FINANCIAL REGULATIONS
These Financial
Regulations were reviewed and approved by the Council at its Meeting held on
For the time
being the Responsible Finance Officer (RFO) will be the Clerk to the Council
1. GENERAL
1.1 These
financial regulations govern the conduct of the financial transactions of the
Council and may only be amended or varied by resolution of the Council.
1.2 The
Responsible Financial Officer (RFO), under the policy direction of the Council,
shall be responsible for the proper administration of the Council's affairs.
1.3 The
RFO shall be responsible for the production of financial management
information.
2. ANNUAL
ESTIMATES
2.1 Detailed
estimates of all receipts and payments for the year shall be prepared each year
by the RFO.
2.3 The
annual budgets shall form the basis of financial control for the ensuing year.
3 BUDGETARY
CONTROL
3.1 Expenditure
on revenue items may be incurred up to the amounts included in the approved
budget.
3.2 No expenditure
may be incurred which will exceed the amount provided in the revenue budget
unless authorised by a special resolution of the Council.
3.3 The
RFO shall regularly provide the Council with a statement of receipts and
payments to date under each head of the budget, comparing actual expenditure
against that planned.
3.4 The
Clerk may incur expenditure on behalf of the Council which is necessary to
carry out any repair, replacement or other work which is of such extreme
urgency that it must be done at once, whether or not there is any budgetary
provision for the expenditure, subject to a limit of £1000. The Clerk shall
report the action to the Council as soon as practicable thereafter.
3.5 Unspent
provisions in the revenue budget shall not be carried forward to a subsequent
year unless specifically authorised by the Council
3.6 No
expenditure shall be incurred in relation to any capital project and no
contract entered into or tender accepted involving capital expenditure unless
the Council is satisfied that the necessary funds are available, or the
requisite borrowing approval has been obtained.
4. ACCOUNTING
AND AUDIT
4.1 All
accounting procedures and financial records of the Council shall be determined
by the RFO as required by the Accounts and Audit Regulations 1996 as amended.
4.2 The
RFO shall be responsible for completing the annual financial statements of the
Council as soon as practicable after the end of the financial year and shall
submit them and report thereon to the Council.
4.3 The
RFO shall be responsible for completing the Accounts of the Council contained
in the Annual Return (as supplied by the Auditor appointed from time to time by
the Audit Commission) and for submitting the Annual Return for approval and
authorisation by the Council within the timescales set by the Accounts and
Audit Regulations 1996 as amended, or set by the Auditor.
4.4 The
RFO shall be responsible for ensuring that there is adequate and effective
system of internal audit of the Council's accounting, financial and other
operations in accordance with Regulation 5 of the Accounts and Audit
Regulations 1996 as amended. Any officer or member of the Council shall, if the
RFO or Internal Auditor requires, make available such documents of the Council
which appear to the RFO or Internal Auditor to be necessary for the purpose of
the internal audit and shall supply the RFO or Internal Auditor with such
information and explanation as the RFO or Internal Auditor considers necessary
for that purpose.
4.5 The
Internal Auditor shall carry out the work required by the RFO, or by the
Council, with a view to satisfactory completion of the Internal Auditor's
Report section of the Annual Return as compiled annually by the Audit
Commission. The Internal Auditor, who
shall be competent and independent of the operations of the Council, shall
report to Council in writing on a regular basis with a minimum of one annual
report in respect of each financial year.
4.6 The
RFO shall make arrangements for the opportunity for inspection of the accounts,
books, and vouchers required by Audit Commission Act 1998 section 15 and the
Accounts and Audit Regulations 1996 as amended.
4.7 The RFO shall, as soon as practicable,
bring to the attention of all councillors any correspondence or report from the
Internal or External Auditor, unless the correspondence is of a purely
administrative matter.
5. BANKING
ARRANGEMENTS AND CHEQUES
5.1 The
Council's banking arrangements shall be made by the RFO and approved by the
Council. They shall be regularly reviewed
for efficiency.
5.2 A
schedule of the payments required, forming part of the Agenda for the Meeting,
shall be prepared by the RFO or Bookkeeper and, together with the relevant
invoices, be presented to Council. If the schedule is in order it shall be authorised
by a resolution of the Council and shall be initialled by the Chairman of the
Meeting. If more appropriate the detail may be shown in the Minutes of the
Meeting.
5.3 Cheques
drawn on the bank account in accordance with the schedule referred to in paragraph
5.2 or in accordance with paragraph 6.4, shall be signed by two members of
Council.
5.4 To
indicate agreement of the details shown on the cheque or order for payment with
the counterfoil and the invoice or similar documentation, the signatories shall
each also initial the cheque counterfoil.
6 PAYMENT
OF ACCOUNTS
6.1 All
payments shall be effected by cheque or other order drawn on the Council's
bankers.
6.2 All
invoices for payment shall be examined, verified and certified by the Clerk.
The Clerk shall satisfy him/herself that the work, goods or services to which
the invoice relates shall have been received, carried out, examined and
approved.
6.3 The
RFO shall examine invoices in relation to arithmetical accuracy and shall
analyse them to the appropriate expenditure heading. The Clerk shall take all
steps to settle all invoices submitted, and which are in order, at the next
available Council Meeting, subject to
6.4 If a
payment is necessary to avoid a charge to interest under the Late Payment of
Commercial Debts (Interest) Act 1998, and the due date for payment is before
the next scheduled Meeting of Council, where the Clerk and RFO certify that
there is no dispute or other reason to delay payment, the Clerk may
(notwithstanding para 6.3) take all steps necessary to settle such invoices
provided that a list of such payments shall be submitted to the next
appropriate meeting of Council.
6.5 The
RFO may provide petty cash for the purpose of defraying operational and other
expenses. Vouchers for payments made shall be forwarded to the RFO with a claim
for reimbursement.:
a) The RFO shall
maintain a petty cash float for the purpose of defraying operational and other
expenses. Vouchers for payments made from petty cash shall be kept to
substantiate the payment.
b) Income received
must not be paid into the petty cash float but must be separately banked, as
provided elsewhere in these regulations.
c) Payments to
maintain the petty cash float shall be shown separately on the schedule of
payments presented to Council under 5.2 above.
7 PAYMENT
OF SALARIES
7.1 The
payment of all salaries shall be made in accordance with payroll records and
the rules of PAYE and National Insurance currently operating, and salaries
shall be as agreed by Council.
7.2 Payment
of salaries and payment of deductions from salary such as may be made for tax,
national insurance and pension contributions, may be made in accordance with
the payroll records and on the appropriate dates, provided that each payment is
reported to and ratified by the next available Council Meeting.
8 LOANS
8.1 All
loans and investments shall be negotiated in the name of the Council and shall
be for a set period in accordance with Council policy.
8.2 The
Council’s Investment Policy, shall be in accordance with the Trustee Act 2000,
and shall be reviewed on a regular basis (at least annually).
8.3 All
investments of money under the control of the Council shall be in the name of
the Council.
8.4 All
borrowings shall be effected in the name of the Council, after obtaining any
necessary borrowing approval. Any application for borrowing approval shall be
approved by Council as to terms and purpose.
8.5 All
investment certificates and other documents relating thereto shall be retained
in the custody of the RFO.
9 INCOME
9.1 The
collection of all sums due to the Council shall be the responsibility of and
under the supervision of the RFO.
9.2 Particulars
of all charges to be made for work done, services rendered or goods supplied
shall be agreed annually by the Council, notified to the RFO and the RFO shall
be responsible for the collection of all accounts due to the Council.
9.3 The
Council will review all fees and charges annually, following a report of the
Clerk.
9.4 Any
sums found to be irrecoverable and any bad debts shall be reported to the
Council and shall be written off in the year.
9.5 All
sums received on behalf of the Council shall be banked intact as directed by
the RFO. In all cases, all receipts shall be deposited with the Council's
bankers with such frequency as the RFO considers necessary.
9.6 The
origin of each receipt shall be entered on the paying-in slip.
9.7 Personal
cheques shall not be cashed out of money held on behalf of the Council.
9.8 The
RFO shall promptly complete any VAT Return that is required. Any repayment
claim due in accordance with VAT Act 1994 section 33 shall be made at least
annually coinciding with the financial year end.
9.9 Where
any significant sums of cash are regularly received by the Council, the RFO shall
take such steps as are agreed by the Council to ensure that more than one
person is present when the cash is counted in the first instance, that there is
a reconciliation to some form of control such as ticket issues, and that
appropriate care is taken in the security and safety of individuals banking
such cash.
10 ORDERS
FOR WORK, GOODS AND SERVICES
10.1 An
official order or letter shall be issued for all work, goods and services
unless a formal contract is to be prepared or an official order would be
inappropriate. Copies of orders shall be retained.
10.2 Order
books shall be controlled by the RFO.
10.3 All
members and Officers are responsible for obtaining value for money at all
times. An officer issuing an official order is to ensure as far as reasonable
and practicable that the best available terms are obtained in respect of each
transaction, usually by obtaining three or more quotations or estimates from
appropriate suppliers, subject to any de minimis
provisions in Regulation 11.1 below.
10.4 The
RFO shall verify the lawful nature of any proposed purchase before the issue of
any order, and in the case of new or infrequent purchases or payments, the RFO
shall ensure that the statutory authority for such purchase or payment shall be
reported to the meeting at which the order is approved so that the Minutes can
record the power being used.
11 CONTRACTS
11.1 Procedures
as to contracts are laid down as follows:
(a) Every contract shall comply with these
financial regulations, and no exceptions shall be made otherwise than in an
emergency provided that these regulations shall not apply to contracts which
relate to items (i) to (vi) below:
(i)
for the supply of gas, electricity, water, sewerage
and telephone services;
(ii)
for specialist services such as are provided by
solicitors, accountants, surveyors and planning consultants;
(iii)
for work to be executed or goods or materials to be
supplied which consist of repairs to or parts for existing machinery or
equipment or plant;
(iv)
for work to be executed or goods or materials to be
supplied which constitute an extension of an existing contract by the Council;
(v)
for additional audit work of the external Auditor up
to an estimated value of £250 (in excess of this sum the Clerk and RFO shall
act after consultation with the Chairman and Vice Chairman of Council);
(vi)
for goods or materials proposed to be purchased which
are proprietary articles and/or are only sold at a fixed price.
(b) Where it is intended to enter into a contract
exceeding £2,500 in value for the supply of goods or materials or for the
execution of works or specialist services other than such goods, materials,
works or specialist services as are excepted as set out in paragraph (a) the
Clerk shall invite tenders from at least three firms to be taken from the appropriate
approved list.
(c) When applications are made to waive financial
regulations relating to contracts to enable a price to be negotiated without
competition the reason shall be embodied in a recommendation to the Council.
(d) Such invitation to tender shall state the
general nature of the intended contract and the Clerk shall obtain the
necessary technical assistance to prepare a specification in appropriate cases.
The invitation shall in addition state that tenders must be addressed to the
Clerk in the ordinary course of post. Each tendering firm shall be supplied
with a specifically marked envelope in which the tender is to be sealed and
remain sealed until the prescribed date and time for opening tenders for that
contract.
(f) All sealed tenders shall be opened at the same
time on the prescribed date by the Clerk in the presence of at least one member
of Council.
(g) If less than three tenders are received for
contracts above £2,500 or if all the tenders are identical the Council may make
such arrangements as it thinks fit for procuring the goods or materials or
executing the works.
(h) Any invitation to tender issued under this
regulation shall contain a statement to the effect of the Standing Orders 61,
63 and 64 of the Model Standing Orders as published by NALC.
(i) Where it is
intended to enter into a contract less than £2,500 in value for the supply of
goods or materials or for the execution of works or specialist services other
than such goods, materials, works or specialist services as are excepted as set
out in paragraph (a) the Clerk or RFO shall obtain 3 quotations (priced
descriptions of the proposed supply); where the value is below £1,000 and above
£500 the Clerk or RFO shall strive to obtain 3 estimates. Otherwise, Regulation
10 (3) above shall apply.
(j) The Council shall not be
obliged to accept the lowest or any tender, quote or estimate.
12. PAYMENTS UNDER
12.1 Payments
on account of the contract sum shall be made within the time specified in the
contract by the RFO upon authorised certificates of the architect or other
consultants engaged to supervise the contract (subject to any percentage
withholding as may be agreed in the particular contract).
12.2 Where
contracts provide for payment by instalments the RFO shall maintain a record of
all such payments. In any case where it is estimated that the total cost of
work carried out under a contract, excluding agreed variations, will exceed the
contract sum by 5% or more a report shall be submitted to the Council.
12.3 Any
variation to a contract or addition to or omission from a contract must be
approved by the Council and communicated to the Contractor in writing, the
Council being informed where the final cost is likely to exceed the financial
provision.
13 PROPERTIES AND ESTATES
13.1 The
Clerk shall make appropriate arrangements for the custody of all title deeds of
properties owned by the Council. The RFO shall ensure a record is maintained of
all properties owned by the Council, recording the location, extent, plan,
reference, purchase details, nature of the interest, tenancies granted, rents
payable and purpose for which held in accordance with Regulation 4(3)(b) of the
Accounts and Audit Regulations 1996 as amended.
13.2 No
property shall be sold, leased or otherwise disposed of without the authority
of the Council, together with any other consents required by law, save where
the estimated value of any one item of tangible movable property does not
exceed £50.
14 INSURANCE
14.1 Following
an annual risk assessment, the RFO shall effect all insurances and negotiate
all claims on the Council's insured risks.
14.2 The
RFO shall keep a record of all insurances effected by the Council and the
property and risks covered thereby and annually review it.
14.3 The
RFO shall be notified of any loss liability or damage or of any event likely to
lead to a claim, and shall report these to Council at the next available
meeting.
14.4 All
appropriate employees of the Council shall be included in a suitable fidelity
guarantee insurance which shall cover the maximum risk exposure as determined
by the Council.
15 CHARITIES
15.1 Where
the Council is sole trustee of a Charitable body the Clerk and RFO shall ensure
that separate accounts are kept of the funds held on charitable trusts and
separate financial reports made in such form as shall be appropriate, in
accordance with Charity Law and legislation, or as determined by the Charity
Commission. The Clerk and RFO shall arrange for any Audit or Independent
Examination as may be required by Charity Law or any Governing Document.
16 RISK
MANAGEMENT
16.1 The
Clerk with the RFO shall prepare and promote risk management policy statements
in respect of all activities of the Council.
16.2 When
considering any new activity the Clerk and RFO shall prepare a draft Risk
Management policy for the activity and shall bring a draft addressing the legal
and financial liabilities and Risk Management issues that arise to Council for
consideration and, if thought appropriate, adoption.
17 REVISION OF FINANCIAL REGULATIONS
17.1 It
shall be the duty of the Council to review the Financial Regulations of the
Council from time to time.
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