1 INTRODUCTION

Project Reporting Criteria	TBM report appendix	Separate report to Cabinet
Initial project approval:
Total projected cost less than £1,000,000.	√
Total projected cost greater than or equal to £1,000,000 could be in the capital monitoring report appendix (TBM) or in a separate report to the Cabinet, depending on size, risk, revenue or policy implications.	√	√
Projects committing the council to on-going additional revenue costs. As above, depends on size of capital cost and/or risk, policy implications as to which is most appropriate.	√	√
Specific works funded under a s106 or CIL agreement	√
Leasing costs to be incurred instead of capital financing costs where assets are to be acquired, and where expenditure would be within budget.	√
Significant increases in tender or contract prices.	√

B.2.5.10 Where provision is made within the Capital Programme for advance feasibility design and works, each Chief Officer may incur expenditure associated with the feasibility and initial design of future capital schemes with the approval of the Chief Finance Officer. Any expenditure incurred where a scheme does not proceed will be recharged to the service’s revenue budget.

B.2.5.11 To ensure that all capital proposals have undergone a project appraisal in accordance with guidance issued by the Chief Finance Officer.

B.2.5.12 To ensure that tenders and/or quotations are obtained in accordance with the council’s Corporate Procurement Strategy, procurement Codes of Practice (COPs) and Contract Standing Orders. This includes ensuring that centrally negotiated contracts are used if they are in place.

B.2.5.13 To prepare regular reports reviewing the capital programme provisions for their services. They should also provide estimated final costs of schemes in the approved capital programme for consideration by the Chief Finance Officer and inclusion in (at least) quarterly reports to the Cabinet.

B.2.5.14 To promptly identify and report slippage on any schemes and to liaise with the Chief Finance Officer in respect of reprofiling capital expenditure into future financial years where circumstances outside the control of the council mean that it is not possible to spend capital budgets in the current financial year.

B.2.5.15 To ensure that adequate records are maintained for all capital contracts in line with Contract Standing Orders.

B.2.5.16 To proceed with projects only when there is adequate provision in the capital programme and with the agreement of the Chief Finance Officer where required.

B.2.5.17 To ensure that all necessary approvals have been received from the Planning Authority or Government Departments where appropriate.

B.2.5.18 To prepare and submit information, jointly with the Chief Finance Officer, to be included within the TBM report to the Cabinet, of any variation in contract costs greater than the amount approved within the Capital Programme. Chief Officers may meet cost increases of up to 10% or £100,000, whichever is the lesser, by virement from savings elsewhere within their capital programme or revenue budget, subject to agreement with the Chief Finance Officer.

B.2.5.19 To obtain Chief Finance Officer approval for carry forwards of year-end capital underspends, other than when funded from scheme specific resources. Where projects are overspent, this may be a first call on the service’s capital allocation in the subsequent year’s programme.

B.2.5.20 To ensure that credit arrangements, such as leasing agreements, are not entered into without the prior approval of the Chief Finance Officer and, if applicable, approval of the scheme through the capital programme.

B.2.5.21 To consult with the Chief Finance Officer and to seek Cabinet approval where the Chief Officer proposes to bid for supported borrowing or other external funding to support expenditure that has not already been included in the approved Capital Programme.

B.2.5.22 To ensure that no schemes are brought forward or substituted in the Capital Programme without Chief Finance Officer approval where ‘slippage’ of an approved scheme may have occurred.

B.2.5.23 To aim to complete, construct or procure all items expected to be undertaken in each financial year of a scheme in order to ensure that capital schemes are carefully resourced and monitored. The aim must be to keep capital slippage to an absolute minimum and to take action to avoid the risk of losing capital resources through slippage.

B.3 MAINTENANCE OF RESERVES

Why is this important?

B.3.1 The local 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. Reserves 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.

Key Controls

B.3.2 To maintain reserves in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom and agreed accounting policies.

B.3.3 For each reserve established, the purpose, usage and basis of transactions should be clearly identified.

B.3.4 Authorisation of expenditure from specific reserves by the appropriate Chief Officer should only be actioned with the approval of the Chief Finance Officer. Allocations from the council’s general contingency reserves require the approval of the Chief Finance Officer in accordance with budget guidelines set by Full Council.

Responsibilities of the Chief Finance Officer

B.3.5 To annually review the levels of reserves, taking into account an appropriate assessment of financial risks, and advise the Cabinet and/or Full Council on prudent levels of general reserves and risk provisions for the council.

Responsibilities of Chief Officers

B.3.6 To ensure that resources are used only for the purposes for which they were intended.
APPENDIX C

C RISK AND OPPORTUNITY MANAGEMENT AND CONTROL OF RESOURCES

C.1 RISK AND OPPORTUNITY MANAGEMENT (ROM)

Why is this important?

C.1.1 All organisations face risks that can affect achievement of their objectives. Risk Management is defined as “the culture, processes and structure, which come together to optimise the management of potential opportunities and adverse effects”.

C.1.2 Risk and Opportunity Management is concerned with evaluating the probability of an event and its consequences, identifying the measures the organisation already has in place to manage identified issues (risks) and then taking any further action to control these risks effectively. The adequacy of the control measures should be monitored and the control measures reviewed as necessary.

C.1.3 It is at the core of decision-making, business planning, managing change and innovation and needs to be practised at all levels. It enables the effective use of resources, securing the assets of the organisation and its continued financial and organisational well-being.

C.1.4 Risks and Opportunities need to be identified, evaluated and managed:

· at a strategic level when setting objectives, outlining strategic business plans, planning major changes, large projects and/or undertaking improvement reviews;

· at an operational level by selecting the most appropriate means to manage the particular risk identified; this could range from assessing risks and setting objectives and actions when planning or managing risks by implementing health and safety policies or procedures, complying with Financial Regulations, Contract Standing Orders or seeking insurance cover.

Key controls

C.1.5 The key controls for risk management are:

· The ROM Strategy is agreed and adhered to across the council.

· Procedures are in place to identify, assess and manage the risks that may hinder the council from reaching its objectives.

· Risk and opportunity management is a formalised stage of the business planning process, project management, major changes initiatives and financial programme key controls.

· A monitoring process is in place to review regularly the effectiveness of risk reduction strategies and the operation of these controls.

· Risk management training and support is available across the council.

· Managers know that they are responsible for managing risks and are provided with information on risk management initiatives and incidence levels.

Responsibilities of the Cabinet

C.1.6 The Cabinet is responsible for approving the council’s ROM Strategy and for reviewing the effectiveness of risk management. The Audit & Standards Committee also has a role in reviewing risk and opportunity management arrangements (see Financial Regulations).

Responsibilities of the Corporate DirectorCorporate Director, Corporate Services and Chief Finance Officer

C.1.7 The Corporate DirectorCorporate Director, Corporate Services is required to:

· prepare the council’s ROM Strategy for approval by the Cabinet;

· issue and maintain procedures relating to risk management;

· develop risk management controls in conjunction with all Chief Officers;

· promote risk management across the council and provide advice to managers on the most appropriate risk management tools to use.

C.1.8 The Chief Finance Officer is required to:

· arrange cost effective and appropriate insurance cover and deal with insurance claims and resultant risk actions to reduce the incidence and severity of similar losses;

· ensure procedures are in place to investigate claims within required timescales;

· consult with relevant Chief Officers to develop risk management controls for insurable risks;

· effect corporate insurance cover through external insurance and internal funding, and to oversee the negotiation of all claims in consultation with other officers and relevant bodies where necessary;

· maintain a continuous review of claims experience and to effect the optimum balance of internal and external insurance cover over time.

Responsibilities of Chief Officers

C.1.9 Chief Officers are required to:

· ensure that there is a continuous review of exposure to risk within their services, produce and update risk registers for these services and act at all times so as to minimise risks;

· produce evidence of risk registers and risk management actions when undertaking strategic business planning, major change initiatives, large projects (for example, capital projects), new partnership arrangements and improvement reviews;

· monitor the progress of identified risks and subsequent risk management actions;

· notify the Chief Finance Officer immediately of any major risks that are identified and cannot be managed within the resource levels of the service;

· raise the awareness and understanding of risk management throughout the council through training and regular use of risk management techniques in decision-making and planning;

· notify the Chief Finance Officer immediately of any loss, liability or damage that may lead to a claim against the authority, together with any information or explanation required by the Chief Finance Officer or the authority’s insurers;

· co-operate at all times with the investigations of the Insurance Manager and supply all information upon request. It is imperative that officers comply with the timescales for investigating claims. Failure could directly affect the authority’s ability to defend a claim or could result in financial penalties being imposed on the authority;

· take responsibility for risk management, having regard to advice from the Chief Finance Officer and other specialist officers (for example, the Risk Manager, the Insurance Manager, crime prevention, fire prevention, health and safety);

· notify the Chief Finance Officer promptly of all new risks, properties or vehicles that require insurance and of any alterations affecting existing insurances, and supply the Chief Finance Officer with asset valuations for insurance purposes as required;

· consult the Chief Finance Officer on the terms of any indemnity that the authority is requested to give and to ensure no indemnities are given on behalf of the council without the agreement of the Chief Finance Officer and the Executive Lead for Strategy, Governance and Law ;

· ensure that employees, or anyone covered by the authority’s insurances, do not admit liability or make any offer to pay compensation that may prejudice the assessment of liability in respect of any insurance claim;

· ensure that all companies or individuals contracted to carry out construction work have adequate Public Liability insurance cover, consulting if necessary with the Chief Finance Officer;

· provide all relevant information and documentation to the Chief Finance Officer when requested;

· to fund from their budget the total cost of any claim which has been lost due to a service’s inability to meet the protocol time limits.

C.2 INTERNAL CONTROLS

Why is this important?

C.2.1 The council is complex and beyond the direct control of individuals. It therefore requires internal controls to manage and monitor progress towards strategic objectives. The council is now required to publish an Annual Governance Statement alongside its Statement of Accounts.

C.2.2 The council has statutory obligations and, therefore, requires internal controls to identify, meet and monitor compliance with these obligations. It also faces a wide range of financial, administrative and commercial risks, both from internal and external factors, which threaten the achievement of its objectives. Internal controls are necessary to manage these risks.

C.2.3 It is the responsibility of Chief Officers to maintain and promote sound arrangements for internal control. These arrangements will be devised by management to ensure that the council’s objectives are achieved in a manner that promotes economical, efficient and effective use of resources and that the council’s assets and interests are safeguarded.

Key Controls

C.2.4 The key controls and control objectives for internal control systems are:

· key controls should be reviewed on a regular basis and the council should make a formal statement annually to the effect that it is satisfied that the systems of internal control are operating effectively;

· 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;

· financial and operational control systems and procedures, which include physical safeguards for assets, segregation of duties, authorisation and approval procedures and information systems;

· an effective internal audit function that is properly resourced. It should operate in accordance with the principles contained in Public Sector Internal Audit Standards and with any other statutory obligations and regulations.

Responsibilities of the Chief Finance Officer

C.2.5 To assist the council 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.

C.2.6 To put in place and maintain an adequate and effective internal audit service.

C.2.7 To report significant new or changed risks to the Audit & Standards Committee.

Responsibilities of Chief Officers

C.2.8 To check that established controls are being adhered to and to evaluate their effectiveness, in order to be confident in the proper use of resources, achievement of objectives and management of risks.

C.2.9 To review existing controls in the light of changes affecting the council and to establish and implement new ones in line with guidance from the Chief Finance Officer.

C.2.10 To ensure staff have a clear understanding of their responsibility to identify and manage risk on a continuous basis.

C.3 AUDIT REQUIRMENTS

C.3.1 Internal Audit

Why is this important?

C.3.1.1 The requirement for an internal audit function for local authorities is implied by s151 of the Local Government Act 1972, which requires that authorities “make arrangements for the proper administration of their financial affairs”. The Accounts and Audit Regulations 2015 (as amended) require the council to maintain an adequate and effective internal audit service.

C.3.1.2 Accordingly, internal audit is an assurance function that primarily provides an independent and objective opinion to the council on the control environment comprising risk management, control and governance by evaluating its effectiveness in achieving the organisation’s objectives. It objectively examines, evaluates and reports on the adequacy of the control environment as a contribution to the proper, economic, efficient and effective use of resources.

Key Controls

C.3.1.3 The key controls for internal audit are:

· that it is independent of day-to-day service operation in its planning and operation;

· the Chief Internal Auditor (CIA) has direct access to the Chief Executive, the Chief Finance Officer, Monitoring Officer and all levels of management and directly to elected Members as appropriate;

· that internal auditors comply with the Public Sector Internal Audit Standards and the International Standards for Internal Auditing (IIA).

Responsibilities of the Chief Finance Officer

C.3.1.4 To ensure there is an effective internal audit function and assist with management in providing effective arrangements for financial scrutiny.

C.3.1.5 To ensure that internal auditors have the authority to:

· access council premises at reasonable times;

· access all assets, records (including electronic), documents, correspondence and system applications;

· receive any information and explanation considered necessary concerning any matter under consideration;

· require any employee of the council to account for cash, stores or any other authority asset under their control;

· access records belonging to third parties, such as contractors, when required;

· directly access the Chief Executive, the Chief Finance Officer, the Monitoring Officer, the Cabinet and Members as appropriate.

C.3.1.6 To ensure that Internal Audit staff at all times respect the confidentiality of operations or management information in the areas subject to audit activity.

C.3.1.7 To approve the Internal Audit Strategy and Annual Audit plans prepared by the Chief Internal Auditor, which take account of the characteristics and relative risks of the activities involved.

C.3.1.8 To advise on counter fraud strategies and measures, and ensure that effective procedures are in place to investigate promptly any fraud or irregularity.

C.3.1.9 To ensure the provision of advice on the nature and extent of any further investigation to be conducted following the discovery or report of any irregularity involving cash, stores or other assets. Where there is the possibility of criminal action being brought, to ensure that any further interviewing is conducted to meet the requirements of the Police and Criminal Evidence Act 1984 and other relevant legislation.

C.3.1.10 To refer any matter to the Police following consultation with the Chief Officer concerned, and the Monitoring Officer.

C.3.1.11 To ensure that at the conclusion of each internal audit, a report and recommendations (if any) are submitted promptly to the relevant Chief Officer of the service concerned.

Responsibilities of Chief Officers

C.3.1.12 To ensure that internal auditors are given access at all reasonable times to premises, personnel, documents and assets and are provided with any information and explanations, that they consider necessary for the purpose of their work.

C.3.1.13 To consider and respond promptly to recommendations in audit reports and ensure the implementation of recommendations by agreed deadlines.

C.3.1.14 To ensure that any agreed actions arising from audit recommendations are carried out in a timely and efficient fashion and in line with the timescale agreed with the head of the Internal Audit service.

C.3.1.15 Chief Officers are responsible for notifying the Internal Audit service immediately of any suspected fraud, theft, irregularity, improper use or misappropriation of the authority’s property or resources. Pending investigation and reporting, the Chief Officer should take all necessary steps to prevent further loss and to secure records and documentation against removal or alteration.

C.3.1.16 To ensure that new systems for maintaining financial records, or records of assets, or changes to such systems, are discussed with and agreed by the Chief Finance Officer prior to implementation.

C.3.2 External Audit

Why is this important?

C.3.2.1 Currently, external auditors are appointed to each local authority in England and Wales by Public Sector Audit Appointments Ltd (PSAA). The external auditor has rights of access to all documents and information necessary for audit purposes.

C.3.2.2 The basic duties of the external auditor are defined in the Audit Commission Act 1998 and the Local Government Act 1999. In particular, s4 of the 1998 Act requires a code of audit practice, which external auditors follow when carrying out their duties. The Code of Audit Practice issued in 2010 (as amended and updated) sets out the auditor’s objectives to review and report upon:

· the financial aspects of the audited body’s corporate governance arrangements;

· the audited body’s financial statements;

· aspects of the audited body’s arrangements to manage its performance, including the preparation and publication of specified performance information.

C.3.2.3 This council’s accounts are scrutinised by the external auditor, 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 legal requirements. Under the Code of Audit Practice the external auditors will also be required to certify that they believe the council has spent money effectively and obtained value for money.

Key Controls

C.3.2.4 External auditors are appointed by PSAA normally for a minimum period of five years. External auditors are governed by codes of practice and UK and International auditing standards.

Responsibilities of the Chief Finance Officer

C.3.2.5 To ensure that the external auditors are given access at all reasonable times to premises, personnel, documents and assets that the external auditors consider necessary for the purposes of their work.

C.3.2.6 To ensure there is effective liaison between external and internal audit.

C.3.2.7 To work with the external auditor and advise Full Council, the Cabinet, the Audit & Standards Committee and Chief Officers on their responsibilities in relation to external audit.

Responsibilities of Chief Officers

C.3.2.8 To ensure that external auditors are given access at all reasonable times to premises, personnel, documents and assets which the external auditors consider necessary for the purposes of their work.

C.3.2.9 To ensure that all records and systems are up to date and available for inspection.

C.4 PREVENTING FRAUD AND CORRUPTION

Why is this important?

C.4.1 The council is committed to fighting fraud and a zero tolerance policy in the administration of its responsibilities, whether internal or external fraud.

C.4.2 The council’s expectation of propriety and accountability is that Members and staff at all levels will lead by example in ensuring adherence to legal requirements, rules, procedures and practices.

C.4.3 The council also expects that individuals and organisations (for example, suppliers, contractors, partners, service providers) with whom it comes into contact will act towards the council with integrity and without thought or actions involving fraud and corruption.

C.4.4 The council must ensure that it complies with the Proceeds of Crime Act 2002, Money Laundering Regulations 2007 and the Bribery Act 2010.[NM1]

C.4.5 Money laundering

C.4.5.1 Money laundering is the term used for a number of offences involving the proceeds of crime or terrorist funds. It also includes the processing, or in any way dealing with, or concealing, the proceeds of crime.

C.4.5.2 The Proceeds of Crime Act 2002 and Money Laundering Regulations 2007 [NM2] place some important obligations on all staff. The head of the Internal Audit service is the designated Money Laundering Reporting Officer for the council. Staff are required to inform the head of the Internal Audit service of any known or suspected money laundering activities. Staff should not normally accept a single cash transaction in excess of £10,000 GBP or the equivalent in Euros (EUR) at current exchange rates without the approval of the head of the Internal Audit service or nominated deputy.

C.4.6 Bribery Act 2010

C.4.6.1 Bribery is a criminal offence and council officers and Members must not pay bribes or offer improper inducements to anyone for any purpose, nor accept bribes or improper inducements.

C.4.6.2 To use a third party as a conduit to channel bribes to others is a criminal offence. Officers and members must not engage indirectly in or otherwise encourage bribery.

Key Controls

C.4.7 The key controls regarding the prevention of financial irregularities are that:

· the council has an effective Counter Fraud Strategy and maintains a culture that will not tolerate fraud or corruption;

· all Members and staff act with integrity and lead by example;

· senior managers are required to deal swiftly and firmly with those who defraud or attempt to defraud the council or who are corrupt;

· high standards of conduct are promoted amongst members by the Audit & Standards Committee, and compliance with the Code of Conduct for Members;

· the maintenance of a register of interests in which any hospitality or gifts accepted by staff must be recorded;

· whistle blowing procedures are in place and operate effectively;

· legislation including the Public Interest Disclosure Act 1998 is adhered to;

· the maintenance of a register of Members’ financial and other interests and a register of gifts and hospitality, over the value of £25, that Members have received in connection with their official duties.

Responsibilities of the Chief Finance Officer

C.4.8 To develop and maintain a Counter Fraud Strategy.

C.4.9 To maintain adequate and effective internal control arrangements.

C.4.10 To ensure that all suspected irregularities are reported to the head of the Internal Audit service, and, if appropriate, to the Chief Executive and the Cabinet.

Responsibilities of Chief Officers

C.4.11 To ensure that all suspected irregularities are reported to the Internal Audit service.

C.4.12 To instigate the council’s disciplinary procedures where the outcome of an audit investigation indicates improper behaviour.

C.4.13 To ensure that where financial impropriety is discovered, the Chief Finance Officer is informed. Where sufficient evidence exists to believe that a criminal offence may have been committed, the police may be called in following consultation with the Chief Finance Officer and/or Monitoring Officer to determine with the Crown Prosecution Service whether any prosecution will take place.

C.4.14 To maintain a directorate register of staff interests, such that potential conflicts of interest are identified and avoided wherever possible.

C.4.15 The Monitoring Officer must maintain a register of Members’ financial and other interests and a register of gifts and hospitality over the value of £25.

C.5 ASSETS

C.5.1 Security and Inventories

Why is this important?

C.5.1.1 The council 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. Up-to-date asset registers are a prerequisite for proper fixed asset accounting and sound asset management.

Key Controls

C.5.1.2 The key controls for the security of resources such as land, buildings, fixed plant machinery, equipment, software and information are:

· resources are used only for the purposes of the council and are properly accounted for;

· resources are available for use when required;

· resources no longer required are disposed of in accordance with the law and the regulations of the council so as to maximise benefits;

· asset registers and a property terrier are maintained for the council, assets are recorded when they are acquired and the records are updated as changes occur with respect to the location and condition of the asset;

· all staff are aware of their responsibilities with regard to safeguarding the council’s assets and information, including the requirements of the Data Protection Act and software copyright legislation;

· all staff are aware of their responsibilities with regard to safeguarding the security of the council’s ICT systems, including maintaining restricted access to the information held on them and compliance with the council’s ICT and internet security policies;

· an Asset Management Plan is maintained to identify strategies to deal with council property, ensuring property is used effectively and efficiently and with value for money, linked to the council’s budgets, strategies, and objectives.

Responsibilities of the Chief Finance Officer

C.5.1.3 To ensure that an asset register is maintained in the council’s financial records in accordance with good practice for all fixed assets with a value in excess of a pre-determined level which will be kept under review. In addition the Assistant Director Property & Design has delegated power to maintain a property terrier, which records the holding committee and/or service, location, extent, plan reference, purchase and sale details, nature of the interest, tenancies granted, rents payable and purposes for which the property is held. The function of the asset register and the property terrier is to provide the council with information about fixed assets so that they are safeguarded, used efficiently and effectively, adequately maintained and insured.

C.5.1.4 To ensure that assets are valued in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom, and valued to the Royal Institution of Chartered Surveyors (RICS) Appraisal & Valuation Standards.

C.5.1.5 To provide guidance on the form of records to be kept for stocks and stores.

C.5.1.6 To prepare the council’s Asset Management Plan.

Responsibilities of Chief Officers[2]

C.5.1.7 The below-mentioned responsibilities of Chief Officers in relation to assets shall be read in accordance with the Council’s Corporate Landlord arrangements as set out in the Scheme of Delegations to Officers.

C.5.1.8 The appropriate Chief Officer shall ensure that adequate inventories are maintained in a form approved by the Chief Finance Officer for all properties, plant and machinery, furniture, fittings equipment and any movable assets of significant value currently owned or used by the council. Periodic checks of inventories should be undertaken. Where appropriate, security marking shall be used. The value of items to be included in an inventory shall be prescribed by the Chief Finance Officer.

C.5.1.9 To submit information to the Chief Finance Officer for the purpose of updating accounting, costing and financial records in respect of fixed assets including property and vehicles etc.

C.5.1.10 To ensure that lessees, and other prospective occupiers of council land, are not allowed to take possession of or enter council land unless a lease or agreement has been put in place in a form agreed by the Assistant Director Property and Design. This provision does not apply to HRA land, which is to be managed by the relevant Chief Officer in accordance with the Scheme of Delegations to Officers.

C.5.1.11 To ensure the proper security of all buildings and other assets under their control. Chief Officers are responsible for the receipt, care, safe custody and issue of stocks and stores. Stores records shall be kept in a form agreed by the Chief Finance Officer. Leased vehicles, plant or equipment may not be disposed of without the prior approval of the Chief Finance Officer.

C.5.1.12 Where property is considered to be surplus to the requirements of a service area, to notify the Assistant Director Property & Design who will make decisions regarding the future management or disposal of the property. This provision does not apply to HRA land, which is to be managed by the relevant Chief Officer in accordance with the Scheme of Delegations to Officers.

C.5.1.13 To grant easements, licenses or wayleaves of less than 3 months duration in accordance with the Scheme of Delegation to Officers. Any further extension of such agreements is to be managed by the Assistant Director Property and Design. This provision does not apply to HRA land, which is to be managed by the relevant Chief Officer in accordance with the Scheme of Delegations to Officers.

C.5.1.14 To pass title deeds to the Corporate Director, Corporate Services who is responsible for custody of all title deeds.

C.5.1.15 To ensure that no council asset is subject to personal use by an employee without proper authority.

C.5.1.16 To ensure the safe custody of vehicles, equipment, furniture, stock, stores, uniforms, keys, staff identity cards and other property belonging to the council and to maintain an effective system of stock control where appropriate. A certificate of the value of stocks held as at 31 March each year should be provided to the Chief Finance Officer. Stocks should be maintained at reasonable levels, having regard to factors such as turnover, value, delivery quantities and delivery period, and are subject to a regular independent physical check.

C.5.1.17 To consult the Chief Finance Officer in any case where security is thought to be defective or where it is considered that special security arrangements may be needed.

C.5.1.18 To ensure cash holdings on premises are kept to a minimum and are held securely and within insured limits. Secure arrangements should also be in place for any cheques held on council premises.

C.5.1.19 To ensure that keys to safes and similar receptacles are carried on the person of those responsible at all times and that the issue of keys is formally recorded and controlled and that the loss of any such keys must be reported to the Chief Finance Officer as soon as possible.

C.5.1.20 To record all disposal or part exchange of assets that should normally be by competitive tender or public auction, unless, following consultation with the Chief Finance Officer, the Cabinet agrees otherwise.

C.5.1.21 Where property is removed for an authorised purpose, and only if appropriate insurance cover has been obtained, full details and authorisation should be properly recorded (e.g. in a loans book) to enable its identification. Authorised purposes might include the use of portable computer equipment away from the office and also equipment used for home-based working.

C.5.1.22 To investigate and remove from the council’s records (that is, write off) discrepancies as necessary, in accordance with approved procedures, or to obtain Cabinet approval if they are of significant value following consultation with the Chief Finance Officer. Where equipment or materials become unusable or obsolete, the Chief Finance Officer may arrange for it to be written off in accordance with instructions issued by them. Where equipment or materials have a scrap value or resale value, disposal shall be at the best price obtainable following the procedure for disposal issued by the Chief Finance Officer.

C.5.1.23 To ensure that goods are checked to the goods received note at the time of delivery, matched to order specification and that a delivery note is obtained.

C.5.2 Intellectual Property

Why is this important?

C.5.2.1 Intellectual property is a generic term that includes inventions and writing. If these are created by the employee during the course of employment, then, as a general rule, they belong to the employer, not the employee. Various Acts of Parliament cover different types of intellectual property.

C.5.2.2 Certain activities undertaken within the council may give rise to items that may be patentable, for example, software development. These items are collectively known as intellectual property.

Key Controls

C.5.2.3 In the event that the council decides to become involved in the commercial exploitation of inventions, the matter should only proceed following consultation with and on the advice of the Chief Finance Officer and Head of Law.

C.5.2.4 Data and content, including that on the council’s public website, should only be made available for re-use under the terms of the Open Government Licence.

Responsibilities of the Chief Finance Officer

C.5.2.5 To develop and disseminate good practice through the council’s intellectual property procedures.

Responsibilities of Chief Officers

C.5.2.6 To ensure that controls are in place to ensure that staff do not carry out private work in council time and that staff are aware of an employer’s rights with regard to intellectual property.

C.5.2.7 To consult the Chief Finance Officer and Head of Law on any proposals to commercially exploit inventions.

C.5.2.8 The Head of Law is responsible for assessing whether any exceptional circumstances may support an exemption to publish data and content under the Open Government Licence.

C.5.3 Disposal of Assets

Why is this important?

C.5.3.1 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 documented procedures for the sale of land and buildings are set out in the Asset Management Plan. Section 123 Local Government Act 1972 generally requires councils to obtain best consideration that can reasonably be obtained when disposing of such assets. However, disposal at less than best consideration is possible under the legislation, for example, when other benefits are to be gained, including social housing and regeneration, but the circumstances need to be checked carefully in each case to ensure that the detailed requirements for a disposal at less than the best consideration can be satisfied.

Key Controls

C.5.3.2 Assets for disposal are identified and are disposed of at the most appropriate time, and only when it is in the best interests of the council, and best price is obtained, bearing in mind other factors, such as environmental issues. For items of significant value, disposal should be by competitive tender or public auction.

C.5.3.3 Procedures protect staff involved in the disposal from accusations of personal gain.

Responsibilities of the Chief Finance Officer

C.5.3.4 To issue guidelines representing best practice for disposal of assets.

C.5.3.5 To ensure appropriate accounting entries are made to remove the value of disposed assets from the council’s records and to include the sale proceeds if appropriate.

Responsibilities of Chief Officers

C.5.3.6 To ensure that the guidelines on the disposal of surplus or obsolete materials, stores or equipment are followed.

C.5.3.7 To ensure that income received for the disposal of an asset is properly banked and coded.

C.6 TREASURY MANAGEMENT

Why is this important?

C.6.1 Many millions of pounds pass through the council’s books each year. This has led to the establishment of formal codes of practice on Treasury Management drawn up by CIPFA. These aim to provide assurances that the council’s money is properly managed in a way that balances risk with return, but with overriding consideration being given to the security of the council’s financial resources.

Key Controls

C.6.2 All monies in the hands of the council shall be aggregated for the purposes of Treasury Management and shall be under the control of the Chief Finance Officer or the council’s appointed agent.

C.6.3 That the council adopts the key recommendations of CIPFA’s “Treasury Management in the Public Services: Code of Practice” (the Code) as described in section 5 of that Code.

C.6.4 Accordingly the council will create and maintain, as the cornerstones for effective treasury management:

· A treasury management policy statement, stating the policies, objectives, and approach to risk management of its treasury management activities;

· suitable treasury management practices (TMP’s), setting out the manner in which the council will seek to achieve those policies and objectives, and prescribing how it will manage and control those activities;

· investment management practices (IMPs) for investments that are not for treasury management purposes.

C.6.5 The content of the policy statement and TMP’s will follow the recommendations contained in sections 6 and 7 of the Code, subject only to amendment where necessary to reflect the particular circumstances of the council. Such amendments will not result in the council materially deviating from the Code’s key recommendations.

C.6.6 The content of the AIS will follow guidance issued by the government. Full Council will approve the AIS prior to the commencement of the year, and any subsequent changes or revisions, on the recommendation of the Policy & Resources Committee.

C.6.7 The Council delegates responsibility for the implementation and monitoring of its treasury management policies, practices and AIS to the Cabinet, and for the execution and administration of all treasury management decisions to the council’s Chief Finance Officer who will act in accordance with the council’s treasury management policy statement, TMP’s and AIS.

C.6.8 Cabinet will receive reports on its treasury management policies, practices and activities (including the AIS) at least three times a year, these being an annual strategy and plan in advance of the year, a mid-year review and an annual report after its close, in the form prescribed in the TMP’s.

Responsibilities of the Chief Finance Officer

C.6.9 To arrange the borrowing and investments of the council in such a manner as to comply with the CIPFA Code and the council’s Treasury Management Policy statement and Annual Investment Strategy.

C.6.10 To report at least three times a year on treasury management activities to the Cabinet.

C.6.11 To ensure that all investments of money are made in the name of the council or in the name of nominees approved by the Cabinet.

C.6.12 To effect all borrowings in the name of the council and to maintain records of such borrowing in accordance with the CIPFA Code and the council’s Treasury Management Policy Statement.

C.6.13 To act as, or to appoint the council’s bankers to act as, the council’s registrar of stocks, bonds, mortgages etc.

Responsibilities of Chief Officers

C.6.14 To follow the instructions on banking issued by the Chief Finance Officer.

C.6.15 To ensure that loans are not made to third parties and that interests are not acquired in companies, joint ventures or other enterprises without the approval of the Chief Finance Officer who will be responsible for seeking approval of the Cabinet and/or Full Council where appropriate.

C.7 TRUST FUNDS, FUNDS HELD FOR THIRD PARTIES AND OTHER VOLUNTARY FUNDS

C.7.1 Trust and other voluntary funds frequently provide service areas with additional sources of finance to provide services to their customers. Although not public money, such funds are administered by employees of the council in normal work time and therefore minimum standards must be met. In addition, customers, clients and benefactors who contribute to the fund are entitled to expect minimum levels of financial stewardship and accountability.

C.7.2 It is most important that an effective audit is carried out by a person with experience appropriate to the level of turnover of the fund. Where the annual income of the fund exceeds £50,000, the council recommends that a qualified accountant is appointed as the auditor/independent examiner.

C.7.3 The auditor must be totally independent from and have no indirect connection with the administration of the fund such as might inhibit the impartial conduct of the audit. This precludes:

· any member of staff involved in the administration of the fund;

· a relative of any member of staff responsible for administering the fund.

C.7.4 In addition, the auditor should have the requisite ability and practical experience to carry out a competent examination of the accounts.

C.7.5 Where the annual vatable income of the fund exceeds the VAT registration threshold, the auditor should be a Consultative Committee of Accountancy Bodies (CCAB) qualified accountant; that is, a member of one of the six recognised accountancy bodies in the UK.

Key Controls

C.7.6 The key controls for Trust Funds, funds held for third parties and other voluntary funds are:

· Funds are only used for the purposes for which they are intended.

· All funds with income over £50,000 are inspected or audited on an annual basis by an appropriately qualified auditor.

· All monies are accounted for and kept separate from council funds.

Responsibilities of the Chief Finance Officer

C.7.7 To ensure that all trust funds held in the name of the council are audited in line with any statutory requirements.

C.7.8 To provide guidance on accounting arrangements.

Responsibilities of Chief Officers

C.7.9 To arrange for all trust funds to be held, wherever possible, in the name of the council. All officers acting as trustees by virtue of their official position shall deposit securities etc. relating to the trust with the Chief Finance Officer, unless the deed otherwise provides.

C.7.10 To arrange, where funds are held on behalf of third parties, for their secure administration, approved by the Chief Finance Officer, and to maintain written records of all transactions.

C.7.11 To ensure that trust funds are operated within any relevant legislation and the specific requirements for each trust.

C.7.12 To follow all guidance issued by the Chief Finance Officer.

C.7.13 Chief Officers shall maintain an itemised inventory of private property of persons taken into the care of the council, in each case prepared in the presence of two authorised officers. Such property shall be removed only in the presence of two people who shall both certify the itemised inventory of these items. Chief Officers shall also maintain an itemised inventory of private property when steps are necessary to prevent or mitigate loss or damage of moveable property. Inventory records shall be produced to the Chief Finance Officer on request.

C.7.14 The Corporate DirectorCorporate Director Housing, Care & Well-being shall be responsible for the administration of the personal effects and property of deceased persons within the definition of the Public Health (Control of Disease) Act 1984.

C.7.15 All private valuables of persons taken into the care of the council such as jewellery, watches or other articles of a similar nature and documents of title shall be deposited for safe custody in accordance with arrangements approved by the Chief Finance Officer. A record must always be maintained by the Chief Officer wherever cash is held, including bank accounts or building society accounts. Due care must be taken to prevent or mitigate loss or damage to property of those who are taken into care.

C.7.16 Disposals of such property shall be in accordance with arrangements approved by the Chief Finance Officer.

C.7.17 Chief Officers are responsible for ensuring that all voluntary funds held, where money and/or assets are handled by employees in the course of their employment or office, which have not been issued by the council, are properly administered and that they are audited under arrangements approved by the Chief Finance Officer. Where cash is held in a bank account or building society account or such similar arrangements, a record must be maintained accordingly by the Chief Officer concerned. Cheques issued in respect of these accounts must not be pre-signed.

C.8 STAFFING

Why Is this Important?

C.8.1 In order to provide good quality services, it is crucial that the council recruits and retains high calibre, knowledgeable staff, qualified to an appropriate level. There must be adherence to council policies and procedures on staff recruitment and security of confidential information.

Key Controls

C.8.2 The key controls for staffing are:

· an appropriate workforce strategy and policy exists, in which staffing requirements and budget allocation are matched within agreed limits/tolerances;

· procedures are in place for forecasting staffing requirements and cost;

· controls are implemented that ensure that staff time is used efficiently and to the benefit of the council;

· checks are undertaken prior to employing new staff to ensure that they are appropriately qualified, experienced and trustworthy, and have appropriate security clearance;

· within the total financial estimate provision approved by the council, Chief Officers shall be entitled to vary the numbers and composition of their workforce in order to meet service requirements provided such variations do not commit the council to increased expenditure in future years. Where an ‘Establishment Management’ process is approved by the Chief Executive and the Chief Finance Officer, the Chief Officers must comply with the requirements of the process including any specified authorisations or approvals.

Responsibilities of the Chief Finance Officer

C.8.3 To act as an advisor to Chief Officers on areas such as National Insurance and pension contributions, as appropriate.

Responsibilities of the Chief Executive

C.8.4 Overall responsibility for ensuring that Human Resources and Health & Safety strategies, codes of practice, policies and procedures are developed and implemented across the council.

Responsibilities of Chief Officers

C.8.5 To produce an annual staffing budget.

C.8.6 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). This includes compliance with any approved staffing budget or establishment management procedures.

C.8.7 To monitor staff activity to ensure adequate control over such costs as sickness, overtime, training and temporary staff.

C.8.8 To comply with corporate requirements on recruitment to ensure that employees are appropriately qualified, experienced and trustworthy, and have appropriate security clearance.

C.8.9 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.In particular, where an ‘Establishment Management’ procedure is approved by the Chief Executive and Chief Finance Officer, Chief Officers must comply with the requirements of the process including any specified authorisations or approvals.

C.8.10 To ensure authorisation for recruitment to vacant posts is in accordance with any corporate vacancy management process approved by the Chief Executive or Corporate Leadership Team and that any opportunities are taken to generate short-term savings from vacant posts without severely impacting on service performance. Further guidance is set out in D.2.3 Payments to employees and Members.

C.8.11 To comply with any direction set by the Cabinet, the Chief Executive or Corporate Leadership Team in respect of vacancy management controls.

APPENDIX D

D SYSTEMS AND PROCEDURES

D.1 IT SYSTEMS AND RELATED PROCEDURES

Why is this important?

D.1.1 Service areas have many systems and procedures relating to the control of the council’s assets, including purchasing, costing and management systems. Services are increasingly reliant on Information Technology (IT) for their financial management information. The information must therefore be accurate and the systems and procedures sound and well administered. They should contain controls to ensure that transactions are properly processed and errors detected promptly.

D.1.2 The Chief Finance Officer has a professional responsibility to ensure that the council’s financial IT systems are sound and should therefore be notified of any new developments or changes.

D.1.3 The Chief Finance Officer is responsible for the procurement, development, implementation and maintenance of all IT systems to the standards required by the business functions of Brighton & Hove City Council and its infrastructure.

Key Controls

D.1.4 The key controls for systems and procedures are:

· basic data exists to enable the council’s objectives, targets, budgets and plans to be formulated;

· performance is communicated to the appropriate managers on an accurate, complete and timely basis;

· early warning is provided of deviations from target, plans and budgets that require management attention;

· operating systems and procedures are secure.

Responsibilities of the Chief Finance Officer

D.1.5 To make arrangements for the proper administration of the council’s financial affairs, including to:

· issue advice, guidance and procedures for officers and others acting on the council’s behalf;

· determine the financial systems, form of accounts and supporting financial records;

· establish arrangements for audit of the council’s financial affairs;

· approve any new financial systems to be introduced, including systems linked to or interfaced with “feeder systems” the corporate financial information system;

· approve any changes to be made to existing financial systems or related feeder systems;

· ensure output from the system is complete, accurate and timely;

· have suitable controls to ensure that systems and procedures are secure.

Responsibilities of Chief Officers

D.1.6 To ensure that accounting records are properly maintained and held securely.

D.1.7 To ensure that vouchers and documents with financial implications are not destroyed, except in accordance with arrangements approved by the Chief Finance Officer.

D.1.8 To ensure that a complete management trail is maintained, allowing financial transactions to be traced between the accounting records and the original document.

D.1.9 To incorporate appropriate controls to ensure that, where relevant:

· all input is genuine, complete, accurate, timely and not previously processed

· all processing is carried out in an accurate, complete and timely manner.

D.1.10 To comply with all other system controls as required by the Chief Finance Officer.

D.1.11 To ensure compliance with all guidance and relevant legislation in relation to HM Revenue & Customs requirements, and be responsible for meeting from delegated budgets any penalties and interest payments which may arise following non-compliance.

D.1.12 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.

D.1.13 To ensure there is a documented and tested Disaster Recovery plan or Business Continuity Plan to allow information system processing to resume quickly in the event of an interruption. Wherever possible, back-up information should be securely retained in a fireproof location, always off site.

D.1.14 To ensure that systems are documented and staff trained in operations.

D.1.15 To consult with the Chief Finance Officer before changing any existing IT system or introducing new systems.

D.1.16 To ensure that only officers authorised to act on their behalf process payments, collect income and place orders, including variations; this should be evidenced through either: local procedure/practice notes, job descriptions/organisational structure, a record of authorised signatories or a scheme of financial delegation or authorisation.

D.1.17 To provide a Scheme of Delegation or Authorisation or supply lists of authorised officers, with specimen signatures and delegated limits to the Chief Finance Officer, together with any subsequent variations.

D.1.18 To ensure that, where appropriate, IT systems are registered in accordance with data protection legislation and that staff are aware of their responsibilities under the legislation.

D.1.19 To ensure that relevant standards and guidelines for computer systems are observed.

D.1.20 To ensure that ICT equipment, infrastructure and software are protected from loss and damage through theft, vandalism, etc.

D.1.21 To comply with the copyright, designs and patents legislation and, in particular, to ensure that:

· only software legally acquired and installed by the council is used on its computers;

· staff are aware of legislative provisions;

· in developing systems, due regard is given to the issue of intellectual property rights , and where computer systems are developed for the council, the resulting programs should be held in escrow or equivalent arrangements.

D.2 INCOME AND EXPENDITURE

D.2.1 Income

Why Is this Important?

D.2.1.1 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 or at the point of supplying goods or services as this improves the council’s cash-flow and also avoids the time and cost of administering debts.

Key Controls

D.2.1.2 The key controls for income are:

· all income due to the council is identified and charged correctly, in accordance with the Corporate Fees & Charges Policy, which is regularly reviewed;

· all income is collected from the correct person, at the right time, using the correct procedures and the appropriate stationery;

· all money received by an employee on behalf of the council is paid without delay to the Chief Finance Officer or, as they direct, to the authority’s bank account, and is properly recorded. The responsibility for cash collection should, ideally, be separated from:

§ the responsibility for identifying the amount due;

§ the responsibility for reconciling the amount due to the amount received.

· income received is not used to meet expenditure;

· effective action is taken to pursue non-payment within defined timescales;

· formal approval for debt write-off is obtained;

· appropriate write-off action is taken within defined timescales;

· appropriate accounting adjustments are made following write-off action;

· all appropriate income documents are retained and stored for the defined period in accordance with the document retention schedule;

· money collected and deposited is reconciled to the bank account by a person who is not involved in the collection or banking process;

· to guard against fraud and money laundering, the maximum cash deposit accepted will be £10,000 or the equivalent in Euros at current exchange rates.

Responsibilities of the Chief Finance Officer

D.2.1.3 To agree arrangements and promote best practice for the collection of all income due to the council.

D.2.1.4 To collect income due in all cases where formal invoices are raised.

D.2.1.5 To ensure that all income received is kept securely and banked properly.

D.2.1.6 To order and supply to services all receipt forms, books or tickets and similar items and to satisfy themselves regarding the arrangements for their control.

D.2.1.7 To approve the form of all cash collection facilities and associated procedures. This includes safes, automated cash collection machines and other cash collection facilities.

D.2.1.8 To agree the write-off of bad debts in accordance with financial limits and to report to the Cabinet if this is material to either the accounts of the council as a whole or to the service in question.

D.2.1.9 To approve all debts to be written off in accordance with financial limits and to keep a record of all sums written off and to adhere to the requirements of the Accounts and Audit Regulations 2015 (as amended).

D.2.1.10 To establish and initiate appropriate recovery procedures, including legal action where necessary, for debts that are not paid promptly.

D.2.1.11 To ensure that appropriate accounting adjustments are made following write-off action.

Responsibilities of Chief Officers

D.2.1.12 To ensure that all income is accounted for. An officer authorised to raise an invoice shall not be permitted to amend or cancel invoices raised by them. Chief Officers shall ensure that only officers authorised by them are able to amend or cancel invoices on their behalf and that all requests to amend or cancel invoices will require a minimum of two authorised signatories. The Chief Finance Officer shall be notified promptly of all money due to the council including details of contracts, leases or agreements and arrangements entered into which involve the receipt of money by the council. The Chief Finance Officer must be promptly notified of new, or variations to, rents and leases or other periodic income to ensure that the periodic income register is accurately maintained.

D.2.1.13 To establish a charging framework for the supply of goods or services, including the appropriate charging of VAT, which accords with the Corporate Fees & Charges Policy and to review charges regularly.

D.2.1.14 To separate the responsibility for identifying amounts due and the responsibility for collection, as far as is practicable.

D.2.1.15 To issue official receipts or to maintain other documentation for income collection in a form approved by the Chief Finance Officer.

D.2.1.16 Raising invoices has a cost implication. Invoices for supplies or services with a value of less than £5 must not be issued without the approval of the relevant Chief Officer.

D.2.1.17 To ensure that a record is kept of any money or cash equivalents (e.g. postal orders) received by post and is signed by the receiving officer.

D.2.1.18 To hold securely receipts, tickets and other records of income for the appropriate period.

D.2.1.19 To lock away all income (cash and cheques) to safeguard against loss or theft, and to ensure the security of cash handling. Maximum limits for cash held shall be agreed with the Chief Finance Officer, having regard to the council’s insurance cover, and must not be exceeded.

D.2.1.20 To ensure that all relevant cash collection procedures issued by the Chief Finance Officer are complied with including the requirements of the corporate banking contract and security carrier contracts.

D.2.1.21 To ensure that income is paid fully and promptly into the appropriate council bank account in the form in which it is received. There must be sufficient information to identify the transaction. Money collected and deposited must be reconciled to the bank account on a regular basis. All cheques, money orders and postal orders received in any service area shall be crossed “Brighton & Hove City Council”.

D.2.1.22 To ensure that reconciliations are in place to confirm that all income collected by their services is banked promptly and intact.

D.2.1.23 To ensure income is not used to cash personal cheques or make other payments.

D.2.1.24 To ensure that debtor invoices are raised and despatched promptly following any work done, goods supplied or services rendered where payment has not been received at or prior to the point of supply.

D.2.1.25 To recommend to the Chief Finance Officer debts to be written off in accordance with financial limits and to keep a record of all sums written off up to the approved limit.

D.2.1.26 To notify the Chief Finance Officer of any contracts, leases or other arrangements entered into, which involve the payment of money to the council.

D.2.2 Ordering and Paying for Work, Goods and Services

Why is this important?

D.2.2.1 Public money should be spent with demonstrable probity and in accordance with the council’s policies. Councils have a statutory duty to put in place arrangements to secure economy, efficiency and effectiveness in the use of resources. The council’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 council’s Corporate Procurement Strategy and procurement Codes of Practice (COPs).

D.2.2.2 Every officer and member of the council 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 council, in accordance with appropriate codes of conduct.

Key Controls

D.2.2.3 The key controls for ordering and paying for work, goods and services are:

· all goods and services are ordered only by appropriate persons and are correctly recorded;

· all goods and services shall be ordered in accordance with the council’s Corporate Procurement Strategy, procurement Codes of Practice (COPS) and purchase order system requirements;

· the tender and award of all contracts for goods, services and works shall be subject to the council’s Contract Standing Orders and relevant statutory and Public Contract Regulations;

· goods and services received are checked to ensure they are in accordance with the order. Where practicable, managers should try to ensure goods are not received by the person who placed the order;

· payment should not be made unless goods have been ordered and received by the council to the correct price, quantity and quality standards. Exceptions include advance booking for travel, places at seminars or courses, or overnight accommodation provided the value does not exceed £10,000;

· Excluding the exceptions above, where it is not possible to order and purchase goods or services in the required sequence (i.e. order, receipt of goods, invoice and payment), advance payment may be allowable subject to the prior approval of the Chief Finance Officer;

· all payments are made within the payment terms or otherwise within 30 days to the correct person, for the correct amount and are properly recorded, regardless of the payment method;

· all appropriate evidence of the transaction and payment documents are retained and stored for the defined period, in accordance with the document retention schedule (see paragraph D.8.9.4);

· all expenditure, including VAT, is accurately recorded against the correct budget or accounting code and any exceptions are corrected;

· in addition, the effect of e-business/e-commerce and electronic purchasing (e-Procurement) requires that processes are in place to maintain the security and integrity of data for transacting business electronically.

D.2.2.4 All orders, including e-purchasing orders, must be in a form approved by the Chief Finance Officer.

D.2.2.5 Apart from petty cash, schools’ own bank accounts and other payments from advance accounts, the normal method of payment from the council shall be by BACS, cheque or other instrument or approved method, drawn on the council’s bank account by the Chief Finance Officer. The use of direct debit shall require the prior agreement of the Chief Finance Officer.

D.2.2.6 Orders must not be raised for any personal or private purchases, nor must personal or private use be made of council contracts.

Responsibilities of the Chief Finance Officer

D.2.2.7 To ensure that all the council’s financial systems and procedures are sound and properly administered and that authorisation levels are commensurate with Financial Regulations, Standing Orders, Schemes of Delegation and good practice.

D.2.2.8 To maintain a Scheme of Authorisation for all Corporate Financial and Procurement IT Systems and any subsidiary IT systems capable of generating payments, orders or other financial commitments.

D.2.2.9 To approve any changes to existing financial systems and to approve any new systems before they are introduced.

D.2.2.10 To approve the form of official orders and associated terms and conditions, and ensure there is a back-up of orders that have been generated on the system, as part of the back-up/disaster recovery plan.

D.2.2.11 To make payments from the council’s funds on the Chief Officer’s authorisation or purchase order system authorisation that the expenditure has been duly incurred in accordance with Financial Regulations.

D.2.2.12 To make payments, whether or not provision exists within the estimates, where the payment is specifically required by statute or is made under a Court Order.

D.2.2.13 To make payments to contractors on the certificate of the appropriate Chief Officer or purchase order system authorisation, which must include details of the value of work, retention money, amounts previously certified and amounts now certified.

D.2.2.14 To provide advice and encouragement on making payments by the most economical means and to report to Chief Officers as a collective on payment processing performance in accordance with corporate reporting requirements.

Responsibilities of Chief Officers

D.2.2.15 To comply with guidance issued by the Corporate Procurement Team, to ensure that the most favourable terms for price, delivery and quality have been obtained.

D.2.2.16 To ensure the safe custody and proper use of official orders, including e-purchasing orders. Orders shall include clearly the originator, the nature and quantity of the goods, supplies and services to be supplied and details of agreed or estimated prices, relevant discounts and delivery terms and be authorised by the appropriate officer.

D.2.2.17 To ensure that no orders are issued for goods or services where the cost is not covered by an approved budget in the relevant service area.

D.2.2.18 To ensure that orders are only used for goods and services provided to and for the use of the service area. Individuals must not use official orders or e-purchasing orders to obtain goods or services for their private use.

D.2.2.19 To ensure that only those staff authorised by them place and/or authorise orders in accordance with the Scheme of Authorisation approved by the Chief Finance Officer (see D.2.2.8). 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 in accordance with Contract Standing Orders.

D.2.2.20 To ensure that copy orders are retained where non-computerised records are used, and that they are held securely.

D.2.2.21 To ensure that goods and services are checked on receipt to verify that they are in accordance with the order.

D.2.2.22 To pay invoices promptly in accordance with contract terms; the council target is payment within agreed terms or 30 days from the date the invoice is received.

D.2.2.23 To ensure that payment is not made unless a proper VAT invoice (excluding any balance brought forward) in the name of the council has been received, checked, coded and certified for payment, confirming:

· receipt of goods;

· that the invoice has not previously been paid;

· that expenditure has been properly incurred and is within budget;

· that prices are correct, including discounts; and

· that tax is deducted where appropriate and at the appropriate rate.

D.2.2.24 Chief Officers are responsible for obtaining necessary VAT receipts. Failure to obtain adequate receipts could result in charges levied by H M Revenue & Customs, and this charge will be made to the relevant service.

D.2.2.25 To ensure that payments are not made on a photocopied or faxed invoice, statement or other document other than the formal invoice. Any instances of these being rendered should be reported to the head of the Internal Audit service. In cases of payments on copy invoices, careful checks need to be carried out to prevent duplicate payments. When authenticated, a copy invoice should be marked clearly “not previously passed for payment” and properly certified.

D.2.2.26 To encourage suppliers of goods and services to receive payment by the most economical means for the council. Where payment of accounts by computerised system is proposed (e.g. e-billing), the system and certification procedures must be approved by the Chief Finance Officer. Payments made by direct debit must have the prior approval of the Chief Finance Officer.

D.2.2.27 To ensure that loans, leasing or rental arrangements are not entered into without prior agreement from the Chief Finance Officer. A record of all leases for the provision of accommodation must be kept and be available for audit and Targeted Budget Management at all times. This should include the length of the contract, terms of the lease, financial costings, authorisations to enter into the leases and evidence of contract compliance.

D.2.2.28 To notify the Chief Finance Officer of outstanding expenditure relating to the previous financial year as soon as possible after 31 March in line with the timetable determined annually by the Chief Finance Officer.

D.2.2.29 With regard to contracts for construction and alterations to buildings and for civil engineering works, to document and agree with the Chief Finance Officer 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.

D.2.2.30 The Chief Finance Officer and Chief Officers are responsible for ensuring that invoices are retained (either in secure file storage or electronically) for the defined period in accordance with Financial Regulations – Retention of Records (see paragraph D.8.9.4).

D.2.2.31 Invoices should be made available for inspection as required, for example, by the Chief Finance Officer, External Audit, HM Revenue & Customs.

D.2.3 Payments to Employees and Members

Why is this important?

D.2.3.1 Staff costs are the largest item of expenditure for most council services. It is therefore important that payments are accurate, timely, made only where they are due for services to the council 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 Full Council.

Key Controls

D.2.3.2 The key controls for payments to employees and Members are:

· proper authorisation procedures are in place and that there is adherence to corporate timetables in relation to starters, leavers, variations, and enhancements; and that payments are made on the basis of timesheets or claims;

· frequent reconciliation of payroll expenditure against approved budget and bank account;

· all appropriate payroll documents are retained and stored for the defined period in accordance with the document retention schedule (see paragraph D.8.9.4);

· that HM Revenue & Customs regulations are complied with.

Responsibilities of the Chief Finance Officer and Chief Executive

D.2.3.3 The Corporate DirectorChief Executive has overall corporate responsibility for compliance with statutory rules relating to employee matters and shall issue appropriate relevant advice, guidance and training to all staff to ensure that Chief Officers adhere to all statutory rules and the mandatory aspects of the council’s Human Resources Policies and Practices including the agreed use of appointment procedures; the proper use of job evaluation or other agreed system for determining remuneration; the method used to make payments to staff including those falling within locally determined and local management schemes; dismissals; contract variations and the security and privacy of associated data.

D.2.3.4 To supply information on full time equivalent staffing numbers, and arrange and control secure and reliable payment of salaries, wages, compensation or other emoluments to existing and former employees, with personal information linked to the payroll system, in accordance with procedures prescribed by them, on the due date.

D.2.3.5 To record and make arrangements for the accurate and timely payment of tax, superannuation and other deductions.

D.2.3.6 To make arrangements for payment of all travel and subsistence claims or financial loss allowance.

D.2.3.7 To make arrangements for paying Members’ travel or other allowances upon receiving the prescribed form, duly completed and authorised.

D.2.3.8 To provide advice and encouragement to secure payment of salaries and wages by the most economical means.

D.2.3.9 To ensure that there are adequate arrangements for administering superannuation matters on a day-to-day basis.

Responsibilities of Chief Officers

D.2.3.10 To ensure appointments are made in accordance with the regulations of the council and approved establishments, grades, scales of pay and approved budget levels.

D.2.3.11 To maintain personnel information in a format specified by the Director of Human Resources & Organisational Development. To notify all appointments, terminations, increments, timesheets, or variations which may affect the pay or pension of an employee or former employee, in the form and to the timescale required by the Director of Human Resources & Organisational Development and Chief Finance Officer.

D.2.3.12 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;

· any systems used to process personnel data or remunerations are properly maintained in compliance with these Financial Regulations, and that arrangements for paying salaries, compensation and other emoluments also comply.

D.2.3.13 To ensure that only officers authorised to act on behalf of Chief Officers sign records and timesheets in accordance with the access controls applicable to the HR/Payroll system. The Chief Finance Officer will determine the appropriate access and authorisation levels.

D.2.3.14 To ensure that payroll transactions are processed only through the payroll system, in order to ensure compliance with HM Revenue & Customs requirements. Chief Officers should give careful consideration to the employment status of individuals employed on a self-employed consultant or subcontract basis. HM Revenue & Customs apply a tight definition for employee status, and in cases of doubt, advice should be sought from the Chief Finance Officer.

D.2.3.15 Certification of timesheets by authorised officers means that:-

· the expenditure has been properly incurred, is legal, and that there is relevant estimate provision or other authority to spend;

· the payment is in accordance with the council’s human resources policy and practices and other regulations;

· the calculations of hours, pay rates and other allowances are correct;

· the timesheet is arithmetically correct,

· the timesheet has not previously been paid. In cases of copy timesheets, careful checks need to be carried out to prevent duplicate payments. When authenticated, any copy should be marked clearly “not previously passed for payment” and properly certified.

D.2.3.16 Ex-gratia payments shall be paid through the payroll system in accordance with Standard Financial Procedures - Financial Limits (see paragraph D.8.6).

D.2.3.17 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 council in accordance with nationally agreed rates, ensuring that cost-effective use of travel arrangements is achieved. Due consideration should be given to tax implications and that the Chief Finance Officer is informed where appropriate. Payment of lump sum allowances shall only be made in accordance with arrangements formally approved by the Director of Human Resources & Organisational Development.

D.2.3.18 To ensure that the Chief Finance Officer is notified of the details of any employee benefits in kind, to enable full and complete reporting within the income tax self-assessment system.

D.2.3.19 To ensure that all appropriate payroll documents are retained and stored for the defined statutory period (see paragraph D.8.9.4).

Responsibilities of Members

D.2.3.20 To submit claims for members’ travel and subsistence allowances on a monthly basis and, in any event, within one month of the financial year-end.

D.2.4 Corporate Procurement/Purchasing Cards

Why is this important?

D.2.4.1 Corporate Procurement Cards are issued when:

· There is an operational requirement for the flexibility which the card would offer;

· There is an ongoing need that cannot be met effectively or efficiently by other arrangements;

· There is a pattern of low value, high volume purchases where a purchase order is not appropriate.

D.2.4.2 Corporate procurement cards must not be used as methods of avoiding normal purchasing/payment arrangements.

Key Controls

D.2.4.3 The key controls for corporate procurement cards are:

· All applications for corporate procurement cards should be made on the appropriate form, meeting the specific criteria, appropriately authorised and supported by a business case approved by the budget holder;

§ Conditions of usage are issued to the cardholder as part of the application process, which must be agreed to;

§ There is an individual transaction and monthly spend limit issued for each card holder which cannot be exceeded. Card limits will be reviewed at regular intervals and if necessary revised;

§ WRBS – Purchasing & Compliance Team will monitor the use of corporate procurement cards. If inappropriate expenditure occurs, then it can be deducted from accrued salary and may result in the cancellation of the card;

· Cardholders are required to keep a copy of all documentation that relates to the purchases, receipts can be uploaded to the expense management system

Responsibilities of the Chief Finance Officer

D.2.4.4 To establish a corporate procurement card system that can be operated securely within the council.

D.2.4.5 To ensure that procurement card expenditure is accounted for and correctly presented in the council’s accounts.

Responsibilities of Chief Officers

D.2.4.6 To ensure that officers holding a corporate procurement card:

· Obtain and retain receipts (electronically if available) to support each payment made against the procurement card. Where appropriate, an official receipted VAT invoice must be obtained;

· Submit records as required by the Chief Finance Officer at regular intervals for uploading into the council’s system;

· Make adequate arrangements for the safe custody of the card;

· Reconcile the expenditure monthly; reconciliation sheets to be verified in accordance with the notified procedure;

· Lost or stolen cards must be reported immediately to the council’s banker andWRBS Purchasing & Compliance Team ;

· Return the card to the council’s Purchasing & Compliance Team upon leaving the council or at the request of the Chief Finance Officer;

· Do not use the card to:

o obtain cash advances;

o purchase fuel;

o purchase items where a corporate contract is in place, such as for IT&D hardware and software.

D.2.4.7 The Chief Finance Officer may require the return of the card at any time and may suspend or cancel its use in the event that the cardholder fails to comply with the conditions of use of the card.

Corporate Director

Corporate DirectorCorporate Director

D.2.5 Imprest and Petty Cash Accounts

Why is this important?

D.2.5.1 Imprest and petty cash accounts allow:

· Urgent purchases where officers are unable to obtain goods or services in a timely manner to allow the continued delivery of the service.

· Minor items of expenditure, when it would not be cost effective to purchase the item through the creditor payments system or via a corporate purchasing card.

D.2.5.2 Imprest and petty cash accounts must not be used as methods of avoiding normal purchasing/payment arrangements.

Key Controls

D.2.5.3 The key controls for imprest and petty cash accounts are:

· all transactions are properly accounted for;

· proper authorisation procedures are in place;

· there is appropriate supporting documentation for all purchases;

· purchases are appropriate and could not be made through the council’s normal purchase ordering system or via a corporate purchasing card;

· purchases demonstrate Value for Money;

· accounts are kept in balance and reconciled on a regular basis;

· cash, cheque books and accounting records are held securely.

Responsibilities of the Chief Finance Officer

D.2.5.4 To establish a petty cash/imprest system to be operated by the council.

D.2.5.5 To ensure that petty cash is accounted for and correctly presented in the council’s accounts.

Responsibilities of Chief Officers

D.2.5.6 To ensure that employees operating an imprest account:

· obtain and retain vouchers to support each payment from the imprest account. Where appropriate, an official receipted VAT invoice must be obtained;

· use vouchers and other documentation prescribed by the Chief Finance Officer;

· ensure that a separation of duties is evidenced in the processing and authorisation of each payment;

· retain documentation in accordance with the instructions of the Chief Finance Officer and HMRC;

· maintain the account in balance and submit records as required by the Chief Finance Officer at regular intervals for examination and the reimbursement of expenditure;

· make adequate arrangements for the safe custody of the account including ensuring signatories are current and appropriate, as well as keeping under review those with open credit facility access;

· produce upon demand by the Chief Finance Officer cash and all vouchers to the total value of the imprest amount;

· record transactions promptly;

· reconcile and balance the account at least monthly; reconciliation sheets to be signed and retained by the imprest holder;

· reconcile and balance the account to the satisfaction of their line manager on leaving the employment of the council or on ceasing to be responsible for the account;

· provide the Chief Finance Officer with a certificate of the value of the account held on request (normally once a year);

· ensure that the float is never used to cash personal cheques or to make personal loans and that the only payments into the account are the reimbursement of the float and change relating to purchases where an advance has been made;

· ensure that no income received on behalf of the council may be paid into a petty cash/imprest account but must be banked or paid into the council;

· repay to the Council the balance of the petty cash/imprest held upon leaving the council or at the request of the Chief Finance Officer.

D.2.5.7 No officer shall certify a petty cash/imprest bank account claim for reimbursement of expenditure to themselves.

D.2.5.8 No payments or reimbursements shall be made for values over £100.

D.2.5.9 In no circumstances shall imprest accounts be allowed to go overdrawn.

D.3 VAT & TAXATION

Why is this Important?

D.3.1 Like all organisations, the council 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.

Key Controls

D.3.2 The key controls for taxation are:

· budget holders are provided with relevant information and kept up to date on tax issues;

· budget holders are instructed on required record keeping;

· all taxable transactions are identified, properly carried out and accounted for within stipulated timescales;

· records are maintained in accordance with instructions;

· returns are made to the appropriate authorities within the stipulated timescale.

Responsibilities of the Chief Finance Officer

D.3.3 In liaison with the Chief Finance Officer, to arrange for the completion of all HM Revenue & Customs returns regarding Pay As You Earn (PAYE).

D.3.4 To complete a monthly return of VAT inputs and outputs to HM Revenue & Customs.

D.3.5 To provide details to HM Revenue & Customs regarding the construction industry tax (CIS) deduction scheme.

D.3.6 To maintain up-to-date guidance for council employees on taxation issues.

D.3.7 To provide details to the HM Revenue & Customs and account for income tax deducted from payments made by the council.

Responsibilities of Chief Officers

D.3.8 To ensure that the correct VAT liability is attached to all income due and that all VAT recoverable on purchases complies with HM Revenue & Customs regulations.

D.3.9 To ensure that, where construction and maintenance works are undertaken, the contractor fulfils the necessary construction industry tax deduction requirements.

D.3.10 To ensure that all persons employed by the council are added to the council’s payroll and tax deducted from any payments, except where the individuals are proven to be genuinely self-employed or are employed by a recognised staff agency.

D.3.11 To follow the guidance on taxation issued by the Chief Finance Officer.

D.4 TRADING ACCOUNTS

Why is this important?

D.4.1 Trading accounts have become more important as local authorities have developed a more commercial culture. Councils are required to keep trading accounts for services provided on a basis other than straightforward recharge of cost.

Responsibilities of the Chief Finance Officer

D.4.2 To advise on the establishment and operation of trading accounts and business units.

Responsibilities of Chief Officers

D.4.3 To observe all statutory requirements in relation to business units, including, where required, the maintenance of a separate revenue account to which all relevant income is credited and all relevant expenditure, including overhead costs, is charged.

D.4.4 To ensure that the same accounting principles are applied in relation to trading accounts as for other services or business units.

D.4.5 To ensure that any trading unit prepares an annual business plan.

D.5 COUNCIL SYSTEMS

Why is this important?

D.5.1 It is essential that the council’s financial systems are developed in a planned and co-ordinated way so that they interface correctly in order to deliver high quality management information to support the council’s requirements and strategies.

Responsibilities of the Chief Finance Officer

D.5.2 To liaise with Chief Officers on the proposed development of financial systems.

Responsibilities of Chief Officers

D.5.3 To follow the council’s IT Strategy and liaise with the Chief Finance Officer on any proposals either to purchase IT equipment or software, or to undertake a significant upgrade or expansion of existing systems. This includes compliance with any corporate Procurement and IT&D approval procedures for the purchase of IT.

D.5.4 To conform to the council’s ‘Use of IT’ policies including security and control of systems’ standards within their services and for security and privacy of data necessary to accord with the Data Protection Act.

D.5.5 All Chief Officers must ensure that all such systems within their services are registered in accordance with the Data Protection Act. When accessing central or other systems, Chief Officers will be responsible for ensuring that agreed procedures are followed. Any proposal to purchase or develop a major computer system (IT hardware, software or communications equipment) shall be the subject of a business case in an approved form and in accordance with the council’s ICT Strategy and corporate Procurement and IT approval procedures. Such proposals will also be subject to post implementation review.

D.5.6 Chief OfficersCorporate Director, shall make sound and sufficient contingency and Disaster Recovery and Business Continuity arrangements to ensure the security and business continuity of services in the event of a disaster, for example, fire, flood etc. and to enable the restitution of systems and data.

D.5.7 The Corporate DirectorCorporate Director, Corporate Services shall be responsible for the issue of guidance related to the control and security of information and communication systems.

D.6 CONTROL OF CONTRACTS

Why is this important?

D.6.1 The achievement of value for money when procuring goods and services is a key task to ensure that public money is well spent. Very large sums are spent on procured goods and services and the adoption and implementation of good procurement practice can significantly improve value for money through reduced prices, improved quality and/or increased volumes at no extra cost. The council has introduced ‘Category Management’ as an approach to further improve value for money.

Responsibilities of the Corporate DirectorCorporate Director, Corporate Services

D.6.2 To issue and review regularly Contract Standing Orders, the Corporate Procurement Strategy, Procurement Codes of Practice and Procurement Guidance/Toolkits to ensure that procurement efficiencies and value for money are key objectives across the council.

Responsibilities of Chief Officers

D.6.3 To comply with the documents and guidance referred to in paragraph D.6.2.

D.6.4 Operational leasing or contract hire arrangements for vehicles, plant or equipment may be entered into by Chief Officers, provided the Chief Finance Officer is satisfied that the method of finance is appropriate for the asset concerned and that the best terms available have been secured.

D.6.5 Works in Default:-

· Each Chief Officer responsible for issuing works in default notices must obtain at least three written quotations for the work from contractors selected from the council’s approved Selective Tendering Standing List.

· Cabinet approval must be sought if the estimated cost of the works is equal to or exceeds £1,000,000. Chief Finance Officer approval is required for works estimated at below £1,000,000.

· A charge on the property must be made as soon as the works are completed by advising the Head of Law accordingly.

· Each Chief Officer shall ensure that all companies contracted to carry out works in default have adequate Public and Personal Liability insurance cover, consulting if necessary with the Chief Finance Officer.

· All other Financial Regulations and Standing Orders relating to ordering and payment for goods and services apply.

D.6.6 Works to execute statutory functions and to remedy urgent public health hazards:-

· Occasionally it is necessary for the council to serve notice to undertake various works, including unblocking or repairing drains, removing rubbish and boarding up dangerous properties.

· All works undertaken in this regard should comply with Contract Standing Orders.

D.7 BANKING ARRANGEMENTS

Why is this important?

D.7.1 It is essential that the council operates cost effective and sound banking systems to ensure its financial transactions are documented with the utmost accuracy, with the avoidance of fraud and corruption. The Cabinet shall approve all banking contract terms and conditions.

Responsibilities of the Chief Finance Officer

D.7.2 To make or approve all other arrangements with the council’s bankers and is authorised to operate such accounts as they deem necessary. Bank accounts for imprest holders and delegated financial management schemes and the provision of card facilities shall be subject to the approval of the Chief Finance Officer.

D.7.3 With the exception of imprest accounts or Local Management Schemes, to order all cheques, including accounts operated through the post office network, and make proper arrangements for their safe custody.[LK3]

D.7.4 To issue corporate purchasing cards to Chief Officers or other officers with delegated authority with the consent of the Chief Finance Officer and only on terms approved by them.

D.7.5 To ensure cheques drawn on the council’s main bank accounts bear the facsimile signature of the Chief Finance Officer or be signed by them or officers authorised by the Chief Finance Officer. The manual pre-signing of cheques is not permitted on any cheque drawn on a council bank account.

D.7.6 To manually sign cheques in excess of £50,000 or authorise an officer nominated by the Chief Finance Officer to sign manually.

D.7.7 To ensure bank accounts, which are maintained by establishments as imprest accounts or under schemes of local management, are operated on a dual signatory basis unless specific alternative arrangement have been agreed in writing with the Chief Finance Officer.

D.7.8 Where payments are to be transmitted either electronically or automatically, to approve the necessary arrangements made to safeguard the interests of the council.

D.7.9 To ensure all council funds are banked to the corporate accounts of the council, appropriate subsidiary accounts or other accounts in the name of the council and approved by the Chief Finance Officer. To ensure no other accounts are used for transacting or transferring council funds.

Responsibilities of Chief Officers

D.7.10 To manage bank accounts, imprest accounts and commercial cards in accordance with guidance issued by the Chief Finance Officer, and ensure that all council funds are banked to corporate accounts of the council.

D.7.11 To maintain records of delegated powers given to officers to manage banking arrangements.

D.8 FINANCIAL LIMITS

Why is this important?

D.8.1 Financial limits need to be set in the interests of good governance and financial management. The Chief Finance Officer is responsible for managing and maintaining an effective Scheme of Financial Limits which is primarily, but not exclusively, embedded in the procedures for access to and use of relevant corporate financial systems. Chief Officers are responsible for ensuring that only authorised officers act on their behalf and that each officer complies with the Scheme of Financial Limits as it applies to them.

D.8.2 Virements - Revenue Budget

D.8.2.1 Chief Officers are responsible for ensuring that virements are actioned in accordance with the requirement specified in Standard Financial Procedures paragraph A.2.1.

D.8.2.2 In keeping with the “Targeted Budget Management” framework, Chief Officers shall ensure that only officers authorised to act on their behalf process virements. This will normally be evidenced through either: local procedure/practice notes, job descriptions/organisational structure, a record of authorised officers and/or a scheme of financial delegation.

D.8.3 Virements - Capital Programme

D.8.3.1 Chief Officers shall consult with the Chief Finance Officer on planned virements within the Capital Programme.

D.8.4 Carry Forwards

D.8.4.1 The policy in respect of the carry forward of underspendings and overspendings is set out in Standard Financial Procedures paragraph A.2.2.

D.8.5 Authorisation Limits to minimise budget pressures

D.8.5.1 The Corporate Leadership Team may occasionally put in place authorisation limits so that no expenditure can be incurred over certain limits (e.g. £1,000) without approval of a Chief Officer and/or an Corporate Director to safeguard the council’s budget position.

D.8.6 Ex-Gratia Payments

D.8.6.1 Chief Officers may authorise ex-gratia payments in respect of minor items of loss or damage to personal property and clothing of employees and customers in respect of services delivered by their directorate.

D.8.6.2 No ex-gratia payments in excess of £5,000 shall be made without the approval of the Chief Finance Officer.

D.8.6.3 A complete record of ex-gratia payments made by Chief Officers shall be maintained and shall be available to the Chief Finance Officer on request.

D.8.7 Write Off of Debts

D.8.7.1 No debts due to the Council shall be written off except with the consent of Section 151 Officer or Deputy S151 Officer (i.e. the Chief Finance Officer and their nominated S151 Deputy).

D.8.7.2 The S151 Officer shall be authorised to write off corporate debts up to £2,500 subject to evidence and confirmation from finance officers that all cost-effective recovery routes have been exhausted.

D.8.7.3 The S151 Officer shall also be authorised to write off any other debt due to the council subject to the following:-

· A full explanation of the circumstances to the satisfaction of the S151 Officer having been provided by the appropriate Chief Officer;

· All Chief Officers must indicate that they have seen and approve debts, for their services, recommended for write off;

· Where in the opinion of the S151 Officer the amount involved is significant in relation to either the accounts of the council as a whole or to the service in question, the circumstances shall be reported to the Cabinet.

D.8.8 Write Off of Stocks and Stores

D.8.8.1 No deficiency, which occurs in excess of £10,000 shall be written off by a Chief Officer without the prior approval of the Chief Finance Officer.

D.8.8.2 Variations below this figure may be written off by a Chief Officer with the agreement of the Chief Finance Officer.

D.8.8.3 A complete record of stocks and stores written off shall be maintained by the appropriate Chief Officer and retained.

D.8.9 Retention of Records

D.8.9.1 Chief Officers are responsible for ensuring that electronic and physical records are carefully and systematically filed as they are required for inspection by a number of agencies such as Internal Audit, the external auditors, Department for Works and Pensions, HM Revenue & Customs officials, etc.

D.8.9.2 The advised minimumperiods for the retention of financial records are detailed below. The list is not exhaustive and is based on either legislative requirements or the Local Government Classification & Retention Scheme recommended by the Information & Records Management Society. If uncertain as to whether a particular retention class on the list is applicable, contact the Council’s Records Manager for assistance. Periods referred to are in addition to the current year of account, which ends at the conclusion of the annual external audit of the Council’s accounts.

D.8.9.3 Records held locally in establishments shall be retained in accordance with guidance issued by the Council’s Records Manager.

D.8.9.4 Schedule for the Retention of Records:

The schedule below is not exhaustive and highlights the most important financial documents. Updates information and guidance is provided by the Council’s Records Manager.

Record	Period (plus current year)
Published Accounts/Annual Reports	Permanently
Final Accounts Working Papers**	2 years
Audit investigations and irregularity reports	6 years
Audit letters and reports	6 years
Benefit Payments	5 years
Taxation Returns	Permanently
Pension Scheme Records	Permanently
Property Deeds of landholdings	Permanently
Loans and investment records	6 years
Bank/Credit Card Statements, Bank credits	6 years
Cheques	6 years
Creditors Invoices	6 years
VAT receipts	6 years
Council Tax Records	5 years
Creditor payment records	6 years
Copy Orders	6 years
Group Certificates	6 years
Prime Salaries & Wages notifications	5 years
Copy payslips, allowances and expenses	6 years
Issue of Cards and statements	6 years
Insurance	5 years
Contracts and Supporting Documents - under seal*	12 years
Contracts let in accordance with Standing Orders*	6 years
Stock/Stores Records	6 years
Stock Write Off and Debt Write Off records	5 years
Bank Paying-in books	5 years
Till Rolls	2 years
Receipt Books	5 years
Rail warrants	6 years
School Meals Records	2 years
Audit Trails of computer system security related events	2 years
Application control, error and exception reports	2 years
Budget Working papers	2 years

(*after contract ends)
(** 2 years after the accounts have been completed and signed by the external auditor)

APPENDIX E

E EXTERNAL ARRANGEMENTS

E.1 PARTNERSHIPS

Why is this important?

E.1.1 Local authorities work in partnership with others – including public agencies, private companies, community groups and voluntary organisations and other relevant bodies – to deliver important community services to meet user needs.

E.1.2 Local authorities can 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.

Key Controls

E.1.3 The key controls for council partners are:

· if appropriate, to be aware of their responsibilities under the authority’s Financial Regulations and the code of practice on tenders and contracts;

· to ensure that risk management processes are in place to identify and assess all known risks;

· to ensure that project appraisal processes are in place to assess the viability of a project in terms of resources, staffing and expertise;

· to agree and accept formally the roles and responsibilities of each of the partners involved in the project or services before commencement;

· to communicate regularly with other partners so that problems can be identified and shared to achieve their successful resolution.

Responsibilities of the Chief Finance Officer

E.1.4 To ensure that any partnership arrangements are underpinned by clear and well documented internal financial controls.

E.1.5 To advise on the key elements of funding a project or service. They include:

· a scheme appraisal for financial viability in both the current and future years;

· risk appraisal and management;

· resourcing, including taxation issues;

· audit, security and control requirements;

· management of underspends and overspends;

· carry-forward arrangements;

· recovery of overheads.

E.1.6 To ensure that the accounting arrangements are satisfactory and that statutory and other accounts and associated claims and returns in respect of grants are prepared.

E.1.7 To maintain a corporate register of partnerships.

Responsibilities of Chief Officers

E.1.8 To ensure that, before entering into agreements with external bodies, a risk assessment, an options appraisal and appropriate financial checks have been undertaken.

E.1.9 To ensure that such agreements and arrangements do not impact adversely upon the services provided by the council.

E.1.10 To ensure that all agreements and arrangements are properly documented and appropriate legal advice sought, particularly for large scale partnerships such as S75 Health Act 2006 health and social care partnerships.

E.1.11 To provide appropriate information to the Chief Finance Officer to enable a note to be entered into, or a memorandum account added to, the council’s Statement of Accounts, and possible consolidation under group accounts, concerning material items.

E.2 EXTERNAL FUNDING

Why is this important?

E.2.1 External funding is potentially a very important source of income, but funding conditions need to be carefully considered to ensure that they are compatible with the aims and objectives of the council. Funds from external agencies such as the Heritage Lottery Fund or Arts Council can provide additional resources to enable the relevant partnership to deliver services to the local community. However, in some instances, although the scope for external funding has increased, such funding may be linked to narrow specifications and may not be flexible enough to support the council’s overall priorities.

Key Controls

E.2.2 The key controls for external funding are:

· to ensure that key conditions of funding and any statutory requirements are complied with and that the responsibilities of the accountable body are clearly understood;

· as far as possible, to ensure that funds are acquired only to meet the priorities approved in the policy framework by Full Council, although it may be local or sub-regional partnerships that bid for these funds;

· most importantly, to ensure that any match-funding requirements are given due consideration prior to entering into long-term agreements and that future revenue budgets reflect these requirements.

· to ensure that any potential ongoing commitments from projects or partnerships are properly identified and considered at the outset.

Background

E.2.3 The significant sources of external funding currently accessed by Brighton & Hove City Council or local partnerships include:

· UK Government programmes, e.g. Levelling Up;

· UK funding programmes, e.g. Heritage Lottery Fund.

E.2.4 Numerous other external funding sources exist which may be accessed by the council or local partnerships. If further guidance is required advice should be sought from the Chief Finance Officer or the relevant Chief Officer.

E.2.5 It is often the case that the council acts as the Accountable Body for externally funded programmes. The function of the council as Accountable Body is to take financial responsibility for the funding programme, irrespective of the council’s level of involvement in the individual projects within the programme. Included within the financial responsibility of the Accountable Body is the requirement to repay to the grant funding authority all sums of grant aid advanced to any project which;

· fails,

· expends funding outside the terms of its grant agreement,

· has inadequate records to verify its expenditure,

· has inadequate records to verify its outputs,

· disposes of capital assets acquired with grant funding,

· in any material respect contravenes its funding agreement.

E.2.6 Given that some projects involve very substantial sums, the potential detrimental effect upon the council is self-evident. Hence the need for these specific financial regulations applicable to external funding.

E.2.7 Matched Funding

E.2.7.1 External funding rarely covers the entire project cost and grant aid is often provided on a “matched funding” basis whereby the grant funder provides an agreed percentage of funds and the balance must be ‘matched’ by other funding provided by the applicant. Match funding may be either in cash or in kind. When matched funding is provided by the council, it affords the opportunity for increased service provision. However, many projects have a lifetime of 3 to 5 years, but can be as long as 7 years. Consequently, when supporting a project, services must consider the long-term impact this will have on their capital and revenue budgets. There is a danger of entering into commitments that cannot be met through council funds. For this reason it is a requirement that at the inception of any project proposal involving external funding, either capital or revenue, the Chief Finance Officer must be notified immediately.

E.2.7.2 Before any contractual obligations are entered into, whether for an internally managed project or an externally managed project to which council funds are being contributed, approval of the Chief Finance Officer must be obtained. A report must also be submitted to Cabinet for approval of the project if there is any match funding and the council’s contribution is equal to or in excess of £1,000,000 and budgetary provision has not previously been approved. This approval needs to be well planned and may need to twin track with any bidding process to ensure that when the outcome of the bidding process is announced, officers are in a position to enter into contract negotiations having already gained the approval of the Chief Finance Officer and, where appropriate, the Cabinet.

E.2.7.3 When a report is sent to the Cabinet requesting the approval of a project, the funding for that project must have been agreed amongst participating services, and that agreement must be in writing and appended to the report. When external partners are involved, written confirmation of their financial commitment must be obtained, on headed paper, and signed by an appropriate officer of the organisation (e.g. if a body corporate, either a director or the company secretary). The written confirmation of each external partner must also be appended to the report.

E.2.7.4 The Cabinet report must contain a paragraph summarising the sources of internal funding and any funding in kind proposed. The paragraph must reference an annex, which provides a detailed budget of the intended project, showing the estimated cost by each expenditure heading and the total cost of the project. The financing of that total cost must equal the funds to be made available internally, from external partners and from the external funding agency. No project may be submitted for approval where the funding arrangements are incomplete.

E.2.8 Delivery Partnerships

E.2.8.1.1The council acts as the Accountable Body for various funding streams and is formally accountable for the delivery of agreed action plans.

E.2.8.1.2The Accountable Body, acting for the appropriate partnership, must ensure that the requirements set out in funding agreement letters and in government department manuals are complied with.

E.2.9 Forward Funding

E.2.9.1.1Where the council makes an advance, grant or other financial assistance to any person (under s1 of the Localism Act 2011, s2 of the Local Government Act 2000 or any other relevant power) to finance revenue or capital expenditure pending receipt of the external grant, the amount of funding is limited to the forecast value of the quarter’s claim which is being advanced. No further forward funding will be made available until a project sponsor organisation has provided satisfactory evidence to enable the council to make a grant claim to the grant funding authority. Forward funding will only be considered where the project has had formal approval and is supported by an appraisal.

E.2.9.1.2In the exceptional circumstances of programmes funded by European Union funds, this rule is varied to allow forward funding over a longer duration. Under European Union grant rules the final payment of grant cannot usually be made until all projects in a programme have submitted their final audited grant claim.

E.2.9.1.3Any external programme that requires forward funding pending the receipt of grant income is subject to approval by the Cabinet. The approval will set the maximum limit for the forward funding. The Chief Finance Officer would then have delegated authority to approve forward funding requests for individual projects up to that maximum limit for the programme.

E.2.9.1.4When forward funding with a projected value of less than £100,000 in each quarter is requested by a project, approval for the forward funding, for the duration of the project, must be given by the relevant Chief Officer.

E.2.9.1.5If at any time it becomes evident that forward funding in excess of £100,000 will be required in a future quarter, then approval of the Chief Finance Officer must be obtained by the appropriate Chief Officer requesting authority to forward fund for the duration of the project.

E.2.9.1.6The forward funding of voluntary and community-based organisations that seek to implement projects for the council must comply with the funding agreement.

E.2.10 Funding Agreements

E.2.10.1 A partnership deed must be signed by the project sponsor organisation and the council, for each project undertaken within any grant funding programme.

Responsibilities of the Chief Finance Officer

E.2.11 To ensure that all funding notified by external bodies is received and properly recorded in the council’s accounts.

E.2.12 To ensure that the match-funding requirements are considered prior to entering into the agreements and that future revenue budgets reflect these requirements.

E.2.13 To issue grant claims procedures to ensure that grant claims are submitted on time to the appropriate funding body and to ensure that audit requirements are met.

Responsibilities of Chief Officers

E.2.14 To comply with corporate guidance or protocols in respect of bidding activity for external funds. This is designed to ensure that:

· the quality of bids is improved, increasing the chance of success;

· bids are linked with partners wherever possible, thereby avoiding duplicated or conflicting bids likely to be rejected by funders due to the lack of a joined-up approach;

· management and staff are supported to navigate complex bidding processes;

· where possible, information on external funding is collated across the authority.

E.2.15 Where required by these regulations, to ensure that the Cabinet approves reports for externally funded projects after full consultation with the Chief Finance Officer.

E.2.16 To ensure that all claims for funds are made by the due date in accordance with procedures issued by the Chief Finance Officer. All Government grant claims or claims for externally funded schemes must be examined and certified by the Chief Finance Officer or Deputy and authorised in writing.

E.2.17 All grant claims should be accompanied by the Grant Claim header sheet where applicable and a detailed reconciliation to the council’s main financial system.

E.2.18 To ensure that the project progresses in accordance with the agreed project and that all expenditure is properly incurred and recorded in accordance with Financial Regulations and any specific requirements of the funding body.

E.2.19 Copies of notifications from Government Departments including consents, approvals, regulations, circulars and letters in any way relating to finance shall be forwarded by Chief Officers immediately to the Chief Finance Officer.

E.3 WORK FOR THIRD PARTIESINCLUDING COLLABORATION AGREEMENTS

Why is this important?

E.3.1 Current legislation enables the council 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 such work are minimised and that it is within the legal powers of the council. This section also includes collaboration arrangements such as shared services where a service or services of the council intend to join forces with another provider to provide services to a third party (and/or back to the authority), either as the lead agency or as a junior partner.

Key Controls

E.3.2 The key controls for working with third parties are:

· to ensure that proposals are costed properly in accordance with guidance provided by the Chief Finance Officer;

· to ensure that appropriate approval to enter into contracts, either directly or through collaboration arrangements, for the provision of services to a third party (and/or back to the authority) is obtained;

· to ensure that contracts and collaboration arrangements do not breach European Union or UK procurement legislation and directives;

· to ensure that contracts are drawn up using guidance provided by the Chief Finance Officer and that the formal approvals process is adhered to;

· to issue guidance with regard to the financial aspects of third party contracts and the maintenance of the contract register.

Responsibilities of the Chief Finance Officer

E.3.3 To issue guidance with regard to the financial aspects of third party contracts and collaboration arrangements and to maintain a contract register.

Responsibilities of Chief Officers

E.3.4 Chief Officers may enter into contracts, Service Level Agreements, or collaboration arrangements (e.g. shared services) for the provision of services to third parties (and/or back to the authority) in accordance with financial limits set out in Contract Standing Orders over the contract period provided always that such provision does not contravene extant statutory powers and duties and European Union or UK procurement legislation and directives;

E.3.5 Where the value exceeds officer delegations or financial limits set out in Contract Standing Orders over the contract period, the approval of the Cabinet must be obtained before any negotiations are concluded to work for third parties or to enter into collaborative arrangements.

E.3.6 To ensure that appropriate insurance arrangements are made.

E.3.7 To ensure that the council is not put at undue risk from any bad debts.

E.3.8 To ensure that no contract is subsidised by the council.

E.3.9 To ensure that, wherever possible, payment is received in advance of the delivery of the service.

E.3.10 To ensure that the Chief Officer’s staff have the appropriate expertise to undertake the contract.

E.3.11 To ensure that such contracts do not impact adversely upon the services provided for the council.

E.3.12 To ensure that all contracts are properly documented.

E.3.13 To provide appropriate information to the Chief Finance Officer to enable a note to be entered into the Statement of Accounts and possible consolidation under group accounts.

SCHEDULE OF OFFICER RESPONSIBILITIES

Monitoring Officer

Financial Regulations including Standard Financial Procedures refer to the Monitoring Officer. This is a statutorily appointed role which may carry different job titles from time to time.

Chief Finance Officer

The Chief Financial Officer (S151 Officer) is the statutorily appointed role within the Authority and my have different job titles from time to time.Corporate Director

Deputy Chief Finance Officer (Deputy S151 Officer)

This role is nominated by the Chief Finance Officer and deputises for the Chief Finance Officer in relation to the statutory requirements of Section 151 of the Local Government Act 1972.Corporate Director

[1] A division of service is a major service area defined by the Chief Finance Officer. This will normally be service areas headed up by a Chief Officer or an officer reporting directly to a Chief Officer.

[2] The below references to the Council’s Corporate Landlord arrangements come into effect on 23 May 2013.

PART 4A1

A.1.4 To maintain an appropriate set of Financial Management Standards and Procedures taking into account best practice and statutory requirements. These will underpin the financial management training and support provided to the authority’s Members and officers.

A.2.1.3 To prepare, in consultation with the relevant Corporate Director, a report to Cabinet where virements of £1,000,000 or more are proposed excepting technical centralisation / decentralisation virements as noted in A.2.1.5 and virements within Schools DSG as noted in A.2.1.2.

A.2.1.4 To approve virements greater than £200,000 but less than £1,000,000 excepting technical centralisation / decentralisation virements as noted in A.2.1.5 and virements within Schools DSG as noted in A.2.1.2.

A.2.1.13 Virements within schools DSG are dealt with in the Scheme for Financing Schools and the Schools Forums Regulations.

A.2.2.6 To maintain any unallocated outturn underspend within General Reserves (the Working Balance) unless otherwise allocated by the full Council or Cabinet.

A.4.5 To ensure compliance with the following principles when allocating accounting duties:

A.4.8 To ensure the proper retention of financial documents in accordance with the requirements set out in Standard Financial Procedures paragraph D.8.9.

A.4.11 To comply with the principles outlined at paragraph A.4.5 above when allocating accounting duties.

A.4.14 To supply information to the Chief Finance Officer as appropriate to enable the requirements of ‘Accountable Body’ status to be met in accordance with European Union or UK requirements.

A.4.15 To supply information required to enable the Statement of Accounts to be completed in accordance with guidelines issued by the Chief Finance Officer.

A.5.9 In respect of the signing and certification of the annual statement of accounts, to comply with the duties of the ‘responsible financial officer’ under regulation 8 of the Audit and Accounts Regulations 2015.

B.2.1 Format of the Budget

B.2.2.9 To determine and keep under review financial authorisation levels, including those contained within financial systems, including variation or removal of financial authorisation in accordance with the framework of budget management and control.

B.2.2.12 To ensure that all officers within their service who are responsible for committing expenditure undertake appropriate training, particularly where this is mandated, to ensure they comply with relevant guidance and financial regulations.

B.2.2.19 To ensure compliance with the scheme of virement (see paragraph A.2.1).