Role of Statutory Monitoring Officers

Protocol for S151 Officer - Borough Treasurer (also known as the Chief Financial Officer)

A. Statutory Responsibilities

1. The responsibilities of the Chief Financial Officer role rest with the Borough Treasurer who will be the Council's Section 151 Officer and undertakes to discharge his/her statutory responsibilities with a positive determination and in a manner that enhances the overall reputation of the Council.

2. The over-riding duty of the Chief Financial Officer is to fulfil the statutory responsibilities attached to the position. These statutory duties derive from 6 principle sources as set out below.

3. Statutory Definition - the statutory definition of the Treasurer was developed by case law in Attorney General -v- De Winton 1906. It was established that the Treasurer is not merely a servant of the authority but holds a fiduciary relationship to the local taxpayers.

4. Responsible Financial Officer - Section 151 of the Local Government Act 1972 requires every authority in England and Wales to "... make arrangements for the proper administration of their financial affairs and shall secure that one of their Officers has responsibility for the administration of those affairs". Legal opinion taken states that the term "administration" in the statutes means responsibility for managing the totality of the financial affairs of a local authority in all of its dealings.
   
   The Officer appointed as the responsible financial Officer must by virtue of section 113 of the Local Government Finance Act 1988 be a Member of a specified accountancy body. The statutory role must be performed by an "Officer" of the authority.

5. Unlawful Expenditure and an Unbalanced Budget - the Chief Financial Officer's duties are significantly extended by section 114 of the 1988 Act which requires a report to all Members to be made by that Officer in consultation with the Monitoring Officer and Head of Paid Service if there is, or is likely to be, unlawful expenditure or an unbalanced budget. Section 114 also requires the authority to provide its Chief Financial Officer with such staff, accommodation and other resources as are in his opinion sufficient to allow his duties under that section to be performed. When a decision may involve unlawful expenditure or a loss or deficiency or an unlawful item of account as a result of the exercise of executive functions then the Chief Financial Officer must submit his/her report to the Executive. He or she must also send copies of the report to every Member of the authority and the External Auditor.
   
   The Executive must consider the report within 21 days and all action in respect of the report must be suspended until it has been considered by the Executive. This is referred to as the "prohibition period". After considering the report the Executive must provide a report to the Council, Chief Financial Officer and the External Auditor explaining what action if any is to be taken and the reasons for that action or for not taking action.

6. Local Government Act 2000 - the Chief Financial Officer and the Monitoring Officer have a role in advising whether particular decisions are likely to be contrary to the policy framework or budget of the authority. The authority will need to ensure that the Chief Financial Officer and the Monitoring Officer have access as necessary to meetings and papers and that Members must consult with him/her regularly. The model Code of Conduct for Members requires Members to have regard to advice provided by the Chief Financial Officer in any formal report that s/he submits under section 114 of the Local Government Finance Act 1988.
   
   The Chief Financial Officer (like the Head of Paid Service & the Monitoring Officer) may not be suspended for more than 2 months for the purpose of investigating misconduct unless it is in accordance with the recommendation in a report made by an independent person.
   
   The Section 151 role is categorised under the 2000 Act as a non-executive function and the Chief Financial Officer is designated as a "statutory Chief Officer". This means that his/her appointment is the responsibility of the Council and not the Executive. The appointment cannot be delegated to the Head of Paid Service or his/her nominee.

7. Accounts and Audit Regulations - the Accounts and Audit Regulations 2003 emphasise the need for effective financial management and sound systems of internal control. They require that the Council should maintain an adequate and effective system of internal audit for their accounting records and control systems. It is a function of the Chief Financial Officer to direct Internal Audit and ensure that it is adequate for the authority's purposes.

8. Local Government Act 2003 - the Chief Financial Officer is required to:

   • Report to the authority at the time that the budget is considered and the Council Tax set on both the robustness of the budget estimates and the adequacy of financial reserves.

   • Ensure that the guidelines and ratios set down for the purposes of Prudential Capital regime are adhered to once fixed and report to Council if they are going to be infringed.

   B. The Position and Influence of the Borough Treasurer

9. There should be a single Treasurer who is a qualified Member of a specified accountancy body and who is vested with the statutory responsibilities for maintaining financial administration and steWardship including the responsible financial Officer duties and with strategic and corporate roles.

10. The Borough Treasurer should have the right to attend the authority's Executive Management Team meetings to ensure that financial and funding implications are factored into discussions from the outset and should have a parallel right of access to all meetings of the authority's Board, Cabinet, Council and its committee and panel meetings. This right shall include the ability to address all those bodies.

11. In order to ensure that there is an appropriate and clearly defined division of responsibilities for the corporate management of the authority such that no one individual has unfettered powers of decision, the role of Borough Treasurer should not be combined with the role of Chief Executive.

12. In order to ensure that the statutory duties are discharged effectively the Borough Treasurer should be able to control and influence both the work programme of Internal Audit in relation to those duties and the quantity and quality of staff made available to undertake the relevant internal audit projects.

    C. Key Roles and Activities of the Borough Treasurer

13. Maintaining strong financial management underpinned by effective financial controls - the key activities that the Borough Treasurer is responsible for in this area are:

    • Advising on corporate risk management including safeguarding assets, risk avoidance and insurance - this will encompass having a systematic risk management strategy.

    • Advising on effective systems of internal control and putting these in place. These will include financial controls.

    • Providing a formal assurance or commentary as to the effectiveness or otherwise of the internal control environment.

    • Ensuring that financial management arrangements are sound and effective.

    • Ensuring a prudential financial framework is in place so that the authority keeps its commitments in balance with available resources and monitors these.

    • Ensuring that budget calculations are robust and reserves adequate (his/her view of adequacy expressed to the budget making Council meeting) and that a sound medium term financial strategy exists for both revenue and capital spending.

    • Securing effective arrangements for prudential borrowing and treasury management including compliance with CIPFA Codes on Capital Finance and Treasury Management.

    • Ensuring that there is an effective Internal Audit function including the right of independent access to Officers and Members.

    • Securing effective systems of financial administration.

    • Ensuring that statutory and other accounts and associated claims and returns in respect of grant are prepared - this would include certifying that the annual Statement of Accounts presents fairly the financial position and transactions of the authority.

14. Contributing to Corporate Management and Leadership - the key activities in this area are:

    • Playing a full part in the authority's policy and strategy development, ensuring that resourcing issues are taken into account.

    • Providing input to key policies which contribute to the demonstration of effective corporate governance arrangements (Anti-Fraud and Corruption Strategy, Code of Corporate Governance, Risk Management Policy and Strategy, Whistle-blowing etc.)

    • Maintaining strong working relationships with leading Councillors, Cabinet Members, other Senior Management Team Officers and the authority's partners.

    • Ensuring that the authority's financial resources are well managed giving timely, accurate and impartial financial advice and ensuring that there are rigorous processes for constructing and monitoring budgets.

15. Supporting and advising democratically elected representatives - the key activities in this area are:

    • Providing advice to Members on developing an overall financial strategy that serves policy and service objectives.

    • Advising Members in identifying priorities setting the budget and identifying how resources will be used.

    • Helping Members to monitor financial performance against budgets including the provision of financial monitoring information and regular reports.

    • Providing training for Members so that they will be able to undertake their duties with regard to finance

    • Ensuring that all Members of the authority, not just Executive Members, receive advice and information

16. Supporting and advising Officers in their operational roles - the key activities in this area are:

    • Ensuring that there is an effective approach to financial management including widespread understanding of the role of finance and the importance of sound financial management.

    • Advising Officers of the financial consequences of development proposals and partnership opportunities and risks to support strategy development.

    • Ensuring that the authority's resources are well managed including the provision of financial information to facilitate the efficient and effective use of resources.

    • Ensuring that budgets are properly managed by making clear Officers' roles and responsibilities and ensuring that budget managers have access to financial skills and information.

    • Ensuring that financial advice and information is provided in an appropriate, complete and timely fashion.

17. Leading and Managing an effective and responsive financial service - the key activities in this area are:

    • Demonstrating accountability to Members of the Public by providing robust financial and performance information including at Council Tax consultation and during the inspection of the accounts.

    • Establishing good professional working relationships with External Auditors, Inspectors and other statutory agencies

    • Ensuring that the services provided by finance are in line with the expectation and needs of internal stakeholders.

    • Ensuring that high standards of performance are in place throughout the function.

    • Exercising leadership of the function by conducting him/herself in accordance with highest standards of personal and professional behaviour.

    • Acting as Head of Profession for all finance staff in the authority.

    D. Working Arrangements

18. It is important that Members and Officers work together to promote the financial health of the Council. The Chief Financial Officer plays a key role in this and it is vital that Members and Officers work with the Chief Financial Officer (and his/her staff) to enable him/her to discharge his/her statutory responsibilities and other duties.

19. The following arrangements and understandings between the Chief Financial Officer, Members and Chief Officers are designed to ensure the effective discharge of the Council's business and functions. The Chief Financial Officer will:-

    1. be alerted by Members and Officers to any issue(s) that may become of concern to the Council, including in particular, issues around the financial affairs of the authority and probity that are likely to (or do) arise;

    2. have advance notice (including receiving agendas, minutes, reports and related papers) of all relevant meetings of the Council at which a binding decision of the Council may be made (including a failure to take a decision where one should have been taken) at or before the Council, Cabinet, Board, Committee meetings and/or Executive Team (or equivalent arrangements);

    3. have formal input into all reports to Council, Cabinet, Board, Committee meeting and/or Executive Team, which have financial implications;

    4. have the right to attend any meeting of the Council (including the right to be heard) before any binding decision is taken by the Council (including a failure to take a decision where one should have been taken) at or before the Council, Cabinet, Board, Committee meetings and/or Executive Team (or equivalent arrangements);

    5. in carrying out any investigation(s), have unqualified access (subject to overriding legal constraints) to any information held by the Council and to any Member or Officer who can assist in the discharge of his/her functions;

    6. ensure the other statutory Officers (Head of Paid Service and the Monitoring Officer) are kept up-to-date with relevant information regarding any financial or probity issues that are likely to (or do) arise;

    7. meet regularly with the Head of Paid Service and the Monitoring Officer as the Standards Panel to consider and recommend action in connection with Corporate Governance issues and other matters of concern regarding any legal, ethical standards, probity, propriety, procedural or other constitutional issues that are likely to (or do) arise;

    8. in accordance with statutory requirements, make a report to the Council, as necessary on the staff, accommodation and resources s/he requires to discharge his/her statutory functions;

    9. have an appropriate relationship with the Executive Leader, Deputy Leader and the Chair of Standards Committee and Scrutiny Committees with a view to ensuring the effective and efficient discharge of Council business;

    10. develop an effective working liaison and relationship with the External Auditor;

    11. oversee the implementation and monitor the operation of the Code of Corporate Governance and report annually to the Joint Overview Panel on compliance with the Code in conjunction with the Monitoring Officer;

    12. have as deputies the Chief Accountant and Internal Audit Manager and keep them briefed on any relevant issues that they may be required to deal with in the absence of the Chief Financial Officer. The Deputies will only act in the absence of the Chief Financial Officer if urgent action is required which cannot await his/her return.

20. To ensure the effective and efficient discharge of the arrangements set out in paragraph 19 above, Members and Officers will report any breaches of Council financial policies or procedures to the Chief Financial Officer, as soon as practicable.

21. Where the Chief Financial Officer receives information of a potential financial irregularity s/he shall authorise the investigation of it by Internal Audit and shall report regularly to the Standards Panel on the progress in dealing with that matter. S/he will have power to insist on the carrying out of any action points in the final audit report's recommendation in consultation with the Standards Panel.

22. The Chief Financial Officer is available for Members and Officers to consult on any issues of the Council's finances and probity issues.

Monitoring Officer (Borough Solicitor) Protocol

A. Statutory Responsibilities

1. The Monitoring Officer is a statutory appointment under Section 5 of the Local Government and Housing Act 1989 as amended by paragraph 24 of schedule 5 Local Government Act 200. This Protocol provides some general information on how those statutory requirements will be discharged at Tameside Metropolitan Borough Council.

2. The current responsibilities of the Monitoring Officer role rest with the Borough Solicitor who undertakes to discharge his/her statutory responsibilities with a positive determination and in a manner that enhances the overall reputation of the Council. In doing so s/he will also safeguard, so far as is possible, Members and Officers whilst acting in their official capacities, from legal difficulties and/or criminal sanctions.

3. The main functions of the Monitoring Officer are:-

   1. To report to the Council and to the Executive in any case where s/he is of the opinion that any proposal or decision of the authority has given rise to or is likely to or would give rise to any illegality, maladministration or breach of statutory code under Sections 5 and 5A of the Local Government and Housing Act 1989; (LGHA 89)

   2. To investigate any matter which s/he has reason to believe may constitute, or where s/he has received an allegation that a matter may constitute, a reportable incident under Sections 5 and 5A of the LGHA 89;

   3. To act as the principal adviser to the authority's Standards Committee;

   4. To act as the principal adviser to the authority's Standards Panel

   5. To maintain the register of Members' interests;

   6. To act as the Proper Officer for the preparation, publication and retention of records of decisions taken by or on behalf of the Council and the Executive;

   7. To have responsibility for responding to complaints to the Local Government Ombudsman

   8. To undertake, with others, investigations in accordance with the Council's Whisteblowing procedures

   9. To act as Proper Officer for the Data Protection Act 1998 and the Freedom of Information Act 2000

4. In general terms, the Monitoring Officer's ability to discharge these duties and responsibilities will depend, to a large extent, on Members and Officers:-

   1. complying with the law (including any relevant Codes of Conduct);

   2. complying with any General Guidance issued, from time to time, by the Standards Committee and the Monitoring Officer;

   3. making lawful and proportionate decisions;

   4. complying with the Council's Constitution and standing orders

   5. generally, not taking action that would bring the Council, their offices or professions into disrepute; and

   6. communicating effectively with the Monitoring Officer and seeking advice on any issues relating to constitutional or ethical matters

The main statutory references for the Monitoring Officer's functions are set out in Appendix 1.

B. Working Arrangements

1. It is important that Members and Officers work together to promote the corporate health of the Council. The Monitoring Officer plays a key role in this and it is vital therefore, that Members and Officers work with the Monitoring Officer (and his/her staff) to enable him/her to discharge his/her statutory responsibilities and other duties.

2. The following arrangements and understandings between the Monitoring Officer, Members and Chief Officers are designed to ensure the effective discharge of the Council's business and functions. The Monitoring Officer will:-

   1. be alerted by Members and Officers to any issue(s) that may become of concern to the Council, including, in particular issues around legal powers to do something or not, ethical standards, probity, propriety, procedural or other constitutional issues that are likely to (or do) arise;

   2. have advance notice (including receiving agendas, minutes, reports and related papers) of all relevant meetings of the Council at which a binding decision of the Council may be made (including a failure to take a decision where one should have been taken) at or before the Council, Cabinet, Committee meetings and/or Executive Team (or equivalent arrangements);

   3. have the right to attend any meeting of the Council (including the right to be heard) before any binding decision is taken by the Council (including a failure to take a decision where one should have been taken) at or before the Council, Cabinet, Committee meetings and/or Executive Team (or equivalent arrangements);

   4. in carrying out any investigation(s) have unqualified access to any information held by the Council and to any Member or Officer who can assist in the discharge of his/her functions;

   5. ensure the other statutory Officers (Head of Paid Service and the Chief Finance Officer) are kept up-to-date with relevant information regarding any legal, ethical standards, probity, propriety, procedural or other constitutional issues that are likely to (or do) arise;

   6. meet regularly with the Head of Paid Service and the Chief Finance Officer to consider and recommend action in connection with Corporate Governance issues and other matters of concern regarding any legal, ethical standards, probity, propriety, procedural or other constitutional issues that are likely to (or do) arise;

   7. report to the Council, from time to time, on the Constitution and any necessary or desirable changes following consultation, in particular, with the Executive Leader, the Head of Paid Service and Chief Finance Officer;

   8. in accordance with statutory requirements, make a report to the Council, as necessary on the staff, accommodation and resources s/he requires to discharge his statutory functions;

   9. have an appropriate relationship with the Executive Leader, Deputy Leader and the Chair of Council Business, Standards Committee and Scrutiny Committees with a view to ensuring the effective and efficient discharge of Council business;

   10. develop effective working liaison and relationship with the Standards Board for England, the District Auditor and the Local Government Ombudsman (including having the authority, on behalf of the Council, to complain to them, refer any breaches to them or give and receive any relevant information, whether confidential or otherwise, through appropriate protocols, if necessary) and settle any compensation payments for alleged or actual maladministration found against the Council in consultation with the Chief Executive and the appropriate Senior Management Team Officer;

   11. maintain and keep up-to-date relevant statutory registers for the declaration of Members' interests, gifts and hospitality;

   12. give informal advice and undertake relevant enquiries into allegations of misconduct (in the absence of a written complaint being received by the Standards Board for England) and, if appropriate, make a written report to the Standards Committee (unless the Chair of the Standards Committee agrees a report is not necessary) or to the Standards Board for England if, in the opinion of the Monitoring Officer, there is a serious breach of Tameside Council's Code of Conduct for Members;

   13. in consultation, as necessary, with the Executive Leader of the Council, Cabinet, Standards Committee and the Standards Board for England, defer the making of a formal report under Section 5 Local Government and Housing Act 1989 where another investigative body is involved;

   14. undertake all statutory Monitoring Officer functions in respect of Mossley Town Council and make arrangements to ensure effective communication between his/her office and the Clerk to Mossley Town Council on Monitoring Officer and Standards Committee issues;

   15. subject to the approval of the Standards Committee, be responsible for preparing any training programme for Members on ethical standards and Code of Conduct issues;

   16. oversee the implementation and monitor the operation of the Code of Corporate Governance and report annually to the Joint Overview Panel on compliance with the Code

   17. advise on all applications from Council employees (or prospective employees) for exemption from political restriction in respect of their posts and where appropriate sign the certificate of opinion required by the independent adjudicator

   18. appoint a deputy and keep him/her briefed on any relevant issues that s/he may be required to deal with in the absence of the Monitoring Officer. The Deputy will only act in the absence of the Monitoring Officer if urgent action is required which cannot await the return of the Monitoring Officer.

3. To ensure the effective and efficient discharge of the arrangements set out in paragraph 5 above, Members and Officers will report any breaches of statutory duty or Council policies or procedures and other vires or constitutional concerns to the Monitoring Officer, as soon as practicable.

4. The Monitoring Officer will seek to resolve potential reportable incidents by avoiding the illegality etc., or by identifying alternative and legitimate means of achieving the objective of the proposal.

5. Where the Monitoring Officer receives a complaint of a potential reportable incident, s/he shall in appropriate cases seek to resolve the matter amicably, by securing that any illegality, failure of process or breach of code is rectified, that the complainant is informed of the rectification, with or without a compensation payment and/or apology. However, it is recognised that the Monitoring Officer may determine that the matter is of such importance that a statutory report is the only appropriate response.

6. In appropriate cases, the Monitoring Officer may rely upon existing processes within the authority (such as internal appeals procedures or insurance arrangements) to resolve any potential reportable incident, but may intervene in such processes to identify that the particular matter is a potential reportable incident and to ensure the satisfactory resolution of the issue.

7. In appropriate cases, and to secure the rapid resolution of a potential reportable incident or avoid a separate statutory report, the Monitoring Officer shall be entitled to add his/her written advice to the report of any other Officer of the authority.

8. Notwithstanding the above, the Monitoring Officer retains the right in all cases to make a statutory report where, after consultation with the Chief Executive and the Chief Finance Officer, s/he is of the opinion that this is necessary in order to respond properly to a reportable incident. In addition, in appropriate cases, the Monitoring Officer may refer matters to the Police for investigation.

9. The Monitoring Officer is available for Members and Officers to consult on any issues of the Council's legal powers, possible maladministration, impropriety and probity issues, or general advice on the constitutional arrangements (eg Standing Orders, policy framework, terms of reference, scheme of delegations etc).

10. To ensure the effective and efficient discharge of this Protocol, the Chief Finance Officer will ensure adequate insurance and indemnity arrangements are in place to protect and safeguard the interests of the Council and the proper discharge of the Monitoring Officer role.

C. Sanctions for breach of Tameside Council's Code of Conduct for Members and this protocol

Complaints about any breach of Tameside Council's Code of Conduct for Members must be referred to the Standards Board for England, which could lead, ultimately, to the disqualification of a Member. Complaints about any breach of this Protocol by a Member will be referred to the Standards Committee and to the relevant Leader and/or Chief Whip of the Political Party Group. Complaints about any breach of this Protocol by an Officer may be referred to the relevant Executive Team Officer and/or the Chief Executive.

Appendix 1 - Monitoring Officer Protocol

Summary of Main Monitoring Officer Functions