FTC-Financial Regulations

Contents


1	Introduction
1.1	Frodsham Town Council (FTC) is responsible for public money. It has a statutory duty for effective management of the funds in its charge and has an obligation for obtaining value for money for the people of Frodsham.
1.2	These Regulations provide the framework for managing FTC’s financial affairs and apply to all Councillors, Officers and anyone else acting on behalf of FTC.
1.3	The Regulations may not be amended or varied except by resolution of FTC.
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2	Responsible Financial Officer (RFO)
2.1	The RFO, under FTC’s policy direction, will determine FTC’s accounting system [Accounts & Audit Regulations 1996 paras 4(1), 4(2) & 4(4)(b)] and be responsible for:
	i.	Ensuring proper administration of FTC’s financial affairs;
	ii.	Ensuring that FTC’s accounts and supporting records are:
		Maintained in accordance with proper practices, Sufficient to show FTC’s financial transactions, and Kept up to date in a timely manner;
	iii.	Providing advice/guidance to Councillors & others acting on FTC’s behalf to underpin these Regulations; and
	iv.	Producing financial management information reports
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3	Budgetary Planning
3.1	Each Committee will formulate proposals in respect of revenue and capital costs for the following financial year no later than mid-November in each year.
3.2	In formulating their proposals, Committees will consider receipts & payments relating to revenue & capital appertaining to more than one year. Where deemed appropriate & necessary, Committees will include relevant costs in their proposals.
3.3	Committees will submit their proposals for approval by FTC to its meeting in November.
3.4	The RFO will prepare estimates of receipts & payments for the year based on approved proposals.
3.5	The RFO will supply each Member with a copy of the approved estimates.
3.6	FTC will review the estimates no later than the end of January each year and will fix the precept to be levied for the ensuing financial year.
3.7	The annual budget will form the basis of financial control for the ensuing year.
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4	Budgetary Control
4.1	FTC may incur expenditure on revenue items up to the limit of budget allocation for each heading.
4.2	FTC may not incur expenditure on any revenue item exceeding the total budget allocation for revenue items.
4.3	In case of need to carry out urgent repair, replacement or other work, the RFO may incur the necessary expenditure on behalf of FTC subject to a limit of £250 whether or not there is budgetary provision for it. The RFO will provide details of any such expenditure to FTC’s meeting following the ‘incident’.
4.4	Unspent provision in the revenue budget will not be carried forward to a subsequent year unless allocated to a specific project.
4.5	FTC may not incur expenditure or enter into a contract or accept a tender for a capital project unless necessary funds for the project are available or it has obtained the requisite approval for borrowing such funds.
4.6	All capital works will be administered in accordance with FTC’s Standing Order 11 & Financial Regulation 14, pertaining to contracts.
4.7	The RFO will advise FTC on prudent levels of reserves for the Council.
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5	Accounting & Audit
5.1	The RFO will prepare the following reports and present them to FTC for approval as soon as practicable after the end of the relevant period:
	i.	Monthly Transactions Reports (Schedules of Payments & Receipts) together with relevant invoices & receipts and consisting of statements of receipts & payments to-date under each heading of the budget, comparing planned & actual expenditure [Accounts & Audit Regulations 1996 para 4(3)(a)]; and
	ii.	Quarterly Financial Statements for the periods April - June, July - September, October - December & January - March after the end of the associated quarter.
		Note: The Schedules of Payments & Receipts will be approved by a resolution of FTC and must be signed by the Chairman. Where appropriate, details may be included in the Minutes of the meeting that considers the Schedules.
5.2	The RFO will complete FTC’s end-of-year accounts [Accounts & Audit Regulations 1996 para 7(3)], prepare the Annual Return (form supplied by the External Auditor appointed by the Audit Commission) and submit it for approval by FTC within the timescale set by the Accounts & Audit Regulations 1996 para 8(2) (the timescale may be altered by the External Auditor).
5.3	The RFO will maintain a record of income & expenditure in relation to claims proposed/made by FTC for contribution, grant or subsidy from any Minister of the Crown or a body to whom such a Minister may pay sums out of moneys provided by Parliament or a Community institution. [Accounts & Audit Regulations 1996 para 4(3)(c)]
5.4	The RFO will maintain an adequate & effective system of Internal Audit of FTC’s accounting, financial & other operations. [Accounts & Audit Regulations 1996 para 5]
5.5	FTC’s Officers & Councillors must make available any document(s) of the Council and supply any information or explanation deemed necessary for the purpose of the Internal Audit by the RFO or the Internal Auditor. [Accounts & Audit Regulations 1996 para 5]
5.6	The appointed Internal Auditor must be competent and independent of FTC’s operations.
5.7	The Internal Auditor will:
	i.	Conduct the Internal Audit;
	ii.	Complete the Internal Auditor’s Report section of the Annual Return; and
	iii.	Provide FTC with a minimum of one written Annual Report in respect of each financial year.
5.8	The RFO will make arrangements for:
	i.	Publication of the Annual Return in a manner and within the timescale specified in the Accounts & Audit Regulations 1996 paras 9(3)(a) & 9(4);
	ii.	Inspection of the Accounts and the Auditor’s Report by any Local Government elector [Audit Commission Act 1998 S15 & Accounts & Audit Regulations 1996 paras 12(2) & 16]; and
	iii.	Provision of copies of Annual Return and/Auditor’s Report for purchase by any person for a charge agreed by FTC [Accounts & Audit Regulations 1996 paras 9(3)(b)]
5.9	The RFO will bring to the attention of all Councillors correspondence (excluding that pertaining to administrative matters) and reports from the Internal or External Auditors as soon as practicable.
5.10	The RFO must ensure that, where appropriate, computer and other systems are registered in accordance with the Data Protection Act 1998.
5.11	The RFO will take appropriate measures to enable the prevention and detection of inaccuracies and fraud, and the ability to reconstitute any lost records. [Accounts & Audit Regulations 1996 para 4(4)(a)]
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6	Banking Arrangements & Handling of Cheques
6.1	The RFO will make FTC’s banking arrangements with the Council’s approval.
6.2	FTC will review the arrangements periodically to ensure their efficiency.
6.3	Cheques drawn on FTC’s bank must be signed by either two Councillors and countersigned by the RFO or by three Councillors.
6.4	Signatories must not include the beneficiary of the cheque.
6.5	Signatories must initial counterfoils of the cheques to establish a verifiable audit trail.
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7	Payment of Accounts
7.1	The RFO will make all payments by cheque or other order drawn on FTC’s bankers.
7.2	The RFO will verify & certify all invoices for payment after satisfying himself/herself that the work, goods or services, to which the invoice relates, have been supplied, examined & approved.
7.3	The RFO will examine invoices for arithmetic accuracy and settle those found to be in order.
7.4	The RFO will account for settled invoices in the Schedule of Payments (Regulation 5.1.i).
7.5	Payments to avoid a charge of interest under the Late Payment of Commercial Debts (Interest) Act 1998 will normally be made after the Mayor/Deputy Mayor and the RFO have certified the absence of dispute or other reason for delaying the payment. In exceptional circumstances (eg unavailability of the Mayor/Deputy Mayor before the due date for payment, the RFO may settle such invoices, provided that he/she submits a list of such payments to FTC’s next meeting.
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8	Petty Cash
8.1	The RFO will maintain as petty cash a float of £100 for the purpose of defraying operational & other ‘official’ expenses.
8.2	Officers will submit vouchers for re-imbursement of cash spent. The RFO will keep the vouchers to substantiate payments made from petty cash.
8.3	The RFO will account for petty cash payments in the Schedule of Payments (Regulation 5.1.i).
8.4	Income received on behalf of FTC must not be paid into the petty cash float.
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9	Payment of Salaries
9.1	FTC will be responsible for agreeing and reviewing employees’ salaries.
9.2	The RFO will pay the salaries, calculated on the basis of employees’ individual contracts & payroll records and in accordance with the prevailing PAYE & National Insurance rules.
9.3	The RFO will make payments for Income Tax, National Insurance & pensions contributions (deducted from salaries) to the appropriate Authorities on specified dates and account for these payments in the Schedule of Payments (Regulation 5.1.i).
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10	Payment of Expenses
10.1	Councillors & staff may reclaim legitimate expense incurred in pursuit of their official duties.
10.2	The RFO must satisfy him/herself as to the validity of the claim.
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11	Investments & Loans
11.1	Investments & loans will be negotiated in the name of the Council and will be for a fixed period in accordance with FTC’s policy.
11.2	FTC's Investment Policy is subject to the provisions of Trustee Act 2000. FTC will review the Policy annually.
11.3	Any loans will be negotiated after FTC has obtained any necessary borrowing approval and approved the terms & conditions of the loan.
11.4	The RFO will arrange safe custody of all investment certificates and related documents.
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12	Income
12.1	The RFO will be responsible for the collection of all monies due to FTC.
12.2	FTC will agree particulars of all charges made for work done, service rendered or goods supplied and notify details to the RFO.
12.3	The RFO will maintain a list of fees & charges payable to the Council. FTC will review the fees & charges annually.
12.4	The RFO will report details pf any irrecoverable monies and/or bad debts to FTC and write them off. [Accounts & Audit Regulations 1996 para 4(4)(c)]
12.5	The RFO will be responsible for depositing all cash received on behalf of the Council with FTC’s bankers and ensuring that the origin of each sum of money received is entered on the paying-in slip.
12.6	Personal cheques will not be cashed out of money held on behalf of FTC.
12.7	The RFO will submit claim(s) for repayment of VAT annually at the end of each financial year. [VAT Act 1994 Section 33]
12.8	The RFO will implement procedures, agreed by FTC, for receipt & banking of large sums of cash, including presence of more than one Councillor for the initial count, issue of ‘tickets’ for reconciliation of cash and measures for security and safety of individuals banking the cash.
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13	Orders for Work, Goods & Services
13.1	Regulation 13 does not apply to:
	i.	Work undertaken by the General Assistant with the cost not expected to exceed £250.
	ii.	Procurement of work, goods & services for which a formal contract is appropriate (Regulation 14).
13.2	The RFO will issue an Official Order (or letter) for work, goods or services that are not subject to the provisions of Regulation 13.1 and retain copies of all such Orders.
13.3	The RFO will maintain an up-to-date Order Book and be responsible for its safe custody.
13.4	The RFO will take reasonable steps to obtain the best available terms by, where practicable, obtaining at least three estimates or quotations from suppliers subject to Procurement Procedures defined in Annex A & threshold provisions in Regulation 14.4.
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14	Contracts
14.1	For the purposes of Regulation 14, a contract is an agreement for:
	The carrying out of work; or The purchase lease or hire of goods; or The supplying of a service
14.2	Regulation 14 will apply to all contracts with the exception of agreements for:
	i.	Supply of gas, electricity, water, sewerage & telephone services;
	ii.	Specialist services, eg, solicitors, accountants, planning consultants etc;
	iii.	Extension of an existing contract, with the additional cost subject to a limit of £250;
	iv.	Additional audit-related work of the External Auditor up to an estimated value of £250 [the RFO will consult the Mayor & Deputy Mayor for sums exceeding £250 before acting];
	v.	Purchase of goods/articles that are proprietary articles and/or sold at a fixed price; and
	vi.	Emergency procurement of goods or service (Regulation 4.3)
14.3	The RFO will invite estimates, quotations or tenders and award contracts to suppliers in accordance with Procurement Procedures (Annex A) & threshold provisions (Regulation 14.4).
14.4	The following thresholds will apply to procurement of goods, services & work:
	i.	Estimated value of contract is equal to or more than £25,000: The RFO will invite tenders from at least three suppliers
	ii.	Estimated value of contract is between £2,000 and £24,999: The RFO will obtain three quotations (costed details of proposed supply).
	iii.	Estimated value of contract is between £250 and £1,999: The RFO will obtain three estimates/quotations
	iv.	Estimated value of contract is less than £250: The RFO will take reasonable steps to obtain ‘best value’ by, where practicable, obtaining at least three estimates/quotations.
14.5	An application for waiver of Regulation 14.4 to enable the price of a contract to be negotiated without competition must include the reason for the request in a recommendation to FTC.
14.6	Invitations to tender will:
	i.	Specify the User Requirement (the RFO will obtain technical advice/assistance where necessary);
	ii.	Contain instructions for submission of the tender (must be sent by ordinary post and addressed to the Town Clerk);
	iii.	Contain a statement to the effect of Standing Orders 6.1.d (Declaration of Interests) and 6.2.a-c (Canvassing of & Recommendation by Councillors) and
	iv.	Include a specifically marked envelope in which the tender is to be sealed and returned
14.7	The RFO will keep the sealed envelopes till the prescribed date for opening and open them at the same time in the presence of at least one Councillor.
14.8	If FTC receives less than three tenders/quotations/estimates (Regulation 14.4) or if all ‘bids’ for a contract are identical, the Council may make such arrangements as it thinks fit for procuring the goods/services/work.
14.9	FTC will not be obliged to accept the lowest or any tender, quote or estimate.
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15	Contracts For Building Or Other Construction Works Over £25,000.00
15.1	Subject to any percentage withholding as agreed in a contract, the RFO will:
	i.	Obtain authorised certificates of the architect or other consultants engaged to supervise that contract; and
	ii.	Make payment on account of the contract within the time specified in the contract
15.2	Where contracts provide for payment by instalments, the RFO will maintain a Record of Instalments Paid.
15.3	FTC and the contractor’s clerk must agree any variation or addition to or omission from a contract in writing.
15.4	In the likelihood of the total cost of work carried out under a contract, excluding agreed variations, exceeding the value of the contract by 5% or more or exceeding the financial provision for the contract, the RFO will submit a report to FTC.
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16	Stores & Equipment
16.1	FTC’s employees will be responsible for the care & custody of the Council’s stores & equipment in their charge.
16.2	All goods received must be checked for being ‘as ordered’ & serviceable at the time of delivery and must be accompanied by a Delivery Note.
16.3	Stocks must be kept at the minimum levels consistent with operational requirements.
16.4	The RFO will conduct checks of stocks & stores at least annually and report any discrepancies to FTC at the earliest opportunity.
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17	Properties & Estates
17.1	The RFO will maintain a Record of Properties [Accounts & Audit Regulations 1996 para 4(3)(b)] owned or administered by FTC. The Record must include:
	i.	Title/Deed’s reference number;
	ii.	Location address & plan;
	iii.	Details of purchase/lease;
	iv.	Nature & extent of interest;
	v.	Purpose for which held;
	vi.	Tenancies granted; and
	vii.	Rents payable.
17.2	The RFO will make appropriate arrangements for safe custody of all Title Deeds of properties owned by FTC.
17.3	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.
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18	Risk Management & Insurance
18.1	The RFO, together with Councillors, will promote FTC’s Risk Management Policy.
18.2	The RFO will ensure that risk management controls are in place and, together with Councillors, monitor activities to ensure effectiveness of risk management processes.
18.3	The RFO will produce a Risk Assessment & Management Statement (including any legal & financial liabilities) in respect of FTC’s proposal(s) for undertaking of each new activity and submit it for FTC’s consideration.
18.4	FTC will conduct an Annual Risk Assessment of its current activities.
18.5	Following the Assessment, the RFO will review/affect all insurances on FTC’s behalf.
18.6	The RFO will keep a record of all insurances affected by FTC and the property & risks covered by each insurance policy.
18.7	The RFO will negotiate a suitable ‘fidelity guarantee insurance’ in respect of employees to ensure that the Council is covered for exposure to risk as determined by the Council.
18.8	On receiving notification (from Councillors or members of the public) of risks pertaining to properties or vehicles that need to be insured, the RFO will take steps to affect any necessary alterations to existing insurances.
18.9	On receiving notification (from Councillors or members of the public) of liability on account of loss or damage, or any event likely to lead to a claim, the RFO will report the details to FTC’s meeting following receipt of information.
18.10	The RFO will negotiate claims, when they arise, on the Council’s insurers.
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19	Charities
19.1	Where FTC is the sole Trustee of a Registered Charity, the RFO will:
	i.	Prepare & maintain accounts of the funds held on behalf of the Charitable Trust(s);
	ii.	Produce Financial Information Reports in accordance with charity law or as determined by the Charity Commission; and
	iii.	Arrange for audit or independent examination of Trust Accounts as required by charity law.
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20	Monitoring & Review of Financial Regulations
20.1	The RFO is responsible for continual monitoring of the effectiveness of FTC’s Financial Regulations and submitting any changes necessary for their improvement to FTC for approval.
20.2	The RFO will report, where appropriate, breaches of these Regulations to FTC.
20.3	FTC will formally review the Financial Regulations every two years to ensure compliance with statutory requirement.
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Annex : Procurement Procedures
Procurement procedures for public service contract differ according to the nature and value of the proposed contract, and are subject to EU & UK law and FTC’s Financial Regulations.
1	Advertising in the EU Journal: Where a contract has a value above EU thresholds, procurement must be by advertising in the European Journal. The following thresholds for aggregated contract values over the life of a contract came into effect on 1 January 2006:
	Services and Supplies: £144,459 Works: £3,611,474
2	Open Competitive Tendering will be used for contracts where FTC considers the process to be cost effective & in the Council’s interest.
	Advertising will be through FTC’s website, local press and specialist journals Details will be sent to interested suppliers within 6 days of enquiry
3	Selection List: The RFO may compile a list of suppliers who are able to satisfy him/her that they can supply goods, services or works to FTC’s specification. FTC will use the List for selection of:
	A supplier to whom the contract will be awarded; or Suppliers who will be invited to submit quotations
4	Restricted Procurement: When no Selection List available, FTC will:
	Advertise on its website, local press & specialist journals; and Short-list at least three suppliers against pre-defined criteria; and Invite quotations from short-listed suppliers
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Frodsham Town Council

Financial Regulations

1

Introduction

2

Responsible Financial Officer (RFO)

3

Budgetary Planning

4

Budgetary Control

5

Accounting & Audit

6

Banking Arrangements & Handling of Cheques

7

Payment of Accounts

8

Petty Cash

9

Payment of Salaries

10

Payment of Expenses

11

Investments & Loans

12

Income

13

Orders for Work, Goods & Services

14

Contracts

15

Contracts For Building Or Other Construction Works Over £25,000.00

16

Stores & Equipment

17

Properties & Estates

18

Risk Management & Insurance

19

Charities

20

Monitoring & Review of Financial Regulations

Annex : Procurement Procedures