1
Purpose of Financial Regulations
1.1
Financial
Regulations are part of the range of internal control systems which the Council
has put in place to ensure that risks to the delivery of its objectives are
minimised.
1.2
They set out
the roles and responsibilities of the Council, the Cabinet and Senior Officers
in respect of financial management, and are supported by more specific
Financial Procedures providing guidance to all those involved in financial
transactions.
1.3
Schools with
delegated budgets are subject to a separate framework of regulation.
1.4
These
financial procedure rules are approved by the Council and will be subject to
annual review.
2
Budget Setting
2.1
The approved
revenue and capital budgets are the financial expression of the Council’s
service delivery plans. The budgets and associated financing implications are
approved each year by Full Council, on the basis of recommendations from the
Cabinet, and after having regard to the results of Stakeholder consultation.
2.2
Full Council
may approve overall capital service allocations but leave the selection of
individual schemes to the Cabinet.
2.3
Approval of
revenue and capital budgets as above confers authority on the Cabinet,
Strategic Directors and Heads of Service to spend up to the net sums specified
for each of the services within their remit, as set out within the Financial
Information System.
2.4
Changes to the
budget may be agreed by Directors in consultation with Cabinet members and the
Chief Financial Officer, provided that there is:
2.4.1
No resulting
reduction in the General Reserve
2.4.2
No material
reduction in service levels
2.4.3
No resulting
un-financed increase in commitments in future years
Full Council approval
is required for other budget changes.
2.5 Unspent budgets may be carried forward into the next financial year with the approval of the Chief Financial Officer. Overspendings will be a first call against the following year’s budget.
3 Duties and Responsibilities of Elected Members
3.1 The Cabinet is responsible for proposing a budget and for the strategic delivery of services within approved budgets and the approved policy framework. Full Council sets the budget and also the policy framework. The Cabinet shall receive in-year budget monitoring information and ensures that any remedial action is taken.
3.2 The Scrutiny Committee has a responsibility to review and assist with resolving the financial issues it regards as most benefiting from its input.
3.3 Policy Commissions will pursue work programmes developing specific policy and strategic solutions to longer term issues, including those with a financial context.
4 Duties and Responsibilities of the Chief Financial Officer
4.1
The Chief Financial Officer has particular statutory
and case law responsibilities which are incorporated in the following:
4.1.1
Proper
administration of the Council’s financial affairs
4.1.2
setting and
monitoring compliance with accounting and financial management procedures and
standards
4.1.3
implementing
the Council’s duty to maintain an effective and adequate internal audit
4.1.4
advising on
the corporate financial position, including the robustness of the budget and
the adequacy of reserves
4.1.5
giving
financial advice on all reports considered by the Cabinet and delegated
decisions of Cabinet members
4.1.6
determining
financing of capital and revenue budget items in the best financial interests
of the Council
4.1.7
prescribing
key financial controls and where necessary, the format of the Council’s
financial records
4.1.8
providing
financial information
4.1.9
co-ordinating
forward revenue and capital plans and monitoring delivery
4.1.10 treasury management and all banking
arrangements
4.1.11 arrangements for the disbursement of the
Council’s payments in respect of
creditors, staff and partners
4.1.12 arrangements for the collection of income
due to the Council as identified by Directors, Heads of Service and their staff
4.1.13 advising the Pension Fund Investment Panel
5
Duties and Responsibilities of Directors and
Heads of Service
This section sets
out the financial management responsibilities of Directors and Heads of
Service. Most or all tasks will be delegated to Heads of Service who may in
turn further delegate to more junior staff. The general presumption is that
decisions should be taken at the lowest appropriate level, but it should be
kept in mind that whilst tasks can be delegated, Directors and Heads of Service
remain jointly and severally responsible for compliance. Responsibilities
include the following:
5.1
Deploying
budget resources to deliver the Council’s objectives in the most economically
advantageous way, and reporting on performance as required.
5.2
Ensuring that
expenditure and income are monitored on at least a monthly basis and that:
5.2.1
service cash
limits are not exceeded
5.2.2
future
expenditure commitments are constrained to matching resources
5.2.3
an ‘exit
strategy’ is in place for projects funded from non-recurring or declining
income streams
5.2.4
potential
overspends are reported to the Chief Financial Officer, Directors Board, and
the Cabinet if appropriate, together with proposals for remedial action.
5.3
Producing and
implementing medium term service plans which incorporate:
5.3.1
Revenue and
capital bids prioritised in terms of corporate objectives
5.3.2
Least harmful
responses to corporate savings requirements
5.3.3
Analysis of risks to service delivery and
business continuity planning
5.3.4
Forthcoming
procurements and other significant projects.
Application of the Council’s risk assessment and ‘Gateway’ process where
appropriate
5.3.5
Maximisation
of income through charging and trading, as well as any other sources of
additional funding
5.3.6
Business cases
in support of spend to save and prudential code projects
5.3.7
Contributions
to the Council’s medium term financial plan
5.4
Ensuring value
for money through delivery of the Council’s efficiency savings targets, and by
benchmarking unit costs and performance against other organisations on an
annual basis.
5.5
Developing
partnerships where these provide clear advantages to service quality or
efficiency, subject to:
5.5.1
Clear
definition of the benefits expected
5.5.2
Robust monitoring
arrangements
5.5.3
Clarity in the
way risk is to be minimised and shared
5.5.4
A viable exit
strategy
5.5.5
Corporate
approval where size or degree of risk warrants
5.6
Maintaining
accounting records and audit trails in a form acceptable to the Chief Financial
Officer, together with a documented scheme of delegation and authorised
signatories. Each account and budget head to have a named responsible officer.
5.7
Ensuring that
financial systems in operation, and any changes thereto, are approved by the
Chief Financial Officer, and that statutory taxation requirements are adhered
to.
5.8
Minimising the
possibility of loss through error, theft or fraud, or misuse of Council assets,
and the risk of litigation, damage to the Council’s reputation and its
interests. This includes:
5.8.1
Applying risk
management techniques in order to reduce risk to optimal levels
5.8.2
Keeping the
Chief Financial Officer informed about existing, new or changing risks, both
insurable and uninsurable
5.8.3
Providing
assurance that the system of internal control is operating effectively within
their service areas and if not what remedial action they propose. Such assurance will form the basis of the
Council’s Statement of Internal Control.
5.8.4
Applying the
principles of segregation of duties, such that wherever possible, more than one
individual is involved in managing the Council’s financial transactions
6
Other
Policies and Guidance
6.1
There are a
number of policies and guidance notes which Directors and Heads of Service are
responsible for drawing to the attention of staff where necessary. The table
below lists many of the documents and provides guidance on who needs to be
aware of them in each case.
|
Document |
Required reading by: |
|
Asset Management
Plan |
Officers involved
in investment planning |
|
Capital Strategy |
Officers involved
in investment planning |
|
Code of Conduct |
All staff and
members |
|
Contract Standing
Orders |
Officers ordering
goods or services, officers and managers who procure and manage contracts |
|
Counter Fraud
Policy |
All managers and
supervisors |
|
Medium Term
Financial Plan |
Service and
budget planners |
|
Procurement
Guidance |
Officers ordering
goods and services officers and managers who procure and manage contracts |
|
Risk Management
Framework |
All managers |
|
|
|
|
Financial
Procedures and Guidance: |
|
|
Anti-money
laundering policy |
Staff involved in
income collection |
|
Accounting
standards & practice notes |
Budget managers |
|
Banking
arrangements |
Budget managers |
|
Managing the
Council’s financial resources (Treasury Management) |
Managers and
staff involved in treasury management |
|
Controlled (financial)
stationery |
Staff involved in
systems using controlled financial stationery |
|
Payment Services
Guidance |
Staff dealing
with creditor payments |
|
Insurance |
All managers |
|
Principles of
segregation of duties |
Managers |
|
Sundry Income
Policy |
Staff involved in
income collection |
|
Transactions with
staff and members (including remuneration and the reimbursement of expenses) |
All managers and
supervisors |
|
Use of corporate
financial systems |
All managers |
|
Receiving Income |
Staff involved in
income collection |
|
Protecting the
Council’s Assets (including :Disposal) |
All managers |
|
Asset records |
All managers |
|
Partnerships |
All managers and
staff involved in partnerships |
|
Retention of
Financial Records |
All managers |
|
Dealing with
fraud and irregularity |
All managers and
staff |
|
Authorisation of
transactions, delegation of financial authority |
All managers and
staff |
|
Accounting for
Voluntary Funds |
All managers and
staff involved in administering voluntary funds |
|
Emergency
Provisions |
All managers and
staff |
|
Miscellaneous
Financial Procedures |
All managers and
staff |