Financial Regulations
Policy Adopted May 2023. Next Review Date May 2024
1. General
1.1 These financial regulations govern the conduct of financial management by the council and may only be amended or varied by resolution of the council. Financial regulations are one of the council’s three governing policy documents providing procedural guidance for members and officers. Financial regulations must be observed in conjunction with the council’s standing orders and any individual financial regulations relating to contracts.
1.2 The council is responsible in law for ensuring that its financial management is adequate and effective and that the council has a sound system of internal control which facilitates the effective exercise of the council’s functions, including arrangements for the management of risk.
1.3 The council’s accounting control systems must include measures:
for the timely production of accounts;
that provide for the safe and efficient safeguarding of public money;
to prevent and detect inaccuracy and fraud; and
identifying the duties of officers.
1.4 These financial regulations demonstrate how the council meets these responsibilities and requirements.
1.5 At least once a year, prior to approving the Annual Governance Statement, the council must review the effectiveness of its system of internal control which shall be in accordance with proper practices.
1.6 Members of council are expected to follow the instructions within these Regulations and not to entice employees to breach them. Failure to follow instructions within these Regulations brings the office of councillor into disrepute.
1.7 The Responsible Financial Officer (RFO) holds a statutory office to be appointed by the council. The Clerk has been appointed as RFO for this council and these regulations will apply accordingly.
1.8 The accounting control systems determined by the RFO shall include:
procedures to ensure that the financial transactions of the council are recorded as soon as reasonably practicable and as accurately and reasonably as possible;
procedures to enable the prevention and detection of inaccuracies and fraud and the ability to reconstruct any lost records;
measures to ensure that risk is properly managed.
1.9 The council is not empowered by these Regulations or otherwise to delegate certain specified decisions. In particular any decision regarding:
setting the final budget or the precept (council tax requirement);
approving accounting statements;
approving an annual governance statement;
borrowing;
declaring eligibility for the General Power of Competence; and
addressing recommendations in any report from the internal or external auditors, shall be a matter for the full council only.
2. Accounting and Audit
2.1 The RFO will determine all accounting procedures and financial records of the Council in accordance with the Accounts and Audit Regulations, appropriate guidance and proper practices.
2.2 The RFO will complete the annual financial statements of the Council including the annual return as soon as practicable after the end of the financial year and will submit and report on them to the Council. The Council will review each year and ensure that there is an adequate, effective system of internal audit of the Council’s accounting, financial and other procedures in line with Proper Practice.
2.3 The RFO will submit the Annual Return to the External Auditor by the due date, ensuring the return is complete.
2.4 An Internal Auditor will be appointed by the Council to carry out the work required to comply with the Proper Practice. The person appointed will be competent and independent of the operation of the Council, having no involvement in the financial decision-making management or control of the council.
2.5 The RFO shall make arrangements for the exercise of electors’ rights in relation to the accounts including the opportunity to inspect the accounts, books, and vouchers and display or publish any notices and statements of account required by Audit Commission Act 1998, or any superseding legislation, and the Accounts and Audit Regulations.
2.6 The RFO will ensure that an appropriate and accurate Register of Assets is maintained by the Council. It will be reviewed at least annually, in conjunction with a health and safety inspection of assets if appropriate.
2.7 The RFO will promptly complete any VAT Return that is required. Any repayment claim due in accordance with the VAT Act 1974 section 33 will be made at least annually coinciding with the financial year.
3. Annual estimates and forward planning
3.1 The RFO will compile estimates of income and expenditure annually for the Council’s consideration. The Council will review and approve the budget not later than the end of December in preparation for the precept being agreed.
3.2 The council shall fix the precept (council tax requirement), and relevant basic amount of council tax to be levied for the ensuing financial year not later than by the end of January each year. The RFO shall issue the precept to the billing authority and shall supply each member with a copy of the approved annual budget.
3.2 During the year the budget will be reviewed against actual expenditure and income on a monthly basis. Amendments to the budget will be discussed in Council and changes minuted.
4. Budgetary control and authority to spend
4.1 Expenditure on items may be authorised as follows:
Majority of Councillors for all items over £50
The Clerk, in conjunction with the Chair or another Councillor for items below £50, to a maximum of £50 per Councillor per month.
Such authority is to be evidenced in writing. Spending will not be approved retrospectively.
5. Banking arrangements and cheques
5.1 The Council’s banking arrangements, including the Bank Mandate, will be made by the RFO and approved by the Council. They will be regularly reviewed for efficiency.
5.2 The RFO shall prepare a schedule of payments requiring authorisation, forming part of the Agenda for each regular Meeting and, together with the relevant invoices, present the schedule to council. The council shall review the schedule for compliance and, having satisfied itself shall authorise payment by a resolution of the council. A detailed list of all payments shall be disclosed within or as an attachment to the minutes of the meeting at which payment was authorised. Personal payments (including salaries, wages, expenses and any payment made in relation to the termination of a contract of employment) may be summarised to remove public access to any personal information.
5.3 All invoices for payment shall be examined, verified and certified by the RFO to confirm that the work, goods or services to which each invoice relates has been received, carried out, examined and represents expenditure previously approved by the council.
5.4 The RFO shall examine invoices for arithmetical accuracy. The RFO shall take all steps to pay all invoices submitted, and which are in order, at the next available council meeting.
6. Instructions for the making of payments
6.1 A resolution of the Council will nominate at least five members to be authorised by the Council to sign cheques and/or authorise payments drawn on the bank account.
6.2 Cheques or orders for payment drawn on the bank account in accordance with the schedule as presented to council or committee shall be signed by two members of council in accordance with a resolution instructing that payment. A member who is a bank signatory, having a connection by virtue of family or business relationships with the beneficiary of a payment, should not, under normal circumstances, be a signatory to the payment in question.
6.3 Any utility bill may be paid by Direct Debit provided that the instructions are signed by two authorised Councillors.
6.4 If a cheque payment is made, to indicate agreement of the details shown on the cheque or order for payment with the counterfoil and the invoice or similar documentation, the signatories shall each also initial the cheque counterfoil.
6.5 Cheques or orders for payment shall not normally be presented for signature other than at a council or committee meeting (including immediately before or after such a meeting). Any signatures obtained away from such meetings shall be reported to the council at the next convenient meeting.
6.6 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 (for example for postage or minor stationery items) shall be refunded on a regular basis, at least quarterly.
7. Loans and Investments
7.1 All loans and investments will be negotiated in the name of the Council and will be set for a period approved by the Council.
7.2 All borrowings will be in the name of the Council and will not be entered into until necessary approvals have been given. Any application will be approved by Council, especially the terms and purpose. These terms must be reviewed annually.
7.3 All investments of money under the control of the Council will be in the name of the Council and all certificates or other documents will be retained by the RFO.
8. Contracts and Purchase Orders
8.1 An official order or letter will be issued for all work or service paid for by the Council. All Councillors and officers are responsible for obtaining good value for money at all times. An officer placing an order on behalf of the Council will ensure that good value and appropriate terms are obtained for the transaction.
8.2 Every contract for goods or services shall comply with these financial regulations, and no exceptions shall be made otherwise than in an emergency provided that this regulation need not apply to contracts which relate to items (i) to (vi) below:
for the supply of gas, electricity, water, sewerage and telephone services;
for specialist services such as are provided by legal professionals acting in disputes;
for work to be executed or goods or materials to be supplied which consist of repairs to or parts for existing machinery or equipment or plant;
for work to be executed or goods or materials to be supplied which constitute an extension of an existing contract by the council;
for additional audit work of the external auditor up to an estimated value of £500 (in excess of this sum the Clerk and RFO shall act after consultation with the Chair and Vice Chair of council); and
for goods or materials proposed to be purchased which are proprietary articles and / or are only sold at a fixed price.
8.3 When it is to enter into a contract of less than £25,000 in value for the supply of goods or materials or for the execution of works or specialist services other than such goods, materials, works or specialist services as are excepted as set out in paragraph 8.2 the Clerk or RFO shall strive to obtain 3 quotations (priced descriptions of the proposed supply); where the value is below £2,000 and above £500 the Clerk or RFO shall strive to obtain 2 estimates.
8.4 Where the council intends to procure or award a public supply contract, public service contract or public works contract as defined by The Public Contracts Regulations 2015 (“the Regulations”) which is valued at £25,000 or more, the council shall comply with the relevant requirements of the Regulations. The Regulations require councils to use the Contracts Finder website to advertise contract opportunities, set out the procedures to be followed in awarding new contracts and to publicise the award of new contracts
8.5 The council shall not be obliged to accept the lowest or any tender, quote or estimate.
9. Asset management
9.1 The Clerk shall make appropriate arrangements for the custody of all title deeds and Land Registry Certificates of properties held by the council. The RFO shall ensure a record is maintained of all properties held by the council, recording the location, extent, plan, reference, purchase details, nature of the interest, tenancies granted, rents payable and purpose for which held in accordance with Accounts and Audit Regulations.
9.2 No tangible property shall be purchased or otherwise acquired, 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 £100.
10. Insurance
10.1 Following the annual risk assessment (see 11) the Council will review the level of insurance cover and ensure it is adequate and appropriate for the activities of the Council. Minimum cover will include Public Liability, Employers Liability, Money and Fidelity Guarantee.
11. Risk Assessment
11.1 A risk assessment will be undertaken by the RFO annually of all the activities of the Council and a report approved by the Council. This assessment will also cover the appropriateness of the internal audit arrangements. The Risk Assessment will be reviewed annually.
11.2 If the Council undertakes a new activity not covered by the existing risk assessment an assessment will be undertaken before the activity commences.
12. Suspension and revision of Financial Regulations
12.1 It shall be the duty of the council to review the Financial Regulations of the council from time to time. The Clerk shall make arrangements to monitor changes in legislation or proper practices and shall advise the council of any requirement for a consequential amendment to these Financial Regulations.
12.2 The council may, by resolution of the council duly notified prior to the relevant meeting of council, suspend any part of these Financial Regulations provided that reasons for the suspension are recorded and that an assessment of the risks arising has been drawn up and presented in advance to all members of council.
