Ilam Parish Council Financial Regulations
1.1
The Council is responsible in law for ensuring that its financial
management is adequate and effective. These Financial Regulations govern the
conduct of financial management and may only be amended or varied by resolution
of the Council.
1.2
The Council’s accounting control systems include measures:
● for the timely production of accounts;
● that provide for the safe and
efficient safeguarding of public money; and
● to prevent and detect inaccuracy
and fraud.
1.3
The Clerk has been appointed as Responsible Financial Officer (RFO), a
statutory office appointed by the Council. The RFO:
● acts under the direction of the Council;
● administers the Council's financial
affairs in accordance with all Acts, Regulations and proper practices;
● determines the Council’s accounting
records and accounting control systems;
● ensures the accounting control
systems are observed;
● maintains the Council’s accounting
records up to date in accordance with proper practices;
● assists the Council to secure
economy, efficiency and effectiveness in the use of its resources; and
● produces financial management
information as required by the Council.
1.4
Councillors and the RFO are expected to follow the instructions within
these Regulations. Failure to do so brings the office of Councillor into
disrepute. Deliberate or wilful breach of these Regulations may give rise to
disciplinary proceedings.
1.5
The accounting records determined by the RFO shall be sufficient to show
and explain the Council’s transactions and to enable the RFO to ensure that any
income and expenditure account and statement of balances, or record of receipts
and payments and additional information, as the case may be, or management
information prepared for the Council from time to time comply with the Accounts
and Audit Regulations.
1.6
The accounting records determined by the RFO shall in particular
contain:
● entries from day to day 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; and
● wherever relevant, a record of the Council’s
income and expenditure in relation to claims made, or to be made, for any
contribution, grant or subsidy.
1.7
The accounting control systems determined by the RFO shall include:
● procedures to ensure that the
financial transactions of the Council are recorded as soon as reasonably
practicable and as accurately and reasonably as possible;
● procedures to enable the prevention
and detection of inaccuracies and fraud and the ability to reconstruct any lost
records;
● identification of the duties of
officers dealing with financial transactions and division of responsibilities
of those officers in relation to significant transactions;
● procedures to ensure that
uncollectable amounts, including any bad debts are not submitted to the Council
for approval to be written off except with the approval of the RFO and that the
approvals are shown in the accounting records; and
● measures to ensure that risk is
properly managed.
1.8
Only the full Council is empowered to make decisions regarding:
● setting the final budget or the
precept (Council tax requirement);
● approving accounting statements;
● approving an annual governance
statement;
● writing off bad debts; and
● addressing recommendations in any
report from the internal or external auditors.
1.9
In addition the Council must determine and keep under regular review the
bank mandate for all Council bank accounts.
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. 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).
2.1
All accounting procedures and financial records of the Council shall be
determined by the RFO in accordance with the Accounts and Audit Regulations,
appropriate guidance and proper practices.
2.2
The RFO shall complete the annual statement of accounts, annual report,
and any related documents of the Council 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 and report
thereon to the Council within the timescales set by the Accounts and Audit
Regulations. He/she will submit the Annual Return to the External Auditor by
the due date, ensuring the return is complete.
2.3
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.
2.4
An Internal Auditor will be appointed each year by the Council to audit
the annual financial statements in accordance with proper practices. He/she shall:
● be competent
and independent of the
financial operations of the Council;
● demonstrate competence, objectivity
and independence, be free from any actual or perceived conflicts of interest,
including those arising from family relationships; and
● have no involvement in the Council’s financial decision making,
management or control.
2.5
Internal or external auditors may not under any circumstances:
● perform any operational duties for
the Council; or
● initiate or approve accounting transactions.
2.6
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.
2.7
The RFO shall, without undue delay, bring to the attention of all Councillors
any correspondence or report from internal or external auditors.
2.8
Any repayment claim due in accordance with the VAT Act 1974 section 33
will be made at least annually coinciding with the financial year.
3.1
At the Council’s meeting in January each year the RFO will advise the
Councillors of the expected income and expenditure for the coming year and they
will then decide how much precept to apply for.
4.1
Expenditure may be authorised up to the amounts included for that class
of expenditure. This authority is to be determined by:
● the Council for all items over £50;
● the Clerk, in conjunction with Chairman of the Council, for any items below £50.
4.2
No expenditure shall be authorised unless the Council is satisfied that
the necessary funds are available.
4.3
All capital works shall be administered in accordance with the Council's
Standing Orders and Financial Regulations.
4.4
At each Council meeting the RFO shall advise the Council of receipts and
payments since the previous meeting.
5.1
The Council’s banking arrangements will be decided by the Council and
organised by the RFO. Two members will be authorised by the Council to sign
cheques.
5.2
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. He/she shall take steps in a timely manner
to pay by cheque all invoices submitted that are in order.
5.3
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 (for example for
postage or minor stationery items) shall be refunded on a regular basis, at
least annually.
6.1
The collection of all sums due to the Council shall be the
responsibility of and under the supervision of the RFO.
6.2
Any sums found to be irrecoverable and any bad debts shall be reported
to the Council and shall be written off in the year.
6.3
All sums received on behalf of the Council shall be banked intact. In
all cases, all receipts shall be deposited with the Council's bankers as soon
as possible with the origin of each receipt entered on the paying-in slip.
6.4
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.
7.1
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 by the RFO.
7.2
The Council is responsible for obtaining value for money at all times
and shall ensure as far as reasonable and practicable that the best available
terms are obtained in respect of each transaction.
7.3
Orders for values £500 to £2000 require a minimum of two quotations; for
values above £2000 three quotations are required. All estimates will be
approved by the Council; while the Council is not obliged to accept the lowest
quotation the reasons for accepting the quotation will be recorded.
7.4
A member may not issue an official order or make any contract on behalf
of the Council.
8.1
Every contract shall comply with these Financial Regulations, and no
exceptions shall be made otherwise than in an emergency provided that this
regulation need not apply to contracts for:
●
specialist services such as are provided by solicitors, accountants,
surveyors and planning consultants;
●
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;
●
work to be executed or goods or materials to be supplied which
constitute an extension of an existing contract by the Council;
●
additional audit work of the external auditor up to an estimated value
of £500 (in excess of this sum the RFO shall act after consultation with the
Chairman and Vice Chairman of Council); and
● goods or
materials proposed to be purchased which are proprietary articles and/or are
only sold at a fixed price.
8.2
Any 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.
9.1
No tangible moveable property
shall be purchased or otherwise acquired, sold, leased or otherwise disposed
of, without the authority of the Council, save where the estimated value of any
one item of tangible movable property does not exceed £50.
9.2
The RFO shall ensure that an appropriate and accurate Register of Assets
is kept up to date. The continued existence of tangible assets shown in the
Register shall be verified at least annually.
10.1
The Council will select the most economic insurance cover that is
adequate and appropriate for the activities of the Council.
11.1
It shall be the duty of the Council to review these Financial
Regulations from time to time. 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.
11.2
The Council may, by resolution of the Council duly notified prior to the
relevant meeting of Council, suspend any part of these Financial Regulations
provided that reasons for the suspension are recorded.