Constitution - Part 5G - Financial standing orders - Overview



1.1 To conduct its business efficiently the County Council needs to ensure that it has sound financial management.  Part of this process is the establishment of financial regulations which set out the County Council's financial rules.  Good financial management secures value for money, controls spending, ensures due probity of transactions and achieves objectives on time, and decisions are informed by accurate accounting information.

1.2 As part of the County Council's governance arrangements, there is a statutory requirement to appoint an officer to be responsible for its financial affairs. For the County Council, the Assistant Director - Finance (S151 Officer) has been appointed to undertake their role. 

1.3 In approving the financial regulations, the County Council has sought to provide a strong corporate framework for conducting the financial affairs of the County Council, incorporating appropriate controls and providing those responsible for delivering services with financial responsibility. The financial regulations provide clarity about the financial accountabilities of officers and members including those managing resources where the County Council is acting as Trustee, accountable body or where services are provided by a third party on behalf of the County Council.

1.4 All members and officers have a responsibility for taking reasonable action to provide for the security and use of the resources and assets under their responsibility and control, and for ensuring that the use of such resources and assets is legal, is consistent with the County Council's policies, is properly authorised, provides value for money and achieves best value.

1.5 Failure to comply with the financial regulations may result in disciplinary action. 

1.6 The financial regulations are subject to the provisions of Part 5E of this Constitution, which allows urgent decisions to be taken which are outside the Budget and Policy Framework.

1.7 The financial regulations do not apply to schools.

1.8 The 'Cumbria LA scheme for the financing of schools' (PDF 929kb) (including the detailed schools financial regulations) provide the requirements for schools, relating to those matters where decisions have been delegated to school governing bodies.

2.1 The following financial regulations provide the framework for managing the County Council's financial affairs. They apply to every member and officer of the County Council and anyone contracted to act on its behalf.

2.2 The financial regulations identify financial responsibilities of individuals - Members, Assistant Director - Finance (S151 Officer) and Directors. Directors should maintain a written record (scheme of delegation) for their area of responsibility clearly stating where decision making has been delegated to them or their staff, including seconded staff.

2.3 Where such decisions are delegated, the Officer to whom the decision has been delegated will provide sufficient information to the Director on request, in order to give assurance that tasks or decisions have been performed in accordance with financial regulations. Where decisions have been delegated or devolved to other responsible officers, references to the Director in the regulations should be read as referring to them.

2.4 The Section 151 Officer is responsible for maintaining a continuous review of the financial regulations and submitting any proposed amendments to the Audit and Assurance Committee before their adoption by Council. The Section 151 Officer is also responsible for reporting, where appropriate, breaches of the rules to Council and/or to Cabinet. The Section 151 Officer is also authorised to temporarily suspend financial regulations in exceptional circumstances.

2.5 The Section 151 Officer is responsible for issuing advice and guidance to underpin the financial regulations that members, officers and others acting on behalf of the County Council are required to follow.

2.6 Any person charged with the use or care of the County Council's resources and assets should inform themselves of the County Council's requirements under the following financial regulations, with any queries being referred to the Section 151 Officer.

2.7 Directors should ensure that any financial procedures/guidelines produced by their departments are fully compliant with the financial regulations and the agreement of the Section 151 Officer or her delegated representatives should be obtained where such financial procedures are developed.

2.8 Any proposals for changes or amendments to the financial regulations will be forwarded to the Section 151 Officer for consideration.

2.9 All employees will report to their manager, supervisor or other responsible senior officer, any illegality, impropriety, breach of procedure or serious deficiency discovered in the following of financial regulations. Managers and members will notify immediately and confidentially the Section 151 Officer, or if not appropriate the Head of Paid Service (the Chief Executive) or the Monitoring Officer (the Assistant Director - Corporate Governance), where it appears that a breach has occurred.

3.1 The Section 151 Officer will be the first contact within the County Council for the External Auditor who has rights of access to all documents and information necessary for audit purposes.

3.2 The County Council may, from time to time, be subject to audit, inspection or investigation of its financial systems by other external bodies such as OFSTED, and HM Revenue and Customs who have statutory rights of access to financial records. The Section 151 Officer will be the principal contact within the County Council on such financial matters.

4.1 The Section 151 Officer is the Officer responsible for the proper administration of the County Council's financial affairs under Section 151 of the Local Government Act 1972, and Sections 112-114 of the Local Government Finance Act 1988.

4.2 The Section 151 Officer has a duty under Section 114(2) of the Local Government Act 1988 to make a report if it appears that Council, Cabinet, or any Committee is about to or has already carried out either:

(a)  A decision which involves or would involve the County Council in incurring expenditure which is unlawful; or

(b)  A course of action which if pursued would be unlawful and likely to cause a loss or deficiency to the County Council.

4.3 The Section 151 Officer has a duty under Section 114(3) of the Local Government Finance Act 1988 to make a report (in consultation with the Head of Paid Service and the Monitoring Officer) to every Member where it appears that the expenditure incurred or likely to be incurred in a financial year exceeds resources available to meet the expenditure. It is the duty of Directors to notify the Section 151 Officer of any situations that might be considered:

(a)  Unlawful; and/or

(b)  Might exceed available resources in light of the above responsibilities.

In discharging this responsibility, the Section 151 Officer will ensure that arrangements for financial and accounting matters and the security of financial assets are efficient and effective.

4.4 The Section 151 Officer can require Directors to provide any timely and relevant information that enable them to carry out their functions and to give proper advice.

4.5 All financial systems, procedures, records and controls and changes to them will be agreed in advance with the Section 151 Officer, who may issue formal instructions or guidance from time to time.

4.6 Section 25 of the Local Government Act 2003 places a duty on the Section 151 Officer to report to Council about:

(a) Whether the proposed reserves will be enough for the Council's purposes; and

(b)  How robust the budget is.

5.1 The Section 151 Officer will advise Council, Cabinet or any other relevant Committee on any matter containing financial implications. Such advice may be included in the reports of other officers.

5.2 Directors will ensure that the Section 151 Officer has the opportunity to comment on all proposals containing financial implications at the earliest practical stage before the dispatch of a report.

5.3 Members and officers carrying out functions under delegated powers will ensure that they seek and receive such financial and legal advice as may be necessary on the consequences of a course of action before taking a decision on such action.

5.4 The Section 151 Officer is responsible for advising Directors where relevant on the financial implications of guidance and relevant legislation issued by appropriate bodies as it applies.

5.5 The Section 151 Officer is responsible for advising Directors on relevant taxation issues (including other funds such as the Pension Fund) and liaising, negotiating and where necessary taking appropriate action to promote and protect the County Council's financial position.

5.6 The Section 151 Officer will be entitled to attend and report on financial matters directly to Council, Cabinet, and any committees or working groups the Council may establish and to the Corporate Management Team.

5.7 The Section 151 Officer is responsible for monitoring standards and giving advice on financial management and administration throughout the County Council.  They are responsible for guiding the training and professional development of all staff employed in posts designated as requiring a qualified accountant, accounting technician, or auditor, wherever located and will be responsible for the appointment of such staff and will be consulted on any proposal to create or delete a post requiring such a qualification for appointment. 

6.1 The Section 151 Officer will determine the format and maintain the County Council's principal accounting records and will be the County Council's adviser on all accounting and financial matters. Directors are responsible for making sure that financial records are maintained in a manner determined in advance by the Section 151 Officer.

6.2 The Section 151 Officer will ensure that the County Council's accounting records are kept in accordance with appropriate accounting standards and mandatory guidance and that the statement of accounts is prepared in line with the Code of Practice on Local Authority Accounting in the United Kingdom.

6.3 The Section 151 Officer will ensure that the County Council's statement of accounts is prepared and made available in accordance with the statutory timetable.

(a)  The Section 151 Officer will issue procedures and a timetable for the closure of the accounts in accordance with good accounting practice.

(b)  Directors are responsible for making sure that the timetable referred to in (a) above is complied with.

(c)  The Audit and Assurance Committee (Part 2E of this Constitution) is responsible for approving the statement of accounts by the statutory date following the end of the financial year on 31st March.

7.1 The Section 151 Officer will make arrangements for completing the County Council's tax returns and other statutory financial returns and providing relevant information to external bodies on the financial activities of the County Council as a whole.
8.1 The Accounts and Audit (England) Regulations 2011 specifically requires that a '‚Ķrelevant body must undertake an adequate and effective internal audit of its accounting records and of its system of internal control in accordance with proper practices in relation to internal control'. The Section 151 Officer will commission on behalf of the Council a suitable internal audit of its accounting records and of its system of internal control in accordance with the proper practices in relation to internal control.

9.1 Directors are each accountable to the County Council for the financial management and administration of those services and activities allocated to them in accordance with County Council policy, including effective ongoing budgetary control, with appropriate support and advice from the Section 151 Officer. 

9.2 Directors are responsible for ensuring that Cabinet are advised of the financial implications of all proposals and that the financial implications have been agreed by the Section 151 Officer.

9.3 Directors are responsible for ensuring and monitoring compliance with financial regulations by their staff and for reporting to the Section 151 Officer any known or suspected breaches of the financial regulations.

9.4 Directors are responsible for ensuring that all staff in their departments are aware of and understand the existence and content of the financial regulations and other internal regulatory documents and related guidelines and procedures and that they comply with them.

10.1 The following should be read in conjunction with Part 3 'Scheme of Delegations to Officers' of this Constitution.

10.2 Directors will maintain a written record where decision making has been delegated to members of their staff, including seconded staff, in the form of a scheme of delegation. The scheme of delegation will include authorised limits in respect of payments, income collection, placing orders, payroll and staffing changes.

10.3 The record will clearly specify the extent of, and limits of the powers delegated to each individual and the circumstances in which matters must still be referred to higher management for decision. As a minimum it will contain a register of posts, names, specimen signatures and the extent of the responsibility involved.  This record will include delegations related to electronic authorisation.  The scheme of delegation will be reviewed by each Director at least annually.

10.4 The Director will communicate such authorisation in writing to the individuals concerned.

10.5 The content of such register, and selected extracts from it, will be provided to the Section 151 Officer as and when requested. It is the duty of Directors to promptly notify any changes to the scheme of delegation to the Section 151 Officer.