance and rules, which are set out in the West Surrey Scheme of Financing Schools and the Schools’ Finance Manual.
1.8 The Financial Procedure Rules should be read in conjunction with the Council’s:
· Anti-Fraud and Corruption Strategy and Framework
· Business Continuity Plan Guidance
· Risk Management Strategy
· Whistle blowing Policy
· Procurement and Contract Standing Orders
1.9 The Section 151 Officer may appoint one or more deputy Section 151 Officers each of whom has authority to exercise all the powers and duties of the Section 151 Officer during the absence or incapacity of, or during the vacancy of the role of the Section 151 Officer.
1.10 The Section 151 Officer has the authority to delegate matters under these Financial Procedure Rules, where appropriate to a deputy Section 151 Officer or another officer of West Surrey council, and records will be maintained of any such delegations.
1.11 Should any uncertainty or dispute arise about these Procedure Rules, the matter must be referred to the Section 151 Officer for interpretation and arbitration.
Council
2.1 Council members, acting as the Full Council, are responsible for approving:
· The overall policy framework
· Medium Term Financial Strategy (MTFS)
· Annual Revenue and Capital Budgets
· Prudential Indicators for treasury management
· Limits on virements between budgets
· Capital Strategy
· Investment Strategy
· Treasury Management Strategy
· Annual Housing Revenue Account Budget
· Housing Revenue Account 30-year business plan
· Determining the Council Tax Base, calculating the band D equivalent properties and incorporating demands of parish councils and special expenses
Executive
2.2 The Executive is responsible for proposing the policy framework and budget to the Full Council and for the discharge of executive functions in accordance with it. Decisions can be delegated to individual executive members or officers in line with the Scheme of Delegation.
3.1 The Section 151 Officer’s role and responsibilities are set out in statute and are governed by (but not restricted to):
· Section 151 of the Local Government Act 1972;
· Section 114 of the Local Government Finance Act 1988;
· Local Government and Housing Act 1989;
· Local Government Act 2003; and
· Accounts and Audit Regulations 2015
3.2 The Section 151 Officer is responsible for the day-to-day management of the Council's financial affairs. They shall provide information and assistance to all officers to help them carry out their responsibilities for effecting the sound financial management of their services.
3.3 As Responsible Financial Officer, under Section 114 of the Local Government Act 1988, making a report to the Council, the Executive and the appointed external auditor, if the Council or one of its appointed officers:
a) has made, or is about to make, a decision which involves committing one of the existing authorities to unlawful expenditure on behalf of West Surrey Council; or
b) has taken, or is about to take, an unlawful action on behalf of West Surrey Council, which has resulted or would result in a loss or deficiency; or
c) If it appears to them that the expenditure of West Surrey Council expects or proposes to incur in a financial year is likely to exceed the resources (including sums borrowed or the revenue impact of borrowing) available to meet that expenditure.
3.4 Working with the Executive, any Best Value Commissioners and any other Member body established to provide advice and financial information on the emerging financial position of West Surrey Council and on the key financial controls necessary to secure sound financial management in the new organisation.
3.5 All financial procedures and records shall be subject to his/her approval. Under The Accounts and Audit Regulations, the Section 151 Officer, as Responsible Financial Officer, is responsible for the financial management of the Council, sound systems of internal control, risk management, and an annual review of the effectiveness of the system of internal control.
3.6 The Section 151 Officer will determine the administrative and accounting arrangements for the Housing Revenue Account subject to all relevant statutory provisions and any guidance issued by the Ministry of Housing, Communities and Local Government (MHCLG).
3.7 The Section 151 Officer will provide guidance on the apportionment of support and overhead costs between the General Fund and Housing Revenue Account. Any apportionment of costs must be fair to both council tenants and council taxpayers.
3.8 The Section 151 Officer is responsible for ensuring any borrowing is undertaken in accordance with the Chartered Institute of Public Finance and Accountancy (CIPFA) Prudential Code of Practice and the Council’s approved prudential borrowing indicators.
3.9 The Section 151 Officer shall report to members on the overall budget performance and recommend corrective action as and when required. They shall ensure, as far as practicable, Financial Procedure Rules and supporting policies protect the Council against any unlawful financial transactions or actions.
3.10 The Section 151 Officer will ensure that procedures are documented and made available to users for those financial systems identified as business critical.
3.11 The Section 151 Officer shall, after consultation with the Chief Executive, report any non-compliance with these Rules which they consider substantial. The report shall be made initially to the Leader and, following that, to the relevant Committee depending on the circumstances.
3.12 The Section 151 Officer must be given access to any necessary information to comply with his/her statutory duties.
4.1 Whilst responsibility for the administration of the Council’s financial affairs lies with the Section 151 Officer, all individuals engaged in Council activities are responsible for financial governance, ensuring that their actions comply with the Financial Procedure Rules.
Senior Officers
4.2 “Senior Officers” (Chief Executive, Executive Directors, Directors, Assistant Directors, Heads of Service and other designated officers) have individual and collective responsibility to ensure that the Seven Principles of Public Life i.e. the Nolan Principles (selflessness, integrity, objectivity, accountability, openness, honesty and leadership) are applied in all matters relating to financial activity of the council. They are ultimately accountable for ensuring effective planning and management of their budgets to deliver their service priorities within the agreed budget envelope and will sign an annual Budget Accountability Statement and is responsible for ensuring efficiency plans are in place and are deliverable.
4.3 Senior Officers may delegate day to day management to a Budget Manager in his/her directorate or service, provided that a list of officers so authorised shall be supplied to the Section 151 Officer. Although day to day management of a budget may be delegated, responsibility and accountability remain firmly with Senior Officers. Effective management of resources is a fundamental requirement of managers and failure to manage budgets will be investigated under the disciplinary procedure. Persistent or significant failure could constitute gross misconduct.
4.4 Senior Officers shall propose annual revenue and capital budgets for each service within the budget guidelines agreed by the Executive.
Budget managers
4.5 Budget Managers should make all relevant staff aware of these rules (and associated documents) and highlight the relevance and compliance of the rules to team members.
4.6 Budget Managers are accountable for their budget areas and to make arrangements for managing income and expenditure and ensure value for money in service delivery. Budget Managers are responsible for taking action to recover and to report on any budgetary variances, and for reporting to Senior Officers if there is a possibility that budgets may be overspent. Effective management of resources is a fundamental requirement of Budget Managers and failure to manage the budget properly will be investigated under the Council’s disciplinary procedure.
4.7 Budget managers are responsible for the budget narrative that informs the monthly reports to Directorate Leadership Teams (DLT), the Corporate Leadership Team (CLT) and to members. Finance officers are available to support this process.
4.8 Senior Officers and Budget Managers are responsible for ensuring that all staff, contractors, agency workers in their directorates, anyone acting on behalf of the Council and elected members are aware of the existence and content of the Council’s Financial Procedure Rules and other internal regulatory documents and that they comply with them. They must also ensure that there is adequate availability of and access to the current version of Financial Procedure Rules.
5.1 Where a matter arises in any Directorate which could materially affect the Council's finances, other than a matter already approved, Senior Officers shall consult the Section 151 Officer before any provisional expenditure is incurred or any commitment given.
5.2 All Executive reports shall contain a section dealing with the financial implications of the matter(s) covered by the report and shall be submitted to the Section 151 Officer, who shall satisfy himself/herself that the financial information is comprehensive and accurate before the report is finalised and published. Other committee reports that contain financial implications should follow the same process.
6.1 The Chief Finance Officer is responsible for preparing a balanced budget in accordance with the Local Government Act 1992, as amended, in particular by the Localism Act 2011.
6.2 The General Fund Revenue and Housing Revenue Account (HRA) budget should reflect the corporate aims and priorities of the Council and is set in the context of the proposed Medium-Term Financial Strategy.
6.3 The Section 151 Officer, in consultation with the Chief Executive, shall advise the Executive each year on the timescales and procedures to be adopted for the formulation of all Financial Plans including the Medium Term Financial Strategy, Annual Revenue Budget, Capital Strategy, Investment Strategy, Capital Programme, Treasury Management Strategy, a Housing Revenue Account Business Plan and receipt of local precept and / or special expenses information from town and parish councils in the West Surrey area. The Executive shall agree a timetable which will include stages for consultation with Resources and Performance and appropriate Select Committees and other appropriate stakeholders. Members will be actively involved in scrutiny of budget proposals ahead of submission to the Executive and Council, and subsequently in the monitoring of progress.
6.4 Senior Officers shall adhere to the agreed timescales and procedures in providing the information required to enable the preparation of Service Development and Financial Plans.
6.5 In accordance with the agreed timescales, the Section 151 Officer shall submit a report to the Executive, taking account of the views of appropriate committees, with the information required to enable the Executive to recommend a Capital and Investment Strategy and Programme, Revenue Budget and Council Tax for the following financial year to Council. The report will comment on the robustness of the budget proposals submitted for approval in compliance with the requirements of Section 25 of the Local Government Act 2003.
6.6 The responsibilities of Senior Officers are set out in the Budget Accountability Statement. Any additional expenditure not already included in the existing Revenue Budget must be found from corresponding savings/efficiencies in other areas.
6.7 Senior Officers, in consultation with the Section 151 Officer, shall make appropriate arrangements for the effective identification, progression and management of external funding and partnership opportunities (there after referred to as “funding opportunity”) applicable to their service area.
6.8 All bids for a funding opportunity for externally funded schemes shall be made in consultation with the Section 151 Officer or his/her deputy before a bid is submitted. Proper allowance must be made for work which will have to be undertaken by all other services/directorates to implement the scheme and all costs which must be met by the Council, in consultation with the appropriate Senior Finance Manager. Some applications may require member approval, as set out in the Constitution, particularly where the Council is entering into contractual arrangements. Costings in funding bids should, wherever possible, include direct, indirect, and overhead costs, using the Commercial Rate Card as a guide.
6.9 All officers engaged in the progression of such schemes shall adhere to these Financial Procedure Rules, the Council’s Procurement Rules and any other directions or instructions given by the Council. Where the Council has been defined by the funder as the Accountable Body for a scheme, Financial Procedure Rules applies equally to the staff of any partnering organisations in respect of the scheme.
6.10 Where a third party works in partnership with the Council in delivering an externally funded project, officers must ensure that a third-party agreement is in place which reflects the terms and conditions of the funding agreement between the Council and the external funder. The responsible officer shall ensure that the third-party complies with the third-party agreement to safeguard the Council’s position regarding compliance with its agreement with the funder. For all significant arrangements, the advice of the Monitoring Officer should be taken on the form and content of any agreement.
6.11 Further guidance on preparation of financial plans timescales and procedures, submission and monitoring of capital schemes, roles and responsibilities, and funding proposals and process can be sought from the appropriate Senior Finance Manager.
7.1 Budget Managers are authorised to incur expenditure up to the amounts included in their approved budget. Budget managers are ultimately accountable for the spending within their budget areas. Although day to day budget management may be delegated to other budget managers, the responsibility for financial approval must remain with the budget manager in line with the workflows built into the General Ledger and Procurement Standing Orders.
7.2 The Section 151 Officer shall update budgets to reflect approved variations agreed by the Executive. In addition, they shall approve amendments and update the Revenue Budget in accordance with Section 8.
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Officer |
TBC |
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Budget Holder |
TBC |
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Level 5 Service Manager |
TBC |
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Level 4 Assistant Director |
TBC |
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Level 3 Director |
TBC |
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Level 2 Executive Director |
TBC |
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Chief Executive |
TBC |
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Executive |
TBC |
7.3 Overspending against the approved budget is not permitted. However, a situation may arise which requires expenditure to be incurred as a matter of such urgency that there must be no delay. If there is no, or insufficient, budget provision available, the Budget Manager should, in consultation with the relevant Senior Officer and Section 151 Officer obtain the necessary goods, and/or works, and/or services. The additional expenditure should be met by virement in accordance with Section 8.
7.4 The Section 151 Officer or deputies approve any non-redundancy related settlement claims (not covered by 7.5) over £50,000; otherwise, the appropriate Senior Finance Manager will approve.
7.5 The approval of special severance agreements and non-special severance and, redundancy applications (e.g. compulsory and voluntary redundancy, ill health retirement and compensation for an injury at work payments) are covered within the Scheme of Delegation Section 3 Part A.
8.1 Senior Officers shall comply with the outlined roles and responsibilities and the Budget Accountability Statement. Individual budgets may be delegated to Budget Managers/Budget Holders within the directorate; however, Senior Officers maintain overall responsibility and are accountable for managing the budgets in compliance with the Budget Accountability Statement.
8.2 Senior Officers are responsible for delivering services within the allocated budget. It is not acceptable to overspend, and mismanagement of the budget may lead to disciplinary action.
8.3 Senior Officers and Budget Managers are responsible for delivering the savings/efficiencies identified within their assigned budgets.
8.4 Budget Managers shall provide accurate forecast returns in accordance with the budget monitoring timetable. Any overspends against a single budget line must be met by a saving elsewhere within the budget. If an overall unavoidable overspend is likely to occur, the Budget Manager must notify the appropriate Senior Officer and Senior Finance Manager and provide a detailed explanation of why the overspend is truly unavoidable. Any underspends should also be reported early, as these may be required to offset unavoidable pressures elsewhere.
8.5 The monthly forecast returns should provide coherent and detailed explanations which support the reported figures activity levels for budget variances, highlight potential budget problems progress on management actions and outline the impact on future budgets.
8.6 On behalf of Senior Officers, Assistant Directors of Finance will present monthly monitoring reports to DLTs. The Section 151 Officer will present a consolidated monthly monitoring report to CLT.
8.7 Using a risk-based methodology, regular financial monitoring reports shall also be prepared and submitted, in the agreed format, to DLT, CLT and the Executive as a standing agenda item on a monthly basis.
9.1 Budget approval gives Budget Managers the right to incur expenditure on behalf of the Council. Budget Managers may vire between their budget headings within the constraints outlined in the Financial Procedure Rules, in consultation with the appropriate Senior Finance Manager. Virements should not be used to adjust for under/overspends on various headings but only where a definite decision has been taken to change approved spending plans.
9.2 Revenue virements resulting from a change in policy or priorities (either within the same portfolio or between portfolios) will be subject to the following approval.
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Amount |
Minimum approval required |
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Up to and including £TBC |
TBC |
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In excess of £TBC, but no more than £TBC |
TBC |
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More than £TBC |
TBC |
9.3 Exceptions to the virement rules are as follows:
a) Member approval is not required where a budget will continue to be used for the approved purpose but is being moved, for example, to reflect a change in budget holder responsibilities. Such transfers will however require the approval of a Finance Director and the relevant Assistant Director(s) of Finance;
b) Member approval is not required for budget movements arising in order to comply with the CIPFA Service Expenditure Reporting Code of Practice guidance on accounting for overheads, or budget movements arising in order to comply with proper accounting practice. Approval is required from the relevant Senior Finance Manager and/or a Finance Director.
9.4 Anything else?
10.1 The Section 151 Officer shall issue guidance to all Directorates on the indicative levels of increase in fees and charges for services to ensure that as far as possible a common approach to charges and revisions of charges is adopted across the Council subject to cost recovery requirements set out in 10.2.
10.2 Senior Officers and Budget Managers will conduct an annual review of all fees and charges, in consultation with the appropriate Senior Finance Manager, as part of the annual budget setting process. The purpose of the review would be to ensure that:
a) Charges are set with the intention to recover the full cost of provision of each service. Any deviations should be agreed in accordance with 10.4;
b) Chargeable discretionary services are not subsidised without a specific supporting policy decision; and the level of subsidy for chargeable statutory services is recorded;
c) The annual review will encompass a review of the budgeted income generation, direct costs and allocated costs per the Rate Card, associated benchmarking comparatives, any changes to the local economy and any changes in legalisation to statutory services.
10.3 Each Directorate will supply to Finance Senior Management Team (FSMT) a list of fees and charges highlighting changes to the fee or charge, and comparative change from year to year. FSMT will consider whether any fees and charges are commercially sensitive, or politically high priority to define whether the change requires approval by the Executive or noting.
10.4 Once the fees and charges (discretionary and statutory) annual review has been conducted and reviewed by FSMT, within the annual budget setting timeline, the following table provides the approval and publishing delegation:
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Change: |
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Existing fees and charges |
New fees and charges |
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in line with guidance or rounding2, |
increase higher than issued guidance |
Under or over recovery of costs** |
part of a high priority schedule |
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Approved by: |
Budget Managers |
Relevant Executive Member |
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In consultation with: |
Appropriate Senior Finance Manager
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Finance Senior Management Team |
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Published in: |
Noted within the Executive Budget Report *
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Approved by the relevant Executive member (in year changes) or within the Executive Budget Report *
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*or within another Executive report before the start of the new financial year. If commercially sensitive, the individual fees and charges would be considered for Part 2 Committee report
**see 10.5 for costs recovery requirements.
10.5 In determining charges for discretionary services, the cost of providing the service should be calculated and fees charged to the service user in order to recover all direct, indirect and overhead costs, as well as current service costs, incurred by the Council in the delivery of the service and in compliance with relevant legislation. See 10.7 regarding exceptions. Where relevant, the cost of chargeable officer time should be used as calculated by corporate finance in the Commercial Rate Card (updated annually). Senior Officers should liaise with the appropriate finance officer in relation to the proposals. Finance officers must wherever possible prevent an unintended subsidy of discretionary services through the under-recovery of indirect and/or ancillary costs incurred in the delivery of discretionary services.
10.6 As part of the annual review of fees and charges, Senior Officers shall also examine the possibility of introducing charges for services where no charges are currently made. This will be undertaken in consultation with Legal Services.
10.7 Some fees and charges may be based on part cost recovery, subject to a supporting policy decision regarding subsidy (10.2). Reasoning and evidence should be provided to show why the charging of full cost would be detrimental to policy aims and that no alternative provision model is available or feasible. Non-recovery of current service costs does not require approval beyond Budget Managers.
10.8 Where charges are assessed according to ability to pay, Senior Officers may plan for the charges to be reduced in accordance with an assessment methodology approved by the Executive.
10.9 Housing rents should be set and increased annually in line with the Council’s rent policy, relevant tenancy agreements, and guidance issued by the Regulator of Social Housing.
Subsidiaries of the Council
10.10 Revenue and capital expenditure by subsidiaries is the responsibility of the respective company Boards. Expenditure that is above thresholds set in the respective companies’ Articles of Association will be approved by the Council’s Shareholder Investment Panel, and additionally by the Strategic Investment Board if greater than £1 million in value.
10.11 Approval of business plans, oversight of business performance, and other governance matters relating to subsidiaries and other investments will be provided by the Strategic Investment Board, supported by the Shareholder Investment Board and the Asset Strategy Board.
11.1 The setting and collection of council tax and non-domestic rates is determined by legislation. The Council will set the annual rate of council tax by dividing the total council tax requirement by the council tax base. The Council may also apply specific levies to fund designated services if permitted by legislation. Other bodies in West Surrey including parish and town councils, and the Surrey Fire and Rescue Commissioner may raise a precept on the council tax bills raised by the Council.
11.2 The Section 151 Officer is responsible for determining the administrative and accounting arrangements for the Council Tax collection fund. This includes approving the Council Tax base estimates.
11.3 As a billing authority, the Council will apply the relevant multiplier to the rateable value of each business property.
12.1 The carry forward of unspent provisions in the Revenue Budget from one financial year to the next is not permitted except with explicit approval of the Section 151 Officer, in consultation with the Leader of the Council, relevant Portfolio Holder and the Portfolio Holder for Finance.
12.2 The Section 151 Officer shall, as soon as is practicable, supply a detailed list of the items and amounts approved to Senior Officers and Budget Managers. The Section 151 Officer will report specific items to members within the overall outturn report.
12.3 Year end balances will be transferred to and from reserves by the Section 151 Officer, in line with the Council’s Reserves Policy, and with the approval of the Executive as part of the outturn report.
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Amount |
Minimum approval required |
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TBC |
Executive Director (following consultation with deputy S151 Officer(s)) |
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TBC |
Executive Director (following consultation with S151 Officer and relevant Portfolio Holder(s)) |
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TBC |
The Executive (following consultation with relevant Portfolio Holder, Executive Director and S151 Officer (if not already involved)) |
14.1 The Council’s approach to capital investment is set out in the Council’s Capital, Investment and Treasury Management Strategy, which is approved by Council as part of the budget setting papers each February. New schemes and projects will usually only be added to the Capital Programme as part of the annual budget setting process, however, changes, capital virements and additions may be made during the year, subject to one of three decision-making structures.
a) Capital expenditure relating to equity investments or investment property will be subject to assessment by the officer-led Shareholder Investment Panel, the Asset Strategy Board and ultimately approved by members at Strategic Investment Board.
b) Capital expenditure by subsidiaries is the responsibility of the respective company Boards. Expenditure that is above thresholds set in the respective companies’ Articles of Association will be approved by the Council’s Shareholder Investment Panel, and additionally by the Strategic Investment Board if greater than £1 million in value.
c) All other capital expenditure will be subject to assessment by the appropriate Strategic Capital Group; for Information Technology, Infrastructure and Property, the Capital Programme Panel and formal member approval, where required by the Scheme of Delegation.
14.2 Capital expenditure other than on equity investments and investment property is subject to a governance route based on value and an assessment of impact and risk. New capital schemes and projects and changes to existing schemes and projects are assessed and scrutinised in up to three stages prior to being included in the Capital Programme.
· Senior Finance Manager or their nominated officer for Information Technology, Infrastructure and Property;
· Strategic Capital Groups, comprising the Head of Service or their nominated officer and Senior Finance Manager. Strategic Capital Groups can make decisions on new approvals of up to £0.250 million or approve existing schemes where the scheme or project is within the approved Capital Programme Budget and does not require additional officer or member approval, based on an assessment of impact and risk. Variations to existing budgets can be approved up to 10% of total budget, up to a maximum of £0.250 million.
· The Capital Programme Panel, comprising of the Section 151 Officer or their nominated officer, the chairs of the Strategic Capital Groups and other nominated officers. The Capital Programme Panel can make decisions on new approvals of up to £1 million where the scheme or project does not require member approval based on an assessment of impact and risk. Variations to existing budgets can be approved up to 10% of total project budget, up to a maximum of £0.5 million.
· Approval by the Executive is required for all other additions and changes.
14.3 Where overarching capital programmes are included in the capital budgets approved by the Executive and Council as part of the capital budget setting progress, overarching programme strategies should also be approved by the Executive, setting out the parameters for incurring capital expenditure against these programme budgets.????
14.4 Where overarching strategies delegate the approval of individual schemes over £1 million to the relevant Portfolio Holder(s) and Executive Director(s), subject to scrutiny of business cases by the Capital Programme Panel. Individual schemes should initially be reviewed by Capital Programme Panel and then be signed off by the relevant Executive Director(s). Final approval will be via the relevant Portfolio Holder(s) via a formal delegated decision sheet which will be published and subject to call-in processes.
14.5 In these cases, the Portfolio Holder, Executive Director and Capital Programme Panel will also be responsible for ensuring, in consultation with Strategic Capital Groups, that the overarching strategy approved by the Executive remains deliverable within the overall programme budget and that key metrics, e.g. number of additional school places, will be delivered.
14.6 All proposed schemes must be based on a robust business case and subject to appropriate internal or external due diligence. In particular the business cases must ensure:
· Capital Programme proposals are consistent with the Council’s Organisation Strategy, Capital Strategy and Investment Strategy, Asset and Place Strategy and Directorate Strategies and have a strategic mandate to proceed;
· each capital scheme or project is assessed for both financial and service risk;
· the proposed timetable for the scheme or project is realistic; and
· all associated revenue implications are fully quantified and covered in the current and future years
14.7 Only those schemes and projects that meet the strategic priorities and have been assessed via the stages outlined above, subject to member approval where required, will be approved as part of the Capital Budget. Projects in an earlier stage of development may be included in the Capital Pipeline but will require business case approval, assessed via the stages outlined above, before they can commence.
14.8 Contracts for capital works will be awarded in accordance with the rules set out in Procurement Standing Orders.
15.1 Once a capital scheme or project has been approved in the Council’s Capital Programme Budget, each Budget Manager shall be responsible for monitoring expenditure, and for providing information in accordance with arrangements set out in the Capitalisation Handbook to enable regular reports to be submitted to DLTs, CLT, Select Committees and to the Executive. Note: Annually Senior Officers are requested to acknowledge their responsibilities and capital budget remit. Budget Accountability Statements are produced before the commencement of the financial year and require confirmation of the accountabilities and the budget envelope.
15.2 If necessary and following consultation with the Section 151 Officer or their nominated officer, virements may be made between capital schemes to reflect the value of each accepted tender. Virements should be approved by the appropriate Strategic Capital Group, Capital Programme Panel or the Executive based on the thresholds and non-financial factors set out in 13.2.
15.3 Block items within the Capital Programme comprising multiple schemes (e.g. Maintenance and Minor Works Programmes) shall be regarded as a single project subject to the total scheme costs not being exceeded and satisfying the requirements of any external funder.
16.1 The Section 151 Officer shall ensure that all financial transactions of the Council are accurately reflected in the Council’s accounting records.
16.2 All financial systems, accounting policies and accounting records shall be in a form agreed by the Section 151 Officer. All proposed changes to accounting policies must be approved by the Section 151 Officer and discussed with the Council’s external auditors, in line with accounting standards.
16.3 The Section 151 Officer will make appropriate arrangements for and advise officers and members on all taxation issues that affect the Council.
16.4 The Section 151 Officer will sign off the annual Statement of Accounts, once they are satisfied that the statement represents a true and fair view of the financial position of the Council. The Statement of Accounts will be submitted for approval to the Audit and Governance Committee.
16.5 Senior Officers are required to sign a Manager’s Assurance Statement each year in a form prescribed by the Section 151 Officer to assist with evidence for the annual accounts. The Manager’s Assurance Statement would be issued at the end of the financial year confirming:
a) adherence and compliance to all relevant governance, contingent liabilities, post balance sheet events, claims, related parties and conflicts of interest related to financial year end transactions, and contribution and the correlation of actual financial year end position links to the outturn report.
b) The group of Senior Officers signing a Manager’s Assurance Statement is similar to the group acknowledging Budget Accountability Statements. The Manager’s Assurance Statements addresses those areas that do not have budgets due to being funded from other sources like Better Care Fund and mid-year alignments. Note: Budget Accountability Statements are for Senior Officers acknowledging the framework and remit of responsibilities at the beginning of the financial year. The Budget Assurance Statements outlines the budget responsibilities of the new financial year.
16.6 Arrangements for the retention or destruction of financial records shall be in accordance with the Council’s Record Retention Policy. In any event, no document relating to the financial transactions of the Council, or its employees shall be destroyed before the completion of the External Audit for the year concerned.
16.7 Senior Officers shall be responsible for ensuring that there are adequate arrangements, in respect of financial information held in electronic form, to safeguard continuity in the event of an emergency and shall comply with the requirements set out in the Council's IT Security Policy.
17.1 The Section 151 Officer shall ensure that the Council maintains an adequate and effective system of internal audit of its accounting records and of its system of internal control in accordance with the proper internal audit practices, as laid down in The Accounts and Audit Regulations. This also extends to external audit, where appropriate, subject to external partners and external funding requirements. To facilitate independence and objectivity in reporting, the reporting lines of the Internal Audit function should be unfettered by line management structures so that direct access to any officer, member or external regulating authority (e.g. external audit) will be available.
17.2 In order to discharge his/her responsibilities under 16.1 above, the Section 151 Officer, Internal Audit and any other authorised staff shall have the right to
· Enter any Council premises or land at any reasonable time, without prior notice;
· Have access at all times to all records and documents (including email and correspondence) relevant to the business of the Council as maintained by the Council or third parties on its behalf including (but not limited to) external contractors and consultants;
· Require and receive any information and explanations considered necessary to the audit; and
· Require any employee or agent of the Council to account for assets under his/her control
17.3 The Chief Internal Auditor shall report on a regular basis to the Audit and Governance Committee with a summary of internal audit activity and shall bring to the attention of the Chief Executive and the Audit and Governance Committee any significant matters which may have come to his / her attention in the course of delivering the internal audit function.
18.1 All officers are required to inform their manager on becoming aware of any irregularity, or suspected irregularity, affecting income, expenditure, cash, stores or any of the resources of the Council. Senior Officers shall inform the Chief Internal Auditor as soon as practicable. If it is not appropriate to inform local management because of a potential connection to the alleged irregularity, then officers should contact the Chief Internal Auditor directly. This requirement also applies to elected members and to agents working on behalf of the Council where the concern is around Council related matters.
18.2 The Chief Internal Auditor shall consider during the course of any investigation or at its conclusion, as they deem appropriate, whether the matter may require investigation by the Police and/or notification to the External Auditor. Where appropriate they shall seek the advice of the Monitoring Officer and inform the Chief Executive.
18.3 At the conclusion of any investigation or earlier if appropriate, the Chief Internal Auditor shall, in consultation with the Monitoring Officer, agree with the Senior Officer concerned the steps that should be taken to mitigate any loss and prevent a recurrence of it. The Chief Internal Auditor shall report, if they consider it necessary, initially to the Chief Executive and, following that, to the Audit and Governance Committee, depending on the circumstances.
18.4 All investigations of this type undertaken by Internal Audit will be under the direction of the Chief Internal Auditor, in consultation with the Section 151 Officer and the HR Director. Such investigations will be undertaken in line with the Council’s Antifraud and Corruption Strategy and Framework, which forms part of the Constitution. The HR Director will ensure that “whistle blowing” procedures are defined, documented, widely communicated and reviewed at appropriate intervals, in consultation with the Section 151 Officer, the Monitoring Officer and the Chief Internal Auditor.
18.5 The Chief Internal Auditor or his/her delegated authority within Internal Audit acts as the Council’s Money Laundering Reporting Officer (MLRO). The MLRO will ensure that there is an Anti-Money Laundering Policy published on the Council’s external website which sets out the procedures which must be followed to enable the Council to comply with its legal obligations. This policy, which is contained in the Anti-Fraud and Corruption Strategy and Framework, states that the Council will not accept cash payments in excess of £5,000.
19.1 Senior Officers shall be responsible for ensuring that all orders issued from their departments for goods, works and services are in accordance with Procurement Standing Orders.
20.1 Agency workers, Contractors, and individual Consultants should be sourced in accordance with Procurement and HR guidelines.
20.2 Guidelines TBC.
20.3 When the appointment is for specific projects, the Chief Executive (and if required the Leader) must approve interim staff, consultant or contractor appointments where the fee exceeds £TBC a year (or in proportion where the engagement is for less than one year) before the contract starts.
20.4 All consultant or contractor engagements with an aggregate value of £TBC or over, must be subject to competitive tender and review by the regular procurement governance process before approval by the Leader and Chief Executive. The Leader and Chief Executive will not approve such engagements retrospectively.
20.5 Consultants, contractors and agency workers engaged to supervise contracts on behalf of the Council shall be required to comply with these Financial Procedure Rules as if they were direct employees of the Council. Such a requirement shall be included in every agreement for their services. Any reference in these Financial Procedure Rules to a Budget Manager shall apply to a consultant, contractor or agency worker. Where a report is required, it shall be made by the consultant, contractor or agency worker to the appropriate Senior Officer, who shall report to members as required.
21.1 All procurement and purchasing undertaken must adhere to the specified processes as agreed by the CLT and follow the requirements of the Procurement Standing Orders. The Section 151 Officer may authorise the use of Purchasing Cards for Council staff for the purposes of defraying petty cash and other minor or urgent expenses.
21.2 All material assumptions and risks inherent in evaluations of proposed contracts must be fully disclosed to those officers and members making decisions on the award of the contract, before the contract award is made.
21.3 Long term strategic contracts must include provision to secure continuous improvement, improved efficiency and value for money. Financial relationships must be made under the relevant corporate guidance as highlighted in the introduction. In this context, partnerships are deemed to be joint arrangements involving the Council pooling financial and/or other resources with other bodies in the pursuit of agreed joint objectives.
21.4 All partnership arrangements and pooled budgets must be agreed under written terms appropriate to the extent of the financial risk to the Council and may only be entered into following appropriate consultation with and approval from the Section 151 Officer and the Monitoring Officer. Where the Council’s contribution to, or financial risk from such arrangements, exceeds £100,000, the Executive’s approval is required. Appropriate approval must be obtained before entering into any proposed partnership.
22.1 The payment of all salaries, wages, pensions, compensation and other emoluments to employees, former employees or beneficiaries of the Council shall be made in accordance with arrangements approved by the Chief Executive and the People, Performance and Development Committee.
22.2 The HR Director shall arrange for all relevant payments in respect of sums deducted from employees' remuneration and any employers' contributions to be made to the appropriate agency.
22.3 Senior Officers shall notify the HR Director, or his/her agent, of all matters affecting payment as soon as possible. Notification will be in the form prescribed by the Section 151 Officer and Monitoring Officer.
22.4 Time records or other pay documents (including those relating to flexible working hours) shall be in a form prescribed or approved by the HR Director.
22.5 The HR Director shall ensure that there are proper arrangements to maintain all necessary human resources records concerning pay, superannuation, statutory sick pay, national insurance and income tax.
22.6 The HR Director shall have regard to any recommendations made by the Section 151 Officer in all matters of a financial nature.
23.1 Senior Officers and Budget Managers shall seek the prompt collection of all monies due to the Council in accordance with arrangements approved by the Section 151 Officer and as specified in the Income Manual.
23.2 Senior Officers and Budget Managers are responsible for dealing with the receipt of money and other remittances and holding them in secure conditions before they are banked or otherwise dealt with.
23.3 The Section 151 Officer is responsible for the Council's overall banking arrangements. All arrangements for opening bank accounts and for the banking and withdrawal of money shall be approved by the Section 151 Officer. The Section 151 Officer shall determine the arrangements for the reconciliation of all Council bank accounts.
24.0 Debt Management and Bad Debt write offs (not Adult Social Care)
24.1 The appropriate Director has authority to write off debts for individual outstanding balances for the following:
|
Council Tax |
TBC |
|
Business Rates |
TBC |
|
Housing Benefit |
TBC |
|
Housing Rent |
TBC |
|
Commercial Rent |
TBC |
|
Sundry debt* |
TBC |
* includes xxxxx
24.2 The Section 151 Officer has the authority to approve write offs of unpaid debts up to the value of £100,000 per individual debt where the relevant Budget Manager, Legal Services and Corporate Finance agree there is no realistic chance of recovering the debt or it is considered uneconomical to attempt debt recovery. The Section 151 Officer has the overriding authority to approve or reject write offs if there is not agreement between the Budget Manager, Legal Services and Corporate Finance about a particular debt.
24.3 The Section 151 Officer may delegate in writing approval of individual write offs of unpaid debts to another member of the Corporate Finance service.
24.4 Any individual debts of more than £100,000 must be approved by the Executive, subject to the recommendation of the Section 151 Officer.
24.5 Write-off of irrecoverable debt will be charged to the relevant budget code where the debt was first raised unless otherwise agreed by the Section 151 Officer or their delegated representatives. The year-end financial outturn report will provide a summary of all irrecoverable debt written off during the year.
24.6 Credit balances, which are over three years old, and which cannot be substantiated or justified, will be released to the relevant fund after closure of accounts of each year, subject to formal approval by the Section 151 officer.
24.7 TBC- provisions for bad debt.
24.8 The Section 151 Officer will determine the criteria to calculate how much to provide for outstanding debts in relation to their age and type in consultation with the relevant Budget Managers and Legal Services. The bad debt provisions will be recalculated based on the latest debt levels and types on a quarterly basis. Relevant services will bear the impact of any increase or decrease required to the bad debt provision relating to ICBs. The impact of increases or decreases required to the general bad debt provision will be charged to Central Income and Expenditure. Each year consideration will be given as to whether any budget provision should be made to account for the potential impact of bad debt on the Council’s revenue budget in the coming year. This will be approved as part of the annual budget setting process. Any savings realised against this budget provision will be transferred to reserves.
25.1 The Section 151 Officer has the authority to approve write offs of unpaid Adult Social Care assessed fees & charges up to the value of £100,000 per individual debt where the relevant Budget Manager and financial assessment staff in Adult Social Care, Legal Services and Corporate Finance agree there is no realistic chance of recovering the debt or it is considered uneconomical to attempt debt recovery. The Section 151 Officer has the overriding authority to approve or reject write offs if there is not agreement between Adult Social Care, Legal services and Corporate Finance about a particular debt.
25.2 The Section 151 Officer may delegate in writing approval of individual write offs of unpaid Adult Social Care assessed fees & charges to another member of the Corporate Finance service.
25.3 The Section 151 Officer or the delegated Corporate Finance officer may delegate in writing approval of write offs of unpaid Adult Social Care assessed fees & charges up to £5,000 to designated officers in Adult Social Care. Where this delegation is made, the designated Adult Social Care officers will have the authority to approve write offs without the need to seek advice and formal approval from Corporate Finance.
25.4 Any individual debts relating to unpaid Adult Social Care assessed fees & charges of more than £100,000 must be approved by the Executive, subject to the recommendation of the Section 151 Officer.
25.5 Write-off of irrecoverable debt will be charged to the relevant budget in Adult Social Care. The year-end financial outturn report will provide a summary of all irrecoverable debt written off during the year relating to Adult Social Care assessed fees & charges.
25.6 Credit balances, which are over three years old, and which cannot be substantiated or justified, will be released to the relevant fund after closure of accounts of each year, subject to formal approval by the Section 151 officer.
25.7 Where the Council’s Client Financial Affairs Team acts as the court appointed Financial Deputy or Department for Work & Pensions Appointee for a resident who dies they will be responsible for undertaking the following duties:
· Advising known parties of the death, including financial institutions and organisations where the resident has a known financial relationship.
· Liaising with known Executors or known Next of Kin who are actively pursuing Letters of Administration for authority to act on the estate.
· Referring the matter to the Treasury Solicitor where there is no known Next of Kin.
· Arranging for funeral expenses to be paid where invoices are received from Funeral Directors together with a copy of the death certificate.
25.8 Where the Council has set up a bank account for the resident:
· Where they are required by the bank and set up with the ability to do so the Client Financial Affairs Team will instruct the bank to stop all Direct Debits and Standing Orders on the account.
· Other than payment of funeral expenses outlined above, the Client Financial Affairs Team will take no other action in relation to the account unless instructed to do so by the appointed Executor or Person granted Letters of Administration.
· The Client Financial Affairs Team will transfer the closing balance to the account requested by the Executor or Person granted Letters of Administration
25.9 The Section 151 Officer has the authority to approve waivers of Adult Social Care assessed fees & charges in accordance with any provision in the Council’s Adult Social Care charging policy.
25.10 The Section 151 Officer may delegate in writing approval to waive Adult Social Care assessed fees & charges up to specified amounts to another member of the Corporate Finance service and designated Adult Social Care officers.
25.11 The Council will maintain a provision for bad debt relating to unpaid Adult Social Care assessed fees & charges. The Section 151 Officer will determine the criteria to calculate how much to provide for outstanding debts in relation to their age and type in consultation with Adult Social Care and Legal Services. The social care bad debt provision will be recalculated based on the latest debt levels and types on a quarterly basis. The impact of any increase or decrease required to the social care bad debt provision will be charged to the Council’s Adult Social Care budget. Adult Social Care will review each year how much it is proposed is budgeted for potential bad debt to limit in-year impacts of write offs, changes to the bad debt provision or other costs associated with bad debts such as legal fees paid for debts that prove to be irrecoverable. Any budget provision proposed by Adult Social Care will be approved as part of the annual budget setting process.
26.0 Assets
Land and Property
26.1 The rules set out within this framework are to be applied for circumstance arising that are not already covered within the Scheme of Delegations or Procurement Standing Orders or Section 11 set out above (Authority to incur capital expenditure).
26.2 All acquisitions of land and buildings up to the value £1 million require approval from the Capital Programme Panel, the relevant the Portfolio Holder in conjunction with the Leader. This value relates to freehold and leasehold interest.
26.3 All acquisitions of land or buildings valued at £1 million or more requires Executive approval.
26.4 All disposals of land or buildings up to the value of £1 million require approval from the relevant Portfolio Holder in conjunction with the Leader. This value relates to freehold and leasehold interest and includes setting a reserve figure for auction sales.
26.5 All disposals of land or buildings valued at £1 million or more requires Executive approval. All disposals should be recorded within an approved register.
26.6 All acquisitions and disposals must be referred to the Land and Property Team. The application of best value considerations may result in disposal of assets at less than market value due to wider economic, environmental, and social value factors. The approach to valuation should be agreed in advance, in consultation with the Section 151 Officer.
26.7 The Chief Executive, in consultation with the Leader or Deputy Leader and the Chair or Vice Chair of the Housing Committee, can utilise the Housing Revenue Account for the purchase of land or buildings in accordance with the Council’s general power of competence under the Localism Act 2011, or in the case of the HRA, for the Council’s House Building Programme.
26.8 Authority is delegated to the Strategy & Resources Committee / Housing Committee to approve individual purchases of land or buildings within the district at or above £TBC million in value.
Assets other than Land and Property
26.9 Assets declared surplus to the Council’s requirements should be disposed of at the most appropriate time, and only when it is in the best interest of the Council, and best value is obtained. For assets of significant value, disposal should be by competitive tender or public auction.
26.10 Any proceeds from the disposal of assets should be receipted and recorded, even if the disposal value is zero.
26.11 No items can be disposed of to a member of staff without the explicit approval of the Section 151 Officer.
26.12 All acquisitions and disposals valued over £10,000 must be subject to a professional valuation. The approach to valuation should be agreed in advance, in consultation with the Section 151 Officer.
26.13 Senior Officers are responsible for, and shall make arrangements for, the safe custody and care of all assets in his/her department, including exercising proper control over the use of those assets. Such assets shall include plant, machinery, vehicles, furniture, equipment, other non-consumable property, stocks and stores and IT equipment.
26.14 Senior Officers are responsible for keeping inventory records and the marking of Council property. The Council's property shall not be removed other than in accordance with the ordinary course of the Council's business or used otherwise than for the Council's purposes.
26.15 Senior Officers are authorised to adjust their inventory records, relating to items outlined in 25.11 where any surplus or deficiency arises up to £2,500 in respect of any one item, provided appropriate investigations have been carried out to establish the reasons and prevent a recurrence. Records of such adjustments are subject to Internal Audit inspection.
26.16 The Section 151 Officer shall authorise Officers to adjust their inventory records where any surplus or deficiency arises between £2,500 and £5,000 in respect of any one item provided the appropriate Officer has investigated and reported the reasons for the discrepancy.
26.17 Adjustments to inventory records in respect of any one item where the amount exceeds £5,000 shall be referred to the Executive.
26.18 Budget Managers, after consultation with the Section 151 Officer, are authorised to delete any item from their inventory records where the item has become obsolete and is no longer adequate for the purpose intended, or the item is broken or worn.
27.0 Stocks and Stores
27.1 Lead Officers and Budget Managers are responsible for the receipt, issue and checking of the stocks and stores in their departments and for maintaining appropriate stock levels.
27.2 The extent to which items shall be included in records, and the form of record-keeping, shall be determined by the appropriate Senior Officer in consultation with the Section 151 Officer.
27.3 Senior Officers, in consultation with the Section 151 Officer, are authorised to adjust stock balances up to £10,000 in respect of any one item provided appropriate investigations have been carried out to establish the reasons and prevent a recurrence. All other write offs require Executive approval.
27.4 The year-end financial outturn report to the Executive will set out all stock write offs granted in the year.
28.0 Estates
28.1 The Director of Land and Property shall update the Council’s Asset Management Plan as necessary and maintain a terrier of all land and properties held by the Council.
28.2 The Monitoring Officer shall have custody under secure arrangements of all the title deeds in the possession of the Council.
28.3 The Director of Land and Property shall be responsible for land and property under his/her control, and for obtaining the best economic return possible consistent with Council policy and legal requirements. They shall ensure that all rents etc. are regularly reviewed.
29.0 Risk management and insurance
29.1 The Risk Management Strategy outlines the arrangements in place to ensure the Council identifies and deals with the key risks it faces. The Section 151 Officer is responsible for ensuring that a risk management process is maintained across the Council and may specify risk management activity to be undertaken by other officers. The Risk Management Framework complements the strategy and ensures a consistent approach to risk management across the organisation by detailing the Council’s approach to risk identification, assessment, control, and reporting.
29.2 The Council’s approach to risk management is a continuous and evolving process that runs through the Council’s strategies and service delivery. It ensures key risks are managed and resilience is strengthened in order to support the delivery of the Council’s priorities.
29.3 The Section 151 Officer is responsible for advising the Executive on insurance arrangements. The Section 151 Officer shall be responsible for the day-to-day administration of the Council's insurances and negotiating all policies and claims in consultation with the relevant Senior Officers and Budget Managers.
29.4 Senior Officers, in consultation with the Section 151 Officer, shall be responsible for the effective management of all insurable risks.
29.5 Senior Officers shall consult the Monitoring Officer and the Section 151 Officer concerning the terms of any indemnity which the Council may be requested to give.
29.6 All Officers shall give prompt notification to the Section 151 Officer of all new risks, properties or vehicles which require to be insured in accordance with arrangements determined by him/her.
29.7 Any person who makes use of his/her own vehicle for Council business shall comply with the appropriate County Council policies with regards to car users and any instructions relating to this policy issued by the HR Director.
29.8 Senior Officers shall ensure there is proper security at all times for all assets under his/her control and safe and proper arrangements for the custody of keys to safes and similar receptacles.
29.9 Senior Officers shall immediately notify the Section 151 Officer of any loss, liability, damage or other similar event likely to lead to a claim. Where appropriate, the Section 151 Officer shall inform the Monitoring Officer and the Police. Such notification shall be confirmed promptly in writing.
30.0 Treasury Management and the Pension Fund
30.1 All money held by the Council shall be aggregated for the purposes of treasury management and shall be under the control of the Section 151 Officer, subject to the constraints of delegated powers given to schools. They shall seek expert advice on these matters when considered appropriate.
30.2 The Section 151 Officer is responsible for the Council's treasury management activities in accordance with CIPFA's Code of Practice for Treasury Management in Local Authorities and the Prudential Code. They shall propose an annual Treasury Management Strategy Statement to the Audit and Governance Committee.
30.3 The Section 151 Officer will ensure that the provisions of the strategic and operational requirements in 29.2 are implemented, legislative requirements are complied with, and regular monitoring of all Treasury Management activity is undertaken.
30.4 Effective scrutiny of the Treasury Management Strategy will be undertaken by the Resources and Performance Select Committee, as part of the overall scrutiny of the budget. The Section 151 Officer will submit a mid-year review and an annual outturn report on treasury management to the Audit and Governance Committee.
30.5 The Council, as corporate trustee for a limited number of Trust Funds and charities through its members and officers, will ensure that the Council administers them in accordance with its legal responsibilities as trustee, distinct and separate from its functions as a local authority. The council, when undertaking the aforementioned duties, will also comply with the CIPFA Code of Practice in Treasury Management and any relevant Charity Commission guidance, to ensure provisions are appropriately implemented.