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Financial management

Introduction to the University's financial regulations - Financial Management


Sources of Income

Universities depend upon public funds for some of their annual income. The largest single component of their general income is derived from tuition and fee income associated with our student body.

Other major sources of income include:

  • OfS recurrent revenue grant
  • research grants and contract income
  • residences, hospitality, and retail income
  • investment income
  • income from consultancy and other professional services
  • residences and catering
  • donations and endowments given by individuals or corporate bodies

OfS Grant Conditions

The registration of the University by the OfS requires the University to meet a number of conditions. These include the following;

  • Access and participation for students from all backgrounds
  • Quality, reliable standards and positive outcomes for all students
  • Protecting the interests of students
  • Financial sustainability
  • Good governance
  • Information for students
  • Accountability for fees and funding

Receipt of grant payments from the OfS is governed by the terms and conditions of funding which establishes a number of responsibilities:

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

These include the following;

  • responsibilities of governing body, Council
  • appointment of the Accountable Officer
  • financial sustainability and commitments
  • material adverse events and reportable events
  • quality of provision of services to students

Vice-Chancellor and President (Vice-Chancellor)

The Vice-Chancellor and President is the Accountable Officer for the University, as defined in the OfS Regulatory Framework. Further information about the responsibilities of the Accountable Officer can be found in the OfS Regulatory Note 10.

The Vice-Chancellor is responsible to Council for monitoring and promoting efficiency, effectiveness, and economy in the University.

Director of Finance

The Director of Finance is responsible to the Vice-Chancellor for the day to day financial administration of the University and supports the Vice-Chancellor in the development of financial strategy and planning. The Director of Finance is responsible for the following;

  • preparing annual revenue and capital budgets, and financial forecasts
  • preparing accounts, management information, monitoring and reporting of income and expenditure against budgets and forecasts
  • providing support to budget holders on the management and control of their budgets
  • preparing the University’s AR&A and other financial statements and compliance returns which the University is required to submit to other authorities
  • ensuring that robust systems of internal control exist including within the finance systems
  • providing advice on all matters relating to financial regulations, policies and procedures
  • day to day liaison with internal and external auditors and bankers

Faculty Deans and the Dean of the School of Management (Deans)

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.

Deans will notify the Heads of Department in their Faculty of the budgets that the Dean has determined for that Department. Deans can vary the budget provided to Heads of Departments during the course of the year as required by the University and notified 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 Professional Service, Support and Self-funding centres are likewise ultimately responsible to the Vice Chancellor. Heads of these 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.

Budget Holders

Deans, Heads of Department, and other budget holders are responsible to the Vice-Chancellor for financial management in their areas of responsibility. They are advised by the Director of Finance in executing their financial duties, and must ensure proper use of funds in accordance with these Regulations and any procedural guidelines issued to budget holders; this includes delegated powers of authority for managing directly controlled pay and non-pay budgets.

Deans and Heads of Departments are responsible for establishing and maintaining clear lines of responsibility for all financial matters within their faculty or department. Where resources are devolved to budget holders, they are accountable to their head of department for their own budget.

Deans and Heads of Departments shall provide the Director of Finance with such information as may be required to enable:

  • compilation of the University’s financial records
  • preparation and implementation of financial budgets and forecasts
  • implementation of audit and financial reviews, projects and value for money exercises seeking to achieve efficiency, economy, and effectiveness of operations

It is a requirement of the OfS Terms and conditions of funding that Council is responsible for delivering value for money from public funds. It should keep under review its arrangements for managing all the resources under its control, taking into account guidance on good practice issued from time to time by the OfS, the National Audit Office, the Public Accounts Committee or other relevant bodies.
These responsibilities are delegated to Deans and Heads of Department for their areas of responsibility. This delegation is evidenced by the approval of budgetary control signature sheets and recorded within the finance system through the work flowing of transactions for approval.

Risk Management

The University acknowledges the risks inherent in its business, and is committed to managing these effectively, including those which pose a significant threat to the achievement of its financial budgets and forecasts.

Council has overall responsibility for ensuring there is a risk management strategy and a common approach to the management of risk throughout the University through the development, implementation and embedding within the organisation of a formal, structured risk management strategy and procedures.

In line with the risk management strategy, Council also requires that the supporting procedures include:

  • the adoption of a common approach to risk management
  • detailed regular review at department or support function level to identify, assess and monitor significant risks
  • development of risk management and plans to mitigate risk for all significant risks
  • regular reporting to Council of all risks above established tolerance levels
  • an annual review of the implementation of risk management arrangements

These responsibilities are delegated to Deans and Heads of Department through the requirement to develop and maintain a risk register for their areas of responsibility. Support in the identification and recording of risks can be obtained from the Director of Planning, Policy and Compliance.

Budgets and Resource Allocation

The Budget Process

The Director of Finance is responsible for preparing the University's budget and forecast. Budgets and forecasts are reviewed by UEB before being presented for approval to Finance Committee and Council. They are the aggregate of the detailed budget allocations of individual cost centres which are allocated to budget holders through the finance system, Agresso.

Budgetary Control

The control of income and expenditure within an agreed budget is the responsibility of the budget holder, who must ensure that monitoring is undertaken effectively. Budget holders are responsible to the Head of Department for the income and expenditure budget allocated to them. Budget holders are assisted in their duties by management information provided by the F&PO through the finance system.

Agreed budgets are notified annually to all budget holders for University-funded activity, budgets for externally funded activities are also recorded on the finance system.

It is the responsibility of the Dean to ensure that the income and 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 advice of the Director of Finance must be sought regarding any proposed financial commitment which cannot be met from within the budget allocations provided.

Carry Forward of Balances on Budget Allocations

Academic Departments The University will operate an incentive system to allow Faculties to retain a proportion of surpluses achieved against budget or forecast. These funds can be used at the Deans discretion on capital or revenue expenditure. All expenditure is subject to the rules described in these regulations. The incentive system will be subject to periodic review and changes agreed as part of the annual Budget and Forecasting process.

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.

Financial Reporting

Preparation of Annual Report and Accounts (AR&A)

The Director of Finance is responsible for preparing the University's AR&A and for ensuring that the audited AR&A are presented to Council for approval. The AR&A will previously have been presented to both Finance Committee and ARAC which is responsible for recommending their approval to Council.

The University’s financial year commences on 1 August.

Accounting Policies

The accounting policies used in the preparation of the AR&A are based on Financial Reporting Standard (FRS) 102 and the FE/HE Statement of Recommended Practice: Accounting for Further and Higher Education (FE/HE SORP).

Accounting Records

The accuracy of accounting records and balances on accounts under their control are the responsibility of the appropriate budget holder.

They are responsible for for the review and approval of the correct coding of income and expenditure to appropriate budget through the coding of the project and account code as recoded in the finance system.

Finance Systems (Agresso)

The integrity of the finance system is the responsibility of the Director of Finance. Access controls to the systems will be administered by Digital, Data and Technology.

University Subsidiaries

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


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