Sources of Income

Universities depend upon public funds for a large part of their annual income. The largest single component of their general income is derived from the recurrent grant distributed by the Higher Education Funding Council for England (HEFCE). Other major sources of income include:

  • grants from the Training and Development Agency for Schools
  • research grants and contract income
  • tuition fees and support grants for students
  • investment income
  • income from services rendered
  • residences and catering
  • funds from individuals in the form of endowments, donations, and subscriptions

HEFCE Grant Conditions

Payment of grant to the University by the Funding Council is governed by the terms of the Financial Memorandum between the University and the Funding Council. This establishes that the payment of grant is in support of:

  • the provision of education and the undertaking of research
  • the provision of any facilities and the carrying on of any other activities which the Council of the University considers it necessary or desirable to - provide or carry on for the purpose of, or in connection with, education or research.

The Financial Memorandum also lays down conditions in regard to:

  • the financial management of the University
  • risk management
  • property acquisition and disposal of land and buildings
  • borrowing and leasing by the University
  • the provision of financial statements
  • the costing and pricing of research contracts and other services
  • internal and external audit
  • the provision of information by the University
  • failure to comply and repayment of grant by the University

Financial Management


The Vice-Chancellor is the Designated Office-Holder for the University, as defined in the Financial Memorandum between the University and the Funding Council.

The Vice-Chancellor is responsible to Council for monitoring and promoting the efficiency and good order of the University.

Director of Finance

The Director of Finance is responsible to the Vice-Chancellor for the financial administration of the University, including the preparation of annual estimates and financial plans, and annual accounts.

Faculty Deans and the Head of the School of Management and the Department for Health

All references to Faculty Deans include the Head of the School of Management and Department of Health; all references to Faculties include the School of Management and Department of Health.

Faculty Deans are responsible to the Vice-Chancellor for the financial management of their Faculty.

Deans are responsible to the Vice-Chancellor for the allocation of resources within their Faculty and for the monitoring and control of expenditure against resources in their Faculty.

In discharging their responsibilities, the Deans and the Head of the School of Management should be advised by the Director of Finance.

Heads of Department

Heads of Academic Departments are responsible to the Dean of the Faculty to which their Department belongs for the monitoring and control of expenditure against budgets in their areas.

Heads of other Departments are likewise ultimately responsible to the Vice Chancellor. Heads of Departments are responsible for the economic, efficient and effective use of resources allocated to their cost centre and should establish clear lines of responsibility for all financial matters within their Department.

Budgets and Resource Allocation

The Budget Process

The Director of Finance is responsible for preparing the University's estimates. Estimates are reviewed by Executive before being presented to the Finance Committee and Council. These estimates contain the detail of budget allocations into individual cost centres.

Budgetary Control

The control of expenditure within agreed budgets for University-funded and also externally-funded activities is the responsibility of the Head of Department concerned who should ensure that appropriate records are maintained. It is the responsibility of the Dean of each Faculty to ensure that the expenditure of each Department within their Faculty, whether for University-funded or externally-funded activities, is within agreed allocations and that appropriate records are kept. The Finance Office will supply management information on a routine and regular basis, and will supplement this on request with more detailed information as required. The advice of the Director of Finance must be sought regarding any proposed financial commitment which cannot be met from within the budget allocation.

Carry Forward of Balances on Budget Allocations

Academic Departments If, at the end of the Financial Year, actual net expenditure on operating non pay or equipment budget items has been less than the budget allocation of funds for that year, the surplus will normally be carried forward, and added to the budget allocation for the following year. Where the underpend is greater that 5% of the budget Faculties will normally be requested to put forward proposals on how the carry forward will be spent to VCG for approval.

Where a deficit is incurred, the circumstances will be investigated and where appropriate, the overspend may be deducted from the allocation the following year or offsett against other Faculty surpluses.

Other Departments Any budget not spent by the end of the Financial Year will be retained by the University unless otherwise agreed by the Director of Finance.


Preparation of Accounts

The Director of Finance is responsible for preparing the University's Annual Accounts and for ensuring that audited accounts are presented to Council. The accounts will previously have been presented to the Finance Committee, which is responsible for recommending their approval to Council.

Accounting Policies

The accounting policies used in the preparation of the University's Annual Accounts are based on the Statement of Recommended Practice: Accounting for Further and Higher Education (SORP)

Accounting Records

The accuracy of accounting records and balances on accounts under their control are the responsibility of Heads of Departments.

They are responsible for the correct coding of income and expenditure to appropriate account codes and project codes.

Computer-based Financial Systems

The integrity of the central computer-based financial systems is the responsibility of the Director of Finance. Access controls to the systems will be administered by the BUCS/MIS Section.

University Companies

The financial statements of companies wholly owned by the University or in which it has a controlling interest are consolidated, where material, into the University accounts. Details of interests in the companies are provided in the Notes to the Accounts.