Agenda item

Report of the Director of Finance and Public Value (DF/23/86) seeking approval to update financial regulations and recommend the changes to the Council, attached.

The Committee is asked to note that the Governance Working Group considered and endorsed the changes at its meeting on 4 September 2023.

RESOLVED

(a) that the proposed changes to the Financial Regulations which update these regulations to reflect current legislation, best practice guidance and current practice be endorsed and recommended to Council; and

(b) that the removal of the “Detailed Standards” from the Financial Regulations and for these detailed standards to become internal documents which continue to govern the actions of Officers of the Authority and for these standards to be directly under the jurisdiction of the Director of Finance and Public Value further be recommended for adoption.

The Committee considered the Report of the Director of Finance and Public Value (DF/23/86) which sought approval to update financial regulations and recommend the changes to the Council.

The Committee further noted that the Governance Working Group considered and endorsed the changes at its meeting on 4 September 2023.

The Report highlighted that a new Finance System had been procured by the Council and would be implemented during 2023/24 ready for “go live” in 2024.  The procurement had focused on purchasing a system that was a market leader and would provide the Authority with the latest technology, specifically tailored for Local Government.  The impact of this would be that processes and systems within the Authority would change significantly.

The review of the Financial Regulations had been expedited due to the implementation of the new finance system, but also as part of the overall review of Governance for the Authority.

The proposal was to remove the detailed procedures and place them in the Finance Standards SharePoint site, accessible only to Officers of the Authority.  The detailed standards would be renamed Financial Procedures in line with terminology used by other, benchmarked local authorities.  The second part of the proposal was for a complete review of all areas of the Financial Regulations to update the content to reflect current legislation, guidance and practice.

The review and update of the Financial Regulations was a workstream within the Future Finance Project and during the review it was noted that the contents fell fall within two distinct areas:

1.    The framework describing the accountabilities and delegations from Council which ensured the proper administration of the Authority’s financial affairs; and

2.    Detailed Standards which described the financial procedures that Officers of the Authority’s must follow to process day to day transactions.

The current format of the document meant that the Financial Regulations had become a weighty document (49 pages), not easily navigated, details of confidential internal operations were in the public domain and the complexity of the document had made it harder to use and enforce.

The recent changes in leadership meant there was a stronger focus on accountability and control and updated and newly focussed Financial Regulations would enable clarity and accessibility for all Members and Officers. 

The Committee noted there had been benchmarking with other Authorities (West Sussex County Council, Hampshire County Council, Kent County Council and Oxfordshire County) which highlighted that Devon published significantly more details than the comparators.

Internally, staff had been invited to review the newly drafted regulations and to feedback, which had been incorporated.

The updated Financial Regulations positively supported the “How We Will Work” element of the Council’s Strategic Plan 2021–2025, specifically enabling greater financial resilience and improved financial planning as well as increased discipline and rigour around decision making.

In summary, the proposal aimed to ensure that Financial Regulations within the Constitution were clearer, focused, accessible to all, shorter and relevant to Members and the external audience. Furthermore, financial operational standards would be able to be updated swiftly as the new finance system was implemented and sensitive information would no longer be in the public domain.

Members asked the following questions and raised issues as follows:

·       clarification of the governance at the lower level of decision making, for example updating operating standards;

·       the Chair of the Corporate Infrastructure and Regulatory Services Spotlight Review into the future finance system welcomed the updates in terms of how they supported the roll out of the new system;

·       clarification of the financial thresholds related to decision making, including that for FIN letters (delegated decisions by the Cabinet Member for Finance);

·       the importance of Local Members being consulted on matters that impact on their divisions and that a Local Member Protocol was being prepared as part of the Governance Working Group; and

·       clarification over the meaning of ‘guarantees’ as outlined at section C8 of the revised regulations.

It was MOVED by Councillor Hart, SECONDED by Councillor Cox, and

RESOLVED

(a) that the proposed changes to the Financial Regulations which update these regulations to reflect current legislation, best practice guidance and current practice be endorsed and recommended to Council; and

(b) that the removal of the “Detailed Standards” from the Financial Regulations and for these detailed standards to become internal documents which continue to govern the actions of Officers of the Authority and for these standards to be directly under the jurisdiction of the Director of Finance and Public Value further be recommended for adoption.