FM 201
Date of issue: 22 December 2000

2.     Dictionary:

"Propriety – fitness; rightness; correctness of behaviour or morals"

"Regularity – conforming to a standard of etiquette or procedure; correct; according to convention"

Government Accounting (GA):

"Propriety is the further requirement that expenditure and receipts should be dealt with in accordance with Parliament’s intentions and the principles of Parliamentary control, including the conventions agreed with Parliament (and in particular the Public Accounts Committee)."

"Regularity is the requirement for all items of expenditure and receipts to be dealt with in accordance with the legislation authorising them, any applicable delegated authority and the rules of Government Accounting." ie regularity is about compliance with appropriate authorities.

Nolan (Standards in Public Life):

"We take propriety to encompass not only financial rectitude, but a sense of the values and behaviour appropriate to the public sector."

INDIVIDUAL RESPONSIBILITY

3.     In 1997 HM Treasury published a booklet called "Regularity and Propriety: A Handbook" which was widely circulated within PPARC (copies are available from the Regularity and Propriety Officer, Finance Division, Swindon Office e-mail: jill.drinkwater@pparc.ac.uk). It includes definitions of Propriety and Regularity, details of the responsibilities of the Accounting Officer, what is expected of public servants particularly in relation to public funds, the "Seven Principles of Public Life" (see Annex A), and what is proper conduct. PPARC aspires to the sentiments contained in this booklet and requires that all employees should adhere to the basic "do’s and don’ts" listed ie:

• Don’t bend or break the rules;
• Put in place and follow clear procedures;
• If approval is needed, get it first;
• Don’t allow a conflict of interests to affect, or appear to affect, decisions (see FM 202 on The Prevention of Fraud);
• Don’t use public money for private benefit;
• Be even-handed; and
• Record the reasons for decisions.

5.     There are few aspects of any organisation’s operations that do not have ethical and social responsibility implications. These are embedded in PPARC’s core values and form part of corporate strategy and planning as well as being included in all training and education programmes.

6.     Ethics are present in all societies, organisations and most individuals but can vary to a greater or lesser extent from one to another. What is ethical today may not be tomorrow and vice versa. Also what is ethical in one country or society may not be so in another and vice versa. Therefore there are no special sets of rules that apply – only the application of general ethical principles to business behaviour.

7.     Corporate social responsibility relates to an organisation’s social responsiveness and has been embraced under the heading of Corporate Governance. Management must recognise that every corporate decision and action can have a social impact (for good or bad). Therefore being socially responsible requires management to seek to minimise the harmful social effects of its decisions and actions whilst giving due consideration to the likely financial implications of these actions. There are many "stakeholders" behind all ethical and social responsibility issues and their interests and concerns must be seen to be given full consideration when making decisions. These stakeholders include: central and local government; international partners; grant holders; HEIs; employees; customers; suppliers; creditors; local communities; tax payers; etc. The environment could also be considered to be another stakeholder and should not be forgotten when making Corporate decisions.

Corporate Reputation and Probity

8.     The Turnbull Report (Internal Control: Guidance for Directors on the Combined Code) raised the profile of the subject of business ethics and corporate social responsibility. The principles of the Code, which has been adopted by Government Departments as well as private companies, require that:

"The board should maintain a sound system of internal control to safeguard shareholders’ investment and the company’s assets";

"The directors should, at least annually, conduct a review of the effectiveness of the group’s system of internal control and should report to shareholders that they have done so. The review should cover all controls, including financial, operational and compliance controls and risk management";

and under the heading of Risk Assessment the question is asked:

"Are the significant internal and external operational, financial, compliance and other risks identified and assessed on an ongoing basis? (Significant risks may, for example, include those related to market, credit, liquidity, technological, legal, health, safety and environmental, reputation, and business probity issues.)" – for corporate reputation and probity, read social responsibility and ethics.

9.     To address these issues PPARC must conduct its business in an open, transparent, honest and trustworthy manner. It must behave ethically and be socially responsible in both its business dealings and in its attitudes to, and recognition of, society’s concerns and needs. A good corporate reputation is a very important organisational resource but is easily lost. Corporate probity and reputation are major risk issues therefore it is important that systems, processes and audit procedures are in place to enable the risks to be identified, assessed, reviewed and reported on.

LEAKED SELECT COMMITTEE REPORTS

10.     In June 1999 the Committee on Standards and Privileges issued a report on the premature disclosure of Foreign Affairs Committee reports. A clear recommendation was made, and accepted by the Prime Minister, regarding what civil servants should do if then find themselves in receipt of a leaked Select Committee Report. The following formal guidance has now been issued by the Head of the Civil Service and is applicable to all employees of the Home Civil Service, Diplomatic Service and other Government bodies including NDPBs such as PPARC:

"An official in receipt of a leaked Committee report should make no use of it, should not circulate it further and should return it without delay to the Clerk of the Committee. He/she may then inform his/her Minister. Any breach of this guidance should be considered a disciplinary offence."

11.     Anyone finding themselves in receipt of such a leaked document should immediately notify the Propriety and Regularity Officer, via their line manager, so that appropriate action can be taken.

12.     Any enquiries concerning the content or interpretation of this FM should be addressed to Jill Drinkwater, Propriety and Regularity Officer, PPARC Finance Division, Swindon Office, tel: 01793 442124, e-mail: jill.drinkwater@pparc.ac.uk

Jill Drinkwater
Propriety and Regularity Officer
PPARC Finance Division

Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.

Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.

In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.

Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.

Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.

Holders of public office should promote and support these principles by leadership and example.

There are several sources of guidance that can be referred to when asking whether it is "appropriate" to follow a particular course of action or whether something is within the remit of PPARC. The main ones are:

The Royal Charter: this shows the powers, roles, responsibilities and membership of council;

The Management Statement and Financial Memorandum (MS&FM) [June 1999]: this provides levels of delegated authority to PPARC, describes the partnership between the OST and PPARC and defines a comprehensive framework of respective responsibilities and accountabilities;

Government Accounting (GA): provides the top level of guidance on the principles of public sector accounting and must be followed;

"Dear Accounting Officer" Letters (DAOs): interim amendments to GA and further guidance from Treasury and the OST are promulgated in the form of DAOs which are issued to sites via Propriety and Regularity Section, Finance Division, Swindon Office;

PPARC Financial Memoranda (FMs): provide details of specific authorities and procedures within the Council;

HM Treasury booklet "Regularity and Propriety": this booklet stresses the need for public servants to observe the highest standards of conduct and act with propriety in the care and management of public funds and provides a checklist of "do’s and don’ts" in public life.

Conditions of Employment Memoranda (CEMs): these are produced by Swindon Office Personnel and circulated by the Business Administration Group at Swindon Office;

"Delegation of Authority" Letters: these are issued individually by the Chief Executive, annually, to each Establishment Director, Director Science, Director Administration and Head of Corporate Affairs Division and provide details of personal levels of delegated authority;

RCIAS Good Practice Bulletins: these are issued from time to time on particular topics of common interest to all the Research Councils.