Police Investigations and Review Commissioner: governance and accountability framework

Broad framework within which Police Investigations and Review Commissioner (PIRC) will operate and key roles and responsibilities which underpin the relationship between the PIRC and the Scottish Government.


Specific Financial Provisions

Delegated Authorities

44. The PIRC’s specific delegated financial authorities – as agreed in consultation between the PIRC and the Scottish Government are set out in the attached Appendix. The PIRC shall obtain the Scottish Government’s prior written approval before entering into any undertaking to incur any expenditure that falls outside these delegations. The PIRC shall also comply with any requirements for prior Scottish Government approval included in the SPFM and/or this document. Prior Scottish Government approval must always be obtained before incurring expenditure for any purpose that is or might be considered novel, contentious or repercussive or which has or could have significant future cost implications.

Income Generation

45. PIRC’s income will be by means of grant in aid. No other regular income is envisaged. Should other sources of income become apparent, the PIRC shall discuss with the sponsor unit any implications this may have on budgets and funding.

46. Gifts, bequests or donations received by the PIRC score as income and should be provided for in the agreed resource DEL and capital DEL budgets, updated as necessary in consultation with the Scottish Government. However, the PIRC should be able to demonstrate that expenditure funded by gifts etc is additional to expenditure normally supported by grant in aid (i.e. Scottish Government core funding) or by trading and other income. Before accepting such gifts etc. the PIRC shall consider if there are any associated costs in doing so or any conflicts of interests arising. The PIRC shall keep a written record of any such gifts etc and what happened to them.

Financial Investments

47. Unless covered by a specific delegated authority the PIRC shall not make any financial investments without the prior approval of the Scottish Government. That would include equity shares in ventures which further the objectives of the PIRC. The PIRC shall not invest in any venture of a speculative nature.

Borrowing

48. Borrowing cannot be used to increase the PIRC spending power. All borrowing by the PIRC - excluding agreed overdrafts - shall be from the Scottish Ministers in accordance with guidance in the Borrowing, Lending & Investment section of the SPFM.

Lease Arrangements

49. Unless covered by a specific delegated authority, the PIRC shall not enter into any finance, property or accommodation related lease arrangement - including the extension of an existing lease or the non-exercise of a tenant’s lease break - without the Scottish Government’s prior approval. Before entering / continuing such arrangements the PIRC must be able to demonstrate that the lease offers better value for money than purchase and that all options of sharing existing public sector space have been explored. Non-property/accommodation related operating leases are subject to a specific delegated authority. The PIRC must have capital DEL provision for finance leases and other transactions which are in substance borrowing.

Tax Arrangements

50. Non-standard tax management arrangements should always be regarded as novel and/or contentious and must therefore be approved in advance by the Scottish Government. Relevant guidance is provided in the Tax Planning and Tax Avoidance section of the SPFM. The PIRC must comply with all relevant rules on taxation, including VAT. All individuals who would qualify as employees for tax purposes should be paid through the payroll system with tax deducted at source. It is the responsibility of the PIRC to observe VAT legislation and recover input tax where it is entitled to do so. The implications of VAT in relation to procurement and shared services should be considered at an early stage to ensure that financial efficiency is achieved. The PIRC must also ensure that it accounts properly for any output tax on sales or disposals.

Lending and Guarantees

51. Any lending by the PIRC must adhere to the guidance in the Borrowing, Lending & Investment section of the SPFM on undertaking due diligence and seeking to establish a security. Unless covered by a specific delegated limit the PIRC shall not, without the Scottish Government’s prior approval, lend money, charge any asset, give any guarantee or indemnity or letter of comfort, or incur any other contingent liability (as defined in the Contingent Liabilities section of the SPFM), whether or not in a legally binding form. Guarantees, indemnities and letters of comfort of a standard type given in the normal course of business are excluded from this requirement.

Third Party Grants

52. Unless covered by a specific delegated authority the PIRC shall not, without the Scottish Government’s prior agreement, provide grant funding to a third party. Such funding would be subject to the guidance in the State Aid section of the SPFM. Guidance on a framework for the control of third party grants is provided as an annex to the Grant & Grant in Aid section of the SPFM.

Impairments, Provisions and Write-Offs

53. Assets should be recorded on the balance sheet at the appropriate valuation basis in accordance with the FReM. Where an asset - and that includes investments - suffers impairment it is important that the prospective impairment and background is communicated to the Scottish Government at the earliest possible point in the financial year to determine the implications for the PIRC’s budget. Similarly any significant movement in existing provisions or the creation of new provisions should be discussed in advance with the Scottish Government. Write-off of bad debt and/or losses scores against the PIRCs resource DEL budget classification and is subject to a specific delegated limit.

Insurance

54. The PIRC is subject to the Scottish Government policy of self-insurance. Commercial insurance must however be taken out where there is a legal requirement to do so and may also be taken out in the circumstances described in the Insurance section of the SPFM - where required with the prior approval of the Scottish Government. In the event of uninsured losses being incurred the Scottish Government shall consider, on a case by case basis, whether or not it should make any additional resources available to the PIRC. The Scottish Government will provide the PIRC with a Certificate of Exemption for Employer's Liability Insurance.

Procurement and Payment

55. The PIRC’s procurement policies shall reflect relevant guidance in the Procurement section of the SPFM and relevant guidance issued by the Scottish Government’s Procurement and Commercial Directorate. Procurement should be undertaken by appropriately trained and authorised staff and treated as a key component of achieving the PIRC’s priorities consistent with the principles of Value for Money, the highest professional standards and any legal requirements. All external consultancy contracts over the value of £100,000 or any proposal to award a contract without competition (non-competitive action) over the value of £100,000 must be endorsed in advance by the Commissioner.

56. Any major investment programmes or projects undertaken by the PIRC shall be subject to the guidance in the Major Investment Projects section of the SPFM (and is also subject to a specific delegated authority). The sponsor unit must be kept informed of progress on such programmes and projects and Ministers must be alerted to any developments that could undermine their viability. ICT investment plans must be reported to the Scottish Government’s Office of the Chief Information Officer.

57. The PIRC shall pay all matured and properly authorised invoices relating to transactions with suppliers in accordance with the Expenditure and Payments section of the SPFM and in doing so shall seek wherever possible and appropriate to meet the Scottish Government’s target for the payment of invoices within 10 working days of their receipt.

Gifts Made, Special Payments and Losses

58. Unless covered by a specific delegated authority the PIRC shall not, without the Scottish Government’s prior approval, make gifts or special payments or write-off of losses. Special payments and losses are subject to the guidance in the Losses and Special Payments section of the SPFM. Gifts by management to staff are subject to the guidance in the Non-Salary Rewards section of the SPFM.

Clawback

59. Where the PIRC has financed expenditure on assets by a third party, the PIRC shall make appropriate arrangements to ensure that any such assets above an agreed value are not disposed of by the third party without the PIRC’s prior consent. The PIRC shall put in place arrangements sufficient to secure the repayment of its due share of the proceeds - or an appropriate proportion of them if the PIRC contributed less than the whole cost of acquisition or improvement. The PIRC shall also ensure that if assets financed by the PIRC cease to be used by the third party for the intended purpose an appropriate proportion of the value of the asset shall be repaid to the PIRC.

State aid

60. State aid is a European Commission term which refers to forms of public assistance, given to undertakings on a discretionary basis, which has the potential to distort competition and affect trade between Member States of the European Union. Any activity that the PIRC undertakes itself, or funds other bodies to undertake, that can be offered on a commercial market for goods and services is subject to state aid rules. A state aid assessment is therefore required prior to distributing any funding and would be subject to the guidance in the state aid section of the SPFM.

PIRC Expenses

61. Remuneration, allowances and expenses paid to the Commissioner (and any pension arrangements) must comply with the Scottish Government Pay Policy for Senior Appointments and any specific guidance on such matters issued by the Scottish Ministers.

Contact

Email: Katrina McDonald

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