Agenda item

In accordance with the Terms of Reference set out in the Constitution, the Audit Committee is required to maintain an overview of the Council’s Contract Procedure Rules and Financial Regulations.  The Audit Committee reviewed the revised documents at its meeting on 23 March and any observations will be circulated separately.  The Executive is now required to review the documents with proposed changes and recommend them to the Council for approval.

Recommendation

It is recommended that the Executive reviews and considers any observations from the Audit Committee and recommends to the Council that the revised Financial Regulations and Contract Procedure Rules be adopted.

The Executive has agreed to RECOMMEND to the COUNCIL that the revised Financial Regulations and Contract Procedure Rules be adopted.

[This item is recommended to the Council for decision and is not subject to the call-in procedure.]

[Reason: to review the documents in accordance with the Constitution and agree any revisions]

164.1  The Financial Regulations and Contract Procedure Rules were last updated in January 2012 and have been reviewed in line with our commitment within the Annual Governance Statement.

164.2  The objective of the review was to ensure that the Financial Regulations and Contract Procedure Rules reflect the current management reporting structure and to support service delivery whilst ensuring our governance arrangement remain secure in relation to risk and statutory compliance.

164.3  The Financial Regulations have been reviewed and proposed changes are shown as tracked changes at Annexe 1.  References to management posts superseded in the management restructure have been updated to the current post titles. The following items are drawn to the Executive’s attention for specific review:

            a.         A201 scheme of virement: propose to maintain these limits.

b.         B203: changed budget monitoring reports to CMT from Bi-monthly to monthly.

c.         C515: “maintain inventories for fixtures, equipment above £200” whilst low value, this limit deters fraud.

d.         C705: translated “Head of OD” to Finance for reporting staffing budget likely             overspends.

e.         D108: translate “Head of Information Technology” to Head of Customer IT and Office Services before changing any existing IT based systems.

f.          D203: write off limits for bad debts: propose to maintain the limits as shown in the table below:

g.         D227 and 227a: propose to maintain the 30 day invoice payment and 1 days for local suppliers and small businesses.

h.         D238: authorised Signatory list, translated “Head of Exchequer Services” to          read Head of Finance.

164.4  The Contract Procedure Rules have been reviewed and proposed amendments are shown as tracked changes at Annexe 2.  Public Contract Regulations 2015 were published on 6 February 2015 and come into effect on 26 February 2015. These have been reviewed alongside the CPRs and no amendments are proposed.

164.5  References to management posts superseded in the management restructure have been updated to the current post titles. The following items have been adjusted and are drawn to the Executive’s attention for review:

·         EU Directives references have been updated to include Public Contracts Regulations 2015 (“the Regulations”).

·         The CPRs have been updated to reflect the use of Intend as the procurement process. All references to postal and email have been deleted and new procedure implemented for “In-tend” electronic procurement.

·         Reference to “Improvement and Efficiency South East” has been deleted as this has been superseded by the In-tend process.

·         The same financial thresholds are proposed to continue, with only threshold 4 changing as necessary to comply with OJEU limit changes.

164.6  The financial thresholds for the aggregate value of the contract are currently as follows:

Threshold 1:  up to and including £10,000

Threshold 2:  from £10,000 up to and including £25,000

Threshold 3:  from £25,000 up to and including £172,000

Threshold 4:  over £172,000*

*Threshold 4 value aligns broadly to the OJEU limit for supplies and services. This will be updated automatically if the OJEU limit changes

EU Procurement thresholds from 1st January 2014 to 31 December 2015 are:

•           Supplies £172,514

•           Services £172,514

•           Works £4,322,012

The EU Procurement thresholds are still current as at February 2015.

164.7  Section 6 has been inserted as follows:

6          ELECTRONIC TENDERING (E-TENDERING)

6.1       All quotations and tenders shall be sought using the Council’s electronic tendering portal, the South East Shared Services e-Sourcing Portal, provided by ‘In-tend’.

The In-tend system captures and records information through out each tender exercise. Therefore requirement to maintain a paper audit trail as specified in previous CPRs has been removed.

No changes have been made to the number of quotes required within each threshold level; the current rules are workable and provide good governance.

Dispatch of invitation to tender rules are updated to comply with the In-tend system, which has templates. These capture information and remove the need for a manual record to be made. Section 12.

Receipt of tendered and quotations has been amended to comply with the In-tend system functionality. Section 13.

Method of opening and recording tenders has been amended to comply with the In-tend system functionality. Section 14.

164.8  In accordance with the Terms of Reference set out in the Constitution, the Audit Committee is required to maintain an overview of the Council’s Contract Procedure Rules and Financial Regulations. The Audit Committee reviewed the revised documents at its meeting on 23 March and endorsed the revisions, with no particular observations to submit to the Executive.

164.9  The Executive accordingly

RECOMMENDS that

69.       the revised Financial Regulations and Contract Procedure Rules, attached as Annexes 1 and 2, be adopted.

[Reason: to review the documents in accordance with the Constitution and agree any revisions]