Financial Regulations

St Columb Major Town Council Financial Regulations

These Financial Regulations were adopted by the Council at its annual meeting held on 20th May 2025. (A pdf version of this policy is available for download.) Contents

General
Risk management and internal control
Accounts and audit
Budget and precept
Procurement
Banking and payments
Electronic payments
Cheque payments
Payment cards
Petty Cash
Payment of salaries and allowances
Loans and investments
Income
Payments under contracts for building or other construction works
Assets, properties and estates
Insurance
Suspension and revision of Financial Regulations
Appendix 1 – Tender process

These Financial Regulations were adopted by the Council at its meeting held on 20th May 2025

1. General

1.1. These Financial Regulations govern the financial management of the council and may only be amended or varied by resolution of the council. They are one of the council’s governing documents and shall be observed in conjunction with the council’s Standing Orders. 1.2. Councillors are expected to follow these regulations and not to entice employees to breach them. Failure to follow these regulations brings the office of councillor into disrepute. 1.3. Wilful breach of these regulations by an employee may result in disciplinary proceedings. 1.4. In these Financial Regulations:

‘Accounts and Audit Regulations’ means the regulations issued under Sections 32, 43(2) and 46 of the Local Audit and Accountability Act 2014, or any superseding legislation, and then in force, unless otherwise specified.
“Approve” refers to an online action, allowing an electronic transaction to take place.
“Authorise” refers to a decision by the council, or a committee or an officer, to allow something to happen.
‘Proper practices’ means those set out in The Practitioners’ Guide.
Practitioners’ Guide refers to the guide issued by the Joint Panel on Accountability and Governance (JPAG)…
‘Must’ and bold text refer to a statutory obligation the council cannot change.
‘Shall’ refers to a non-statutory instruction by the council to its members and staff.

1.5. The Responsible Financial Officer (RFO) holds a statutory office, appointed by the council. [The Clerk has been appointed as RFO and these regulations apply accordingly.] The RFO:

acts under the policy direction of the council;
administers the council’s financial affairs in accordance with all Acts, Regulations and proper practices;
determines on behalf of the council its accounting records and control systems;
ensures the accounting control systems are observed;
ensures the accounting records are kept up to date;
seeks economy, efficiency and effectiveness in the use of council resources;
produces financial management information as required by the council.

1.6. The council must not delegate any decision regarding:

setting the final budget or the precept (council tax requirement);
the outcome of a review of the effectiveness of its internal controls;
approving accounting statements;
approving an annual governance statement;
borrowing;
declaring eligibility for the General Power of Competence;
addressing recommendations from the internal or external auditors.

1.7. In addition, the council shall:

determine and regularly review the bank mandate for all council bank accounts;
authorise any grant or single commitment in excess of £1000;

2. Risk Management and Internal Control

The council must ensure that it has a sound system of internal control, which delivers effective financial, operational and risk management.
The Clerk/RFO shall prepare, for approval by the council, a risk management policy covering all activities of the council. This policy and consequential risk management arrangements shall be reviewed by the council at least annually.
When considering any new activity, the Clerk/RFO shall prepare a draft risk assessment including risk management proposals for consideration by the council.
At least once a year, the council must review the effectiveness of its system of internal control, before approving the Annual Governance Statement.
The accounting control systems determined by the RFO must include measures to:
- ensure that risk is appropriately managed;
- ensure the prompt, accurate recording of financial transactions;
- prevent and detect inaccuracy or fraud;
- allow the reconstitution of any lost records;
- identify the duties of officers dealing with transactions; and
- ensure division of responsibilities.
At least once a quarter, and at each financial year end, a member other than the Mayor {or a cheque signatory} shall be appointed to verify bank reconciliations (for all accounts) produced by the Clerk/RFO. The member shall sign and date the reconciliations and the original bank statements (or similar document) as evidence of this. This activity, including any exceptions, shall be reported to and noted by the council.
Regular back-up copies shall be made of the records on any council computer and stored either online or in a separate location from the computer. The council shall put measures in place to ensure that the ability to access any council computer is not lost if an employee leaves or is incapacitated for any reason.

3. Accounts and Audit

All accounting procedures and financial records of the council shall be determined by the RFO in accordance with the Accounts and Audit Regulations.
The accounting records determined by the RFO must be sufficient to explain the council’s transactions and to disclose its financial position with reasonably accuracy at any time. In particular, they must contain:
- day-to-day entries of all sums of money received and expended by the council and the matters to which they relate;
- a record of the assets and liabilities of the council;
The accounting records shall be designed to facilitate the efficient preparation of the accounting statements in the Annual Governance and Accountability Return.
The RFO shall complete and certify the annual Accounting Statements of the council contained in the Annual Governance and Accountability Return in accordance with proper practices, as soon as practicable after the end of the financial year. Having certified the Accounting Statements, the RFO shall submit them (with any related documents) to the council, within the timescales required by the Accounts and Audit Regulations.
The council must ensure that there is an adequate and effective system of internal audit of its accounting records and internal control system in accordance with proper practices.
Any officer or member of the council must make available such documents and records as the internal or external auditor consider necessary for the purpose of the audit and shall, as directed by the council, supply the RFO, internal auditor, or external auditor with such information and explanation as the council considers necessary.
The internal auditor shall be appointed by the council and shall carry out their work to evaluate the effectiveness of the council’s risk management, control and governance processes in accordance with proper practices specified in the Practitioners’ Guide.
The council shall ensure that the internal auditor:
- is competent and independent of the financial operations of the council;
- reports to council in writing, or in person, on a regular basis with a minimum of one written report during each financial year;
- can demonstrate competence, objectivity and independence, free from any actual or perceived conflicts of interest, including those arising from family relationships; and
- has no involvement in the management or control of the council.
Internal or external auditors may not under any circumstances:
- perform any operational duties for the council;
- initiate or approve accounting transactions;
- provide financial, legal or other advice including in relation to any future transactions; or
- direct the activities of any council employee, except to the extent that such employees have been appropriately assigned to assist the internal auditor.
For the avoidance of doubt, in relation to internal audit the terms ‘independent’ and ‘independence’ shall have the same meaning as described in The Practitioners Guide.
The RFO shall make arrangements for the exercise of electors’ rights in relation to the accounts, including the opportunity to inspect the accounts, books, and vouchers and display or publish any notices and documents required by the Local Audit and Accountability Act 2014, or any superseding legislation, and the Accounts and Audit Regulations.
The RFO shall, without undue delay, bring to the attention of all councillors any correspondence or report from internal or external auditors.

4. Budget and Precept

Before setting a precept, the council must calculate its council tax requirement for each financial year by preparing and approving a budget, in accordance with The Local Government Finance Act 1992 or succeeding legislation.
Budgets for salaries and wages, including employer contributions, shall be reviewed by the council at least annually in November for the following financial year and the final version shall be evidenced by a hard copy schedule signed by the Clerk and the Mayor of the Council.
No later than October each year, the RFO shall prepare a draft budget with detailed estimates of all receipts and payments/income and expenditure for the following financial year along with a forecast for the following two financial years, taking account of the lifespan of assets and cost implications of repair or replacement.
Unspent budgets for completed projects shall not be carried forward to a subsequent year. Unspent funds for partially completed projects may only be carried forward (by placing them in an earmarked reserve) with the formal approval of the full council.
The draft budget and two-year forecast, including any recommendations for the use or accumulation of reserves, shall be considered by the council.
Having considered the proposed budget and two-year forecast, the council shall determine its council tax requirement by setting a budget. The council shall set a precept for this amount no later than the end of December for the ensuing financial year.
Any member with council tax unpaid for more than two months is prohibited from voting on the budget or precept by Section 106 of the Local Government Finance Act 1992 and must disclose at the start of the meeting that Section 106 applies to them.
The Clerk/RFO shall issue the precept to the billing authority no later than the end of December and supply each member with a copy of the agreed annual budget.
The agreed budget provides a basis for monitoring progress during the year by comparing actual spending and income against what was planned.
Any addition to, or withdrawal from, any earmarked reserve shall be agreed by the council.

5. Procurement

Members and officers are responsible for obtaining value for money at all times. Any officer procuring goods, services or works should ensure, as far as practicable, that the best available terms are obtained, usually by obtaining prices from several suppliers.
The Clerk/RFO should verify the lawful nature of any proposed purchase before it is made and in the case of new or infrequent purchases, should ensure that the legal power being used is reported to the meeting at which the order is authorised and also recorded in the minutes.
Every contract shall comply with the council’s Standing Orders and these Financial Regulations and no exceptions shall be made, except in an emergency.
For a contract for the supply of goods, services or works where the estimated value will exceed the thresholds set by Parliament, the full requirements of The Public Contracts Regulations 2015 or any superseding legislation must be followed.
Where the estimated value is below the Government threshold, the council shall (with the exception of items listed in paragraph 6.12) obtain prices as follows:
For contracts estimated to exceed £3,000 including VAT, the Clerk shall seek formal tenders from at least three suppliers agreed by the council.
For contracts estimated to be over £30,000 including VAT, the council must comply with any requirements of the legislation regarding the advertising of contract opportunities and the publication of notices about the award of contracts.
For contracts greater than £3,000 excluding VAT the Clerk/RFO shall seek at least 3 fixed-price quotes.
Where the value is between £500 and £3,000 excluding VAT, the Clerk/RFO shall try to obtain 3 estimates (which might include evidence of online prices, or recent prices from regular suppliers).
For smaller purchases, the Clerk shall seek to achieve value for money.
Contracts must not be split into smaller lots to avoid compliance with these rules.
The requirement to obtain competitive prices need not apply to contracts that relate to:
- specialist services, such as legal professionals acting in disputes;
- repairs to, or parts for, existing machinery or equipment;
- extensions of existing contracts;
- goods/services that are only available from one supplier or are sold at a fixed price.
When applications are made to waive these regulations, the reason should be set out in a recommendation to the council or relevant committee. Avoidance of competition is not a valid reason.
The council shall not be obliged to accept the lowest or any tender, quote or estimate.
Individual purchases within an agreed budget may be authorised by:
- the Clerk (under delegated authority) for items below £500 excluding VAT;
- the Clerk, in consultation with the Mayor, for items below £1,000 excluding VAT.
Such authorisation must be supported by a minute or other auditable evidence trail.
No individual member or informal group of members may issue an official order or make any contract on behalf of the council.
No expenditure may be authorised that will exceed the budget other than by resolution of the council, except in an emergency.
In cases of serious risk to council services or public safety, the Clerk may authorise expenditure up to £1,000 excluding VAT. Such action must be reported to the Mayor and council.
No major project shall proceed without assurance of necessary funds and (if needed) borrowing approval.
Orders or letters must be issued for all work, goods and services unless a formal contract is being prepared. Copies shall be retained with proof of receipt.
Access to the ordering system shall be controlled by the Clerk/RFO.

6. Banking and Payments

The council’s banking arrangements, including the bank mandate, shall be made by the Clerk/RFO and authorised by the council; banking arrangements shall not be delegated to a committee. The council has resolved to bank with Barclays Bank. The arrangements shall be reviewed annually for security and efficiency.
The council must have safe and efficient arrangements for making payments, to safeguard against the possibility of fraud or error. Wherever possible, more than one person should be involved in any payment, e.g., dual online authorisation or dual cheque signing.
All invoices for payment should be examined for accuracy, analysed to the appropriate expenditure heading, and verified that the goods/services were received and authorised by the council, before certification by the Clerk/RFO.
Personal payments (e.g., salaries, wages, expenses) may be summarised to avoid disclosing personal information.
All payments shall be made by online banking or cheque, in accordance with a resolution of the council.
The RFO shall present a schedule of payments requiring authorisation, along with the invoices, to the council for review and resolution. The authorised schedule shall be initialled immediately below the last item by the chair of the meeting. A detailed list of all payments shall be disclosed within or attached to the minutes.

7. Electronic Payments

Where internet banking arrangements are made, the Clerk/RFO shall be appointed as the Service Administrator. The bank mandate shall identify authorised councillors who can approve transactions, and at least two people shall be involved in approvals.
All authorised signatories shall have access to view the council’s bank accounts online.
No employee or councillor shall disclose any banking PIN or password unless authorised in writing by the council.
The Service Administrator shall set up all items due for payment online.
In prolonged absence of the Service Administrator, an authorised signatory shall set up payments due before the Administrator returns.
Two authorised councillors shall verify payment details against invoices before approving each online payment.
Evidence shall be retained showing which councillors approved each payment online.
A full list of all monthly payments shall be provided to the next council meeting, supported by a bank statement.
With council approval, regular payments (e.g., utilities, taxes, pensions) may be paid by variable direct debit, signed/approved by two members. Use of each direct debit shall be reviewed at least every two years.
Payments may be made by BACS/CHAPS with council resolution, provided each is approved online by two bank signatories. BACS/CHAPS authority shall be renewed every two years.
Regular fixed payments may be made by standing order if signed by two members and properly recorded. This shall also be reviewed biennially.
Supplier account details may only be changed upon written notification verified by two of the Clerk/RFO and a councillor. Supplier data shall be checked biennially.
Council computers used for financial business must have adequate security: antivirus, antispyware, and firewall software, updated regularly.
Saved password autofill (except secure password managers with verification) should not be used for council banking logins.

8. Cheque Payments

Cheques or orders for payment, in accordance with a resolution or delegated decision, shall be signed by two members.
A signatory having a family or business relationship with the beneficiary of a payment shall not, under normal circumstances, be a signatory to that payment.
To indicate agreement of the cheque details with the counterfoil and invoice, the signatories shall initial both the counterfoil and the invoice.
Cheques or orders for payment shall normally only be signed at, or immediately before/after, a council meeting.

9. Payment Cards

Any Debit Card issued for use will be specifically restricted to the Clerk/RFO and will have a single transaction limit of £500 unless council authorisation is given in writing beforehand.
A pre-paid debit card may be issued to employees with varying limits, set by the council. Transactions will be reported, and topping-up authorised at the council’s discretion.
Any corporate credit card or trade account opened by the council will be restricted to use by the Clerk/RFO. Balances must be paid in full each month.
Personal credit or debit cards of members or staff may not be used except for expenses up to £2000 (including VAT), as per council policy.

10. Petty Cash

The council will not maintain a cash float. All cash received must be banked intact.
Any payments made in cash by the Clerk/RFO (e.g., for postage or minor items) shall be refunded on a regular basis.

11. Payment of Salaries and Allowances

As an employer, the council must comply with statutory PAYE requirements.
Councillor allowances (where paid) are subject to PAYE and must be taxed accordingly before payment.
Salary rates shall be agreed by the council. No changes to pay or employment terms may be made without council approval.
Salaries shall be paid after statutory and discretionary deductions on contractually agreed dates.
Deductions shall be paid to the relevant bodies on time, and reported as outlined in these regulations.
All net salary and deductions shall be recorded confidentially, with monthly totals reported in the cashbook. Payroll reports will be reviewed for accuracy.
Termination payments must be backed by a full business case and approved by full council.
Before hiring interim staff, the council must consider a full business case.

12. Loans and Investments

All borrowing must be approved by full council, recorded in minutes, and done in the council’s name after Government approval where necessary.
Financial arrangements not requiring borrowing approval (e.g. hire purchase, leasing) must be authorised by full council after reviewing value for money.
The council shall consider an Investment Strategy & Policy, reviewed annually and in line with statutory guidance.
All investments must be in the name of the council.
Investment documents shall be securely held by the Clerk/RFO.
Transfers related to investments (including bank transfers) must follow these financial regulations.

13. Income

Collection of all income is the responsibility of the Clerk/RFO.
Fees and charges must be reviewed annually by council based on the Clerk/RFO’s report.
Irrecoverable sums and bad debts shall be reported to the council and written off by resolution.
All income must be deposited intact with the council’s bankers. The origin of income must be recorded.
Personal cheques must not be cashed from council-held funds.
VAT must be accurately recorded, with claims submitted at least annually (or bi-annually if over £100) as per Section 33 of the VAT Act 1994.

14. Payments under Contracts for Building or Other Construction Works

Where contracts include instalments, the RFO shall maintain records and make payments within contractual time limits based on certified documents.
Any changes to the contract must be authorised in writing by the Clerk/RFO. If costs exceed the contract by 5% or the available budget, council must be informed.

15. Assets, Properties and Estates

The Clerk/RFO shall arrange secure custody of all title deeds and Land Registry certificates.
An accurate Asset and Investment Register must be kept up to date in compliance with regulations.
Land or tangible moveable property may not be acquired, sold, leased, or otherwise disposed of without council authority and relevant consents.
- A written report must be provided covering valuation, survey, planning, and consultation as required.
- Items under £500 may be disposed of with a proper business case and council authority.

16. Insurance

The RFO shall maintain insurance records and review coverage annually in line with the risk review.
All losses or incidents likely to lead to a claim must be reported by the Clerk/RFO at the next meeting and to insurers immediately.
All relevant council members and staff shall be covered by security or fidelity guarantee insurance matching the maximum exposure risk.

17. Suspension and Revision of Financial Regulations

The council shall review Financial Regulations annually and after any change of Clerk/RFO.
The council may suspend part of these regulations by resolution, provided the reason and risk assessment are recorded.
The council may temporarily amend the regulations to address absence, government reorganisation, or exceptional circumstances.

Appendix 1 – Tender Process

Tender invitations must describe the contract and be prepared with appropriate technical assistance.
Tenders should be addressed to the Clerk via post unless electronic tendering is pre-approved by council.
Postal tenders must be sealed in specially marked envelopes and opened only on the designated date by the Clerk and one member.
For electronic tenders, the council must use a monitored email address to ensure no early access to submissions.
Tender invitations must reference Standing Orders and the Bribery Act 2010.
Where no suitable tender is accepted, no attendee from the decision-making meeting may re-submit later tenders, quotes, or estimates.

These Financial Regulations were adopted by the Full Council at its Annual Meeting on 20th May 2025