Ilam Parish Council Financial Regulations

1              General

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 Councilís 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 Councilís accounting records and accounting control systems;

      ensures the accounting control systems are observed;

      maintains the Councilís 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 Councilís 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 Councilís 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 Ďthe regulationsí 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 Ďproper practiceí or Ďproper practicesí shall refer to guidance issued in† Governance and Accountability for Local Councils - a Practitionersí 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 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 Councilís 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 electorsí 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              Annual Estimates and Forward Planning

3.1         At the Councilís 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              Authority to Spend

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              Banking Arrangements and Payments

5.1         The Councilís 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              Income

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              Orders for Work, Goods and Services

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              Contracts

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              Assets

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         Insurance

10.1     The Council will select the most economic insurance cover that is adequate and appropriate for the activities of the Council.

11         Suspension and Revision of Financial Regulations

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.