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1. GENERAL
i)These financial regulations govern the conduct of the financial
transactions of Litcham Parish Council and may only be amended
by a resolution of the Council.
ii) The Responsible Financial Officer (RFO), under the direction
of the Council, shall be responsible for the proper administration
of the Council's affairs.
iii) The RFO shall be responsible for the production of financial
management information.
2. FINANCIAL PLANNING
i) Each Committee (if any) shall formulate and submit proposals
to the Council in respect of revenue and capital costs for the
following financial year not later than the end of November each
year.
ii) Detailed estimates of all receipts and payments for the year
shall be prepared each year by the RFO and presented to the Council
no later than the end of September.
iii) The Council shall review estimates of expenditure and set
a budget for the ensuing financial year not later than the end
of November each year and shall at this time fix the Precept to
be levied.
iv) The annual budget shall form the basis of financial control
for the ensuing year The RFO shall supply each member with a copy
of the approved budget..
v) The Council shall prepare and have regard to a five year forecast
of Receipts and Payments which shall be prepared at the same time
as the annual budget.
3. BUDGETARY CONTROL
i) Expenditure on revenue items may be incurred up to the
amounts included in the approved budget.
ii) No expenditure may be incurred that will exceed the amount
provided in the revenue budget unless authorised by a resolution
of the Council.
iii) The RFO shall regularly provide the Council with a statement
of receipts and payments to date under each head of the budgets,
comparing actual expenditure against that planned.
iv) The Clerk or RFO may incur expenditure on behalf of the Council
which is necessary to carry out any repair, replacement or other
work which should be done at once, whether or not there is any
budgetary provision for the expenditure, subject to a limit of
£250. This action must be reported immediately to all members
of the Council.
v) Unspent provisions in the revenue budget shall not be carried
forward to a subsequent year.
vi) No expenditure shall be incurred 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, or the requisite borrowing approval has been
obtained.
vii) All capital works shall be administered in accordance with
the Council's standing orders and financial regulations relating
to contracts.
4. ACCOUNTING AND AUDIT
i) All accounting procedures and financial records of the
Council shall be determined by the RFO as required by the Accounts
and Audit Regulations 1996 as amended.
ii) The RFO shall be responsible for completing the annual financial
statements of the Council and shall submit these to the Council
at the Annual General Meeting (AGM) of the Council .
iii) The RFO shall be responsible for completing the Accounts
of the Council contained in the Annual Return (as supplied by
the External Auditor appointed from time to time by the Audit
Commission) and for submitting the Annual Return for approval
and authorisation by the Council within the timescales set by
the Accounts and Audit Regulations 1996 as amended or set by the
Auditor.
iv) The RFO shall be responsible for ensuring that there is an
adequate and effective system of internal audit of the Council's
accounting, financial and other operations in accordance with
Regulation 5 of the Accounts and Audit Regulations 1996 as amended.
Any officer or member of the Council shall, if the RFO or Internal
Auditor requires, make available such documents of the Council
which appear to the RFO or Internal Auditor to be necessary for
the purpose of the internal audit and shall supply the RFO or
Internal Auditor with such information and explanation as the
RFO or Internal Auditor considers necessary for that purpose.
v) The Internal Auditor shall carry out the work required by the
RFO, or by the Council, with a view to satisfactory completion
of the Internal Auditor's Report section of the Annual Return
as compiled annually by the Audit Commission. The Internal Auditor,
who shall be competent and independent of the operations of the
Council, shall report to Council in writing on a regular basis
with a minimum of one annual report in respect of each financial
year.
vi) The RFO shall make available for inspection accounts, books,
and vouchers as required by Audit Commission Act 1998 section
15 and the Accounts and Audit Regulations 1996 as amended.
vii) The RFO shall, as soon as practicable, bring to the attention
of all councillors any correspondence or report from the Internal
or External Auditor, unless the correspondence is of a purely
administrative matter.
5. BANKING ARRANGEMENTS AND CHEQUES
i) The Council's banking arrangements shall be made by the
RFO and approved by the Council. They shall be regularly reviewed
for efficiency.
ii) A schedule of the payments required, forming part of the Agenda
for the Meeting, shall be prepared by the RFO and, together with
the relevant invoices, be presented to 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. If more
appropriate the detail may be shown in the Minutes of the Meeting.
iii) Cheques drawn on the bank account in accordance with the
schedule referred to in paragraph 5.i) or in accordance with paragraph
6.iv), shall be signed by any two designated members of Council.
iv) To indicate agreement of the details shown on the cheque or
order for payment with the counterfoil and the invoice or similar
documentation, the chairman of the meeting shall initial the cheque
counterfoil.
v) The Council will not maintain any form of cash float.
vi) All cash received must be banked intact.
6. PAYMENT OF ACCOUNTS
i) With the exception of paragraph iv) all accounts for payment
and claims upon the Council shall be laid before the Council for
approval.
ii) All invoices for payment shall be examined, verified and certified
by the RFO. The RFO shall satisfy himself that the work, goods
or services to which the invoice relates shall have been received,
carried out, examined and approved.
iii) The RFO shall examine invoices in relation to arithmetic
accuracy and shall analyse them to the appropriate expenditure
heading. The RFO shall take all steps to settle all invoices submitted,
and which are in order, at the next available Council Meeting.
iv) If a payment is necessary to avoid a charge to interest [under
the Late Payment of Commercial Debts (Interest) Act 1998], and
the due date for payment is before the next scheduled Meeting
of Council, where the RFO certifies that there is no dispute or
other reason to delay payment, the RFO may (notwithstanding para
6.iii) take all steps necessary to settle such invoices provided
that a list of such payments be submitted at the next meeting
of Council.
v) Any payments or purchases made by the Clerk/RFO in pursuance
of his duties (for example for postage or stationery items) shall
be refunded on the production of a detailed list of such expenditures
supported by receipts or other proofs of purchase and properly
presented to the council.
7. PAYMENT OF SALARIES
i) The payment of all salaries shall be made in accordance
with the rules of PAYE and National Insurance currently operating,
and salaries shall be as agreed by Council.
ii) The Clerk shall be responsible for reporting all salaries
paid by the Council to the appropriate office of the Inland Revenue.
8. LOANS AND INVESTMENTS
i) 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.
ii) The Council's Investment Policy, shall be in accordance with
the Trustee Act 2000, and shall be reviewed on a regular basis
(at least annually).
iii) All investments of money under the control of the Council
shall be in the name of the Council.
iv) 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 Council as to terms
and purpose.
v) All investment certificates and other documents relating thereto
shall be retained in the custody of the RFO.
9. INCOME
i) The collection of all sums due to the Council shall be
the responsibility of the RFO.
ii) Particulars of all charges to be made for work done, services
rendered or goods supplied shall be agreed annually by the Council,
notified to the RFO and the RFO shall be responsible for the collection
of all accounts due to the Council.
iii) The Council will review all fees and charges annually, following
a report of the RFO.
iv) Any sums found to be irrecoverable and any bad debts shall
be reported to the Council and shall be written off in the year.
v) All sums received on behalf of the Council shall be banked
intact by the RFO as soon as is practicable.
vi) The origin of each receipt shall be entered on the paying-in
slip.
vii) Personal cheques shall not be cashed out of money held on
behalf of the Council.
viii) 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.
ix) 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
i) 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.
ii) Order books shall be controlled by the RFO.
iii) All members and Officers are responsible for obtaining value
for money at all times. An officer issuing an official order is
to ensure as far as reasonable and practicable that the best available
terms are obtained in respect of each transaction, subject to
any de minimis provisions in Regulation 11 below.
iv) The RFO shall verify the lawful nature of any proposed purchase
before the issue of any order, and in the case of new or infrequent
purchases or payments, the RFO shall ensure that the statutory
authority shall be reported to the meeting at which the order
is approved so that the Minutes can record the power being used.
11. CONTRACTS
i) Procedures as to contracts are laid down as follows:
Every contract shall comply with these financial regulations,
and no exceptions shall be made otherwise than in an emergency
provided that these regulations shall not apply to contracts which
relate to items (a) to (f) below: -
a) for the supply of gas, electricity, water, sewerage and telephone
services;
b) for specialist services such as are provided by solicitors,
accountants, surveyors and planning consultants;
c) for 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;
d) for work to be executed or goods or materials to be supplied
which constitute an extension of an existing contract by the Council;
e) for additional audit work of the external Auditor up to an
estimated value of £250 (in excess of this sum the Clerk
and RFO shall act after consultation with the Chairman and Vice
Chairman of Council);
f) for goods or materials proposed to be purchased which are proprietary
articles and/or are only sold at a fixed price.
ii) Where it is intended to enter into a contract exceeding £10,000
(ten thousand) in value for the supply of goods or materials or
for the execution of works or specialist services other than such
goods, materials, works or specialist services as are excepted
as set out in paragraph 11.i) the Clerk shall invite tenders from
at least three firms previously approved by the Council.
iii) When applications are made to waive financial regulations
relating to contracts to enable a price to be negotiated without
competition the reason shall be embodied in a recommendation to
the Council.
iv) 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 in addition state 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.
v) 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 Council.
vi) If less than three tenders are received for contracts above
£10,000 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.
vii) Any invitation to tender issued under this regulation shall
contain a statement to the effect of paragraphs 11.iv) 11.v) and
11.vi)
viii) When it is to enter into a contract less than £10,000
in value for the supply of goods or materials or for the execution
of other than those excepted in paragraph (a) the Clerk or RFO
shall obtain 3 quotations (priced descriptions of the proposed
supply); where the value is below £1,000 and above £250
the Clerk or RFO shall strive to obtain 3 estimates. Otherwise,
Regulation 10.iii) above shall apply.
ix) The Council shall not be obliged to accept the lowest tender,
quote or estimate.
12. PAYMENTS UNDER CONTRACTS FOR BUILDING OR OTHER CONSTRUCTION
WORKS
i) Payments on account of the contract sum shall be made within
the time specified in the contract by the RFO upon authorised
certificates of the architect or other consultants engaged to
supervise the contract (subject to any percentage withholding
as may be agreed in the particular contract).
ii) Where contracts provide for payment by instalments the RFO
shall maintain a record of all such payments. In any case where
it is estimated that the total cost of work carried out under
a contract, excluding agreed variations, will exceed the contract
sum of 5% or more a report shall be submitted to the Council.
iii) Any variation to a contract or addition to or omission from
a contract must be approved by the Council and Clerk to the Contractor
in writing, the Council being informed where the final cost is
likely to exceed the financial provision.
13. STORES AND EQUIPMENT
i) The Clerk or RFO shall be responsible for the care and
custody of stores and equipment held by the council.
ii) Delivery Notes shall be obtained in respect of all goods received
into store or otherwise delivered and goods must be checked as
to order and quality at the time delivery is made.
iii) Stocks shall be kept at the minimum levels consistent with
operational requirements.
iv) The RFO shall be responsible for periodic checks of stocks
and stores at least annually.
14. PROPERTIES AND ESTATES
i) 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 Regulation
4(3)(b) of the Accounts and Audit Regulations 1996 as amended.
ii) 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.
15. INSURANCE
i) Following an annual risk assessment, the RFO shall effect
all insurances and negotiate all claims on the Council's insurers.
ii) The Clerk shall give prompt notification to the council of
all new risks, which require to be insured and of any alterations
affecting existing insurances.
iii) The RFO shall keep a record of all insurances effected by
the Council and the property and risks covered thereby and annually
review it.
iv) The RFO shall notify the council 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.
v) All appropriate employees of the Council shall be included
in a suitable fidelity guarantee insurance which shall cover the
maximum risk exposure as determined by the Council.
16. CHARITIES
i) Where the Council is sole trustee of a Charitable body
the RFO shall ensure that separate accounts are kept of the funds
held on charitable trusts 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 RFO shall arrange for any Audit or Independent Examination
as may be required by Charity Law or any Governing Document.
17. RISK MANAGEMENT
i) The RFO shall prepare and promote risk management policy
statements in respect of all activities of the Council.
ii) When considering any new activity the RFO shall prepare a
draft Risk Management policy for the activity and shall bring
a draft addressing the legal and financial liabilities and Risk
Management issues that arise to Council for consideration.
18. REVISION OF FINANCIAL REGULATIONS
i) It shall be the duty of the Council to review the Financial
Regulations of the Council from time to time.
Adopted by Resolution of LITCHAM PARISH
COUNCIL on 20 February 2006
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