Accounting Officer System Statement

1 June 2017 Department for Communities and Local government Accounting Officer System Statement Crown copyright, 2017 Copyright in the typographical arrangement rests with the Crown. You may re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open government Licence. To view this licence, or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: This document/publication is also available on our website at If you have any enquiries regarding this document/publication, complete the form at or write to us at: Department for Communities and Local government Fry Building 2 Marsham Street London SW1P 4DF Telephone: 030 3444 0000 For all our latest news and updates follow us on Twitter: June 2017 ISBN: 978-1-4098-5071-7 3 Contents 1.

2 Introduction 5 2. Statement of Accounting Officer responsibilities 6 3. The accountability System 7 4. Responsibilities within the core department 8 The governance framework 8 The financial control framework principles 9 Budget Delegation 11 Decision making for business cases 11 Spend delegations 13 Performance and planning 14 The risk framework 15 Governance assurance exercise 177 5. Relationships with arm s length bodies 18 6. Local Funding arrangements 23 Local government accountability System 23 Local Growth Fund accountability System 23 7. Third party delivery arrangements 24 8. Grants to Private and Voluntary Sectors 24 Grant award 24 Monitoring and Compliance 25 9. Major Contracts and outsourced services 25 Procurement 25 Contract Management 26 10. Investments, joint ventures and other assets 26 The HCA 27 Devolved funding 28 The full portfolio view 29 Annex A: Accounting Officer Accountability System Statement for Local government 30 Introduction 32 The overall scope of my accountability 32 How the core accountability System works 37 How the accountability System responds to failure 42 How the department gets assurance 44 The accountability framework and devolution deals 46 Conclusion 468 4 Annex B.

3 Accounting Officer Accountability System Statement for the Local Growth Fund 50 Introduction 50 The Local Growth Fund and Local Enterprise Partnerships 52 The Scope of Accounting Officer accountability in relation to the Local Growth Fund 53 How the accountability System works for the Local Growth Fund 55 Monitoring and evaluating delivery 57 How LEPs receive their Local Growth Fund allocations 59 Conclusion 60 5 1. Introduction Principal Accounting Officers in government departments are accountable to Parliament for the proper stewardship of the resources allocated to their departments. Details of the requirement to ensure regularity and value for money are set out in the HM Treasury guide Managing Public Money. The Department for Communities and Local government has documented and published details of local accountability systems for a number of years.

4 The first was the Local government Accountability System Statement published in 2012. We then published the Local Growth Fund Accountability System Statement in 2015. The purpose of this Accounting Officer System Statement is to provide Parliament with a single Statement setting out all of the accountability relationships and processes within the Department of Communities and Local government and across the System for which we are responsible. This System Statement has a wider scope than those already published. It incorporates both the Local government and the Local Growth Fund Accountability System Statements (see Annex A and B for detail). A review of the department s governance structures and performance for 2016-17 is published in my governance Statement within the department s Annual Report and Accounts 2016-17 (pages 32 to 45).

5 The governance Statement covers accountability for all public money and other public resources which fall within the department s responsibilities. It outlines standard processes which apply within the department and any significant bespoke arrangements which apply. The Accounting Officer System Statement complements the governance Statement . The governance Statement charts how, in my role as Principal Accounting Officer , I have carried out responsibilities to manage and control the resources used in the department over the course of the latest financial year. The Accounting Officer System Statement charts the accountability relationships in place now and for the future. It is a live document that will be updated as systems change. 6 2. Statement of Accounting Officer responsibilities I am the Principal Accounting Officer for the Department for Communities and Local government .

6 This System Statement sets out all of the accountability relationships and processes within the department, making it clear who is accountable at all levels of the System . As Principal Accounting Officer , I am personally responsible for safeguarding the public funds for which I have been given charge under the Department for Communities and Local government Estimate and the Business Rates Retention and Non-Domestic Rates Trust Statement . Where I have appointed additional Accounting Officers, their responsibilities are also set out in this System Statement . This System Statement covers the core department, its arm s length bodies and other arm s length relationships such as local authorities and local enterprise partnerships. It describes accountability for all expenditure of public money through the department s Estimate, all public money raised as income, and the management of shareholdings, financial investments and other publicly owned assets for which I am responsible.

7 This System Statement describes the System which I apply to fulfil my responsibilities as an Accounting Officer in accordance with Treasury guidance set out in Managing Public Money, and ensure that spending is carried out with regularity, propriety and achieves value for money. This System Statement describes the accountability System which is in place at the date of this Statement , and which will continue to apply until a revised Statement is published. Melanie Dawes Principal Accounting Officer and Permanent Secretary 7 3. The accountability System The diagram below shows how accountability flows from the departmental group to its arm s length bodies and delivery partners and references where in this document each part of the accountability System is described. There are three distinct accountability systems: funding through core DCLG and our arm s length bodies; the Local government accountability System ; and the Local Growth Fund accountability System .

8 The department has two finance directors one for spending through the core department and ALBs, and one for funding to Local government . 8 4. Responsibilities within the core department The governance framework As Permanent Secretary, I am appointed by Treasury as the department s Principal Accounting Officer . I take personal responsibility for maintaining a sound System of internal control that supports the delivery of the department s policies, aims and objectives, whilst safeguarding public funds and departmental assets. The governance framework for the department has been designed to maintain the existing internal control environment whilst developing further controls as appropriate as the department s risk profile evolves. The structures are shown below in the diagram. 9 Alongside the Board structures set out one page 8, Ministers and the Permanent Secretary have clearly defined responsibilities that support good governance within the departmental group through parliamentary accountability: The Secretary of State is responsible and answerable to Parliament for the exercise of the powers on which the administration of the department depends.

9 He has a duty to Parliament to account, and to be held to account, for the policies, decisions and actions of the group. The Principal Accounting Officer may be called to account in Parliament for the stewardship of the resources within the department s control and the System of accountability for funding devolved to the local level. The financial control framework principles For each financial year, HM Treasury agrees budget control totals and issues Delegation Limits to each department. This gives me, as the department s Principal Accounting Officer , standing authorisation to commit resources or incur expenditure from money voted by Parliament without specific approval from HM Treasury, within the agreed framework. This includes a delegation for expenditure on new projects, programmes, policy proposals and financial transactions.

10 These are set out in the table below. The table also shows disclosure thresholds new projects or programmes above these limits must be disclosed to HM Treasury. Nature of delegation Delegated Limit Disclosure threshold All projects and programmes; and announcements and policy proposal within a defined lifetime Resource 10 million n/a Capital 30 million 20 million Announcements and policy proposal creating ongoing expenditure Resource 10 million per year n/a Capital 30 million per year 20 million per year Financial Transactions AAA-CCC counterparty credit rating 50 million 20 million CC-D counterparty credit rating 0 million N/A 10 Other delegated authorities include those for write offs and impairments; claims waived or abandoned; and special payments. HM Treasury specifies those types of expenditure where delegated authority does not apply and approval should be sought (for example, any novel and contentious expenditure).