| Importance of this area |
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| The importance of this area is in the need for sound planning, monitoring and control of resources. Sound budget management is crucial to informing good decision making and achieving best value in the use of the Council’s resources. |
B1 Policy Framework
B 1.1 The Full Council is responsible for agreeing the authority’s policy framework and budget that will be proposed by the Executive. In terms of financial planning the key elements are
B2 Performance Plans
B 2.1 The Policy framework includes the many statutory performance plans that the County Council has to compile such as the Best value Performance Plan, the Local Transport Plan, the Children Services Plan etc. The Director of Finance, IT & Trading is responsible for the provision of financial information to be included in performance plans in accordance with statutory requirements and agreed timetables.
B3 Revenue Budget Preparation
B 3.1 The Director of Finance, IT & Trading is responsible for ensuring that a revenue budget for the coming year and a medium term financial strategy for the two subsequent financial years is prepared for consideration by the Executive.
B 3.2 The Director of Finance, IT & Trading is responsible for providing guidance on the general format of the budget.
B 3.3 The Executive is responsible for setting a target budget for each Executive Remit service area.
B 3.4 Subsequently Service Directors will prepare, in consultation with the relevant Executive Member and in accordance with the framework set down by the Director of Finance, IT & Trading an estimate of income and expenditure for the ensuing financial year within the spending targets set by the Executive.
B 3.5 The Executive will then submit a ‘final budget’ to the Full Council for approval.
B 3.6 The Director of Finance, IT & Trading is responsible for reporting to the Full Council on the robustness of estimates contained within the budget proposed by the Executive and the adequacy of reserves allowed for in the budget proposals.
B4 Determination of Affordable Borrowing
B4.1 It is the responsibility of the Director of Finance, IT & Trading to provide the County Council with a written report on affordable levels of borrowing. This report is to be presented at the meeting when the annual budget is set and should have regard to the Prudential Code for Capital Finance issued by the Chartered Institute of Public Finance and Accountancy. The report will contain a number of prudential indicators that demonstrate the capital spending plans are affordable, prudent and sustainable.
B5 Resource Allocation
B 5.1 The Director of Finance, IT & Trading is responsible for developing and maintaining a resource allocation process that ensures that both capital and revenue expenditure plans take account of the council’s policy framework and changing priorities within that.
B 5.2 It is the responsibility of Service Directors to ensure that the revenue and capital budget estimates reflect agreed service plans, are in line with the medium term financial plan, the capital strategy and that they follow any guidance issued by the Executive. The guidance will take account of the following:-
B6 Maintenance of Reserves
B 6.1 It is the responsibility of the Director of Finance, IT & Trading to provide the Executive with a written report on levels of reserves that are considered prudent. This advice to be based on an annual risk assessment of the Authority.
B 6.2 The Authority’s medium term financial plan should, in part, be based on how to either reach or maintain the recommended level of reserves.
B7 Revenue Budget Monitoring and Control
B 7.1 Management and control of a Directorate budget (or part where appropriate) is the responsibility of the appropriate Director.
B 7.2 Service Directors must ensure that there is a designated senior officer accountable to them for the detailed management of their budget and notify the Director of Finance, IT & Trading of those so designated.
B 7.3 Service Directors and the Director of Finance, IT & Trading will jointly carry out regular budget monitoring and reporting to identify financial problems and key issues and to recommend the management action necessary to resolve them. Responsibility for management action rests with the Service Director.
B 7.4 Joint monitoring reports defining service financial problems and key issues with recommended action will be made to the Executive on a regular basis. Where agreement on information or recommended action cannot be reached, the Service Director and Director of Finance, IT & Trading have the duty to report separately.
B 7.5 With the explicit approval of the Executive in each case, and subject to the overall outturn position, at the end of each financial year any net under-spendings within a Directorate's revenue budget may be carried forward into the following year. Any net over-spendings of the Directorates shall be made good in the ensuing financial year unless other exceptional arrangements are approved by the Full Council
B 7.6 The County Council's final financial position as presented in the Annual Statement of Accounts will be approved by the Full Council.
B8 Monitoring and Control of Affordable Borrowing
B8.1 It is the responsibility of the Director of Finance, IT & Trading to develop and maintain systems to monitor performance against prudential indicators. Reports on performance against indicators including early warning of any possible breach of any prudential indicator will be made to the Executive on a regular basis.
B9 Authority to Incur Revenue Expenditure
B 9.1 No expenditure shall be incurred or any reduction in income authorised by any officer or Committee unless such expenditure or reduction in income is:-
(a) covered by the annual or supplementary budgets approved by the Full Council;
(b) the benefit of a carried forward under-spending within Regulation 6.5
(c) covered by a virement (see Financial Accountabilities B 9)
B10 Purchase of IT Equipment
B 10.1 The Executive have delegated powers for approving the purchase of IT Hardware to the Director of Finance, IT & Trading and the Executive Member with responsibility for the Resources Remit. The approval process will be aligned to the cycle of Executive meetings.
B11 Virements
B 11.1 Where a virement represents a major change in policy and is greater than £100,000, the Service Director and the Director of Finance, IT & Trading need to prepare a brief report for the Executive seeking its approval to the policy change and the associated virement.
B 11.2 All other virements should be approved by the Service Director or nominated representative and the Director of Finance, IT & Trading informed in writing.
B12 Capital Expenditure and Leasing
Preparation of the capital programme
B 12.1 The Director of Finance, IT & Trading is responsible for ensuring that a capital strategy for the ensuing financial year and three subsequent financial years is prepared.
B 12.2 The Director of Finance, IT & Trading is responsible for ensuring that every Directorate submits to the Executive proposals for capital expenditure for the ensuing financial year.
B 12.3 Before items included in an approved Capital Programme may be committed a detailed estimate of their cost must be submitted to the Executive for approval. Items costing £100,000 or more must be submitted individually; others may be aggregated.
B 12.4 The amount of capital expenditure to be financed by borrowing must be approved by the Full Council.
Authority to incur, and control of, capital expenditure
B 12.5 All capital expenditure proposals must be included in the approved capital programme.
B 12.6 Revised approval must be obtained from the Executive if the cost of an item increases above the approved estimate by more than the excess permitted in the Procedures for Tenders and Contracts. Approved increases must be contained within the approved total programme. Exceptionally, Executive approval may be sought to increase the approved total programme and its financing.
B 12.7 The introduction of new capital items after the Capital Programme has been approved (whether additional or in substitution) requires the advance approval of the Executive.
B 12.8 The Executive must approve any re-phasing of Capital Programmes.
B 12.9 Capital items purchased must be recorded in the appropriate register or inventory.
Capital receipts
B 12.10 The Director of Finance, IT & Trading must be informed of all proposed sales of land and buildings so that the effect on financial and property management can be assessed.
B 12.11 The procedures for declaring properties surplus to requirements are set out in the Council's Code of Practice for the Disposal of Surplus Property.
B 12.12 The Director of Finance, IT & Trading will be responsible for the negotiations of all such sales.
B 12.13 Capital receipts must be accounted for separately from revenue income and officers banking these monies must ensure accurate use of capital analysis codes, as well as compliance with the other regulations concerning income and banking.
Leasing
B 12.14 All vehicle, plant, furniture and equipment leasing must be negotiated in conjunction with the Director of Finance, IT & Trading. Provision for the acquisition of leased items must be included in the capital programme.
B 12.15 All property leases and other property acquisitions must be notified to the Director of Finance and IT, who will seek the approval of the Executive, before a commitment is entered into so that the effect of Central Government controls on the Capital Programme can be assessed.
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