EAST AYRSHIRE COUNCIL COUNCIL 28 MARCH 2013 UPDATE TO FINANCIAL REGULATIONS. Report by Executive Director of Finance and Corporate Support

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1 EAST AYRSHIRE COUNCIL COUNCIL 28 MARCH 2013 UPDATE TO FINANCIAL REGULATIONS Report by Executive Director of Finance and Corporate Support 1 PURPOSE OF REPORT 1.1 To present an update to the Council s Financial Regulations for approval. 2 BACKGROUND INFORMATION 2.1 The Local Code of Corporate Governance requires that Financial Regulations are kept under review and updated regularly. Approval of the Financial Regulations falls to the Council. 2.2 Under the Scheme of Delegation, the Executive Director of Finance and Corporate Support has authority to prepare, maintain and enforce the Council s financial regulations. 2.3 A number of structural changes have taken place recently with a consequence of this being a number of references to incorrect job titles within the financial regulations. 2.4 Further consideration has been given to the environment in which we now operate. A number of key systems and processes, including procurement, are now carried out electronically and there is a need to ensure the financial regulations reflect this. 2.5 Accounting Policy Bulletins (APB s) provide detailed guidance on the applications of the regulations. They carry the same status and authority as if they were part of the financial regulations and are approved and issued by the Head of Finance. A rolling programme of APB reviews is in place to ensure these remain current and appropriate. 3 UPDATES TO FINANCIAL REGULATIONS 3.1 The updated financial regulations are attached as appendix 1 to this report. Changes to the current regulations are highlighted by means of italicised text, and are summarised in the table below.

2 General (ii) The most frequent change in the Financial Regulations is the reference to Executive Head of Finance and Asset Management which has now been replaced by Executive Director of Finance and Corporate Support. Inclusion of a section introducing the responsibilities of Chief Officers. Confirmation of the status and authority of Accounting Policy Bulletins (APB s). Updated to reflect the reporting arrangements of East Ayrshire Performs. New section outlining the need for Executive Directors to ensure an appropriate control system is in place for authorising transactions. Capital Estimates have been redefined as the Capital Programme. Reference is now made to the Head of Finance as being the Chief Officer responsible for setting timetables and preparing revenue estimates (was previously Executive Head of Finance and Definition of virement (per CIPFA) provided (iv) 10.3 Confirmation that virement requires approval per the scheme of delegation. Clarity provided around the difference between realignment and virement. Reference is now made to the Head of Finance as being the Chief Officer responsible for control of income (was previously Executive Head of Finance and Inclusion of the key clauses from the CIPFA Code of Practice on Treasury Management (2011). Reference to the Head of Finance in relation to registers of borrowing and approval of leases (was previously Executive Head of Finance and Reference to the Head of Finance in relation to banking arrangements (was previously Executive Head of Finance and Reference to the Head of Finance in relation to investments and charitable funds (was previously Executive Head of Finance and

3 (iv) Reference to the Head of Finance in relation to stores and inventories (was previously Executive Head of Finance and Asset Major update to reflect a number of changes to the procurement environment including the use of e-procurement and the need to eliminate off-contract spend. Inclusion of the National Centres of Expertise and Scotland Excel as replacements for the previously mentioned Authorities Buying Consortium. Reference to the Head of Finance in relation to instructions on methods of payment (was previously Executive Head of Finance and Updated to reflect differing payment processes for e-procurement related invoices. Increased emphasis on the need to pay within 30 days, and how services are expected to contribute to this timescale. Reference to the Head of Finance in relation to authorised signatories and supplementary checks on payments (was previously Executive Head of Finance and Reference to the Head of Finance in relation to year end accounting and returns (was previously Executive Head of Finance and Additional section recognising the Members Portal as an outlet for Internal Audit reports. Reference to the Head of Finance added as a consultee to the annual audit plan. Updated to reflect regular reporting of progress against the audit report rather than annually. Reference to the Head of Finance in relation to operating a petty cash imprest (was previously Executive Head of Finance and Reinforcement of the imprest holder s responsibility not to overdraw. Inclusion of a section requiring all payments from imprest accounts to be supported by a VAT receipt if appropriate. New section detailing the use of prepaid purchase cards as an alternative to petty cash imprests. Reference to the Head of Human Resources in relation to payroll expenses and allowances (was previously Executive Head of Finance and

4 Reference to the Head of Democratic Services in relation to Members regulations relative to expenses and allowances (was previously Executive Head of Finance and Asset Management and Executive Director of Corporate Support). Reference to the Head of Human Resources in relation to salaries, wages and pensions (was previously Executive Head of Finance and Reference to the Head of Corporate Infrastructure in relation to security arrangements (was previously Executive Head of Finance and New section highlighting the importance of key holding and associated security requirements. Reference to the Head of Finance in relation to cash holding limits (was previously Executive Head of Finance and Asset Reference to the Head of Finance and the Police in relation to lost safe keys (was previously Executive Head of Finance and More detail provided around the particular area of cash carrying and personal safety. Reference to the Head of Finance in relation to cheque and controlled documentation security (was previously Executive Head of Finance and New section detailing security requirements associated with credit cards and prepaid purchase cards. Reference to the Head of Finance in relation to retention of documents (was previously Executive Head of Finance and Reference to the Head of Democratic Services in relation to DPA (was previously Head of IT). Executive Director of Neighbourhood Services replaced with Head of Housing of Environment Services for the housing property asset register. Executive Director of Corporate Support replaced with Head of Corporate Infrastructure for the IT asset register. Executive Head of Finance and Asset Management replaced with Head of Corporate Infrastructure for the land and non-housing property asset register. Reference to the Head of Finance in relation to risk and insurance (was previously Executive Head of Finance and Asset Reference to support function of Principal Risk and Insurance Advisor. Requirement to record risk on departmental risk registers and review these appropriately.

5 (vii) 28(viii) Reference to the Head of Finance in relation to insurance claims and cover (was previously Executive Head of Finance and Asset Opportunity to extend insurance contract beyond five years where advantageous to the Council. Additional information on contractual and legal liabilities associated with partnership working. 4 FINANCIAL/LEGAL/HUMAN RESOURCES IMPLICATIONS 4.1 The Financial regulations provide the framework for managing the Council's financial affairs. They are intended as an aid to good financial management and outline the necessary procedures to secure the proper administration of financial affairs. 4.2 They are prepared by the Council s Statutory Proper Officer, are approved by the Council and require to be observed by all Elected Members and employees. 5 RISK IMPLICATIONS 5.1 Relevant and appropriate financial regulations are a key element in ensuring a sufficiently robust system of financial controls is in place and that high standards of financial probity and accountability for public funds can be delivered. 6 RECOMMENDATIONS 6.1 It is recommended that the Council i) Approves the amended financial regulations as detailed in Appendix 1; and ii) Otherwise notes the content of the report. Alex McPhee Executive Director of Finance and Corporate Support 6 March 2013 LIST OF BACKGROUND PAPERS Nil Any person wishing further information should contact Craig McArthur, Head of Finance (Telephone ).