Stokenchurch Parish Council – Financial Regulations
These Financial Regulations were adopted by the Council at its Meeting held on 16 October 2019.
Amended AGM 4TH of May 2022, Finance meeting 27th of July 2022 Item 4.1
1. GENERAL
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.
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. These financial regulations demonstrate how the Council meets these responsibilities and requirements.
1.3. At least once a year, as part of 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.
1.4. Deliberate or wilful breach of these Regulations by an employee may give rise to disciplinary proceedings. Members of Council are expected to follow the instructions within these Regulations. Failure to follow instructions within these Regulations brings the office of Councillor into disrepute.
1.5. The Responsible Financial Officer (RFO) is a statutory office appointed by the Council. The RFO
1.6. The accounting records shall be sufficient to show and explain the Council’s transactions and to ensure that any income and expenditure is recorded in line with the Accounts and Audit Regulations.
1.7. The accounting records shall in particular contain:
1.8. The Council is not empowered by these Regulations or otherwise to delegate certain specified decisions. In particular any decision regarding:
shall be a matter for the full Council only.
1.9. In addition, the Council must:
1.10. 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.
1.11. 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 in accordance with the Accounts and Audit Regulations, appropriate guidance and proper practices.
2.2. Council shall be asked to verify bank reconciliations for all accounts produced by the RFO at the end of each month. The Chair shall sign the reconciliations as evidence of verification.
2.3. The RFO shall complete the annual statement of accounts and any related documents 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 for approval 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 in accordance with proper practices.
2.6. The internal auditor shall:
2.7. Internal or external auditors may not under any circumstances:
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. The Finance Committee shall prepare forecast estimates of all receipts and payments for the following financial year. Having regard to the forecast, it shall thereafter formulate and submit proposals for the following financial year in the form of a budget to the Council not later than the end of December each year.
3.2. The Council shall agree the budget and 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 Clerk shall issue the precept to the billing authority and shall supply each member with a copy of the approved annual budget.
3.3. The approved annual budget shall form the basis of financial control for the ensuing year.
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:
Any expenditure not approved by full Council, to be reported to Council at the next meeting.
Contracts may not be disaggregated to avoid controls imposed by these regulations. The Council shall not be obliged to accept the lowest quote, but must consider value for public money.’
4.2. 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.
4.3. The RFO shall regularly provide the Council with a statement of receipts and payments to date under each heading of the budgets, comparing actual expenditure against that planned as shown in the budget. These statements are to be prepared at least at the end of each financial quarter.
5. BANKING ARRANGEMENTS AND AUTHORISATION OF PAYMENTS
5.1. The Council's banking arrangements, including the bank mandate, shall be approved by the Council; banking arrangements may not be delegated to a committee.
5.2. The RFO shall prepare a schedule of payments requiring authorisation, forming part of the agenda for each Council meeting and, together with the relevant invoices, present the schedule to Council. The Council shall review the schedule for compliance and, having satisfied itself shall authorise payment by a resolution of the Council. The approved schedule shall be signed by the Chair of the Meeting.
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 analyse them to the appropriate expenditure heading. The RFO shall take all steps to pay all invoices submitted, and which are in order, after approval at the next available Council meeting.
5.5. 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.
6. INSTRUCTIONS FOR THE MAKING OF PAYMENTS
6.1. The Council will make safe and efficient arrangements for the making of its payments.
6.2. Cheques drawn on the bank account shall be signed by two members of Council or one member of Council and the RFO. 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.
6.3. 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.
6.4. Payment will usually be made by BACS methods by the RFO provided that the payment has been approved by Council and instructions for each payment are retained.
6.5. 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.
6.6. Regular back-up copies of the records on any computer shall be made and shall be stored securely.
6.7. The Council, and any members using computers for the Council’s financial business, shall ensure that anti-virus, together with a high level of security, is used.
6.8. Use of any Debit Card issued for use will be specifically restricted to the Chair, the Clerk and the RFO.
6.9. The Clerk and RFO shall maintain a petty cash float of £150 for the purpose of small operational and other expenses. Petty Cash can be used to reimburse expenses accompanied by a receipt as described in the Council’s Expenses Policy and Petty Cash procedures. Income received must not be paid into the petty cash float but must be separately banked.
6.10. Expenses incurred by employees or Council members can be reclaimed through the schedule of payments approved at Council meetings, in accordance with the Council’s Expenses policy.
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. Each payment shall be approved by Council through the schedule of payments approved at Council meetings.
7.3. No changes shall be made to any employee’s pay or terms and conditions of employment without the prior consent of the Council.
7.4. Any termination payments shall be supported by a clear business case and reported to the Council. Termination payments shall only be authorised by Council.
8. LOANS AND INVESTMENTS
8.1. 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/Welsh Assembly Government (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 consider the need for an Investment Strategy and Policy which, if drawn up, shall be in accordance with relevant regulations, proper practices and guidance. Any Strategy and Policy shall be reviewed by the Council at least annually.
8.5. All investments of money under the control of the Council shall be in the name of the Council.
8.6. 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. All sums received on behalf of the Council shall be banked intact by the RFO. In all cases, all receipts shall be deposited with the Council's bankers with such frequency as the RFO considers necessary.
9.3. Personal cheques shall not be cashed out of money held on behalf of the Council.
9.4. 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.
9.5. Where any significant sums of cash are regularly received by the Council, the RFO shall take such steps as are 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 AND CONTRACTS
10.1. 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.
10.2. Every order for services or contract shall comply with these financial regulations, and no exceptions shall be made otherwise than in an emergency.
10.3 Any contracts for regular services should be reviewed whenever there was a price increase or at least every three years to ensure that they still represent value for money.
11. ASSETS, PROPERTIES AND ESTATES
11.1. The Finance Committee shall ensure that an appropriate and accurate Register of Assets is kept and reviewed at least annually.
12. INSURANCE
12.1. The Clerk shall keep a record of all insurances effected by the Council and the property and risks covered thereby and annually review it.
12.2. The Clerk shall negotiate all claims on the Council's insurers in consultation with the Chair and the RFO.
12.3. The Clerk 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.
13. RISK MANAGEMENT
13.1. The Council is responsible for putting in place arrangements for the management of risk. The Finance Committee shall prepare, for approval by the Council, a Risk Management Register in respect of all activities of the Council. Risk management arrangements shall be reviewed by the Council at least annually.
13.2. When considering any new activity, the Finance Committee shall prepare a draft risk assessment for inclusion in the Risk management Register for consideration and adoption by the Council.
14. SUSPENSION AND REVISION OF FINANCIAL REGULATIONS
14.1. It shall be the duty of the Council to review the Financial Regulations of the Council from time to time. The RFO 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.
14.2. The Council may, by resolution of the 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.