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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 27/03/2007
Annual Review of Financial Regulations and Contract Procedure Rules



APPENDIX E
WAVERLEY BOROUGH COUNCIL

EXECUTIVE - 27TH MARCH 2007

Title:

ANNUAL REVIEW OF FINANCIAL REGULATIONS AND CONTRACT PROCEDURE RULES
[Wards Affected: N/A]

Summary and purpose:

In February 2003, the Council approved a major revision of Waverley’s Financial Regulations and Contract Procedure Rules. These documents are reviewed each year to ensure that they continue to be fit for purpose. This report sets out a number of minor changes to take effect from 1st April 2007.

Social and Community Implications:

The Financial Regulations and Contract Procedure Rules help to ensure that the Council’s financial and procurement transactions are undertaken in accordance with good practice. This benefits the overall provision of Waverley’s services in terms of securing value for money and ensuring resources are available to achieve the Council’s objectives.

Environmental Implications:

There are no environmental implications arising from this report.

E-Government implications:

There are no direct e-government implications but the Contract Procedure Rules provide a flexible, up-to-date framework for procurement which applies to the delivery of Waverley’s e-government programme. This report includes some changes in relation to new forms of electronic transaction processing.

Resource and legal implications:

There are no direct resource implications, however, the proposed changes will further improve financial control and help to ensure that best procurement practice is in operation to achieve the best return on the use of resources.

Introduction and Background

1. In February 2003, the Council approved a major revision of Waverley’s Financial Regulations (FRs) and Contract Procedure Rules (CPRs). Officers undertook to review the adequacy of these documents each year and report back to Members, along with any proposed changes. Consequently annual reviews have taken place, and the most recent approved changes came into effect on the 1st April 2006.

2. The consequence of having held an annual review since 2003 is that the number of changes that are now recommended in any one year is low. It is important that the annual review is continued in order to ensure that the Council’s rules are kept up-to-date and relevant. They form a central part of the internal control environment, and thus have a direct relevance to the Statement on Internal Control.

The Proposed Changes

3. The proposed changes to the FRs are detailed in Annexe 1 and the proposed changes to the CPRs are shown in Annexe 2. The changes are highlighted by underlining new text and crossing through existing text where a deletion is proposed.

4. The changes to CPRs reflect the Council’s statutory responsibilities in respect of continuity planning and seek to address clauses where officers have identified potential for misunderstanding or misuse.

5. As approved in February 2003, in addition to these changes the main financial thresholds in the Contract Procedure Rules are increased by the Retail Price Index each year and then all limits, including those in the Financial Regulations, will be reviewed every five years. The amounts will increase by 4.2% (rounded) with effect from 1st April 2007 and these are detailed in Annexe 3 for information.

6. Following approval by the Council, a full updated set of both documents will be sent to all members to update their copy of the Members’ Handbook. All officers will be notified that the updated documents are held on the intranet and appropriate officers training will be offered to officers in 2007/08. Additionally, the revised CPRs will be amalgamated with some notes providing practical guidance, which have been prepared by the Director of Finance, so that officers only need to refer to one document.

Recommendation

That the Executive considers the proposed changes to the Financial Regulations and Contract Procedure Rules as detailed in Annexes 1 and 2 and recommends them to the Council for approval.

Background Papers (DoF)

There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.

CONTACT OFFICERS:

Name: Graeme Clark Telephone: 01483 523236
E-mail: grclark@waverley.gov.uk

Name: Mark Hill Telephone: 01483 523240
E-mail: mhill@waverley.gov.uk


ANNEXE 1

Proposed changes to Financial Regulations – From 1st April 2007

New Regulations

PARTNERSHIPS
Responsibilities Director of Finance
C801 To ensure that all service, contractual and financial partnerships have been the subject of a robust risk assessment prior to the Council committing to enter into the partnership, which has considered:
The responsibilities and commitment of the Council
Any financial obligations entered into
The governance arrangements
Any liabilities or insurance requirements

Responsibilities of chief officers
C802 Inform the Director of Finance and the Corporate Development Officer prior to committing the Council to any form of partnership
C803 Complete a risk assessment as described in C801
C804 Ensure that proper review and monitoring arrangements are in place
C805 Update Waverley’s central register of partnerships




ANNEXE 2

Proposed changes to Contract Procedure Rules – From 1st April 2007

A106 Where a quotation is sought, competitive prices may be received by the relevant chief officer either by fax, e-mail or in writing through the postal system. Where they are received by fax or e-mail The officer seeking them shall maintain a log showing:

A108 Where the contract value is estimated to be over threshold 2 and up to threshold 3, a minimum of three alternative quotations shall be sought in writing through the postal system in accordance with CPR J101. Where a tender is appropriate, CPR A107 and CPR J102 shall apply.

A109 Where the contract value is estimated to be over threshold 3 and up to threshold 4, a minimum of three tenders shall be sought in writing through the postal system in accordance with CPR J102.

F101 Before inviting tenders or quotations for contracts estimated to be over threshold 3 in value, or where a contractor has expressed an interest in being included in a standing list compiled under CPR H, an assessment should be made of a contractor’s
a) financial stability and resources
b) technical and other relevant references
c) insurances
d) business continuity plans
e) qualifications and experience
f) environmental, ethical and employment policies
g) previous experiences of dealings with the contractor H106 The relevant chief officer shall select the contractors to be invited to tender, taking account of an assessment of the contractors’:
a) financial stability and resources
b) technical and other relevant references
c) adequacy of insurances
d) business continuity plans
e) qualifications and experience
f) environmental, ethical and employment policies. H103 Expressions of interest shall be sought in writing through the postal system or by electronic means. L119 The relevant chief officer shall identify relevant Council policies, strategies and statements that are applicable to the contract, and shall ensure that an adequate and appropriate assessment of tenderers’ own policies and practices and/or readiness to comply with the Council’s is included in the assessment of tenders/quotations. This shall apply regardless of whether the best value solution or the lowest price is to be selected, and the assessment matrix prepared in accordance with CPR L102 shall include relevant criteria applicable to the assessment.

L120 Such assessment shall encompass as a minimum the following:
a) customer care
b) sustainability
c) equality and diversity
d) anti-fraud and corruption
e) health and safety

Q101 Contract Procedure Rules shall not apply in the following circumstances (N.B. this CPR should be read in conjunction with Q103):
a) extensions to the duration and/or value of an existing contract, provided that the extension is within the terms and conditions of the original contract, to a maximum of 3 years unless otherwise required by EC Directives, subject to
the provisions of CPR Q103, and
where the sum of the proposed extension and any previous extension(s) is more than 3 years, the approval of the Executive is required prior to the award of the proposed extension no contract may be extended more than once unless the approval of the Executive is obtained; S. POWER TO CANCEL A CONTRACT BECAUSE OF INDUCEMENT AND REWARD STANDARD CONTRACT CLAUSES ADDRESSING RELEVANT LEGISLATION

S102 Every written contract shall contain a clause that requires the contractor to work in partnership with the Council in combating fraud and corruption as applicable to the contract.

S103 Appropriate clauses shall be included in written contracts to ensure the contractor complies with Waverley’s policies, statements and practices as defined in accordance with CPR L120 throughout the period of the contract. V102 All payments made under a contract within threshold 4 and above in value shall be recorded in the contract payments register maintained by the Director of Finance. Where the contract value falls within threshold 3, but is not less than 40,000, the Director of Finance shall be consulted as to whether the contract shall be recorded in the contracts register. The relevant chief officer shall ensure that payment details are submitted for recording in the register prior to payment being made.


Table of Financial Limits in Contract Procedure Rules subject to RPI increase

CPR Threshold per CPR A101Current Financial LimitsNew Financial Limits with effect from. 1-4-2007
1Up to 3,800Up to 4,000
2From 3,800 to 11,000From 4,000 to 11,500
3From 11,000 to 54,300From 11,500 to 56,600
4From 54,300 to 108,600From 56,600 to 113,200
5Over 108,600Over 113,200

References to these limits in Contract Procedure Rule A101, as outlined in Annexe 2, and other documents will be amended accordingly.


Comms/exec/2006-07/342