Part 10 - Financial Procedure Rules - 3

A1

Financial management covers all financial accountabilities in relation to the running of the authority including the financial policy framework and budget.

A2

The full council is responsible for adopting the authority's constitution and members' code of conduct and for approving the policy framework and budget within which the executive operates. It is also responsible for approving and monitoring compliance with the authority's overall framework of accountability and control. The framework is set out in its constitution. The full council is also responsible for monitoring compliance with the agreed policy and related executive decisions.

A3

The full council is responsible for approving procedures for recording and reporting decisions taken. This includes those 'key decisions' delegated by and decisions taken by the council and its committees. These delegations and details of who has responsibility for which decisions are set out in the constitution.

A4

The executive is responsible for proposing the policy framework and budget to full council, and for discharging executive functions in accordance with the policy framework and budget.

A5

Executive decisions can be delegated to an individual executive member or officer.

A6

The executive is responsible for establishing protocols to ensure that individual executive members consult with relevant officers before taking a decision within his/her delegated authority. In doing so the individual member must take account of legal and financial liabilities and risk management issues which may arise from the decision.

A7

The chief finance officer has statutory duties in relation to the financial administration and stewardship of the authority. This statutory responsibility cannot be overridden. The statutory duties arise from:

• Section 151 of the Local Government Act 1972
• Local Government Finance Act 1988
• The Local Government and Housing Act 1989
• The Accounts and Audit Regulations 1996.

A8

The chief finance officer is responsible for:

• the proper administration of the authority's financial affairs;
• setting financial management standards and monitoring their compliance;
• advising on the corporate financial position and on the key financial controls necessary to secure sound financial management;
• providing financial information; and
• preparing the revenue budget, capital programme and for treasury management.

A9

Section 114 of the Local Government Finance Act 1988 requires the chief finance officer to report to the full council, executive and external auditor if the authority or one of its officers:

• has made, or is about to make, a decision which involves incurring unlawful expenditure;
• has taken, or is about to take, an unlawful action which has or would result in a loss or deficiency to the authority; and
• is about to make an unlawful entry in the authority's accounts.

Section 114 of the 1988 Act also:

• requires the chief finance officer to nominate a properly qualified member of staff to deputise should he/she be unable to perform the duties under section 114 personally; and
• requires that the council provides the chief finance officer with sufficient staff, accommodation and other resources - including legal advice where this is necessary - to carry out the duties under section 114.

A10

Management team and service unit heads are responsible for:

• ensuring that executive members are advised of the financial implications of all proposals and that the financial implications have been agreed by the chief finance officer; and
• signing contracts on behalf of the authority within approved limits as set out in standing orders for contracts.

A11

It is the responsibility of policy directors and service unit heads to consult with the chief finance officer and seek approval regarding any matters which are liable to affect the authority's finances materially, before any commitments are incurred.

A12

The full council is responsible for agreeing procedures for virement of expenditure between budget headings.

A13

Officers are responsible for agreeing in-year virements within delegated limits, in consultation with the chief finance officer.

A14

The chief finance officer is responsible for:

• selecting accounting policies and ensuring that they are applied consistently;
• determining the accounting procedures and records for the authority; and
• ensuring that the annual statement of accounts is prepared in accordance with the Code of Practice on Local Authority Accounting in the United Kingdom: A Statement of Recommended Practice (CIPFA/LASAAC). The full council is responsible for approving the annual statement of accounts.

B1

The full council is responsible for agreeing the authority's policy framework and budget, which will be proposed by the executive. In terms of financial planning, the key elements are:

• The Corporate Plan
• The budget
• The Capital Programme

B2

The full council is responsible for approving the policy framework and budget.

B3

The full council is also responsible for approving procedures for agreeing variations to approved budgets, plans and strategies forming the policy framework and for determining the circumstances in which a decision will be deemed to be contrary to the budget or policy framework. Decisions should be referred to the full council by the chief finance officer or monitoring officer.

B4

The full council is responsible for setting the level at which the executive may reallocate budget funds from one service to another. The executive is responsible for taking in-year decisions on resources and priorities in order to deliver the budget policy framework within the financial limits set by the council.

B5

The head of paid service is responsible for proposing the corporate plan to the executive for consideration before its submission to full council for approval.

B6

The head of paid service is responsible for proposing the best value performance plan to the executive for consideration before its submission to full council for approval.

B7

The general format of the budget will be approved by the full council and proposed by the executive on the advice of the chief finance officer. The draft budget should include allocations to different services and projects, proposed taxation levels and contingency funds.

B8

The chief finance officer is responsible for ensuring that a revenue budget is prepared on an annual basis and a financial strategy on a three-year basis for consideration by the executive, before submission to the full council. The full council may amend the budget or ask the executive to reconsider it before approving it.

B9

The executive is responsible for issuing guidance on the general content of the budget in consultation with the chief finance officer as soon as possible following approval by the full council.

B10

It is the responsibility of service unit heads to ensure that budget estimates reflecting agreed service plans are submitted to the executive and that these estimates are prepared in line with guidance issued by the executive in consultation with the chief finance officer.

B11

The chief finance officer is responsible for providing appropriate financial information to enable budgets to be monitored effectively. He/she must monitor and control expenditure against budget allocations and report to the executive on the overall position on a quarterly basis.

B12

It is the responsibility of service unit heads to control income and expenditure within their area and to monitor performance taking account of financial information provided by the chief finance officer and his/her staff. They are responsible for variances within their own areas and should take any action necessary to avoid exceeding their budget allocation and alert the chief finance officer to any problems.

B13

The chief finance officer is responsible for developing and maintaining a resource allocation process which ensures due consideration of the council's policy framework.

B14

The chief finance officer is responsible for ensuring that a capital programme is prepared on an annual basis for consideration by the executive, before submission to the full council.

B15

Guidelines on budget preparation are issued to members and officers by the chief finance officer following agreement with the executive. The guidelines will take account of:

• legal requirements;
• medium term planning prospects;
• the corporate plan;
• available resources;
• spending pressures;
• best value and other relevant Government guidelines;
• other internal policy documents;
• cost cutting issues (where relevant).

B16

It is the responsibility of the chief finance officer to advise the executive and/or full council on prudent levels of reserves for the authority

C1

It is essential that robust systems are developed and maintained for identifying and evaluating all significant operational risks to the authority on an integrated basis. This should include the proactive participation of all those associated with planning and delivering services.

C2

The executive is responsible for approving the authority's risk management policy statement and strategy and for reviewing the effectiveness of risk management. The executive is responsible for ensuring that proper insurance exists where appropriate.

C3

Internal control refers to the systems of control devised by management to help ensure the authority's objectives are achieved in a manner which promotes economical, efficient and effective use of resources and that the authority's assets and interests are safeguarded.

C4

The chief finance officer is responsible for advising on effective systems of internal control. These arrangements need to ensure compliance with all applicable statutes and regulations, and other relevant statements of best practice. They should ensure that public funds are properly safeguarded and used economically, efficiently, and in accordance with the statutory and other regulations that govern their use.

C5

It is the responsibility of service unit heads to establish sound arrangements for planning, appraising, authorising and controlling their operations in order to achieve continuous improvement, economy, efficiency and effectiveness and for achieving their financial performance targets.

C6

The Accounts and Audit Regulations 1996 issued by the Secretary of State for the Environment require every local authority to maintain an adequate and effective internal audit.

C7

The Audit Commission is responsible for appointing external auditors to each local authority. The basic duties of the external auditor are governed by section 15 of the Local Government Finance Act 1982, as amended by section 5 of the Audit Commission Act 1998.

C8

The authority may, from time to time, be subject to audit, inspection or investigation by external bodies such as HM Customs and Excise and the Inland Revenue who have statutory rights of access.

C9

The chief finance officer is responsible for the development and maintenance of an anti-fraud and anti-corruption policy.

C10

Service unit heads should ensure that records and assets are properly maintained and securely held. They should also ensure that contingency plans for the security of assets and continuity of service in the event of disaster or system failure are in place.

C11

The authority has adopted CIPFA's Code of Practice for Treasury Management in Local Authorities.

C12

The full council is responsible for approving the treasury management policy statement setting out the matters detailed in paragraph 15 of CIPFA's Code of Practice for Treasury Management in Local Authorities. The policy statement is proposed to the full council by the executive. The chief finance officer has delegated responsibility for implementing and monitoring the statement.

C13

All money in the hands of the authority is controlled by the officer designated for the purposes of Section 151 of the Local Government Act 1972, referred to in the code as the chief finance officer.

C14

The chief finance officer is responsible for reporting to the executive a proposed treasury management strategy for the coming financial year at or before the start of each financial year.

C15

All executive decisions on borrowing, investment or financing shall be delegated to the chief finance officer who is required to act in accordance with CIPFA's Code of Practice for Treasury Management in Local Authorities.

C16

The chief finance officer is responsible for reporting to the executive not less than four times in each financial year on the activities of the treasury management operation and on the exercise of his/her delegated treasury management powers. One such report will comprise an annual report on treasury management for presentation by 30 September of the succeeding financial year.

C17

The full council is responsible for determining how officer support for executive and non-executive roles within the authority will be organised.

C18

The head of paid service is responsible for providing overall management to staff. He or she is also responsible for ensuring that there is proper use of the evaluation or other agreed systems for determining the remuneration of a job

D1

Sound systems and procedures are essential to an effective framework of accountability and control.

D2

The chief finance officer is responsible for the operation of the authority's accounting systems, the form of accounts and the supporting financial records. Any changes made by officers to the existing financial systems or the establishment of new systems must be approved by the chief finance officer. However, service unit heads are responsible for the proper operation of financial processes in their own units.

D3

Any changes to agreed procedures by officers to meet their own specific service needs should be agreed with the chief finance officer.

D4

Service unit heads must ensure that, where appropriate, computer and other systems are registered in accordance with data protection legislation. Service unit heads must ensure that staff are aware of their responsibilities under the freedom of information legislation.

D5

It is the responsibility of service unit heads to ensure that a proper scheme of delegation has been established within their area and is operating effectively. The scheme of delegation should identify staff authorised to act on the service unit heads' behalf, or on behalf of the executive, in respect of payments, income collection and for placing orders together with the limits of their authority in compliance with Council policy. The executive is responsible for approving procedures for writing off debts as part of the overall control framework of accountability and control.

D6

D7

The head of personnel and training is responsible for advising officers, in the light of guidance issued by appropriate bodies and relevant legislation as it applies, on all taxation issues that affect the authority in relation to the payment of salaries, wages and allowances.

D8

The chief finance officer is responsible for advising officers, in the light of guidance issued by appropriate bodies and relevant legislation as it applies, on all other taxation issues that affect the authority.

D9

The head of personnel and training is responsible for the authority's tax records, making all tax payments, receiving tax credits and submitting tax returns by their due date as appropriate in relation to the payment of salaries, wages and overtime.

D10

The chief finance officer is responsible for maintaining all the authority's other tax records, making all tax payments, receiving tax credits and submitting tax returns by their due date as appropriate.

D11

It is the responsibility of the chief finance officer to advise on the establishment and operation of trading accounts and business units.

E1

The local authority provides a distinctive leadership role for the community and brings together the contributions of the various stakeholders. It must also act to achieve the promotion or improvement of the economic, social or environmental well being of its area.

E2

The executive is responsible for approving delegations, including frameworks for partnerships. The executive is the focus for forming partnerships with other local public, private, voluntary and community sector organisations to address local needs.

E3

The executive can delegate functions - including those relating to partnerships - to officers. These are set out in the scheme of delegation that forms part of the authority's constitution. Where functions are delegated, the executive remains accountable for them to the full council.

E4

The head of paid service represents the authority on partnership and external bodies, in accordance with the scheme of delegation.

E5

The monitoring officer is responsible for promoting and maintaining the same high standards of conduct with regard to administration in partnerships that apply throughout the authority.

E6

The chief finance officer must ensure that the accounting arrangements to be adopted relating to partnerships and joint ventures are satisfactory. He or she must also consider the overall corporate governance arrangements and legal issues when arranging contracts with external bodies. He/she must ensure that the risks have been fully appraised before agreements are entered into with external bodies.

E7

Management team and service unit heads are responsible for ensuring that appropriate approvals are obtained before any negotiations are concluded in relation to work with external bodies.

E8

The chief finance officer is responsible for ensuring that all funding notified by external bodies is received and properly recorded in the authority's accounts.

E9

The Cabinet is responsible for approving the contractual arrangements for any work for third parties or external bodies.