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1.1. These Financial Regulations govern the financial management of the council and may only be amended or varied by resolution of the council. They are one of the council’s governing documents and shall be observed in conjunction with the council’s Standing Orders.
1.2. Councillors are expected to follow these regulations and not to entice employees to breach
them. Failure to follow these regulations brings the office of councillor into
disrepute.1.3. Wilful breach of these regulations by an employee may result in disciplinary
proceedings.1.4. In these Financial Regulations:
· ‘Accounts and Audit Regulations’ means the regulations issued under Sections 32, 43(2)
and 46 of the Local Audit and Accountability Act 2014, or any superseding
legislation, and then in force, unless otherwise specified.· “Approve” refers to an online action, allowing an electronic transaction to take place.
· “Authorise” refers to a decision by the council, or a committee or an officer, to allow
something to happen.· ‘Proper practices’ means those set out in The Practitioners’ Guide
· Practitioners’ Guide refers to the guide issued by the Joint
Panel on Accountability and Governance (JPAG) and published by NALC in England or
Governance and Accountability for Local Councils in Wales – A Practitioners
Guide jointly published by One Voice Wales and the Society of Local Council
Clerks in Wales.· ‘Must’ and bold text refer to a statutory obligation the council cannot change.
· ‘Shall’ refers to a non-statutory instruction by the council to its members and staff.
1.5. The Responsible Financial Officer (RFO) holds a statutory office, appointed by the
council. The Clerk has been appointed as RFO and these regulations apply
accordingly. 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 control systems;
· ensures the accounting control systems are observed;
· ensures the accounting records are kept up to date;
· seeks economy, efficiency and effectiveness in the use of council resources; and
· produces financial management information as required by the council.
1.6. The council must not delegate any decision regarding:
· setting the final budget or the precept
(council tax requirement);· the outcome of a review of the
effectiveness of its internal controls· approving accounting statements;
· approving an annual governance
statement;· borrowing;
· declaring eligibility for the General
Power of Competence; and· addressing recommendations from the
internal or external auditors1.7. In addition, the council shall:
· determine and regularly review the bank mandate for all council bank accounts;
· authorise any grant or single commitment in excess of £1,000
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2.1. The council must ensure that it has a sound system of internal control, which delivers effective financial, operational and risk management.
2.2. The Clerk shall prepare, for approval by the council, a risk management policy covering all activities of the council. This policy and consequential risk management arrangements shall be reviewed by the council at least annually.
2.3. When considering any new activity, the Clerk and or Councillor shall prepare a draft risk assessment including risk management proposals for consideration by the council.
2.4. At least once a year, the council must review the effectiveness of its system of internal control, before approving the Annual Governance Statement.
2.5. The accounting control systems determined by the RFO must include measures to:
· ensure that risk is appropriately managed;
· ensure the prompt, accurate recording of financial transactions;
· prevent and detect inaccuracy or fraud; and
· allow the reconstitution of any lost records;
· identify the duties of officers dealing with transactions and
· ensure division of responsibilities.
2.6. At least once in each quarter, and at each financial year end, a member other than the Chair shall be appointed to verify bank reconciliations for all accounts produced by the RFO. The member shall sign and date the reconciliations and the original bank statements (or similar document) as evidence of this. This activity, including any exceptions, shall be reported to and noted by the council.
2.7. Regular back-up copies shall be made of the records on any council computer and stored either online or in a separate location from the computer. The council shall put measures in place to ensure that the ability to access any council computer is not lost if an employee leaves or is incapacitated for any reason.
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3.1. All accounting procedures and financial records of the council shall be determined by the RFO in accordance with the Accounts and Audit Regulations.3.2 The accounting records determined by the RFO must be sufficient to explain the council’s transactions and to disclose its financial positionwith reasonable accuracy at any time. In particular, they must contain:
· day-to-day entries of all sums of money received and expended by the council and the matters to which they relate;
· a record of the assets and liabilities of the council;
3.3. The accounting records shall be designed to facilitate the efficient preparation of the accounting statements in the Annual Governance and Accountability Return.
3.4. The RFO shall complete and certify the annual Accounting Statements of the council contained in the Annual Governance and Accountability Return in accordance with proper practices, as soon as practicable after the end of the financial year. Having certified the Accounting Statements, the RFO shall submit them with any related documents to the council, within the timescales required by the Accounts and Audit Regulations.
3.5. The council must ensure that there is an adequate and effective system of internal audit of its accounting records and internal control system in accordance with proper practices.
3.6. Any officer or member of the council must make available such documents and records as the internal or external auditor consider 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.
3.7. The internal auditor shall be appointed by the council and shall carry out their work to evaluate the effectiveness of the council’s risk management, control and governance processes in accordance with proper practices specified in the Practitioners’ Guide.
3.8. The council shall ensure that the internal auditor:
· is competent and independent of the financial operations of the council;
· reports to council in writing, or in person, on a regular basis with a minimum of one written report during each financial year;
· can demonstrate competence, objectivity and independence, free from any actual or perceived conflicts of interest, including those arising from family relationships; and
· has no involvement in the management or control of the council
3.9. Internal or external auditors may not under any circumstances:
· perform any operational duties for the council;
· initiate or approve accounting transactions;
· provide financial, legal or other advice including in relation to any future 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.
3.10. For the avoidance of doubt, in relation to internal audit the terms ‘independent’ and ‘independence’ shall have the same meaning as described in The Practitioners Guide.
3.11. 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 documents required by the Local Audit and Accountability Act 2014, or any superseding legislation, and the Accounts and Audit Regulations.
3.12. The RFO shall, without undue delay, bring to the attention of all councillors any correspondence or report from internal or external auditors.
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4.1. Before setting a precept, the council must calculate its [council tax (England)/budget (Wales)] requirement for each financial year by preparing and approving a budget, in accordance with The Local Government Finance Act 1992 or succeeding legislation.
4.2. Budgets for salaries and wages, including employer contributions shall be reviewed by the council at least annually in November for the following financial year and the final version shall be evidenced by a hard copy schedule signed by the Clerk and the Chair of the Council.
4.3. No later than November each year, the RFO shall prepare a draft budget with detailed estimates of all receipts and payments/income and expenditure for the following financial year along with a forecast for the following three financial years, taking account of the lifespan of assets and cost implications of repair or replacement.
4.4. Unspent budgets for completed projects shall not be carried forward to a subsequent year but may be vired to other budget areas. Unspent funds for partially completed projects may only be carried forward by placing them in an earmarked reserve with the formal approval of the full council.
4.5. Each committee (if any) shall review its draft budget and submit any proposed amendments to the council not later than the end of November each year.
4.6. The draft budget with any committee proposals and three-year forecast, including any recommendations for the use or accumulation of reserves, shall be considered by the council.
4.7. Having considered the proposed budget and three-year forecast, the council shall determine its council tax requirement by setting a budget. The council shall set a precept for this amount no later than the end of January for the ensuing financial year.
4.8. Any member with council tax unpaid for more than two months is prohibited from voting on the budget or precept by Section 106 of the Local Government Finance Act 1992 and must disclose at the start of the meeting that Section 106 applies to them.
4.9. The RFO shall issue the precept to the billing authority no later than the end of February and supply each member with a copy of the agreed annual budget.
4.10. The agreed budget provides a basis for monitoring progress during the year by comparing actual spending and income against what was planned. Half yearly report to be presented to the council by RFO in November each year.
4.11. Any addition to, or withdrawal from, any earmarked reserve shall be agreed by the council, as part of the budgetary control process.
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5.1. Members and officers are responsible for obtaining value for money at all times. Any officer procuring goods, services or works should ensure, as far as practicable, that the best available terms are obtained, usually by obtaining prices from several suppliers.
5.2. The RFO should verify the lawful nature of any proposed purchase before it is made and in the case of new or infrequent purchases, should ensure that the legal power being used is reported to the meeting at which the order is authorised and also recorded in the minutes.
5.3. Every contract shall comply with the council’s Standing Orders and these Financial Regulations and no exceptions shall be made, except in an emergency.
5.4. For a contract for the supply of goods, services or works where the estimated value will exceed the thresholds set by Parliament, the full requirements of The Procurement Act 2023 and The Procurement Regulations 2024 or any superseding legislation (“the Legislation”), must be followed in respect of the tendering, award and notification of that contract.
5.5. Where the estimated value is below the Government threshold, the council shall (with the exception of items listed in paragraph 5.12) obtain prices as follows:
5.6. For contracts estimated to exceed £30,000 including VAT, the Clerk shall seek formal tenders from at least three suppliers agreed by the council OR advertise an open invitation for tenders in compliance with any relevant provisions of the Legislation. Tenders shall be invited in accordance with Appendix 1.
5.7. For contracts estimated to be over £30,000 including VAT, the council must comply with any requirements of the Legislation regarding the publication of invitations and notices.
5.8. For contracts greater than £2,000 excluding VAT the Clerk or RFO shall seek at least 3 fixed-price quotes.
5.9. Where the value is between £500 and £2,000 excluding VAT, the Clerk or RFO shall try to obtain 3 estimates which might include evidence of online prices, or recent prices from regular suppliers.
5.10. For smaller purchases, the clerk shall seek to achieve value for money.
5.11. Contracts must not be split to avoid compliance with these rules.
5.12. The requirement to obtain competitive prices in these regulations need not apply to contracts that relate to items (i) to (iv) below:
i. specialist services, such as legal professionals acting in disputes;
ii. repairs to, or parts for, existing machinery or equipment;
iii. works, goods or services that constitute an extension of an existing contract;
iv. goods or services that are only available from one supplier or are sold at a fixed price.
5.13. When applications are made to waive this financial regulation to enable a price to be negotiated without competition, the reason should be set out in a recommendation to the council. Avoidance of competition is not a valid reason.
5.14. The council shall not be obliged to accept the lowest or any tender, quote or estimate.
5.15. Individual purchases within an agreed budget for that type of expenditure may be authorised by:
· the Clerk, under delegated authority, for any items below £500 excluding VAT.
· the Clerk, in consultation with the Chair of the Council, for any items below £2,000 excluding VAT.
· the council for all items over £2,000;
Such authorisation must be supported by a minute (in the case of council or committee decisions) or other auditable evidence trail.
5.16. No individual member, or informal group of members may issue an official order unless instructed to do so in advance by a resolution of the council or make any contract on behalf of the council.
5.17. No expenditure may be authorised that will exceed the budget for that type of expenditure other than by resolution of the council except in an emergency.
5.18. In cases of serious risk to the delivery of council services or to public safety on council premises, the clerk may authorise expenditure of up to £2,000 excluding VAT on repair, replacement or other work that in their judgement is necessary, whether or not there is any budget for such expenditure. The Clerk shall report such action to the Chair as soon as possible and to the council as soon as practicable thereafter.
5.19. No expenditure shall be authorised, no contract entered into or tender accepted in relation to any major project, unless the council is satisfied that the necessary funds are available and that where a loan is required, Government borrowing approval has been obtained first.
5.20. An official order or letter shall be issued for all work, goods and services above £500 excluding VAT unless a formal contract is to be prepared or an official order would be inappropriate. Copies of orders shall be retained, along with evidence of receipt of goods.
5.21. Any ordering system can be misused and access to them shall be controlled by the RFO.
5.22. An on-the-spot agreement to spend up to an additional 5% of the order value may be made by the project leader, if circumstances are applicable. This will be documented in writing and reported to the council at the next available meeting.
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6.1. The council’s banking arrangements, including the bank mandate, shall be made by the RFO and authorised by the council; banking arrangements shall not be delegated to a committee. The council has resolved to bank with National Westminster. The arrangements shall be reviewed from time to time for security and efficiency.
6.2. The council must have safe and efficient arrangements for making payments, to safeguard against the possibility of fraud or error. Wherever possible, more than one person should be involved in any payment, for example by dual online authorisation or dual cheque signing. Even where a purchase has been authorised, the payment must also be authorised and only authorised payments shall be approved or signed to allow the funds to leave the council’s bank.
6.3. All invoices for payment should be examined for arithmetical accuracy, analysed to the appropriate expenditure heading and verified to confirm that the work, goods or services were received, checked and represent expenditure previously authorised by the council before being certified by the RFO. Where the certification of invoices is done as a batch, this shall include a statement by the RFO that all invoices listed have been ‘examined, verified and certified’ by the RFO.
6.4. Personal payments (including salaries, wages, expenses and any payment made in relation to the termination of employment) may be summarised to avoid disclosing any personal information.
6.5. All payments shall be made by online banking/cheque, in accordance with a resolution of the council, unless the council resolves to use a different payment method.
6.6. For each financial year the RFO may draw up a schedule of regular payments due in relation to a continuing contract or obligation (such as Salaries, PAYE, National Insurance, pension contributions, rent, rates, regular maintenance contracts and similar items), which the council may authorise in advance for the year}.
6.7. A copy of this schedule of regular payments shall be signed by two members on each and every occasion when payment is made – to reduce the risk of duplicate payments.
6.8. A list of such payments shall be reported to the next appropriate meeting of the council.
6.9. The Clerk and RFO shall have delegated authority to authorise payments only in the following circumstances:
i. {any payments of up to £500 excluding VAT, within an agreed budget}.
ii. payments of up to £2,000 excluding VAT in cases of serious risk to the delivery of council services or to public safety on council premises, with the agreement of the Chair / Councillors
iii. any payment necessary to avoid a charge under the Late Payment of Commercial Debts (Interest) Act 1998 or to comply with contractual terms, where the due date for payment is before the next scheduled meeting of [the council], where the Clerk and 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.
iv. Fund transfers within the councils banking arrangements up to the sum of £10,000, provided that a list of such payments shall be submitted to the next appropriate meeting of council.
v. Scheme of delegation to comply with approved Financial Regulations.
6.10. The RFO shall present a schedule of payments requiring authorisation, forming part of the agenda for the meeting, together with the relevant invoices, to the council . The council shall review the schedule for compliance and, having satisfied itself, shall authorise payment by resolution. A detailed list of all payments shall be disclosed within or as an attachment to the minutes of the appropriate meeting. -
7.1. Where internet banking arrangements are made with any bank, the RFO shall be appointed as the Service Administrator. The bank mandate agreed by the council shall identify two (minimum) councillors from the list of authorised signatories, who will be authorised to approve transactions on those accounts and a minimum of two people will be involved in any online approval process. No signatory should be involved in approving any payment to themselves.
7.2. All authorised signatories shall have access to view the council’s bank accounts online.
7.3. No employee or councillor shall disclose any PIN or password, relevant to the council or its banking, to anyone not authorised in writing by the council.
7.4. The Service Administrator shall set up all items due for payment online. A list of payments for approval, together with copies of the relevant invoices, shall be sent via email to two authorised signatories.
7.5. In the prolonged absence of the Service Administrator an authorised signatory shall set up any payments due before the return of the Service Administrator.
7.6. Two councillors who are authorised signatories shall check the payment details against the invoices before approving each payment using the online banking system.
7.7. Evidence shall be retained showing which members approved the payment online and a printout of the transaction confirming that the payment has been made shall be appended to the invoice for audit purposes.
7.8. A full list of all payments made in a month shall be provided to the next council meeting and form part of the minutes of that meeting.
7.9. With the approval of the council in each case, regular payments (such as gas, electricity, telephone, broadband, water, National Non-Domestic Rates, refuse collection, pension contributions and HMRC payments) may be made by variable direct debit, provided that the instructions are signed/approved online by two authorised members. The approval of the use of each variable direct debit shall be reviewed by the council at least every two years.
7.10. Payment may be made by BACS or CHAPS by resolution of the council provided that each payment is approved online by two authorised bank signatories, evidence is retained and any payments are reported to the council at the next meeting. The approval of the use of BACS or CHAPS shall be renewed by resolution of the council at least every two years.
7.11. If thought appropriate by the council, regular payments of fixed sums may be made by banker’s standing order, provided that the instructions are signed {or approved online} by two members, evidence of this is retained and any payments are reported to council when made. The approval of the use of a banker’s standing order shall be reviewed by the council at least every two years.
7.12. Account details for suppliers may only be changed upon written notification by the supplier verified the Clerk and [the RFO] and two councillors. This is a potential area for fraud and the individuals involved should ensure that any change is genuine. Data held should be checked with suppliers every two years.
7.13. Members and officers shall ensure that any computer used for the council’s financial business has adequate security, with anti-virus, anti-spyware and firewall software installed and regularly updated.
7.14. Remembered password facilities {other than secure password stores requiring separate identity verification} should not be used on any computer used for council banking
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8.1. Cheques or orders for payment in accordance with a resolution or delegated decision shall be signed by two members.
8.2. A signatory having a family or business relationship with the beneficiary of a payment shall not, under normal circumstances, be a signatory to that payment.
8.3. To indicate agreement of the details on the cheque with the counterfoil and the invoice or similar documentation, the signatories shall also initial the cheque counterfoil and invoice.
8.4. Cheques or orders for payment shall not normally be presented for signature other than at, or immediately before or after a council meeting. Any signatures obtained away from council meetings shall be reported to the council at the next convenient meeting.
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9.1. Any Debit Card issued for use will be specifically restricted to the Clerk and the RFO and will also be restricted to a single transaction maximum value of £250 unless authorised by council or in writing before any order is placed.
9.2. A pre-paid debit card may be issued to employees with varying limits. These limits will be set by the council. Transactions and purchases made will be reported to the council and authority for topping-up shall be at the discretion of the council.
9.3. Any corporate credit card or trade card account opened by the council will be specifically restricted to use by the Clerk and RFO and any balance shall be paid in full each month.
9.4. Personal credit or debit cards of members or staff shall not normally be used except in the absence of council issued debit cards. Payments in excess of £250 must be authorised by council beforehand. All card payments incurred will be in accordance with council policy.
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10.1 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 or RFO (for example for postage or minor stationery items) shall be refunded on a regular basis, at least quarterly.
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Procedures as to contracts are laid down as follows:
- Every contract shall comply with these financial regulations, and no exceptions shall be made otherwise than in an emergency provided that these regulations shall not apply to contracts which relate to items below:
- for the supply of gas, electricity, water, sewerage and telephone services;
- for specialist services such as are provided by solicitors, accountants, surveyors and planning consultants;
- 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 £250 (in excess of this sum the RFO shall act after consultation with the Chairman and Vice Chairman of the Council);
- for goods or materials proposed to be purchased which are proprietary articles and/or are only sold at a fixed price.
- Where it is intended to enter into a contract exceeding £5,000 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 shall invite tenders from at least three firms as approved by Council.
- 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.
- 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.
- All sealed tenders shall be opened at the same time on the prescribed date by the Clerk in the presence of the Chairman or another Councillor in the absence of the Chairman.
- If less than three tenders are received for contracts above £5,000 or if all the tenders are identical the Council may make such arrangements as it thinks fit for procuring the goods or materials or executing the works.
- Any invitation to tender issued under this regulation shall contain a statement to the effect of Standing Order 30.c.
- When it is to enter into a contract of equal to or less than £5,000 and above £1000 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 RFO shall try to obtain 3 quotations. Otherwise, Regulation 10 (3) above shall apply.
- The Council shall not be obliged to accept the lowest, or any, tender, quote or estimate.
- Every contract shall comply with these financial regulations, and no exceptions shall be made otherwise than in an emergency provided that these regulations shall not apply to contracts which relate to items below:
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- 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).
- 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.
- Any variation to a contract must be approved by the Council and conveyed by the Clerk to the Contractor in writing.
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- The officer in charge of each section shall be responsible for the care and custody of stores and equipment in that section.
- 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.
- Stocks shall be kept at the minimum levels consistent with operational requirements.
- The RFO shall be responsible for periodic checks of stocks and stores at least annually.
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- 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, nature of the interest, tenancies granted, rents payable and purpose for which held in accordance with Accounts and Audit Regulations.
- 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.
- 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 by Council, possibly in conjunction with a health and safety inspection of assets.
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- Following the annual risk assessment (per Financial Regulation 17), the RFO shall effect all insurances and negotiate all claims on the Council’s insurers.
- 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.
- The RFO shall keep a record of all insurances effected by the Council and the property and risks covered thereby and annually review it.
- 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.
- 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.
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Where the Council is sole trustee of a Charitable body the 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.
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- The Council is responsible for putting in place arrangements for the management of risk. The Clerk shall prepare, for approval by the Council, 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.
- When considering any new activity, the Clerk shall prepare a draft risk assessment including risk management proposals for consideration and adoption by the Council.
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It shall be the duty of the Council to review the Financial Regulations of the Council from time to time, and at least annually. 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.
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19.1. The council shall review these Financial Regulations annually and following any change of clerk or RFO. The Clerk shall monitor changes in legislation or proper practices and advise the council of any need to amend these Financial Regulations.
19.2. The council may, by resolution 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 presented to all members. Suspension does not disapply any legislation or permit the council to act unlawfully.
19.3. The council may temporarily amend these Financial Regulations by a duly notified resolution, to cope with periods of absence, local government reorganisation, national restrictions or other exceptional circumstances.