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A3. SCOTTISH CHILDREN'S REPORTER ADMINISTRATION'S EXPENDITURE - GENERAL PRINCIPLES
A3.1 Expenditure not proposed in the budget
The SCRA shall not, without prior Departmental approval, enter into any undertaking to incur any expenditure not provided for in the annual budget approved by the sponsor Department.
A3.2 Procurement of goods and services
The SCRA may acquire goods and services without the approval of the sponsor Department. It must do so in line with the guidelines on procurement set out in the SPFM and any other relevant guidance on procurement issued from time to time by the Scottish Executive ( e.g. by the Scottish Procurement or the Building Divisions). The SCRA is responsible for complying fully and appropriately with its legal obligations, including, but not limited to the EC and WTO procurement rules.
A3.3 Value for money
The purpose of procurement is to meet the user's requirements. All expenditure proposals shall, so far as appropriate, be subject to the guidance in the Appraisal and Evaluation section of the SPFM. In accordance with the requirements of the SPFM, the SCRA must ensure that all purchases of works, equipment, goods and services are based on value for money, i.e. the optimum combination of whole life cost and quality (or fitness for purpose) and other issues such as delivery against price, to meet the user's requirements. It would not be consistent with value for money, or the equal treatment of suppliers, for procurement to be used to pursue aims unrelated to the subject of the contract. As far as possible, requirements should be expressed in terms of output and performance to provide scope for innovative solutions and avoid suggestions of favouritism.
A3.4 Competition
Contracts for goods and services should be awarded following competition, unless there are convincing reasons to the contrary, to promote economy, efficiency and effectiveness in public expenditure. Contracts of an ongoing nature should be regularly reviewed and subjected to competition at appropriate intervals (usually no more than every 3 years, unless economic arguments clearly justify a longer contractual relationship). The form of competition chosen should be consistent with any legal requirements and appropriate to the value and complexity of the goods or services being acquired.
Wherever practical, the SCRA shall expose activities undertaken by its own employees to outside competition and arrange for them to be contracted out where this would provide improved value for money. The SCRA shall send to the sponsor Department, not later than one month after the end of each financial year, an exception report for that year, with reasons, listing those cases with a cost of over £5,000 in which competitive tendering was not employed or in which the lowest tender was not accepted. Where there is no exception to report, a confirmatory "nil return" should be sent.
A3.5 Assessment of contractors
Potential contractors should be assessed on grounds of suitability, for example in respect of their financial standing and ability to perform the contract ( i.e. technical expertise). The SCRA should, wherever possible, seek opportunities to collaborate with others in respect of common requirements. This will help avoid unnecessary duplication of effort and gain the benefits of aggregation of requirements and economies of scale. If the SCRA wishes to enter into contracts under framework agreements put into place by others, it must seek advice as to whether the framework agreement has been awarded in accordance with the EC rules on behalf of other potential users.
A3.6 Separation of duties
There must be clear separation of duties between the roles of budget holder, customer, purchaser and those involved in making payments. The SCRA is, in accordance with the SPFM, responsible for ensuring that appropriate arrangements exist to ensure that staff involved in placing of contracts ("purchasers") have the necessary skills and experience. Any arrangements that the SCRA has in respect of granting staff delegated authority to award contracts should reflect this requirement. In all dealings with suppliers and potential suppliers, the SCRA must preserve the highest standards of honesty, integrity, impartiality and objectivity.
A3.7 Timeliness in paying bills
The SCRA should collect receipts and pay all matured and properly authorised invoices in accordance with the terms of contracts or within 30 days, as provided for in http://intranet/content/fcsd/finance/standards/spfm/payments/index.htm The SCRA should comply with the British Standard for Achieving Good Payment Performance in Commercial Transactions ( BS 7890).
A3.8 Novel, contentious or repercussive proposals
The SCRA must obtain the approval of the sponsor Department:
- before incurring any expenditure for any purpose which is or might be considered novel or contentious, or which has or could have significant future cost implication, including on staff benefits;
- before making any significant change in the scale of operation or funding of any initiative or particular scheme previously approved by the sponsor Department; and
- before making any change of policy or practice which has wider financial implications ( e.g. because it might prove repercussive among other public sector bodies) or which may significantly affect the future level of resources required.
The SCRA shall not establish subsidiary companies or joint ventures without the express approval of the sponsor Department. In judging such proposals the sponsor Department will have regard to the Scottish Ministers' wider strategic aims and objectives.
Any subsidiary company or joint venture controlled or owned by the SCRA shall be consolidated with it in accordance with UKGAAP for public expenditure accounts purposes subject to any particular treatment required by UKGAAP. Unless specifically agreed with the sponsor Department such subsidiary companies or joint ventures shall be subject to the controls and requirements set out in the Management Statement/Financial Memorandum.
A3.9 Risk management
3.9.1 The SCRA shall ensure that the risks, which it faces, are dealt with in an appropriate manner, in accordance with relevant aspects of best practice in corporate governance, and shall develop a risk management strategy, in accordance with the Risk Management section of the SPFM.
3.9.2 The SCRA shall adopt and implement policies and practices to safeguard itself against fraud and theft, in line with the Fraud section of the SPFM.
3.9.3 The SCRA shall take all reasonable steps to appraise the financial standing of any firm or other body with which it intends to enter into a contract or to give grant or grant in aid.
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