Annex A

My predecessor wrote formally to Derek Hill about his responsibilities as Secretary of the Judicial Studies Board (JSB). Now that you have succeeded Derek as Secretary of the JSB I am writing to let you know how your duties relate to mine as the Department's Principal Accounting Officer.

The JSB is a Non-Departmental Public Body (NDPB), financed directly from the Lord Chancellor's Department (LCD) Vote. It is not constituted by statutory provision and the more usual arrangements for NDPBs - funding by grant and formal appointment of the senior full-time official as accounting officer with personal accountability to Parliament - are not apt to its circumstances. However, to mark the special status of the JSB it would be appropriate to treat you as if you were its accounting officer.

Accordingly, this letter sets out my responsibilities as Principal Accounting Officer of LCD and the duties which are delegated to you in respect of the JSB.

I am accountable under the Lord Chancellor to Parliament for LCD's Vote. I cannot delegate that overall accountability. However, I can and, by this letter, do delegate to you authority on behalf of the JSB to spend, within prescribed limits, the amounts necessary in discharge of the duties for which the JSB is responsible and for which public money has been allocated in accordance with the Memorandum of Understanding between LCD and the JSB.

The Memorandum (with its annexes) describes the relationship between LCD and the JSB and sets the arrangements and conditions for the allocation of public money to the JSB. You have a copy of the Memorandum. The Department's Finance Officer has sent you the financial framework for the JSB which details the accounting requirements and specific financial delegations which constitute the "prescribed limits" mentioned earlier. This letter and the Financial Framework will form Annexes B and C to the Memorandum.

I do not wish the discharge of my overall accountability to involve detailed and continuous scrutiny of the JSB's financial administration. That would obscure the purposes of delegation and blur the lines of responsibility. Instead, the primary responsibility for advising JSB on the discharge of its financial functions rests with you. This places on you further responsibilities: for propriety and regularity of the JSB's expenditure; for obtaining the best possible value for money spent on administration and the services it purchases and delivers; for the regularity of management and financial accounts information; and for ensuring that the JSB's officers fully understand the principles which they should apply to expenditure. So that you may have a clear picture of what is involved, you should read the Treasury Memorandum which sets out the usual responsibilities of an accounting officer of an NDPB. Despite the third sentence of its paragraph 4, you should deem its contents as equally applicable to you. Should circumstances arise which make it necessary for you to take action in accordance with its paragraphs 15 and 16, you should consult me in advance and when considering any notification to Treasury or the Comptroller and Auditor General.

I also expect you to observe the requirements of the Code of Open Government, as may be appropriate to the work of the JSB.

The Public Accounts Committee (PAC), which oversees public expenditure, has wide powers to examine the use and management of public money; to call witnesses; and to seek evidence in its investigations. I remain accountable through the PAC for the expenditure from LCD's Vote. However, should the need arise, you will be expected to accompany me before the PAC to provide evidence or explanation on matters relating to the management of all monies allocated to the JSB. Information on what may be expected of you at a PAC hearing is provided in the Treasury Memorandum.

Finally, you should also be aware that the status analogous to that of an accounting officer status is requisite for the post of Secretary to the JSB, and that if it could no longer be accorded it would likely make it impossible for the postholder to continue in office.

I am sending a copy of this letter to the Chairman of the JSB and to the Director General, Policy of LCD.

Yours ever
Sir Hayden Phillips

Annex C

Financial Framework

In accordance with paragraph 9 of the Memorandum of Understanding effective from 1 April 1999 and the Accounting Officer's letter of 12 April 1999, the following is the financial framework which the Judicial Studies Board (JSB) is to operate within. Where reference is made in this framework to LCD - it means LCD Finance Division.

Amendment and Review

This framework may be changed in accordance with Government Accounting and Treasury requirements, to take account of new developments or by agreement. Such changes will be notified in writing and form part of the Memorandum of Understanding.

The Secretary is responsible for ensuring that the JSB:

Budget

use CSL Newport for processing payments from, and receipts to the budget allocated to the JSB under paragraph 9.1 of the Memorandum; to check these transactions for accuracy; and to monitor their inclusion on the Departmental accounting system.

does not open a bank account nor retain cash beyond a working imprest agreed with the Lord Chancellor's Department (LCD).

Purchases and disposals

does not rent, lease or purchase any assets with a capital value of more than £20,000 without the prior approval in writing of the LCD and, in respect of the rent, lease or purchase of IT equipment or accommodation, without the advice of LCD being sought before entering into any commitments;

does not dispose of assets having a realisable value in excess of £10,000 without the prior approval in writing of LCD;

keeps a separate record, by using the Department's fixed asset register, of all acquisitions and disposals of fixed assets which meet the criteria set in LCD's Finance Manual paragraph 21.1.8, including acquisitions and disposals for which LCD's approval has been obtained in iii) and iv) above;

in regard to the purchase and custody of stores and equipment, maintains adequate inventories giving sufficiently detailed information of such stores and equipment, which shall be available for inspection by LCD or its auditors on request;

does not enter into any contracts for consultancy services in excess of £20,000 without prior LCD approval in writing. For this purpose consultancy services for IT contracts should be regarded as part of the total sum of the IT contract.

Claims Register and receipts

maintains a claims register to record any sums due to the JSB and shall not abandon any such claims nor remit any receipts, except by writing off in accordance with xiii) below;

retain annual receipts up to a set level agreed each year with LCD's Finance Officer and apply them generally against its administrative costs;

Hospitality Register and Entertainment

maintains a record of gifts and hospitality, both given and received, and informs LCD before any gift or donation is contemplated and before any hospitality in excess of an annual allocation of £2,000 is incurred. Such expenditure, whether under £2,000 or approved in excess of that sum, shall be met from JSB's resources and, in accordance with Finance Manual 27.3.9 included in an annual return to LCD;

Contingent liabilities

does not incur any loan or contingent liability whether implicitly or by entering into any indemnity or guarantee to a third party or issue any letter of comfort, without the agreement of LCD;

Fraud, Write-offs and special payments

in the event that any instances of fraud, suspected fraud or financial irregularity arise, notifies LCD in accordance with the requirements of LCD's Finance Manual, Section 26;

does not write off any losses, whether of money, value of assets lost, stolen or damaged or receipts foregone in excess of £100 without the prior approval of LCD in writing and maintains a record of such losses as they arise, for inclusion in JSB's accounts and notification to LCD in accordance with the requirements of LCD's Finance Manual, Section 28;

does not make any special payments, whether ex gratia arising from maladministration within JSB or otherwise without first obtaining the approval of LCD in writing; in the event such approval is given, meets such payment from JSB's resources; and keeps a record of all such payments for inclusion in JSB's accounts and notification to LCD in accordance with the requirements of LCD's Finance Manual, Section 28;

Availability of records

makes available to LCD staff or the staff of the National Audit Office all records on request.

Statements of Financial Responsibility

has suitable arrangements in place which allows the Secretary to nominate other officers to act in his/her name and/or authorise them to incur expenditure on behalf of JSB, provided he/she issues them with a clear financial authority and payment authorisation to act in the manner designated. Statements of financial responsibility should accord with LCD's Finance Manual, Section 6?3;

Accounts

prepares a receipts and payments account (the format of which is laid out at Appendix A) each year from the JSB's records mentioned above; copy APIs, travel and subsistence claims, records of any receipts passed to CSL, Newport and monthly progress statements from the Departmental accounting system;

Audit

has suitable arrangements in place for internal audit and that these accord with the objectives, standards and practice set out in the Government Internal Audit Manual. Such arrangements will currently be carried out by LCD Internal Assurance Division as one of the services provided under Annex D of the Memorandum of Understanding. It should be noted that this relates to JSB's need for its own internal audit and are in addition to the audits under paragraph 9.6 of the Memorandum of Understanding which the Internal Assurance division may carry out on behalf of the Principal Accounting Officer for LCD or the external audit carried out by National Audit Office on behalf of the Comptroller and Auditor General.

Annex D

Services Provided by DCA to JSB

Accounting services
Archives
Catering
Contracts and procurement support
Departmental Car Scheme
File storage and record management services
Fuel and utilities
Health and safety guidance
Information Technology
Internal Audit
Legal advice and support
Library and information services
Messenger services
Office, committee and conference accommodation
Office furniture and supplies
Office machinery and equipment
Payment of salaries and pensions
Personnel management, including assistance with staff recruitment and appraisal
Postage
Press office facilities
Reprographic services
Security
Security vetting
Staff training
Staff welfare services
Stationery
Superannuation
Training
Telephones and fax

Appendix A

JUDICIAL STUDIES BOARD: RECEIPTS AND PAYMENTS ACCOUNT

The Judicial Studies Board resources are made available through the Lord Chancellor's Department. The cost of some items (in particular accommodation, some salaries, superannuation and Lord Chancellor's Department Headquarters' overheads) is not determined by the Board.

Payments
Accommodation charges
Headquarters' overheads
Fees to Board members¹
Salaries of seconded staff ²
Salaries of casual staff, typing services and overtime³
Superannuation of seconded staff
Travel and subsistence - staff
Telephone and Postage
Printing and publishing; supply of information technology; office equipment; books and newspapers
Entertainment
Fees payable to judiciary and stipendiary magistrates
Travel and subsistence - judicial
External training costs and professional fees
Miscellaneous

¹ Including ERNIC and superannuation
² Including ERNIC only
³ Including ERNIC and superannuation