The Council’s Audit Manager presented a paper with proposed changes to the financial instructions.
That the following changes be recommended to Council for approval:
Changes are proposed as follows in underlined italic text:
Virement forms will be required in the following circumstances to cover virements between expenditure heads within the capital programme, and to cover further use of capital receipts and external funding, grants and contributions:
(v) Where the sum involved is up to £20,000, the appropriate responsible budget holder may approve the virement in consultation with the appropriate accountant. No form is required;
(vi) Between £20,001 and £50,000, the appropriate Business Lead or their nominated deputy shall complete and sign a virement form in consultation with the appropriate accountant; which is to be authorised by the Chief Finance Officer or nominated deputy; the Portfolio Holder is to be consulted.
Where the sum involved is between £50,001 and
£250,000 £125,000 (and is not a Key
Decision), the appropriate Business Lead and the Chief Finance
Officer or their nominated deputies shall sign a virement form in consultation with the appropriate
accountant. This must then be authorised by two Business Leads and
agreed by the Portfolio Holder as a Portfolio Holder
decision. submitted to the Executive for approval,
or as a Portfolio Holder decision for non
key decisions (£125,000 or less) and satisfying the
other non key decision
(viii) Where the sum involved is between £125,001 and £250,000, two Business Leads and the Chief Finance Officer or their nominated deputies shall sign a virement form in consultation with the appropriate accountant. This must then be submitted to the Executive for approval.
Where the amount exceeds £250,000 per individual virement
the appropriateallBusiness Leads, and the
Chief Finance Officer, and all Business Leads shall sign a
virement form in consultation with the
appropriate accountantand submit it to full Council for
General Fund (Revenue) Budgets
Currently revenue virement limits are as follows:
· up to £20,000 can be approved by officers,
· from £20,001 to £40,000 by Business Manager and Chief Finance Officer
· from £40,001 to £100,000 by the above and approved by Executive or as a Portfolio Holder Decision
· Greater than £100,000 by full Council
It is proposed to increase the £40,000 threshold to £50,000.
6.1.16Any such virements must not commit the Council to expenditure over more than the one financial year (revenue), and relate only to the intended project (capital).
6.1.17In addition, the Chief Finance Officer or nominated deputy shall have the discretion whether or not to report any virement to the Executive Committee.
6.1.18 Responsible Officers are responsible for initiating the virement procedure if an overspend is likely to occur within the departmental budget. A virement request form is to be completed where approval is required.
6.1.19 Where any revenue or capital projects have initially
already been submitted to, and agreed by, the Capital
Review Group, Corporate Leadership team,
Committee, and Council (if applicable), a
retrospective virement request form
will not be required if the funding arrangements have already been
agreed by the Chief Finance Officer. in conjunction with the Finance
6.1.20Fully funded schemes (e.g. Section 106 or external funding), up to £125,000, which are in accordance with an existing agreement or approved strategy, can be initiated by the Chief Finance Officer in consultation with the appropriate Business Lead, and reported in the members’ newsletter for information.
Capital: This revision does not change the overall financial limits, but aims to give clarity of process and align them to the Key Decision financial value of £125,000 up to which a decision can be dealt with by Portfolio Holder procedure, as opposed to full Council.
Revenue: This is a minor change to bring the lower level revenue virement limit in line with the Key Decision threshold of £50,000, and to align it with the capital limit at that level, to avoid confusion. It also helps reflect inflationary increases and spending power. It is only on virement between budgets so doesn’t alter any use of reserves which stays at above £30k for Executive approval.
Sections 6.7 and 6.8: Asset Management and Disposal
Section 6 of the Financial Instructions deals with Asset Management including the acquisition and disposal of land and buildings.
The acquisition of any land and buildings requires the approval of
the Executive and shall be made within the context of the
Council’s Asset Management Plan
and Community Asset
Transfer Policy, subject to the
provisions of the Council’s Constitution with regard to key
decisions and 6.7.2 below.
6.7.2 Minor acquisitions up to £50,000 in value may be approved by the Business Manager – Economy and Assets, in consultation with the Portfolio Holder, the Head of Paid Service, the Business Lead, and Chief Finance Officer. The Business Manager – Economy and Assets and Chief Finance Officer will sign the Decision Notice for the acquisition to evidence their agreement.
6.7.3 All purchases or the leasing of land, buildings, vehicles or items of plant or equipment shall be within the budget provision and the Chief Finance Officer must be consulted on the method of financing.
6.7.4 All purchases or the leasing of land, buildings, vehicles or items of plant and equipment shall be on the best financial terms that can be obtained for the Council. The purchasing or leasing arrangements in respect of vehicles or items of plant and equipment are to be in accordance with the purchasing arrangements laid down elsewhere in these Instructions and the Contract Procedure Rules.
Disposal of Land and Buildings
6.8.1 The decision to agree to the disposal of assets with a value up to £10,000 may be made by the Business Manager – Economy and Assets.
For those with a value above
£10,000 and up to
£50,000 the Business Manager – Economy and
Assets must consult with the Portfolio Holder, Head of Paid
Service, Business Lead, and Chief Financial
Officer. The Business Manager – Economy and Assets and Chief
Finance Officer will sign the Decision Notice for
the disposal to evidence their agreement. Above
£50,000 requires the agreement of the Portfolio Holder
in accordance with the rules for Portfolio Holder
the agreement of the Portfolio Holder is
required, These Instructions
are subject to the provisions of the Council’s
Constitution with regard to key decisions, as well as having regard
to the Council’s Asset Management Plan and Community Asset
Transfer Policy. Decisions will be reported
retrospectively to the next Executive committee.
The decision to agree to the disposal by Lease, where the
period of the lease does not exceed 10 years, may be made by
the Business Manager – Economy and Assets, having regard to
the requirements of the Asset Management Plan
Asset Transfer Policy, and where it does not prejudice existing
land holdings or future development proposals.
6.8.4 Lease decisions which commit the Council to periods in excess of 10 years must be approved by the Executive.
To enable a quicker decision process for minor transactions up to £50,000 where there may be a need to act rapidly on identified opportunities.
To facilitate Market Walk lease management in a timely manner.
Other minor and cosmetic changes to be made by the Audit Manager:
· Updating of job titles and departmental structures
· Income section to be amended to reflect the Council’s move to cashless
· Remove references to the corporate petty cash facility and other cash floats
Reflect minor changes to processes generated by new systems such as electronic ordering, forthcoming self-serve payroll services under the Midland iTrent system and changes to BACS through the new Smarter Pay software.