Date Adopted: July 2016 Min: 82/16/TC and are based on the NALC
Date Amended: February 2020
Review Date: May 2021
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 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 Deliberate or wilful breach of these Regulations by an employee may give rise to disciplinary proceedings.
1.7 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 and this would be a Code of Conduct issue.
1.8 The Responsible Financial Officer (RFO) holds a statutory office to be appointed by the council.
1.9 The RFO;
• acts under the policy direction of the council;
• administers the council’s financial affairs in accordance with all Acts, Regulations and proper practices;
• determines on behalf of the council its accounting records and accounting control systems;
• ensures the accounting control systems are observed;
• maintains the accounting records of the council up to date in accordance with proper practices;
• assists the council to secure economy, efficiency and effectiveness in the use of its resources; and
• produces financial management information as required by the council.
1.10 The accounting records determined by the RFO shall be sufficient to show and explain the council’s transactions and to enable the RFO to ensure that any income and expenditure account and statement of balances, or record of receipts and payments and additional information, as the case may be, or management information prepared for the council from time to time comply with the Accounts and Audit Regulations.
1.11 The accounting records determined by the RFO shall in particular contain:
• entries from day to day of all sums of money received and expended by the council and the matters to which the income and expenditure or receipts and payments account relate;
• a record of the assets and liabilities of the council; and
• wherever relevant, a record of the council’s income and expenditure in relation to claims made, or to be made, for any contribution, grant or subsidy.
1.12 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;
• identification of the duties of officers dealing with financial transactions and division of responsibilities of those officers in relation to significant transactions;
• procedures to ensure that uncollectable amounts, including any bad debts are not submitted to the council for approval to be written off except with the approval of the RFO and that the approvals are shown in the accounting records; and
• measures to ensure that risk is properly managed.
1.13 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;
• writing off bad debts;
• 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.
1.14 In addition, the council must:
• determine and keep under regular review the bank mandate for all council bank accounts;
• approve any grant or a single commitment in excess of £5,000; and
• in respect of the annual salary for any employee have regard to recommendations about annual salaries of employees made by the relevant committee in accordance with its terms of reference.
1.15 In these financial regulations, references to the Accounts and Audit Regulations or ‘the regulations’ shall mean the regulations issued under the provisions of section 27 of the Audit Commission Act 1998, or any superseding legislation, and then in force unless otherwise specified.
In these financial regulations the term ‘proper practice’ or ‘proper practices’ shall refer to guidance issued in Governance and Accountability for Local Councils – a Practitioners’ Guide (England) issued by the Joint Practitioners Advisory Group (JPAG), available from the websites of NALC and the Society for Local Council Clerks (SLCC).
2 ACCOUNTING AND AUDIT (INTERNAL AND EXTERNAL)
2.1 All accounting procedures and financial records of the council shall be determined by the RFO in accordance with the Accounts and Audit Regulations, appropriate guidance and proper practices.
2.2 On a regular basis, at least once in each quarter, and at each financial year end, a member other than the Chairman or a cheque signatory shall be appointed to verify bank reconciliations (for all accounts) produced by the RFO. The member shall sign the reconciliations and the original bank statements (or similar document) as evidence of verification. This activity shall on conclusion be reported, including any exceptions, to and noted by the council or Finance & Resources Committee.
2.3 The RFO shall complete the annual statement of accounts, annual report, and any related documents of the council contained in the Annual Return (as specified in proper practices) as soon as practicable after the end of the financial year and having certified the accounts shall submit them and report thereon to the council within the timescales set by the Accounts and Audit Regulations.
2.4 The council shall ensure that there is an adequate and effective system of internal audit of its accounting records, and of its system of internal control in accordance with proper practices. Any officer or member of the council shall make available such documents and records as appear to the council to be necessary for the purpose of the audit and shall, as directed by the council, supply the RFO, internal auditor, or external auditor with such information and explanation as the council considers necessary for that purpose.
2.5 The internal auditor shall be appointed by and shall carry out the work in relation to internal controls required by the council in accordance with proper practices.
2.6 The internal auditor shall:
• be competent and independent of the financial operations of the council;
• report to council in writing, or in person, on a regular basis with a minimum of one annual written report during each financial year;
• demonstrate competence, objectivity and independence, be free from any actual or perceived conflicts of interest, including those arising from family relationships; and
• have no involvement in the financial decision making, management or control of the council.
2.7 Internal or external auditors may not under any circumstances:
• perform any operational duties for the council;
• initiate or approve accounting transactions; or
• direct the activities of any council employee, except to the extent that such employees have been appropriately assigned to assist the internal auditor
2.8 For the avoidance of doubt, in relation to internal audit the terms ‘independent’ and ‘independence’ shall have the same meaning as is described in proper practices.
2.9 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.
2.10 The RFO shall, without undue delay, bring to the attention of all councillors any correspondence or report from internal or external auditors.
3 ANNUAL ESTIMATES (BUDGET) AND FORWARD PLANNING
3.1 Each committee (if any) shall review its three-year forecast of revenue and capital receipts and payments. Having regard to the forecast, it shall thereafter formulate and submit proposals for the following financial year to the council not later than the end of November each year including any proposals for revising the forecast.
3.2 The RFO must each year, by no later than January, prepare detailed estimates of all receipts and payments including the use of reserves and all sources of funding for the following financial year in the form of a budget to be considered by the Finance and Resources committee and the council.
3.3 The council shall consider annual budget proposals in relation to the council’s three year forecast of revenue and capital receipts and payments including recommendations for the use of reserves and sources of funding and update the forecast accordingly.
3.4 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.
3.5 The approved annual budget shall form the basis of financial control for the ensuing year.
3.6 The General Reserve is a contingency to cushion the impact of unexpected events or emergencies and to avoid unnecessary temporary borrowing.
3.7 The Council considers a prudent level of General Reserves to be three to six months’ net revenue expenditure.
3.8 Earmarked funds are a means of building up funds over several years to deliver a defined project, or for known significant expenditure. Earmarked funds must be reviewed by Council at the annual budget setting meeting.
3.9 The RFO will report movements to earmarked funds at the end of the financial year to Council for approval, and any changes to the proposed use of the reserve must be agreed.
3.10 The amount to be Earmarked in any one financial year will not exceed the difference (surplus) between the budgeted net expenditure and the actual net expenditure.
3.11 Reserves can be spent or Earmarked at the discretion of the Council. They can result from:
a) events which have allowed monies to be set aside.
c) decisions causing anticipated expenditure to have been postponed, delayed or cancelled.
d) monies set aside for the renewal or replacement of the Council’s assets.
3.12 Expenditure will not be charged direct to Earmarked Reserves and transfers to and from Earmarked Reserves will be distinguished from service expenditure in the year-end Accounts.
3.13 For each reserve established the following will be clearly documented:
a) The reason for or the purpose of the Earmarked Reserve will be clearly defined by the Council
b) The types of expenditure the Earmarked Reserve will be used for and the basis of transactions will be clearly defined by the Council.
c) Any circumstances for which the Earmarked Reserve cannot be used as defined by the Council.
3.14 Reserves will be managed, and reviewed by the RFO who has the authority to transfer money from an Earmarked Reserve to an appropriate budget commensurate with the original purpose:
a) On a transaction by transaction basis to ensure that the correct expenditure is been taken from the correct reserve and that no reserve is overspent.
b) Twice per year, once during the budget review procedure and once at the year end the RFO, in consultation with the Town Clerk, will review the appropriateness of each reserve and provide a position statement on the Earmarked Reserves to the Finance and Resources Committee.
c) At such time any reserves considered no longer appropriate will be transferred back to the General Reserve.
3.15 Authority to spend any sums against an Earmarked Reserve where there is no defined plan or budget to transfer to will be reported to the Finance and Resources Committee for approval.
4 BUDGETARY CONTROL AND AUTHORITY TO SPEND
4.1 Expenditure on revenue items may be authorised up to the amounts included for that class of expenditure in the approved budget. This authority is to be determined by:
a) The Clerk or RFO for any items below the value of £5000;
b) The Clerk or RFO, in conjunction with Chairman of Council or Chairman of the appropriate committee, for any items above £5,000;
c) A duly delegated committee of the council for items above £10,000;
d) The council for all items over £20,000;
e) In an Election year authority is given to the RFO to pay election expenses up to £20,000;
f) At the Princess Theatre: the BDO has the authority to place an order up to £500 as long as it is within budget, any invoices/orders between £500 to £5,000 are to be authorised by the Clerk/RFO and BDO, any invoices exceeding £5,000, to be authorised by the Clerk/RFO, BDO and in conjunction with the chairman of the Princess Management Committee. Items over £10,000 to be authorised as above 4.1b) and items over £20,000 to be authorised by the Council as above c). Except when relating to shows and ticket sales.
g) At the Princess Theatre: New services, contract amendments, negotiations and extensions to be approved by the RFO and by the Princess Management Committee as appropriate
4.2 Such authority is to be evidenced by a minute or authorisation by the Clerk or RFO and where necessary also by the appropriate Chairman.
4.3 Contracts may not be disaggregated to avoid controls imposed by these regulations.
4.4 No expenditure may be authorised that will exceed the amount provided in the revenue budget for that class of expenditure other than by resolution of the council, or duly delegated committee.
During the budget year and having considered fully the implications for public services, unspent and available amounts may be moved to other budget headings or to an earmarked reserve as appropriate (‘virement’).
4.5 Unspent provisions in the revenue or capital budgets for completed projects shall not be carried forward to a subsequent year.
4.6 The salary budgets are to be reviewed at least annually in November for the following financial year and such review shall be evidenced by a hard copy schedule signed by the Clerk and the Chairman of Council or relevant committee. The RFO will inform committees of any changes impacting on their budget requirement for the coming year in good time.
4.7 In cases of extreme risk to the delivery of council services, the clerk may authorise revenue expenditure on behalf of the council which in the clerk’s judgement it is necessary to carry out. Such expenditure includes repair, replacement or other work, whether or not there is any budgetary provision for the expenditure, subject to a limit of £5,000. The Clerk shall report such action to the chairman as soon as possible and to the council as soon as practicable thereafter.
4.8 No expenditure shall be authorised 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 and the requisite borrowing approval has been obtained.
4.9 All capital works shall be administered in accordance with the council’s standing orders and financial regulations relating to contracts.
4.10 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 to the appropriate date against that planned as shown in the budget. These statements are to be prepared at least at the end of each financial quarter and shall show explanations of material variances. For this purpose, “material” shall be in excess of £500 or 15% of the budget.
4.11 Changes in earmarked funds shall be approved by council as part of the budgetary control process.
4.12 The amount treated as earmarked reserves in any one financial year will not exceed the difference (surplus) between the annual budget net expenditure and the actual net expenditure. The amount treated as capital reserves will be any unspent sums remaining from the capital receipt.
5 BANKING ARRANGEMENTS AND AUTHORISATION OF PAYMENTS
5.1 The council’s banking arrangements, including the bank mandate, shall be made by the RFO and approved by the council; banking arrangements may not be delegated to a committee. They shall be regularly reviewed for safety and efficiency.
5.2 A schedule of the payments made, forming part of the Agenda, shall be presented to each meeting of the Town Council. If the Schedule is in order it shall be authorised by a resolution of the Council and shall form part of the Minutes of the meeting. 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 and allocate them to the appropriate expenditure heading. The RFO shall take all steps to pay all invoices submitted, and which are in order.
5.5 The Clerk and RFO shall have delegated authority to authorise the payment of items in the following circumstances:
a) 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/RFO certify that there is no dispute or other reason to delay payment, provided that a list of such payments shall be submitted to the next appropriate meeting of council;
b) An expenditure item authorised under 5.6 below (continuing contracts and obligations) provided that a list of such payments shall be submitted to the next appropriate meeting of council; or
c) fund transfers within the councils banking arrangements provided that a list of such payments shall be submitted to the next appropriate meeting of council.
5.6 For each financial year the RFO shall draw up a list of due payments which arise on a regular basis as the result of a continuing contract, statutory duty, or obligation (such as but not exclusively) salaries, PAYE and NI, Superannuation Fund and regular maintenance contracts and the like for which the council or a duly authorised committee, may authorise payment for the year provided that the requirements of regulation 4.1 (Budgetary Controls) are adhered to. A list of such payments shall be submitted to the next appropriate meeting of the council.
5.7 A record of regular payments made under 5.6 above shall be drawn up and be signed by two members on each and every occasion when payment is authorised – thus controlling the risk of duplicated payments being authorised and / or made.
5.8 In respect of grants a duly authorised committee shall approve expenditure within any limits set by the council and in accordance with any policy statement approved by the council. Any Revenue or Capital Grant in excess of £5,000 shall before payment, be subject to ratification by resolution of the council.
5.9 Members are subject to the Code of Conduct that has been adopted by the council and shall comply with the Code and Standing Orders when a decision to authorise or instruct payment is made in respect of a matter in which they have a disclosable pecuniary or other interest, unless a dispensation has been granted.
5.10 The council will aim to rotate the duties of members in these Regulations so that onerous duties are shared out as evenly as possible over time.
5.11 Any changes in the recorded details of suppliers, such as bank account records, shall be approved in writing by two members.
6 INSTRUCTIONS FOR THE MAKING OF PAYMENTS
6.1 The council will ensure safe and efficient arrangements for the making of its payments.
6.2 Following authorisation under Financial Regulation 5 above, the council, a duly delegated committee or, if so delegated, the Clerk shall give instruction that a payment shall be made.
6.3 All payments shall be effected by cheque or other instructions to the council’s bankers, or otherwise, in accordance with a resolution of council.
6.4 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.
6.5 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.
6.6 Any signatures obtained away from council meetings shall be reported to the council at the next convenient meeting.
6.7 If thought appropriate by the council, payment for utility supplies (energy, telephone and water) and any National Non-Domestic Rates may be made by variable direct debit provided that the instructions are signed by two members and any payments are reported to council as made. The approval of the use of a variable direct debit shall be renewed by resolution of the council at least every year.
6.8 If thought appropriate by the council, payment for certain items (principally salaries and items budgeted for) may be made by variable direct debits provided that the instructions are signed, or otherwise evidenced by two members and any payments are reported to council as made. The approval of the use of a variable direct debit shall be renewed by resolution of the council at least every year.
6.9 If thought appropriate by the council, payment for certain items may be made by BACS or CHAPS methods provided that the instructions for each payment are signed, or otherwise evidenced, by two authorised bank signatories, are retained and any payments are reported to council as made. The approval of the use of BACS or CHAPS shall be renewed by resolution of the council at least every two years.
6.10 If thought appropriate by the council payment for certain items may be made by internet banking transfer provided evidence is retained showing which members approved the payment.
6.11 Where a computer requires use of a personal identification number (PIN) or other password(s), for access to the council’s records on that computer, a note shall be made of the PIN and passwords and retained in a sealed envelope in a safe place in the council building.
6.12 No employee or councillor shall disclose any PIN or password, relevant to the working of the council or its bank accounts, to any person not authorised in writing by the council or a duly delegated committee.
6.13 Regular back-up copies of the records on any computer shall be made and shall be stored securely away from the computer in question, and preferably off site.
6.14 The council, and any members using computers for the council’s financial business, shall ensure that anti-virus, anti-spyware and firewall software with automatic updates, together with a high level of security, is used.
6.15 Where the Council has made internet banking arrangements, the RFO shall be appointed as the Service Administrator. The bank mandate approved by the council shall identify a number of councillors who will be authorised to approve transactions on those accounts. The bank mandate will state clearly the amounts of payments that can be instructed by the use of the Service Administrator alone, or by the Service Administrator with a stated number of approvals.
6.16 Access to any internet banking accounts will be directly to the access page (which may be saved under “favourites”), and not through a search engine or e-mail link. Remembered or saved passwords facilities must not be used on any computer used for council banking work. Breach of this Regulation will be treated as a very serious matter under these regulations.
6.17 Changes to account details for suppliers, which are used for internet banking may only be changed on written hard copy notification by the supplier and supported by hard copy authority for change signed by two members. A programme of regular checks of standing data with suppliers will be followed.
6.18 Any Debit Card issued for use will be specifically restricted to the Clerk and will also be restricted to a single transaction maximum value of £1,000 unless authorised by council or finance committee in writing before any order is placed.
6.19 The Council shall have pre-paid debit cards which can be issued to employees with varying limits. The limit set by the council is monthly expenditure of £2000 in total. Transactions and purchases made will be reported to the council, and authority for topping-up shall be at the discretion of the council.
6.20 The Council shall have a fuel card limited to the purchase of fuel for the purpose of re-fuelling the Council owned vehicle and machinery.
6.21 Any corporate credit card or trade card account opened by the council will be specifically restricted to use by the Clerk/RFO and shall be subject to automatic payment in full at each month-end. Personal credit or debit cards of members of staff shall not be used under any circumstances.
6.22 The RFO may provide petty cash to 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 shall maintain a petty cash float of £300 for the Town Council, £500 for the Princess Theatre, for the purpose of defraying operational and other expenses. Vouchers for payments made from petty cash shall be kept to substantiate the payment.
b) Income received must not be paid into the petty cash float but must be separately banked, as provided elsewhere in these regulations.
c) Payments to maintain the petty cash float shall be shown separately on the schedule of payments presented to council under 5.2 above.
7 PAYMENT OF SALARIES
7.1 As an employer, the council shall make arrangements to meet fully the statutory requirements placed on all employers by PAYE and National Insurance legislation. The payment of all salaries shall be made in accordance with payroll records and the rules of PAYE and National Insurance currently operating, and salary rates shall be as agreed by council, or duly delegated committee.
7.2 Payment of salaries and payment of deductions from salary such as may be required to be made for tax, national insurance and pension contributions, or similar statutory or discretionary deductions must be made in accordance with the payroll records and on the appropriate dates stipulated in employment contracts, provided that each payment is reported to the next available council meeting, as set out in these regulations above.
7.3 No changes shall be made to any employee’s pay, emoluments, or terms and conditions of employment without the prior consent of the HR Committee.
7.4 Each and every payment to employees of net salary and to the appropriate creditor of the statutory and discretionary deductions shall be recorded in a separate confidential record (confidential cash book). This confidential record is not open to inspection or review (under the Freedom of Information Act 2000 or otherwise) other than:
a) by a councillor who can demonstrate a need to know;
b) by the internal auditor;
c) by the external auditor; or
d) by any person authorised under Audit Commission Act 1998, or any superseding legislation.
7.5 The total of such payments in each calendar month shall be reported with all other payments as made as may be required under these Financial Regulations, to ensure that only payments due for the period have actually been paid.
7.6 An effective system of personal performance management should be maintained for the senior officers.
7.7 Any termination payments shall be supported by a clear business case and reported to the council. Termination payments shall only be authorised by council.
7.8 Before employing interim staff, the council must consider a full business case.
8 LOANS AND INVESTMENTS
8.1 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. The application for borrowing approval, and subsequent arrangements for the loan shall only be approved by full council.
8.2 Any financial arrangement which does not require formal borrowing approval from the Secretary of State (such as Hire Purchase or Leasing of tangible assets) shall be subject to approval by the full council. In each case a report in writing shall be provided to council in respect of value for money for the proposed transaction.
8.3 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.
8.4 The council shall review its Investment Strategy and Policy annually.
8.5 All investment certificates and other documents relating thereto shall be retained in the custody of the RFO.
8.6 Payments in respect of short term or long term investments, including transfers between bank accounts held in the same bank, or branch, shall be made in accordance with Regulation 5 (Authorisation of payments) and Regulation 6 (Instructions for payments).
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 at least annually, following a report of the Clerk and or RFO.
9.4 Any sums found to be irrecoverable and any bad debts shall be reported to the council and shall be written off in the year.
9.5 All sums received on behalf of the council shall be banked intact as directed by the RFO. In all cases, all receipts shall be deposited with the council’s bankers with such frequency as the RFO considers necessary.
9.6 The origin of each receipt shall be entered on the paying-in slip.
9.7 Personal cheques shall not be cashed out of money held on behalf of the council.
9.8 The RFO shall promptly complete any VAT Return that is required. Any repayment claim due in accordance with VAT Act 1994 section 33 shall be made at least annually coinciding with the financial year end.
9.9 Where significant sums of cash are regularly received by the council, the RFO shall take such steps as agreed by the council to ensure that more than one person is present when the cash is counted in the first instance, that there is a reconciliation to some form of control such as ticket issues, and that appropriate care is taken in the security and safety of individuals banking such cash.
10 ORDERS FOR WORK, GOODS AND SERVICES
10.1 An official order or letter shall be issued for all work, goods and services unless a formal contract is to be prepared or an official order would be inappropriate. Copies of orders shall be retained.
10.2 Order books shall be controlled by the RFO.
10.3 All members and officers are responsible for obtaining value for money at all times. An officer issuing an official order shall 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 minimas provisions in Regulation 11.1 below.
10.4 Subject to 10.3, preference should be given to suppliers in the parish or the county.
10.5 A member may not issue an official order or make any contract on behalf of the council.
11.1 Procedures as to contracts are laid down as follows:
a) Every contract shall comply with these financial regulations, and no exceptions shall be made otherwise than in an emergency and provided that this regulation does not apply to contracts which relate to items (i) to (vi) below:
i. for the supply of gas, electricity, water, sewerage and telephone services;
ii. for specialist services such as are provided by solicitors, accountants, surveyors and planning consultants;
iii. for work to be executed or goods or materials to be supplied which consist of repairs to or parts for existing machinery or equipment or plant;
iv. for work to be executed or goods or materials to be supplied which constitute an extension of an existing contract by the council;
v. for additional audit work of the external auditor up to an estimated value of £500 (in excess of this sum the Clerk shall act after consultation with the Chairman and Vice Chairman of council); and
vi. for goods or materials proposed to be purchased which are proprietary articles and/or are only sold at a fixed price.
b) 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 .
c) The full requirements of The Regulations, as applicable, shall be followed in respect of the tendering and award of a public supply contract, public service contract or public works contract which exceed thresholds in The Regulations set by the Public Contracts Directive 2014/24/EU (which may change from time to time) .
d) When applications are made to waive financial regulations relating to contracts to enable a price to be negotiated without competition the reason shall be embodied in a recommendation to the council.
e) Such invitation to tender shall state the general nature of the intended contract and the Clerk shall obtain the necessary technical assistance to prepare a specification in appropriate cases. The invitation shall in addition state that tenders must be addressed to the Clerk in the ordinary course of post. Each tendering firm shall be supplied with a specifically marked envelope in which the tender is to be sealed and remain sealed until the prescribed date for opening tenders for that contract.
f) All sealed tenders shall be opened at the same time on the prescribed date by the Clerk in the presence of at least one member of council.
g) Any invitation to tender issued under this regulation shall be subject to Standing Orders 18,2 and shall refer to the terms of the Bribery Act 2010.
h) 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 (a), the Clerk and or RFO shall obtain 3 quotations (priced descriptions of the proposed supply); where the value is below £3,000 and above £1000 the Clerk and or RFO shall strive to obtain 3 estimates. Otherwise, Regulation 10.3 above shall apply.
i) The council shall not be obliged to accept the lowest or any tender, quote or estimate.
j) Should it occur that the council, or duly delegated committee, does not accept any tender, quote or estimate, the work is not allocated and the council requires further pricing, provided that the specification does not change, no person shall be permitted to submit a later tender, estimate or quote who was present when the original decision making process was being undertaken.
12 PAYMENTS UNDER CONTRACTS FOR BUILDING OR OTHER CONSTRUCTION WORKS (PUBLIC WORKS CONTRACTS)
12.1 Payments on account of the contract sum shall be made within the time specified in the contract by the RFO upon authorised certificates of the architect or other consultants engaged to supervise the contract (subject to any percentage withholding as may be agreed in the particular contract).
12.2 Where contracts provide for payment by instalments the RFO shall maintain a record of all such payments. In any case where it is estimated that the total cost of work carried out under a contract, excluding agreed variations, will exceed the contract sum by 5% or more a report shall be submitted to the council.
12.3 Any variation to a contract or addition to or omission from a contract must be approved by the council and Clerk to the contractor in writing, the council being informed where the final cost is likely to exceed the financial provision.
13 STORES AND EQUIPMENT
13.1 The officer in charge of each section shall be responsible for the care, custody and regular stock taking of stores and equipment in that section.
13.2 Delivery notes shall be obtained in respect of all goods received into store or otherwise delivered and goods must be checked as to order and quality at the time delivery is made.
13.3 Stocks shall be kept at the minimum levels consistent with operational requirements.
13.4 The RFO shall, at least annually, be responsible for checks of stocks and stores.
14 ASSETS, PROPERTIES AND ESTATES
14.1 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.
14.2 No tangible moveable 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 £500.
14.3 No real property (interests in land) shall be sold, leased or otherwise disposed of without the authority of the council, together with any other consents required by law. In each case a report in writing shall be provided to council in respect of valuation and surveyed condition of the property (including matters such as planning permissions and covenants) together with a proper business case (including an adequate level of consultation with the electorate).
14.4 No real property (interests in land) shall be purchased or acquired without the authority of the full council. In each case a report in writing shall be provided to council in respect of valuation and surveyed condition of the property (including matters such as planning permissions and covenants) together with a proper business case (including an adequate level of consultation with the electorate).
14.5 Subject only to the limit set in Regulation 14.2 above, no tangible moveable property shall be purchased or acquired without the authority of the full council. In each case a report in writing shall be provided to council with a full business case.
14.6 The RFO shall ensure that an appropriate and accurate Register of Assets and Investments is kept up to date. The continued existence of tangible assets shown in the Register shall be verified at least annually, possibly in conjunction with a health and safety inspection of assets.
15.1 Following the annual risk assessment (per Regulation 17), the RFO shall effect all insurances and negotiate all claims on the council’s insurers in consultation with the Clerk.
15.2 Prompt notification from senior officers shall be given to the RFO of all new risks, properties or vehicles which require to be insured and of any alterations affecting existing insurances.
15.3 The RFO shall keep a record of all insurances affected by the council and the property and risks covered thereby and annually review it.
15.4 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.
15.5 All appropriate members and employees of the council shall be included in a suitable form of security or fidelity guarantee insurance which shall cover the maximum risk exposure as determined by the council, or duly delegated committee.
16 FINANCIAL RISK MANAGEMENT
16.1 The council is responsible for putting in place arrangements for the management of risk. The RFO shall prepare, for approval by the council, financial risk management policy statements in respect of all activities of the council. Risk policy statements and consequential risk management arrangements shall be reviewed by the council at least annually.
16.2 When considering any new activity, the Clerk with the RFO shall prepare a draft risk assessment including risk management proposals for consideration and adoption by the council.
17 SUSPENSION AND 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. 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.
17.2 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.