Financial Regulations

1. General

These financial Regulations shall govern the conduct of the financial transactions of the Council and may only be amended or varied by resolution of the Council.
The Responsible Financial Officer (RFO) under the policy direction of the Finance & General Purposes Committee (F&GP Committee) shall be responsible for the proper administration of the Council's financial affairs.
The RFO shall be responsible for the production of financial management information.

2. Annual Estimates

Each committee shall formulate and submit proposals to the F&GP Committee in respect of revenue services and capital projects for inclusion in the rolling capital programme not later than the end of October each year.
Detailed estimates of income and expenditure on revenue services, and receipts
and payments on capital account, shall be prepared each year by the RFO.
The F&GP Committee shall review the Estimates and submit them to the Council not later than the end of January in each year and shall recommend the Precept to be levied for the ensuing financial year. The RFO shall supply each member with a copy of the approved estimates.
The annual capital and revenue budgets shall form the basis of financial control for the ensuing year.

3. Budgetary Control

Expenditure on the Revenue Account may be incurred up to the amounts included in each approved committee budget.
No expenditure may be incurred which cannot be met from the amount provided in the appropriate committee revenue budget unless a virement has been approved by the F&GP Committee or the Council.
The RFO shall periodically provide the F&GP Committee with a statement of income and expenditure to date under each head of the approved annual revenue and capital budgets.
The Clerk may incur expenditure on behalf of the council which is necessary to carry out any repair replacement or other work which is of extreme urgency that it must be done at once, whether or not there is a budgetary provision for the expenditure, subject to a limit of £2500. The Clerk shall report the action to the appropriate committee as soon as practicable, thereafter.
Where expenditure is incurred in accordance with regulation 3.4 above and the sum required cannot be met from savings made elsewhere within the committee's approved budget, it shall be subject to the provisions of a supplementary estimate approved by the F&GP committee or the Council.
Unspent provisions in the revenue budget shall not be carried forward to a subsequent year.
No expenditure shall be incurred in relation to any capital project and no contract entered into or tender accepted involving expenditure on capital account unless the committee concerned is satisfied that it is contained in the rolling capital programme and that the necessary capital funds are available, or the requisite borrowing approval can be obtained.
All capital works shall be administered in accordance with the Council's Standing Orders and Financial Regulations relating to contracts.

4. Accounting and Audit

All accounting procedures and financial records of the Council shall be determined by the RFO as required by the Accounts and Audit Regulations 2003.
The RFO shall be responsible for completing the annual Final Accounts of the Council as soon as practicable after the end of the financial year and shall prepare a report for the consideration of the F&GP Committee.
The financial records and Final Accounts shall be examined by the Council’s appointed Internal Auditor whose report shall be submitted to the F&GP Committee.
The Final Accounts, once scrutinised by and on the recommendation of the F&GP Committee, shall be approved by a resolution of the Council.
The Chairman or, in his/her absence, the Vice Chairman shall sign the Council’s Annual Return on behalf of the Council following the approval of the Final Accounts by resolution of the Council, prior to being forwarded to the Audit Commission’s appointed external Auditors.
The following principles shall be observed in connection with accounting duties.
The duty of providing information, calculating, checking and recording sums due to, or from, the Council, should be separated as completely as possible from the duty of collecting or dispersing them.
Officers charged with the duty of examining and checking the accounts of cash transactions should not be engaged in any of those transactions.
The Council’s appointed Internal Auditor together with the RFO shall be responsible for maintaining an adequate and effective system of internal audit of the Council's accounting, financial and other operations in accordance with the Accounts and Audit Regulations 2003. Any officer or member of the Council shall, if the Internal Auditor requires make available such documents of the Council which relate to their accounting and other records as appear to the Internal Auditor to be necessary for the purpose of the audit and shall supply the Internal Auditor with such information and explanation as the Internal Auditor considers necessary for that purpose.

5. Banking Arrangements and Cheques

The Council's banking arrangements shall be made by the RFO and approved by the F&GP committee.
A schedule of the payment of money shall be prepared by the RFO and together with the relevant invoices etc. presented to the Council. If the schedule is in order it shall he authorised by a resolution of the Council.
Cheques drawn on the bank account in accordance with the schedule referred to in the previous paragraph shall be signed by two of the Councillors.
All necessary internal transfers between the various bank accounts shall be responsibility of the RFO and the Council shall provide the appropriate delegated authority for this purpose.

6. Payment of Accounts

Apart from any petty cash payments all payments shall be effected by cheque or other order drawn on the Council's bankers.
All invoices for payment shall be examined, verified and certified by the Officer issuing the order. Before certifying an invoice the officer shall satisfy himself / herself that the work, goods or services to which the invoice relates have been received, carried out, examined and approved.
The RFO shall examine invoices in relation to arithmetical accuracy and authorisation, and shall code them to the appropriate expenditure head. The RFO shall take all possible steps to settle all invoices submitted, promptly, by presenting them to the next available meeting of the council for authorisation, approval and payment.
When the RFO is satisfied that invoices are in order he shall present them to the council for final certification and authorisation on the vouchers provided.
All duly certified invoices will then be entered on the schedule referred to in 5.2 above.
The Council 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:
The RFO shall maintain a petty cash float to a limit of £50 for the purpose of defraying operational and other expenses. Vouchers for payments made from petty cash shall be kept to substantiate the payment.
Income received must not be paid into the petty cash float but must be separately banked, as provided elsewhere in these regulations.
Payments to maintain the petty cash float shall be shown separately on the schedule of the payment of money presented to the council (under 5.2 above).
The RFO may obtain authority from the Council to pay regular payments such as Loan repayments, and utility accounts by Direct Debit via the banking system. Such payments shall be reported as and when paid and identified separately on the Payments of Accounts Schedule, presented for approval to the Council each month in accordance with 4. (above). The Council may rescind it’s authority on the recommendation of the Finance & General Purposes Committee or by a majority vote of the Full Council.

7. Payment of Salaries and Wages

The payment of all salaries and wages shall be made by the RFO from the bank account based on the agreed annual sum and at the frequency in accordance with the Officer's Contract of Employment.
Any time sheets required to be completed shall be signed by the Officer and the Chairman of the Council or, in his/her absence, the Vice Chairman of the Council approving payment of the hours claimed.
The RFO shall supply all information in respect of employees, rates of pay, time sheets etc to the Council’s Payroll Bureaux in order to ensure the accuracy of all payroll calculations.
The Clerk shall be responsible for the monitoring of any Contract made with a Payroll Bureaux on behalf of the Council.
If a separate payroll account is maintained, this shall not be overdrawn at the bank. Transfers to fund shall be made from the Council's general account and shall be shown separately on the schedule of the payment of money presented to the council (under 5.2 above).

8. Loans and Investments

All loans and investments shall be negotiated by the RFO in the name of the Council, and shall be for a set period of time in accordance with Council policy. Changes to loans and investments should be reported to the F&GP committee and council at the earliest opportunity.
All investments of money under the control of the Council shall he in the name of the Council.
All borrowings shall be put into effect in the name of the Council.
All investment certificates and other documents relating thereto shall be retained in the custody of the RFO.

9. Income

The collection of all sums due to the Council shall be the responsibility of and under the supervision of the RFO.
All amounts due to the Council, under agreement, shall be collected by the raising of an appropriate invoice and sent out on behalf of the Council prior to the due date.
Particulars of all charges to be made for work done, services rendered or goods supplied shall be notified to the RFO and the RFO shall be ultimately responsible for the collection of all accounts due to the Council.
The Council will review all fees and charges annually, following a report of the clerk.
Any bad debts shall be reported to the F&GP committee.
All sums received on behalf of the Council shall either be paid to the RFO for banking or be banked by the Officer collecting the money 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.
A reference to the related debt, or otherwise, indicating the origin of each cheque shall be entered on the paying-in slip.
Every transfer of official money from one member of staff to another shall he signed for by the receiving officer.
“Personal” cheques shall not be cashed out of money held on behalf of the Council.

10. Orders for Work, Goods and Services

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 e.g. petty cash purchases. Copies of orders issued shall be maintained and a copy forwarded to the RFO.
Order books shall be controlled by the RFO.
All Officers are responsible for obtaining value for money at all times. An officer issuing an official order is to ensure as far as reasonable and practicable that the best available terms are obtained in respect of' each transaction.

11. Contracts
Procedures as to the contracts are laid down in the Councils Standing Orders as follows:

Every contract whether made by the council or by a committee to which the power of making contracts has been delegated shall comply with these standing orders, and no exception from any of the following provisions of these standing orders shall be made otherwise than by direction of the Council or in an emergency by such a committee as aforesaid provided that these standing orders shall not apply to contracts which relate to items (1) to (5) 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 goods or materials proposed to be purchased which are proprietary articles and/or which are sold only at a fixed price.
Where it is intended to enter into a contract:
exceeding £2,500 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, such firms to be taken from the appropriate approved list
for expenditures of £2,500 or less in value the chairman of the spending committee or his appointed vice chairman together with the Clerk or the duly authorised deputy shall have executive power.
When applications are made to waive standing orders relating to contracts to enable a tender to be negotiated without competition the reason shall be embodied in a recommendation to the Council.
Every exception made by a committee to which the power of making contracts has been delegated shall be reported to the council and the report shall specify the emergency by which the exception shall have been justified.
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 be in addition state that tenders must be addressed to the clerk and the last date by which such tenders should reach the Clerk in the ordinary course of post. Each tendering firm shall be supplied with a specially marked envelope in which the tender is to be sealed and remain scaled 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 or the properly authorised deputy in the presence of at least one member of the Council.
If less than three tenders are received for contracts valued above £2,500 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 standing order shall contain a statement of the effect of standing order Nos. 61, 63, and 74.
The Council shall not be obliged to accept the lowest or any tender.

12. Payments in respect of Contracts for Building or Other Construction Works

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.
Where contracts provide for payment by instalments the RFO shall maintain a record of all such payments. In any case when it is estimated that the total cost of work carried out under a contract, excluding fluctuation clauses, will exceed the contract sum by 5% or more a report shall he submitted to the appropriate committee.
Any variation to a contract or addition to or omission from a contract must be approved by the Clerk in writing, the appropriate committee being informed where the final cost is likely to exceed the financial provision.

13. Stores and Equipment

The Officers shall he responsible for the care and custody of stores and equipment in that section.
Delivery notes must he obtained in respect of all goods received into store and goods must be checked as regard quality at the time delivery is made.
Stocks shall generally be maintained at the minimum levels consistent with operational requirements.
The RFO shall be responsible for an annual check of all stocks and stores.

14. Properties and Estates

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 regulation 4 (3)(b) of the Accounts and Audit Regulations 2003.
No property shall be sold, leased or otherwise disposed of without the authority of the Council, save where the estimated value of any one item does not exceed £500.
Insurance:

Parish Council:

The RFO shall put into effect all insurances and negotiate all claims on the Council's insurers in consultation with the Clerk.
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 insurance's 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.
All appropriate employees of the council shall be included in a suitable fidelity guarantee insurance.

Contractor / Sub-Contractors:

The Council shall inspect any Contractor / Sub-Contractor’s Insurance, engaged by the Parish Council to carry-out work on its behalf, to ensure that there is in existence adequate third party indemnity cover. This shall be undertaken on entering into an order to undertake work or, if used on a regular basis, shall be undertaken on a yearly basis. Where such insurance cover is found not to exist, the Parish Council should refrain using the Contractor until such time as adequate insurance cover can be produced.

16. Assets Register
The RFO shall maintain a record of all assets owned by the Council, together with its original value / purchase price, date of acquisition / purchase, and its current insurance value.

17. Revision of Financial Regulations
It shall be the duty of the F&GP committee to review the financial regulations of the Council from time to time and to make such recommendations to the council as the committee considers are required.

Herstmonceux Parish Council

Index to Financial Regulations

Financial Regulations