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022/2014: Review of Financial Regulations – 19 December 2014

Executive Summary and recommendation

This Decision Notice sets out the results of a review of  the authorisation procedures for revenue and capital expenditure.  This review has been carried out to coincide with the changes to the governance arrangements and the meeting regime which is intended to streamline processes and enable strategic focus on the main aspects within the Police and Crime Plan .

At the same time, the opportunity has also been taken to cease using the Corporate Budget Devolved Resource Manual (CBDRM) system of budget management, and revert to a more widely understood budget management system based on the structure of the organisation and departments, to be effective from 1 April 2015.

The changes can be summarised as:

  • streamline the process to amend the agreed revenue budget in year by only requiring approval at Executive Board for public interest issues and/or where the item cannot be funded from within the existing budget;
  • streamline the process for including an item in the agreed Capital Plan without referral back to the Executive Board – where it is considered appropriate, approval of detailed business cases will be delegated to the Chief Finance Officers;
  • once an item has been approved for inclusion in the revenue or capital budget, budget holders will be empowered to deliver subject to a proper procurement process;
  • simplify the procurement process so that for procurements between £10,000 and £50,000 there is no requirement to complete a full ITT procurement exercise, provided that written quotes have been obtained and evidence of competition and value for money has been retained.

The Executive Board is asked to support the proposed changes and the consequent amendments to the Financial Regulations and the Contract Regulations and to recommend them to the Commissioner for approval, to commence with affect from December 2014.

At all times the provision of this paper will be subject to the requirement that matters of public interest (as defined in the memorandum of understanding) will always require the Commissioners approval.


Police and Crime Commissioner decision: Approved

Signature: signature
Date: 19 December 2014
Title: Police and Crime Commissioner


Part 1 – Unrestricted facts and advice to the PCC

  1. Introduction and background

This Decision Notice sets out the results of a review of  the authorisation procedures for revenue and capital expenditure.  This review has been carried out to coincide with the changes to the governance arrangements and the meeting regime.

At the same time, the opportunity has also been taken to cease using the Corporate Budget Devolved Resource Manual (CBDRM) system of budget management, and revert to a more widely understood budget management system based on departments from 1 April 2015.

  1. Matters for consideration

2.1  Authorisation procedures

The changes will maintain the Executive Board control over proposed projects to fit within the strategic direction, whilst reducing the number of papers (and repeat papers) that come to the Executive Board.

The changes can be summarised as:

  • streamline the process to amend the agreed revenue budget in year by only requiring Executive Board approval for public interest issues and/or where the item cannot be funded from within the existing budget (Chief Constable or Corporate Costs);
  • streamline the process for including an item in the agreed Capital Plan without referral back to the Executive Board – where the Executive Board consider it appropriate, they will be in a position to delegate approval of detailed business cases to the Chief Finance Officers;
  • once an item has been approved for inclusion in the revenue or capital budget, budget holders will be empowered to deliver subject to a proper procurement process;
  • simplify the procurement process so that for procurements between £10,000 and £50,000 there is no requirement to complete a formal procurement exercise, provided that written quotes have been obtained and evidence of competition and value for money has been retained.

Internal control and governance will be maintained by embedding:

  • checks and dip samples by the P2P team
  • internal audit review of the procurement process during 2015/16
  • P2P checks of procurement process before the purchase order is released
  • Monitoring of expenditure against budgets:
    • by the Chief Finance Officers
    • by reporting to the Corporate Performance and Scrutiny Board

The changes will be communicated and embedded by:

  • communication of the new procedures will be top down (via senior colleagues and Command Team) and bottom up (via direct communications to affected colleagues in the relevant department)
  • the updated Financial Regulations and DRM will be made available on the intranet and circulated directly to relevant colleagues
  • master classes for leaders to communicate the new procedures and deal with queries (January 2015).

The changes proposed are designed to empower budget holders to manage their budgets whilst facilitating holding them to account, and maintaining internal control and governance.

Appendix 1 is a flow chart summarising the proposed new system.

Appendix 2 is a copy of the Financial Regulations incorporating the proposed changes.

Appendix 3 is a copy of the Contract Regulations incorporating the proposed changes.

2.2  Budget Management

The CBDRM system of budget management has been in place since 2010/11 and now needs to be amended to take account of the changes to the management structure, empowerment of our leaders, and developments in coding structures following the transfer of staff between the Commissioner and the Chief Constable at Stage 2.

CBDRM was introduced to encourage cross cutting management of costs and resources, so that Departmental Budget Holders needed only to concern themselves with making best use of the volume of resources allocated to them, and control and monitoring of costs would rest with CBDRM budget managers.

Following Stage 2, most of the cross cutting budgets are now aligned directly to departments (eg all Estates costs are charged to P&F, all ICT costs are charged to ICT etc).  Nearly all of the remaining costs go to the home cost centre of the employee concerned and are the budget responsibility of the relevant department.

The budget management system will now be migrated to a full department based budget management system.  Salary and employee costs will continue to be managed and controlled contractually, and the former CBDRM budget managers will still take responsibility for setting organisation wide procedures and systems (eg travel booking, fuel cards etc).

In transactional processing terms this will not make a significant difference but it will help empower people by increasing understanding of the process.  There will be no changes to account codes, only to the authorisation route for (some) expenditure.  The necessary changes in Oracle iProc will be made at the same time as the changes as a result of the Operational Policing Model are implemented, and will be in place by 1 April 2015.

This change has been welcomed by budget holders, who find the system easier to understand.  The Commissioner Chief Finance Officer has expressed his view that this is a more efficient system for budget monitoring purposes.

  1. Other options considered, if any

The option to continue the current processes without change was considered, but rejected because of the benefits of the proposal as outlined.

  • empowering leaders to manage;
  • reducing bureaucracy;
  • maintaining governance and control where needed.
  • Departmental budget management is seen as a more understandable process than CBDRM.
  1. Contribution to Police and Crime Plan outcomes

The proposal will directly support the corporate priority “Transforming the Organisation”

  1. Consultations carried out

This Decision Notice has been written in conjunction with the Commissioner’s Chief Finance Officer and after consultation with the Chief Executive Officer.  Both have expressed their support for the proposed changes.

I have consulted with Budget Holders on the proposed changes and they have been widely welcomed.

  1. Financial Implications/Value for money

There are no direct financial implications of this decision notice.

  1. Legal Implications

Having read this report and having considered such information as has been provided at the time of being asked to express this view, the Acting Deputy Force Solicitor is satisfied that this report does not ask the PCC for North Yorkshire to make a decision which would (or would be likely to) give rise to a contravention of the law.

  1. Equality Implications

The author is satisfied that no impact will arise from acting on the recommendation set out in this report.

  1. Human Resources Implications

No direct people related issues evident other than potential upskilling or training of new  budget holders.  It should be noted however that this proposal fits with the direction and style of approach of the developing People Strategy which seeks to encourage delegation and decision making through managers which this option articulates through the empowerment of budget holders.

Public Access to information

The Police and Crime Commissioner wishes to be as open and transparent as possible about the decisions he/she takes or are taken in his/her name. All decisions taken by the Commissioner will be subject to the Freedom of Information Act 2000 (FOIA).

As a general principle, the Commissioner expects to be able to publish all decisions taken and all matters taken into account and all advice received when reaching the decision. Part 1 of this Notice will detail all information which the Commissioner will disclose into the public domain. The decision and information in Part 1 will be made available on the NYPCC web site within 2 working days of approval.

Only where material is properly classified as restricted under the GPMS or if that material falls within the description at 2(2) of The Elected Local Policing Bodies (Specified Information) Order 2011 will the Commissioner not disclose decisions and/or information provided to enable that decision to be made. In these instances, Part 2 of the Form will be used to detail those matters considered to be restricted.  Information in Part 2 will not be published.


Part 2

Is there a Part 2 to this Notice – YES / NO       (please delete as appropriate)

If Yes, what is the reason for restriction –

Originating Officer Declaration – Author name:      Jane Palmer

– Collar number:     4364

 

  Name      (Collar Number) Date of completion (√)
Head of Departmenthas reviewed the request and is satisfied that it is correct and consistent with the NYPCC’s plans and priorities. Jane Palmer004364 17.11.2014
Legal AdviceLegal advice has been sought on this proposal and is considered not to expose the PCC to risk of legal challenge or such risk is outlined in Part 1 or Part 2 of this Notice. C. Clarke3655 17/11/14
Financial AdviceThe PCC CFO has been consulted on this proposal, for which budgetary provision already exists or is to be made in accordance with Part 1 or Part 2 of this Notice. Michael Porter004317 18.11.14
Equalities AdviceEither there is considered to be minimal impact or the impact is outlined in Part1 or Part2 of this Notice.  Author to complete as Equalities matters are mainstreamed within departments. Jane Palmer004364 17.11.14
HR AdviceHR advice has been sought in relation to any people related matters  Rosemarie Holmes004647 18.11.14

 

I confirm that all the above advice has been sought and received and I am satisfied that this is an appropriate request to be submitted for a decisionSignature              Jane Palmer                                                                                      Date 17.11.14Author to complete at all times

 


 

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