Parish Council

Financial Regulations

Adopted July 2006

EAST DEAN & FRISTON PARISH COUNCIL

FINANCIAL REGULATIONS

1. GENERAL

1.1 These financial regulations govern the conduct of the Financial Transactions of the Council and may only be amended or varied by Resolution of the Council.
1.2 The Responsible Financial Officer (RFO), under the policy direction of the Council, shall be responsible for the proper administration of the Council’s affairs.
1.3 The RFO shall be responsible for the production of financial management information.
1.4 The Accounts and Audit Regulations mentioned in paragraphs below refer to the Accounts and Audit Regulations 1996 and any regulations superseding it.

2. ANNUAL ESTIMATES

2.1 Each Committee (if any) shall formulate and submit proposals to the Finance & General Purposes Chair and Council in respect of revenue and capital costs for the following financial year not later than the end of November each year.
2.2 Detailed estimates of all receipts and payments for the year shall be prepared each year by the RFO & F&GP Chair.
2.3 The Council shall review the estimates not later than the end of January each year and shall fix the Precept to be levied for the ensuing financial year. The RFO shall supply each Member with a copy of the approved estimates.
2.4 The Annual Budgets shall form the basis of financial control for the ensuing year.
2.5 The Council shall consider the need for and shall have regard to a three year forecast of Revenue and Capital Receipts and Payments which may be prepared at the same time as the Annual Budget or Estimates.

3. BUDGETARY CONTROL

3.1 Expenditure on Revenue Items may be incurred up to the amounts included in the approved budget.
3.2 No expenditure may be incurred that will exceed the amount provided in the appropriate revenue budget, without prior agreement of the Council.
3.3 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 against that planned, including YTD and projections.
3.4 The Clerk may incur expenditure on behalf of the Council which is necessary to carry out any repair, replacement or other works which may be of extreme urgency that it must be done at once, whether or not there is any budgetary provision for the expenditure, subject to a limit of £2,000.00 per works. The Clerk shall report the action to the Council as soon as practicable thereafter.
3.5 Unspent provisions in the revenue budget shall not be carried forward to a subsequent year.
3.6 No expenditure shall be incurred 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, or the requisite borrowing approval has been obtained.
3.7 All capital works shall be administered to in accordance with the Council’s Standing Orders and Financial Regulations relating to Contracts.



4. ACCOUNTING AND AUDIT

4.1 All accounting procedures and financial records of the Council shall be determined by the RFO as required by the Accounts and Audit Regulations.
4.2 The RFO shall be responsible for completing the Annual Financial Statements of the Council as soon as practicable after the end of the financial year and shall submit them and report thereon to the Council.
4.3 The RFO shall be responsible for completing the Accounts of the Council contained in the Annual Return (as supplied by the Auditor appointed from time to time by the Audit Commission) and for submitting the Annual Return for approval and authorisation by the Council within the timescales set by the Accounts and Regulations, or set by the Auditor.
4.4 The RFO shall be responsible for ensuring that there is an adequate and effective system of internal audit of the Council’s accounting, financial and other operations in accordance with Regulation 5 of the Accounts & Audit Regulations. Any officer or Member of the Council shall, if the RFO or Internal Auditor requires, make available such documents of the Council which appear to the RFO or Internal Auditor with such information and explanation as the RFO or Internal Auditor considers necessary for that purpose.
4.5 The Internal Auditor shall carry out the work required by the RFO, or by the Council, with a view to satisfactory completion of the Internal Auditor’s Report Section of the Annual Return as compiled annually by the Audit Commission. The Internal Auditor, who shall be competent and independent of the operations of the Council, shall report to Council in writing on a regular basis with a minimum of One Annual Report in respect of each financial year.
4.6 The RFO shall make arrangements for the opportunity for inspection of the Accounts, Books and Vouchers required by the Audit Commission Act 1998 section 15 and the Accounts and Audit Regulations.
4.7 The RFO shall, as soon as is practicable, bring to the attention of all Councillors any correspondence or report from the Internal or External Auditor, unless the correspondence is of a purely administrative matter.

5. BANKING

5.1 The Council’s banking arrangements shall be made by the RFO and approved by the Council. They shall be reviewed regularly for efficiency.
5.2 A schedule of payments required , forming part of the Agenda for the Meeting, shall be prepared by the RFO and, together with the relevant invoices, be presented to Council. If this schedule is in order it shall be authorised by a resolution of the Council and shall be initialled by the Chairman of the Meeting. If more appropriate the detail may be shown in the Minutes of the Meeting.
5.3 Cheques drawn on the bank account in accordance with the schedule referred to in paragraph 5.2 or in accordance with paragraph 6.4, shall be signed by TWO Members of the Council (and countersigned by the CLERK).

6. PAYMENT OF ACCOUNTS

6.1 All payments shall be effected by cheque or other order drawn on the Council’s Current Account Bankers (Barclays).
6.2 All Invoices for payment shall be examined, verified and certified by the Clerk. The Clerk should be satisfied that any work, goods or services to which the invoice relates shall have been received, carried out, examined and approved.
6.3 The RFO shall examine the invoices in relation to arithmetic accuracy and shall allocate them to appropriate expenditure heading. The Clerk shall take all steps to settle all invoices submitted, and which are in order, at the next available Council Meeting.
6.4 If a payment is necessary to avoid a charge of interest under Late Payment of Commercial Debts (Interest) Act 1998, and the due date for payment is before the next scheduled Meeting of the Council, where the Clerk and the RFO certify that there is no dispute or other reason to delay payment, the Clerk may (notwithstanding para 6.3) take all steps necessary to settle such invoices provided that a list of such payments shall be submitted to the next appropriate Meeting of the Council.
6.5 The Council will not maintain any form of cash float. All Cash received must be banked intact as soon as is practicable. Any payments made by the Clerk or RFO, whether cash, cheque or credit card, shall be reimbursed on a monthly basis.

7. PAYMENT OF SALARIES

7.1 The payment of the Clerk’s salary shall be made in accordance with payroll records and the rules of PAYE and National Insurance currently operating. Salaries shall be as agreed by the Council.
7.2 Payment of salaries and payment of deductions from salary such as may be made for Tax, NI and pension contributions, may be made in accordance with the payroll records and on the appropriate dates, provided that each payment is reported to and ratified by the next available Council Meeting.

8. LOANS AND INVESTMENTS

8.1 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.
8.2 The Council’s Investment Policy, shall be in accordance with the Trustee Act 2000, and shall be reviewed on a regular basis (at least once each financial year).
8.3 All Investments of money under the control of the Council shall be in the name of the Council.
8.4 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 the Council as to terms and purpose.
8.5 All Investment Certificates and other documents relating thereto shall be retained in the custody of the RFO.

9. INCOME

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 annually agreed 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 annually, following a report from the Clerk.
9.4 Any sums found to be irrecoverable and any 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 should 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 to the paying-in slip.
9.7 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 Quarterly.
9.8 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 the 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 All Members and Officers are responsible for obtaining good 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, usually by obtaining three or more quotations or estimates from appropriate suppliers, subject to any de-minimis provisions in Regulation 11 (1) below.
10.3 The RFO shall verify the lawful nature of any proposed purchase before the issue of any order and in the case of new or infrequent purchases or payments, the RFO shall ensure that the Statutory Authority shall be reported to the Meeting at which the Order is approved so that the Minutes can record the power being used.

11. CONTRACTS

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 that in an emergency provided that these regulations shall 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 provided by solicitors, accountants, surveyors and planning consultants
(iii) for work to be executed or goods and materials 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 £250. (in excess of this sum the Clerk/RFO shall act after consultation with the Chairman or Vice-Chairman of Council
(vi) for goods or materials proposed to be purchased which are proprietary articles and/or are only sold at a fixed price.

(b) Where it is intended to enter into a contract exceeding £5,000.00 in value for the supply of goods or materials or for the execution of works or specialist services other than such goods, materials or specialist services as are excepted as set out in paragraph (a) above, then the Clerk shall invite tenders from at least three firms to be taken from an appropriate approved list.
(c) 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 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 the tenders for that contract.
(d) 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 the Council.
(e) If less than three tenders are received for contracts above £5,000.00 or if all tenders are identical the Council may make such arrangements as it thinks fit for procuring the goods or materials or executing the works.
(f) Any invitation to tender issued under this regulation shall contain a statement to the effect of Standing Orders 51.
(g) When the Council is to enter in to a contract less than £5,000.00 in value for the supply of goods, 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 para (a) above the Clerk or RFO shall obtain three quotations (priced descriptions of the proposed supply), where the value is below £1,000.00 and above £100.00 the Clerk or RFO shall strive to obtain three estimates, otherwise Regulation10 (3) above shall apply.
(h) The Council shall not be obliged to accept the lowest of any tender, quote or estimate.
(i) When applications are made to waive financial regulations 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 any 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.

12. PAYMENTS UNDER CONTRACTS FOR BUILDING OR OTHER CONSTRUCTION WORKS

12.1 Payments on account of the contract sum shall be made within the time specified in the contract by the RFO upon the authorised certificates of the architect or other consultants engaged to supervise the contract (subject to any percentage withholding as may be agreed in each 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 the 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.
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 and custody 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.

14. PROPERTIES AND ESTATES

14.1 The Clerk shall make appropriate custody 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 locations, extent, plan, reference, purchase details, nature of interest, tenancies granted, rents payable and purpose for which held in accordance with Regulation 4 (3)(b) of the Accounts and Audit Regulations.
14.2 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 £50.00.

15. INSURANCE

15.1 Following an annual risk assessment, the RFO shall effect all insurances and negotiate all claims on the Council’s insurers (in consultation with the Clerk).
15.2 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.
15.3 The RFO shall keep a record of all insurances effected 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 the Council at the next available meeting.
15.5 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.

16. CHARITIES

16.1 Where the Council is Sole Trustee of a Charitable Body the Clerk and the RFO shall ensure that separate accounts are kept if 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.

17. RISK MANAGEMENT

17.1 The Clerk with the RFO shall prepare and promote risk management policy statements in respect of all the activities of the Council.
17.2 When considering any new activity the Clerk and/or the RFO shall prepare a draft Risk Management Policy for the activity, if requested to do so by the Council. The draft should address the legal and financial liabilities and Risk Management issues that may arise for presentation to the Council for consideration and, if appropriate, adoption.

18. REVISION OF FINANCIAL REGULATIONS

18.1 It shall be the duty of the Council to review the Financial Regulations of the Council Annually.

Financial Regulations
Formally Adopted at the Parish Council Meeting held on 6th July 2006

The Clerk
Telephone: 01323 493024
Email: parishcouncil@eastdeanvillage.org.uk

This page last modified on: 06 January 2010