Contact: Ejner Knudsen, ext 7403 email: [email protected]

1 Summary

1.1 Financial Regulations are the regulatory framework within which the financial affairs of the County Council operate, and apply to all staff and members in carrying out their duties. They also clarify responsibilities, seek to ensure compliance with statutory powers and duties, and establish a reference to best professional practice and processes.

1.2 Although comprehensive revisions are infrequent, the continuous monitoring of compliance does identify new developments particularly of professional practice and guidance, which are the source of the recommended changes in this report.

1 Treasury management

1.1 The primary source of guidance on treasury management is CIPFA's Code of Practice which was updated and reported to the Cabinet in February 2003. The corresponding Financial Regulations 4.13 to 4.18 do not specifically relate to the new code, having been drafted to recognise the previous version. It is therefore proposed to delete these paragraphs and replace with the following:

1.2 FR 4.13. The County Council has adopted the key recommendations of CIPFA's Treasury Management in the Public Services: Code of Practice (the Code), as described in Section 4 of that Code.

1.3 FR 4.14. Accordingly, the County Council will create and maintain, as the cornerstones for effective treasury management:

· a treasury management policy statement, stating the policies and objectives of its treasury management activities

· suitable treasury management policies (TMPs) setting out the manner in which the organisation will seek to achieve those policies and objectives and prescribing how it will manage and control those activities.

1.4 FR 4.15. The County Council's Cabinet will receive reports on its treasury management policies, practices and activities, including an annual debt management and investment strategy and plan in advance of the year, and an annual report after its close, in the form prescribed in its TMPs. The annual investment strategy requires the approval of the full County Council.

1.5 FR 4.16. The County Council delegates responsibility for the implementation and monitoring of its treasury management policies and practices to the Cabinet, and for the execution and administration of treasury management decisions to the County Treasurer, who will act in accordance with the council's policy statement and TMPs and CIPFA's Standard of Professional Practice on Treasury Management.

2 Taxation

2.1 The Money Laundering Regulations 2003 came into force on 1 March 2004 and require "relevant businesses" to adopt a number of key measures to counter the process of moving illegally generated funds through routine transactions. Whilst local authorities are not separately identified in the list of "relevant businesses" there are some local authority activities that could come within the scope of the regulations.

2.2 It is therefore proposed to add the following paragraph to Financial Regulation 5.8 which is designed to minimise the risk of the County Council and its officers' unwitting involvement in such illegal transactions and also avoid the need for registration with Customs and Excise:

· in accordance with advice received from Customs and Excise, the County Council will not accept settlement in cash of any transaction above the value of 15,000 euros equivalent (approximately £10,000).

Recommendation

1 That the Governance Committee recommends to the County Council the adoption of the revised Financial Regulations 4.13, 4.14, 4.15, 4.16 and 5.8 as set out in the above paragraphs and the deletion of existing Financial Regulations 4.17 and 4.18.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

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