Introduction by the Vice-Chancellor

The main purpose of this booklet is to set out the financial regulations which have been approved by the University Council.

The policies and procedures included here form part of a system of accountability established by Parliament. They are to be read in conjunction with the Financial Memorandum between the Higher Education Funding Council for England (HEFCE) and the University. The Financial Memorandum in turn is to be read in conjunction with the HEFCE Code of Practice on Accountability and Audit (HEFCE Report 2004/27) which prescribes a system of financial controls for higher education institutions.

The efficiency of the administration of the University and of the way in which it observes the terms of the Financial Memorandum and of the Audit Code of Practice is monitored by the internal auditors, the external auditors, the HEFCE auditors and the National Audit Office (NAO).

Copies of this booklet are circulated to all Faculty Deans, Heads of Departments, Academic Services, Central Service Units and other Cost Centres, and to all senior administrators in both academic and non-academic cost centres, and authorised signatories. Compliance with the Financial Regulations is mandatory for all members of Council, employees and students.

Professor G Breakwell Vice-Chancellor

How to use this document

The Financial Regulations were originally approved by Council at its meeting on Friday 8 December 1995. They set out the basic principles that govern the conduct of the University's financial affairs.

As the Regulations set out general principles it is unlikely that they will change very often.

The more detailed Financial Procedures describe in detail how a specific financial activity can best be carried out. As such they set out recommended best practice and should normally be followed by all Spending Units, unless the Director of Finance specifically approves a variation in writing.

As we live in a rapidly changing world and Financial Procedures describe the detail of actual operations, it is anticipated that these will necessarily change over time to accommodate changing practice.

Changes to Financial Regulations or Financial Procedures will be made on the Finance Office web site and will be highlighted on the University and Finance Office web pages. Each page of the Financial Regulations and Financial Procedures will carry the date of the last revision.

It is the personal responsibility of the Head of Department to ensure that the existence of the Financial Regulations and Procedures, and the importance of observing its provisions is made know to all employees within their department.

Members of staff in the Finance Office are always willing to help staff in Departments who have queries concerning any matter relating to Financial Regulations or Financial Procedures. If you have any concerns, or are unsure about a particular aspect of a specific Regulation or Procedure, please ask for advice.

Similarly, if your Department is about to undertake a new activity which you feel is not adequately covered by existing Financial Regulations or Procedures, please contact the Finance Office at an early stage so that we can advise, and if necessary develop with you a new Financial Regulation or Procedure.

Mrs Diane Aderyn Director of Finance

Glossary Of Terms

The following terms are among these found in the Financial Regulations and in financial reports generally.

Accounts comprise the income and expenditure account (including footnotes), the balance sheet, the cash flow statement and the statement of total recognised gains and losses.

Authorised Signatory is the member of staff committing funds for and on behalf of the University.

Budget (Revenue) is the annual allocation of funds to be spent on the operation of a Department, net of any under or overspends brought forward from previous years.

Departments are the major budget centres in the University. They include academic departments and schools, administrative departments and self-financing centres. All references to Departments include the School of Management.

Designated Office Holder has the responsibility of advising Council if any projected action or policy would be incompatible with the terms of the Financial Memorandum.

Employeeis a person employed, whether part-time or full-time, by the University or a University Company under a contract of employment.

Endowments are those bequests and gifts where the express or implied intention of the benefactor is that the capital should be retained for the ongoing benefit of the institution.

Endowments (General) are those endowments where the use of the capital and income, or only the income, is for the general purposes of the institution.

Endowments (Specific) are those endowments where the use of the capital and income, or only the income, is for a specific purpose or activity so designated by the donor and which can only be used for that purpose or activity.

Facultiesare groupings of academic departments in related disciplines. All references to Faculties include the School of Management.

Financial Administrationis the preparation of accounts, management information, monitoring and control of expenditure against budgets and all financial operations.

Financial Memorandum sets out the terms and conditions for the payment of grant by HEFCE to the University.

Financial Statements comprise the accounts, the statement of accounting policies and the notes to the accounts.

Fixed Assetsare those assets intended to be held for use on a continuing basis in the activities of the University, with a value greater than £25,000.

HEFCE Higher Education Funding Council for England.

HEFCEAS Higher Education Funding Council for England Audit Service.

HEI Higher Education Institution.

Income (General) is that which can be applied to any activity of the institution at the discretion of the institution. Examples of such income are funding council recurrent grant, students' tuition fees and income from general endowments.

Income (Restricted) is that which can only be applied to a specific purpose or activity so designated by the grantor or donor. Examples of such income are funding council grants for specific purposes, most research grants and contracts and income from specific endowments.

Intellectual Property is a collective term covering inventions, discoveries, literary works, software, images, designs, trade marks, and plant varieties. Ownership of rights in IP generally provides the owner with a right to prevent others using it unless they have permission or a licence. The Copyright, Designs and Patents Act 1988 and the Patents Act 1977 are the principal relevant legislation.

Inventory Equipment is any items of plant, computers, etc with a value in excess of £1,000.

Investments (Current Asset) are investments other than fixed asset investments or endowment asset investments.

Investments (Endowment Asset) are those investments held for endowment funds where the income and/or the capital of the funds are required to be used for specific or general purposes of the institution as determined by the terms of the endowment.

Investments (Fixed Asset) are those investments intended to be held for use on a continuing basis in the activities of the HEI. An investment should be classified as a fixed asset only where an intention to hold the investment for the long term can clearly be demonstrated or where there are restrictions as to the investor's ability to dispose of the investment.

NAO National Audit Office.

Provisions are amounts set aside as being reasonably necessary to provide for a liability or loss that is likely, or certain, to be incurred, but is uncertain as to amount or timing.

Reports and Financial Statements comprise the treasurer's report, the auditor's report and the financial statements.

Reserves are the accumulated surplus of income over expenditure, including unspent departmental allocations. Some reserves are ear-marked for specific purposes.

Revaluation Reserve is the sum of unrealised amounts arising from the revaluation of the institution's assets.

University Company is any company over which the University has control.


These Regulations apply to all the activities of the University of Bath, to all funds administered by the University, and to its companies in cases where the Boards of Directors of these companies have resolved to comply with them. All existing companies have so resolved.