Agenda item

Report of the County Treasurer (CT/18/32), on Part 5 of the Constitution relating to the Code of Business Conduct and the proposed revisions and updates, attached.

The Committee considered the Report of the County Treasurer (CT/18/32), on Part 5 of the Constitution relating to the Code of Business Conduct and proposed revisions and updates to financial regulations.

The Report outlined that various elements of the Code were now in need of updating, given the procedure and approval limits had remained unchanged for a number of years for some elements of the Code. The proposed changes were highlighted in detail in the appendices attached to the Report and the Committee noted that consultation had been undertaken with Procurement and Legal Services, where appropriate.

In terms of the proposed changes, part 5b (Procurement Policy) would be updated to include reference to the need for due diligence to be exercised prior to any arrangements where a financial relationship would exist between the Council and external organisations.

The Report further outlined the proposed changes to Part 5c (Financial Regulations);

·         Section (A9) (grants and subscriptions) and the recommendation to increase the level from £20,000 to £50,000 (with grants or subscriptions below £50,000 to be approved by the relevant Chief Officer);

·         A11 and the use of consultants – whilst there were no changes, a link to the policy on Hiring of Temps, Agency Workers, Interims & Consultants would be added;

·         B12 (Capital Expenditure and Leasing) set out proposals for dealing with revised project approvals and the introduction of new capital items after the Capital Programme had been approved.

·         C7 (Sale of Assets) – the arrangements for Heads of Service to make arrangements for disposal of surplus items with an estimated value of up to £1,000, to increase to £5,000;

·         C8 (Stocks and Stores) – at present any deficiency, theft or other loss in value including obsolete stock exceeding 2.5% or £1,000 must be reported to the Chief Finance Officer and to the Cabinet for the necessary authority to write off. It is proposed that this be replaced with a requirement to report to the Chief Finance Officer only;

·         C13 (Voluntary Unofficial Funds) - updated to include reference to the need for separate VAT treatment;

·         D2 (Purchasing Arrangements) – minor changes proposed to update terminology and include references to call-off and framework contracts;

·         D3 (Orders for Goods and Services) – minor changes proposed to include references to VAT;

·         D8 (Payroll) – there were separate processes for dealing with Payroll and Pensions which were referenced accordingly in the section. In terms of overpayments it was proposed that the Chief Finance Officer continued to deal with cases under £10,000 and the prior authority of the Cabinet Member remained for sums in excess of £10,000. However, it was also proposed that the County Solicitor be consulted on all cases exceeding £2,500. A link had also been added to the Policy for dealing with Salary Overpayments;

·         D9 (Travelling, Subsistence and Financial Loss Allowance) – now included reference of the need to retain VAT receipts to support expenses / mileage claims;

·         D10 (Income and Banking) – minor wording changes in respect of VAT. In relation to write-offs the process remained the same except with cases under £10,000, but that the County Solicitor be consulted on write-offs exceeding £2,500;

·         D11 (Taxation) – to include additional text relating to requirements and responsibilities in relation to taxation, and specifically in respect of VAT;

·         E (External Arrangements) – the section had been expanded to cover collaborative and agency arrangements, external funding and other service changes and also further detailed standards, and reference to due diligence and VAT in particular.    

The report also outlined the proposed changes to Part 5e (Procedures for Tenders and Contracts) to include a reference to the due diligence process (1.4) and the removal of section 3.15 (sale of minor assets as this was already covered by Financial Regulations (C7). Also, section 4 (Content of Contracts) would include reference to the consideration of VAT.

For Part 5g (Code of Practice for the Disposal of Surplus Property), the section 2.1 was updated to provide a link to the Property Transaction Process. It was further proposed that the Chief Finance Officer be consulted on the sale of assets at less than Full Market Value (6.0) in accordance with the treatment proposed under Capital Receipts.

In discussion, Members asked for reassurance that local Councillors would always be informed of issues that impacted on their Divisions and that the revised financial regulations reflected this.

Members then suggested the following amendments;

·         Page 5 – removal of the sentence that referred to Best Value and the requirement to achieve 2% efficiency improvements (a previous (not current) Government requirement);

·         Page 5 (bullet 3) – reword the sentence to read ‘ensure more efficient administrative and monitoring processes’;

·         Page 7 – that Officers would undertake to add more detail in relation to due diligence in respect of any financial arrangements with charities;

·         Page 11 – clarification of the membership of the Procurement Group and the word Councillor to be used instead of Member;

·         Page 21 (A9.1) – the sentence to read ‘the Cabinet Member ‘will’ be kept informed;

·         Page 21 (A9.2) – Officers to quantify the word ‘adequate notice’ with a suitable timescale;

·         Page 21 (A11.1) – the full title of the Policy to be included in the paragraph which was ‘Hiring Temps, Agency, Interims & Consultants’;

·         Page 21 (A11.2) – to add the word ‘written’ before the word approval;

·         Page 21 (A11.3) – revision of the sentence to read ‘in consultation with the Leader and Chief Executive’ after the word Chief Officer;

·         Page 27 (B12.9) – replace the word ‘Board’ with ‘Group’;

·         Page 33 (C12.1.2) – replace the word ‘his’ with ‘their’; and

·         Page 65 (2.1) – amend the sentence to say that ‘A copy of the letter ‘will’ be sent to the Local Member, rather than the word ‘should’.

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

RESOLVED that subject to the inclusion of the changes listed above, the proposed amendments to Part 5 of the Constitution be approved.