INTERDEPARTMENTAL TRANSACTIONS
Contents:
Scope
Key Points
Background
Responsibilities and Accountability
Agreements
Charging / Accounting
Annex: Service Level Agreement
Checklist
Scope
1. This section provides guidance on transactions
involving only constituent parts of the Scottish
Administration and on transactions between constituent
parts of the Scottish Administration and other bodies
funded directly from the Scottish Consolidated Fund,
sponsored bodies and UK Government Departments.
Key Points
2. It is essential for each party in interdepartmental
transactions to have a clear understanding of the
respective roles and responsibilities of each party
involved and the lines of policy responsibility and
financial accountability.
3. In the case of interdepartmental transactions between
constituent parts of the Scottish Administration and other
bodies agreement on responsibilities and accountability
should be set out in writing.
4. All interdepartmental transactions and associated
agreements should be reviewed at appropriate intervals.
Background
5. Interdepartmental transactions in the context of this
note covers supplier/customer relationships between the
constituent parts of Scottish Administration and other
bodies funded directly from the Scottish Consolidated Fund,
sponsored bodies and UK Government Departments. It also
covers transactions in relation to the supply of goods
and/or services involving only constituent parts of the
Scottish Administration (i.e. Departments and Agencies of
the Scottish Executive plus statutory office-holders) where
"customers" hold the necessary budgets and have freedom to
choose different sources of supply.
6. In addition, it covers circumstances where the
constituent parts of Scottish Administration participate in
cost sharing, joint projects or pooled schemes with other
bodies etc and where constituent parts of the Scottish
Administration participate in cross-cutting programmes
within the Scottish Administration.
Responsibilities and Accountability
7. It is essential for each party in interdepartmental
transactions to have a clear understanding of the
respective roles and responsibilities of each party
involved and the lines of policy responsibility and
financial accountability. Each will be accountable for its
own actions. The boundary between the responsibilities of
each party will depend on the nature and extent of the
activity in question: e.g. the supplier will be responsible
for the efficiency and economy with which it meets the
customer's requirements and will be held responsible for
any waste resulting from deficiencies in its own
operations; and the customer will be responsible for its
requirement both in terms of volume and of determining the
standards of service it can accept and the use to which the
goods and services are put.
8. In the case of interdepartmental transactions between
the constituent parts of Scottish Administration and other
bodies etc agreement on responsibilities and accountability
should be set out in writing. The Audit Committee of the
Scottish Parliament may wish to take evidence from the
Accountable Officers of all the participating parties if it
investigates a function which involved an interdepartmental
transaction.
Agreements
9. Organisations cannot enter into contracts with other
parts of the same legal entity. Internal agreements which
fall short of being contracts are normally referred to as
"Service Level Agreements". Service Level Agreements (SLAs)
may have all the hallmarks of contracts other than the
normal provisions for the enforcement of a contract. A
checklist of topics which should be covered in such
agreements is provided in the
Annex to this note.
10. Where appropriate, SLAs should be adapted to cover
supplier/customer relationships involving only constituent
parts of the Scottish Administration. SLAs may also be
appropriate in supplier/customer relationships between the
constituent parts of Scottish Administration and other
bodies funded directly from the Scottish Consolidated Fund,
sponsored bodies and UK Government Departments. It should
be noted however that, under the terms of the Scotland Act
1998, it is possible for agreements between the Scottish
Ministers and UK Ministers to be legally binding and
therefore provide for better protection in the event of
disputes. Departments should seek advice on the precise
terms of agreements / contracts on a case by case basis
from the Scottish Procurement Directorate (SPD) and, where
appropriate, Solicitors.
11. Separate agreements will be required in relation to
cross-cutting programmes, cost sharing etc. As a minimum
such agreements should cover objectives, respective roles
and financial and policy responsibilities and, where
appropriate, income sharing.
12. All interdepartmental transactions and associated
agreements should be reviewed at appropriate intervals.
Charging / Accounting
13. Services between the constituent parts of Scottish
Administration and other direct funded bodies, sponsored
bodies and UK Government Departments should be subject to
the guidance on commercial services set out in the guidance
on "Fees and Charges" and accounted for in the normal way.
Services involving only constituent parts of the Scottish
Administration should not normally be subject to charging
but charging may be appropriate where "customers" hold the
necessary budgets and have freedom to choose different
sources of supply. Constituent parts of the Scottish
Administration involved in such interdepartmental
transactions should ensure that they account for their part
in the arrangement in accordance with the Government
Financial Reporting Manual, incorporating notional costs
within their accounts where necessary.
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Page Published/ Updated on: 21st December 2001