CAIRNGORMS NATION­AL PARK AUTHORITY

Audit & Risk Com­mit­tee Paper 5 Annex 1 03/02/21

1EXECUTIVE NDPB MOD­EL FRAME­WORK DOCUMENT

Intro­duc­tion

1. This frame­work doc­u­ment has been drawn up by the Scot­tish Gov­ern­ment (SG) in con­sulta­tion with [name of NDPB] (the NDPB). It sets out the broad frame­work with­in which the NDPB will oper­ate and defines key roles and respons­ib­il­it­ies which under­pin the rela­tion­ship between the NDPB and the SG. While this doc­u­ment does not con­fer any leg­al powers or respons­ib­il­it­ies, it forms a key part of the account­ab­il­ity and gov­ernance frame­work and should be reviewed and updated as neces­sary, and at least every 2 – 3 years. Any pro­pos­als to amend the frame­work doc­u­ment either by the SG or NDPB will be taken for­ward in con­sulta­tion and in the light of SG pri­or­it­ies and policy aims. Any ques­tion regard­ing the inter­pret­a­tion of the doc­u­ment shall be determ­ined by the SG after con­sulta­tion with the NDPB. Legis­lat­ive pro­vi­sions shall take pre­ced­ence over any part of the document.

2. Ref­er­ences to the NDPB include any sub­si­di­ar­ies and joint ven­tures owned or con­trolled by the NDPB. The NDPB shall not estab­lish sub­si­di­ar­ies or enter into joint ven­tures without the express approv­al of the SG.

3. Cop­ies of the doc­u­ment shall be placed in the Scot­tish Par­lia­ment Ref­er­ence Centre. It shall also be pub­lished on the SG and the NDPB websites.

Pur­pose

1. The NDPB is to con­trib­ute to the achieve­ment of the SG’s primary pur­pose of increas­ing sus­tain­able eco­nom­ic growth by align­ing its aims and object­ives with the Pro­gramme for Gov­ern­ment, Scotland’s Eco­nom­ic Strategy and Nation­al Per­form­ance Framework.

2. The NDPB’s stat­utory duties are to: [short sum­mary of any over­arch­ing stat­utory duties with ref­er­ence to the rel­ev­ant legislation]

3. The NDPB’s pur­pose, stra­tegic aims and object­ives, as agreed by the Scot­tish Min­is­ters, are to: [brief details of aims]

Rela­tion­ship between Scot­tish Gov­ern­ment and [NDPB]

1. Effect­ive stra­tegic engage­ment between the SG and [NDPB] is essen­tial in order that they work togeth­er as effect­ively as pos­sible to main­tain and improve pub­lic ser­vices and deliv­er improved out­comes. Both the SG and [NDPB] will take all neces­sary steps to ensure that their rela­tion­ship is developed and sup­por­ted in line with the jointly agreed prin­ciples set out in the state­ment on ​‘Stra­tegic Engage­ment between the Scot­tish Gov­ern­ment and Scotland’s NDPBs’.

[This sec­tion can also detail, if appro­pri­ate, any spe­cif­ic arrange­ments or com­mit­ments that are in place to sup­port effect­ive stra­tegic engage­ment unless that is already covered under the sec­tions on roles of the SG Dir­ect­or and Deputy Dir­ect­or and Spon­sor unit]

Gov­ernance and accountability

Leg­al ori­gins of powers and duties

1. The NDPB is estab­lished [under the rel­ev­ant Act/​Charter] [as a com­pany lim­ited by guarantee/​shares] [as a char­ity]. The con­sti­tu­tion of the NDPB is set out in Sec­tion […] of the Act/​Charter/​Articles of Asso­ci­ation. The NDPB does not carry out its func­tions on behalf of the Crown.

Min­is­teri­al responsibilities

1. The Scot­tish Min­is­ters are ulti­mately account­able to the Scot­tish Par­lia­ment for the activ­it­ies of the NDPB and its use of resources. They are not how­ever respons­ible for day to day oper­a­tion­al mat­ters [and found­ing legis­la­tion pre­vents them from dir­ect­ing the NDPB in rela­tion to spe­cif­ic stat­utory func­tions]. Their respons­ib­il­it­ies include:

• agree­ing the NDPB’s stra­tegic aims and object­ives and key tar­gets as part of the cor­por­ate plan­ning process
• agree­ing the budget and the asso­ci­ated grant in aid require­ment to be paid to the NDPB, and secur­ing the neces­sary Par­lia­ment­ary approval
• car­ry­ing out respons­ib­il­it­ies spe­cified in the [found­ing legis­la­tion] [Charter] [Art­icles of Asso­ci­ation] such as appoint­ments to the NDPB’s board, approv­ing the terms and con­di­tions of board mem­bers, [and appoint­ment of the chief executive]
• oth­er mat­ters such as approv­ing the NDPB’s chief exec­ut­ive and staff pay remit in line with SG Pay Policy and lay­ing the accounts (togeth­er with the annu­al report) before the Parliament

NDPB Board Responsibilities

1. The NDPB board, includ­ing the chair, nor­mally con­sists of [non-executives][Trustees] appoin­ted by the Scot­tish Min­is­ters [in line with the Code of Prac­tice for Min­is­teri­al Pub­lic Appoint­ments in Scot­land]. The role of the board is to provide lead­er­ship, dir­ec­tion, sup­port and guid­ance to ensure the Body deliv­ers and is com­mit­ted to deliv­er­ing its func­tions effect­ively and effi­ciently and in accord­ance with the aims, policies and pri­or­it­ies of the Scot­tish Min­is­ters. It has cor­por­ate respons­ib­il­ity, under the lead­er­ship of the chair, for the following:

• tak­ing for­ward the stra­tegic aims and object­ives for the body agreed by the Scot­tish Ministers
• determ­in­ing the steps needed to deal with changes which are likely to impact on the stra­tegic aims and object­ives of the NDPB or on the attain­ab­il­ity of its oper­a­tion­al targets
• pro­mot­ing the effi­cient, eco­nom­ic and effect­ive use of staff and oth­er resources by the NDPB con­sist­ent with the prin­ciples of Best Value, includ­ing, where appro­pri­ate, par­ti­cip­a­tion in shared ser­vices arrangements
• ensur­ing that effect­ive arrange­ments are in place to provide assur­ance on risk man­age­ment (includ­ing in respect of per­son­nel, phys­ic­al and cyber risks/​threats/​hazards), gov­ernance and intern­al con­trol. (The board must set up an audit com­mit­tee chaired by a non-exec­ut­ive mem­ber to provide inde­pend­ent advice and assur­ance on the effect­ive­ness of the intern­al con­trol and risk man­age­ment systems)
• (in reach­ing decisions) tak­ing into account rel­ev­ant guid­ance issued by the Scot­tish Ministers
• approv­ing the annu­al accounts and ensur­ing Scot­tish Min­is­ters are provided with the annu­al report and accounts to be laid before the Scot­tish Par­lia­ment. The chief exec­ut­ive as the Account­able Officer of the pub­lic body is respons­ible for sign­ing the accounts and ulti­mately respons­ible to the Scot­tish Par­lia­ment for their actions
• ensur­ing that the board receives and reviews reg­u­lar fin­an­cial inform­a­tion con­cern­ing the man­age­ment and per­form­ance of the NDPB and is informed in a timely man­ner about any con­cerns regard­ing the activ­it­ies of the NDPB
• appoint­ing [with the approv­al of the Scot­tish Min­is­ters] the NDPB chief exec­ut­ive, fol­low­ing appro­pri­ate approv­al of the chief executive’s remu­ner­a­tion pack­age in line with SG Pay Policy for Seni­or Appoint­ments and, in con­sulta­tion with the SG, set­ting appro­pri­ate per­form­ance object­ives which give due weight to the prop­er man­age­ment and use of resources with­in the stew­ard­ship of the NDPB and the deliv­ery of outcomes
• demon­strat­ing high stand­ards of cor­por­ate gov­ernance at all times, includ­ing open­ness and trans­par­ency in its decision making.

Fur­ther guid­ance on how the board should dis­charge its duties is provided in appoint­ment let­ters and in On Board – A Guide for Mem­bers of Stat­utory Boards.

The Chair’s Responsibilities

1. The chair is account­able to the Scot­tish Min­is­ters and, in com­mon with any indi­vidu­al with respons­ib­il­ity for devolved func­tions, may also be held to account by the Scot­tish Par­lia­ment. Com­mu­nic­a­tions between the NDPB board and the Scot­tish Min­is­ters should nor­mally be through the chair. He or she is respons­ible for ensur­ing that the NDPB’s policies and actions sup­port the Scot­tish Min­is­ters’ wider stra­tegic policies and that its affairs are con­duc­ted with probity.

2. In lead­ing the board the chair must ensure that:

• the work of the board is sub­ject to reg­u­lar self-assess­ment and that the board is work­ing effectively
• the board, in accord­ance with recog­nised good prac­tice in cor­por­ate gov­ernance, is diverse both in terms of rel­ev­ant skills, exper­i­ence and know­ledge appro­pri­ate to dir­ect­ing the NDPB busi­ness, and in terms of pro­tec­ted char­ac­ter­ist­ics under the Equal­ity Act
• the board mem­bers are fully briefed on terms of appoint­ment, duties, rights and responsibilities
• he or she, togeth­er with the oth­er board mem­bers, receives appro­pri­ate induc­tion train­ing, includ­ing on fin­an­cial man­age­ment and report­ing require­ments and, as appro­pri­ate, on any dif­fer­ences that may exist between private and pub­lic sec­tor practice
• suc­ces­sion plan­ning takes place to ensure that the board is diverse and effect­ive, and the Scot­tish Min­is­ters are advised of the NDPB needs when board vacan­cies arise
• there is a code of con­duct for board mem­bers in place, approved by the Scot­tish Ministers.

1. The chair assesses the per­form­ance of indi­vidu­al board mem­bers on a con­tinu­ous basis and under­takes a form­al apprais­al at least annu­ally. The chair, in con­sulta­tion with the board as a whole, is also respons­ible for under­tak­ing an annu­al apprais­al of the per­form­ance of the chief executive.

Indi­vidu­al Board Mem­bers’ Responsibilities

1. Indi­vidu­al board mem­bers should act in accord­ance with the respons­ib­il­it­ies of the board as a whole and com­ply at all times with the code of con­duct adop­ted by the NDPB and with the rules relat­ing to the use of pub­lic funds and to con­flicts of interest. (In this con­text ​“pub­lic funds” means not only any funds provided to the NDPB by the Scot­tish Min­is­ters but also any oth­er funds fall­ing with­in the stew­ard­ship of the NDPB, includ­ing trad­ing and invest­ment income, gifts, bequests and dona­tions.) Gen­er­al guid­ance on board mem­bers’ respons­ib­il­it­ies is sum­mar­ised in their appoint­ment let­ters and is also provided in On Board.

NDPB Chief Exec­ut­ive responsibilities

1. The chief exec­ut­ive of [the NDPB] is employed and appoin­ted by the board [with the approv­al of the Scot­tish Min­is­ters]. He/​she is the board’s prin­cip­al adviser on the dis­charge of its func­tions and is account­able to the board. His/​her role is to provide oper­a­tion­al lead­er­ship to the NDPB and ensure that the board’s aims and object­ives are met and the NDPB’s func­tions are delivered and tar­gets met through effect­ive and prop­erly con­trolled exec­ut­ive action. His/​her gen­er­al respons­ib­il­it­ies include the per­form­ance, man­age­ment and staff­ing of [the NDPB]. Gen­er­al guid­ance on the role and respons­ib­il­it­ies of the chief exec­ut­ive is con­tained in On Board. Spe­cif­ic respons­ib­il­it­ies to the board include:

• advising the board on the dis­charge of its respons­ib­il­it­ies — as set out in this doc­u­ment, in the found­ing legis­la­tion and in any oth­er rel­ev­ant instruc­tions and guid­ance issued by or on behalf of the Scot­tish Min­is­ters — and imple­ment­ing the decisions of the board
• ensur­ing that fin­an­cial con­sid­er­a­tions are taken fully into account by the board at all stages in reach­ing and execut­ing its decisions, and that appro­pri­ate fin­an­cial apprais­al and eval­u­ation tech­niques, con­sist­ent with the Apprais­al and Eval­u­ation sec­tion of the Scot­tish Pub­lic Fin­ance Manu­al (SPFM), are followed
• ensur­ing that the NDPB adheres, where appro­pri­ate, to the SG’s Pro­gramme and Pro­ject Man­age­ment (PPM) Principles
• hav­ing robust per­form­ance and risk man­age­ment arrange­ments — con­sist­ent with the Risk Man­age­ment sec­tion of the SPFM — in place that sup­port the achieve­ment of the NDPB’s aims and object­ives and that facil­it­ate com­pre­hens­ive report­ing to the board, the SG and the wider pub­lic. Risk man­age­ment arrange­ments should include full con­sid­er­a­tion of organ­isa­tion­al resi­li­ence to phys­ic­al, per­son­nel and cyber risks/​threats/​hazards.
• ensur­ing that adequate sys­tems of intern­al con­trol are main­tained by the NDPB, includ­ing effect­ive meas­ures against fraud and theft con­sist­ent with the Fraud sec­tion of the SPFM
• estab­lish­ing appro­pri­ate doc­u­mented intern­al del­eg­ated author­ity arrange­ments con­sist­ent with the Del­eg­ated Author­ity sec­tion of the SPFM
• advising the board on the per­form­ance of the NDPB com­pared with its aim[s] and objectives
• pre­par­ing the NDPB’s cor­por­ate and busi­ness plans, in the light of the stra­tegic aims and object­ives agreed by the Scot­tish Ministers
• ensur­ing effect­ive rela­tion­ships with SG officials
• ensur­ing that timely fore­casts and mon­it­or­ing inform­a­tion on per­form­ance and fin­ance are provided to the SG; that the SG is noti­fied promptly if over or under spends are likely and that cor­rect­ive action is taken; and that any sig­ni­fic­ant prob­lems wheth­er fin­an­cial or oth­er­wise, and wheth­er detec­ted by intern­al audit or by oth­er means, are noti­fied to the SG in a timely fashion
• ensur­ing staff pay pro­pos­als are in line with SG Pay Policy and sub­mit­ted in time and the neces­sary approvals obtained pri­or to imple­ment­ing any annu­al award.

NDPB Account­able Officer responsibilities

1. The Prin­cip­al Account­able Officer for the Scot­tish Admin­is­tra­tion (the Per­man­ent Sec­ret­ary of the SG) will des­ig­nate the chief exec­ut­ive as the Account­able Officer for the NDPB. Account­able Officers are per­son­ally answer­able to the Scot­tish Par­lia­ment for the exer­cise of their func­tions, as set out in the Memor­andum to Account­able Officers for Oth­er Pub­lic Bod­ies. These include:

• ensur­ing the pro­pri­ety and reg­u­lar­ity of the NDPB’s fin­ances and that there are sound and effect­ive arrange­ments for intern­al con­trol and risk management
• ensur­ing that the resources of the pub­lic body are used eco­nom­ic­ally, effi­ciently and effect­ively, and that arrange­ments are in place to secure Best Value and deliv­er Value for Money for the pub­lic sec­tor as a whole
• ensur­ing com­pli­ance with rel­ev­ant guid­ance issued by the Scot­tish Min­is­ters, in par­tic­u­lar the SPFM and SG Pay Policy
• sign­ing the annu­al accounts and asso­ci­ated gov­ernance statements
• a stat­utory duty to obtain writ­ten author­ity from the board/​chair before tak­ing any action which they con­sidered would be incon­sist­ent with the prop­er per­form­ance of the Account­able Officer func­tions. The Account­able Officer should also noti­fy the rel­ev­ant Port­fo­lio Account­able Officer.

1. It is incum­bent on the chief exec­ut­ive to com­bine his/​her Account­able Officer respons­ib­il­it­ies to the Scot­tish Par­lia­ment with his/​her wider respons­ib­il­it­ies to the board. The board / chair should be fully aware of, and have regard to, the Account­able Officer respons­ib­il­it­ies placed upon the chief exec­ut­ive, includ­ing the stat­utory duty described above.

Port­fo­lio Account­able Officer responsibilities

1. The Prin­cip­al Account­able Officer for the Scot­tish Admin­is­tra­tion will des­ig­nate the Dir­ect­or-Gen­er­al for [ ] as the Account­able Officer for the SG port­fo­lio budget for the NDPB. The respons­ib­il­it­ies of a Port­fo­lio Account­able Officer are set out in detail in the Memor­andum to Account­able Officers for Parts of the Scot­tish Admin­is­tra­tion. He/​she is per­son­ally answer­able to the Scot­tish Par­lia­ment for ensur­ing that:

• the fin­an­cial and oth­er man­age­ment con­trols applied by the SG are appro­pri­ate and suf­fi­cient to safe­guard pub­lic funds and, more gen­er­ally that those being applied by the NDPB con­form to the require­ments both of pro­pri­ety and of good fin­an­cial management
• the key roles and respons­ib­il­it­ies which under­pin the rela­tion­ship between the SG and the NDPB are set out in a frame­work doc­u­ment — and that this doc­u­ment is reg­u­larly reviewed
• effect­ive rela­tion­ships are in place at Dir­ect­or and Deputy Dir­ect­or level between the SG and the NDPB in accord­ance with the stra­tegic engage­ment principles
• there is effect­ive con­tinu­ous assess­ment and apprais­al of the per­form­ance of the chair of the NDPB, in line with the require­ments of the Code of Prac­tice for Min­is­teri­al Pub­lic Appoint­ments in Scotland.

Scot­tish Gov­ern­ment Dir­ect­or and Deputy Director

1. The Dir­ect­or for [………] and Deputy Dir­ect­or for [……….] have respons­ib­il­ity for over­see­ing and ensur­ing effect­ive rela­tion­ships between the SG and [NDPB] which sup­port align­ment of the NDPB’s busi­ness to the SG’s Pur­pose and Nation­al Out­comes and high per­form­ance by the NDPB. They will work closely with the NDPB chief exec­ut­ive and be answer­able to the Port­fo­lio Account­able Officer for main­tain­ing and devel­op­ing pos­it­ive rela­tion­ships with [NDPB] char­ac­ter­ised by open­ness, trust, respect and mutu­al sup­port. They will be sup­por­ted by a spon­sor unit in dis­char­ging these func­tions. The [Port­fo­lio Account­able Officer / Dir­ect­or / Deputy Dir­ect­or] shall be respons­ible for assess­ing the per­form­ance of the NDPB chair at least annually.

Spon­sor unit responsibilities

1. The SG spon­sor unit for the NDPB is [ ]. It is the nor­mal point of con­tact for the NDPB in deal­ing with the SG. The unit, under the dir­ec­tion of the Director/​Deputy Dir­ect­or, is the primary source of advice to the Scot­tish Min­is­ters on the dis­charge of their respons­ib­il­it­ies in respect of the NDPB and under­takes the respons­ib­il­it­ies of the Port­fo­lio Account­able Officer on his/​her behalf.

Spe­cif­ic respons­ib­il­it­ies include:

• dis­char­ging spon­sor­ship respons­ib­il­it­ies in line with the prin­ciples and frame­work set out in the doc­u­ment ​‘Stra­tegic Engage­ment between the Scot­tish Gov­ern­ment and Scotland’s NDPBs’ and ensur­ing that spon­sor­ship is suit­ably flex­ible, pro­por­tion­ate and respons­ive to the needs of the Scot­tish Min­is­ters and the NDPB
• ensur­ing that appoint­ments to the NDPB board are made timeously and, where appro­pri­ate, in accord­ance with the Code of Prac­tice for Min­is­teri­al Appoint­ments to Pub­lic Bod­ies in Scotland
• pro­por­tion­ate mon­it­or­ing of the NDPB’s activ­it­ies through an adequate and timely flow of appro­pri­ate inform­a­tion, agreed with the NDPB, on per­form­ance, budget­ing, con­trol and risk management
• address­ing in a timely man­ner any sig­ni­fic­ant prob­lems arising in the NDPB, alert­ing the Port­fo­lio Account­able Officer and the respons­ible Minister(s) where con­sidered appropriate
• ensur­ing that the object­ives of the NDPB and the risks to them are prop­erly and appro­pri­ately taken into account in the SG’s risk assess­ment and man­age­ment systems
• inform­ing the NDPB of rel­ev­ant SG policy in a timely manner.

Intern­al audit

1. The NDPB shall:

• estab­lish and main­tain arrange­ments for intern­al audit in accord­ance with the Pub­lic Sec­tor Intern­al Audit Stand­ards and the Intern­al Audit sec­tion of the SPFM
• set up an audit com­mit­tee of its board, in accord­ance with the Audit Com­mit­tees sec­tion of the SPFM, to advise both the board and the chief exec­ut­ive in his/​her capa­city as the NDPB Account­able Officer
• for­ward timeously to the SG the audit charter, strategy, peri­od­ic audit plans and annu­al audit assur­ance report, includ­ing the NDPB Head of Intern­al Audit opin­ion on risk man­age­ment, con­trol and gov­ernance and oth­er rel­ev­ant reports as requested
• keep records of, and pre­pare and for­ward timeously to the SG an annu­al report on fraud and theft suffered by the NDPB and noti­fy the SG at the earli­est oppor­tun­ity of any unusu­al or major incidents.

1. The SG’s Intern­al Audit Dir­ect­or­ate has a right of access to all doc­u­ments held by the NDPB intern­al aud­it­or, includ­ing where the ser­vice is con­trac­ted out. The SG has a right of access to all NDPB records and per­son­nel for any purpose.

Extern­al audit

1. The Aud­it­or Gen­er­al for Scot­land (AGS) audits, or appoints aud­it­ors to audit, the NDPB’s annu­al accounts and passes them to the Scot­tish Min­is­ters who shall lay them before the Scot­tish Par­lia­ment, togeth­er with the auditor’s report and any report pre­pared by the AGS. For the pur­pose of audit the aud­it­ors have a stat­utory right of access to doc­u­ments and inform­a­tion held by rel­ev­ant per­sons. The NDPB shall instruct its aud­it­ors to send cop­ies of all man­age­ment reports (and cor­res­pond­ence relat­ing to those reports) and responses to the SG.

2. The AGS, or exam­iners appoin­ted by the AGS, may carry out exam­in­a­tions into the eco­nomy, effi­ciency and effect­ive­ness with which the NDPB has used its resources in dis­char­ging its func­tions. The AGS may also carry out exam­in­a­tions into the arrange­ments made by the NDPB to secure Best Value. For the pur­pose of these exam­in­a­tions the exam­iners have a stat­utory right of access to doc­u­ments and inform­a­tion held by rel­ev­ant per­sons. In addi­tion, the NDPB shall provide, in con­tracts and any con­di­tions to grants, for the AGS to exer­cise such access to doc­u­ments held by con­tract­ors and sub-con­tract­ors and grant recip­i­ents as may be required for these exam­in­a­tions; and shall use its best endeav­ours to secure access for the AGS to any oth­er doc­u­ments required by the AGS which are held by oth­er bodies.

Annu­al report and accounts

1. The NDPB must pub­lish an annu­al report of its activ­it­ies togeth­er with its audited accounts after the end of each fin­an­cial year. The annu­al report must cov­er the activ­it­ies of any cor­por­ate, sub­si­di­ary or joint ven­tures under the con­trol of the NDPB. It should com­ply with the Gov­ern­ment Fin­an­cial Report­ing Manu­al (FReM) and out­line the NDPB’s main activ­it­ies and per­form­ance against agreed object­ives and tar­gets for the pre­vi­ous fin­an­cial year.

2. The accounts must be pre­pared in accord­ance with rel­ev­ant stat­utes and the spe­cif­ic accounts dir­ec­tion (includ­ing com­pli­ance with the FReM) and oth­er rel­ev­ant guid­ance issued by the Scot­tish Min­is­ters. Any fin­an­cial object­ives or tar­gets set by the Scot­tish Min­is­ters should be repor­ted on in the accounts and will there­fore be with­in the scope of the audit. Any sub­si­di­ary or joint ven­ture owned or con­trolled by the NDPB shall be con­sol­id­ated in its accounts in accord­ance with Inter­na­tion­al Fin­an­cial Report­ing Stand­ards as adap­ted and inter­preted for the pub­lic sec­tor context.

3. The draft report should be sub­mit­ted to the SG for com­ment, and the draft accounts for inform­a­tion, by [ ]. The final ver­sion should be avail­able for lay­ing before the Scot­tish Par­lia­ment by the Scot­tish Min­is­ters by [ ]. Whilst the stat­utory date for lay­ing and pub­lish­ing accounts audited by the AGS is by 31 Decem­ber, fol­low­ing the close of the pre­vi­ous fin­an­cial year, there is an expect­a­tion on the part of the Scot­tish Min­is­ters that accounts will be laid and pub­lished as early as pos­sible. The accounts must not be laid before they have been form­ally sent by the AGS to the Scot­tish Min­is­ters and must not be pub­lished before they have been laid. The NDPB shall be respons­ible for the pub­lic­a­tion of the annu­al report and accounts.

Man­age­ment responsibilities

Cor­por­ate and busi­ness plans

1. The NDPB must ensure that a cor­por­ate plan, agreed with the Scot­tish Min­is­ters, is in place and pub­lished on the NDPB’s web­site. The NDPB shall agree with the SG the issues to be addressed in the plan and the timetable for its pre­par­a­tion and review. The final­ised plan shall reflect the NDPB’s stra­tegic aims and object­ives as agreed by the Scot­tish Min­is­ters, indic­at­ive budgets and any pri­or­it­ies set by the Scot­tish Min­is­ters. It shall demon­strate how the NDPB con­trib­utes to the achieve­ment of the SG’s primary pur­pose of increas­ing sus­tain­able eco­nom­ic growth and align­ment with the SG’s Nation­al Per­form­ance Frame­work (NPF). The cor­por­ate plan for the NDPB should include:

• the pur­pose and prin­cip­al aims of the NDPB
• an ana­lys­is of the envir­on­ment in which the NDPB operates
• key object­ives and asso­ci­ated key per­form­ance tar­gets for the peri­od of the plan, the strategy for achiev­ing those object­ives and how these will con­trib­ute towards the achieve­ment of the SG’s primary pur­pose and align­ment with the NPF
• indic­at­ors against which per­form­ance can be judged
• details of planned effi­cien­cies, describ­ing how the NDPB pro­poses to achieve bet­ter value for money, includ­ing through col­lab­or­a­tion and shared services
• oth­er mat­ters as agreed between the SG and the NDPB.

1. The cor­por­ate plan should inform the devel­op­ment of a sep­ar­ate busi­ness plan for each fin­an­cial year. The busi­ness plan for the NDPB should include key tar­gets and mile­stones for the year imme­di­ately ahead, aligned to the NPF, and be linked to budget­ing inform­a­tion so that, where pos­sible, resources alloc­ated to achieve spe­cif­ic object­ives can be iden­ti­fied. A copy of the NDPB’s busi­ness plan should be provided to the spon­sor unit pri­or to the start of the rel­ev­ant fin­an­cial year.

Budget man­age­ment

1. Each year, in the light of decisions by the Scot­tish Min­is­ters on the alloc­a­tion of budgets for the forth­com­ing fin­an­cial year, the SG will send to the NDPB a form­al state­ment of its budget­ary pro­vi­sion, and a note of any related mat­ters and details of the budget mon­it­or­ing inform­a­tion required by the SG. The terms of that let­ter, referred to as the Budget Alloc­a­tion and Mon­it­or­ing let­ter, should be viewed as com­ple­ment­ing the con­tent of this doc­u­ment. The monthly mon­it­or­ing is the primary means of in-year budget­ary con­trol across the SG. As such bod­ies must com­ply with the format and tim­ing of the mon­it­or­ing togeth­er with any requests for fur­ther inform­a­tion. The state­ment of budget­ary pro­vi­sion will set out the budget with­in the clas­si­fic­a­tions of resource Depart­ment­al Expendit­ure Lim­its (RDEL), cap­it­al DEL (CDEL) and Ring-fenced (non-cash) (RfDEL). The NDPB will inform the spon­sor unit at the earli­est oppor­tun­ity if a require­ment for Annu­ally Man­aged Expendit­ure (AME) budget is iden­ti­fied. The SG should also be advised in the event that estim­ated net expendit­ure is fore­cast to be lower than budget pro­vi­sion. Trans­fers of budget­ary pro­vi­sion between the dif­fer­ent clas­si­fic­a­tions require the pri­or approv­al of the SG Fin­ance Dir­ect­or­ate. Any pro­pos­als for such trans­fers should there­fore be sub­mit­ted to the spon­sor unit. Trans­fers of pro­vi­sion with­in the clas­si­fic­a­tions may be under­taken without ref­er­ence to the SG, sub­ject to any con­straints on spe­cif­ic areas of expendit­ure e.g. the approved pay remit.

2. If the trad­ing and oth­er resource income real­ised (includ­ing profit or loss on dis­pos­al of non-cur­rent assets) – scored as neg­at­ive RDEL, or the net book value of dis­pos­als of non-cur­rent assets scored as neg­at­ive CDEL is less than included in the agreed budget the NDPB shall, unless oth­er­wise agreed with the SG, ensure a cor­res­pond­ing reduc­tion in its gross expendit­ure. (The extent to which the NDPB exceeds agreed budgets shall nor­mally be met by a cor­res­pond­ing reduc­tion in the budgets for the fol­low­ing fin­an­cial year.) If income real­ised is more than included in the agreed budgets the NDPB must con­sult and obtain the pri­or approv­al of the SG before using any excess to fund addi­tion­al expendit­ure or to meet exist­ing pres­sures. Fail­ure to obtain pri­or approv­al for the use of excess income to fund addi­tion­al expendit­ure may res­ult in cor­res­pond­ing reduc­tions in budgets for the fol­low­ing fin­an­cial year. The only excep­tion is where the income is from gifts, bequests and dona­tions but this must be spent with­in the same fin­an­cial year as the receipt, oth­er­wise addi­tion­al budget alloc­a­tion will be required. In any event, income from all sources and all planned expendit­ure should be reflec­ted in the monthly budget mon­it­or­ing statement.

Cash man­age­ment

1. Any grant in aid (i.e. the cash provided to the NDPB by the SG to sup­port the alloc­ated budget) for the year in ques­tion must be author­ised by the Scot­tish Par­lia­ment in the annu­al Budget Act. Grant in aid will nor­mally be paid in monthly instal­ments on the basis of updated pro­files and inform­a­tion on unres­tric­ted cash reserves. Pay­ment will not be made in advance of need, as determ­ined by the level of unres­tric­ted cash reserves and planned expendit­ure. Unres­tric­ted cash reserves held dur­ing the course of the year should be kept to the min­im­um level con­sist­ent with the effi­cient oper­a­tion of the NDPB — and the level of funds required to meet any rel­ev­ant liab­il­it­ies at the year-end. Grant in aid not drawn down by the end of the fin­an­cial year shall lapse. Grant in aid shall not be paid into any restric­ted reserve held by the NDPB.

2. The bank­ing arrange­ments adop­ted by the NDPB must com­ply with the Bank­ing sec­tion of the SPFM.

Risk man­age­ment

1. The NDPB shall ensure that the risks that it faces are dealt with in an appro­pri­ate man­ner, in accord­ance with rel­ev­ant aspects of gen­er­ally recog­nised best prac­tice in cor­por­ate gov­ernance, and devel­op an approach to risk man­age­ment con­sist­ent with the Risk Man­age­ment sec­tion of the SPFM. Report­ing arrange­ments should ensure that the spon­sor unit is made aware of rel­ev­ant risks and how they are being man­aged. The NDPB audit com­mit­tee is also required, at the earli­est oppor­tun­ity, to noti­fy the rel­ev­ant SG Audit and Risk Com­mit­tee if it con­siders that it has iden­ti­fied a sig­ni­fic­ant prob­lem which may have wider implications.

Organ­isa­tion­al secur­ity and resilience

1. As part of risk man­age­ment arrange­ments, the NDPB shall ensure that it has a clear under­stand­ing at board level of the key risks, threats and haz­ards it may face in the per­son­nel, phys­ic­al and cyber domains, and take action to ensure appro­pri­ate organ­isa­tion­al resi­li­ence to those risks/​threats/​hazards. It should have par­tic­u­lar regard to the fol­low­ing key sources of inform­a­tion to help guide its approach:

• Hav­ing and Pro­mot­ing Busi­ness Resi­li­ence (part of the Pre­par­ing Scot­land suite of guidance)
• The Scot­tish Pub­lic Sec­tor Action Plan on Cyber Resi­li­ence and asso­ci­ated guidance

Counter fraud arrangements

1. The NDPB should adopt and imple­ment policies and prac­tices to safe­guard itself against fraud and theft, in accord­ance with the Fraud sec­tion of the SPFM. Applic­a­tion of these pro­cesses must be mon­itored act­ively, sup­por­ted by a fraud action plan and robust report­ing arrange­ments. This includes the estab­lish­ment of aven­ues to report any sus­pi­cions of fraud.

Per­form­ance management

1. The NDPB shall oper­ate man­age­ment inform­a­tion and account­ing sys­tems that enable it to review, in a timely and effect­ive man­ner, its fin­an­cial and non-fin­an­cial per­form­ance against the stra­tegic aims, object­ives, tar­gets and mile­stones set out in the cor­por­ate and busi­ness plans. The res­ults of such reviews should be repor­ted on a reg­u­lar basis to the NDPB board and copied to the SG. The SG shall assess the NDPB’s per­form­ance, pro­por­tion­ately, on a con­tinu­ous basis and hold a form­al review meet­ing at least twice a year. The respons­ible Cab­in­et Sec­ret­ary / Scot­tish Min­is­ter shall meet the NDPB chair at least once a year.

NDPB staff management

Broad respons­ib­il­it­ies for NDPB staff

1. The NDPB will have respons­ib­il­ity for the recruit­ment, reten­tion and motiv­a­tion of its staff. The broad respons­ib­il­it­ies towards its staff are to ensure that:

• HR policies, prac­tices and sys­tems com­ply with employ­ment and equal­it­ies legis­la­tion, and stand­ards expec­ted of pub­lic sec­tor employers
• the level and struc­ture of its staff­ing, includ­ing grad­ing and staff num­bers, are appro­pri­ate to its func­tions and the require­ments of eco­nomy, effi­ciency and effect­ive­ness (sub­ject to the SG Pay Policy for Staff Pay Remits)
• the per­form­ance of its staff at all levels is sat­is­fact­or­ily appraised and the NDPB’s per­form­ance meas­ure­ment sys­tems are reviewed from time to time
• its staff are encour­aged to acquire the appro­pri­ate pro­fes­sion­al, man­age­ment and oth­er expert­ise neces­sary to achieve the NDPB’s objectives
• prop­er con­sulta­tion with staff takes place on key issues affect­ing them
• adequate griev­ance and dis­cip­lin­ary pro­ced­ures are in place
• effect­ive whistle-blow­ing policy and pro­ced­ures con­sist­ent with the Pub­lic Interest Dis­clos­ure Act 1998 are in place
• a code of con­duct for staff is in place based on the Mod­el Code for Staff of Exec­ut­ive NDPBs

Pay and con­di­tions of service

1. The NDPB will com­ply with SG Pay Policy in rela­tion to staff and the chief exec­ut­ive. The NDPB shall sub­mit to the SG for approv­al (nor­mally annu­ally unless a multi-year deal has been agreed) a pay remit in line with the SG Pay Policy for Staff Pay Remits and nego­ti­ate a pay set­tle­ment with­in the terms of the approved remit. Pay­ment of salar­ies should also com­ply with the Tax Plan­ning and Tax Avoid­ance sec­tion of the SPFM. Pro­pos­als on non-salary rewards must com­ply with the guid­ance in the Non-Salary Rewards sec­tion of the SPFM. [Where applic­able, the NDPB will also seek appro­pri­ate approv­al under the SG Pay Policy for Seni­or Appoint­ments for the chief executive’s remu­ner­a­tion pack­age pri­or to appoint­ment, annu­ally or when a new appoint­ment or change to the remu­ner­a­tion pack­age is being proposed.]

Pen­sions, redund­ancy and compensation

1. Super­an­nu­ation arrange­ments for the NDPB staff are sub­ject to the approv­al of the SG. NDPB staff shall nor­mally be eli­gible for a pen­sion provided by [its own scheme][state second pension][PCSPS][LGPS][other]. Staff may opt out of the occu­pa­tion­al pen­sion scheme provided by the NDPB, but the employ­ers’ con­tri­bu­tion to any per­son­al pen­sion arrange­ment, includ­ing stake­hold­er pen­sion, shall nor­mally be lim­ited to the nation­al insur­ance rebate level. [Note that there is an excep­tion for NDPBs covered by the PCSPS part­ner­ship arrange­ment, and for PCSPS by-ana­logy versions.]

2. Any pro­pos­al by the NDPB to move from exist­ing pen­sion arrange­ments, or to pay any redund­ancy or com­pens­a­tion for loss of office, requires the pri­or approv­al of the SG. Pro­pos­als on com­pens­a­tion pay­ments must com­ply with the Set­tle­ment Agree­ments, Sev­er­ance, Early Retire­ment and Redund­ancy Terms sec­tion of the SPFM. This includes refer­ral to the SG of any pro­posed sev­er­ance scheme (for example, a scheme for vol­un­tary exit), busi­ness case for a set­tle­ment agree­ment being con­sidered for an indi­vidu­al, or pro­pos­al to make any oth­er com­pens­a­tion pay­ment. In all instances, a body should engage with the SG pri­or to pro­ceed­ing with pro­posed sev­er­ance options, and pri­or to mak­ing any offer either orally or in writing.

Asset and prop­erty management

1. The NDPB shall main­tain an accur­ate and up-to-date record of its cur­rent and non-cur­rent assets con­sist­ent with the Prop­erty: Acquis­i­tion, Dis­pos­al & Man­age­ment sec­tion of the SPFM. ​‘Non-cur­rent’ assets should be dis­posed of in accord­ance with the SPFM. The SG’s Prop­erty Divi­sion should be con­sul­ted about rel­ev­ant pro­posed dis­pos­als of prop­erty that the NDPB holds for oper­a­tion­al pur­poses (rather than invest­ment) at the earli­est oppor­tun­ity so it may be advert­ised intern­ally. An Intern­al Advert­ise­ment form must be com­pleted and sub­mit­ted at least one month pri­or to prop­erty being advert­ised on the open mar­ket. Any pro­pos­al to acquire land, build­ings or oth­er rights in prop­erty for accom­mod­a­tion / oper­a­tion­al pur­poses should com­ply with the SPFM. The NDPB is also sub­ject to the SG Asset Man­age­ment Policy, includ­ing the require­ment for acquis­i­tion of a new lease, con­tinu­ation of an exist­ing lease, decision not to exer­cise a break option in a lease or pur­chase of prop­erty for accom­mod­a­tion / oper­a­tion­al pur­poses, to be approved in advance by Scot­tish Min­is­ters. The Prop­erty Con­trols Team should be con­sul­ted as early as pos­sible in this pro­cess. All assets (prop­erty, plant and equip­ment) are to be prop­erly recor­ded and updated as neces­sary by the NDPB on the Cab­in­et Office elec­tron­ic Prop­erty Inform­a­tion Map­ping Sys­tem (e‑PIMS). [If the NDPB is not required to report data annu­ally to Par­lia­ment, in accord­ance with sec­tion 76 of the Cli­mate Change (Scot­land) Act 2009, the busi­ness area can use oth­er robust prop­erty asset man­age­ment systems.]

Spe­cif­ic fin­an­cial provisions

[Many of the pro­vi­sions included in this sec­tion — and oth­er sec­tions — of the frame­work doc­u­ment high­light spe­cif­ic require­ments in the SPFM that are con­sidered of par­tic­u­lar rel­ev­ance to NDPBs. It should be noted how­ever that guid­ance in the SPFM should always be con­sidered in its entirety as and when rel­ev­ant issues arise.]

Del­eg­ated authorities

1. The NDPB’s spe­cif­ic del­eg­ated fin­an­cial author­it­ies as agreed in con­sulta­tion between the NDPB and the SG — are set out in the attached Appendix. The NDPB shall obtain the SG’s pri­or writ­ten approv­al before enter­ing into any under­tak­ing to incur any expendit­ure that falls out­side these del­eg­a­tions. The NDPB shall also com­ply with any require­ments for pri­or SG approv­al included in the SPFM and/​or this doc­u­ment. Pri­or SG 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

1. The NDPB shall seek to optim­ise income — grant in aid does not qual­i­fy as income — from all sources, includ­ing from the European Uni­on, and ensure that the SG is kept informed. Nov­el or con­ten­tious pro­pos­als for new sources of income or meth­ods of fun­drais­ing must be approved by the SG. Fees or charges for any ser­vices sup­plied by the NDPB shall be determ­ined in accord­ance with the Fees & Charges sec­tion of the SPFM.

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

Fin­an­cial investments

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

Bor­row­ing

1. Bor­row­ing can­not be used to increase the NDPB’s spend­ing power. All bor­row­ing by the NDPB — exclud­ing agreed over­drafts — shall be from the Scot­tish Min­is­ters in accord­ance with guid­ance in the Bor­row­ing, Lend­ing & Invest­ment sec­tion of the SPFM.

Lease arrange­ments

1. Unless covered by a spe­cif­ic del­eg­ated author­ity the NDPB 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 SG’s pri­or approv­al. Before entering/​con­tinu­ing such arrange­ments the NDPB 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 NDPB must have cap­it­al DEL pro­vi­sion for fin­ance leases and oth­er trans­ac­tions which are in sub­stance borrowing.

Tax arrange­ments

1. Non-stand­ard tax man­age­ment arrange­ments should always be regarded as nov­el and/​or con­ten­tious and must there­fore be approved in advance by the SG. Rel­ev­ant guid­ance is provided in the Tax Plan­ning and Tax Avoid­ance sec­tion of the SPFM. The NDPB 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 NDPB 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 NDPB must also ensure that it accounts prop­erly for any out­put tax on sales or disposals.

Lend­ing and guarantees

1. Any lend­ing by the NDPB 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 NDPB shall not, without the SG’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

1. Unless covered by a spe­cif­ic del­eg­ated author­ity the NDPB shall not, without the SG’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

1. 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 SG at the earli­est pos­sible point in the fin­an­cial year to determ­ine the implic­a­tions for the NDPB’s budget. Sim­il­arly any sig­ni­fic­ant move­ment in exist­ing pro­vi­sions or the cre­ation of new pro­vi­sions should be dis­cussed in advance with the SG. Write-off of bad debt and/​or losses scores against the NDPB’s resource DEL budget clas­si­fic­a­tion and is sub­ject to a spe­cif­ic del­eg­ated limit.

Insur­ance

1. [Where the SG decides that the NDPB should be sub­ject to the self-insur­ance policy.] The NDPB is sub­ject to the SG 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 SG. In the event of unin­sured losses being incurred the SG shall con­sider, on a case by case basis, wheth­er or not it should make any addi­tion­al resources avail­able to the NDPB. The SG will provide the NDPB with a Cer­ti­fic­ate of Exemp­tion for Employer’s Liab­il­ity Insurance.

Pro­cure­ment and payment

1. The NDPB’s pro­cure­ment policies shall reflect rel­ev­ant guid­ance in the Pro­cure­ment sec­tion of the SPFM and rel­ev­ant guid­ance issued by the SG’s Pro­cure­ment and Com­mer­cial Dir­ect­or­ate. Pro­cure­ment should be under­taken by appro­pri­ately trained and author­ised staff and treated as a key com­pon­ent of achiev­ing the NDPB’s object­ives 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 (