Scottish Public Finance Manual

Annex D - template Director to Deputy Director

Director

Copy to:     Finance Business Partner (or equivalent)

FINANCIAL RESPONSIBILITY STATEMENT – FINANCIAL YEAR XXXX-YY:

DELEGATION FROM DIRECTOR TO DEPUTY DIRECTOR

1. As (Director) Head of …………..Directorate and Directorate Budget Holder, I am responsible for the propriety and regularity and good financial management of expenditure related to this area of work. To assist me I am able to delegate financial management responsibilities to Deputy Directors, who would then operate as Budget Managers. I look to Deputy Directors to assist me in discharging my financial responsibilities and, in this minute, I set out the extent to which I delegate authority to Deputy Directors. This delegation complements the Certificates of Assurance process which underpins the signing, by the Principal Accountable Officer, of the Governance Statement in the Scottish Government’s consolidated accounts.

2. A table setting out the budget provision for each of the areas under my responsibility for the current financial year is available on the intranet. This is updated for changes in year and is the foundation for the regular financial management reporting.

3. I wish to delegate to you authority for a proportion of our overall budget which will then be used to deliver those projects/areas of work for which you have lead responsibility. ANNEX 1 provides details of the budgets delegated to you and related delegated authority. This may be subject to amendment through the course of the financial year as we work more collaboratively across the DG family, and I ask that you contribute to the flexibility required between Divisions, Directorates and Portfolios to make the most of corporate resources. ANNEX 2 provides a summary of general areas of financial responsibility and delegated authority for information.

4. You have full authority to discharge your financial responsibilities in accordance with the relevant legislative provisions and the  Scottish Public Finance Manual, and will keep spending on individual projects within limits agreed, to ensure that the overall budgets are properly managed.  Any proposals to depart from these limits or issues, which in your opinion are novel, contentious, or sensitive, must be referred, as appropriate, to me. In addition you must take advice from and/or advise the Finance Business Partner (or equivalent) in relation to any budget issues. Please ensure I am notified at the earliest opportunity of any matters that could attract critical comment from Audit Scotland and the Public Audit Committee of the Scottish Parliament.

5. As Budget Manager, you may further delegate some of the day to day monitoring activities associated with maintaining strict financial control to your staff. If doing so, please ensure clear written instructions are provided which outline the levels of expenditure and commitment staff will be allowed to approve. This further delegation can be achieved through job descriptions, performance objectives and desk instructions. As Budget Manager, you will remain ultimately responsible for providing me with regular updates on expenditure and commitments within your area.

6. The budgets delegated must be operated in accordance with the general rules set out in the Scottish Public Finance Manual and the Scottish Government Procurement Policy Manual. Purchasing authority is the subject of a separate delegation. Scottish Procurement and Property Directorate (SPPD) is responsible for the scheme of Delegated Purchasing Authority (DPA) across the core Scottish Government.

7. Your attention is drawn to the procedures around the engagement and use of consultancy outlined in the SPPD guidance, namely the need for Director General approval for contracts in excess of £10,000 – noting that the DG in turn must consult the Cabinet Secretary for Finance on such contracts exceeding £50,000 in cost.

Sources of Advide and Assistance

8. Financial Management & Reporting and Health Finance, as appropriate are the main sources of advice on financial matters. Our Finance Business Partner (or equivalent) must be consulted on expenditure proposals which are either new or which exceed the level of planned resources agreed by Ministers. They can also advise on ad hoc financial issues. Budget holders should also comply with any specific financial management guidance from the Permanent Secretary and Chief Financial Officer, including complying with the Accountable Officer spend control process. The template and guidance can be found on the intranet. Please contact finance if you require any further clarification.

9. Scottish Government Internal Audit and Assurance Directorate should be consulted to help with tasks such as the development of controls within new or changing systems and colleagues in Corporate Reporting Division can advise on technical accounting issues or the introduction of new accounting arrangements.

10. Scottish Procurement and Property Directorate is the main source of advice on procurement and property matters.

11. If you suspect fraud or corruption, as part of your on-going management action, you should refer to the guidance on fraud contained in the Scottish Public Finance Manual and report the suspicion to the Fraud Response mailbox and the Head of the Counter Fraud Profession.  Frauds must be reported to the Fraud Response mailbox for information even if local prescribed procedures are in place.

12. The publications listed below contain important guidance on financial and risk management.

• The Scottish Public Finance Manual
• Finance Guidance Notes
• Scottish Government Procurement Policy Manual
• Scottish Government Consultancy Procedures
• The Scottish Government's Counter Fraud Strategy, Policy, and Response Plan
• The Scottish Government's Approach to Risk Management
• Appraisal and Evaluation in Central Government - The Green Book (HM Treasury)

[Signed]

Director

Annex 1

DELEGATED BUDGET ALLOCATIONS

*Subject to any subsequent changes to in-year budget or changes to assumed income**.

[Please note that where the Portfolio Accountable Officer for a budget is not also the DG with management responsibility for the directorate it is essential to ensure that both are kept informed of all relevant issues.]

Complete the following as required; these are not always delegated below director level;

Losses and Write-Offs

As Director, I have written delegated authority to write off losses or make special or other ex gratia payments. You have authority for approving losses and write-offs on Programme budgets up to a limit of £x00. However, I must be advised of all losses and write-offs and the Finance Business Partner (or equivalent) or Financial Management & Reporting, as appropriate, must also be informed of the loss or write-off in order to ensure that the appropriate accounting treatment is undertaken. Losses and write-offs above this limit must be referred for decision to me and the Finance Business Partner (or equivalent) or Financial Management & Reporting, as appropriate.

In the absence of written delegated authority, the Finance Business Partner (or equivalent) or Financial Management & Reporting, as appropriate, retains responsibility for the control of losses, write-offs, special payments etc. and any such proposals require their explicit approval.

Special payments (compensation, ex-gratia payments etc)

As Director, I have written delegated authority to write off losses or make special or other ex gratia payments. You have authority for approving special payments on Programme budgets up to a limit of £x00. However, I must be advised of all special payments and the Finance Business Partner (or equivalent) or Financial Management & Reporting, as appropriate, must also be informed of the special payment in order to ensure that the appropriate accounting treatment is undertaken. Special payments above this limit must be referred for decision to me and the Finance Business Partner (or equivalent) or Financial Management & Reporting, as appropriate.

Or

Losses and Write-offs/ Special Payments (compensation, ex-gratia payments etc.)

The Finance Business Partner (or equivalent) or Financial Management & Reporting, as appropriate, retains responsibility for the control of losses, write-offs, special payments etc. and any such proposals require their explicit approval. 

**Income (excluding income resulting from gifts, bequests, or donations)

If the amounts received or expected to be received in-year are more than estimated, these should be returned to the centre for reallocation, and you must consult Finance Business Partners (or equivalent) and Financial Management & Reporting to seek  prior approval before using any excess to support additional expenditure. If the amounts received or expected to be received in-year are less than budgeted, you must notify Financial Management & Reporting and, unless otherwise agreed, ensure a corresponding reduction in your gross expenditure so that the agreed budget is not exceeded.

Annex 2

Financial Responsibilities

Policy, Proposals, Reports and Reviews

1. You will ensure that our Finance Business Partner (or equivalent) and, as necessary, Internal Audit, Procurement and Property and Construction Division are involved at the earliest possible stage in the preparation of all policy proposals etc. which may have resource, control, property or other finance related implications for Programme budgets and that they are kept informed of developments. The Finance Business Partner (or equivalent) must also be consulted on all responses to reports, reviews etc. with resource implications or which include issues of financial regularity, propriety, or accountability.

2. You will ensure that Risk Potential Assessment Forms are completed in respect of all such policy proposals to determine whether they should have an independent assurance report from the outset. SG Internal Audit and Assurance Directorate is the main source of advice on programme and project assurance.

Scottish Statutory Instruments/Financial Memorandums

3. The Finance Business Partner (or equivalent) should also be consulted on any Scottish Statutory Instruments (SSIs) or Financial Memorandums to ensure that the financial implications of the secondary legislation are considered and recorded.

Budget Planning, Monitoring and Reporting

4, You will ensure you contribute effectively to public expenditure planning and monitoring exercises co-ordinated by DG Scottish Exchequer and the Chief Financial Officer supported by Financial Management Directorate.

Certificates of Assurance

5. You must provide assurances to me (in the form of a signed Certificate of Assurance and Internal Control Checklist) on the system of internal control within your area. This enables me to provide the Portfolio Accountable Officers with the appropriate level of assurance supporting the signing by the Permanent Secretary of the governance statement in the Scottish Government’s consolidated accounts.

Risk Management

6. You will ensure that risks to the achievement of business objectives, regularity, propriety or value for money, are identified, assessed and that controls and actions (including any systems appropriate to the risks) are in place to manage them at an acceptable level and in line with the Scottish Government’s risk appetite approach.

7. You will ensure your alignment with the Directorate’s risk management arrangements, working with the directorate’s risk champion and ensuring that the arrangements in place for your division are proportionate to the size and scale of your area.

Grant and Grant in Aid

8. You will ensure compliance with the principles on Grant and Grant in Aid as detailed within the Scottish Public Finance Manual and within specific SG guidance on the intranet.

Value For Money

9. You will seek to achieve value for money in relation to your allocated budgets by ensuring that resources are used efficiently, effectively and economically as part of the broader principle of feasibility outlined in the SPFM Accountability section. The requirements of SPFM Appraisal and Evaluation section must be adhered to, particularly with regard to the need to prepare pre-expenditure assessments and business cases to demonstrate the value for money case and to evaluate the outturn of a project, programme or policy against its objectives.

10. Options appraisals, including financial appraisal and evaluation, are essential to good financial management, detailed policy development and design. They are also a key component to ensuring objective analysis is provided to support decision making. You will ensure that an appropriate appraisal has been carried out

Best Value

11. You will ensure that arrangements have been made to secure Best Value from resources by pursuing continuous improvement.

Financial Guarantee Contracts/Contingent Liabilities/Letters of Comfort

12. You must clear any proposals which will create a contingent liability with the Finance Business Partner (or equivalent). All guarantees/indemnities/letters of comfort must be cleared by the Finance Business Partner (or equivalent), to ensure that appropriate accounting and budgetary implications are fully considered. and that, if required, approval has been received from the Finance and Public Audit Committee before proceeding.

13. A contingent liability includes any legally binding enforceable undertaking given in the form of a guarantee which would bind the Scottish Government into providing the resources in the event of the guarantee or indemnity maturing; or a general statement of comfort which could be considered to impose a moral financial obligation on the Scottish Government.

Programme/Project Management

14. Effective management of major investment programmes and projects (as defined in the Major Investment Projects section of the SPFM) is essential to ensure that they that deliver the specified outcome or output, to the agreed quality, timescale and budget.

15. The Major Investment Projects section of the SPFM sets out the key steps and processes to be followed in managing a major investment programme or project.

16. Portfolio Accountable Officers must be kept informed of progress on major investment programmes and projects and must inform Ministers if there are any developments that could undermine the planned budget or viability of the programme or project.

Public Sector Pay

17. The Pay Policy / Pensions Team must be consulted on and agree any pay remit proposals or changes to pay and conditions of service. In addition, the Finance Business Partner (or equivalent) should be consulted on affordability.

Subsidy Control

18. You will consult the Subsidy control team on all proposals which may have subsidy control implications.  Subsidy control provisions are now covered by the UK Subsidy Control Act 2022 and the UK’s international obligations including various Free Trade Agreements and those arising as a consequence of World Trade Organisation membership. There are circumstances in which Subsidies are allowed however, Subsidy control issues must be considered as early as possible in the policy development stage. Any unlawful subsidies given in contravention of the UK Subsidy Control Act 2022, FTAs, and WTO – may result in infraction proceedings and the possible recovery, with interest, of the payment from the recipient. All relevant accounts may also be liable to qualification.

Regularity and Propriety

19. Regularity – You must ensure that all expenditure and receipts are dealt with in accordance with the legislation authorising them and any relevant guidance issued by Scottish Ministers e.g. the Scottish Public Finance Manual.

20. Propriety – You must ensure that expenditure and receipts are dealt with in accordance with the Scottish Parliament’s intentions and conventions in line with parliamentary control.

21. The Finance Business Partner (or equivalent) or the Financial Management & Reporting Team, as appropriate, must be consulted in all cases where the guidance is unclear.

Debt Repayment

22. Early repayment of borrowing from Scottish Ministers will require the approval of the Chief Financial Officer supported by the Financial Management Directorate.

Gifts and Donations

23. Any proposal to make a gift, (or a prize in a competition) or to make a charitable donation from the approved budgets, must be cleared by me and, as appropriate by the Finance Business Partner (or equivalent) or the Financial Management & Reporting Team.

Disposal or Acquisition of Property

24. You must seek advice from Property and Construction Division, when a disposal of property or an acquisition of property is being considered, alongside principles and guidance outlined at Property acquisition, disposal and management - Scottish Public Finance Manual - gov.scot (www.gov.scot) – this includes prospective disposals or acquisitions by Non-Departmental Public Bodies.  The Finance Business Partner (or equivalent) must be fully informed on any proposals of this nature.

New initiatives or spending proposals which will put existing plans under pressure, or which cannot be met from existing provision

25. Any proposals which cannot be met from within existing spending plans must be referred to me and the Finance Business Partner (or equivalent).

Proposals which might set a precedent, have repercussions for others or are novel or contentious

26. Any proposals which might set a precedent or have repercussions for others must be referred, as appropriate, to the Finance Business Partner (or equivalent) or the Financial Management & Reporting Team. This includes any ex-gratia payments.

Management of Assets

27. You must ensure that any assets within your command e.g. land, building, equipment are properly and well managed.  Robust systems must be in place to ensure that the accuracy and integrity of information held on registers, databases and inventories is safeguarded and readily available for inspection. You are responsible for maintaining records of attractive items, local investment registers and systems for the management of equipment.

Budget and Cash Management

28. You will ensure that your division works closely with the Finance Business Partner (or equivalent) and the Financial Management & Reporting Team to provide accurate and robust profiles and forecasts of outturn for budget exercises, alongside comprehensive returns within the monthly deadline. Additionally you will ensure monthly cash management forecasts are provided to Financial Operations Division, Treasury & Banking.

Payment Policy

29. You will ensure that your division complies with the Scottish Government payment policy to make payments promptly; where appropriate, in accordance with the Scottish Government target of payment within 10 working days of receipt of a valid invoice. In particular, you should ensure that purchase orders are raised accurately and receipted promptly once goods or services have been received.

Debt Management

30. You will ensure that your business areas follow the requirements outlined in the central Order to Cash Policy alongside the  Income receivable and receipts requirements in the SPFM.

VAT

31. You will ensure that UK VAT legislation is complied with in all cases. In making any decisions on VAT the VAT guidance contained within the SPFM should be considered and complied with where applicable. In cases where there is any uncertainty with the correct VAT treatment to apply, advice must be sought from the VAT and CIS branch of Financial Operations Division.

Business Planning/Performance Appraisal

32. You will ensure that delegated financial responsibilities are included, where appropriate, in Business Plans. For staff below Deputy Director level delegated financial responsibilities must be incorporated in job descriptions and objectives supporting the performance appraisal process as well as any local desk instructions.

Divisional Procedures

33. Divisional desk instructions relating to financial procedures must be aligned to existing central guidance on Pathways to ensure that local processes comply with approved SG-wide policies.

Delegated Purchasing Authority

34. Delegated Purchasing Authority (DPA) is the authority to enter into a contract for goods, services and works and oversee the process leading up to and including the award of a contract and any subsequent contract changes.

35. No Scottish Government member of staff can enter into a contract without written purchasing authority from the Director of the Scottish Procurement and Property Directorate (or nominated representative) (except using the electronic Purchasing Card (ePC) or a framework agreement awarded by SPPD).

Electronic Purchasing Card

36. The electronic Purchasing Card (ePC) should be used for goods and services costing up to £5,000 per transaction excluding VAT.  Using the card reduces the time required to raise and process large numbers of ad-hoc payments. Suppliers benefit by being paid a few days after despatching the goods or delivering the services.

37. Responsibility for the proper management and control of an ePC card must be incorporated into an individual’s job description and if appropriate covered by an appraisal objective.

page updated: July 2025