Managing Budgets

4 Treatment of Year End Balances – Revenue

4.1 Overview

To give budget holders the ability to effectively and efficiently manage their services and budgets the Council allows flexibility between different years’ budgets.  Thus, within parameters specified by the Council, under and overspends can be carried forward. 

Under no circumstances can under or overspend carry forwards be transferred between the Housing Revenue Account and the General Fund, nor between School’s and other Council services.

Regulations for School’s Governing Bodies with regards carrying forward under or overspent delegated budgets is covered by School’s Financial Regulations.

4.2 Responsibility/Accountability

4.2.1 Cabinet (click here for all responsibilities for the Cabinet)

The relevant Cabinet Member is responsible for approving any underspend carried forward between services within a Cabinet Portfolio.
The full Cabinet must approve any underspend carried forward between Cabinet Portfolios.

4.2.2 Directors (click here for all responsibilities for Directors)

Assessing the annual Revenue Outturn Report detailing the action taken on the previous financial year’s carryforward amounts to ensure that proposals were actioned.

Directors’ Management Team will determine the most appropriate use of any windfall gains as a result of underspends in order to best achieve corporate objectives, service improvement priorities and efficient use of resources.

Where a Director has a statutory responsibility for a service; they are responsible for reporting any overspend, and the action agreed to address it, to the Chief Executive.  Where the Business Unit Head is responsible for a service which comes under the remit of a Director for statutory reasons, the reporting is to that Director, not Directors’ Management Team.

Accountable to Directors’ Management Team for the implementation of action relating overspent budgets carried forward.

Submitting a “Carry Forward of Year End Balance Certificate” for the carry forward of a net underspend to the Section 151 Officer by 31 March. (click here for a blank Carry Forward of Year End Balance Certificate)

Accountable to the relevant Cabinet Portfolio Member and Chief Executive for complying with the policy and regulations.

Identifying year-end balances and proposing treatment for them.

Notifying Accountancy of year-end balances and proposed treatment.

Reporting to Cabinet, Chief Executive and Directors’ Management Team in the Revenue Outturn Report issued in the financial year following the year of the carry forward, detailing how underspends were used and how overspends have been addressed.

4.2.3 Section 151 Officer (click here for all responsibilities of the Section 151 Officer)

Informing  Business Unit Heads as soon as possible after the completion of the Revenue Outturn for the year of the carry forwards to be actioned.

4.2.4 Business Unit Heads (click here for all responsibilities for Business Unit Heads)

Ensuring staff adhere to the policy governing treatment of year-end balances.

Reporting any overspend, and the action agreed to address it, to Directors’ Management Team.  Where the Business Unit Head is responsible for a service which comes under the remit of a Director for statutory reasons, the reporting is to that Director, not Directors’ Management Team.

Accountable to Directors’ Management Team for the implementation of action relating overspent budgets carried forward.

Submitting a “Carry Forward of Year End Balance Certificate” for the carry forward of a net underspend to the Section 151 Officer by 31 March. (click here for a blank Carry Forward of Year End Balance Certificate)

Accountable to the relevant Cabinet Portfolio Member and Chief Executive for complying with the policy and regulations.

Identifying year-end balances and proposing treatment for them.

Notifying Accountancy of year-end balances and proposed treatment.

Reporting to Cabinet, Chief Executive and Directors’ Management Team in the Revenue Outturn Report issued in the financial year following the year of the carry forward, detailing how underspends were used and how overspends have been addressed.

4.3 Policy (click here for the detailed procedures)

Planned underspend on individual service budgets of up to 5% gross expenditure or income may be carried forward in accordance with the regulations in Part IV.  Overspends at year end not met through virement or specific Member approval will be carried forward and be a first count against the following year’s budget.  Action for addressing any underspends carried forward must be identified and reported on in the following financial year.

Overspending at the year-end may result in disciplinary procedures being initiated particularly where no action has been taken to resolve or deal with it.