Shropshire Council

Appendix C - Risk Management and Control of Resources

In this appendix:

  1. Internal Controls
  2. Audit Requirements:
  3. Resources: Land, Buildings, ICT, Fixed Plant and Machinery:
  4. Asset Disposal
  5. Risk Management and Insurance
  6. Treasury Management and Banking
  7. Investments and Borrowing
  8. Unofficial and Voluntary Funds and Funds held for Third Parties:
  9. Staffing, including Gifts and Hospitality

 

C.1 Internal Controls

Why is this important?

C.1.1 The Council is complex and beyond the direct control of individuals. It therefore requires internal controls to:

  • facilitate the effective exercise of its functions and the achievement of its aims and objectives;
  • ensure that the financial and operational management of the council is effective; and
  • include effective arrangements for the management of risk.

C.1.2 The Council has statutory obligations to meet and requires internal controls to identify, meet and monitor compliance with these obligations.

C.1.3 The Council faces a wide range of financial, administrative and commercial risks, both from internal and external factors, which threaten the achievement of their objectives. Internal controls are necessary to identify, evaluate and control these risks.

C.1.4 The system of internal controls is established in order to provide measurable occurrence of:

  • Efficient and effective operations.
  • Reliable financial information and reporting.
  • Compliance with laws and rules.

Key controls

C.1.5 Effective review on a regular basis and at least annually.

C.1.6 Managerial control systems, including defining policies, setting objectives and plans, monitoring financial and other performance, and taking appropriate anticipatory and remedial action. The key objective of these systems is to promote ownership of the control environment by defining roles and responsibilities.

C.1.7 Financial and operational control systems and procedures, which include physical safeguards for assets, segregation of duties, authorisation and approval procedures and information systems.

C.1.8 An effective internal audit function which operates in accordance with the principles embroiled in CIPFA’s Code of Practice for Internal Audit in Local Government in the United Kingdom, and with any other statutory obligations and rules.

Responsibilities of S151 Officer

C.1.9 Assist the Council to put in place an appropriate control environment and effective internal controls which provide reasonable assurance of effective and efficient operations, internal financial controls and compliance with laws and rules.

C.1.10 Ensure that the Council puts in place effective internal financial controls covering codified guidance, budgetary systems, supervisions, management review and monitoring, physical safeguards, segregation of duties, accounting procedures, information systems and authorisation and approval processes.

Responsibilities of directors, managers and budget holders

C.1.11 To ensure they have adequate internal control systems in place covering all aspects of their operations, both financial and non-financial.

C.1.12 To manage processes to check that established controls are being adhered to, and to evaluate their effectiveness, in order to be confident in the proper use of resources.

C.1.13 To provide an annual assurance statement to the Section 151 Officer in respect of the adequacy and effectiveness of the internal control environment within their areas of operations, and to identify any material weaknesses and how these are being addressed. This annual assurance statement will form part of the evidence to support the Annual Governance Statement

C.1.14 To up-date existing controls and establish and implement new ones and keep the Section 151 Officer informed of all changes.

C.1.15 To ensure staff have a clear understanding of the consequences of a lack of control in the areas within which they work and the consequences of these not being followed.

C.2 Audit Requirements

a) Internal Audit

Why is this important?

C.2.1 The Section 151 Officer has a statutory responsibility for the overall financial administration of the Council’s affairs and is responsible for maintaining an adequate and effective continuous internal audit.

C.2.2 Internal audit is an independent objective assurance and consulting activity designed to add value and improve the Council’s operations. It helps the Council accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. (Public Sector Internal Audit Standards (PSIAS) 2013).

C.2.3 Internal Audit has a key role to play in independently reviewing the effectiveness of the Council’s entire internal control environment in respect to the processes for governance, risk management and control. It contributes an objective opinion to the council’s Annual Governance Statement

Key controls

C.2.4 The key controls for internal audit are:

  • The Head of Audit is the Council’s Chief Audit Executive as defined under the Standards and is the Chief Internal Auditor as defined in CIPFA’s Statement on the Role of the Chief Internal Auditor who reports to the Section 151 Officer and ensures that Internal Audit remains independent in its planning and operation.
  • The Head of Audit has direct access to the Head of Paid Service, all levels of management and to elected members including the Council’s Audit Committee.
  • Internal auditors comply with the Public Sector Internal Audit Standards (PSIAS) including the Definition of Internal Auditing and the Code of Ethics, and other relevant guidance as set out in the Internal Audit Charter.
  • The Head of Audit is responsible for maintaining periodic audit plans which have due regard to the key priorities and associated risks of the council, the objectives and risks for each service areas in delivering their services and the requirements of the external auditor.
  • The Head of Audit must report to the s151 Officer or the Audit Committee if there are insufficient resources or limitations in the scope of their work to provide reasonable assurance or a service consistent with the definition of Internal Audit.

Responsibilities of Section 151 Officer

C.2.5 The Section 151 Officer has been delegated with maintaining an adequate and effective system of internal audit. He or she must ensure that internal auditors have the authority to:

  • Access at reasonable times, premises or land used by the Council.
  • Access all Council and partner assets, records, documents, correspondence and control systems except for those from which they are statutorily prevented.
  • Require and receive any information and explanation considered necessary concerning any matter under consideration from any employee, member, partner or third party.
  • Require any employee of the Council or any partner/ third party to account for cash, stores or any other Council property under their control and produce for inspection if required.
  • Access records belonging to third parties, such as contractors, when required.
  • Report directly to the Head of Paid Service, all levels of management and to elected members including the Council’s Audit Committee.
  • Evaluate the adequacy effectiveness of internal controls in responding to risks within the organisations governance operations and information systems designed to secure assets and data to assist management in preventing and deferring fraud.

C.2.6 The Head of Audit should maintain an Internal Audit Charter and annual risk based audit plan in conjunction with the Section 151 Officer which takes account of the characteristics and relative risks of the activities involved. She should liaise with the Head of Paid Service and Managers on the audit plans and cover required.  In addition to the statutory requirement, this takes account of the need to seek added value, effective use of resources, improved performance and cost-effective controls.

C.2.7 Where an appropriate response to audit recommendations has not been made within a reasonable period, the S151 Officer and, or the Head of Audit may refer the matter to the Head of Paid Service and, or the Audit Committee.

C.2.8 Internal Audit has specific fraud related responsibilities which are set out in the Counter Fraud, Bribery and Anti-Corruption Strategy. To investigate promptly any fraud or irregularity of which they become aware of and to report to the Head of Paid Service who will consider any legal proceedings and disciplinary action in consultation with the appropriate director or manager.

C.2.9 To report annually to the Head of Paid Service and to the Audit Committee on the main issues raised by Internal Audit during the year.

C.2.10 Internal Audit will define and manage consultancy assignments as set out in the PSIAS.

Responsibilities of directors and managers

C.2.11 To ensure that internal and external auditors are given access at all reasonable times to premises, personnel, documents and assets which the auditors consider necessary for the purposes of their work.

C.2.12 To ensure that auditors are provided promptly with any information and explanations which they seek in the course of their work.

C.2.13 To consider and respond promptly to recommendations in audit reports.

C.2.14 To ensure that any agreed actions arising from audit recommendations are carried out in a timely and efficient fashion.

C.2.15 To notify the Section 151 Officer immediately of any suspected fraud, theft, irregularity, improper use or misappropriation of the Council’s property or resources. Pending investigation and reporting, the Director or Managers should take all necessary steps to prevent further loss and to secure records and documentation against removal, destruction or alteration.

C.2.16 To ensure that new systems for maintaining financial records, or records of assets, or changes to such systems, are discussed with and agreed by the Head of Audit prior to implementation.

C.2.17 To ensure that all employees within their services are aware of the Council’s ‘Speaking up about Wrongdoing Policy’ and the Counter Fraud, Bribery and Anti-Corruption Policy.

b) External Audit

Why is this important?

C.2.18 The Local Government Association (Public Sector Appointments Ltd) is responsible for appointing external auditors to each local council. The Section 151 Officer is responsible for working with the external auditor and for advising the Council, Cabinet, directors and managers on their responsibilities in relation to external audit.  The external auditor has the same rights of access as the internal auditor to all documents which are necessary for audit purposes.

C.2.19 The basic duties of the external auditor are governed by the Local Audit and Accountability Act 2014, under which auditors need to satisfy themselves that:

  • The accounts are prepared in accordance with rules made under Section 23 of the 1982 Act and comply with the requirements of all statutory provisions applicable to the accounts.
  • Proper practice has been observed in compilation of accounts.
  • The Council has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

C.2.20 The Council’s accounts are scrutinised by external auditors, appointed by the Local Government Association (Public Sector Appointments Ltd), who must be satisfied that the statement of accounts present ‘a true and fair view’ of the financial position of the Council and its income and expenditure for the year in question and complies with the legal requirements.

Key controls

C.2.21 External auditors are appointed by the Local Government Association (Public Sector Appointments Ltd) normally for a minimum period of five years. The National Audit Office prepares guidelines which the external auditors follow when auditing the Council’s statement of accounts. Under ISA (UK and I 265 (Communicating Deficiencies in Internal Control to those charged with Governance and Management). External Audit can identify and report significant deficiencies in any internal controls directly to the Audit Committee and those charged with governance.

Responsibilities of Section 151 Officer

C.2.22 To draw up the timetable and issue guidance for final accounts purposes and to advise staff and external auditors accordingly.

C.2.23 To ensure that external auditors are given access at all reasonable times to premises, personnel, documents and assets which the external auditors consider necessary for the purposes of their work.

C.2.24 To ensure there is effective liaison between internal and external audit services.

Responsibilities of directors and managers

C.2.25 To ensure that external auditors are given access at all reasonable times to premises, personnel, documents and assets which the external auditors consider necessary for the purpose of their work.

C.2.26 To ensure that all paperwork and systems are up-to-date and available for inspection.

c) Preventing Financial Irregularities

Why is this important?

C.2.27 The Council will not tolerate fraud and corruption in the administration of its responsibilities whether from inside or outside the Council.

C.2.28 The Council’s expectation of propriety and accountability is that members and staff at all levels will lead by example in ensuring adherence to legal requirements, rules, procedures and practices.

C.2.29 The Council also expects that individuals and organisations (e.g. suppliers, contractors, service providers) that it comes into contact with, will act towards the Council with integrity and without thought or actions involving fraud and corruption.

Key controls

C.2.30 The key controls regarding the prevention of financial irregularities are:

  • The Council’s Counter Fraud, Bribery and Anti-Corruption Strategy.
  • The culture and tone of the council is one of honesty and opposition to fraud and corruption.
  • That all members and staff act with integrity, and lead by example
  • That all individuals and organisations associated in any way with the Council will act with integrity.
  • That senior managers are required to deal swiftly and firmly with those who defraud the Council or who are corrupt.

Responsibilities of Section 151 Officer

C.2.31 To maintain adequate and effective internal and external audit arrangements for the Council.

C.2.32 To ensure that financial irregularities are reported to the Head of Paid Service, Cabinet and the Council’s Audit Committee.

C.2.33 To determine, in conjunction with the Head of Audit the scope of any internal enquiries or investigations, subject to consultation with the appropriate director or managers.

C.2.34 To decide, in consultation with the appropriate director or manager, whether any matter under investigation should be referred for police investigation and take recovery action as appropriate on such matters.

C.2.35 To keep the Head of Paid Service informed if a suspected irregularity occurs involving staff who are the responsibility of the Section 151 Officer.

C.2.36 To ensure in conjunction with the appropriate director managers, that the council’s disciplinary procedures are followed where the outcome of an audit or other investigation indicates fraud or irregularity

Responsibilities of directors and managers

C.2.37 To ensure that all suspected irregularities are reported to the Section 151 Officer and Head of Audit.

C.2.38 To instigate the Council’s disciplinary procedures where the outcome of an audit investigation indicates improper behaviour.

C.3 Resources: Land, Buildings, ICT, Fixed Plant and Machinery

a) Security

Why is this important?

C.3.1 The Council holds assets in the form of property, vehicles, equipment, and other items worth many millions of pounds. It is important that assets should be safeguarded and used efficiently in the delivery of services and that there should be arrangements for the security of both assets and service operations.

Key controls

C.3.2 The key controls for the security of resources, such as land, buildings, fixed plant, ICT and machinery are:

  • Budget holders obtain appropriate resources for the specified level of service delivery.
  • Resources are acquired using an approved procurement process.
  • Resources are used only for the purposes of the Council and properly accounted for.
  • Resources are secured to be available for use when required.
  • Resources no longer required are disposed of in accordance with the law and the rules of the Council so as to maximise benefits.

Responsibilities of Section 151 Officer

C.3.3 The S151 Officer shall keep an Asset Register which shall record all of the material capital assets owned by the Council together with their values. Assets shall be valued in accordance with the ‘Code of Practice on Local Authority Accounting in the United Kingdom (published by CIPFA). The Asset Register shall be kept up to date and in accordance with the requirements of the S151 Officer. Directors shall supply any information required in order to maintain the Register.

C.3.4 The S151 Officer shall maintain an up to date terrier of all land owned, leased or licensed by the Council and of land sold or leased off. The terrier must:

  • record the purpose for which the land is held and;
  • record the location, extent and plan reference of the land.

C.3.5 Directors shall supply any information required in order to maintain the Register.

C.3.6 To receive information from each budget holder required for accounting, costing and financial records.

C.3.7 To assist and advise, in consultation with the appropriate budget holder, the records to be maintained to ensure proper security and control of premises, stocks, stores, equipment, cash and other items of significant value

Responsibilities of directors, managers and budget holders

C.3.8 The Head of Business Enterprise and Commercial Services shall maintain a property database for all properties. Any use of property by a budget holder other than for direct service delivery should be supported by documentation identifying terms, responsibilities and duration of the use.

C.3.9 To ensure that lessees and other prospective occupiers of Council land are not allowed to take possession or enter the land until a lease or agreement, in a form approved by the Head of Business Enterprise and Commercial Services, in consultation with the Section 151 Officer and Head of Legal and Democratic, has been established as appropriate.

C.3.10 To ensure the proper security of all buildings and other assets under their control.

C.3.11 To periodically review land and buildings in order to identify any that may be surplus to business requirements.

C.3.12 Where land or buildings are identified as surplus to requirements, a recommendation for the sale of land should be the subject of a report by the appropriate Director following advice from legal and financial services.

C.3.13 Asset sales are required to follow the Disposals Protocol adopted by Property Services. Should a disposal of an asset not follow this standardised process, any request for disposal should be referred to the Section 151 Officer.

C.3.14 Where the use of buildings or land is subject to appropriation between services, to refer the appropriation for approval by Cabinet, taking into account the alternative possible uses of the land.

C.3.15 To pass the deeds to the Head of Legal and Democratic, who is responsible for custody of all title deeds.

C.3.16 To ensure that no Council asset is subject to third party or personal use by an employee without proper authority.

C.3.17 To ensure that the safe custody of vehicles, equipment, stock, stores and other property belonging to the Council.

C.3.18 To ensure that the Directorate maintains a register of moveable assets in accordance with arrangements defined by the Section 151 Officer.

C.3.19 To ensure that assets are identified, their location recorded and that they are appropriately security marked and insured.

C.3.20 To consult the Section 151 Officer in any case where security is thought to be defective or where it is considered that special security arrangements may be needed.

C.3.21 To ensure cash holdings on premises are kept to a minimum and do not exceed insurance limits, and to advise the Section 151 Officer where there may be an exception to this case.

C.3.22 The disposal of all surplus equipment, stocks or stores expected to realise in excess of £5,000 should normally be by competitive tender or public auction unless, following consultation with the Section 151 Officer, Cabinet agrees otherwise. A record of all such disposals should be maintained.

C.3.23 To arrange for the valuation of assets for accounting purposes to meet requirements specified by the Section 151 Officer.

C.3.24 To arrange for the valuation of assets for accounting purposes to meet requirements specified by the Section 151 Officer.

C.3.25 To ensure that all their employees are aware that they have a personal responsibility with regard to the protection and confidentiality of information, whether held in manual or computerised records. Information may be sensitive or privileged, or may possess some intrinsic value, and its disclosure or loss could result in a cost to the Council in some way.

b) Inventories

Why is this important?

C.3.26 The Council holds many different assets. It is important that these assets should be safeguarded and used efficiently in the delivery of services and that there should be arrangements for the security of both assets and service operations. Material capital assets shall be recorded in the asset register other significant assets shall be subject to inventory.

Key Controls

C.3.27 The key controls for the inventory of resources, such as land, buildings, fixed plant, ICT and machinery are:

  • Inventories are maintained to record all significant resources that are not recorded in appropriate registers elsewhere.
  • Inventories are regularly reviewed and updated.

Responsibilities of Section 151 Officer

C.3.28 To advise on the form, layout and content of inventory records to be maintained by the Council.

Responsibilities of directors, managers and budget holders

C.3.29 To maintain inventories in a form approved by the Section 151 Officer to adequately record and describe fittings and equipment, plant and machinery under their control.

C.3.30 To carry out an annual check of all items on the inventory in order to take action in relation to surpluses or deficiencies, annotating the inventory accordingly and reporting any material discrepancies to the Section 151 Officer.

C.3.31 Attractive and portable items, such as computers, cameras and video recorders, should be identified with security markings as belonging to the Council and appropriately controlled and secured.

C.3.32 To make sure that property is only used in the course of the Council’s business unless the director or manager concerned has given permission otherwise.

C.3.33 To seek Cabinet approval to the write-off of redundant equipment where individual items are valued in excess of £100,000.

c) Stocks and Stores

Why is this important?

C.3.34 The Council holds stocks and stores of goods in various locations throughout the authority. These stocks and stores are assets of the council which must be appropriately safeguarded from theft and spoiling.

Key Controls

C.3.35 The key controls for the stocks and stores of resources are:

  • Stocks and stores are held in environments appropriate to their value and type
  • Stocks and stores should be held at reasonable levels
  • Stocks and stores should be subject to independent checks, at least annually, and any discrepancies investigated.

Responsibilities of Section 151 Officer

C.3.36 To advise on the arrangements for the care and custody of stocks and stores.

Responsibilities of directors, managers and budget holders

C.3.37 To make arrangements for the care and custody of stocks and stores in their areas.

C.3.38 To ensure stocks are maintained at reasonable levels and subject to a regular independent physical check. All discrepancies should be investigated and pursued to a satisfactory conclusion.

C.3.39 To write-off discrepancies of up to £5,000.

C.3.40 To authorise or write-off disposal of redundant stocks and equipment. Procedures for disposal of such stocks and stores should be by competitive quotations or auction unless, following consultation with the Section 151 Officer, Cabinet decides otherwise in a particular case.

C.3.41 To seek advice from Internal Audit on discrepancies above £5,000.

C.3.42 A manager or director, with the agreement of the Section 151 Officer, can write off redundant stocks and stores between £5,001 and £100,000. Write off’s over £100,000 require approval by Cabinet.

d) Intellectual Property

Why is this important?

C.3.43 Intellectual property is a generic term that includes inventions and writings. If these are created by the employee during the course of employment, then as a general rule they belong to the employer, not the employee. Various Acts of Parliament cover different types of intellectual property.

C.3.44 Certain activities undertaken within the Council may give rise to items which may be patentable. These are collectively known as intellectual property.

Key controls

C.3.45 In the event that the Council decides to become involved in the commercial exploitation of inventions, the matter should proceed in accordance with the Council’s intellectual property procedures.

Responsibilities of Section 151 Officer

C.3.46 To develop and disseminate good practice through the Council’s intellectual property procedures.

Responsibilities of all managers

C.3.47 To ensure that there are no conflicts concerning staff conducting private work in Council time.

Why is this important?

C.4.1 It would be unsatisfactory and inefficient for the cost of assets to outweigh their benefits. Obsolete, non-repairable or unnecessary resources should be disposed of in accordance with the law and rules of the Council.

Key controls

C.4.2 Assets are disposed of at the most appropriate time, and only when it is in the best interests of the Council, and that the best price is obtained. For items of significant value, disposal should be by competitive tender or public auction and any funds realised should be corporately retained.

Responsibilities of Section 151 Officer  

C.4.3 To advise on best practice for disposal of assets.

C.4.4 To ensure appropriate accounting entries are made.

Responsibilities of directors and managers

C.4.5 To seek advice from purchasing advisors on the disposal of surplus or obsolete materials, stores or equipment.

C.4.6 To ensure that income received for disposal of an asset is properly collected, banked and accounted for.

C.5 Risk Management and Insurance

Why is this important?

C.5.1 All organisations, whether they are in the private or public sectors, face risks to people, property and continued operations. Risk is defined as the chance or possibility of loss, damage or injury caused by an unwanted or uncertain action or event.  Risk management is the planned and systematic approach to the identification, evaluation and control of risk.

C.5.2 Insurance has been the traditional means of risk transfer and protecting against loss, but this cannot be seen as the complete answer. By reducing or even preventing the incidence of losses (whether they result from crime or accident), the Council will benefit from reduced costs of providing insurance cover and will also avoid the disruption and wasted time caused by losses and insurance claims.

C.5.3 It is the overall responsibility of Cabinet, jointly with the Council, to approve the Council’s Opportunity Risk Management Strategy, and to promote a culture of risk management awareness throughout the Council. Monitoring of, and reporting on, the effectiveness of the Strategy is an essential part of the process.

Key controls

C.5.4 The key controls for risk management and insurance are:

  • Robust systems are in place to identify, assess, prevent or contain significant operational risks on an integrated basis, and these systems are promoted throughout the Council.
  • Acceptable levels of retained risk are identified and evaluated and arrangements are in place for their funding, either by internal provision or external insurance as appropriate.
  • Managers know that they are responsible for managing relevant risks and are provided with appropriate and timely information on claims experience and risk management initiatives relating to their areas of responsibility.
  • Procedures are in place to investigate and process claims within required timescales.
  • A monitoring process is in place to review regularly the effectiveness of risk reduction strategies and the operation of these controls. The risk management process should be conducted on a continuing basis.
  • All reports shall contain reference to any major risks which the item reported may have for the Council.

Responsibilities of Section 151 Officer

C.5.5 To prepare and promote the Council’s Opportunity Risk Management Strategy and to advise Cabinet, directors and managers on risk management matters.

C.5.6 Subject to any legal advice of the Monitoring Officer, to determine and effect appropriate corporate insurance cover, through external insurance and, or internal funding, and to negotiate all claims, in conjunction with other officers as necessary.

C.5.7 To provide advice to the Council and Council Management Team on insurance matters.

C.5.8 To include all appropriate employees of the Council in a suitable fidelity guarantee insurance.

C.5.9 To offer insurance cover to schools in accordance with Fair Funding arrangements.

C.5.10 To develop and implement risk management controls, monitoring and reporting arrangements in conjunction with other directors and managers.

C.5.11 To oversee and ensure the preparation of the Council’s Opportunity Risk Management Strategy in agreement with the Section 151 Officer and promote the Strategy throughout the Council.

C.5.12 To review and report to Cabinet, directors and managers on the robustness of the financial arrangements of risk management and insurance.

Responsibilities of directors and managers

C.5.13 To notify the Section 151 Officer promptly of all new or increased risks, activities, properties or vehicles which require insurance and of any alterations affecting existing insurances.

C.5.14 To notify the Section 151 Officer and the Monitoring Officer immediately, in writing or electronically, of any loss, liability or damage, or of any event, likely to lead to a claim against the Council, together with any information or explanation required by the Section 151 Officer or the Council’s insurers.

C.5.15 To consult the Section 151 Officer and Monitoring Officer in respect of the terms of any indemnity which the Council is requested to give.

C.5.16 To ensure that Council employees, or anyone covered by the Council’s insurances, do not admit liability or make any offer to pay compensation which may prejudice the assessment of liability in respect of any claim against the council.

C.5.17 To take responsibility for, and promote risk management, having regard to advice from the Section 151 Officer and other specialist officers (e.g. Risk and Insurance Manager, Risk Management Officer, Crime Prevention, Fire Prevention, Health and Safety).

C.5.18 To ensure that there are regular reviews of risk within their Directorates / Services and to report at regular intervals (at least twice per year) to Cabinet, in conjunction with the Section 151 Officer, on the implementation and effectiveness of the Opportunity Risk Management Strategy.

C.6 Treasury Management and Banking

Why is this important?

C.6.1 Many millions of pounds pass through the Council’s books each year. A few Councils have suffered high profile losses through inappropriate treasury management procedures. This led to the establishment of Codes of Practice. These aim to provide assurances that the Council’s money is properly managed in a way which balances risk with return, but with the overriding consideration being given to the security of the Council’s capital sum.

C.6.2 The Council has adopted a Treasury Policy Statement based on the CIPFA Code of Practice for Treasury Management. All treasury operations are carried out in accordance with this Statement and the Code.

Responsibilities of Section 151 Officer

C.6.3 To arrange the borrowing and investment activities of the Council in such a manner as to comply with the CIPFA Code of Practice on Treasury Management and the Council’s Treasury Policy Statement.

C.6.4 To prepare an Annual Treasury Strategy, for the forthcoming financial year, for approval by Council prior to the start of that financial year, including the determination of prudential indicators in accordance with the Prudential Code for Capital Finance 2003 (as amended). To report a Mid-Year Treasury Strategy and Annual Treasury Report to Council outlining the implementation and effectiveness of the Treasury Strategy. Subject to the foregoing, the Section 151 Officer is responsible for the management of the Council’s loan debt and for the investment of surplus funds.

C.6.5 To manage, control and monitor the council’s banking arrangements, including the opening and closing of such bank accounts as are considered necessary within the terms of the overall banking arrangement. Opening or closing any bank account shall only be undertaken by, or with the approval of, the Section 151 Officer.  The title of any such bank accounts shall include the words “Shropshire Council”.

C.6.6 Cheques drawn on authorised imprest accounts, shall be ordered only on the authority of the Section 151 Officer, who shall make proper arrangements for their safe custody.

Responsibilities of directors and managers

C.6.7 To comply with financial rules relating to banking arrangements and to follow the guidance on banking issued by the Section 151 Officer. To advise the Section 151 Officer of material amounts due to be credited or debited to the Council’s bank accounts in order to enable efficient cash flow management.

C.7 Investments and Borrowing

Responsibilities of the Section 151 Officer

C.7.1 To ensure that all borrowings and investments are made in the name of the Council.

C.7.2 To ensure that all securities in support of investments which are the property of the Council or its nominees and the title deeds of all property in the Council’s ownership are held in accordance with arrangements approved by the Section 151 Officer.

C.7.3 To act as the Council’s registrar of stocks, bonds and mortgages and to maintain records of all borrowing of money by the Council. They may also authorise the premature repayment of individual bonds and mortgages.

C.7.4 All money in the hands of the Council shall be aggregated for the purpose of treasury management and shall be under the control of the Section 151 Officer as the officer designated for the purposes of Section 151 of the Local Government Act 1972.

Responsibilities of directors and managers

C.7.5 To ensure that no loans are made to third parties and no interests are acquired in companies, joint ventures, or other enterprises without the approval of Council, following consultation with the Section 151 Officer.

C.8 Unofficial and Voluntary Funds and Funds Held for Third Parties

a) General

C.8.1 An unofficial or voluntary fund is defined, for the purpose of this rule, as any fund, other than an official fund of the Council, which is controlled, wholly or in part, by an officer by reason of their employment by the Council, or by the managers or governors of a school maintained by the Council.

Responsibilities of Section 151 Officer

C.8.2 To arrange that all such funds are, wherever possible, in the name of the Council. All officers acting as trustees by virtue of their official position shall deposit securities or similar documents relating to the trust with the Section 151 Officer unless the deed otherwise provides. And to ensure that the Council has the right to inspect and audit such funds and the administrative systems underlying them and report on them as it sees fit.

C.8.3 To arrange, where funds are held on behalf of third parties, for their secure administration and maintain written records of all transactions and to ensure that the Council has the right to inspect and audit such funds and the administrative systems underlying them and report on them as it sees fit.

C.8.4 To ensure that trust funds are operated within any relevant legislation and the specific requirements for each trust.

C.8.5 Private fund monies should be kept separate from Council money. A separate bank account should be set up for each in the name of the fund, not that of an individual or the Council.

C.8.6 To maintain an up to date record of all voluntary funds administered by officers of the Council excluding school funds.

Responsibilities of directors and managers

C.8.7 To ensure that all such funds are declared to them by the controlling officer(s) and that annual accounts, audited by suitably qualified auditors, are submitted within a reasonable time after the end of each accounting period, to the body responsible for the management or control of each fund.

C.8.8 To ensure that all officers acting as trustees by virtue of their official position shall deposit securities or similar documents relating to the trust with the Head of Legal and Democratic unless the deed otherwise provides.

C.8.9 To inform the Section 151 Officer of the names of all such funds and of their controlling officer(s) and managing body. Where the director or managers so request, the Section 151 Officer shall advise on the suitability of the form of accounts and of the audit arrangements.

b) Court of Protection and Guardian ad Litem Administration 

Responsibilities of Section 151 Officer

C.8.10 To ensure there are appropriately documented processes and procedures in place to securely administer clients Count of Protection, Appointeeship or Guardian ad Litem accounts.

C.8.11 To arrange for the system of administration and operation of these funds to be inspected and reported upon by Internal Audit.

Responsibilities of Director of Adult Services

C.8.12 To ensure a nominated chief officer has been identified to act as the Deputy to the Office of the Public Guardian.

C.8.13 To ensure appropriate accounts are set up and managed in the name of the individual clients and that an annual statement of account is provided to the Court of Protection, Office of the Public Guardian where required and independently verified.

C.8.14 To ensure that all accounts are administered in the most economical way for the benefit of the clients, this to include dealing with all income tax matters and other related issues such as welfare benefits.

C.8.15 To deal with all property related matters for the absolute benefit of the client and to ensure that appropriate systems and procedures are in place to ensure client welfare.

c) Imprest Accounts

Responsibilities of Section 151 Officer  

C.8.16 Following consultations with directors and managers as appropriate, to provide officers of the Council with cash or bank imprest accounts to meet minor expenditure on behalf of the Council and to prescribe rules for operating these accounts. These accounts must be operated in accordance with instructions issued by the Section 151 Officer.  Minor items of expenditure should not exceed the prescribed amount.

C.8.17 To maintain a record of all petty cash advances made, and periodically review the arrangements for the safe custody and control of these advances. Requests to varythe advance must be put in writing or electronically by the director or manager to the Section 151 Officer.

C.8.18 To reimburse imprest holders as often as necessary to restore the imprest balance but normally not more than monthly.

Responsibilities of directors and managers

C.8.19 To ensure that all officers operating an imprest account:

  • Obtain and retain vouchers to support each payment from the imprest account. Where appropriate an official receipted VAT invoice must be obtained.
  • Make adequate arrangements in their office for the safe custody of the supporting records and cash.
  • Produce upon demand by the Section 151 Officer and Head of Audit, cash and all vouchers to the total value of the imprest account
  • Record transactions promptly.
  • Reconcile and balance the account at least monthly, reconciliation sheets to be signed and retained by the imprest holder.
  • Provide the Section 151 Officer with a certificate of the value of the account held at 31 March each year.
  • Ensure that the imprest is never used to cash personal cheques or to make personal loans and that the only payments into the account are the reimbursement of the imprest and change relating to purchases where an advance has been made.
  • Ensure income due to the Council is banked or paid to the Council as provided elsewhere in these rules and not into the imprest account.
  • On leaving the Council’s employment or otherwise ceasing to be entitled to hold an imprest advance, account to the Section 151 Officer for the amount advanced to them.
  • Do not allow any bank imprest account to become overdrawn.

C.9 Staffing, including Gifts and Hospitality

Why is this important?

C.9.1 In order to provide the highest level of service, it is crucial that the council recruits and retains high calibre, knowledgeable staff, qualified to an appropriate level. An appropriate staffing strategy and policy should exist, in which staffing requirements and budget allocation should be matched.

Key controls

C.9.2 The key controls for staffing are that:

  • Procedures are in place for forecasting staffing requirements and cost.
  • Procedures are in place for monitoring staffing expenditure against budget.
  • Controls are implemented that ensure that staff time is used efficiently and benefit the Council.
  • Every employee has a personal responsibility to be aware of and comply with the council’s Official Gifts and Hospitality Policy set out in the Employees’ Handbook.

Responsibilities of Section 151 Officer

C.9.3 To ensure that budget provision exists for all existing and new employees.

C.9.4 To act as an advisor to directors and managers on areas such as National Insurance, pension contributions as appropriate.

Responsibilities of directors and managers

C.9.5 To produce an annual staffing budget.

C.9.6 To ensure that the staffing budget is an accurate forecast of their staffing levels and is equated to an appropriate revenue budget provision (including on-costs and overheads).

C.9.7 To monitor staff activity to ensure adequate control over such costs as sickness, overtime, training and temporary staff.

C.9.8 To ensure that the staffing budget is not exceeded and that it is managed to enable the agreed level of service to be provided within the directorate’s services cash limit.

C.9.9 To ensure that the Section 151 Officer is immediately informed if the staffing budget is likely to be materially over (or under) spent and costs cannot be controlled within cash limits.

C.9.10 To ensure that they and their officers complete the register of interests maintained by the Monitoring Officer.

C.9.11 To follow the Council’s recruitment procedures.

C.9.12 To apply the Council's Capability procedures as appropriate.