Financial Standing Orders

ADOPTED BY SAXMUNDHAM TOWN COUNCIL AT ITS MEETING HELD ON 8 MAY 2006 AND AGREED TO COME INTO EFFECT IMMEDIATELY

NOTE : ANY AMBIGUITY THAT MAY ARISE IN THESE REGULATIONS, OR CLARIFICATIONS NEEDED, SHOULD BE RESOLVED BY REFERENCE TO THE SUFFOLK ASSOCIATION OF LOCAL COUNCILS (SALC)

1. GENERAL DEFINITIONS

•  These financial standing orders govern the conduct of financial management by the Council and may only be amended or varied by resolution of the Council. 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 financial control which facilitates the effective exercise of the Council's functions, including arrangements for the management of risk and for the prevention and detection of fraud and corruption. These financial standing orders are designed to demonstrate how the Council meets these responsibilities.

•  The Responsible Financial Officer (RFO) is a statutory officer and shall be appointed by the Council. The Clerk has been appointed as RFO for this Council and these standing orders will apply accordingly. The RFO, acting under the policy direction of the Council, shall administer the Council's financial affairs in accordance with proper practice. The RFO shall determine on behalf of the Council its accounting records, and accounting control systems. The RFO shall ensure that the accounting control systems are observed and kept up-to-date in accordance with proper practices.

•  The RFO shall produce financial management information as required by the Council.

•  In these financial standing orders, references to the Accounts and Audit Regulations shall mean the Regulations issued under the provisions of section 27 of the Audit Commission Act 1998 and then in force.

•  In these financial standing orders the terms ‘proper practice' or ‘proper practices' shall refer to guidance issued in Governance and Accountability in Local Councils in England and Wales – a Practitioners' Guide , available from SALC.

1. ANNUAL BUDGET

•  Detailed estimates of all receipts and payments including the use of reserves and all sources of funding for the year shall be prepared each year by the RFO, in collaboration with the Policy & Resources Committee, in the form of a budget to be considered by the Council.

•  The Council shall review the budget 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 issue the precept to the billing authority.

•  The annual budgets shall form the basis of financial control for the ensuing year.

1. BUDGETARY CONTROL

•  The Clerk may incur expenditure on behalf of the Council which is necessary to carry out any repair, replacement or any other work which is of such 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 £500. The Clerk shall report the action to the Council as soon as practicable thereafter.

•  Unspent provision in the revenue budget shall not be carried forward to a subsequent year unless placed in an earmarked reserve by resolution of the Council.

•  No expenditure shall be incurred 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.

1. ACCOUNTING AND AUDIT

•  All accounting procedures and financial records of the Council shall be determined by the RFO in accordance with the Accounts and Audit Regulations.

•  The RFO shall complete the annual financial statements of the Council, including the Council's Annual Return, as soon as practicable after the end of the financial year and shall submit then and report thereon to the Council.

•  The RFO shall complete 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 shall submit the Annual Return for approval and authorisation by the Council within the timescales set by the Accounts and Audit Regulations.

•  The RFO shall ensure that there is an adequate and effective system of internal audit of the Council's accounting, financial and other operations, in accordance with proper practices.

•  The Internal Auditor shall be appointed by, and shall carry out the work required by, the Council in accordance with proper practices.

•  The RFO shall make arrangements for the opportunity for inspection of the accounts, books and vouchers and for the display or publication of any Notices and Statement of Account required by the Audit Commission Act 1998 and the Accounts and Audit Regulations.

1. BANKING ARRANGEMENTS AND CHEQUES

•  The Council's banking arrangements, including the Bank Mandate, shall be made by the RFO and approved by the Council. They shall be regularly reviewed for efficiency.

•  A schedule of the payments required, forming part of the agenda for each Council meeting, shall be prepared by the RFO and, together with the relevant invoices, be presented to the Council. If the schedule is in order it shall be authorised by a resolution of the Council and shall be initialled by the Chairman of the Meeting.

•  Cheques drawn on the bank account in accordance with the schedule, as detailed in paragraph 5.2 above, shall be signed by a minimum of two members of the Council.

•  To indicate agreement of the details shown on the cheque or order for payment with the counterfoil and the invoice or similar documentation, the signatories shall each also initial the cheque counterfoil.

1. PAYMENT OF ACCOUNTS

•  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 Clerk. The Clerk shall satisfy him/herself that the work, goods or services to which the invoice related shall have been received, carried out, examined and approved.

•  The Council will maintain a petty cash float of £50, under the control and responsibility of the Clerk, for the purpose of defraying minor operational and other expenses. Vouchers for payments made from this float shall be kept to substantiate the payment.

•  Payments to maintain the petty cash float shall be shown separately on the schedule of payments presented to the Council as detailed under paragraph 5.2 above.

•  If thought appropriate by the Council, payment for utility supplies (energy, telephone and water) may be made by variable direct debit provided that the instructions are signed by two members of the Council and any payments are reported to the Council as made.

1. PAYMENT OF SALARIES

•  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 salaries shall be as agreed by Council.

•  Payment of salaries and payment of deductions from salary such as may be made for tax, national insurance and other contributions, may be made in accordance with the payroll records and on the appropriate dates stipulated in employment contracts, provided that each payment is reported to and ratified by the next available Council meeting.

1. LOANS AND INVESTMENTS

•  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.

•  All investments of money under the control of the Council shall be in the name of the Council.

•  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 after reviewing its terms and purpose. The terms and conditions of borrowings shall be reviewed at least annually.

1. INCOME

•  The collection of all sums due to the Council shall be the responsibility of, and under the supervision of, the RFO.

•  The Council will review all fees and charges at least every two years, following a report of the clerk.

•  All sums received on behalf of the Council shall be banked intact 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, this usually being as soon as possible after receipt.

•  The RFO shall complete promptly any VAT Return that is required. Any repayment claim due in accordance with the VAT Act 1994 section 33 shall be made quarterly.

•  Personal cheques shall not be cashed out of money held on behalf of the Council.

1. 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. Copies of orders shall be retained by the RFO.

•  Order books shall be controlled by the RFO.

•  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, usually by obtaining three quotations or estimates, whenever possible, from appropriate suppliers, subject to the de minimis provisions as detailed in paragraph 11.1 below.

1. CONTRACTS

•  Where it is intended to enter into a contract exceeding £2,000 in value for the supply of goods or materials or for the execution of works or specialist services the Clerk shall invite tenders from three firms, whenever possible.

•  When applications are made to waive financial standing orders relating to contracts to enable a price to be negotiated without competition, the reason shall be embodied in a recommendation to the Council.

•  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, in addition, 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 tenders for that contract.

•  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, which will usually, but not necessarily, be the Chairman.

•  If less than three tenders are received for contracts above £2,000, 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.

•  The Council shall not be obliged to accept the lowest or any tender, quote or estimate.

1. ASSETS AND PROPERTIES

•  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 Accounts and Audit Regulations.

•  No property shall be sold, leased or otherwise disposed of without the authority of the Council, together with any other consents required by law.

•  The RFO shall ensure that an appropriate and accurate Register of Assets and Investments is kept up-to-date.

1. INSURANCE

•  The RFO shall effect all insurances and negotiate all claims on the Council's insurers.

•  The RFO shall keep a record of all insurances effected by the Council and the property and risks covered thereby and review it annually.

•  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.

1. THE MARKET HALL CHARITY As the Council is a sole trustee of a charitable body, the Clerk and RFO shall ensure that separate accounts are kept of the funds held on charitable trust terms 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.

1. REVISION OF FINANCIAL STANDING ORDERS It shall be the duty of the Council to review the financial standing orders of the Council 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 to these financial standing orders.