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CARE QUALITY COMMISSION
Standing Financial Instructions
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Standing Financial Instructions
Page
FOREWORD
6
1.
1.1
1.2
1.3
INTRODUCTION
General
Terminology
Responsibilities and delegation
7
7
7
9
2.
2.1
2.2
2.3
2.4
2.5
AUDIT
Audit and Risk Assurance Committee
Director of Governance and Legal Services
Role of Internal Audit
External Audit
Fraud and corruption
14
14
14
15
16
16
3.
RESOURCE AND CASH LIMIT CONTROL
18
4.
19
4.1
4.2
4.3
4.4
4.5
4.6
ALLOCATIONS, PLANNING, BUDGETS, BUDGETARY
CONTROL, AND MONITORING
Oversight of allocations
Preparation and Approval of Business Plans and Budgets
Budgetary Delegation
Budget Control and Reporting
Virement and Transfer
Capital Expenditure
5.
ANNUAL ACCOUNTS AND REPORTS
23
6.
6.1
6.2
6.3
BANK ACCOUNTS
General
Bank Accounts
Banking Procedures
24
24
24
24
7.
7.1
7.2
7.3
7.4
7.5
INCOME, FEES AND CHARGES AND SECURITY OF CASH 19
CHEQUES AND OTHER NEGOTIABLE INSTRUMENTS
Income Systems
Fees and Charges
Income fromNon-Regulated Services
Debt Recovery
Security of Cash, Cheques and other Negotiable Instruments
26
26
26
26
26
27
8.
8.1
TENDERING AND CONTRACTING PROCEDURE
Duty to comply with Board Standing Orders and Standing
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19
19
20
20
21
22
28
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
9.
9.1
9.2
9.3
9.4
9.5
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Financial Instructions
28
EU Directives Governing Public Procurement
28
Reverse eAuctions
28
Capital Investment Manual and other Department of Health
Guidance on Estate
28
Formal Competitive Tendering
28
Compliance requirements for all contracts
28
Government Procurement and Efficiency Controls
29
Single Tender Actions
30
Extension of contracts
30
TERMS OF SERVICE AND PAYMENT OF COMMISSIONERS,
OF DIRECTORS AND EMPLOYERS
Remuneration Committee
Funded Establishment
Employee Appointments
Processing of Payroll
Contract of Employment
31
31
31
31
31
33
10.
NON-PAY EXPENDITURE
34
10.1 Delegation of Authority
34
10.2. Choice, Requisitioning, Ordering, Receipt and Payment for Goods 34
and Services
11.
INVESTMENTS
38
12.
FINANCIAL FRAMEWORK
39
13.
40
13.1
13.2
13.3
13.4
CAPITAL INVESTMENT, PRIVATE FINANCING, FIXED ASSET
REGISTERS AND SECURITY OF ASSETS
Capital Investment
Asset Registers
Security of Assets and Fixed Assets
Depreciation of fixed assets
14.
STORES AND RECEIPT OF GOODS
45
15.
15.1
15.2
DISPOSALS AND CONDEMNATIONS, LOSSES AND SPECIAL 46
PAYMENTS
Disposals and Condemnations
46
Losses and Special Payments
46
16.
INFORMATION TECHNOLOGY
48
17.
STANDARDS OF BUSINESS CONDUCT
50
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40
41
42
43
17.1
17.2
17.3
17.4
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Guiding Principles on the Conduct of Public Business
50
Contact with Contractors and Suppliers
50
Avoiding Favouritism
51
Warning to Contractors
51
18.
RETENTION OF RECORDS
52
19.
19.1
19.2
19.3
19.4
19.5
19.6
RISK MANAGEMENT AND INSURANCE
Identification and management of risk
Insurance arrangements
Duty to take due care
Incidents and events giving rise to possible claims
Reporting of risks and claims
Accountability for risk management
53
53
53
54
54
54
55
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APPENDICES:
Page
Appendix A - Arms Length Bodies (ALBs) Guidance On Losses And
Special Payments
56
Appendix B - Special Payments Requirements Form
61
Appendix C - DH delegations to CQC
64
Appendix D - Delegated Procurement Limits
67
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FOREWORD
The “Directions on Financial Management in England” issued under HSG(96)12
in 1996 require that each Board adopts Standing Financial Instructions which set
out the responsibilities of key individuals and structures.
The Standing Financial Instructions form part of the CQC Board’s statutory
framework including Board Standing Orders and a Scheme of Delegation. Along
with more detailed procedural notes which are published on the CQC intranet,
these arrangements collectively cover all aspects of financial management and
control and set the business rules and protocols within which Commissioners,
Directors and employees must work when taking action on behalf of the CQC
Board.
Version Control
The Standing Financial Instructions will be reviewed annually. The review will be
co-ordinated by the Head of Governance in consultation with relevant Heads of
Function. A designated person in each team should be responsible for logging
any changes needed to the Standing Financial Instructions. Any in-year changes
should be submitted to the Head of Governance who will forward either to the
Board or to the Chief Executive for approval.
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INTRODUCTION
1.1
General
1.1.1 These Standing Financial Instructions are issued in accordance with the
Financial Directions issued by the Secretary of State under the provisions
of the Health and Social Care Act 2008 for the regulation of the conduct of
the Care Quality Commission in relation to all financial matters. They have
effect as part of the Standing Orders of the Board of the Care Quality
Commission.
1.1.2 These Standing Financial Instructions explain the financial responsibilities,
policies and procedures to be adopted by the Commission. They are
designed to ensure that its financial transactions are carried out in
accordance with the law and Government policy in order to achieve
integrity, accuracy, value for money, efficiency and effectiveness.
1.1.3 These Standing Financial Instructions provide general guidance. For
detailed procedural advice, they must be read in conjunction with:





“Managing Public Money” – HM Treasury’s guidance manual (October
2007)
HM Treasury’s Government Financial Reporting Manual
CQC Procurement Policy and Guidance
The Civil Service Management Code
Other financial procedure notes approved by the Director of Finance
and Corporate Services.
1.1.4 Should any difficulties arise regarding the interpretation or application of
any of the Standing Financial Instructions, the advice of the Director
of Finance and Corporate Services must be sought before any action is
taken.
1.1.5 The failure to comply with the Standing Financial Instructions and Board
Standing Orders can in certain circumstances be regarded as a
disciplinary matter that could result in dismissal.
1.2
Terminology
1.2.1 Any expression must have the same meaning in these instructions:
 “Accounting Officer” is the Officer responsible and accountable for
funds entrusted to the Commission. This person is responsible for
ensuring the proper stewardship of public funds and assets. At CQC,
the Chief Executive is the Accounting Officer.
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“Board” means the Care Quality Commission, which consists of a Chair
and up to twelve Members, both Executive and Non-Executive,
appointed by the Secretary of State for Health. The majority of the
Board must be Non-Executive Members.

“Board Member” means any person appointed as a Member of the
CQC Board. Also called a Commissioner.

“Budget” means a resource, expressed in financial terms, for the
purpose of carrying out, for a specific period, any or all of the functions
of the Commission.

“Budget Holder” means the person with delegated authority to
manage the budget for a specific area of the organisation.

“Chief Executive” means the chief officer of the Commission.

“Commission” means the Care Quality Commission.

“Directors” are the most senior employees in CQC, accountable
directly to the Chief Executive, and with responsibility for a significant
range of business.

“Director of Finance and Corporate Services” means the Chief
Financial Officer of the Commission.

“Legal Adviser” means a properly qualified person appointed by
the Commission to provide legal advice.

“Employee means any person who is a member of staff of the
Commission ultimately accountable to the Chief Executive. This
includes persons employed by the Department of Health but
seconded to work within the Commission’s staff structure and, where
appropriate, includes the Chief Executive.
1.2.2 Wherever the title Chief Executive, Director of Finance and Corporate
Services, or other nominated employee is used in these instructions, it
must be deemed to include such other Director or employee who has
been duly authorised in writing to represent them.
1.2.3 Wherever the term “employee” is used it must be deemed to include
employees of third parties contracted to the Commission when acting on
behalf of the Commission.
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1.3
Responsibilities and delegation
The Board
1.3.1 The Board exercises financial supervision and control by:
(a) Formulating the financial strategy to deliver the strategic objectives of
CQC
(b) Requiring the submission of budgets within approved
allocations/overall income for its approval
(c) Defining and approving essential features in respect of important
procedures and financial systems (including the need to obtain value
for money)
(d) Defining specific responsibilities placed on Commissioners and
employees as indicated in the Scheme of Delegation document.
1.3.2 The Board must only enter into contracts on behalf of the Commission
within the statutory powers delegated to it by the Secretary of State,
complying with relevant directions and the Board’s own Standing Orders.
Accounting Officer
1.3.3 The Chief Executive has been appointed by the Principal Accounting
Officer in Department of Health as the Accounting Officer for CQC and for
Healthwatch England. The responsibilities delegated to the Accounting
Officer are set out in the DH/CQC Framework Agreement (especially
Annex B), including his responsibilities for following the principles and
rules set out in HM Treasury’s guidance, Managing Public Money. The
Accounting Officer may be required to give evidence, normally with the
Department’s Accounting Officer, when summoned before the PAC on the
Commission’s stewardship of public funds.
1.3.4 The essence of the role of the Accounting Officer is a personal
responsibility for the propriety and regularity of the public finances of CQC,
and for ensuring that its resources are used economically, efficiently and
effectively. The Accounting Officer is expected to sign CQC’s accounts,
the annual report and the Governance Statement, taking personal
responsibility for ensuring they are prepared in accordance with the
Department of Health’s instructions. With regards to regularity and
propriety, the Accounting Officer is expected to ensure that all actions
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relating to the stewardship of public funds can withstand the test of
Parliamentary and public scrutiny.
1.3.5 The Accounting Officer is expected to ensure that:
 appropriate financial systems are in place and applied and that
procedures and controls are reviewed regularly so that they remain
relevant and reliable, especially during times of change;

proper financial procedures are followed and that accounting records
are maintained in the form prescribed by the Department for its group
accounts

CQC’s annual accounts (and if required by the Secretary of State, any
interim accounts) are submitted to the C&AG for audit as soon as
reasonably practicable after the year end and any records are made
available for scrutiny by the Comptroller and Auditor General

CQC’s accounts, and any report prepared by the Comptroller and
Auditor General in relation to those accounts, are laid before
Parliament within the timetable specified.

CQC remains within its cash limits, seeks approval of any expenditure
outside normal delegations, respects agreed budgets and avoids
unaffordable longer term commitments, taking a proportionate view
about other demands for resources

CQC’s efficiency in the use of resources is tracked and recorded

public funds allocated to CQC including HWE are properly managed
and safeguarded, and that assets for which CQC is responsible such
as land, buildings or other property are also controlled and
safeguarded

in considering policy proposals relating to the resources for which the
Accounting Officer is responsible all relevant financial considerations
including issues of propriety, regularity or value for money and risk are
taken into account in making a decision

delegation of responsibility is accompanied by clear lines of control and
accountability together with reporting arrangements

effective management systems appropriate for the achievement of
CQC’s objectives including financial monitoring and control systems
have been put in place
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risks whether to achievement of CQC’s objectives, regularity, propriety
or value for money are identified, that their significance is assessed
and that systems appropriate to the risks are in place in all relevant
areas to manage them Managing opportunity and risk to achieve the
right balance commensurate with the organisation’s business and risk
appetite

arrangements are in place to secure value for money, ensuring the
organisation’s procurement, projects and processes are systematically
evaluated and assessed to provide confidence about suitability,
effectiveness, prudence, quality, good value and avoidance of error
and waste and compliant with EU Procurement Directives 2009.

the selection and appraisal of programmes and projects, using the
Treasury’s Green Book to evaluate alternatives and good quality
project and programme management techniques to track and adjust
progress.
Delegations
1.3.6 The Chief Executive may delegate his responsibilities, but remains
accountable for the effectiveness of CQC’s financial control.
1.3.7 Within the Standing Financial Instructions, the Chief Executive is ultimately
accountable to the Board, and as Accounting Officer, to the Principal
Accounting Officer (the Permanent Secretary) and to the Secretary of
State, for ensuring that the Commission meets its duty to perform its
functions within the available financial resources. The Chief Executive has
overall executive responsibility for the Commission’s activities; is
responsible to the Chairman and the Board for ensuring that its financial
obligations and targets are met and has overall responsibility for the
Commission’s system of internal control.
1.3.8 It is the duty of the Chief Executive to ensure that Commissioners of
the Board and all employees are notified of, and understand, their
responsibilities within these Instructions. The Chief Executive delegates
this responsibility to the Director of Finance and Corporate Services and
the Head of Governance.
1.3.9 The Director of Finance and Corporate Services is the chief financial officer
for CQC and has been given responsibility by the Accounting Officer for:
(a) Implementing the Commission’s financial policies and ensuring these
are kept up to date
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(b) Maintaining an effective system of internal financial control including
ensuring that detailed financial procedures and systems incorporating
the principles of separation of duties and internal checks are in place,
documented and maintained to supplement these instructions
(c) Ensuring that sufficient records are kept to show and explain the
Commission’s transactions, in order to disclose, with reasonable
accuracy, the financial position of the Commission at any time
(d) Providing professional leadership to the finance function, ensuring
appropriate training and continued development of the finance
function.
1.3.10 Without prejudice to any other functions of the Commission, and
employees of the Commission, the duties of the Director of Finance and
Corporate Services include:
(a) The provision of financial advice to Commissioners and employees
(b) The design, implementation and supervision of systems of internal
financial control
(c) The preparation and maintenance of such accounts, certificates,
estimates, records and reports as the Commission may require for the
purpose of carrying out its statutory duties.
Commissioners and Employees
1.3.11 All Commissioners and employees, severally and collectively, are
responsible for:
(a) The security of the property of the Commission
(b) Avoiding loss
(c) Exercising economy and efficiency in the use of resources and
ensuring value for money when entering into transactions
(d) Conforming with the requirements of Board Standing Orders,
Standing Financial Instructions, the Scheme of Delegation and
other financial procedures.
Contractors and their employees
1.3.12 Any contractor or employee of a contractor who is empowered by the
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Commission to commit the Commission to expenditure or who is
authorised to obtain income must be covered by these instructions. It is
the responsibility of the Director of Finance and Corporate Services to
ensure that such persons are made aware of this.
1.3.13 For all Commissioners and any employees who carry out a financial
function, the form in which financial records are kept and the manner in
which Commissioners and employees discharge their duties must be to
the satisfaction of the Director of Finance and Corporate Services.
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2.
AUDIT
2.1
Audit and Risk Assurance Committee
2.1.1 For detailed information on the Audit and Risk Assurance Committee’s
role and responsibilities, please refer to the Audit and Risk Assurance
Committee Terms of Reference (available on the CQC intranet).
2.2
Director of Governance and Legal Services
2.2.1 The Director of Governance and Legal Services is responsible for
(a) Ensuring there are adequate arrangements in place to review, evaluate
and report on the effectiveness of internal financial control including the
establishment of an effective Internal Audit function
(b) Ensuring that the Internal Audit is adequate and meets the
mandatory audit standards
(c) Deciding at what stage to involve the police in cases of
misappropriation and other irregularities not involving fraud or corruption.
In cases when these irregularities do involve fraud and corruption, the
CQC Counter Fraud Policy must be referred to for detailed guidance on
the appropriate course of action.
(d) Ensuring that an annual internal audit report is prepared for the
consideration of the Audit and Risk Assurance Committee. The report
must cover:
(i) A clear opinion on the effectiveness of internal control in
accordance with current guidance issued by Government on the
assurance framework including, for example, compliance with
control criteria and standards
(ii) Major internal financial control weaknesses discovered
(iii) Progress on the implementation of internal audit recommendations
(iv) Progress against the current internal audit plan
(v) A detailed internal audit plan for the coming year
(vi) Strategic audit plan covering the coming three years.
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2.2.2 The Director of Governance and Legal Services or designated auditors
are entitled without necessarily giving prior notice to ask for and receive:
(a) Access to all records, documents and correspondence relating to any
financial or other relevant transactions, including documents of a
confidential nature
(b) Access at all reasonable times to any land, premises, Commissioners
or employees of the Commission
(c) Any cash, stores or other property of the Commission under a
Commissioner or an employee's control
(d) Explanations concerning any matter under investigation.
2.3
Role of Head of Internal Audit
2.3.1 The Head of Internal Audit (HIA) will review, appraise and report upon:
(a) The extent of compliance with relevant established policies, plans and
procedures
(b) The adequacy and application of financial and other related
management controls
(c) The suitability of financial and other related management data
(d) The extent to which the Commission’s assets and interests are
accounted for and safeguarded from loss of any kind, arising from:
(i) Fraud and other offences
(ii) Waste, extravagance, inefficient administration
(iii) Poor value for money or other causes
(e) The assurance framework and the controls that support the Accounting
Officer’s Governance Statement included in the Commission’s Annual
Accounts
2.3.2 The Head of Internal Audit will agree an audit plan with the Director of
Governance and Legal Services, for agreement by the Chief Executive,
and will present it to the Audit and Risk Assurance Committee for
approval. The HIA will issue a progress report on the audit plan at regular
intervals for review by the Audit and Risk Assurance Committee
2.3.3 Whenever any matter arises which involves, or is thought to involve,
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irregularities concerning cash, stores, or other property or any suspected
irregularity in the exercise of any function of monetary nature, the
Director of Governance and Legal Services must be notified immediately
by the HIA.
2.3.4 The Head of Internal Audit will normally attend Audit and Risk Assurance
Committee meetings and has a right of access to all Audit and Risk
Assurance Committee members, the ARAC Chair and the Chief
Executive.
2.3.5 The Head of Internal Audit must be accountable to the Director of
Governance and Legal Services. The Head of Internal Audit can, however,
raise any concerns with the Chief Executive as Accounting Officer in order
to maintain independence of the internal audit function. The reporting
system for internal audit must be agreed between the Chief Executive, the
Director of Governance and Legal Services, the Audit and Risk Assurance
Committee and the Head of Internal Audit. The agreement must be in
writing and must comply with the guidance on reporting contained in the
Internal Audit Standards. The reporting system must be reviewed at least
every three years.
2.3.6 The Head of Internal Audit will have annual ‘closed’ meetings with the
members of the Audit and Risk Assurance Committee to review
performance and consider further learning points from internal audit
findings and audit process
2.4
External Audit
2.4.1 The Comptroller and Auditor General has appointed the National Audit
Office and Deloittes as CQC’s external auditor. The Audit and Risk
Assurance Committee is responsible for ensuring that the external
auditors deliver a cost effective service to CQC. If there are any problems
relating to the service provided by the External Auditor, the Director of
Finance and Corporate Services must raise this with the External Auditor
in the first instance and refer it to the Audit and Risk Assurance
Committee if unresolved.
2.4.2 The External Auditor is invited to attend Audit and Risk Assurance
Committee and other committee meetings.
2.5
Fraud and Corruption
2.5.1 The Chief Executive as Accounting Officer has overall responsibility for
ensuring that there are sound systems of internal control (e.g. procedures,
guidance notes and effective supervision) to minimise the opportunities for
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fraud and corruption within the day-to-day business of the CQC and its
contractors.
2.5.2 The Chief Executive has delegated to the Director of Governance and
Legal Services the responsibility for complying with HM Treasury’s
requirements in 'Tackling Internal Fraud', published January 2011 and
also in the CQC Counter-Fraud Policy, including maintaining the policy,
strategy and practices for dealing with the prevention, detection and
resolution of fraud and corruption within the CQC
2.5.3 In the event of a fraud being detected, the Director of Governance and
Legal Services must nominate a suitable person to carry out the duties of
a fraud investigator as specified by CQC’s Fraud Policy (available on the
CQC intranet).
2.5.4 The fraud investigator must report to the Fraud Response Group, which is
chaired by the Director of Governance and Legal Services.
2.5.5 The Director of Governance and Legal Services will provide a written
report, at least annually, on counter fraud work within the Commission for
submission to the Audit and Risk Assurance Committee.
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RESOURCE AND CASH LIMIT CONTROL
3.1
Unless otherwise agreed, the Commission will be given an annual
Revenue Resource, Capital Resource and Cash Limit allocation from the
Department of Health. The Commission is required by statutory provisions
not to exceed its cash limit. As Accounting Officer, the Chief Executive has
overall executive responsibility for the Commission's activities and is
responsible to the Principal Accounting Officer and to Parliament for
ensuring that the Commission stays within its cash limit.
3.2
The definition of cash limits is set out in the Directions on Financial
Management in England.
3.3
Any sums received on behalf of the Secretary of State are treated as
sums received by the Commission, except where these are earmarked
specifically to Healthwatch England.
3.4
On behalf of the Accounting Officer, the Director of Finance and Corporate
Services will:
 Provide reports in the form required by the Secretary of State and
requested by the Department of Health
 Ensure expenditure approved against the Cash Limit is actioned
only
at the time of need
 Be responsible for ensuring that an adequate system of monitoring
financial performance is in place to enable the Commission to fulfil its
statutory responsibility not to exceed its separately identified limits.
3.5
Cash flow performance and projections will be monitored monthly by the
Head of Finance.
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4.
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ALLOCATIONS, PLANNING, BUDGETS, BUDGETARY CONTROL,
AND MONITORING
Oversight of allocations
4.1.1 As Accounting Officer, the Chief Executive Officer requires the Director of
Finance and Corporate Services to manage and control the budget on his
behalf, including
4.2

ensuring that the basis and assumptions used for distributing
allocations are reviewed periodically, that these are reasonable and
realistic and secure the Commission’s entitlement to funds

prior to the start of each financial year submitting to the Board for
approval a report showing the total allocations received and their
proposed distribution

regularly updating the Board on changes to the initial allocation and the
uses of such funds drawing attention to any significant variations,
associated risks and any mitigating action, which may be necessary

highlighting any issues and risks to the DH at the earliest opportunity.
Preparation and Approval of Business Plans and Budgets
4.2.1 The Chief Executive will oversee the development of a three year strategy
with a three year financial plan which is submitted to the Board for
approval. It should be updated annually as part of the business planning
and budgeting process.
4.2.2 The Head of Planning & Performance, on behalf of the Chief Executive,
will compile and submit to the Board an annual business plan which takes
into account financial targets and forecast of available resources. The
annual business plans will contain:
 a statement of the significant assumptions on which the plan is based

details of workload, delivery services and resources required to
achieve the plan.
4.2.3 Prior to the start of the financial year the Head of Finance will, on behalf
of the Chief Executive and the Director of Finance and Corporate
Services, prepare and submit budgets for approval by the Board. Such
budgets will:

be in accordance with the aims and objectives set out in the Annual
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Business Plan
4.3

accord with workload and manpower plans

be produced following discussion and agreement with appropriate
Budget Holders

be prepared within the limits of available funds

have proper regard to the expected availability of funds

identify potential risks
Budgetary Delegation
4.3.1 On behalf of the Chief Executive, the Director of Finance and Corporate
Services delegates budgets to Budget Holders, who are currently
Directors and Heads of Function, to permit the performance of a defined
range of activities. Each delegation is made to a particular cost centre.
The delegation must be in writing and clearly define the responsibilities of
the post and of any other person who will contribute to the management of
the budget delegated to them.
4.4
Budget Control and Reporting
4.4.1 The Head of Finance and his/her staff are responsible for:
 ensuring that financial control arrangements are in place for each
budget which will discharge the responsibility of Budget Holders and
their staff

acting on behalf of the Budget Holder to report on their budgets and
related performance and procedures

ensuring and reporting on compliance with the Commission’s policies
and procedures so as to enable the Director of Finance and Corporate
Services to provide assurance to the Board

monitoring financial performance on a monthly basis against budget
and business plan, regularly reviewing them and enabling the Director
of Finance and Corporate Services to report to the Board.

ensuring that adequate training is delivered on an ongoing basis to
Budget Holders to help them manage their budgets successfully.
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4.4.2 The Director of Finance and Corporate Services will ensure that the Board
is informed of any changes to the initial allocation of budget and use of
funds, drawing the Board’s attention to significant variations, associated
risks and mitigating actions required.
4.4.3 Budgets will be profiled in cost centres according to when the expenditure
is expected to be incurred (ie on a Resource basis). Expenditure will be
profiled against the relevant cost codes to provide information on types of
costs being incurred. Re-profiling will only take place when there are
confirmed changes to budgets.
4.4.4 All Budget holders must provide information as required by the Head of
Finance to enable budgets to be compiled, maintained and monitored.
4.4.5 Budget Holders must ensure full compliance with correct financial
procedures, and in particular:a) require the maintenance of records of expenditure, including all budget
commitments; all orders; all goods received notes; and expenditure
against each order, as required by the Head of Finance,
b) ensure that the records of expenditure are available for inspection at all
times by the Head of Finance and his/her nominated representatives,
c) seek appropriate internal financial, commercial, legal or other relevant
advice in order to ensure that the budget is effectively managed, and
d) ensure that the amount provided in the approved budget is not used in
whole or in part for any purpose other than specifically authorised
subject to the rules of virement.
4.4.6 The Head of Finance will devise and maintain systems of budgetary
control. These will include:

quarterly financial reports to the Board in a form approved by the
Board, including a comparison of the approved budget with emerging
expenditure and income

the availability of timely, accurate and comprehensible advice and
financial reports to each budget holder on a monthly basis, covering
the areas for which they are responsible

investigation and reporting of variances from financial, workload and
manpower budgets
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
monitoring of management action to correct variances

arrangements for the authorisation of budget transfers
4.4.7 Each Budget Holder is responsible for ensuring that:

any likely overspending or reduction of income which cannot be met by
virement is not incurred without the prior consent of the Head of
Finance and sign-off by the Chief Executive

the amount provided in the approved budget is not used in whole or in
part for any purpose other than specifically authorised subject to the
rules of virement

no permanent employees are appointed without the approval of the
Recruitment and Establishment Controls Committee other than those
provided for in the budgeted establishment as approved by the Board
and the Chief Executive.
4.4.8 The Director of Finance & Corporate Services and the Head of Finance
are responsible for identifying and implementing cost improvements and
income generation initiatives in accordance with the requirements of the
Annual Business Plan and a balanced budget, on behalf of the Chief
Executive.
4.5
Virement and Transfer
4.5.1 Budget Holders may transfer funds within (but not between) staff and nonstaff budget headings (either on a cost centre or regional or directorate
basis with the approval of the relevant Business Director).
4.5.2. The Head of Finance will report to the DH for information, any transfers
from revenue to capital.
4.5.3. It is not permitted to transfer Capital budgets to support increased
Revenue spending.
4.6
Capital Expenditure
4.6.1 The general rules applying to delegation and reporting also apply
to capital expenditure. (Standing Financial Instructions, Allocations,
Business Planning, Budgets, Budgetary Control and Monitoring). (see
further chapter 13)
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5.
ANNUAL ACCOUNTS AND REPORTS
5.1
The Accounting Officer will produce an Annual Report and Accounts
for the Commission, with input from the Director of Finance and
Corporate Services, recording the main activity and achievements for the
previous financial year.
5.2
The annual financial accounts will be scrutinised by the Audit and Risk
Assurance Committee prior to being submitted to the Commission for
approval.
5.3
The Commission’s Annual Report and Accounts must be audited by the
National Audit Office (or its appointed auditor), adopted by the Board
and laid before Parliament before the Summer Recess.
5.4
The Head of Finance on behalf of the Board and the Chief Executive will:

prepare financial returns in accordance with the guidance given by the
Department of Health and the Treasury, the Commission’s
accounting policies, and generally accepted accounting principles and
standards

prepare, certify and submit annual financial reports to the Secretary
of State in accordance with current guidelines

submit financial returns to the Secretary of State for each financial
year in accordance with the timetable prescribed by the Department
of Health.
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BANK ACCOUNTS
6.1
General
6.1.1 All banking is carried out on the Commission’s behalf by the
Commission’s appointed bankers. The Commission operates its accounts
via the Government Banking Service.
6.1.2 The Head of Finance will therefore agree with the Commission’s
appointed bankers a Service Level Agreement, which ensures that the
standards and policies, which would normally appear in these Standing
Financial Instructions, are attributed to an accountable third party.
6.1.3 The Head of Finance must also ensure that there are robust monthly
reconciliations of the Commission’s accounting records to those of the
Commission’s appointed bankers to help ensure integrity and reliability in
financial reporting.
6.2
Bank Accounts
6.2.1 The Head of Finance is responsible for:
(a) establishing bank accounts operated via the Government Banking
Service
(b) ensuring payments made from bank accounts do not
exceed the amount credited to the account except where
arrangements have been made
(c) reporting to the Board all arrangements made with the Commission’s
bankers for accounts to be overdrawn
(d) ensuring compliance with Department of Health guidance on the
level of cleared funds.
6.3
Banking Procedures
6.3.1 The Head of Finance will prepare detailed instructions on the operation of
bank accounts which must include:
(a) the conditions under which each bank account is to be
operated
(b) those authorised to sign cheques or other orders drawn on the
Commission’s accounts
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(c) the opening and closing of CQC bank accounts, including the set-up of
standing orders and direct debits, are limited to authorised staff
delegated by the Director of Finance and Corporate Services. All bank
accounts will be in the full name of the “Care Quality Commission” and
will operate within the CQC financial system.
6.3.2 The Head of Finance must advise the Commission’s bankers in writing of
the conditions under which each account will be operated and notify them
of any subsequent amendments.
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7.
7.1
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INCOME, FEES AND CHARGES AND SECURITY OF CASH, CHEQUES
AND OTHER NEGOTIABLE INSTRUMENTS
Income Systems
7.1.1 The Head of Finance is responsible for designing, maintaining and
ensuring compliance with systems for the proper recording, invoicing,
collection and coding of all monies due.
7.1.2 The Head of Finance is also responsible for ensuring prompt banking of all
monies received.
7.2
Fees and Charges
7.2.1 The Head of Finance is responsible for approving and regularly reviewing
the level of all fees and charges and ensuring that these are in line with
HM Treasury guidelines on Fees and Charges. Independent professional
advice on matters of valuation must be taken as necessary.
7.2.2 All employees must inform the Head of Finance promptly of money due
arising from transactions which they initiated/deal with, including all
contracts, leases, tenancy agreements, private patient undertakings and
other transactions in the event of a likely debt problem or non payment.
7.2.3 Fees are refundable in accordance with the Commission’s Annual Refund
Policy.
7.2.4. Fees are not transferable in the event of closure of a service provider.
7.3
Income for Non Regulated Services
7.3.1 Particulars of all charges to be made for work done, services rendered or
good supplied by the Commission, and of all other amounts due to the
Commission, shall be notified promptly by a Budget Holder to the
Accounts Manager.
7.4.
Debt Recovery
7.4.1 The Head of Finance is responsible for the appropriate recovery action on
all outstanding debts.
7.4.2 Income not received must be dealt with in accordance with losses
procedures for recovery and reporting.
7.4.3 Overpayments must be avoided but in the event that it occurs, all
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reasonable steps must be taken to achieve recovery.
7.5
Security of Cash, Cheques and other Negotiable Instruments
7.5.1. The Head of Finance is responsible for:

approving the form of all receipt books, agreement forms, or other
means of officially acknowledging or recording monies received or
receivable

ordering and securely controlling any such stationery

the provision of adequate facilities and systems for employees whose
duties include collecting and holding cash, including the provision of
safes or lockable cash boxes, the procedures for key holding, and for
coin operated machines

ensuring proper systems and procedures for handling cash and
negotiable securities on behalf of the Commission are in place and
communicated.
7.5.2 Official money must not under any circumstances be used for encashment
of private cheques.
7.5.3 All cheques, postal orders, cash etc must be banked intact.
Disbursements must not be made from cash received, except under
arrangements approved by the Head of Finance.
7.5.4 The holders of safe keys must not accept unofficial funds for depositing in
their safes unless such deposits are in special sealed envelopes or locked
containers. It must be made clear to the depositors that the Commission
is not to be held liable for any loss, and written indemnities must be
obtained from the organisation or individuals absolving the Commission
from responsibility for any loss.
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8.
8.1
TENDERING AND CONTRACTING PROCEDURE
Duty to comply with Board Standing Orders and Standing
Financial Instructions
8.1.1 The procedures for making all contracts by or on behalf of the Commission
must comply with the Scheme of Delegation and Standing Financial
Instructions. This document is in line with the CQC policy on procurement,
with all terms and conditions consistent between the two documents.
8.2 EU Directives Governing Public Procurement
8.2.1 Directives by the Council of the European Union made known by the
Department of Health prescribing procedures for awarding all forms of
contracts must have effect as if incorporated in the Board Standing
Orders and these Standing Financial Instructions. Procurement limits are
set out at Annex C.
8.3
Reverse e Auctions
8.3.1 The Commission will apply Treasury best practice for Reverse e Auctions.
8.4
Capital Investment Manual and other Department of Health Guidance
on Estate
8.4.1 The Commission will comply as far as is practicable with the
requirements of the Department of Health "Capital Investment Manual"
and “Estate code” in respect of capital investment and estate and property
transactions. Strategies will be subject to the approval of the DH Property
Asset Management Board.
8.5
Formal Competitive Tendering
8.5.1 The Commission’s policies regarding formal competitive tendering are
provided in detail in the Procurement Policy and Procedures, available on
the CQC intranet.
8.6
Compliance requirements for all contracts
8.6.1 The Board must only enter into contracts on behalf of the Commission
within the statutory powers delegated to it by the Secretary of State and
must comply with:
(a) The Commission’s Board Standing Orders and Standing
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Financial Instructions
(b) EU Directives and other statutory provisions
(c) Any relevant directions including the Capital Investment Manual,
Estate code and Guidance on the Procurement and
Management of Consultants
(d) Where appropriate contracts must be in or embody the same
terms and conditions of contract as was the basis on which
tenders or quotations were invited
(e) In all contracts made by the Commission, the Board must
endeavour to obtain best value for money by use of all systems
in place, and establish appropriate management controls at
individual contract level.
8.7
Government procurement and efficiency controls
8.7.1 In 2010-11 Government introduced procurement controls as part of a plan
to secure significant efficiency savings. The Cabinet Office has confirmed
that these controls will remain in place until March 2015. The controls
operate in external recruitment, new consultancy spend, new ICT projects
over £1m and paid for communications, advertising and marketing activity
above £20K. The current guidance on procurement is provided by the
Government Procurement Service, an Executive Agency of the Cabinet
Office. 1
8.7.2 The Government Procurement Service operates centralised category
frameworks which CQC must use in the following areas:









1
Energy
Communications, Marketing and Public Relations
Professional Services
Fleet
Office solutions,
ICT Commodities
Print and print management
Travel
Learning & Development
http://www.cabinetoffice.gov.uk/government-efficiency
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8.7.3 Some of these categories have strict controls which must be adhered to at
all times. The Cabinet Office Efficiency Guidance requires that all
Government Departments and their ALBs and NDPBs seek additional
approval to procure Professional Services, Marketing and
Communications or IT services. CQC staff must liaise with the Head of
Finance in relation to procuring these services. Depending on the
approval levels, staff may be required to complete external business
cases to be submitted to Department of Health:
 Contracts for professional services over £250,000 require prior
ministerial approval. Failure to do so shall be considered gross
misconduct;

Those relating to professional services valued at over £50,000 require
prior DH sponsor approval. Failure to do so shall be considered
misconduct and invoke disciplinary action;

All procurements over £10,000 shall be subject to competition as laid
down in the Scheme of Delegation.

8.8 Single Tender Actions (STA)
8.8.1 All STA’s are required to go through a procurement process which will
include publishing an invitation to tender via the e-tendering portal.
8.8.2 Any request for single tender action must have prior authority as per
Scheme of Delegation (SoD) and Procurement Procedures. The particular
approval levels for Single Tender Actions are set out at Annex D under
Single Tender Action, p. 67.
8.9 Contract Extension
8.9.1 All contract extensions must be discussed with the Procurement team to
determine if a valid extension clause is present within the contract allowing
it to be legally extended.
8.10
Authorisation Limits
8.10.1 The delegated authorisation limits from the Procurement Policy are set
out in detail at Annex D, pp. 64ff.
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9.
9.1
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TERMS OF SERVICE AND PAYMENT OF COMMISSIONERS, OF
DIRECTORS AND EMPLOYEES
Remuneration Committee
9.1.1 For detailed information on the Remuneration Committee’s role and
responsibilities, please refer to the Remuneration Committee Terms of
Reference document.
9.2
Funded Establishment
9.2.1 The manpower plans incorporated within the annual budget will form the
funded establishment.
9.3
Employee Appointments
9.3.1 The recruitment of individual employees including the use of agency
employees will be the responsibility of the appropriate Director. No
Director or employee may re-grade employees, either on a
permanent or temporary nature, or hire agency employees, or agree to
changes in any aspect of remuneration:

unless authorised to do so within the Scheme of Delegation authorised
at the time, or

unless with the express written approval of the Chief Executive.
9.3.2 The Board will approve procedures presented by the Chief Executive
for determination of commencing pay rates, conditions of service, etc, for
employees, where this is not covered by Department of Health policies or
terms of service for staff and secondees.
9.4
Processing of Payroll
9.4.1 The Director of Human Resources will negotiate a service level agreement
with the relevant payroll supplier regarding arrangements for:


Verification and documentation of data
The timetable for receipt and preparation of payroll data and the
payment of employees

Security and confidentiality of payroll information

Checks to be applied to completed payroll before and after payment
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Release of payroll data under the provisions of the Data Protection Act
Methods of payment available to various categories of employees

Specifying timetables for submission of properly authorised time
records and other notifications

The final determination of pay

Agreeing method of payment.
9.4.2 The Director of Finance and Corporate Services is responsible for:

Making payment on agreed dates

Maintenance of subsidiary records for superannuation, income tax,
social security and other authorised deductions from pay

Procedures for payment by bank credit to employees

Procedures for the recall of cheques and bank credits

Pay advances and their recovery; maintenance of regular and
independent reconciliation of pay control accounts

Separation of duties of preparing records and handling cash

A system to ensure the recovery from leavers of any sums of money
and property owing to the Commission.
9.4.3 Appropriately nominated employees have delegated responsibility for:

Submitting time records and other notifications in accordance with
agreed timetables

Completing time records and other notifications in accordance with the
Head of Business Partnering, Reward and HR Services instructions
and in the form prescribed by the Head of Business Partnering,
Reward and HR Services

Submitting termination forms in the prescribed form immediately upon
knowing the effective date of an employee’s resignation, termination
or retirement. Where an employee fails to report for duty in
circumstances that suggest they have left without notice, the HR
Services team mustbe informed immediately.
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9.4.4 Regardless of the arrangements for providing the payroll service, the
Director of HR must ensure that the chosen method is supported by
appropriate (contracted) terms and conditions, adequate internal controls
and audit review procedures and that suitable arrangements are made for
the collection of payroll deductions and payment of these to appropriate
bodies.
9.5
Contract of Employment
9.5.1 The Chief Executive has delegated responsibility to the Director of Human
Resources for:

Ensuring that all employees are issued with a Contract of
Employment in a form approved by the Board and which complies
with employment legislation

Dealing with variations to, or termination of, contracts of employment
and any resulting changes in salary.
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NON-PAY EXPENDITURE
10.1
Delegation of Authority
10.1.1 The Board will approve the level of non-pay expenditure on an annual
basis and the Chief Executive will determine the level of delegation to
Budget Holders (currently Directors and Heads of Function).
10.1.2 The Head of Finance on behalf of the Chief Executive will set out the
maximum level of each requisition and the system for authorisation above
that level. The Head of Finance and his/her team will maintain control of
the list of employees who are authorised to place requisitions for the
supply of goods and services.
The current approval limits are
 Heads of Function & Deputy Directors of Operations may approve up
to £25,000
 Directors may approve up to £156, 442 (OJEU limit)
 The Director of Finance & Corporate Services and the Head of Finance
may approve any pre-approved expenditure
10.1.3 The Head of Finance and Corporate Services on behalf of the Chief
Executive must set out procedures for seeking professional advice
regarding the supply of goods and services.
10.2
Choice, Requisitioning, Ordering, Receipt and Payment for Goods
and Services
10.2.1 The requisitioner, in choosing the item to be supplied (or the service to
be performed) must always obtain the best value for money for the
Commission. In so doing, the advice of the Commission's Head of
Finance must be sought.
10.2.2 The Head of Finance is responsible for the prompt payment of accounts
and claims. Payment of contract invoices will be in accordance with the
Better Payment Practice code and guidance published by HM Treasury.
10.2.3 The Director of Finance and Corporate Services will:

advise the Board regarding the setting of thresholds above which
quotations (competitive or otherwise) or formal tenders must be
obtained; and, once approved, the thresholds must be incorporated
in Board Standing Orders and regularly reviewed
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advise the Board of any variations from the above, clearly setting
out reasons for doing so

ensure records are maintained of any duly approved waiver or
variation to these Standing Financial Instructions and present this
record for Audit and Risk Assurance Committee scrutiny at each
meeting (usually quarterly) to ensure powers of waivers are not
used systematically or regularly to avoid compliance with these
rules

prepare procedural instructions on the obtaining of goods, works
and services incorporating the threshold
10.2.4 The Financial Controller will:

ensure the prompt payment of all properly authorised accounts and
claims

be responsible for designing and maintaining a system of
verification, recording and payment of all amounts payable. The
system must provide for:
o A list of employees authorised to certify invoices along with
specimen signatures. Certification in accordance with detailed
financial procedure notes
o A timetable and system for submission to the Director of
Finance and Corporate Services of accounts for payment;
provision must be made for the early submission of accounts
subject to cash discounts or otherwise requiring early payment.
o Instructions to employees regarding the handling and payment
of accounts within the Finance Department.

10.2.4
be responsible for ensuring that payment for goods and services is
only made once the goods and services are received, (except as
below).
Pre-payments are only permitted where exceptional circumstances
apply. In such instances:
 the appropriate Director must provide, in the form of a written
report, a case setting out all relevant circumstances of the
purchase. It must also set out the effects on the Commission if the
supplier is at some time during the course of the pre-payment
agreement unable to meet his commitments
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
10.2.5
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the Director of Finance and Corporate Services will need to be
satisfied with the proposed arrangements before contractual
arrangements proceed. The Budget Holder is responsible for
ensuring that all items due under a pre-payment contract are
received and he/she must immediately inform the appropriate
Director or Chief Executive if problems are encountered.
Official Orders must:
 be consecutively numbered

be in a form approved by the Head of Finance

state the Commission's terms and conditions of trade
 only be issued to, and used by, those duly authorised by Head of
Finance on behalf of the Chief Executive.
10.2.6
Employees must ensure that they comply with the guidance and limits
specified by the Director of Finance and Corporate Services and that:

all contracts, leases, tenancy agreements and other commitments
which may result in a liability are notified to the Director of Finance
and Corporate Services in advance of any commitment being made

contracts above specified thresholds are advertised and awarded in
accordance with EC and GATT rules on public procurement> and
comply with the White Paper on Standards, Quality and
International Competitiveness (CMND 8621)

no orders are issued for any item or items to any firm which has
made an offer of gifts, reward or benefit to Directors or
employees, which are inconsistent with the Commission’s Gifts and
Hospitality Policy.

no requisition/order is placed for any item or items for which there is
no budget provision unless authorised by the Head of Finance on
behalf of the Chief Executive
10.2.7 All goods, services, or works are ordered on an official order except works
and services executed in accordance with a contract.

Verbal orders must only be issued very exceptionally – by an
employee designated by the Chief Executive and only in cases of
emergency or urgent necessity. These must be confirmed by an
official order and clearly marked “Confirmation Order”
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
Orders not split or otherwise placed in a manner devised so as to
avoid the financial thresholds

Goods not taken on trial or loan in circumstances that could commit
the Commission to a future uncompetitive purchase

Changes to the list of directors/employees authorised to certify
invoices are notified to the Head of Finance

Purchases from petty cash are restricted in value and by type of
purchase in accordance with instructions issued by the Head of
Finance

Petty cash records are maintained in a form as determined by the
Head of Finance
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11.
INVESTMENTS
11.1
Temporary cash surpluses must remain in the Government Banking
Service.
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12.
FINANCIAL FRAMEWORK
12. 1 The Director of Finance and Corporate Services must ensure that
Commissioners are aware of the Financial Reporting Manual (FReM) and
that the direction and guidance in the framework is followed by the
Commission.
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13.
13.1
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CAPITAL INVESTMENT, PRIVATE FINANCING, FIXED ASSET
REGISTERS AND SECURITY OF ASSETS
Capital Investment
13.1.1 On behalf of the Accounting Officer, the Director of Finance and Corporate
Services
 must ensure there is an adequate appraisal and approval process in
place for determining capital expenditure priorities and the effect of
each proposal upon business plans

is responsible for the management of all stages of capital schemes
and for ensuring that schemes are delivered on time and to cost

must ensure that the capital investment is not undertaken without
confirmation of the availability of resources including the revenue
consequences such as capital charges.
13.1.2 The Board will agree an annual consolidated capital programme, which
may cover one or more years, identifying capital expenditure priorities.
Performance against the programme will be monitored each quarter.
13.1.3 Bids for capital projects, will be prepared as part of directorate budgets, for
prioritisation centrally by the Director of Finance and Corporate Services in
the context of the agreed annual consolidated capital programme.
13.1.4 For every capital expenditure proposal above the specified amount as set
out in DH guidelines, the Director of Finance and Corporate Services
must ensure:

That a business case (in line with the guidance contained within the
Purchasing and Supply Manual) is produced setting out:
o An option appraisal of potential benefits compared with known
costs to determine the option with the highest ratio of benefits to
costs
o Appropriate project management and control arrangements.

That he/she has certified professionally to the costs and revenue
consequences detailed in the business case.
13.1.5 The Investment Committee supports the Director of Finance and
Corporate Services in making business case and procurement approvals.
All business cases over £50K must currently be submitted to the
Executive Team’s Investment Committee for approval (terms of reference
are available on the CQC intranet).
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13.1.6 All assets will be purchased within approved budgets, controlled and
monitored while in use and disposed of in accordance with laid down
procedures.
13.1.7 For capital schemes where the contracts stipulate stage payments, the
Director of Finance and Corporate Services will follow Treasury/Cabinet
Office procedures for their management, and for management of CQC
leasehold estate making use of the DH Estate Code. Property strategies
need to be approved by the Department of Health Property
Asset Management Board.
13.1.8 The approval of a capital programme must not constitute approval for
expenditure on any scheme. The Chief Executive must issue to the
employee responsible for any scheme:
 Specific Commission authority to commit expenditure

Commission authority to proceed to tender

Approval to accept a successful tender.
13.1.9 The Chief Executive will issue a Scheme of Delegation for capital
investment management in accordance with the DH Estate Code
guidance and the Commission's Board Standing Orders.
13.1.10The Director of Finance and Corporate Services must issue procedures
governing the financial management, including variations to contract, of
capital investment projects and valuation for accounting purposes.
13.1.11 The limits for capital expenditure are set out in Appendix D of this
document under Capital Expenditure (p. 66).
13.2
Asset Registers
13.2.1 On behalf of the Accounting Officer, the Director of Finance and Corporate
Services is responsible for the maintenance of registers of
Assets, the form of any register and the method of updating, and
arranging for a verification of assets exercise against the asset register to
be conducted once a year.
13.2.2 The Commission must maintain a register of fixed assets; single items
over £5,000 or items considered part of a group with a total cost
exceeding £5000.
13.2.3 Additions to the fixed assets register must be clearly identified to an
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appropriate Budget Holder and be validated by reference to:
 Supplier’s invoices.
13.2.4Where capital assets are sold, scrapped, lost or otherwise disposed of,
their value must be removed from the accounting records and each
disposal must be validated by reference to authorisation documents and
invoices (where appropriate).
13.2.5 The Head of Finance must approve procedures for reconciling balances
on fixed assets accounts in ledgers against balances on fixed asset
registers.
13.3
Security of Assets and fixed assets
13.3.1 The overall control of fixed assets is the responsibility of the Chief
Executive. The Director of Finance and Corporate Services discharges
this responsibility on his behalf.
13.3.2 Asset control procedures (including fixed assets, cash, cheques and
negotiable instruments, and also including donated assets) must be
approved by the Head of Finance. These procedures will make provision
for:
 Recording officer responsibility for each asset

Identification of additions and disposals

Identification of all repairs and maintenance expenses

Physical security of assets

Periodic verification of the existence of, condition of, and title to, assets
recorded

Identification and reporting of all costs associated with the retention of
an assets

Reporting, recording and safekeeping of cash, cheques, and
negotiable instruments.
13.3.3 Where practical, assets must be marked as Commission property.
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13.3.4 Directorates will maintain registers showing capital assets, material
inventory items and all leased assets. The responsibility for the security
and custody of all assets in the ownership of the Commission shall be
vested in Business Services Manager at local offices and the Office
Managers at the regional offices.
13.3.5 The asset register of equipment issued to homeworkers is maintained by
CQC’s outsourced IT services provider (CSC) on behalf of the Head of
ICT Services, who is able to review the register at any time.
13.3.6 The responsible officers shall maintain an asset register relating to the
assets under their overall control and will instigate periodic physical
checks of assets against the register. All discrepancies revealed by
verification of physical assets to the fixed asset register must be notified to
the Head of Finance. The responsible officers shall immediately notify the
Head of Finance of any misuse of or damage to an asset in the
Commission’s possession. Any suspected or actual instance of theft must
also be immediately notified to the Head of Finance on the incident report
form. In the event of an asset being lost by reason of misuse, damage or
theft, the responsible officer must complete a Loss of Assets report.
13.3.6 Whilst each employee has a responsibility for the security of property of
the Commission, it is the responsibility of Directors and senior
employees in all disciplines to apply such appropriate routine security
practices in relation to property as may be determined by the Board. Any
breach of agreed security practices must be reported in accordance with
instructions.
13.3.7 Any damage to the Commission premises, vehicles and equipment, or any
loss of equipment, stores or supplies must be reported by Directors and
employees in accordance with the procedure for reporting losses.
13.3.8 Recommendations for the disposal or writing off of any equipment shall be
referred to the Head of Finance who shall determine the recommendation
and make appropriate financial records.
13.4 Depreciation of Fixed Assets
13.4.1 CQC will maintain specified capitalisation limits, to be approved by the
Commission.
13.4.2 The cost of capital is charged in accordance with HM Treasury
requirements.
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13.4.3 Expenditure on office refurbishments, office furniture and fittings, office
equipment, IT equipment and infrastructure is capitalised as tangible
assets if having a value of £5,000 or more and having a working life of
more than one year. Assets costing below £5,000 are capitalised when
considered part of a group if total costs exceeds £5,000 in value. Staff and
contractor costs incurred on IT infrastructure projects are capitalised. The
assets are recorded at cost and are restated at current value each year
using the appropriate Office of National Statistics price index.
13.4.3 Expenditure on IT software developments, including the Commission’s
website, are capitalised as intangible assets if having a value of £5,000 or
more or considered part of a group with a total cost exceeding £5,000.
Assets are re-valued annually using the appropriate Office of National
Statistics price index.
13.4.5 Depreciation and amortisation on fixed assets will be provided on a
straight-line basis, at rates calculated to write off the costs, less any
residual value, over their estimated useful lives as follows:Property, Plant and Equipment
Furniture and fittings:Office Refurbishment
Furniture
Office Equipment
Information Technology:IT equipment
IT infrastructure
10 years
10 years
5 years
3 years
3 years
Intangible
Software Licences
Developed Software and website
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3 years
3 years
14.
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Submitted to the Board for approval on 20th March 2013
STORES AND RECEIPT OF GOODS
14.1
Subject to applicability to the Commission, stores and receipts of goods
must be dealt with as follows.
14.2
Stores, defined in terms of controlled stores and departmental stores (for
immediate use) must be:
 Kept to a minimum
 Subjected to annual stock take
 Valued at the lower of cost and net realisable value.
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15.
15.1
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Submitted to the Board for approval on 20th March 2013
DISPOSALS AND CONDEMNATIONS, LOSSES AND SPECIAL
PAYMENTS
Disposals and Condemnations
15.1.1 The Head of Finance must prepare detailed procedures for the disposal of
assets including condemnations and ensure that these are notified to
employees.
15.1.2 When it is decided to dispose of a Commission asset, the Head of
Department or authorised deputy will determine and advise the
Head of Finance of the estimated market value of the item, taking account
of professional advice where appropriate.
15.1.3 All unserviceable articles must be condemned or otherwise disposed of by
an employee following authorisation by the Director of Finance and
Corporate Services, taking assurance from the Head of Finance.
15.2 Losses and Special Payments
15.2.1 HM Treasury retains control over certain write-offs and payments known
collectively as losses and special payments:
 Losses cover any case where full value has not been obtained for
money spent or committed, including cash losses, losses due to errors
by staff

Special payments cover any compensation payments, extra
contractual or ex gratia payments, and any payment made without
specific identifiable legal power for the Commission to make the
payment.
15.2.2 The Department of Health allows the Accounting Officer and the Board of
an Arms Length Body to sign off
 Cash losses up to £75,000,
 Stores losses up to £50,000
 Special payments up to £20,000
provided the losses have not arisen from fraud, dereliction of duty or other
similar failure. Losses exceeding this amount or in any way novel or
contentious need HM Treasury approval. (Refer to Annex C; the rules
governing Writing off Losses are set out in Managing Public Money
Appendix 4.10).
15.2.3 The Head of Finance must prepare procedural instructions on the
recording of and accounting for condemnations, losses and special
payments. In doing so, the Head of Finance must take account of the rules
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as laid down by the DH and HMT and ensure that all personnel are aware
of the procedure for approvals (refer to annexes A and B).
15.2.4 The Head of Finance is responsible for maintaining a register of losses
and special payments in which write-offs and other related action is
recorded. Losses and Special Payments occurring in any period must be
notified at each Audit and Risk Assurance Committee.
15.2.5 Any employee discovering or suspecting a loss of any kind must
immediately inform their Head of Function, who must immediately
inform their Director, the Chief Executive and the Director of Governance
and Legal Services. Where a criminal offence is suspected, the Director of
Governance and Legal Services must immediately inform the police if theft
or arson is involved, but if the case involves suspicion of fraud, then the
particular circumstances of the case will determine the state at which the
police are notified.
15.2.6 For losses apparently caused by theft, fraud, arson, neglect of duty or
gross carelessness, except if trivial and where fraud is not suspected, the
Director of Governance and Legal Services must immediately notify the
Board of the Commission and the Statutory Auditor.
15.2.7 The writing-off of losses cannot be given effect without the approval of the
Director of Finance and Corporate Services within their defined limits.
15.2.8 The Director of Finance and Corporate Services must be authorised to
take any necessary steps to safeguard the Commission interests in
bankruptcies and company liquidations.
15.2.9 No special payments exceeding delegated limits may be made without
the prior approval of the Chief Executive.
The Delegated Limits are set out under “Other Delegations” in Appendix D
(pp72-73)
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16.
16.1
Agenda item 8
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Submitted to the Board for approval on 20th March 2013
INFORMATION TECHNOLOGY
The Director of Finance and Corporate Services, who is responsible for
the accuracy and security of the computerised financial data of the
Commission, must:
 Devise and implement any necessary procedures to ensure adequate
(reasonable) protection of the Commission's data, programmes and
computer hardware for which he/she is responsible from accidental or
intentional disclosure to unauthorised persons, deletion or modification,
theft or damage, having due regard for the Data Protection Act 1998

Ensure that adequate reasonable controls exist over data entry,
processing, storage, transmission and output to ensure security,
privacy, accuracy, completeness and timeliness of the data, as well as
the efficient and effective operation of the system

Ensure that adequate controls exist such that the computer operation
is separated from development, maintenance and amendment

Ensure that an adequate management audit trail exists through the
computerised system and that such computer audit reviews as he/she
may consider necessary are being carried out.
16.2
The Director of Finance and Corporate Services must satisfy him/herself
that new financial systems and amendments to current systems are
developed in a controlled manner and thoroughly tested prior to
implementation. Where this is undertaken by another organisation,
assurances of adequacy will be obtained from them prior to
implementation.
16.3
The Director of Finance and Corporate Services must ensure that
contracts for computer services for financial applications with another
health organisations or any other agency must clearly define the
responsibility of all parties for the security, privacy, accuracy,
completeness and timeliness of data during processing, transmission and
storage. The contract must also ensure rights of access for audit
purposes.
16.4
Where another organisation or any other agency provides a computer
service for financial applications, the Director of Finance and Corporate
Services must periodically seek assurances that adequate controls are in
operation.
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Submitted to the Board for approval on 20th March 2013
Where computer systems have an impact on corporate financial systems,
the Director of Finance and Corporate Services must satisfy that:

Systems acquisition, development and maintenance are in line with
corporate policies such as an Information Technology Strategy

Data produced for use with financial systems is adequate, accurate,
complete and timely and that a management (audit) trail exists

Director of Finance and Corporate Services staff have access to such
data

Such computer audit reviews as are considered necessary are being
carried out
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Agenda item 8
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Submitted to the Board for approval on 20th March 2013
STANDARDS OF BUSINESS CONDUCT
17.1 Guiding Principles in conduct of Public Business
17.1.1 The Accounting Officer is personally responsible for ensuring regularity,
and propriety of the public finances of CQC, and for ensuring that its
resources are used economically, efficiently and effectively. All
Commissioners, employees and contractors are expected to comply with
the highest standards of behaviour, including:

Observing the highest standards of propriety involving impartiality,
integrity and objectivity in relation to the stewardship of public funds

Maximising value for money through ensuring that services are
delivered in the most economical, efficient and effective way, within
available resources, and with independent validation of performance
achieved wherever practicable. Value for money is not the lowest
price: it is the optimal combination of costs and quality to meet the
Commission’s requirements

Being accountable to Parliament and individual citizens for the
activities
of the Commission, their stewardship of public funds and the extent to
which key performance targets and objectives have been met
17.1.2 The standards of conduct expected of Commissioners is set out in the
Board’s Standing Orders and Code of Conduct, including in relation to
receipt of gifts and hospitality and declaration of interests.
17.1.3 The standards expected of staff are set out in the staff Code of Conduct
and related policies, such as the Counter Fraud Policy, the Whistleblowing
Policy, all of which are available on the intranet.
17.1.4 CQC will not tolerate any sort of fraud or corruption. The aim of the policy
is to ensure that all members of staff (including secondees, contractors
and agency staff) are aware of what is expected of them and the action
that will be taken if fraud is committed.
17.2 Contact with contractors and suppliers
17.2.1All employees who are in contact with suppliers and contractors
(including external consultants), and in particular Directors and Heads of
Function/Deputy Directors of Operations who are authorised
to sign Purchase Orders, or place contracts for goods, materials or
services, must adhere to professional standards.
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17.3 Avoiding Favouritism
17.3.1 Fair and open competition between prospective contractors or suppliers
for contracts is a requirement of the Commission’s Board Standing
Orders and of EC Directives on Public Purchasing for Works and
Supplies. This means that:

No private, public or voluntary organisation or company which may bid
for business must be given any advantage over its competitors, such
as advance notice of requirements. This applies to all potential
contractors, whether or not there is a relationship between them and
the employer, such as a long-running series of previous contracts.

Each new contract must be awarded solely on merit, taking into
account the requirements and the ability of the contractors to fulfil
them.

No special favour is shown to current or former Employees or their
close relatives or associates in awarding contracts to private or other
businesses run by them or employing them in a senior or relevant
employee capacity. Contracts may be awarded to such businesses
where they are won in fair competition against other tenders, but
scrupulous care must be taken to ensure that the selection process is
conducted impartially and that Employees who are known to have a
relevant interest play no part in the selection.
17.4 Warning to Potential Contractors
17.4.1 The Commission will ensure that all invitations to potential contractors to
tender for business include a notice warning tenderers of the
consequences of engaging in any corrupt practices involving
employees or employees of public bodies.
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18.
RETENTION OF RECORDS
18.1
The Chief Executive is responsible for maintaining records required to be
retained in accordance with CQC’s Retention and Disposal schedule. The
Information Asset Owner in each Directorate has delegated responsibility
for carrying out this responsibility on the Chief Executive’s behalf.
18.2
The legacy hard copy records held in archives must be capable of retrieval
by authorised Persons. The Records and Document Management Team
Leader manages the CQC contract to ensure an effective and efficient
service to CQC
18.3
CQC’s records are kept to:
 Meet current and future business needs;
 Comply with statutory, legal and corporate governance best practice
requirements;
 Ensure that the way we manage records is documented, understood
and implemented; and
 Meet the reasonable current and future needs of internal and external
stakeholders.
Records that are no longer required are eliminated as early as possible in
an authorised and systematic manner in line with our Retention & Disposal
schedule and destruction process.
The Information Asset Owner is responsible for ensuring the destruction
process is followed and that records are reviewed and logged before
destruction.
The KIM champions are responsible to their Director and Head of Function
(Information Asset Owners) to work with the KIM teams as local area
representatives on issues relating to knowledge and information
management.
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19.
Agenda item 8
Paper No: CM/02/13/07
Annex C
Submitted to the Board for approval on 20th March 2013
RISK MANAGEMENT AND INSURANCE
19.1
Identification and management of risk
19.1.1 The Director of Governance and Legal Services must ensure that the
Commission has a robust and effective process for risk management. This
will include:

A process for identifying, evaluating, and reporting on high level
strategic risks at Executive Team level

A process for identifying, evaluating, and reporting on risks and
potential liabilities within <Commission Groups>

Management processes to ensure all significant risk and potential
liabilities are recognised and properly managed within a central risk
register

Arrangements to review the risk management processes periodically.
19.1.2 Directors are responsible for complying with risk management processes
laid down by the Risk Manager and ensuring there are regular reviews of
risk within their Directorates. Directors are responsible for the effective
management of risks within their Directorate.
19.1.3 The Director of Governance and Legal Services will report to the Audit
and Risk Assurance Committee on an annual basis on the processes for
managing the Commission’s risks and at each meeting the key risks,
which have been identified, and arrangements for their management. Any
significant new risks identified during the year will also be reported.
19.1.4 Directors will, as required, report on their specific risks to the Audit and
Risk Assurance Committee.
19.2
Insurance arrangements
19.2.1 Insurance arrangements will be arranged in accordance with the principles
set out by HM Treasury. HM Treasury guidance underlines the principle of
self-insurance for most non-commercial risks involving public money. The
Commission will comply with its contractual obligations to effect insurance
cover, principally on leased and operating assets and short-term hire of
premises for events.
19.2.2 The Director of Finance and Corporate Services is responsible for:
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Effecting adequate insurance to protect the Commission’s interests

Negotiating all claims in consultation with Heads of Departments as
required

Ensuring an annual review of the Commission’s insurance is
undertaken.
19.2.3 It is the responsibility of Directors to:
19.3

Notify the Director of Finance and Corporate Services promptly of all
new risks requiring insurance and of any alterations affecting existing
risks or insurance

Notify the Director of Finance and Corporate Services in writing of any
loss, liability or damage of any event likely to lead to a claim

Notify the Director of Governance and Legal Services immediately of
any potential legal liabilities

Ensure employees or anyone else covered by the Commission’s
insurances do not admit liability or make an offer to pay compensation
that may prejudice the assessment of liability in respect of any
insurance claim.
Duty to take due care
19.3.1 All employees using leased assets, including cars, must exercise due care
to minimise any insurance liability.
19.4
Incidents and events giving rise to possible claims
19.4.1 It is the responsibility of all employees to ensure that any incident
involving personal injury or death or any other incident likely to lead to a
claim against the Commission occurring in pursuance of Commission
business is notified to the appropriate Director and the Director of Finance
and Corporate Services as soon as possible and in line with agreed policy.
19.5
Reporting of risks and claims
19.5.1 The Director of Governance and Legal Services will report on risk
management, and the Director of Finance and Corporate Services on any
incidents or claims notified, to the Audit and Risk Assurance Committee
and provide a formal report each year on losses arising from uninsured
incidents.
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19.6
Accountability for risk management
19.6.1
19.6.2
19.6.3
19.6.4
19.6.5
Principle
Overall responsibility for risk
management arrangements
Operation of risk management
Ensuring risks are
appropriately insured
Monitor risks and ensure that
potential claims are handled
appropriately within the
Commission through notifying
their Business Manager
Care of assets, including
leased assets to reduce
insurance liabilities
Prompt notification of incidents
to and Risk Manager
Notification to Audit and Risk
Assurance Committee of risk
management and losses from
uninsured incidents
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Accountability
Director of Governance and
Legal Services
Directors
Director of Finance and
Corporate Services
Director
All employees with assets in
their care
All employees with assets in
their care
Director of Governance and
Legal Services for risk
management;
Director of Finance and
Corporate Services for
uninsured incidents
Agenda item 8
Paper No: CM/02/13/07
Annex C
Submitted to the Board for approval on 20th March 2013
ANNEX A - ARMS LENGTH BODIES (ALBs) GUIDANCE ON LOSSES
AND SPECIAL PAYMENTS
How to identify when Treasury and/or Department of Health approval is
required for Losses and Special Payments
1.
INTRODUCTION
This document is an outline of when Treasury or Department of Health
approval for losses and special payments is required but must be read in
conjunction with Managing Public Money (MPM), where full details are
set out in Chapter 4 and its annexes. This document was issued by HM
Treasury under cover of DAO 04/07 and it replaced the Government
Accounting Manual (GAM) from October 2007. The MPM can be found at
the Treasury website on www.hm-treasury.gov.uk.
All ALBs must rigorously follow the procedures laid down in MPM and
must have their own robust procedures for dealing with losses and special
payments.
2.
TREASURY APPROVAL
Losses and special payments are items that Parliament would not have
contemplated when it agreed funds for the health service or passed
legislation. By their nature, they are items that ideally should not arise.
They are therefore subject to special control procedures compared with
the generality of payments, and special notation in the accounts to draw
them to the attention of Parliament.
3.
REPORTING TO DEPARTMENT OF HEALTH
A requirement of the delegation by the Treasury to the DH is that the DH’s
Audit Committee annually reviews a report on the use of this delegation
and that the report made to them is copied to the HM Treasury. All cases
requiring DH or Treasury approval must be submitted to the DH in
advance of payment for special payments and as they arise for losses.
4.
SPECIAL PAYMENTS
4.1.
In voting money or passing specific legislation, Parliament does not and
cannot approve special payments outside the normal range of
departmental activity. Such transactions are therefore subject to greater
control than other payments.
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ALBs must authorise special payments only after careful appraisal of the
facts and when satisfied that the best course has been identified. It is
good practice to consider routinely whether particular cases reveal
concerns about the soundness of the control systems; and whether they
have been respected as expected. It is also important to take any
necessary steps to put failings right.
4.3.
ALBs must always consult the DH about special payments unless there
are specific agreed delegation arrangements. So an ALB must seek DH
approval, in advance, for any special payment for which it has no
delegated authority, or which exceeds its authority. In turn, the DH may
need to consult the Treasury.
4.4.
All cases which are novel, contentious or repercussive and/or that relate to
special severance payments must be referred to the Treasury.
4.5.
The special payments on which the Treasury may need to be consulted
are shown below. The list is not exclusive. If in doubt, please consult the
DH.

Extra-contractual payments: payments which, though not legally
due under contract, appear to place an obligation on a public sector
organisation which the courts might uphold. Typically these arise
from the organisation’s action or inaction in relation to a contract.
Payments may be extra-contractual even where there is some doubt
about the organisation’s liability to pay, e.g. where the contract provides
for arbitration but a settlement is reached without it. (A payment made as
a result of an arbitration award is contractual.)

Extra-statutory and extra-regulatory payments are within the
broad intention of the statute or regulation, respectively, but go beyond a
strict interpretation of its terms.

Compensation payments are made to provide redress for
personal injuries (except for payments under the Civil Service Injury
Benefits Scheme), traffic accidents, damage to property etc, suffered by
civil servants or others. They include other payments to those in the public
service outside statutory schemes or outside contracts.

Special severance payments are paid to employees,
contractors and others beyond above normal statutory or
contractual requirements when leaving employment in public service
whether they resign, are dismissed or reach an agreed termination of
contract.
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
5.
Agenda item 8
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Submitted to the Board for approval on 20th March 2013
 Ex gratia payments go beyond statutory cover, legal liability, or
administrative rules, including:
o Payments made to meet hardship caused by official failure or delay
o Out of court settlements to avoid legal action on grounds of official
inadequacy
Payments to contractors outside a binding contract, e.g. on grounds of
hardship.
TREASURY / DH APPROVAL PROCESS
Step 1
Follow internal approval process. Ascertain if the special payment is novel,
contentious or repercussive and/or relates to special severance payments.
If yes, then it must be referred to the Treasury for approval, via the ALB
Finance team.
Step 2
If not then ascertain if the special payment is within the delegated limits.
If the loss or write-off is within delegated limits, then the ALB’s internal
approval process is sufficient.
Step 3
If the value of the loss or write exceeds the delegated limits then it must
be referred to the DH for approval. If it is novel, contentious or
repercussive, then DH will need to refer it to Treasury for approval.
Key points

ALBs must have a robust internal process in place to consider all
special payments. The soundness of and adherence to control
systems must be reviewed and steps taken to correct any failings

Special Payments must be referred to the DH for approval in
advance of payment if the amount exceeds the delegated limit of the
ALB or if they are novel, contentious or repercussive

Where Special Payments are deemed novel, contentious or
repercussive, the DH has to seek Treasury approval in advance of
payment. Special severance payments always require Treasury
approval

In all cases, DH/Treasury approval must be sought in advance of any
payments made. If payments are made and approval is not obtained
then accounts may be qualified

Where appropriate, cases must be referred to the Governance and
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Assurance Committee (GAC). Please refer to the GAC Submission
Guidance. Again, this must be done in advance of any payments
being made.
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Refer to the workflow diagram below for a quick reference guide.
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ANNEX B - SPECIAL PAYMENTS REQUIREMENTS FORM
To obtain Treasury or Department of Health approval, the following information is
required:
Is Payment novel, contentious repercussive
YES
NO
or a special severance payment?
YES
NO
Explain the nature and circumstances of the case, including any scope for
reference to a tribunal, with its potential consequences.
Set out the amount proposed as settlement; also identify what your legal costs
would be if settlement agreed
Summarise the legal advice, including the assessment of the organisation's
chances of winning or losing the case. Attach a copy of legal advice received
Assess the value for money offered by the possible settlement. It is useful to
identify the maximum and minimum amounts claimant could win if successful,
plus your costs if case defended i.e. your legal fees and estimate of management
costs.
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Confirm that the relevant management procedures have been followed. Identify
any other options considered and reasons not pursued.
Bring out any non-financial considerations, e.g. where it is desirable to end
someone's employment but dismissal is not warranted
Explain whether the case in question could have wider impact, e.g. for a group of
potential tribunal cases
Confirm that special payment is not a soft option in order to avoid normal
management procedures, disciplinary action, unwelcome publicity or damage to
reputation
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Ensure that applications for retrospective approval contain the same level of
detail is if the case had been brought to the Treasury in advance.
Please note that although important, the VFM case is not the only thing HM
Treasury consider, the processes, management and wider message are equally
important.
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CQC’s DELEGATED AUTHORITIES ISSUED BY DH
ANNEX C
Limits and Spending Controls Specifically Assigned by DH to the ALB Accounting Officer and
Board
Delegated Authorities to
Coalition Government Efficiency Controls
Commit Expenditure
Grants to
Voluntary
Bodies
Sign Contract
With Supplier
To sign contract, authorise
purchase order, or otherwise
commit expenditure for ¹
Unlimited, within a budget
allocated by the DH
specifically for this purpose
Unlimited within the budget set
at the start of year
(except as
below)
Contracts For
Professional
Services
“Professional
services” are
defined as
consultancy
services i.e. an
arrangement
where an
individual or
organisation is
engaged to
perform a
specific one off
task or set of
tasks involving
skills or
perspectives
which would
not normally be
expected to
reside within
the ALB
Applicable to all ALBs’ Business as Usual Activity.
[Revised arrangements apply to MHRA and HPA]
ALBs must commit volume spend and buy from
centrally sourced approved Government
frameworks.
ALBs are required to participate and co-operate fully
in the Shared Services Programme and its
initiatives, in order to maximise the scope for
savings.
Up to £250,000 per tender
NB All spend requires a
business case to be submitted to
your DH sponsor as Ministerial
approval is required
All ALBs are required to review all assignments
falling within the Efficiency Reform Group (ERG)
definition of Consultancy on a rolling basis every
three months and submit for approval in line with the
Operational Guidance. All consultancy spend
approved must be reported on a monthly basis to
Ministers, Treasury Spending Team and ERG.
There is a freeze on all new consultancy spend. All
spend will require Departmental approval and in
addition, further approval is required from the
Cabinet Office for spend over £20,000.
The Government has announced a freeze on all new
advertising and marketing spend. Only essential
expenditure on critical advertising and marketing is
allowed. All marketing & communication spend over
£5,000 must have approval from DH
Communications control panel ERG approval is
required for spending over £100,000
ALBs have delegated authority up to £40,000 for
recruitment marketing activity.
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Capital
Investment
(includes any
revenue costs eg
leases). All
subject to
Business Case
Guidance for
ALBs, issued by
Capital
Investment
Branch (CIB)
<£1m whole life costs 2
£1m - £5m whole life costs
approval required from DH
Sponsor 3
>£5m whole life costs,
approval required from DH
Sponsor and CIB 4
Spending on new Information and Communications
Technology contracts with a lifetime value above
£5m, and specifically any ICT spend over £1m on
systems that support administration, are subject to
ERG approval.
There is a freeze on signing any new property leases
or lease extensions unless they are approved by the
Chief Secretary to the Treasury. All property events
need to be approved by the DH Property Asset
Management Board, regardless of cost.
1
All policies which commit expenditure of over £40 million per annum, or £200 million over five
years, should be subject to an independent review of the financial cost estimates by the Revenue Investment
Branch (RIB). Policies that require HM Treasury approval must also be subject to a RIB review prior to
submission to HM Treasury.
2
All accommodation business cases should be referred to DH/ALB Property Asset Management
Board (PAMB) for information only.
3
All accommodation business cases also require PAMB approval
4
All accommodation business cases also require PAMB approval
Limits and Spending Controls Specifically Assigned by DH to the ALB Accounting Officer
Delegated Authorities to Commit Coalition Government Efficiency Controls
Expenditure
Applicable to all ALBs Business as Usual Activity.
To sign contract, authorise
[Revised arrangements apply to MHRA and HPA]
purchase order, or otherwise
commit expenditure for
Unlimited within the budget set at
Commit to
the start of year and within the
purchase under
contract value
existing contract
Unlimited
Reimbursement
of Business
Expenses
Token/Protocol gifts only
Items to be
purchased as
gifts
In the course of normal business:
Give guarantees,
unlimited
accept liabilities
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Staff
Recruitment
Staff pay: pay
systems, use of
pay flexibilities
and annual
settlements
Staff
Redundancy
Unlimited
ALB Chief Executives have delegated authority to
approve recruitment to frontline posts or business critical
posts. New ALBs are required to complete a baseline
return enable DH to validate assessments.
Unlimited within Treasury and
Cabinet Office pay remit
procedures and guidance
ALBs have authority to spend up to £40,000 on any single
recruitment advertising activity needed to appoint to front
line or business critical posts.
Any post with a salary in excess of £142,500 will require
sign off by the Chief Secretary to the Treasury prior to
going to advertising. Approval is also required when an
employment contract is issued, renewed or an individual
earning in excess of £142,500 moves to a new post.
Unlimited – subject to procedures
and limits placed by DH
Governance Assurance Committee
(GAC). For limits see Appendix 4
of the Delegated Authorities.
Other Delegations
LOSSES
Delegation Group 1 – Managing
Public Money Annex 4.10
Delegation Group 2 – Managing
Public Money Annex 4.10
SPECIAL PAYMENTS
Authorisation of
payments without normal
prior commitment of the
expenditure, and/or
certification of receipt of
goods/services
Subject to Managing
Public Money and
guidance set out in
Appendix 4 of the
Delegated Authorities).
Ex gratia payments including
compensation payments, extra
statutory and extra regulatory
payments and extra contractual
payments to contractors
Prepayments
Arising in the normal course of
business and subject to MPM (annex
4.6)
Accounting Officer and Board
£75,000
(subject to guidance in Appendix 4 of Delegated
Authorities)
£50,000
(subject to guidance in Appendix 4 of Delegated
Authorities)
£20,000
(excluding payments that are novel, contentious,
repercussive or special severance payments)
Unlimited
Other Delegations
ASSET DISPOSAL
LOANS and
IMPRESTS
Dispose of assets including formal
write-off value
Impress to staff in advance of travel
expenses
Loans to staff for specified purposes
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Accounting Officer and Board
£500,000
£50,000
£50,000
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1
INCOME
Other loans
Commit to contract (or tender) to
provide goods or services to non-DH
organisations
£50,000
Unlimited – subject to agreement from sponsoring
team within DH
Subject to Managing
Public Money (Annex
5.3)
1.
The specified purposes are: for house purchase, for season ticket purchase, and for bicycle
purchase
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ANNEX D - Delegated Limits from the Procurement policy (Limits strictly replicated in line with Treasury levels
imposed upon The Department of Health, included in ‘Managing Public Money’)
Order/Contract
Value (Including
VAT)
Authorisation Required to
commence Procurement
Form of Procurement
Competition
Contract Award Authorisation
after Procurement process
Contract Sign off
Up to £4,999
BAU form not required
A competition within an
appropriate Government
framework or one written
quotation.
Oracle Approval Process
Any Authorised Signatory
£5,000 to £9,999
Business Manager,
Management Accounts,
A competition within an
appropriate Government
framework or minimum of two
suppliers invited to tender.
Oracle Approval Process
Head of Function
A competition within an
appropriate Government
framework or a minimum of three
suppliers invited to tender
Head of Service up to £25,000
Head of Function up to £25,000
Procurement & Contract
Manager,
Head of Function or Director
£10,000 – £49,999
Business Manager,
Management Accounts,
Procurement & Contract
Manager,
Director over £25,000
Director over £25,000
Director
£50,000 to
£173,940
Business Manager,
Management Accounts,
A competition within an
appropriate Government
framework or a minimum of four
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Executive Team
Director
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suppliers invited to tender
Procurement & Contract
Manager,
Director and Executive Team
[Investment Committee currently
does this on behalf of ET]
£173,941 to
£499,999
Business Manager,
Management Accounts,
Procurement & Contract
Manager
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Executive Team
Director
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Executive Team and Chief
Executive
Chief Executive
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Chief Executive and Board
Chief Executive
Director of Finance and
Corporate Services and
Executive Team [Investment
Committee currently does this
on behalf of ET]
£500,000 to
£999,999
Business Manager,
Management Accounts,
Procurement & Contract
Manager,
Director of Finance and
Corporate Services and
Executive Team [Investment
Committee currently does this
on behalf of ET]
£1,000,000 to
£5,000,000
Business Manager,
Management Accounts,
Procurement & Contract
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Manager,
Director of Finance and
Corporate Services and
Chief Executive and reported to
the Board
Over £5,000,000
Business Manager,
Management Accounts,
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Procurement & Contract
Manager,
Director of Finance and
Corporate Services and
Chief Executive and reported to
the Board
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Chief Executive and Board
Chief Executive
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Capital Expenditure
Capital
Expenditure Limits
Authorisation Required to
commence Procurement
Form of Competition
Contract Award Authorised by
Contract Sign off
Up to £1,000,000
whole life costs
Approval from Board
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Chief Executive and Board
Chief Executive
£1,000,000 to
£5,000,000 whole
life costs
Approval from Board, DH
sponsor branch
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Chief Executive and Board
Chief Executive
£5,000,000 to
£10,000,000
Approval from Board, Cabinet
Office and Capital Investment
Branch
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Chief Executive and Board
Chief Executive
More than
£10,000,000
Approval from Board, Cabinet
Office and Capital Investment
Board
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Chief Executive and Board
Chief Executive
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Single Tender Action
Order/Contract
Value (Including
VAT)
Authorisation Required to
commence Procurement(BAU
form)
Form of Engagement
Contract Award Authorisation
after Procurement process
Contract Sign off
£5,000 to £10,000
Business Manager,
Management Accounts,
Invitation to Tender process
Oracle Approval Process
Head of Function
Invitation to Tender process
Director and Executive Team
Director
Procurement & Contract
Manager,
Director or Head of Service and
Head of Finance
£10,000 to
£173,940
Business Manager,
Management Accounts,
Procurement & Contract
Manager,
Director of Finance and
Corporate Services.
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Above £173k to
£499,999
Business Manager,
Management Accounts,
Invitation to Tender process.
Director of Finance / Investment
Committee/Executive Team.
Director
A competition within an
appropriate Government
framework or tendered in
accordance with EU legislation
Executive Team and Chief
Executive
Chief Executive
Procurement & Contract
Manager,
Director of Finance and
Corporate Services.
£500,000 and
above
Business Manager,
Management Accounts,
Procurement & Contract
Manager,
Director of Finance and
Corporate Services and
Investment Committee
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Other Delegations
Reimbursement of
Business Expenses
Level 1
Level 2
Level 3
Level 4
Accounting Officer/Board
Directors
Budget Manager
Other authorised staff
Unlimited
Director of Finance and
Corporate Services only
£10,000
£1000
Nil
Other Directors £1000
Items purchased from Petty
Cash
£20
£20
£20
£20
Items purchased as gifts
(protocol gifts only)
Unlimited
£300
£100
Nil
Write off cash losses,
including damage to
equipment and or loss of
property
£75,000
£10,000
£1000
£100
Write off bad debts2
Unlimited
£100,000 total value per
annum
£5,000 within £20,000 total
per annum
£500
Contingent liabilities2
DFCS only
Fruitless payments2
£75,000
£50,000
£1000
£100
Prepayments/other
DFCS approval required
2
(Director of Finance and
Corporate Services
£50,000)
In line with Managing Public Money annexes, 4.10, 5.5 and 4.6
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payments in advance2
Disposal of assets
(including formal write off of
value
£50,000
Loans to staff
£50,000
DFCS £50,000
Other £50,000
DFCS only £50,000
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Nil
To be authorised by DFCS
To be authorised by DFCS