Financial Regulations. Financial. Regulations. Working Together. September Borders College 24/11/ Working Together.

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1 Financial Working Together Regulations September 2009 Borders College 24/11/ Working Together

2 Table of Contents Section 1 - Introduction and Background... 6 Section 2 - Management Responsibility Responsibility of the Board Responsibility of the College Principal Responsibility of the Finance and General Purposes Committee Responsibility of the Director of Finance and Resources Responsibility of Staff Repayment of Funds Section 3 - Financial Planning (Capital & Revenue Budgets) Financial Plan and Capital Budget Revenue Budget Accounting Section 4 - Authorisation and Control of Capital Expenditure Effect of the Authorisation Financial Memorandum Variation During the Life of a Capital Project Budgetary Control Section 5 - Authorisation and Control of Revenue Expenditure Need for Consent Limitation On Expenditure Budgetary Control Variances Reports to Committees Section 6 - Budget Review Capital Revenue Section 7 - Control and Legality of Expenditure Legality Control Section 8 - Authorised Signatories Section 9 - Financial Reporting Responsibility Internal Reporting External Reporting Year End Reporting Accounts Directions Issued by Council Borders College 24/11/ Working Together

3 Section 10 - Control of Income Charges Accounting Arrangements Invoicing Recording of Funds Received Student Fees Personal Cheques Transfers of Cash, Cheques, etc Fees Collection Consultancies Grants and Contract Conditions Section 11 - Borrowing and Leasing Board of Management Borrowing Arrangements Borrowings to be in the Name of the College Leasing Section 12 - Banking Arrangements Arrangements with Bankers Opening and Closing of Bank Accounts Payments Into the Bank Control of Cheques Automated Transfers Section 13 - Cash Imprests Provision of Imprests Bank Accounts for Imprest Holders Exclusion of Payments Limit On Expenditure Statement of Account Termination of Imprest Holder Section 14 - Control of Investments and Trusts/Trust Funds Investments Deposits of Trusts Securities Reporting Section 15 - Control of Stocks and Fixed Assets Fixed Asset Register Responsibility Custody Records Stocktaking Movements Valuation Disposals Borders College 24/11/ Working Together

4 Section 16 - Order Book and Payments of Accounts Official Orders and Exemptions Method of Payment Checking of Goods, Materials and Services Received Central Purchasing and Standardisation Certification Cash Discounts Invoices Finance Department Checks Amendments to Payments/Vouchers Personal Purchases by Members of Staff Section 17 - Contracts and Tendering Record of Contracts Variations to Contracts Claims from Contractors Delay of Contract Interim Payments Tendering Procedures Section 18 - Accounting Accounting Procedures and Records Segregation of Duties Section 19 Audit Requirements and Treasury Management External Audit Internal Audit Reporting Internal Audit Standards Irregularities and Fraud Value for Money Treasury Management Section 20 - Salaries, Wages and Pensions Information Regarding Appointments Arrangements for Payments Form and Certification of Records Section 21 - Insurance Responsibility for Insurance Notification of Risks Notification of Claims Review of Cover Borders College 24/11/ Working Together

5 Section 22 - Security Responsibility for Security Limits to Cash Holdings Safe Keys Valuable Documents Data Protection Act Section 23 - Financial Systems Security Authorised Users Financial Procedures Manual Section 24 - Observance of Financial Regulations Responsibility of Senior Managers Breach of Regulations Register of Interest for Defined Categories of Staff Acceptance of Gifts or Other Benefits Section 25 - Review of Financial Regulations Responsibility Variation Section 26 - Appendices Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I Appendix J Borders College 24/11/ Working Together

6 Section 1 - Introduction and Background The Further and Higher Education (Scotland) Act ( the Act ) 2005 created a framework for further education colleges in Scotland offering full time and part time education to act as free-standing corporate bodies with powers to employ staff and to own land and buildings. Grant-in-aid funding is the responsibility of the Scottish Further and Higher Education Funding Council (SFC). Status of Financial Regulations This document sets out the Borders College s financial regulations. It translates into practical guidance the College s broad policies relating to financial control. This document was approved by the Finance and General Purposes Committee on 06 March It applies to the College and all its subsidiary undertakings. These financial regulations are subordinate to the College s statutes and to any restrictions contained within the College s Financial Memorandum with the SFC. These financial regulations do not in themselves set standards or provide control information, but they do outline a financial control system within which management can delegate authority whilst informing staff of correct financial procedures. The purpose of these financial regulations is to provide control over the totality of the College s resources and provide management with assurances that the resources are being properly applied for the achievement of the institution s strategic plan and business objectives: - Financial viability Achieving value for money Fulfilling its responsibility for the provision of effective financial controls over the use of public funds Ensuring that the institution complies with all relevant legislation Safeguarding the assets of the institution Borders College 24/11/ Working Together

7 Compliance with the financial regulations is compulsory for all staff of the College or its subsidiaries. Any member of staff who fails to comply with the financial regulations may be subject to disciplinary action under the institution s disciplinary procedures. It is the responsibility of department managers to ensure that their staff members are made aware of the existence and content of the College s financial regulations. The Finance Committee is responsible for maintaining a continuous review of the Financial Regulations, through the Director of Finance and Resources, and for advising the Board of any additions or changes necessary. The College s detailed financial procedures set out precisely how these regulations will be implemented and are contained in a separate manual which is available on all main College sites. The Financial Regulations should be read in conjunction with relevant guidance on accountability or propriety issued by: - The SFC Audit Scotland National Audit Office or the Scottish Parliament Audit Committee Government Accounting Government Internal Audit Manual UK GAAP & SORP: Accounting for Further and Higher Educational Institutions College Administrative Scheme The College s Financial Procedures The SFC issued a Financial Memorandum effective from 1st January The primary purpose of the Memorandum is concerned with establishing a framework of ground rules through which funds provided by SFC are administered by the College so as to ensure that these funds are applied appropriately and are safeguarded. Borders College 24/11/ Working Together

8 Section 2 - Management Responsibility 1 Responsibility of the Board The College Board of Management has a duty to manage the College and ensure that it provides suitable and efficient further education to its students, having regard to the provision in the area it serves and the likely needs of potential students. Its general responsibilities include: - Administering and managing the College, its property, rights, liabilities and obligations with the funds available from all sources. Ensuring the provision of suitable and efficient further education. Setting and charging fees for further education and deciding on which individual courses should be offered. Agreeing development plans for all College activities (including business plans for commercial activities). Allocating finance and other resources to these planned activities. Monitoring, reviewing and reporting on the general performance of the College and ensuring that its plans are being achieved. Ensuring that the College has in place effective internal control systems to safeguard the assets of the College and to prevent and detect fraud. Setting a framework for pay and conditions of service of all staff. Approving the appointment of external auditors and an internal audit service. Planning and conducting its financial and academic affairs so that its total income is not less than sufficient, taking one year with another, to meet its total expenditure. Approving the College s strategic plans. To assist the Board of Management in meeting these responsibilities, the Board will maintain an Audit Committee in accordance with the best practice principles of corporate governance. The Board will also maintain a Finance and General Purposes Committee, Remuneration Committee and other committees as appropriate. The responsibility of the Chairs of the Committees will be set out in the Board s Standing Orders. The Board of Management shall be responsible for ensuring that funds from the SFC are used only in accordance with the Act, The Financial Memorandum and any other conditions as prescribed by the SFC from time to time. It is also responsible for ensuring that the financial and other management controls applied by the College are sufficient to safeguard funds received from the SFC. The Board shall, for the purposes stated above, require the Principal to exercise responsibility for the control of resources, for seeking economy, efficiency and effectiveness in the use of all the College s resources, and for ensuring that financial considerations are taken into account at all stages in framing and reaching decisions and in their implementations. Borders College 24/11/ Working Together

9 The Director of Finance and Resources and Vice Principals shall be nominated representatives of the Principal when the latter is absent for any reason and shall be deemed to have the same authority for the purposes of these regulations in such eventualities. 2 Responsibility of the College Principal The College Principal is responsible for the detailed administration of the College and will act as the Chief Executive of the College and the Board s Chief Educational Adviser. As Accountable Officer of the College, the Principal is responsible for satisfying the Board of Management that funds provided to the College are used only in accordance with the Act, the Financial Memorandum issued by the SFC and other SFC conditions. The Principal is ultimately responsible to the Board for the control of resources, for seeking economy, efficiency and effectiveness in the use of the College s resources and for ensuring that financial considerations are taken into account at all stages of decision making. In particular, the Principal shall: - Sign the accounts and ensure satisfactory and adequate records are retained in a form acceptable for presentation to the Scottish Executive. Advise the Board of Management on the proper discharge of their financial duties. Satisfy the Board of Management that there is compliance with all such terms and conditions to which reference is made in the Financial Memorandum and advise the Board of Management if, at any time, in his/her opinion, any action or policy under consideration of the Board of Management is incompatible with the terms and conditions of the Memorandum. Notify the Board of Management and the Chief Executive of the SFC, without delay, of any matters of serious concern, including irregularities and fraud, regarding the College s financial affairs. Ensure that the requirements of Government Accounting are met. Be authorised to write-off losses and instruct special payments (subject to limitations made by the Council). The Principal may be assisted in the exercise of these functions by employees of the Board of Management, but shall not assign absolutely to any person the responsibility set out in this section. Borders College 24/11/ Working Together

10 3 Responsibility of the Finance and General Purposes Committee Subject to the Terms of Reference of Committees, the Finance and General Purposes Committee shall be responsible for regulating and controlling the finances of the College within the guidelines determined by the Board of Management. 4 Responsibility of the Director of Finance and Resources The Director of Finance and Resources shall be responsible for the administration of the financial affairs of the College. The implementation of operational financial management may be delegated to the Financial Controller. 5 Responsibility of Staff The staff of the College and its subsidiaries shall ensure at all times that they obtain value for money in performing the business of the College. Except in an emergency and/or as authorised by the Standing Orders relating to Contracts and the Scheme of Delegated Functions, staff shall consult with the finance staff and the Director of Finance and Resources with respect to any matter which is liable to affect materially the finances of the College before any provisional or other commitment is incurred or before reporting thereon to a Committee. 6 Repayment of Funds The Board of Management accepts that if the College fails to comply with any terms and conditions attached to funds from the SFC, the College may be required: - a. To repay to the SFC any sums received from it; and b. To pay interest to the SFC in respect of any period during which a sum due to the SFC in accordance with this or any other condition is unpaid. The Board also accepts that if, in the opinion of the SFC any provision set out in the Financial Memorandum is not observed by the College, the SFC will be entitled in respect of funds from the SFC: - In the case of funding by way of grant to determine immediate repayment of any and all grants, or any part or parts of the grants at any time after the SFC becomes aware of such failure to observe; and In the case of funding by way of loan to determine immediate repayment of the whole or part of each such loan at any time after the SFC becomes aware of such failure to observe. Borders College 24/11/ Working Together

11 Section 3 - Financial Planning (Capital & Revenue Budgets) 1 Financial Plan and Capital Budget The Principal shall determine the procedure for the preparation annually of a 3-year financial plan for capital expenditure as part of the Strategic Plan. This shall conform to the SFC s requirements. The annual capital budget shall correspond to the first year of the financial plan and detail the committed capital projects and new capital projects on which the College intends to incur expenditure. The detailed form of the financial plan and capital budgets shall be determined by the Principal, in consultation with the Director of Finance and Resources. All senior managers shall provide such information as may be required for the purpose of preparation of the financial plan and capital budget. The financial plan and capital budget intended as part of the Strategic Plan shall be considered by the Finance and General Purposes Committee and thereafter submitted to the Board of Management for approval. The Director of Finance and Resources is responsible for providing regular statements concerning all capital expenditure to the Finance and General Purposes Committee for monitoring purposes. Following the completion of a capital project, a post-evaluation or final report should be submitted to the Finance and General Purposes Committee including actual expenditure against budget and reconciling funding arrangements where a variance has occurred as well as other issues affecting completion of the project. The Board of Management will obtain prior written consent from the SFC before it undertakes a level of capital finance where the annualised costs of capital finance being the sum of the servicing and capital repayment costs of each loan or other arrangements spread evenly of the period of the relevant loan or arrangement or the actual annual cost in any one year of all capital finance: - Exceeds 5% of total income; or Exceeds half of the average surplus recorded in the audited financial statement for the last three years or half of the surplus forecast for the current year if that is lower; or Exceeds 10% of its annual income excluding bursaries and other earmarked funds received for revenue purposes, or 1 million whichever is the lower. The Board of Management will sanction capital finance arrangements only where: - It can demonstrate an ability to repay the finance and pay interest thereon without recourse to requesting additional grant funding from the Council; It can demonstrate that its ability to maintain financial and academic viability will not be impaired as a result; It can demonstrate the value to be generated by the transaction; It can demonstrate that any such new investment or asset acquisition is in accordance with the College s Strategic Plan. Borders College 24/11/ Working Together

12 An effective system of monitoring the rate of expenditure on capital projects and revenue budgets will be an essential part of the financial monitoring (Appendix C below). 2 Revenue Budget The Director of Finance and Resources is responsible for preparing annually a rolling three year financial plan for approval by the Board of Management on the recommendation of the Finance and General Purposes Committee and for preparing financial forecasts for submission to the SFC. Financial plans should be consistent with the College s Strategic Plans and Estates Strategy approved by the Board. The Board will, from time to time, set budget objectives for the institution. Budget objectives will be set out in the College s Financial Strategy and these will be reflected in the more detailed financial plans for the institution. The Director of Finance and Resources is responsible for preparing each year an annual revenue budget and capital programme for consideration by the Finance and General Purposes Committee before submission to the Board. The budget should also include monthly cash flow forecasts for the year and a projected year-end balance sheet. The Director of Finance and Resources will ensure that detailed budgets are prepared in order to support the resource allocation process and that these are communicated to budget holders as soon as possible following their approval by the Board. Each senior manager shall provide the Principal with such details as may be required for the purposes of reporting to the Finance and General Purposes Committee on the financial planning of revenue expenditure including data on the levels of existing services. Each senior manager shall, in conjunction with the Director of Finance and Resources prepare revenue estimates in respect of his/her Department in accordance with resource allocations laid down by the Finance and General Purposes Committee and to the timetable set by the Director of Finance and Resources, with the approval of the Principal. The revenue budget shall be considered by the Finance and General Purposes Committee and thereafter submitted to the Board of Management for approval along with a recommendation by the Finance and General Purposes Committee as to the fees to be charged. Changes proposed to the approved budget will be first considered by the Finance and General Purposes Committee, which will make proposals to the Board. Borders College 24/11/ Working Together

13 Other Major Developments Any proposed establishment of a company or joint venture, or any new aspect of business which will require an investment in buildings, resources or staff time of more than 50,000 should be presented for approval to the Finance and General Purposes Committee. The Director of Finance and Resources will establish protocols for these major developments to enable them to be considered for approval. 3 Accounting The College s financial year will run from 1 August until 31 July the following year. The consolidated financial statements are prepared on the historical cost basis of accounting and in accordance with applicable accounting standards. The financial statements are prepared in accordance with Statement of Recommended Practice Accounting for Further and Higher Education, subject to any specific requirements of the funding body, and in accordance with the provisions of the Companies Act New land and buildings will be recorded in the balance sheet at actual build or acquisition cost, except where they are received as gifts, where they will be recorded at depreciated replacement value. Buildings will be depreciated in equal instalments over their estimated remaining useful life. Land will not be depreciated. The Director of Finance and Resources is responsible for the retention of financial documents. These will be kept in a form that is acceptable to the relevant authorities. The College is required by law to retain prime documents for the previous six years and the current year. These Include: - Official purchase orders Paid invoices Accounts raised Bank statements Copies of receipts Paid cheques Payroll records The Director of Finance and Resources will make appropriate arrangements for the retention of electronic records. Additionally, for auditing and other purposes, other financial documents should be retained for three years or as determined by the funding body. Public Access Under the terms of the Charities Act 1993, the Board is required to supply any person with a copy of the College s most recent financial statements within two months of a request. Borders College 24/11/ Working Together

14 The college will, wherever possible, hold financial transactions in electronic format. The College will obtain confirmation from its Internal Audit Service that the proposed recording of transactions in electronic format satisfies the requirements of Audit and other key stakeholders. Under the terms of the Freedom of Information Act and the College s freedom of information procedure, the College is committed to assisting members of the public in exercising their statutory rights to access all types of recorded information including original source documentation (hard copy). Requests for material will be dealt with promptly with information being made available within 20 working days. The Board has a duty to keep proper accounting records and shall prepare financial statements in respect of each accounting period in the form prescribed by the SFC. The College must maintain details of, and record in its Financial Statements, losses and special payments. In this context, the phrase losses and special payments includes, but is not restricted to, losses and special payments arising from: - The write off of bad debts; Any other waiver by the College of sums due to it; The writing down of the carrying value of assets in the balance sheet due to a permanent diminution in value; Any financial losses due to fraud, theft or other illegal acts by staff, students or third parties; Any ex-gratia payments made by the College for whatever purpose; or Payments or other financial compensation in respect of termination of employment where such payments are in excess of the normal statutory and contractual level. The SFC s present directions are that the financial statements shall conform to the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education, and to other relevant statements and standards of the Accounting Standards Board and its predecessor body. The Board shall have submitted to it periodic statements of the financial affairs of the College and scrutiny of these should be delegated to the relevant committee. Commercial Contracts and Other Services In determining the price to be charged for commercial contracts and other external services, the College shall have regard to the need to assess and to recover full costs unless the Board of Management considers it appropriate to do otherwise, having regard to the circumstances of particular cases. In such circumstances the Board of Management must be fully aware of the extent and source of resources being used to meet the shortfall on the cost recovery of these activities. Borders College 24/11/ Working Together

15 Section 4 - Authorisation and Control of Capital Expenditure Attention is drawn to the delegated procedures produced by the SFC. The SFC has issued a number of guides setting out procedures to be followed when developing a business case for a major estates project. In addition the College should follow guidance set out in the Government s Green Book. 1 Effect of the Authorisation (A) Financial Plan The approval of the financial plan by the Board of Management shall permit senior managers: - i. To incur preliminary expenses and design costs in respect of projects included in years two and three of the plan; and ii. To take steps necessary to acquire land associated with projects specifically included in the years two and three of the plan. Expenses to be incurred in terms of Paragraph A (i) and A (ii) above must be included in the financial plan in year one. (B) Capital Budgets The approval of the capital estimates by the Board of Management (and the receipt of the consent of the SFC) shall permit senior managers to proceed with projects within the capital estimates unless: - i. The actual tender cost of the project or the revised estimate of the project exceeds the provision in the capital estimates; or ii. The nature of the capital project has changed substantially from that envisaged when the capital estimates were approved. In these cases fresh approval shall be necessary from the Finance and General Purposes Committee before the project proceeds; such approval shall be given only if the expenditure can be contained within the total capital allocation for the College that year. 2 Financial Memorandum The Financial Memorandum issued by the SFC sets out circumstances when borrowing consent is required for the acquisition of land and buildings. Borders College 24/11/ Working Together

16 3 Variation during the Life of a Capital Project Once a design has been drawn up and cost limits have been approved by the Council there must be no departure from approved costs without authorisation. If it becomes apparent that a project will be under/over spent, or if the phased expenditure is likely to vary, it shall be the duty of the College Principal to report immediately, formally and in writing, to the Council so that appropriate action may be taken. 4 Budgetary Control It is the duty of the Director of Finance and Resources to furnish the Board of Management, relevant committees, and senior managers, regularly and timeously, with budgetary control statements comparing actual financial performance with the relevant capital and revenue estimates. The control of income and expenditure within an agreed budget is the responsibility of the designated budget holder, who must ensure that day to day monitoring is undertaken effectively. Significant departures from agreed budgetary targets must be reported immediately to the Director of Finance and Resources by the budget holder concerned. It is the duty of the senior managers concerned to ensure that the provision for capital expenditure is not exceeded and that all expenditure conforms to these regulations and the SFC s Building Procedures Notes. Borders College 24/11/ Working Together

17 Section 5 - Authorisation and Control of Revenue Expenditure 1 Need for Consent No expenditure shall be incurred without the approval of the Finance and General Purposes Committee, except as authorised by the Scheme of Delegated Functions, and the standing orders relating to contracts. 2 Limitation on Expenditure No expenditure chargeable to revenue shall be incurred unless it has been included in the revenue budget except: - i. Where a supplementary estimate has been approved by the Finance and General Purposes Committee or ii. In emergency situations, in terms of the Scheme of Delegated Functions. 3 Budgetary Control The Principal shall determine which budgets shall be delegated to which officers. The College shall, by the 30th June each year, or other date as agreed, submit to the SFC a budget of income and expenditure authorised by the Board of Management for the financial year beginning 1 August following, in such form as the SFC may require. Such delegated budgets shall constitute authority to incur expenditure subject to: - The Board s tendering procedures being observed; and The Board s authorisation limits not being exceeded. It shall be the duty of the Director of Finance and Resources to furnish regularly and timeously to all senior managers budgetary control statements on revenue income and expenditure comparing actual performance with the respective budgets. It shall be the duty of the senior managers concerned to ensure that items of expenditure in the revenue budget of the cost centres for which they are responsible conform to the requirements of these Regulations. Senior managers shall also provide the Director of Finance and Resources with whatever assistance and information he/she considers necessary in order to ensure the effectiveness of the budgetary control system. This will include the allocation of budgets over cost centres, the phasing of budgets over accounting periods, the reallocation of budgets between cost centres as required, the explanation of budgetary variances and the determination of probable out-turns. Borders College 24/11/ Working Together

18 Delegated budgets not used by delegated budget holders at the end of the financial year shall lapse unless specific authorisation has been given by the Principal to an agreed limit of carry forward. 4 Variances Where it appears that any head of income or expenditure may vary significantly from that appearing in the revenue budget, it shall be the duty of the senior manager concerned, in conjunction with the Director of Finance and Resources to report to the Principal as soon as possible after the variance has become apparent the details of the variance and any remedial action required. 5 Reports to Committees All reports presented to the Board and any of its committees must specifically identify the extent of any financial implications. Any such implications must be clearly stated in the report identifying cost and income in the current and future years, the impact on capital and revenue spending and whether or not, and exactly where, such resources are included in the budget or, if not, how and from where it is proposed that such financial resources be obtained. In addition reports should describe risks associated with a particular project and sensitivity analysis should be carried out on major projects presented for approval. Borders College 24/11/ Working Together

19 Section 6 - Budget Review 1 Capital Since capital expenditure will be project-specific, the allocation of funds from capital to revenue is not an allowable option; however, with the approval of the Board of Management, capital projects may be funded from revenue. 2 Revenue Budget revision shall be permitted only in the following circumstances: i. A deficit under a head of expenditure may be balanced by a transfer from another head of expenditure on which there is a surplus where the deficit has arisen due to circumstances which could not have been foreseen and the transfer would not involve a change of policy of the Board of Management. Where the amount involved is under 50,000 the budget revision can be agreed by the Principal. Where the amount is over 50,000 the agreement of the Finance and General Purposes Committee shall be required. ii. Where a net saving could be achieved by over-spending under one head of expenditure without changing the policy of the College, a transfer may be made from a head of expenditure which is in surplus provided approval as in Paragraph (i) above is obtained. Borders College 24/11/ Working Together

20 Section 7 - Control and Legality of Expenditure 1 Legality It shall be the duty of all staff to ensure no expenditure or contractual obligation is incurred unless it is within the legal powers of the College. In cases of doubt, they must consult the Principal or the Director of Finance and Resources before incurring expenditure. Expenditure on new services, contributions to outside entities and responses to emergency situations which require expenditure must be clarified as to legality prior to being incurred. 2 Control Senior managers are responsible for the control of all expenditure within the cost centres for which they are responsible for. They must ensure that all resources are properly used and that expenditure both committed and incurred is fully within their approved departmental budget. Borders College 24/11/ Working Together

21 Section 8 - Authorised Signatories A list of authorised signatories is maintained by the Director of Finance and Resources. This is based on the College management structure and sets out low level authorisation for minor transactions whilst ensuring significant transactions have the appropriate senior manager s authorisation, with multiple signatories where appropriate. All amendments to the list must have the approval of the Principal. Borders College 24/11/ Working Together

22 Section 9 - Financial Reporting 1 Responsibility The Director of Finance and Resources shall be responsible for the content of all financial reports submitted to the Board of Management and for ensuring that the Board s requirements are satisfied timeously. 2 Internal Reporting The Board of Management has devised a scheme of their own internal reporting requirements containing summary financial reports at periods as they see fit. 3 External Reporting External reporting requirements are embodied in the Act and guidance circulars issued by the Council. 4 Year End Reporting The format of year-end statutory reporting is embodied within the SFC Circular Letter issued annually to colleges. 5 Accounts Directions issued by Council The SFC directs colleges to comply with the SORP: Accounting for Further and Higher Education Institutions. Borders College 24/11/ Working Together

23 Section 10 - Control of Income All College employees have a general responsibility for ensuring that resources are properly used and contained within budget limitations whilst ensuring that all income due to the College is properly and promptly recovered. The Director of Finance and Resources is responsible for ensuring that appropriate procedures are in operation to enable the institution to receive all income to which it is entitled. All receipt forms, invoices or other official documents in use and electronic collection systems must have the prior approval of the Director of Finance and Resources. The Director of Finance and Resources is responsible for the prompt collection, security and banking of all income received. The Director of Finance and Resources is responsible for ensuring that all grants notified by the SFC and other bodies are received and appropriately recorded in the institution s accounts. 1 Charges The Principal shall review, at least annually, the charges made for services provided by the College (insofar as these are not externally set other than by market forces). Any resultant revision should be submitted for consideration by the Finance and General Purposes Committee or to the Board of Management unless otherwise provided for in specific SFC regulations and/or legislation. In performing these revisions regard should be given to the current rate of inflation as a guide to the minimum increase required to preserve the real value of income. They should also reflect the impact of any change in the role of value added tax where appropriate. 2 Accounting Arrangements It is the duty of the Director of Finance and Resources to make adequate financial accounting arrangement to ensure the proper recording of all monies due to the College and the proper collection, custody, control and disposal of all funds. 3 Invoicing Particulars of all work done or services provided by the College shall be notified to the Director of Finance and Resources promptly in an approved form and all accounts for income due to the College shall be rendered by or under arrangements approved by the Director of Finance and Resources. Borders College 24/11/ Working Together

24 4 Recording of Funds Received All monies received within departments from whatever source must be recorded by the department on a daily basis together with the form in which they were received, for example cash, cheque and other negotiable instruments. All monies received must be paid to the cashier promptly, and in accordance with the timetable laid out by the Director of Finance and Resources. The custody and transit of all monies received must comply with the requirements of the College s insurers. All sums received must be paid in and accounted for in full, and must not be used to meet miscellaneous expenses. Personal or other cheques must not be cashed out of money received on behalf of the institution. The College may only receive payments by debit or credit card or internet receipts using procedures approved by the Director of Finance and Resources. The Director of Finance and Resources will ensure that: - Debtor invoices are raised promptly on official invoices, in respect of all income due to the College. Invoices are prepared and recorded completely and accurately, showing the correct amount due and are credited to the appropriate income code. Any credits granted are valid, properly authorised and completely recorded. VAT is correctly charged where appropriate. Monies received are posted to the correct debtors account. Swift and effective action is taken in collecting overdue debts, in accordance with the financial procedures. Outstanding debts are monitored and reports prepared for management. Only the Director of Finance and Resources can implement credit arrangements and indicate the periods in which different types of invoice must be paid. Requests to write off debts in excess of 5,000 must be referred in writing to the Director of Finance and Resources for submission to the Finance and General Purposes Committee for consideration. Debts below this level may be written off with the permission of the Director of Finance and Resources. 5 Student Fees The procedure for collecting tuition fees must be approved by the Director of Finance and Resources. He/she is responsible for ensuring that all student fees due to the College are received. Any student who has not paid an account for fees or any other item owing to the College shall not receive the certificate of degree, diploma or other qualification awarded by the College until the outstanding debts have been cleared. Such students shall be prevented from re-enrolling at the College and from using any of the College s facilities unless appropriate arrangements have been made. Borders College 24/11/ Working Together

25 The College s scheme for emergency/hardship loans must be approved by the Board. This will include the maximum assistance that can be given in any individual case. Under no circumstances should payments be made other than in accordance with the approved scheme. 6 Personal Cheques Personal cheques shall not be cashed out of the monies held on behalf of the College. 7 Transfers of Cash, Cheques, etc All transfers of cash or cheques from one member of staff to another shall be evidenced in the records of the departments concerned by the signature of the receiving officer. 8 Fees Collection Teaching staff must ensure that only properly registered students whose fees have been accounted for are admitted to and allowed to continue classes. 9 Consultancies Staff members who enter into agreements for the provision of consultancy services must ensure that the charges made are consistent with College policies and have been approved in writing by the Principal. 10 Grants and Contract Conditions The Director of Finance and Resources shall be advised timeously of all relevant information necessary to submit or certify applications for grants due to the College. All grants are to be paid direct to the College via the Finance Department. Many grant awarding bodies and contracting organisations stipulate conditions under which their funding is given. In addition, there are often procedures to be followed regarding the submission of interim or final reports or the provision of other relevant information. Failure to respond to these conditions often means that the College will suffer a significant financial penalty. It is the responsibility of the named manager or grant holder to ensure that conditions of funding are met. Any loss to the College resulting from a failure to meet conditions of funding is the responsibility of the budget holder, and will be charged against departmental funds. Borders College 24/11/ Working Together

26 Section 11 - Borrowing and Leasing 1 Board of Management The Board shall not borrow from any source, give any guarantee, indemnity or provide a letter of comfort, without prior written consent of the SFC. 2 Borrowing Arrangements Where the SFC gives approval for borrowings, arrangements for said borrowings will be undertaken by the Director of Finance and Resources who will report regularly to the College Principal and the Finance and General Purposes Committee. 3 Borrowings to be in the Name of the College Subject to the above all borrowings on behalf of the College shall be effected in the name of the College. The Principal and the Director of Finance and Resources are jointly authorised to sign all loan documents unless: - i. Statute or other legal requirements provide that other signatures are required. ii. Other arrangements have been approved by the Board of Management. 4 Leasing No leasing of equipment or capital assets should be undertaken on behalf of the College without the prior approval of the Principal and the Director of Finance and Resources. Borders College 24/11/ Working Together

27 Section 12 - Banking Arrangements Appointment of Bankers The Board is responsible for the appointment of the institution s bankers and their professional financial advisers (such as investment managers) on the recommendation of the Finance and General Purposes Committee. The appointment shall be for a specific period after which consideration shall be given by the Finance and General Purposes Committee to competitively tendering the service. 1 Arrangements with Bankers All arrangements with the College s bankers concerning the operation of its accounts and the issuance of cheques shall be made by the Director of Finance and Resources and approved by the Board of Management. 2 Opening and Closing of Bank Accounts All official bank accounts shall bear the name of the College, and shall only be opened or closed by the Director of Finance and Resources, with the prior formal approval of the Finance and General Purposes Committee. 3 Payments into the Bank All monies received shall be paid into the College s bank accounts daily or at such other interval as may be approved by the Director of Finance and Resources. 4 Control of Cheques All arrangements for the ordering, safe-keeping, control and signing of cheques on behalf of the College will be made by the Director of Finance and Resources. Authorised cheque signatories are the Principal, Director of Finance and Resources, Vice Principals and the Financial Controller. Two cheque signatories are required on all cheques. 5 Automated Transfers All automated transfers on behalf of the College, such as BACS or CHAPS must be authorised in the appropriate manner. Details of authorised persons and limits shall be provided for in the College s detailed financial procedures. The Director of Finance and Resources is responsible for ensuring that all bank accounts are subject to regular reconciliation and that large or unusual items are investigated as appropriate. Borders College 24/11/ Working Together

28 Section 13 - Cash Imprests 1 Provision of Imprests On the recommendation of the senior manager concerned, the Director of Finance and Resources may provide imprest accounts as considered appropriate. Those named employees of the College will use them for petty and other minor expenses. 2 Bank Accounts for Imprest Holders The Director of Finance and Resources shall open accounts where it is considered appropriate and in no circumstances shall the imprest holder overdraw the account. It shall be a standing instruction to the College s bankers that an imprest holder s account shall not be overdrawn. Bank accounts will not be opened by any officer other than the Director of Finance and Resources. 3 Exclusion of Payments No payments to the College shall be paid into an imprest account but shall be lodged in the main College bank account. Any bank interest earned on imprest accounts will be transferred immediately by standing instruction to the main College bank account and will not be left in the imprest bank balance. 4 Limit on Expenditure Payments from imprest accounts shall be limited to minor items of expenditure and only to such amounts as the Director of Finance and Resources may approve. Payments shall be supported by an authorised voucher. Imprests must not be used to pay major expense claims or any supplier invoices. The Director of Finance and Resources shall prescribe an upper limit for individual items of expenditure to be met out of the imprest funds. 5 Statement of Account The Director of Finance and Resources may at any time request a certificate of the balance from any employee charged with the holding of an imprest. 6 Termination of Imprest Holder An employee leaving the employment of the College or otherwise ceasing to be entitled to hold an imprest advance shall account to the Director of Finance and Resources for the amount advanced to him. A formal record of this accounting shall be prepared and retained in the department concerned for inspection. Borders College 24/11/ Working Together

29 Section 14 - Control of Investments and Trusts/Trust Funds The Director of Finance and Resources has operational responsibility for the control of investments and trusts/trust funds. 1 Investments College funds shall be invested, bought and sold in accordance with the policy of the Board of Management and shall be held in the name of the College unless otherwise provided for in a trust deed or other document. All trust funds shall, whenever possible, be held in the name of the College. 2 Deposits of Trusts Securities All officers acting as trustees by virtue of their official position shall deposit all securities, bank books, documents and articles of value relating to any trust with the Director of Finance and Resources unless the relevant trust deed otherwise provides. 3 Reporting An annual report must be presented by the Director of Finance and Resources to the Board of Management and Trustees (where different), detailing the balance of funds and source and application of funds during the course of the financial year. Borders College 24/11/ Working Together

30 Section 15 - Control of Stocks and Fixed Assets 1 Fixed Asset Register In order to minimise the risk of misappropriation of the College s assets a register will be maintained listing the details of all equipment, motor vehicles and other fixed assets owned or purchased by the College. 2 Responsibility Senior Managers will have overall responsibility for the management and control of stocks and equipment, although the Director of Finance and Resources shall be responsible for the control systems in place. 3 Custody The safe custody and storage of equipment and stocks will be the responsibility of the senior managers in charge of each cost centre. 4 Records The Director of Finance and Resources will specify the form of fixed assets and stores records to be used, together with the control systems in place. Assets owned by the institution shall, so far as is practical, be effectively marked to identify them as institutional property. Assets owned or leased by the College shall not be subject to personal use without proper authorisation. 5 Stocktaking Stocktaking of stores and equipment will be performed at regular intervals as agreed by the Director of Finance and Resources, and as set out in the College s detailed financial procedures. 6 Movements Attention is drawn to the financial procedures manual in the relation to purchase and sale of goods and services. When equipment and stocks are transferred to another department the records should be updated to reflect the move. 7 Valuation Stocks must be valued at the lower of cost and net realisable value. Borders College 24/11/ Working Together