Box 2.

3: examples of transactions requiring explicit Treasury consent extra statutory payments similar to but
outside statutory schemes ephemeral ex gratia payment schemes, eg payments to compensate for official errors
special severance payments, eg compromise agreements in excess of contractual commitments
non-standard payments in kind
unusual financial transactions, eg imposing lasting commitments or using tax avoidance unusual schemes or
policies using novel techniques
o 2.3.5 It is improper for a public sector organisation to spend or make commitments outside the agreed
delegations. The Treasury may subsequently agree to give retrospective consent, but only if the
expenditure in question would have been agreed if permission had been sought at the right time.
o 2.3.6 Sometimes legislation calls for explicit Treasury consent, eq for large or critical projects. There
are also Whitehall wide controls on key progress points for the very largest projects. In such cases it is
unlawful to proceed without Treasury consent - and Treasury consent cannot be given retrospectively.
2.4 Regularity and propriety
o 2.4.1 The concepts of regularity and propriety, fundamental to the right use of public funds, are set out
in box 2.4. The term regularity and propriety is often used to convey the idea of probity and ethics in
the use of public funds - that is, delivering public sector values in the round, encompassing the qualities
summarised in box 1.1. Supporting this concept are the Seven Principles of Public Life - the Nolan
principless - which apply to the public sector at large. In striving to meet these standards, central
government departments should give a lead to the partners with which they work.
Box 2.4: regularity and propriety
Regularity: compliant with the relevant legislation and wider legal principles such as subsidy control
and procurement law, delegated authorities and following the guidance in this document.
Propriety: meeting high standards of public conduct, including robust governance and the relevant
parliamentary expectations, especially transparency.
o 2.4.2 Each departmental accounting officer should make sure that ministers in their department
appreciate:
• the importance of operating with regularity and propriety; and

However, the ultimate judgement in each case lies with the accounting officer personally.
3.6 Directions
o 3.6.1. The accounting officer cannot simply accept the minister's aims or policy without examination.
Each departmental accounting officer should take care to bring to the attention of their minister(s) any
conflict between the minister's instructions and the standards set out in box 3.2.
o 3.6.2. Where a departmental accounting officer determines that a proposal does not meet one or more
of these standards, the best next step is to consider whether the policy or proposed course of action can
be modified to make it fit. If not, and the minister decides it is nevertheless appropriate to continue
with the proposal, the accounting officer should ask their senior minister for a formal written direction
to proceed. An oral direction should be confirmed promptly in writing.
o 3.6.3. Before finalising a direction request, it is good practice for accounting officers to discuss the
matter with the Treasury. Often, by their nature, issues that might call for a ministerial direction are
novel, contentious, or repercussive, and therefore require explicit Treasury consent. Where this is the
case, Treasury consent should be obtained before the direction request is finalised.
o 3.6.4. As always, the ultimate judgement in each case must lie with the accounting officer personally.
The acid test is whether the accounting officer could justify the proposed activity if asked to defend it.
o 3.6.5. There is no set form for requesting a direction, though the accounting officer should be specific
about their nature and the standard or standards that is/are not satisfied.
o 3.6.6. When a direction is made, the Accounting Officer should:
o follow the minster's direction without further ado
o promptly copy the direction request, the direction and other papers the accounting officer considers
relevant to the Comptroller and Auditor General and the Treasury Officer of Accounts
o unless it is in the public interest that the matter is kept confidential, arrange for the direction request
and direction itself to be published on the GOV.UK website promptly, notifying the chairs of the PAC
and the relevant departmental select committee as soon as this occurs
o where confidentiality is required, in addition to copying to the Comptroller and Auditor General and
the Treasury Officer of Accounts as usual, share the direction request and the direction with the chairs
of the PAC and the relevant departmental select committee, along with an explanation of when they
expect the need for confidentiality to fall away and publication to take place
i gated, tolk athe ie route of geolit of gera ministers
 However, the ultimate judgement in each case lies with the accounting officer personally.
3.6 Directions
o 3.6.1. The accounting officer cannot simply accept the minister's aims or policy without examination.
Each departmental accounting officer should take care to bring to the attention of their minister(s) any
conflict between the minister's instructions and the standards set out in box 3.2.
o 3.6.2. Where a departmental accounting officer determines that a proposal does not meet one or more
of these standards, the best next step is to consider whether the policy or proposed course of action can
be modified to make it fit. If not, and the minister decides it is nevertheless appropriate to continue
with the proposal, the accounting officer should ask their senior minister for a formal written direction
to proceed. An oral direction should be confirmed promptly in writing.
o 3.6.3. Before finalising a direction request, it is good practice for accounting officers to discuss the
matter with the Treasury. Often, by their nature, issues that might call for a ministerial direction are
novel, contentious, or repercussive, and therefore require explicit Treasury consent. Where this is the
case, Treasury consent should be obtained before the direction request is finalised.
o 3.6.4. As always, the ultimate judgement in each case must lie with the accounting officer personally.
The acid test is whether the accounting officer could justify the proposed activity if asked to defend it.
o 3.6.5. There is no set form for requesting a direction, though the accounting officer should be specific
about their nature and the standard or standards that is/are not satisfied.
o 3.6.6. When a direction is made, the Accounting Officer should:
o follow the minster's direction without further ado
o promptly copy the direction request, the direction and other papers the accounting officer considers
relevant to the Comptroller and Auditor General and the Treasury Officer of Accounts
o unless it is in the public interest that the matter is kept confidential, arrange for the direction request
and direction itself to be published on the GOV.UK website promptly, notifying the chairs of the PAC
and the relevant departmental select committee as soon as this occurs
o where confidentiality is required, in addition to copying to the Comptroller and Auditor General and
the Treasury Officer of Accounts as usual, share the direction request and the direction with the chairs
of the PAC and the relevant departmental select committee, along with an explanation of when they
expect the need for confidentiality to fall away and publication to take place
i gated, tolk athe ie route of geolit of gera ministers

o Value for money: ensuring that the organisation's procurement, projects and processes are
systematically evaluated to provide confidence about suitability, effectiveness, prudence, quality, good
value judged for the Exchequer as a whole, not just for the accounting officer's organisation (eg using
the Green Book' to evaluate alternatives).
o Control: the accounting officer should personally approve and confirm their agreement to all Cabinet
Committee papers and major project or policy initiatives before they proceed.
Management of opportunity and risk to achieve the right balance commensurate with the institution's
business and risk appetite.
o Learning from experience, both using internal feedback (eg through managing projects and
programmes using techniques such as PRINCE2), and from right across the public sector.
o Accounting accurately for the organisation's financial position and transactions: to ensure that its
published financial information is transparent and up to date; and that the organisation's efficiency in
the use of resources is tracked and recorded.
3.3.4. In the case of principal accounting officers, these responsibilities apply to the business of the whole
departmental group.
3.4 Accounting officer assessments
3.4.1. Accounting officers should routinely scrutinise significant policy proposals or plans to start or vary major
projects and then assess whether they measure up to the standards in box 3.2.
Box 3.2: the standards expected for projects and proposals
o Regularity: the proposal has sufficient legal basis, parliamentary authority, and Treasury authorisation;
and is compatible with the agreed spending budgets.
o Propriety: the proposal meets the high standards of public conduct and relevant Parliamentary control
procedures and expectations.
o young me argin comes u terme enoel: done,
 o Festive the timetal can be implemented accurately, sustainably, and eason myting and rides cosie a
stance sha he tole tao endure e been

• make all its decisions in line with the strategy, aims and objectives of the organisation set by ministers and/or
in legislation
• taken ulay ad view of the organisation 's approach to managing
• impose no more than proportionate and defensible burdens on business; financial management
o use it resources efficienty economical and effectively avoiding waste
o alred me is resources on an affordable and sustainable path, within
o use management information systems to gain assurance about value for money and the quality of
delivery and so make timely adjustments
o avoid over defining detail and imposing undue compliance costs, either internally or on its customers
and stakeholders
o have practical documented arrangements for controlling or working in partnership with other
organisations, as appropriate
o use internal and external audit to improve its internal controls and performance.
o 3.3.1. It is important that each accounting officer takes personal responsibility for ensuring that the
organisation they manage delivers the standards in box 3.1. In particular, the accounting officer must
personally sign: the accounts; the annual report the governance statement (see annex 3.1); and having
been satisfied that they have been properly prepared to reflect the business of the organisation, must
personally approve: voted budget limits; and the associated Estimates Memorandum.
o 3.3.2. The accounting officer of a corporate arm's length body should arrange for a board member to
sign the accounts as well as signing them himself or herself, if (unusually) they are not a member of the
board.
o 3.3.3. There are several other areas where accounting officers should take personal responsibility.
• Regularity and propriety (see box 2.4), including securing Treasury the sublead of Estmiture outside the
normal delegations or outside
14.

Chapter 3

Accounting Officers This chapter sets out the personal responsibilities of all accounting officers in central
government. Essentially accounting officers must be able to assure parliament and the public of high standards
of probity in the management of public funds. This chapter is drawn to the attention of all accounting officers

when they are appointed. 3.1.1. Each organisation in central government - department, agency, trading fund,
NHS body, NDPB or arm's length body - must have an accounting officer. This person is usually its senior
official. The accounting officer in an organisation should

be supported by a board structured in line with the Corporate Governance Code. 3.1.2. Formally the accounting
officer in a public sector organisation is the person who parliament calls to account for stewardship of its
resources. The standards the accounting officer is expected to deliver are summarised in box 3.1. The equivalent
senior business managers of other public sector organisations are expected to deliver

equivalent standards.

3.2 Appointment of accounting officers 3.2.1. The Treasury appoints the permanent head of each central
government department to be its accounting officer. Where there are several accounting officers

in a department, the permanent head is the principal accounting officer. 3.2.2. Within departments, the Treasury
also appoints the chief executive of each

trading fund as its accounting officer. 3.2.3. In turn the principal accounting officer of each department normally

appoints the permanent heads: • of its executive agencies, as agency accounting officers for their agencies;

and • of other ALBs (including all NDPBs), as accounting officers for these

bodies; and at their discretion, additional accounting officers for defined parts) of the
department's business. 3.2.4. In the case of appointment of principal accounting officers of departments and
accounting officers of trading funds, the relevant department should send a

draft letter of appointment directly to the Treasury Office of Accounts team via

12

for the signature of the Treasury Permanent Secretary. This should be done at least fourteen calendar days
before the accounting officer is due to take up their role.
o 3.2.5. In the case of appointment of an accounting officer for an arm's length body, the body should
liaise with its sponsoring department to arrange a letter of appointment from the principal accounting
officer. Again, this should be done at least fourteen calendar days before the accounting officer is due
to take up their role. The private office of the principal accounting officer should then promptly notify
the TOA team.
o 3.2.6. These actions ensure that the register of accounting officers is kept up to date and that
appropriate training can be arranged.
o 3.2.7. If the timeframes above cannot be met, or in the event of a temporary gap between the standing
down of an accounting officer and the appointment of a new accounting officer, the department should
contact the TOA team to discuss the appropriate mechanism to ensure accountability arrangements are
maintained.
o 3.2.8. Template letters of appointment can be found on gov.uk. The TOA team is happy to assist in the
preparation of these letters.
3.3 Special responsibilities of accounting officers
Box 3.1: standards expected of the accounting officer's organisation
Acting within the authority of the minister(s) to whom they are responsible, the accounting officer should ensure
that the organisation, and any ALBs it sponsors, operates effectively and to a high standard of probity. The
organisation should:
governance
o have a governance structure which transmits, delegates, implements and enforces decisions
o have trustworthy internal controls to safeguard, channel and record resources as intended
o work cooperatively with partners in the public interest
o operate with propriety and regularity in all its transactions
* net is customers and busines counterparis arily, honestly and with
• offer appropriate redress for failure to meet agreed customer standards
• gie tinying pubit comi relic accounts fits busines and decisions,
decision-making
• support its ministers with clear, well-reasoned, timely and impartial advice

the need for efficiency, economy, effectiveness and prudence in the administration of public resources, to secure
value for public moneys.
o 2.4.3 Should a minister seek a course of action which the accounting officer cannot reconcile with any
aspect of these requirements, they should seek instructions in writing from the minister before
proceeding (see chapter 3).
o 2.4.4 Should departments need to resolve an issue about regularity or propriety, they should consult the
relevant Treasury spending team. Similarly, ALBs should consult their sponsor departments about such
issues, and the department concerned may in turn consult the Treasury.
o 2.4.5 Neither improper nor irregular expenditure achieves the standards that parliament expects. So any
such expenditure must be noted in the department's annual report and accounts. If the discrepancy is
material it can result in a qualification to the accounts. When any expenditure of this kind comes to
light, it should be drawn to the attention of both the NAO and the Treasury. The immediate follow up
action is to identify the source of any systematic problems so that there is no recurrence. The PAC may
also call the accounting officer to explain the matter at a public hearing.
2.5 Securing adequate legal authority
o 2.5.1 Parliament usually authorities spending on a specific policy or service by approving bespoke
legislation setting out in some detail how it should work. It is not normally acceptable to use a royal
charter as an alternative to primary legislation, for this approach robs parliament of its expectations for
control and accountability. Departments should ensure that both they and their ALBs have adequate
legal cover for any specific actions they undertake.
 o 2.5.2 The Treasury takes this requirement seriously. It is fundamental to the trust and understanding
between the government and parliament on which management of the public finances is founded. In the
Concordat of 1932 (see annex 2.3), the Treasury undertook that departments would not spend without
adequate legal authority.
o 2.5.3 There are some general exceptions. These kinds of expenditure do not require specific legislation
in order to avoid burdening parliamentary time:
routine matters covered by common law (the main examples are in box 2.5);
a very limited range of Consolidated Fund Standing Services (see section 5.3);
o 2.5.4 Projects or services which are modest or temporary (see box 2.6). This exception cannot be used
to plug a gap in spending authority before specific legislation for an ongoing service is passed. The
temporary services derogation only applies to initiatives lasting no more than two years in total, and it
is therefore in anew, to going hai bese spriestion is regice period for spending
^
5 A more detailed description of value for money is at annex 4.4

Box 2.5: expenditure which may rely on a Supply and Appropriation Act routine administration costs:
employment costs, rent, cleaning etc
o lease agreements, eg for photocopiers, lifts
o contractual obligations to purchase goods or services (eg where single year contracts might be bad
value)
•
expenditure using prerogative powers such as defense of the realm and international treaty obligations
In all the three cases in paragraph 2.5.3, departments may rely on the sole authority of a Supply and
Appropriation Act (the culmination of the Estimates process) without the need for specific legal authority,
provided that the other conditions in box 2.1 are met.
Box 2.6: modest or temporary expenditure which may rely on a Supply and Appropriation Act either services or
initiatives lasting no more than two years, eg a pilot study or one off intervention or expenditure of no more than
£1.75m a year (amount adjusted from time to time) provided that there is no specific legislation covering these
matters before parliament and existing statutory restrictions are respected.
These conditions are demanding. Treasury consent is required before they may be relied on.
2.6 New services
2.6.1 When ministers decide on a new activity, all the conditions in box 2.1 must be met before it can begin. In
practical terms this means that most significant new policies which are intended to persist require specific
primary legislation.
Sometimes ministers want to start early on a new policy which is intended to continue but whose enabling
legislation has not yet secured royal assent. It may be possible to make limited preparation for delivery of the
new service before royal assent, but to do so it will usually be necessary to consider borrowing from the
Contingencies Fund (see annex 2.4). Access to this Fund is controlled by the Treasury, subject to the conditions
in box 2.7. Specific Treasury consent is always required.
Box 2.7: conditions for access to the contingencies fund (see also annex 2.4)
o the proposed expenditure must be urgent and in the public interest, ie with wider benefits to outweigh
the convention of awaiting parliamentary authority (political imperative is not enough)
o the relevant bill must have successfully passed second reading in the House of
o the legislation must be certain, or virtually certain, to pass into law with no substantive change in the
near future, and usually within the financial year
they and ty entres matis must explain deadly a pria enthat is to take place,