1.1 Financial Procedure Rules are designed to maintain an acceptable standard of financial administration. They must be available to and followed by all Officers, members and agents acting for the Council. Together with Standing Orders they regulate the conduct of the Council’s business.

1.2 To help you understand the terminology used in the Financial Procedure Rules a Glossary of Terms is attached at Appendix A.

1.3 The contents are set out in alphabetical order for ease of reference

Legislation

1.4 Section 151 of the Local Government Act 1972 requires every local authority “to make arrangement for the proper administration of their financial affairs and secure that one of their Officers has responsibility for the administration of those affairs” The Council has appointed the Deputy Chief Executive as the Section 151 Officer and the Finance Manager as the designated deputy.

1.5 Section 114 of the Local Government Finance Act 1988 requires the Officer appointed under Section 151 to report to the authority and the external auditor:

1.5.1 If it appears to him/her that the Authority, the Executive, Portfolio Holder, Committee, or Officers of the Authority or Joint

Committee on which the Authority is represented:

i. Has made or is about to make a decision which involved or would involve the Authority incurring expenditure which is

unlawful.

ii. Has taken, or is about to take a course of action which, if pursued to its conclusion, would be unlawful and likely to

cause a loss or deficiency on the part of the authority.

iii Is about to enter an item of account, the entry of which is unlawful.

1.5.2 make a report under this section if it appears to him/her that the expenditure of the Authority incurred
(including expenditure it proposes to incur) in a financial year is likely to exceed the resources (including
sums borrowed) available to meet that expenditure.

1.6 The Accounts and Audit Regulations 2003 (as amended) reiterate the responsibilities of the ‘Section 151 Officer’ with regard to accounting records and maintenance of proper accounting practices. These regulations place the responsibility for the maintenance of an adequate and effective system of internal audit on the Authority as a whole.

1.7 Section 76 of the Local Government and Housing Act 1989 requires the Council to take corrective action if there is likely to be a deficit on the Housing Revenue Account.

Scope and Review

1.8 It is the responsibility of Heads of Service to ensure that all staff in their departments are aware of their responsibilities according to the Financial Procedure Rules and other regulatory documents (eg the Anti-Fraud and Corruption Policy, the Money Laundering Policy) and comply with them.

1.9 Failure to follow the Financial Procedure Rules and Standing Orders will be reported to the Deputy Chief Executive immediately and, if serious, to the Executive and may be treated as a disciplinary offence.

1.10 Financial Procedure Rules also apply to agents and consultants acting for the Council and services carried out under agency arrangements or partnerships, unless specifically exempted by the relevant Head of Service and the Deputy Chief Executive.

1.11 All Members and Officers have a general responsibility for taking reasonable action to provide for the security of assets under their control, and ensuring that the use of these resources is legal, is properly authorised and provides value for money.

1.12 The Deputy Chief Executive is responsible for maintaining a continuous review of these regulations and submitting any changes necessary to Full Council for approval.

Interpretation

1.13 On a day-to-day basis, queries should be directed to the Finance Manager.

1.14 All references to Heads of Service relate to the Chief Executive, Deputy Chief Executive, Heads of Service.

Accounting Records and Procedures

2.1 The Section 151 Officer is responsible for keeping the Council’s accounts in accordance with statutory requirement. This function is delegated, on a daily basis, to the Finance Manager.

2.2 Heads of Services shall consult the Finance Manager before changing any accounting procedures, financial records or the implementation or development of computer systems that involve a financial operation or produce output that may influence the allocation of resources.

2.3 The following principles will apply in accounting procedures:

2.3.1 Calculating, checking and recording of sums due to or from the Council will be separated as completely as
possible from their collection or payment.

2.3.2 Officers responsible for examining and checking cash transaction accounts will not process any of these
transactions.

2.4 The Finance Manager is responsible for ensuring financial and management accounting information is available for all services administered by the Council in either computer screen or hard copy format.

2.5 The Council’s statutory accounts will be prepared in accordance with the Accounts and Audit Regulations 2003 (as amended) and the current Code of Practice on Local Authority Accounting in Great Britain.

2.6 The Finance Manager shall have overall control of the closing of the Council’s accounts and preparation of the Council’s Statement of Accounts. Heads of Service shall comply with the closing of accounts timetable and guidance issued by the Finance Manager.

Asset Management

3.1 The Head of Customers Homes and Property shall be responsible for preparing the Property Strategy (which incorporates the Asset Management Plan). Responsibility for the management of assets is shared between the Head of Environmental Services (parks & open spaces, public conveniences and car parks), the Head of Cultural and Project Services (sports and community buildings and tourist information centres) and the Head of Customers Homes and Property (non-operational and surplus property and Council Offices).

3.2 The Head of Legal and Democratic Services will maintain a register of all land and property owned or leased by the Council, and shall have custody of all title deeds and keep them under secure arrangements.

3.3 Disposal of surplus land and buildings to be carried out in accordance with the approved Disposals and Acquisitions Policy, which is incorporated in the Property Strategy.

3.4 A copy of the Property strategy is available on the Council’s Intranet.

3.5 The Finance Manager is responsible for maintaining the Council’s Asset Register, which will be updated quarterly to reflect acquisitions, capital expenditure and disposals.

Audit

Internal Audit

4.1 In accordance with the Accounts and Audit Regulations 2003 (as amended), the Council shall maintain an adequate and effective system of internal audit of its accounting records and of its system of internal control in accordance with the proper practices in relation to internal control, and any Officer or Member shall:-

4.1.1 Make available to Internal Audit such documents that relate to the Council’s accounting and other records
that appear to be necessary for the purpose of the audit; and

4.1.2 Supply Internal Audit with such information and explanation as is considered necessary to Internal Audit
for the purpose.

4.2 The Council’s Internal Auditors have access to land, premises, property, records, data, correspondence and other documents. Heads of Service shall ensure that they and their staff co-operate with the auditors and provide any information or explanation sought by them.

4.3 Internal Audit operates in accordance with the Code of Practice for Internal Audit in Local Government in the United Kingdom, published by CIPFA and with Terms of Reference and the Audit Strategy, which are endorsed by the Audit Committee.

4.4 Internal Audit is provided through the Mid Kent Internal Audit Partnership. The Head of the Internal Audit Partnership has the right of access directly to the Section 151 Officer, the Chief Executive, the Chair of the Audit Committee, and the Leader of the Council.

4.5 The scope for Internal Audit is the ‘entire control environment’. This means that the scope for Internal Audit includes all the Council’s own operations, resources, services and also its responsibilities in relation to other bodies. In order to turn this generic description into actual subjects for audit, the Head of the Internal Audit Partnership uses a Risk Assessment Method which allows all high risk subjects to be identified. Although this process inevitably identifies the Council’s fundamental financial systems as being ‘high risk’, other non financial systems and functions are also identified as important areas for review by Internal Audit.

4.6 A three-year Strategic Plan will be created by the Head of the Internal Audit Partnership, which will be endorsed by the Audit Committee. A one-year Operational Plan will be created each year from the Strategic Plan. The Head of the Internal Audit Partnership will report the work performed against the Plan to the Audit Committee on a six-monthly basis.

Preventing Fraud and Corruption

4.7 The Council will not tolerate fraud and corruption in the administration of its responsibilities whether from inside or outside the Authority.

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

4.9 The Council also expects that individuals and organisations (e.g. suppliers, contractors and service providers) with whom it comes into contact will act towards the Council with integrity.

4.10 The Head of the Internal Audit Partnership shall maintain the Council’s Corporate Anti-Fraud and Corruption policy.

4.11 It is the duty of all Officers and Members who are aware of any financial irregularity to follow the Corporate Anti-fraud and Corruption Policy. Whenever any matter arises involving irregularities concerning cash, stores, council property, or loss or irregularity of any kind, shall raise those concerns with their Head of Service. The Head of Service shall immediately notify the Head of the Internal Audit Partnership who shall investigate.

4.12 The Head of the Internal Audit Partnership shall inform the relevant Head of Service if an investigation identifies evidence of financial irregularity or any other unacceptable behaviour on the part of a member of their staff.

4.13 In the event that the investigation produces evidence of illegal acts the presumptions will be that the matter will be referred to the Police. Prior to any referral to the Police, the Head of the Internal Audit Partnership will seek the endorsement of the Council’s Section 151 Officer and the Monitoring Officer to the proposed course of action.

4.14 A copy of the Council’s Anti-Fraud and Corruption Policy is available to all staff on the Council’s Intranet.

Whistleblowing

4.15 The Council has a Whistleblowing Charter to enable employees to raise their concerns at an early stage and in the right way.

4.16 This Charter is available on the Council’s intranet.

Money Laundering

4.17 It is the Council’s policy to do all it can to prevent, wherever possible, the organisation and its staff being exposed to money laundering, to identify the potential areas where it may occur, and to comply with all legal and regulatory requirements, especially with regard to the reporting of actual or suspected cases.

4.18 The Head of the Internal Audit Partnership shall maintain the Council’s Anti-Money Laundering Policy.

4.19 It is the legal responsibility of every Officer engaged in receiving cash, cheques and other forms of payment for goods, asset sales and the provision of services to make themselves aware of their personal responsibilities as set out in the Anti-Money Laundering Policy.

4.20 The Council has nominated the Head of the Internal Audit Partnership as the Money Laundering Reporting Officer and the Deputy Chief Executive to be the deputy.

4.21 The Council expects any member of staff who has a suspicion regarding money laundering to report this immediately to the Money Laundering Reporting Officer; failure to do so may lead to criminal prosecution.

4.22 The Anti-Money Laundering Policy is available on the Council’s Intranet.

Unofficial Funds

4.23 Directors and Heads of Services are responsible for ensuring the proper administration of unofficial funds, that is any funds associated with Council business, supervised or managed by Council Officers but not part of the Council’s funds (e.g. Mayor’s accounts, Trust Funds etc).

4.24 The Finance Manager will be notified of any unofficial funds and give advice on keeping and auditing them.

4.25 Any Officer holding unofficial funds will produce an accurate account in writing of all financial transactions, with associated supporting documentation.

Banking Arrangements

5.1 The Deputy Chief Executive, as the appointed S151 Officer, has overall responsibility for the sound operation of the Council’s Bank and Giro Accounts. This is delegated for day to day operations to the Finance Manager.

5.2 The Exchequer Manager is responsible for the ordering, custody and issue of all cheques.

5.3 The Deputy Chief Executive will review the Council’s banking arrangement at least every 5 years.

5.4 The Deputy Chief Executive and other Officers approved in writing by the Deputy Chief Executive each have authority, in accordance with the mandate given to the bank, to sign and be accepted as satisfactory signatures for any other purpose in connection with the Council’s Bank and Giro Accounts. The Exchequer Manager shall maintain a register all such Authorised Officers.

5.5 All cheques and electronic payment instructions for amounts of £20,000 and above require two authorising signatures.

5.6 Where the Deputy Chief Executive’s signature or name is pre-printed on cheques or is printed by computer or by cheque signing machine, adequate security arrangement will be made for the custody and control of both cheques and signature plates.

5.7 Stocks of cheques ordered from the Council’s bankers or authorised printers will only be on the authority of the Exchequer Manager.

5.8 All bank accounts are to be reconciled to the cash book by the end of the following month to which they relate.

Budget Process

Introduction

6.1 The Deputy Chief Executive shall have overall responsibility for the co-ordination and preparation of the Council’s Budget (ie Capital, General Fund Revenue and Housing Revenue Account Budgets).

6.2 Each year the Finance Manager will prepare timetables for the preparation, submission and approval of the Medium Term Financial Forecast, Capital Programme, Prudential Indicators and detailed Revenue Budgets.

6.3 All budgets will be prepared in accordance with the Budget and Policy Framework Procedure Rules.

Capital Programme

6.4 Expenditure is deemed to be capital when it relates to:

Purchase or construction of an asset;
Enhancement of an asset;
Grants for capital purposes.

6.5 Council assets include land, buildings, vehicles, plant and equipment. The Council makes grants for capital purposes such as improvement grants and grants for community purposes which are classified as capital expenditure.

6.6 Capital expenditure is often of high value and the benefit is expected to be spread over a number of years. Revenue expenditure is the annual running costs in relation to the provision of a service.

6.7 The Finance Manager will prepare a draft capital programme, which includes all capital schemes undertaken by the Council regardless of funding. The programme will be submitted to the Executive for approval together with the estimate of resources available.

6.8 The Finance Manager will submit to the Executive a draft set of Prudential Indicators outlining the revenue impact of the capital programme as part of the Budget Report.

Medium Term Financial Plan

6.9 In conjunction with the Management Team the Deputy Chief Executive shall prepare recommendations for the Council’s Budget Strategy to be considered by the Executive.

6.10 Heads of Service will prepare information needed to produce the Medium Term Financial Plan for each of their services. The Finance Manager will specify the form this forecast should take and the timetable for its submission.

6.11 A Budget Forecast shall be presented to the Executive each autumn.

6.12 The Executive will consider this and determine the overall level of resources to be made available, and the limits within which the detailed budgets can be prepared.

6.13 A Draft Budget shall be presented to the Executive in December of each year.

Detailed Revenue Budget

6.14 Heads of Service will prepare provisional detailed estimates of revenue income and expenditure for the next financial year in accordance with the timetable and in the format as specified by the Finance Manager.

6.15 These estimates will reflect the Medium Term Financial Plan and the decision of the Executive as detailed above.

6.16 All Revenue Budget heads will be prepared at current costs, and converted to outturn prices by Financial Services. The forecast for inflation will be decided by the Finance Manager in consultation with the Deputy Chief Executive.

6.17 Each budget head will be cash limited, and any minor variations in spending will be met from the approved budget. A budget head is an individual sum specified in the published budget book.

6.18 The Finance Manager will report the detailed draft Revenue Budget to Management Team for consideration and approval. This will subsequently be submitted to the Executive as part of the budget report.

Budget Scrutiny Process

6.19 The Executive’s initial draft budget proposals will be referred to the Overview and Scrutiny Committee in December each year for examination and consideration.

6.20 The Overview and Scrutiny Committee shall report to the Executive on the outcome of its deliberations before the final budget report is submitted to the Executive in February.

Approval of Annual Revenue Budget

6.21 By the 1^st March each year the Council shall determine the Revenue and Capital Budgets, Prudential Indicators, housing rents and Council Tax levels for the year beginning on the following 1^st April.

Budgetary Control

Introduction

7.1 Once the Council agrees the Budget, responsibility for its implementation passes to the Executive.

7.2 The Executive shall be responsible for ensuring compliance with the Council’s overall Budget and that wherever appropriate and necessary corrective action is action in accordance with the Council’s Budgetary Control Procedures.

7.3 The Executive shall recommend to the Council any amendments to the Budgetary Control Procedure as part of its Budget proposals.

Authority for Incurring Expenditure

7.4 The Chief Executive, Deputy Chief Executive, Heads of Service, and their duly Authorised Officers may incur expenditure on items already approved specifically or generally within the Council’s Budget or Capital Programme, provided no overspending or under-recovery will occur.

7.5 Heads of Service have operational responsibility for the Budget and shall manage the budgets at their disposal and be accountable to the Executive for performance. Budget resources are to be deployed to deliver agreed service objectives and priorities.

7.6 Delegation to duly Authorised Officers is necessary for practical purposes. These delegations form lines of accountability, which should be clear, well communicated and regularly reviewed. They also provide control through appropriate levels of authorisation and separation of duties.

7.7 Heads of Service will provide the Finance Manager with details of all financial delegations made to Officers. Essential details are the Officer’s name, grade, specimen signature, transaction type, value limit of authority and evidence of approval by Head of Service.

7.8 Where an urgent spending decision (e.g. Civil Emergency, Legal Imperative or other such service critical events) is required, in excess of £50,000, the Chief Executive or Deputy Chief Executive may authorise such expenditure as is necessary, with the approval of the Chairman of the Overview and Scrutiny Committee. This must be ratified at a later date by the Executive. Under no other circumstances should expenditure be incurred without appropriate provision put in place first. Further guidance is available in Section 4 of the Budgetary and Policy Framework Procedure Rules.

The Authority to Use Reserves

7.9 All other uses of reserves to fund expenditure will need approval by the Executive with the exception of:

the Management Team, in either exceptional and urgent cases where this might be justified or where an amount may be needed to deal with some other service issue including investment to achieve greater efficiency may deploy reserves up to the value of £50,000 in each case. In all cases where the flexibility is applied the Chief Executive must liaise with the Leader of the Council, the Portfolio Holder for Resources and the Deputy Chief Executive (as Chief Financial Officer) and must report any application of reserves to the Executive as part of the budget monitoring cycle. The use of this flexibility is for exceptional circumstances and not to be routinely applied, and in all cases the use of the delegation must be consistent with the council’s business plan priorities. It is a requirement to review this delegation each year as part of the budget cycle.
In cases where a request is made by a Portfolio Holder to the relevant Head of Service, or where a Head of Service after consulting the relevant Portfolio Holder identifies a relevant need to resolve an issue urgently or to address immediate community concerns regarded of sufficient priority and where other budgets are not available then a Head of Service has delegated authority to spend up to £5,000 on any one occasion without Management Team or Executive Committee approval. The use of this delegation is subject to the following:

a) Use of the delegation is not intended as a general supplementary spending power

b) Consideration must first be given to the use of budgets within the responsibility of the Head of Service, or after

consultation with another Head of Service where a budget may be available to address the need

c) That consideration must be given to any relevant processes in place to determine resource allocation priorities (for

example the Single Grants Gateway) and therefore consultation with the relevant officer must take place

d) That the Finance Manager is notified of the use of the delegation so that it may be reported in the next available Budget

Monitoring Report

e) That an overall cap of £100,000 on the use of the delegation applies and when this is reached the Executive will conduct

a full review of the application of the delegation.

The Head of Paid Service, following consultation with the Head of Personnel and Development be delegated to approve staff termination costs (redundancy payments and payments in lieu of notice and other compensation) associated with reductions in staffing, which are supported by the Joint Consultative Committee and the relevant Portfolio Holder. This delegation would not cover the approval of pension fund compensation costs relating to any early retirement cases on the grounds of redundancy or efficiency as these must be approved by the Full Council. Information explaining the use of the delegation must be included in Budget Monitoring Reports to the Executive. Staff severance costs, where not funded by immediate revenue savings would be met from reserves, for which an amount is set aside.

Budget Monitoring

7.10 The Finance Manager is responsible for providing appropriate financial information to enable the Budget to be monitored effectively. They must monitor expenditure and income against budget allocations and produce a Budget Monitoring Statement which is to be reported monthly to the Management Team and quarterly to the Executive. The Monitoring Statement will review progress against the General Fund and Housing Revenue Account Budgets.

7.11 The Finance Manager will submit a provisional outturn report to the Executive by no later than the 30^th May each year to include material variances at service level not covered by virements.

7.12 It is the responsibility of Heads of Service to control income and expenditure within their cash limit and to monitor performance, taking account of the financial information provided by the Finance Manager. They should also take any action necessary to avoid exceeding their budget allocation and alert Finance to any problems.

7.13 The Executive or Management Team shall be entitled to require corrective action to be taken to deal with either a forecast or known overspending or to accommodate a new demand that is considered important or unavoidable.

7.14 Corrective actions may take the form of a re-allocation of budgets (virement) or the suspension or deletion of other planned expenditure.

7.15 Where overspendings arise and where there is no evidence of corrective action having been considered or taken, the Deputy Chief Executive shall be entitled to recommend to the Executive that the overspending be corrected from within the following year’s Budget.

7.16 The Executive has the ability to transfer from the General Fund Balance any amount which would not take the balance below the minimum level, determined each year by the Council at its Budget setting meeting, so as to compensate for pressure, but only as a final measure once all other possibilities for corrective action have been considered.

7.17 The Management Team has flexibility to apply reserves up to the value of £20,000 per occasion to compensate for exceptional cost pressures or where investment is required to enable longer term revenue savings to be made. The Deputy Chief Executive (as s151 Officer) should approve any application of reserves by the Management Team and should ensure that any actions of the Management Team are reported to the Executive in the next Budget Monitoring Report.

Virements

7.18 The Executive will always consider proposals for new initiatives other than those brought forward under the delegations.

7.19 Officers shall be entitled to vire within revenue Budget Heads up to an amount of £50,000 without reference to the Executive subject to virements under £5,000 being made in consultation with the Finance Manager and between £5,000 and £50,000 being approved by Management Team.

7.20 In excess of £50,000 Officers shall be entitled to vire within Budget Heads only after reference to and with the agreement of the Executive..

7.21 The Management Team may approve Virements between capital projects; of up to 10% of the budget or £50,000, whichever is the lesser. The Executive shall approve all other capital virement proposals outside of these limits.

7.22 The Asset and Project Management Group may approve Virements between capital projects; of up to 10% of the budget or £50,000, whichever is the lesser. The Executive shall approve all other capital virement proposals outside of these limits.

7.23 Where a Head of Service is unable to find a compensatory saving within their own budget, they should consult colleagues and accountants to find other suitable virements.

7.24 The Finance Manager shall be entitled not to approve or recommend to Management Team a virement if in their opinion the circumstances do not appear genuine or may not be in the Council’s interests due to other considerations.

Carry Forward of Resources at Year End

7.25 Limited carry over of underspent Revenue Budgets to the next financial year will be possible under the following conditions:

7.25.1 The Budget carry forward scheme will only apply once all overspending in the year have been contained
within the overall budget level set for the year.

7.25.2 Carry forwards are only permitted on Budget Heads that are under the direct control of the Head of
Service.

7.25.3 Carry forwards can only be used to finance one-off types of expenditure.

7.26 All requests with justifications for carry forwards are to be submitted to the Finance Manager by the end of April following the end of the financial year, these will then be summarised and submitted to Management Team for approval. The summary will then be included for information as part of the Final Outturn report submitted to the Executive.

7.27 The Finance Manager shall be permitted to carry forward to a following Financial Year the Budget provision remaining for any capital project.

Code of Conduct for Employees

8.1 The Code of Conduct for Employees applies to and will be followed by all Officers. It covers:

         Standards of behaviour, disclosure of information, political neutrality, relationships, appointment
         and other employment matters, outside commitments, personal interests, equality issues,
         separation of roles during tendering, gifts and hospitality, use of financial resources and
         sponsorship.

8.2 A copy of the Code of Conduct is available to all staff on the Council’s intranet.

Contracts for Works, Goods and Services

Standing Orders

9.1 Heads of Service will ensure compliance with the Council’s Standing Orders for Contracts.

9.2 As far as practicable, Financial Procedure Rules apply to works entered into on behalf of a body from whom the Council has accepted delegated powers, or for whom the Council acts as an agent. The requirements of any such body should be followed if they differ from these Financial Procedure Rules or Contract Procedure Rules.

9.3 In the case of contracts entered into by the Council and supervised by consultants, any agreement with the latter should include a requirement to comply with the Council’s Financial Procedure Rules and Contract Procedure Rules.

Tenders

9.4 A satisfactory Financial Reference and evidence of appropriate insurance will be obtained for the successful tenderer for all contracts over £150,000 in value.

9.5 No contract will be entered into unless the relevant Head of Service is confident of the tenderer’s ability to complete the contract.

9.6 Guidance on accepting tenders both within and exceeding the budget is contained in Section 9 Page No. 586 of Contract Procedure Rules.

Contract Payments

9.7 Heads of Service, or their named representatives, shall be responsible for issuing interim payment certificates, which show the value of works to date, the amounts previously paid, retention to be held and indicating an appropriate level of liquidated damages (if any).

Variations

9.8 Every variation on a contract shall be authorised in writing by a person authorised to sign Official Orders (in the case of goods or services procured by way of an order) or by a person authorised to certify payments in the case of other types of contract.

9.9 If the variation is likely to cause the original contract sum to be exceeded, the Head of Service shall consider the requirements of Financial Procedures Rules in relation to Budgetary Control. The effect of this shall not restrict the issue of a variation if it would result in a stoppage of the contract works or a breach of contractual conditions.

9.10 The reasons for and details, including costs, of every variation must be recorded on the relevant contract file, except for site instructions issued for routine repairs under a maintenance contract provided a budget is built into the contract to cover such work.

Final Account

9.11 Final certificates shall be issued in all cases.

9.12 The appropriate Head of Service or duly Authorised Officer will be fully responsible for the accuracy of the final account supporting such final certificate.

9.13 Claims from contractors for matters not clearly within the terms of any existing contract will be referred to the Head of Legal and Democratic Services to consider the Council’s legal liability and, where necessary, to the Finance Manager for financial consideration before a settlement is reached.

Corporate Credit Cards

10.1 The Exchequer Manager has responsibility for the issue of Corporate Credit Cards. This will only be done on the written request of the appropriate Head of Service. The credit limit is at the sole discretion of the Exchequer Manager.

10.2 Corporate Credit Cards may only be used for Council business and in no circumstances used for personal purposes.

10.3 Corporate Credit Cards must only be used in accordance with the Guidance notes for the use of Credit Cards, issued by the Exchequer Manager, available on the Intranet.

10.4 All payments made must be supported by the appropriate documentation and properly certified by an Authorised Officer.

10.5 Any misuse of a Corporate Credit Card will result in the card being withdrawn and if significant could lead to disciplinary action.

Corporate Governance and Risk Mangement

11.1 The Council has approved and adopted a Code of Corporate Governance, which is consistent with the principles of the CIPFA/SOLACE Framework ‘Delivering Good Governance in Local Government’.

11.2 The Council issues an Annual Governance Statement on a yearly basis, which is signed by both the Leader and the Chief Executive. This is a formal statement that confirms that the Council has ensured that its business is conducted in accordance with the law and proper standards, and that public money is safeguarded and properly accounted for, and used economically, efficiently and effectively.

11.3 Management Team is responsible for ensuring that Council’s Risk Management Policy is regularly kept under review and that all corporate risks are identified, assessed and appropriate controls are put in place as part of the corporate governance/risk management process.

11.4 Heads of Services are responsible for ensuring that business risks, specific to their area of responsibility, are identified, assessed and that appropriate controls are put in place as part of the corporate governance/risk management process in accordance with the Council’s Risk Management Policy.

11.5 A copy of the Council’s Risk Management Policy is available on the Council’s Intranet.

External Funding

12.1 External funding is potentially a very important source of income, but funding conditions need to be carefully monitored to ensure they are compatible with the aims and objectives of the Council.

12.2 The Finance Manager shall be responsible for preparation of claims for Government grants and subsidies, and the Deputy Chief Executive shall be responsible for their authorisation.

12.3 Heads of Service may claim other grants and contributions subject to any match funding required being first approved by the Executive (in relation to Executive functions) or the Council or other relevant Council Committee (in relation to Council functions).

12.4 Funding should only be sought to meet the priorities approved in the Council’s Corporate Plan and Budget Framework approved by Full Council.

12.5 Heads of Service shall ensure that:

12.5.1 Conditions of funding and any statutory requirements are complied with.

12.5.2 The responsibilities of the accountable body are clearly understood.

12.5.3 The project progresses in accordance with the agreed project plan and conditions.

12.5.4 All expenditure is properly incurred and accounted for.

12.5.5 All claims for funds are made by the due date.

12.5.6 Future revenue implications are included within the Medium Term Financial Plan.

12.5.7 Appropriate exit strategies exist.

12.5.8 The Finance Manager is informed of all bidding for external funds.

12.5.9 That all the necessary records are kept to substantiate claims for audit purposes.

12.6 The Finance Manager shall ensure that all funding awarded by external bodies is received and properly recorded in the Council’s accounts and that all audit requirements are completed with.

12.7 The responsible Officer for each externally funded revenue scheme will provide the Finance Manager before the start of each financial year, the estimates for the next Financial Year broken down over heads of expenditure. Performance against these estimates will be reported as part of the Council’s Revenue Budget monitoring arrangements.

12.8 Capital schemes supported by external funding will be monitored and reported as part of the Council’s Capital Programme monitoring arrangements.

Financial Limits Relating To Contracts, Financial Procedure Rules And Budget Thresholds

13.1 Financial limits will be reviewed on an annual basis by the Deputy Chief Executive after taking account of an inflation index and Management Team’s comments.

13.2 Key Decision Thresholds (KDTs) are required for the purpose of determining whether decision to be taken by the Executive should appear in the Forward Plan of Decision items. Key Decisions, which the Executive may resolve, may then be the subject of formal scrutiny. KDTs are to be reviewed annually.

13.3 Changes to the financial limits, including the virement limits and budget thresholds, will be reported to Members annually with the Revenue Budget report.

13.4 The Deputy Chief Executive shall , in consultation with the Head of Legal and Democratic Services, review the financial limits in the Contract Procedure Rules at least every five years and report any recommendations to the Executive which will make recommendations to the Full Council

13.5 A list of the current financial limits are attached at Appendix 2, page 517.

Hospitality Register

14.1 The Council has a policy for the treatment and recording of hospitality offered to Officers. Officers are required to record all such offers within the Hospitality Register. Failure to do so may result in disciplinary action.

14.2 Heads of Service must record in the Hospitality Register their approval of all offers of hospitality, including whether it is accepted or declined.

14.3 Further guidance is available in Conditions of Service available on the Council’s Intranet.

14.4 All declarations are to be included within the Council’s disclosures on transparency.

Income

Setting Fees and Charges

15.1 The Finance Manager, in consultation with Heads of Service, will be responsible for advising the Executive on the fixing of fees and charges for services, except for Building Control Fees and Taxi and Hackney Carriage Licence Fees, which will be reported by the appropriate Head of Service.

15.2 Fees and charges will be reviewed at least annually.

15.3 In respect of services where charges apply or may apply in circumstances where services are obliged through regulations to achieve cost recovery or where other market led factors influence the service and its charging structure, the relevant Head of Service has the discretion to determine appropriate service fees and charges after consulting with the Finance Manager and the relevant Portfolio Holder.

Collection of Income Due

15.4 Individual Officers shall be responsible for any monies received by them on behalf of the Council. They must follow the procedures for paying in, receipting and accounting which have been agreed between their Head of Service the Finance Manager and the Exchequer Manager.

15.5 All receipts, tickets and similar documents or stationery dealing with receipt of monies will be subject to the approval of the Finance Manager and the Exchequer Manager.

15.6 All monies received by an Officer on behalf of the Council will be paid without delay to the Finance Manager and the Exchequer Manager, unless direct deposit with the Council’s bankers is arranged.

15.7 Every sum received by a Council Officer will be immediately acknowledged by the issue of an official receipt, ticket or vouchers, except for cheques and bank transfers where the Finance Manager and the Exchequer Managermay agree other arrangements.

15.8 Every transfer of official money from one Officer to another will be immediately acknowledged by the issue of a receipt or, where appropriate, by signature in a cash accounting record.

15.9 The Finance Manager and the Exchequer Manager are responsible for paying all monies received into the Council’s bank, normally not later than the next day of business.

15.10 Heads of Services will inform the Finance Manager and the Exchequer Managerof all contracts, agreements, grant claims etc. that will result in the Council receiving money. This ensures that the cash can be identified when it is received.

15.11 The Scancoin machine will be reconciled at least once every two months to confirm the accuracy of the balance of the change float held.

15.12 All monies received by the Council on behalf of a third party, will be accounted for and paid to that third party without delay, or in accordance with any agreement or instruction by the Finance Manager and the Exchequer Manager, after deduction of any amounts due in respect of commission or other allowance due to the Council.

15.13 All systems that record income will be reconciled monthly to the Council’s financial management system by the end of the following month to which they relate.

15.14 Personal cheques shall not be cashed out of money held on behalf of the Council, except in accordance with the approval of the Finance Manager and the Exchequer Manager.

Invoicing of Income Due

15.15 Heads of Service shall be responsible for ensuring that debtors’ invoices are raised promptly for credit income due to the Council in respect of their services.

15.16 The Revenues and Benefits Manager shall maintain the Council’s Corporate Debt Recovery Policy and all debt recovery will be carried out in accordance with that policy and related procedures.

15.17 Credit terms for all sundry debts due to the Council shall be 14 days, unless agreed otherwise with the Revenues and Benefits Manager.

15.18 Details of Officers authorised to cancel and amend sundry debts will be sent to the Revenues and Benefits Manager, together with specimen and authority limits. The Revenues and Benefits Manager will maintain a register of all such Authorised Officers and ensure it is used by debtor staff to authenticate all credit notes and cancellations requested.

15.19 The Revenues and Benefits Manager shall provide a computer system for credit income and be responsible for debt recovery. Court action will only be taken following consultation with the relevant Head of Service.

15.20 At the end of each Financial Year Heads of Service will notify the Finance Manager of all income due before the end of the Financial Year but not yet invoiced, in accordance with the closure timetable issued each year by the Finance Manager.

15.21 A copy of the Council’s Corporate Debt Recovery Policy is available on the Council’s Intranet.

Insurance

Under the direction of the Finance Manager the following will apply:

Insurance Cover

16.1 The Insurance Officer shall be responsible for the Council’s insurance portfolio including claims handling, keep a register of insurances and ensure that the Council’s insurance arrangements are reviewed each year.

16.2 Before the annual renewal of insurance cover, the Insurance Officer will provide Heads of Services as necessary with a summary of all current insurances to check and review their adequacy.

16.3 Fidelity guarantee insurance will be arranged for all Council employees and Members, although the extent of cover will differ according to responsibilities.

16.4 Where there is any doubt that a proposed action is covered by insurance, the Head of Service will consult the Insurance Officer before entering into any contractual commitment.

16.5 The Insurance Officer will review the appointment of insurance brokers to act on behalf of the Council every five years.

Insurance Claims

16.6 Heads of Service shall inform the Insurance Officer without delay all new risks, changed or deleted risks and events that might lead to an insurance claim, either by the Council or against the Council.

16.7 Heads of Service will respond to queries in respect of claims relating to their services without delay. For some types of claim the Council is required to respond within fixed deadlines and these must be adhered to, to protect the Council’s interests.

16.8 No Officer will admit liability, take any action or enter into any correspondence admitting liability on behalf of the Council.

Partnerships and Other External Works

17.1 Where the Council enters into a partnership or shared service arrangement with another organisation, the appropriate Head of Service will be responsible for:

17.1.1 Submitting a fully costed business plan to the Finance Manager for checking and to Management
Team or the Executive for approval as appropriate.

17.1.2 Ensuring that before entering into agreements with external bodies, a risk appraisal has been prepared.

17.1.3 Ensuring that such agreements and arrangements do not impact adversely upon the services provided by
the Authority.

17.1.4 Ensuring that all agreements are properly documented.

17.1.5 Providing appropriate information to the Finance Manager to enable a note to be entered into the
Council’s Statement of Accounts concerning material items.

17.2 The Deputy Chief Executive shall be consulted on any proposal to externalise a Council service (in whole or in part) involving competitive tendering, negotiation or any other form of financial arrangement. All proposals will then be forwarded to Management Team for approval and where appropriate submitted to the Executive.

17.3 Heads of Services shall consult the Head of Legal and Democratic Services before beginning the process of competitive tendering for Council services.

17.4 The Deputy Chief Executive shall be consulted on any in-house bid in response to an invitation to tender before it is submitted. All proposals will then be forwarded to Management Team for approval and where appropriate submitted to the Executive.

Payment of Invoices

18.1 The Exchequer Manager is responsible for examining and verifying invoices when they are input into the invoice register. Where an order has been raised and the goods or services receipted by the appropriate Authorised Officer and the invoice matches the order, payment will be made, any exceptions will be returned to originating Officers for certification.

18.2 Details of Officers authorised to sign such certifications will be sent to the Exchequer Manager by each Head of Service, together with specimen signatures and authority limits, in accordance with the delegations granted under the Financial Procedure Rules relating to Budgetary Control. The Exchequer Manager will maintain a register of all Authorised Officers and ensure that this information is properly reflected in the Financial Management System.

18.3 Certification shall be by the personal signature or computer authorisation of the Authorised Officer.

18.4 When a certifying Officer signs an invoice for payment he/she is confirming that the payment is correct in all respects including:

18.4.1 The work, goods or services, to which the account relates have been received, carried out, examined
and approved.

18.4.2 The prices, extensions, calculations, trade discounts, other allowances, credits and tax are correct and
agree with the Official Order or contract.

18.4.3 The relevant expenditure has been properly incurred and is within the approved budget.

18.4.4 Appropriate entries have been made in inventories, stores records or other records as required,

18.4.5 The account has not been previously passed for payment and is a proper liability of the Council.

18.4.6 The correct expenditure code has been inserted in respect of each item.

18.5 Where an invoice is found to be incorrect, e.g. because of an addition error, the VAT is incorrectly calculated or the invoice is not addressed to the Authority, it should be returned to the supplier with an explanatory note. Handwritten amendments should not be made to an invoice as this may invalidate the recovery of VAT.

18.6 It is the individual Officer’s responsibility to make any investigations he/she deems necessary before giving that certification.

18.7 Invoices for payment shall be passed to the Exchequer Manager without delay. All payments will be processed for payment 28 days from date of the invoice unless alternative terms are required and explicitly stated. Payment made outside the agreed payment terms can incur statutory interest (8% above bank base rate).

18.8 The Exchequer Manager will pay accounts due at set intervals, usually not less than once every week.

18.9 Heads of Service will notify the Finance Manager of all outstanding expenditure relating to the previous Financial Year in regard to goods and services received in that Financial Year, in accordance with the agreed Closure Timetable issued each year by the Finance Manager.

Petty Cash Accounts and Cash Floats

19.1 The issue and use of petty cash and cash floats will under the overall control of the Finance Manager.

19.2 Use of petty cash will be kept to a minimum and limited to expenses which are unavoidable or conveniently payable in this manner. They will not include items over £30 unless agreed by the Finance Manager.

19.3 Vouchers must be obtained to support all items of expenditure and must be presented, together with the standard summary of expenditure form, duly coded and authorised for reimbursement.

19.4 Income received on behalf of the Council will not be paid into a petty cash account, but banked in accordance with the Financial Procedure Rules relating to Income.

19.5 Officers responsible for petty cash accounts and cash floats will give the Finance Manager an annual certificate for each account balance in accordance with agreed Closure Timetable issued each year by the Finance Manager.

19.6 On returning a petty cash account, the Responsible Officer will account to the Finance Manager for the amount advanced to him/her.

19.7 Petty cash and other cash floats will be made available for inspection by Internal Audit on demand.

Procurement of Work, Goods and Services

Procurement Strategy

20.1 Heads of Service are expected to ensure that all procurement activities comply with the Procurement Procedures and Contracts Standing Orders.

20.2 The Procurement Strategy is available on the Council’s Intranet.

E-Procurement

20.3 The procedure to be adopted in respect of electronic tendering shall be in accord with a protocol prepared by the Head of Business Change and Technology in consultation with the Head of Legal and Democratic Services.

20.4 Heads of Services shall consult the Finance Manager before any proposals for the development of the use of e-procurement, is undertaken.

Official Orders

20.5 Heads of Service shall be responsible for purchase orders issued by their staff. By placing an order, the member of staff commits the Council to a contract. Therefore, it is important to establish that there is sufficient budget to fund the purchase prior to placing the order.

20.6 The Exchequer Manager will be notified in writing of Officers authorised to issue orders on behalf of the Authority, with details of authorisation limits. The Exchequer Manager will maintain a register of all Authorised Officers and ensure that this information is properly reflected in the Financial Management System.

20.7 All orders will be issued through the Financial Management System except in agreed circumstances, such as for supplies of gas and electricity services, petty cash purchases or where a formal contract is to be prepared. A list of all exempt activities is available from the Exchequer Team.

20.8 If it is not practicable to issue an Official Order when the order is placed, one will be completed immediately afterwards by the Officer placing the order, and marked ‘Confirmation of telephone or verbal order’.

20.9 When ordering goods and services in excess of £50,000, Officers must have regard to Section 10, page 567 of Contract Procedure Rules.

Goods Receipts

20.10 Official Orders will be goods receipted by the Officer responsible for the works or receiving the goods. When an Officer receipts goods and services he/she is confirming that the order is correct in all respects and may be paid. The checks to be made will include:

20.10.1 That the work, goods or services, to which the account relates have been received, carried out,
examined and approved.

20.10.2 That the price, extensions, calculations, trade discounts, other allowances, credits and tax is correct
and agrees with the Official Order or contract.

20.10.3 That the relevant expenditure has been properly incurred and is within the relevant budget.

20.10.4 That appropriate entries have been made in inventories, stores records or other records as required.

20.10.5 That the account has not been previously passed for payment and is a proper liability of the Council.

20.10.6 That the correct expenditure code has been inserted in respect of each item

20.11 It is important to provide separation of duties between Officer raising and goods receipting orders.

Use of Consultants

20.12 Guidance on the Use of Consultants is annexed to the Council’s Contract Procedure Rules.

20.13 Advice on the Use of Consultants is available from the Finance Manager and the Head of Personnel and Development.

Use of Agency Staff

20.14 The Council has a preferred supplier list for temporary agency staff, that it is contracted to use. In exceptional circumstances another agency may be used but only with the consent of the Head of Personnel and Development

20.15 Guidelines on proper procurement of temporary agency staff can be found on the Council’s Intranet.

Contracts

20.16 Contract Procedure Rules set out the procedures for inviting and accepting quotations and tenders.

21. Protection of Private Property in the Temporary Custody of the Authority/Lost Property

21.1 Heads of Service will ensure that details of any lost property is recorded before removal, that two Officers certify the accuracy of the record, and that items are held securely until disposal.

21.2 Heads of Service will obtain proof of ownership prior to the release of property.

21.3 Heads of Service will agree how to dispose of unclaimed items with the Head of the Internal Audit Partnership.

22. Reports with Financial Implications

22.1 The Deputy Chief Executive and the Finance Manager shall be responsible for advising the Executive and Council Committees on the financial implications of reports presented to them.

22.2 Report authors shall seek input from the Deputy Chief Executive and the Finance Manager when preparing reports, that have any financial implications.

23. Retention of Financial Records

23.1 The Finance Manager and Exchequer Manager will retain records which substantiate the Council’s Statement of Accounts, Value Added Tax returns, Construction Industry Tax returns and Government Grant claims for the relevant statutory periods.

23.2 The Council has received dispensation from HM Revenues and Customs to hold scan images in lieu of hard copy documents.

23.3 Heads of Service will retain records which substantiate grant claims made by them and any evidence required in connection with likely future claims which may be made by or against the Council.

24. Salaries, Wages and Members’ Allowances

24.1 The Head of Personnel and Development shall be responsible for paying salaries, wages and other emoluments to Council employees; for making deductions for income tax, national insurance and superannuation and paying these to the relevant authorities and for maintaining the necessary records.

24.2 Timesheets and expenses claims shall be in the form approved by the Head of Personnel and Development and will

24.2.1 Be completed by the employees themselves unless illiterate, when the supervisor will complete them, with
a note of the circumstances.

24.2.2 Be certified by the appropriate Authorised Officer unless otherwise agreed by the Head of Personal and
Development.

24.2.3 Be forwarded to the Head of Personnel and Development at a time agreed by her.

24.3 Details of Officers, including specimen signatures, authorised to sign timesheets and expense claims will be sent to the Head of Personnel and Development by each Head of Service. The Head of Personnel and Development will maintain a register of all such Authorised Officers.

24.4 Heads of Service will notify the Head of Personnel and Development immediately of all appointments, resignations, or other events affecting terms of employment or pay, including all sick absences, honorariums, accidents on or off duty, or special leave without pay.

24.5 Appointments of all employees shall be made in accordance with the Regulations of the Council and the approved grades and rates of pay.

24.6 Heads of Service will consult the Head of Personnel and Development on the appropriate pay level for new or changed posts. This ensures that the Council’s pay structure is applied consistently.

24.7 The Head of Personnel and Development will maintain a Staff Handbook, which will contain items relating to the Conditions of Service. An updated copy of the Staff Handbook will be available to all staff on the Council’s Intranet.

24.8 The Head of Personnel and Development will make payments to any Member entitled to claim allowances in accordance with the Council’s scheme for allowances.

25. Security

General

25.1 Heads of Service are responsible for the security of buildings, stocks, the Head of the Internal Audit Partnership will be consulted where security may be failing or where special security arrangements may be needed.

25.2 Maximum limits for cash holding will be agreed with the Head of the Internal Audit Partnership and not exceeded without his permission.

25.3 Keys to safes, cash boxes, strong rooms and security systems will be held by those responsible at all times. The loss of any such keys must be reported to the appropriate Head of Service immediately.

Data Protection and Information Security

25.4 Heads of Service are responsible for the security and privacy of information held within their services and for ensuring compliance with Data Protection, Copyright and Computer Misuse Acts.

25.5 All Officers will be made aware of their obligations under the Acts and the Council’s policy regarding data and systems security as set out the Council’s Information Security Policy. This includes physical security, privacy and passwords, back ups, viruses and software copyright.

25.6 Heads of Service must ensure that they and their staff conform with the Council’s Internet Acceptable Use Policy and Email Acceptable Use Policy.

25.7 Computer authorisation means approval via computer input, access to which is controlled via user names and passwords and where Officers must comply with the Council’s Information Security Policy by not revealing their password(s) to anyone else.

25.8 The Council’s Information Security Policy, the Internet Acceptable Use Policy and Email Acceptable Use Policy are available on the Council’s Intranet.

26. Sponsorship

26.1 Where an outside organisation wishes to sponsor or is asked to sponsor a Council activity, whether by invitation, tender, negotiation or voluntarily, the basic conventions concerning acceptance of gifts and hospitality applies, as detailed in the Code of Conduct for Employees.

26.2 Offers of Sponsorship must be discussed with the Finance Manager to ensure that the correct record keeping processes and consideration is given for the proper accounting, tax and banking arrangements for any arrangements.

27. Stock, Stores and Controlled Stationery

Accounting arrangements

27.1 Heads of Service shall be responsible for the secure custody of any stock, stores and controlled stationery held within their services and for the recording, issuing and accounting arrangements.

27.2 Stocktaking should take place at the end of each Financial Year and at other times if the Head of Service or Internal Audit deems it appropriate. The Head of Service or duly Authorised Officer involved will ensure that the stocktake is undertaken by sufficient senior and other impartial Officers to secure an independent and reliable result. A signed stock certificate as at the 31^st March each year will be provided to the Finance Manager in accordance with the agreed Closure Timetable issued each year by the Finance Manager.

27.3 Volumes of stock, stores and controlled stationery held will not exceed reasonable requirements and will be reviewed periodically by each Head of Service or duly Authorised Officer concerned.

27.4 The term ‘controlled stationery’ includes documents which have a financial value such as tickets, vouchers, permits and documents which can be used to obtain cash, goods or services such as cheques, Official Orders, etc.

Inventories

27.5 Heads of Service shall be responsible for the safe custody of property used within their services. All property (other than land and buildings) shall be, as far as practical, marked effectively as Council property and recorded on an inventory maintained by the Head of Service.

27.6 Council property may not be removed unless on Council business and with the agreement of the relevant Head of Service.

27.7 All items on the inventory will be checked annually by Services and any significant discrepancies reported to the Head of the Internal Audit Partnership.

Disposals

27.8 Subject to Standing Orders, Directors and Heads of Service may authorise the disposals of items of stores, furniture and equipment below a market value of £1,500 per item or category of items.

27.9 Disposal of more valuable items requires the consent of the Management Team.

28. Taxation

28.1 Tax issues are very complex and the penalties for incorrectly accounting for tax are severe. It is important for all Officers to be aware of their roles and responsibilities so if in doubt, Heads of Service should consult the Finance Manager, the Head of Internal Audit or Head of Personnel and Development for advice.

28.2 Any liability for costs including any penalties and interest charged for incorrect tax treatment will be passed on to services.

28.3 The council has access to external advisory services that should be used, in consultation with the Finance Manager, to advise on the tax implications of council activities.

Construction Industry Taxation Scheme

28.4 The Finance Manager is responsible for maintaining all records, making all deductions and returns as required by HM Revenues and Customs under the Construction Industry Taxation Scheme.

28.5 Heads of Service are responsible for ensuring that tax liabilities and returns can be correctly completed by:

        28.5.1 Ensuring that orders/contracts for works of a building maintenance or construction nature (as defined
        under the Construction Industry Scheme) are only placed with contractors who hold and have supplied a current
        and valid card or certificate entitling them to be paid for works of this type under this scheme; and

28.5.2 Correctly identifying the value of labour subject to tax on any invoice where a tax deduction is necessary.

Value Added Tax (VAT)

28.6 The Finance Manager is responsible for maintaining all records, accounts and claims as directed by the Value Added Tax Act 1983.

28.7 The Finance Manager will take responsible steps to ensure that the payment documentation provided by all suppliers of goods, works or services conforms to the requirements of a proper VAT invoice.

28.8 Each Officer responsible for raising invoices on behalf of the Council will ensure within reason that the Council has complied with the relevant Value Added Tax legislation regarding the supply of its services.

28.9 For services where VAT supplies are classified as Exempt under VAT regulations, Officers will ensure that all activities are fully evaluated for VAT purposes and any tax implications are identified before any expenditure is committed or contractual arrangements made.

28.10 The following are classified as Exempt activities under VAT Rules:

Land and Buildings;
Insurance;
Social Services;
Finance;
Education;
Health;
Burial and cremation.

28.11 The Finance Manager will prepare the VAT partial exemption calculation at least once a year and submit to HM Revenues and Customs before the statutory deadline.

28.12 The Finance Manager will complete a budgeted partial exemption calculation to ensure that the planned activities of the Council do not breech the limit imposed by HM Revenues and Customs.

Income Tax and National Insurance

28.13 Heads of Service are responsible for ensuring that liabilities to account for Income Tax and National Insurance can be correctly and accurately accounted for within the Council’s Accounts in accordance with HM Revenues and Customs and Contributions Agency Regulations. This will include:

28.13.1 Ensuring that all payments to staff (other than those for which a dispensation is held) are made via the
Council’s payroll system.

28.13.2 Ensuring that any taxable benefits arising from payments made/ benefits in kind supplied to and on behalf
of staff is notified to the Head of Personnel and Development for inclusion on P11D and similar returns.

28.14.3 Ensuring that all persons employed by the Authority are added to the Council’s payroll.

        28.14.4 Confirming that suppliers of labour other than employees (e.g. consultants) are not liable to deduction of
        Income Tax and National Insurance as if they were an employee, i.e. by obtaining evidence of Schedule D
        employment or CIS status.

29. Travelling and Subsistence

29.1 All certified claims for payment of car allowances, subsistence allowances, travelling and incidental expenses will be in the form approved by the Head of Personnel and Development.

29.2 The certification will mean that the certifying Officer is satisfied that the journeys were authorised, the expenses properly and necessarily incurred and allowances properly payable by the Council.

29.3 Summary details may be covered by the Council’s disclosures on transparency.

30. Treasury Mangement

30.1 This Council has adopted CIPFA’s Code for Treasury Management in Local Authorities.

30.2 The Council shall determine a Treasury Management Policy setting out its strategy and procedures for Treasury Management and set the Council’s Prudential Indicators. The policy shall be reviewed once a year and completed in accordance with the budget timetable.

30.3 All money in the Council’s possession shall be aggregated for Treasury Management purposes under the overall control of the Deputy Chief Executive and delegated to the Finance Manager on a day to day basis.

30.4 Day to day decisions on borrowing, investment (including the review of the list of the Council’s current short and long term investment counterparties, with particular reference to their credit rating) and financing, including use of Capital Receipts, Reserves and Leasing are delegated from the Council to the Deputy Chief Executive (or through him to his Officers) within the agreed Treasury Management Policy.

30.5 The Deputy Chief Executive will make all investment of Council’s funds in the name of the Council, unless the Council has authorised its investments to be made by an outside agent, when they should be in the name of Trustees for the Council. All investments will be in accordance with the Approved Investment Regulations defined in the Local Government and Housing Act 1989 and the approved Treasury Management Policy.

30.6 All loans to the Council will be negotiated the by the Finance Manager on behalf of the Deputy Chief Executive and paid direct by the lender or his agent into the Council’s bank account.

30.7 The Deputy Chief Executive is authorised to borrow temporarily pending receipts of money from Business Rates, Loans, Council Tax, Government Grants and other income properly due to the Council, within the limit agreed by the Council each year. This is delegated on a day to day basis to the Finance Manager.

30.8 The Finance Manager will keep under review the borrowing limit and will advise the Council accordingly.

30.9 The Finance Manager will report to the Executive not less than once each financial year on the activities of the Treasury Management operation, and on the exercise of Treasury Management powers delegated to him. The report will comprise an Annual Report on Treasury Management to be presented by 30^th June of the succeeding financial year.

31. Write-Offs of Income, Stocks, Furniture and Equipment

31.1 The Deputy Chief Executive, following consultation with the relevant Head of Service, may write off amounts which he is satisfied cannot be collected provided that they do not total more than £1,000 for any one debtor. A summary of the amounts written off shall be periodically reported to the Executive.

31.2 The Head of Customers Homes and Property Services may write off amounts owed by former tenants of Housing Revenue Account Properties provided that the procedures approved by the Council have been followed and the Deputy Chief Executive has approved the list. A summary of the amounts written off shall be periodically reported to the Executive.

31.3 Amounts due to the Council (other than former HRA tenants’ debtors and amounts below £1,000) shall require the approval of the Deputy Chief Executive and the Executive (in relation to Executive functions) or the relevant Council Committee (in relation to Council functions) prior to be written off.

31.4 The Head of Environmental Services or Officers authorised by him may waive Penalty Charge Notices issued to motorists in the Council’s car parks or in designated on-street parking areas and may waive Parking Offence Notices issued to motorists parking in restricted areas, where an acceptable reason for non-payment is supplied.

Appendix 1 - Glossary

Accrual	A sum included in the final accounts to cover income or expenditure attributable to that year but for which payment was not received/made during that year.
Agency Services	Services which are performed for another authority or public body, where the principal (the authority responsible for the service) reimburses the agent (the authority doing the work) for the cost of the work carried out.
Appointed Auditors	External auditors of local authorities appointed by the Audit Commission. In Ashford’s case, this function is carried out by the Commission’s own audit staff.
Audit Commission	An independent body, established under the Local Government Finance Act 1982. The Audit Commission is responsible for appointing external auditors to Local Authorities and setting standards for those auditors, carrying out national studies to promote economy, efficiency and effectiveness in the provision of Local Authority services and defining comparative indicators of Local Authority performance that are published annually.
Budget	A statement of the Authority’s plans for revenue and capital expenditure and income over a specified period of time.
Budget Head	A specific area of activity where expenditure may be incurred or income collected.
Budget Requirement	The estimated Revenue expenditure on General Fund services that needs to be financed from the Council Tax after deducting income from Fees and Charges, certain specific grants and any Funding Reserves.
Capital Expenditure	Spending on the acquisition, construction, enhancement or replacement of tangible assets (such as land, buildings or major items of equipment), which will be used or benefit providing services for a number of years.
Capital Financing	Funds used to pay for capital expenditure.
Capital Receipts	The proceeds from the disposal of land or other assets. Capital Receipts can be used to finance new Capital Expenditure within the rules set down by the Government, but they cannot be used to finance Revenue Expenditure.
CIPFA	The Chartered Institute of Public Finance and Accountancy is the leading professional accountancy body for public services in the UK. CIPFA has responsibility for setting good practice accounting standards for local government.
Collection Fund	A statutory fund maintained by a billing authority, which is used to record local taxes and non-domestic rates collected by the authority, along with payments to precepting authorities, the national pool of non-domestic rates and its own general fund.
Contingent Liability	A potential liability at the Balance Sheet date. If the liability cannot be estimated reasonably accurately, it must be disclosed as a note to the accounts.
Council Tax	The main source of local taxation to local authorities, Council Tax is levied on all domestic households within the Council’s area.
Council Tax Benefit	Assistance provided to adults on low incomes to help them pay their Council Tax bill. The cost of Council Tax benefit is wholly met by Government Grant.
Creditors	Money owed by the Council to others.
Debtors	Money owed to the Council by others.
Deferred Charges	Expenditure that does not result in the creation of a fixed asset but is classified as Capital Expenditure for Capital Control.
Fidelity Guarantee	Insurance against fraudulent losses.
General Fund	The main revenue fund of the authority. Day-to-day spending on services is met from the Fund. Spending on the provision of housing, however, must be charged to a separate Housing Revenue Account.
Government Grant	Sums paid by central Government towards either specific service or in aid of services generally.
Gross Expenditure	The total cost of providing the Council's services before taking into account income from Government grants and Fees and Charges for services.
Housing Benefit	The allowance to persons on low income (or none) to meet, in whole or part, their rent. Benefit paid to the authority's own tenant is known as rent rebate and that paid to private sector tenants as rent allowance.
Housing Revenue Account (HRA)	Account which sets out the expenditure and income arising from the provision of housing. The HRA is funded by specific housing grants and rents payable by the Council’s tenants.
HRA Subsidy	A Government grant paid to some housing authorities towards the cost of providing, managing and maintaining dwellings and paying Housing Benefit to tenants.
Internal Audit	A specialist section of the Council that examines, evaluates and reports on the adequacy of internal control systems and the proper, economic, efficient and effective use of resources.
National Non-Domestic Rate (NNDR)	A levy on businesses, based on a national rate in the pound set by the Government multiplied by the 'rateable value' of the premises they occupy. NNDR is collected by billing authorities on behalf of Central Government and then redistributed among all Local Authorities and Police Authorities on the basis of population.
Net Expenditure	Gross expenditure minus specific service income, (but before deduction of Revenue Support Grant).
Outturn	Actual income and expenditure in a Financial Year
Pension Fund	An employees' pension fund maintained by an authority, or group of authorities, in order to make pension payments on retirement of participants. It is financed from contributions from the employing authority, the employee and investment income. Ashford participates in a pension fund that covers all Kent authorities.
Precept	The levy made by precepting authorities on billing authorities, requiring the latter to collect income from Council Taxpayers on their behalf. County Councils, Police Authorities, Fire & Rescue Authorities and Parish Councils are precepting authorities.
Private Finance Initiative (PFI)	A Central Government initiative which aims to increase the levels of funding available for public services by attracting private sources of finance. The PFI is supported by a number of incentives to encourage authorities' participation.
Provisions	Amounts set aside for specific liabilities or losses which are likely or certain to be incurred, but the amounts or the dates on which they will arise are uncertain. The value of the Provision must be the best estimate of the likely liability or loss.
Rateable Value	The annual assumed rental value of a commercial property, to which rate poundages are applied to arrive at the Non-Domestic Rate payable.
Reserves	Amounts set aside to meet general, rather than specific future expenditure. These include “Earmarked Reserves” (to be spent on specific services or functions) and “General Reserves” (or 'Balances') which every authority must maintain as a matter of prudence. Sums may be put into or taken from Reserves at the Council’s discretion.
Revenue Contributions to Capital	The financing of Capital Expenditure directly from Revenue.
Revenue Expenditure	The day-to-day running costs of providing services.
Revenue Support Grant (RSG)	A grant paid by Central Government to aid Local Authority services in general, as opposed to specific grants, which may only be used for a specific purpose.
Section 137 Expenditure	Section 137 of the Local Government act 1972 (as amended) enables the Council to spend on services for which it has no specific powers, but which benefits some or all of the Authority’s residents.
Specific Grants	Grants from Central Government which may only be used for a specific purpose.
Treasury Management	Management of the Council’s Cash Balances on a daily basis, to obtain the best return while maintaining an acceptable level of risk.
Virement	The transfer of funds between budget heads.

Appendix 2 - Financial Limits Relating to Contracts, Financial Procedure Rules and Budget Threshold - 2010/11

Contract Procedure Rules

Section	Item	Value £
6.2	Value at which Public Advertisement must be placed	£150,000 - Goods and Services £250,000 - Works
6.3	Contract for Goods and Services Public Advertisement/ Min 4 Tenders sought/ Cllr attend opening tender Advertisement (if select list does not apply)/ Min 4 Tenders sought/Tendering opening witnessed Quotes sought	>£150,000 Between £50,000 and £150,000 <£50,000
6.4	Contracts for the execution of Work Public Advertisement/ Min 4 Tenders sought/ Cllr attend opening tender Advertisement (if select list does not apply)/ Min 4 Tenders sought/ Tender opening witnessed Advertisement (if select list does not apply)/ Min 3 Tenders sought/ Tender opening witnessed Quotes sought	>£250,000 Between £150,000 and £250,000 Between £50,000 and £150,000 <£50,000
10.1	Contracts to be in writing and under seal Contracts to be in writing and authorised by two Officers	>£75,000 >£50,000
10.2	Contacts to include provision for liquidated damages	>£75,000

Financial Procedure Rules

Section	Item	Value £
5.5	Payments requiring two authorised signatures	>£20,000
7.19	Virement: approvals Heads of Service Management Team Executive	< £5,000 Between £5,000 and £50,000 >£50,000
19.2	Petty Cash limit on individual items	£30
27.8	Approval for disposal of stores, furniture and equipment Head of Service Management Team	< £1,500 > £1,500
31.1	Approval for Write offs: Deputy Chief Executive Members	Up to £1,000 per individual debtor > £1,000

Budget Thresholds

Key Decision Thresholds are:

a. £50,000 for all Revenue Services

b. £50,000 or 10% of net project cost for Capital Schemes.

Next - Budget and Policy Framework Procedure Rules

This webpage was updated on 6/23/2011

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