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Sub-accounts

SUB ACCOUNTS

Contents:

Scope

Key Points

Background

Sub-accountant

Local Bank Accounts

Instructions to Sub-accountants

Responsibilities of Sub-accountants

Cashier

Monthly Statements of Accounts

Charging and Checking

Audit and Inspection

Annex: Detailed Instructions to Sub-accountants

Scope

1. This section gives guidance on the operation of sub-accounts within the Scottish Administration i.e. the core Scottish Government (SG), the Crown Office and Procurator Fiscal Service, SG Executive Agencies and non-ministerial departments. Other organisations to which the Scottish Public Finance Manual (SPFM) is directly applicable should, where appropriate, arrange for procedures consistent with the guidance to be put in place.

Key Points

2. Sub-accountants must be appointed by the relevant core SG finance area. All offers of appointment must be in writing and will only become effective upon written acceptance, including acceptance of detailed instructions.

3. Any actual loss or suspected loss of cash (or equivalent) or cheques, or any misuse of monies should be brought to the attention of the relevant core SG finance area and Internal Audit Division immediately and before considering any local investigation.

4. Any loss arising from failure by the sub-accountant to observe instructions or to take due precautions may result in disciplinary or other action including a requirement to repay all or part of the loss.

5. Sub-account statements must be submitted in the prescribed form to the relevant core SG finance areas / designated business areas monthly by the 10th day of the month following that to which it relates.

6. The relevant core SG finance area / designated business area is responsible for undertaking checks and arranging for transactions on completed charging sheets to be brought to account in the relevant departmental budget not later than the last day of the month following that to which it relates.

Background

7. The bulk of the receipts and payments relating to the activities of business areas within the Scottish Administration are processed centrally via the SG's accounting system (SEAS). Additional procedures are required, however, to record receipts collected or payments made locally and locally held cash balances. A prerequisite for the operation of these local arrangements (i.e. sub-accounts) is the appointment of an individual to be designated as the "sub-accountant". Petty cash holders, although not formally designated as sub-accountants, are subject to the same rules and procedures.

Sub-accountant

8. A sub-accountant is a member of staff entrusted by the relevant Accountable Officer with the duty of receiving money on his/her behalf and/or making payments on his/her behalf out of monies held for the purpose. All sub-accountants must be established members of staff - Band B1 or equivalent or above - and usually the member of staff in charge of the business area at which the sub-account is operated. Sub-accountants must be appointed by the relevant core SG finance area, in consultation with Human Resources as to the suitability of the individual concerned. All offers of appointment must be in writing and will only become effective upon written acceptance, including acceptance of detailed instructions.

Local Bank Accounts

9. Only the SG's Treasury and Banking Branch (T&B) can authorise the opening of local bank accounts by business areas within the Scottish Administration. Where this is necessary, the relevant core SG finance area should seek the authority of T&B, which will also advise on control aspects, e.g. cheque signatories, cheque limits, monthly bank statements etc. Detailed guidance in relation to banking must be observed.

Instructions to Sub-accountants

10. Sub-accountants may only proceed where agreed instructions, including any delegated authorities, are in place. The attached Annex provides a set of detailed instructions which should be adapted by core SG finance areas to address the particular circumstances of individual sub-accountants. The instructions should be formally issued to sub-accountants on appointment to be read and adhered to in conjunction with the guidance contained in this section.

Responsibilities of Sub-accountants

11. Sub-accountants are required to study the instructions provided and gain a full understanding of the duties of the appointment. Sub-accountants entrusted with public money are responsible for its safe custody and proper use for official purposes throughout the time it is in their keeping. Members of staff so entrusted may not have been trained in finance or accounting duties but they are not for that or any other purposes absolved from responsibility to understand and adhere strictly to guidance governing payments and receipts. They must therefore familiarise themselves with the instructions issued to them, with other instructions brought to their notice, and with the safeguards prescribed. They must also ensure that any members of their staff to whom they have delegated any of their duties are aware of the relevant instructions and are correctly operating the procedures and safeguards set out.

12. Any loss arising from failure to observe instructions or to take due precautions may result in disciplinary or other action including a requirement to repay all or part of the loss if the relevant Accountable Officer should consider such action appropriate in the circumstances.

13. A sub-accountant cannot delegate to others the responsibility owed to the Accountable Officer. It is accepted that in larger offices the sub-accountant may delegate in writing routine duties to members of staff who assume responsibility for performance of these duties. The sub-accountant should ensure that local desk instructions are available and adequate, and that delegated duties are being carried out properly and in accordance with the instructions provided.

Cashier

14. A sub-accountant in a large business area may appoint a member of staff to act as cashier where that member of staff is both established and the equivalent of Band A3 or higher. The appointment of an individual as cashier should be cleared with the relevant core SG finance area, again in consultation with Human Resources. The cashier's duties are as follows:

  • bringing to account all payments and receipts; cash, cheque and bank transfers;
  • issuing an official form of receipt where necessary;
  • forwarding receipts to T&B or paying them into the local bank account where one is maintained;
  • making all cash advances within the office and preparing any payments for authorisation by the sub-accountant;
  • keeping all records of receipts and payments;
  • preparing and vouching the monthly sub-account statements for signature by the sub-accountant; and
  • preparing requests for imprests and arrangements for repayment of imprests where appropriate.

15. Any actual loss or suspected loss of cash (or equivalent) or cheques, or any misuse of monies should be brought to the attention of the relevant core SG finance area and Internal Audit Division immediately and before considering any local investigation.

Monthly Statements of Accounts

16. Sub-account statements must be submitted monthly in the prescribed form either to the relevant core SG finance areas or to separate business areas designated by the relevant core SG finance areas. The statements must be submitted by the 10th day of the month following that to which it relates.

Charging and Checking

17. Payments and receipts transacted through a sub-account must be brought to account monthly. The relevant core SG finance area / designated business area is responsible for arranging for transactions to be processed not later than the last day of the month following that to which it relates. In addition the relevant core SG finance area / designated business area must each month do the following:

  • check that the cash and bank balance held by the sub-accountant is no higher than is necessary for the proper functioning of the account;
  • check that the balance at the end of the month agrees with SEAS after allowing for payments, receipts and refunds of imprests in transit;
  • check that payments and receipts are properly vouched; and
  • check income patterns and investigate any unexplained variations in the level of receipts brought to account in the monthly statement. 

Audit and Inspection

18. All sub-accounts are subject to audit by Internal Audit Division and the Auditor General for Scotland. Sub-accountants may expect some audit visits to be made on a surprise basis and must always be prepared to make all records available on demand for inspection by auditors and to reply promptly to audit queries whether written or oral. The adequacy of operating instructions will be among the matters which will be checked. In addition the business area operating the sub-account should ensure that procedures are in place for surprise inspections to be undertaken periodically by a member of staff independent of those operating the account. Such inspections should cover the reconciliation of cash balances with up-to-date bank statements, cheque books, records of receipts and payments, cash books etc.

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Page Published / Updated: July 2009