Item 8 - Financial Regulations
North Lanarkshire Council · 14 February 2023
Back to IJB Performance, Finance and Audit Committee — 14 February 2023 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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1 REPORT Item No: 8 1. PURPOSE OF REPORT 1.1 This paper is coming to the Performance, Finance and Audit (PFA) Committee: For approval For endorsement For noting 1.2 This report requests that the amendments to the Financial Regulations are noted. 2. ROUTE TO THE PERFORMANCE, FINANCE AND AUDIT COMMITTEE 2.1 This paper has been: Prepared By; Chief Financial Officer Reviewed By; Chief Officer 3. RECOMMENDATIONS 3.1 The PFA Committee is asked to agree the following recommendations: (1) That the Financial Regulations attached as an appendix to this report are noted. 4. VARIATIONS TO DIRECTIONS 5. CONCLUSIONS 5.1 Two minor amendments were recommended by Audit Scotland in their North Lanarkshire IJB 2021/22 Annual Audit Report November 2022 to reflect the budget disaggregation of Children, Families and Justice Services and to note the arrangements for the management of hosted services. These amendments have been made as follows: Section Original Revised Introduction North Lanarkshire Council and NHS Lanarkshire have delegated responsibility to the Board for planning and resourcing service provision for adult and older people health and social care services. North Lanarkshire Council and NHS Lanarkshire have delegated responsibility to the Board for planning and resourcing service provision for the following adult and older people health and social care services: (List Social Care and Health Services) SUBJECT: Financial Regulations TO: Performance, Finance and Audit Committee Lead Officer for Report: Ross McGuffie, Chief Officer Author(s) of Report Amanda Kilburn, Chief Financial Officer DATE: 14th February 2023 Yes No N/A
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2 Section Insert 7 7.1 HOSTED SERVICES In line with the Scottish Government’s Integrated Resources Advisory Group Finance Guidance (section 4.3.1.10), it is agreed that the host partnership requires to manage any in-year overspends or underspends within a hosted service. Financial outturns will be reviewed as part of the annual review of all hosted services, bringing potential for budgetary changes for future years. 6. IMPLICATIONS 6.1 NATIONAL OUTCOMES The effective management of financial resources contributes to the achievement of the national outcomes. 6.2 ASSOCIATED MEASURE(S) None 6.3 FINANCIAL The Financial Regulations will be revised annually. 6.4 RISK ASSESSMENT/RISK MANAGEMENT None 6.5 PEOPLE None 6.6 INEQUALITIES & FAIRER SCOTLAND DUTY Equality and Diversity Impact Assessment Completed & Fairer Scotland Impact Assessment Form Completed: Yes No N/A 6.7 CARBON MANAGEMENT IMPLICATIONS Yes No N/A 7. BACKGROUND PAPERS None. 8. APPENDICES North Lanarkshire HSCP Financial Regulations Appendix 1 ........................................... Chief Finance Officer Members seeking further information about any aspect of this report, please contact Amanda Kilburn on telephone number 07816 126362.
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3 Appendix 1 NORTH LANARKSHIRE HEALTH AND SOCIAL CARE INTEGRATION JOINT BOARD FINANCIAL REGULATIONS January 2023 INTRODUCTION These Financial Regulations of the North Lanarkshire Joint Integration Board (the Board) apply from 1 April 2016 and set out the arrangements for the proper administration of the financial affairs of the Board.
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4 The Public Bodies (Joint Working) (Scotland) Act 2014 received Royal Assent on 1 April 2014. It puts in place the framework for integrating health and social care in Scotland. North Lanarkshire Council and NHS Lanarkshire have delegated responsibility to the Board for planning and resourcing service provision for the following adult and older people health and social care services: Social Care Services Adult Social Care Health Care Services Locality Services Addiction Services Medical and Nursing Directorate Prescribing Out of Area Services Area Wide Services Family Health Services Hosted Services o Sexual Health Services o Continence Services o Immunisation Services o Speech and Language Therapy Services o Children and Adolescents Mental Health Services o Children Services o Integrated Equipment and Adaptations Store o Dietetics Services o Podiatry Services o Prisoner Healthcare Services o Blood Borne Viruses Services o Hospital at Home o Mental Health and Learning Disability Services
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5 1. STATUTORY RESPONSIBILITY AND APPLICATION 1.1 The legislation requires that the Board is subject to the audit and accounts provisions of a body under Section 106 of the Local Government (Scotland) Act 1973 (Section 13). This will require audited annual accounts to be prepared with the reporting requirements specified in the relevant legislation and regulations (Section 12 of the Local Government in Scotland Act 2003 and regulations under section 105 of the Local Government (Scotland) Act 1973). 1.2 The Board is responsible for ensuring that its business is conducted in accordance with the law and appropriate standards and that public money is safeguarded, properly accounted for and used economically, efficiently, effectively, equitably and ethically. The Board's activities are furthermore guided by the Scheme of Delegation which sets out the underlying principles and responsibilities on openness, integrity and accountability. 1.3 In discharging these responsibilities, Board members and senior officers are responsible for implementing effective arrangements for governing the Board's affairs and facilitating the effective exercising of its functions including arrangements for managing risk. 1.4 As a consequence of these responsibilities, the Board must regulate the actions taken on its behalf that carry financial implications to provide assurance of their propriety and consistency. It is furthermore a requirement of these regulations that all financial transactions instructed by the Board are within the legal powers of the Board. These Financial Regulations thus form a key element of the maintenance of a robust, clear and accountable governance framework for the Board. 1.5 The Board has designated the Chief Officer (CO) as having responsibility for the preparation, implementation and reporting of the Board's Strategic Plan and the delivery of all delegated services. 1.6 The Board's Chief Financial Officer (CFO) will be responsible for the administration of the financial affairs of the Board and will support the CO in this respect. 1.7 The financial statements of the Board will be prepared according to the Code of Practice in Local Authority Accounting in the UK. The CFO will be responsible for signing the financial statements. 1.8 Any significant or material breach or non−compliance with these regulations or the associated finance rules, procedures or policies issued under their authority must be reported immediately to the CFO, who may consult others as appropriate to determine the proper action. 1.9 The financial regulations will be reviewed at least annually by the CFO, in consultation with the partners, and presented to the Board for approval if required.
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6 2. RESPONSIBILITIES 2.1 Chief Officer (CO) 2. 1.1 The Board's Scheme of Delegation sets out the powers delegated to officers pursuant to the Public Bodies (Joint Working) (Scotland) Act 2014 2.1.2 Under the Board's Scheme of Delegation, the CO is responsible for establishing sound arrangements for implementing the Board's strategic direction, ensuring that the planned outcomes of the Strategic Plan are achieved whilst giving due regard to sustainability and equality considerations, continuous improvement and economy, efficiency and effectiveness in the use of resources. 2.1.3 As noted in the Scheme of delegation, the CO has authority over the officers of the Board, not withstanding the legal responsibilities of the Board's CFO. 2.1.4 The Scheme of Delegation will provide for a situation where the CO is unavailable and will detail how urgent decisions are made in his/her absence. 2.2 Chief Finance Officer (CFO) 2.2.1 The Board's CFO has been designated responsible for the administration of the Board's financial affairs. 2.2.2 The CFO is responsible for advising the Board on all financial matters and for monitoring and reporting on the Board's financial performance and position. 2.2.3 This officer will also oversee the development and implementation of appropriate strategies to manage risk, control the delegated resources and comply with governance standards. 2.2.4 With the exception of urgent decisions, which must be taken in accordance with the Board's Scheme of Delegation to Officers, authority to discharge financially−related responsibilities must be delegated formally in writing by the CFO. 2.3 NHS Lanarkshire and North Lanarkshire Council Partners 2.3.1 NHS Lanarkshire and North Lanarkshire Council remain fully accountable for the financial performance of their service area against the budget allocated. They may incur revenue expenditure in furtherance of agreed Board policies only to the extent that budgetary provision has been made. 2.3.2 The Health Board and North Lanarkshire Council will formally report major financial issues to the CO and the CFO, who will instruct appropriate action. Section 5 provides further details. 2.3.3 It will remain the duty of the Council Section 95 Officer and the NHS Accountable Officer to monitor and regulate the financial performance of their respective share of the resources available to the Board during each reporting period, throughout the financial year. On a day to day basis the financial responsibilities of the NHS Accountable officer are delegated to the Director of Finance.
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7 2. RESPONSIBILITIES (Cont.) 2.4 Board Members 2.4.1 Board members' responsibilities with regard to financial matters are: (a) Approving the Board's financial strategy, including the partnership priorities and budget−setting; (b) Approving the Board's strategic direction and overseeing arrangements for securing and demonstrating best value; (c) Ensuring proper control is exercised over the Board's delegated resources through scrutiny of periodic financial reports comparing expenditure with the level of budgetary provision; (d) Ensuring the development of service targets and performance measurements of a financial and non−financial nature to monitor service achievements. 2.4.2 In this regard, the respective remits and key functions of the Board, including audit matters, are set out in the Board's Terms of Reference and Delegated Functions. 2.5 Following the Public Pound 2.5.1 The Board's CFO will establish arrangements to maintain control and clear public accountability over the use of resources identified as in the scope of the Board for use as directed and set out in the Strategic Plan. 2.6 Internal and External Audit 2.6.1 The Board will make appropriate and proportionate arrangements, to review and consider all key matters and outputs relating to internal and external audit provision in line with relevant good governance standards in the public sector. 2.6.2 The Board will arrange for the establishment of adequate and proportionate internal arrangements in line with Public Sector Internal Audit Standards. Detailed arrangements for the production, delivery and reporting on the outcome of Internal Audit Plan shall be submitted to the Board annually for approval 2.6.3 The Board will approve unsigned and audited accounts by the 30 June and 30 September respectively. The Accounts Commission will appoint the external auditors to the Board who will undertake their duties in accordance with relevant auditing standards and the Audit Scotland Code of Audit Practice. All significant External Audit outputs will be reported to the next subsequent meeting of the Board. 2.7 Risk Management 2.7.1 The Health Board and North Lanarkshire Council are responsible for the delivery of effective implementation of risk management arrangements in relation to their respective service areas and for ensuring its effectiveness and review on an ongoing basis. 2.7.2 The CO is responsible for establishing the Board's risk strategy and profile and ensuring effective risk management arrangements are in place. 2.7.3 There will be regular, bi−annual reporting on risk management to the Board.
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8 2.7.4 The CO will make appropriate provision for insurance according to the risk management strategy.
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9 3. THE STRATEGIC PLAN 3.1 The Strategic Plan will be underpinned by a financial plan that sets out the expected resource consequences of planned changes in capacity. 3.2 The Board will approve the Strategic Plan after consultation with its stakeholders, in line with the principles and duties set out in the legislation. The resources in the Strategic Plan will comprise: (a) The budget allocation made to the Board by North Lanarkshire Council for delegated adult social care services; (b) The budget allocation made to the Board by the Health Board for delegated healthcare services; and (c) The amount set aside by the Health Board for any delegated services provided in large hospitals for the population of the Board. 3.3 The Strategic Plan will incorporate a medium term financial planning framework (3 years) for the resources within scope of the Strategic Plan. 4. FINANCIAL PLANNING AND BUDGETING 4.1 The Board will publish an annual budget setting out the total resources included in the Strategic Plan for that year. 4.2 The first year will be based on the existing budget contributions from the Health Board and North Lanarkshire Council. 4.3 The resources in the first year of the Board should be based on the due diligence carried out during the shadow year. The due diligence process should be based on the existing financial plans and actual spend of the Health Board and North Lanarkshire Council including planned savings, and other agreed adjustments, on the performance during the shadow period and on past financial performance in recent years. 4.4 The CO and the CFO will develop a resource plan and budget for its resources in line with the method set out in the Integration Scheme. 4.5 The legislation requires that in order to determine payments from the Board to the North Lanarkshire Council and the Health Board, a direction will be given. The direction should be in writing and must include information on the integrated functions that are being directed and how they are to be delivered along with the amount of and method of determining the payment to carry out the delegated functions. 4.6 A direction from the Board will take the form of a letter from the CO to the Health Board or North Lanarkshire Council referring to the arrangements for the delivery set out in the Strategic Plan and/or other documentation. Once issued, they can be amended or varied by a subsequent direction. 4.7 Following receipt of a direction, if circumstances change, the Local Authority Section 95 Officer and the Health Board Accountable Officer will consult with the CO and CFO about any required action that has significant financial implications for the Board. Following this consultation and, as appropriate, a request to
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10 approve a revised direction will be submitted to the Board for approval. Thereafter, the partner will submit any revised direction to their respective Committees for noting. 4. FINANCIAL PLANNING AND BUDGETING (Cont.) 4.8 All reports to the Board shall contain a paragraph in respect of the main risks associated with the financial information contained within the report. 4.9 The Board will allocate the resources identified as in scope by the Health Board and North Lanarkshire Council in line with the Strategic Plan as part of the annual budget setting process. 4.10 The annual budget will be built up from a base budget and will consider inflation, demand and other known pressures. This will then be adjusted as appropriate to take account of efficiency saving requirements. 4.11 It is accepted that in year there may be cause for variation in individual budget lines and virements of resources from one heading to another may be required to make best use of the overall resource. In−year virement of budgets after the financial plan has been set will require to be specified in the scheme of delegation for each of the partners. Authorisation for in year virements will be required from the Board for any proposed transfer in excess of £0.250m. 4.12 The Chief Officer must discuss any in year virement proposal with the partner holding the funding to determine whether the proposal is sound. This will include determining that the funding is free for virement, that no funding conditions, regulations or tax requirements would be breached by its proposed use and that there are no other unmanageable risks. 4.13 Having determined the proposed virement is feasible the following delegated authorities exist: (i) Where the proposal for virement exceeds £0.250m, the Chief Officer requires the Board approval to proceed. In taking the proposal to the Board any concerns raised by the partner holding the funding, (or in the event of a transfer between partners or a potential impact on the either partner) must be reflected in the virement request to the Board. (ii) For virements below £0.250m between lines within the same partner's budget which have no likely service impact on the other partner, the Chief Officer may proceed providing they have agreement from the relevant accountable officer for that body that the virement is feasible. This would be the Chief Accountable Officer of the Health Board and the Section 95 Officer in the case of North Lanarkshire Council. (iii) It would be for the partners scheme of delegation to determine a proportionate and reasonable mechanism for seeking this agreement for virement under £0.250m. In the event of a difference of opinion between the Chief Officer and the relevant partner's accountable officer as to whether the virement is feasible, the proposed virement should be referred to the Board for a decision. The Board cannot compel the partner to execute a virement that would lead it to be a breach of regulations, funding
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11 requirements, its overall budget limits or other duties. In other circumstances the Board may direct the partner to execute the virement but in doing so would also have to agree how the Board would manage the consequences of any residual risk flagged by the partner. 4. FINANCIAL PLANNING AND BUDGETING (Cont.) 4.13 (iv) For virements below £0.250m which are likely to have a service impact on the other partner or which are between partners' budgets the above applies but is widened to take account of both partners' views. (v) If the virement has revenue implications for future years, the virement will firstly be approved by the appropriate partner's Committee and thereafter approved by the Board. 5. MANAGING FINANCIAL PERFORMANCE AND FINANCIAL MONITORING 5.1 The Health Board and North Lanarkshire Council Directors of Finance and the CFO will establish a process of regular in−year reporting and forecasting to provide the CO with management accounts for both arms of the operational budget and for the Board as a whole. 5.2 The detailed procedures for, and the form of, the financial reporting arrangements for the Board will be determined by the CFO in accordance with the general directions of the Local Authority Section 95 Officer and the Health Board Accountable Officer. 5.3 It will remain the duty of the Local Authority Section 95 Officer and the Health Board Accountable Officer to monitor or regulate the financial performance of their respective share of the resources available to the Board during each reporting period throughout the financial year. Budgetary control information will be provided to the CFO on a 4 weekly I monthly basis. The CFO will have the ultimate responsibility to report the financial performance to the IJB for their scrutiny and review as detailed at section 5.5. 5.4 It will be the responsibility of the Local Authority Section 95 Officer and the Health Board Accountable Officer to comply with the agreed reporting timetable and to make available to the CFO timeously the relevant financial information required for the financial reporting arrangements. This will include such details as may be required for the purpose of reporting to the Integrated Joint Board on the financial planning of revenue expenditure including data on levels of existing services and the development of the strategic commissioning plan and the annual report. 5.5 Quarterly management reports will be prepared and presented to the Board for scrutiny and review. The format and details of the report will be agreed by the Board. The existing budgetary control frameworks adopted by each partner will form the basis of generating the required financial and performance monitoring information. 5.6 Each partner will synchronise the formal budget setting timelines and reporting periods to provide regular information to the CFO. The reporting timetable for information being presented to the Board is detailed in the table below. The
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12 reporting timetable reflects the presentation to the Board within 2 months of the period end date: 5. MANAGING FINANCIAL PERFORMANCE AND FINANCIAL MONITORING (Cont.) Period Under Review Period End Reports Submitted to the Board by April − June 30 June * 31 August ** July − September 30 September * 30 November ** October − December 31 December * 28 February ** January − March 31 March * 31 May ** * or nearest complete accounting period end. ** or nearest meeting of the Board 5.7 The CFO will review the financial performance in line with agreed planned outcomes as set out in the Strategic Plan and ensure respective financial plans are updated to support this. 5.8 The Budget for the Board will be set as a balanced budget. 5.9 The Local Authority Section 95 Officer and the Health Board Accountable Officer will not incur, nor will they cause or allow to be incurred, additional expenditure chargeable to the Board which has not been included in the total resources available to the Board without discussion with the CFO. 5.10 Any item of expenditure of an 'emergency' nature will be dealt with by the partner for that service in line with their arrangements for emergency expenditure. 5.11 The Board will approve a Reserve Policy to enable the Board to use its power to hold reserves. The reserves policy and reserves strategy will detail the level of reserves required and their purpose. 5.12 In order to allow a valid comparison of actual results with the estimated income and expenditure of the service, it shall be the responsibility of the Local Authority Section 95 Officer and the Health Board Accountable Officer to provide such information as may be required for this purpose to the CFO. 5.13 Where it appears that the amount of income received or expenditure made has or may significantly deviate from that included in the total resources included in the Strategic Plan, resulting in a significant change to the Board's overall financial position, or impacting upon the policy of the Board, or revenue implications for future years, it will be the responsibility of the Local Authority Section 95 Officer and the Health Board Accountable Officer to consult with the CFO timeously and identify and advise of solutions to remedy the variance. The responsibility and management of these variances remain with the partner incurring the additional spend. Should an overspend be as a result of action taken by the other partner, then the partners should agree a remedial plan.
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13 5.14 If the Board's CFO is advised that a significant change is likely to the Board's overall financial position, and that the deviation involves a change of policy of the Board, or results in revenue implications for future years, a report will be provided for the Board in good time detailing the financial consequences to enable appropriate action to be taken timeously. 5. MANAGING FINANCIAL PERFORMANCE AND FINANCIAL MONITORING (Cont.) 5.15 If an overspend is forecast on either partner's in scope budget, the CO and the Board's CFO will agree a recovery plan with the relevant partner to balance the overspending budget to determine the actions required to be taken to deliver the recovery plan. If the overspend arises from the assumptions in the Board's strategic plan on the impact of service changes that are not realised as anticipated this should be subject to a report and corrective action. This corrective action may include a recovery plan which should consider revisions to the commissioning of services and / or financial plans to account for the changed circumstances and the use of any available reserves. 5.16 The CO will determine the actions required to be taken to deliver the recovery plan in conjunction with parties. These actions should be approved by the Board as advised by the CFO. 5.17 In exceptional circumstances, should the North Lanarkshire Council or the Health Board require the Board to identify resources to offset an in−year overspend, they (i.e. the partner) must do this by amending their contributions to the Board. 5.18 Subject to discussion and consultation with the Health Board and North Lanarkshire Council, the Board may increase the payment to the affected body by utilising any balance on the general fund, if available in line with the reserves policy. This may require adjustments to the allocations from the Board to these bodies to reflect the recovery plan agreed. 5.19 If the recovery plan is unsuccessful and there are insufficient general fund reserves to fund a year end overspend, then the overspending partner has the option to: (a) Make additional one−off adjustment to the resources it is making available to the Board, or (b) Provide additional resources to the Board which are then recovered in future years from subsequent underspends in that Partners contribution, (subject to scrutiny of the reasons for the overspend and assurance that there is a plan in place to address this). 5.20 Unplanned underspends effectively represent overfunding by the North Lanarkshire Council or the Health Board with respect to planned outcomes and could be returned to the Local Authority or Health Board in−year through adjustments to their respective contributions to the Board and recurrently through the process for subsequent year adjustments or maintained by the Board to be carried forward through the General Fund Balance. 6. NOTIONAL SET−ASIDE BUDGET FOR DIRECTED HOSPITAL SERVICES
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14 6.1 In respect of resources for delegated functions that are provided in large hospitals the NHS Lanarkshire Health Board has determined that these resources will be excluded from the aligned budget of the Board and instead retained and set−aside for direction by the Board through the Strategic Plan. These will be termed Set−Aside budgets. 6. NOTIONAL SET−ASIDE BUDGET FOR DIRECTED HOSPITAL SERVICES (Cont.) 6.2 The method for determining the amount of notional set−aside budgets for NHS Lanarkshire hospital services follows guidance issued by the Integrated Resources Advisory Group (IRAG) and is detailed in section 10.5 of the Integration Scheme. The set−aside budget includes the resources for the in scope hospital services used by the partnership population in the Health Board. 6.3 It is noted that overheads will not be included in directed hospital services. 6.4 Any proposal to transfer resources between the set−aside budget and the directly managed Budget for directed hospital services will require to have been modelled by the Health Board and agreed by the Board. The financial implications must be set out in the Strategic Plan of the Board. It must also be demonstrated by the Health Board that the planned capacity change has actually been delivered. 6.5 This applies to both reductions and increases in hospital capacity. Transfers from the set−aside budget to the directly managed budget will require an increase in the allocation from the Health Board to the Board; conversely, transfers from the directly managed budget to the set-aside budget will require an increase in the allocation from the Board to the Health Board. 6.6 It is not anticipated there would be in-year virements between the Board’s directly managed budget and the notional set-aside budget outwith the directions made by the Board pursuant to the Strategic Plan. Should the Board wish to issue new directions in-year, section 6.4 of these Financial Regulations will apply. 7. HOSTED SERVICES 7.1 In line with the Scottish Government’s Integrated Resources Advisory Group Finance Guidance (section 4.3.1.10), it is agreed that the host partnership requires to manage any in-year overspends or underspends within a hosted service. Financial outturns will be reviewed as part of the annual review of all hosted services, bringing potential for budgetary changes for future years. 8. ACCOUNTING SYSTEMS AND RECORDS 8.1 It is the responsibility of the CFO to determine the appropriate accounting policies for the Board. The Accounting Standards as adapted for the public sector will apply to the Board. The Code of Practice on Local Authority Accounting in the UK will be the applicable guidance for their interpretation. Accounting records are required to be kept in line with Best Practice. 8.2 The Board financial statements will be completed to meet the audit and publication timetable specified in regulations (Local Authority Accounts (Scotland) Regulations
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15 2014). The IRAG guidance states that there should be agreement of in-year transactions and year end balances with North Lanarkshire Council and the Health Board by 30 April. 8. ACCOUNTING SYSTEMS AND RECORDS (Cont.) 8.3 The CFO must provide any relevant information required by the Health Board and North Lanarkshire Council to enable their statements to be prepared within the statutory timetable for the preparation and publication of the financial statements. 8.4 Where there is an in−year variance in the Board annual accounts, either an overspend or underspend on service expenditure, the Health Board and the North Lanarkshire Council should agree the creditor/debtor with the Board as part of the year end close down procedures. 8.5 Initially, recording of financial information in respect of the Board will be processed via the local authority ledger. This will be reviewed periodically to ensure this remains an appropriate solution. 8.6 The financial ledger transactions relating the Board will be carried out prior to the end of the financial year with post year−end adjustments for material information only. Year−end balances and transactions will be agreed timeously in order to allow completion of the accounts in line with the required timescales. This date will agreed annually by the Board, the North Lanarkshire Council and the Health Board. 9. CAPITAL 9.1 In the short term, the Board will not be empowered to own capital assets and the VAT regimes of North Lanarkshire Council and the Health Board will apply to capital assets used to provide the delegated services. 9.2 Ownership of assets and associated liabilities will remain with each of the partners. 9.3 In preparing the Strategic Plan, the CO will consider all of the resources which are required to deliver the integration outcomes including the relevant non-current assets owned by the Health Board and North Lanarkshire Council. 9.4 The CO of the Board will consult with the North Lanarkshire Council and the Health Board to make best use of existing resources. 9.5 The Board, or partners, should identify the asset requirements to support the Strategic Plan. This will enable the CO to identify capital investment projects or business cases to submit to North Lanarkshire Council and the Health Board for consideration as part of their capital planning processes, recognising that partnership discussion would be required at an early stage if a project was to be jointly funded. 9.6 If a partner proposes capital investment, relative to the Board's activities, a process of consultation with the Board should be undertaken.
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16 9.7 The Board's budget may include payments from the North Lanarkshire Council and Health Board to cover the revenue costs of assets e.g. rents, repairs and maintenance, rates, cleaning, property insurance etc. This should be agreed as part of the budget negotiations. 10. TAXATION 10.1 HMRC have confirmed that the Board is not a taxable person under the VAT Act 1994 as it will not provide services directly. This is on the basis that the Board is not delivering any supplies that fall within the scope of VAT. 10.2 Although the Board will be responsible for producing the Strategic Plan for the delivery of services by North Lanarkshire Council and the Health Board, the Board will not be responsible for the actual delivery of delegated services and as there is no consideration received by the Board for the production of the plan this will not alter the VAT registration position. 11. HOUSING REVENUE ACCOUNT 11.1 The Board's budget for delegated services includes services that are currently funded by the Housing Revenue Account (HRA). This relates to expenditure on adaptations and also care of gardens. While this budget is to form part of the budget for delegated services, it is part of North Lanarkshire Council's ring-fenced HRA. 11.2 Guidance prepared by the Scottish Government details that the local authority will identify and delegate the budget from the HRA to the Board equal to the amount of money required to pay for council tenants. 11.3 The Guidance clearly states that the HRA ring−fence will continue and that local authorities must ensure that HRA funds are not used for adaptations across other tenures or for different purposes. The checks and safeguards to ensure the integrity of the HRA will be detailed in the Strategic Plan. 11.4 An annual financial statement will be prepared to provide the required level of transparency and accountability.