Lea & Cleverton Parish Council
FINANCIAL REGULATIONS (2015)
These Financial Regulations were adopted by the Council at its Meeting held on September 15th 2015.
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.
1.4 The Council shall be responsible for ensuring that the financial management is adequate and effective and that the council has a system of internal controls which facilitates the effective exercise of its functions and which manages risk.
1.5 The Council shall review at least once a year the effectiveness of its systems of internal controls and shall produce a statement on internal control with its statement of accounts.
1.6 Under the terms of the Transparency Code (December 2014) for smaller authorities with a turnover of less than £25K the Council shall publish on a freely accessible web site all such items as defined under the code.
2. ANNUAL ESTIMATES
2.1 The RFO shall formulate and submit proposals to the Council in respect of revenue and capital costs for the following financial year not later than the January Council meeting each year.
2.2 Detailed estimates of all receipts and payments for the year shall be prepared each year by the RFO.
2.3 The Council shall review the estimates not later than the January Council meeting each year and shall fix the Precept to be levied for the ensuing financial year. The RFO shall supply each member with a copy of the approved estimates.
2.4 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. The Clerk/RFO may, with the approval of Council, vire between subheads.
3.3 The RFO shall regularly provide the Council with a statement of receipts and payments to date under each head of the budgets, comparing actual expenditure against that planned.
3.4 The Clerk/RFO 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 £500. 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.
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.
3.7 All capital works shall be administered in accordance with the Council’s Standing Orders and financial regulations relating to contracts.
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 and any subsequent amendments thereto.
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 following principles shall be observed in connection with the accounting duties:
a) The duty of providing information, calculating, checking and recording sums due to, or from the council should be separated as completely as possible from the duty of collecting or dispersing them.
b) Officers charged with the duty of examining and checking the accounts of cash transactions should not be engaged in any of these transactions
4.4 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 timescale set by the Accounts and Audit Regulations 1996 as amended, or set by the Auditor.
4.4 The RFO shall be responsible for maintaining an 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. and any subsequent amendments thereto. 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 Council shall carry out a review of the effectiveness of internal audit on an annual basis in accordance with the Accounts and Audit Regulations 1996 and any subsequent amendments thereto.
4.6 The Internal Auditor shall carry out the work required by the RFO and 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.
4.7 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 and any subsequent amendments thereto.
4.8 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 Parish Council, with current accounts and high interest accounts maintained at the Bank as required by the Council. They shall be regularly reviewed for efficiency.
5.2 A schedule of the payments of money required, forming part of the Agenda for the Meeting shall be prepared by the RFO and, together with the relevant invoices, be presented to the meeting. If the schedule is in order it shall be authorised by a resolution of the Council. 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 with cheque book stubs and invoices initialled and dated by them.
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 and RFO shall take all steps to settle all invoices submitted, and which are in order, at the next available Council Meeting.
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 and RFO 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 Council will not maintain any form of cash float. All cash received must be banked intact. Any payments made in cash by the Clerk/RFO (for example for postage or minor stationery items) shall be refunded on a regular basis, at least quarterly. Alternatively
6.5 The RFO may provide petty cash to members/officers 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 may 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) Funds to defray the out of pocket expenses of the Clerk/RFO shall be reimbursed on production of a petty cash summary and 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 by the RFO 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 PAYE, national insurance and pension contributions, may be made in accordance with the payroll records and paid to HMRC on the appropriate dates, provided that each payment is reported to and ratified by the next available Council Meeting.
7.2 The salaries and wages shall be reviewed annually and approved by Council and minuted accordingly
8. LOANS AND INVESTMENTS
8.1 It is not the Policy of this Council to enter into any loans.
8.2 Investment of cash reserves will be with the approval of the Parish Council on best possible terms and conditions
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.
9.1 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 RFO and Clerk.
9.4 Any sums found to be irrecoverable and any bad debts shall be reported to the Council.
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 in excess of £200 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 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 letters shall be retained.
10.3 All members and Officers are responsible for obtaining value for money at all times. An officer issuing an official letter 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 (I) below.
10.4 The RFO shall verify the lawful nature of any proposed purchase or payment before the issue of any letter and in the case of new or infrequent purchases or payments, the RFO shall ensure that the statutory authority shall be reported to the meeting at which the order is approved so that the Minutes can record the power being used.
11.1 Procedures as to contracts are laid down as follows:
11.2 All works, which the Parish Council requires to be carried out on their behalf, shall be the subject of competitive tendering.
11.3 Where it is intended to enter into a contract exceeding £1,000:00 but not exceeding £10,000:00 in value for the supply of goods or materials or for the execution of works*, the Clerk/RFO shall give at least three weeks public notice of such intention in the same manner as a public notice of meeting of the Council is given.
11.4 Where the value of the intended contract exceeds £10,000:00, similar notice shall be given in addition in such newspapers circulating in the district, as the Council shall direct.
11.5 Notice of a contract exceeding £10,000:00 shall state the general nature of the intended contract and state the name and address of the person to whom tenders are to be addressed and the last date by which those tenders should reach in the person in the ordinary course of post.
11.6 Tenders shall opened by the Clerk or other person to whom the tenders are required to be addressed on the date specified pursuant to paragraph 11.5 of this Order and shall be reported by the person who opened them to the Council or, where the tenders have been sought by a committee or sub-committee to that committee or sub-committee.
11.7 The Parish Council nor any committee or sub-committee (is bound to accept the lowest tender.) does not bind itself to accept the lowest quotation nor will it accept quotations not complying with these Standing Orders..
11.8 If no tenders are received or if all the tenders are identical the Council may make such arrangements for procuring the goods or materials or executing the works as it thinks fit.
11.9 Contractors who are not VAT registered shall be requested to quote on a “labour only” basis.
11.10 Contractors who are VAT registered shall be requested to quote on a total cost basis.
11.11 Where contracts are awarded to non-VAT registered Contractors the Parish Council shall arrange direct payment for all materials required to carry out the relevant works. All Invoices for such materials so ordered must be in the name of Lea & Cleverton Parish Council.
11.12 Quotations for such works as detailed in paragraph 11.11 above shall be itemized as:
a) Labour Costs.
b) Full information regarding materials requiring to be purchased with details of the supplier involved.
c) Details of sundry items to be supplied from Contractors own stock.
11.13 All quotations must be in writing and must be delivered to the Parish Clerk. Any acceptance of a quotation will only be given in writing after the authorisation of the Parish Council.
11.14 Verbal quotations are not acceptable, nor will the Parish Council give verbal instructions for the execution of any works. Invoices for works carried out on this basis will be refused for payment.
12. PAYMENTS UNDER CONTRACTS FOR BUILDING OR OTHER CONSTRUCTION WORKS
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 of 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 Clerk to the Contractor in writing before any work has begun, 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 if known, 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.
14.1 Following an annual risk assessment, the RFO shall effect all insurances and negotiate all claims on the Council’s insurers
14.2 The Clerk shall give prompt notification to the RFO of all new risks, properties or vehicles which require to be insured and of any alterations affecting existing insurances.
14.3 The RFO shall keep a record of all insurances effected by the Council and the property and risks covered thereby and annually review it.
14.4 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.
14.5 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.
15.1 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.(6)
16. RISK MANAGEMENT
16.1 The Clerk, together with the Chairman and 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 together with the Chairman 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.
16.3 The Council shall carry out a Financial Risk Assessment on an annual basis in accordance with the Accounts and Audit Regulations 1996 and any subsequent amendments thereto. The minutes shall record such review of the financial risks.
16.4 The Council shall arrange weekly inspections of the Queen Elizabeth II Diamond Jubilee Playing Field as required by the Council’s Insurers and shall permanently retain all Inspection reports and details of any accident.
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.
© SLCC 2012
Members may use and adapt these documents within their own councils on the understanding that the copyright remains with the SLCC.
22nd August 2015. PC Finance Regulations/word. Issue 1