Finance Induction by iZcr2dLN

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									University and Student
       Finance
  Howard Bolton
Jonathan Croall       Paul Cropper
 Head of Student
Student Fee Manager   Deputy Director of
      Finance         Finance
Topics

Part 1 – University Finances
• Where does the university get its money from?
• Where is the money spent?
• How is money distributed within the university?
• What is the financial state of the university and the sector?
• What is your responsibility for finances?
• What is the Transparency Review?
Part 2 – Student Finances
• How are students funded and what do they pay?
• Where can advice and support be found?
Financial Services Mission

To support the recruitment and retention of students by maximising the
   investment of human and physical resources devoted to teaching and
   learning.
We will achieve this by:
• ensuring that the university remains financially strong
• achieving best value for money in all activities
• ensuring that decisions are taken within a framework where risk is
   acknowledged, monitored and controlled
Income & Expenditure – 2010/11



                                                      £m
     Income                                         139.0
     Expenditure (before FRS 17)                    123.5
                                                     15.5

     This is the income and expenditure for the day to
     day running of the University, including
     discontinued operations.
Where the money comes from?

                                         £m
Funding Council Grants                  61.8
Tuition Fees and Education Contracts    51.4
Research Grants and Contracts            3.1   Funding Council
Catering and Conferences                 1.1   Grants
                                               Tuition Fees and
Health Authorities                      12.9   Education Contracts
Other Sources                            7.9   Research Grants and
Interest Receivable                      0.8   Contracts
                                               Catering and
Total                                  139.0   Conferences
                                               Health Authorities


                                               Other Sources


                                               Interest Receivable
What does the HEFCE pay per FTE
student in 2011/12?

                       Price group         Mode       £

                                     FTS             6,239
Depends on the price
group within which a       B         SW (year out)   4,771

module falls and the                 PT              6,863

mode of study                        FTS             4,771

                           C         SW (year out)   4,771

                                     PT              5,248

                                     FTS             3,670
                           D         SW (year out)   4,771

                                     PT              4,037
 What and where?

What the money was spent on:            £m
                                              Academic
Staff                                  73.4   Departments
Staff Restructuring                     0.3
Depreciation                            3.5   Academic Services

Other Operating Expenses               38.8
Interest Payable                        2.5   Research Grants
                                              and Contracts
Total                                 118.5
                                              Catering and
                                              Conferences
Where the money was spent:              £m
                                              Premises
Academic Departments                   60.5
Academic Services                      17.1
                                              Administration and
Research Grants and Contracts           3.4   Central Services
Catering and Conferences                1.1
                                              Other
Premises                               13.8
Administration and Central Services    17.0
Other                                   5.4   Staff Restructuring

Staff Restructuring                     0.2
Total                                 118.5
Balance Sheet at 31 July 2011

Net Assets                           Total Funds
Fixed assets            £135,381k    Deferred capital grants    £26,709k
Endowment investments      £293k     Endowments                   £293k
Current assets:                      Reserves:
   Debtors               £14,666k       Revaluation reserve     £40,061k
   Investments            £3,351k       I&E reserve             £68,129k
   Cash                  £47,094k    Total Reserves            £108,190k
                         £65,111k       Total Funds
Short term creditors    (£27,781k)   Total Funds               £135,192k
Net Current Assets       £37,330k

Total Assets Less
Current Liabilities     £173,004k
Long Term Creditors          (£0k)
Provisions                (£309k)
Pension Liability       (£37,503k)
Net Assets              £135,192k
How is the money distributed?


 The DevRev model is
 simple, straightforward
 and transparent. All
 qualifying income is top-
 sliced to give the strategic
 provision [SP] and the
 remainder is split between
 schools and                    Strategic provision
 infrastructure.                Schools
                                Infrastructure
How much is distributed in 2011/12?



Devolved Revenue model for 2011/12:


            Schools                   £60.8m   57%
            Services                  £29.1m   27%
            Strategic provision       £12.8m   12%
            4% Reserves                £4.3m    4%
Allocation to schools and services in 2011/12
(Including Barnsley and Oldham activity)

   Schools                               Services
   Human & Health               £15.0m   Estates                 £9.3m
   Art, Design & Architecture    £8.3m   Computing & Library     £8.0m
   Computing & Engineering       £8.2m   Finance                 £1.8m
   Business                      £8.1m   Marketing               £1.8m
   Applied Sciences              £8.7m   VCO                     £1.6m
   Education & PD                £6.3m   University Campuses     £1.5m
   Music, Humanities & Media     £6.3m   Human Resources         £1.4m
   PCET Consortium               £3.8m   International Office    £1.0m
                                         PINS                    £1.0m
                                         Student Services        £0.8m
                                         Research & Enterprise   £0.6m
                                         Registry                £0.5m
Financial Security of Universities (Each institution
is scored on the basis of it’s financial strength)
                                      The Security Index 2009-10
  700
        Lower Quartile: 240.00
        Average:        329.99
        Upper Quartile: 405.00                                                                           Huddersfield 2009-10, 520.00

  600


                                                                                         Huddersfield 2008-09, 439


  500
                                                                      Huddersfield 2007-08, 399

                                                        Huddersfield 2006-07, 370


  400




  300




  200




  100




    0

                                 Lower Quartile   Mid Range      Upper Quartile
Condition of the Estate (A and B represents
good quality)
                                    Percentage of Estate classed as condition A or B 2009-10
  100.0
          Lower Quartile: 66.20%
          Average:        75.32%                                                    The University of Huddersfield, 85.0
          Upper Quartile: 90.00%
   90.0
                                                 Huddersfield 07-08 & 08-09, 77.0

                                   Huddersfield 06-07, 75.5
   80.0



   70.0



   60.0



   50.0



   40.0



   30.0



   20.0



   10.0



    0.0

                                         Lower Quartile                Mid Range                   Upper Quartile
Surpluses/(Deficits) for each institution
                                Percentage of Historical Cost Surplus / (Deficit) to Total Income (excluding FRS17) 2009-10
   25

         Lower Quartile: 1.73
         Average:        4.15
         Upper Quartile: 7.08
   20

                                                                                                                               Huddersfield 2009-10, 14.17


   15



                                                                                                                  Huddersfield 2008-09, 8.02
   10
                                                                                  Huddersfield 2007-08, 4.61


                                                 Huddersfield 2006-07, 3.79

    5




    0




    -5




   -10

                                                      Lower Quartile          Mid Range          Upper Quartile
Staff costs as a percentage of income

                               Percentage of Staff costs (excluding FRS17) to Total Income 2009-10

  80
       Lower Quartile: 51.76
       Average:        54.52                                                                                                                Huddersfield 2007-08, 59.32
       Upper Quartile: 59.00
                                                                                                              Huddersfield 2006-07, 59.21
  70
                                      Huddersfield 2009-10, 54.54               Huddersfield 2008-09, 58.79


  60




  50




  40




  30




  20




  10




  0

                                             Lower Quartile         Mid Range             Upper Quartile
Teaching grant from the Funding Council as a
percentage of total income
                                Percentage of Recurrent Teaching Grants to Income 2009-10
   70

        Lower Quartile: 18.00
        Average:        28.07
        Upper Quartile: 37.42
   60
                                                                                                                             Huddersfield 2006-07, 45.06
                                                        Huddersfield 2009-10, 39.49
                                                                                                  Huddersfield 2007-08, 43.26
   50
                                                                                               Huddersfield 2008-09, 42.03




   40




   30




   20




   10




   0

                                       Lower Quartile     Mid Range           Upper Quartile
Historical cost surplus as a percentage of
                total income


              Historical cost surplus as a percentage of total income

   14.0%

   12.0%                         University
   10.0%                         Sector
    8.0%

    6.0%

    4.0%

    2.0%

    0.0%
           2005/06    2006/07   2007/08       2008/09   2009/10   2010/11
Total staff costs as a percentage of total
                  income


          Total staff costs (excluding restructuring and FRS 17)
                       as a percentage of total income
    65%

                                                              Sector

    60%                                                       University



    55%




    50%
           2005/06   2006/07    2007/08   2008/09   2009/10       2010/11
                           Liquidity


                Liquidity (as days of expenditure)
200

                                       University
150                                    Sector

100



 50



  0
      2005/06   2006/07     2007/08     2008/09      2009/10   2010/11
Sector Risks


•   Admissions
•   International students
•   Government funding
•   Finances and investments
•   Capital expenditure
•   Pay costs
•   Pension costs
•   Business links
Financial Context
 Reduced funding expected from:

 •   HEFCE Teaching grant
 •   HEFCE Research grant
 •   NHS income
 •   TDA grant
 •   Part-time fee income

 Increased funding expected from:

 • Full-time Home & EU undergraduate fee per student
 • Overseas students
 • Research and Enterprise activity (matched by expenditure)
Financial controls

“To conduct its business effectively a University needs to
  ensure that it has sound financial management systems
  in place and that they are strictly adhered to…...
  Compliance with the financial regulations is compulsory
  for all staff connected with the University.”
Financial controls - Responsibilities



University Council

Financial Services

Individual Schools and Services
Role of Council

Responsible for:
• Effective and efficient use of resources, the solvency of the
   University and for safeguarding its assets
• Approving annual estimates of income and expenditure
• Considering and approving the annual accounts
These responsibilities may not be delegated.
However, Council must establish a (Finance) Committee (and an Audit
   Committee).
Also must:
• make financial rules to ensure the proper administration and control
   of the University’s resources
• cause to be kept accounts and records
• approve arrangements to determine tuition and other fees
Members must declare any financial interests
Financial regulations – Financial control

• The Vice-Chancellor is the University’s designated accounting
  officer and is responsible for the regulation, direction and
  management of the University
• The Director of Finance controls day to day financial administration
• The Dean/Director or Head of Service is responsible for financial
  management in his own area – he/she is advised by Financial
  Services in executing his/her financial duties and assisted by
  management information provided by Financial Services
Financial control - Financial Services

Responsible for:
• Annual revenue budget and capital programme
• During the year producing revised budgets
• Rolling five year financial plan
• Preparing financial information, monitoring and control of income
  and expenditure against budget
• Submitting budgetary reports on all aspects of the University’s
  finances to University committees
• Preparing financial statements and other financial returns and
  reports
• Ensuring that the university maintains satisfactory financial systems
Financial control - Schools & Services

Responsible for:
• Economic, effective and efficient use of resources
• Safeguarding assets allocated to them
• Producing detailed budgets using the resources made available to
  them
• Control of income and expenditure within the agreed budget
  including effective day to day monitoring
• Reporting significant departures from agreed budgets
• Establishing and maintaining clear lines of responsibility within the
  school/service for all financial matters. Where resources are
  devolved to budget holders they are accountable to the
  dean/director or head of service for their own budget
Financial regulations – What do
they contain?
Guidance provided on:
• Financial Control
• Income and banking
• Research grants and contracts
• Expenditure
• Salaries and wages
• Assets
• Other (e.g. Risk management)
Financial regulations – Operational issues (1)

• Cash Receipts – all monies received must be recorded daily and
  paid into Financial Services at least weekly
• Collection of debts – all invoices must be raised promptly on official
  University invoices. Financial Services are responsible for
  implementing credit arrangements and taking swift and effective
  action to collect overdue debts.
• Petty cash – items less than £10 should be paid by purchasing card.
  If not possible use petty cash. Receipts or vouchers must be
  obtained. Each school/service is responsible for safe keeping of
  cash. Financial Services agree total available to each school/service
  and reimburse funds before total amount has been spent.
Financial regulations – Operational issues (2)


• Ordering goods – use orders produced from the University’s finance
  system (except petty cash, purchasing cards)
• Tendering - £3k-£25k (quotes); £25k upwards (tenders); >£139,893
  (EU threshold tenders)
• Payment of invoices – weekly payment run by automatic transfer
  into suppliers bank accounts. The University’s terms of payment are
  30 days from receipt of invoice
• Employees’ expenses – must be in accordance with Expenses and
  Benefits Procedures Manual, authorised by line manager. Weekly
  payments into account of employee
Risk management

Review process:
• Corporate risks identified
• These risks are considered by the Audit Committee before going to
  Council
• The risks are included with the strategic planning contextual
  document circulated to Deans and Directors
• Deans and Directors identify the key risks they face and these are
  included within their planning document
• Corporate and local risks are reviewed during the year
Finance policies and procedures
Available on the Financial Services pages of the University web site:
• Financial regulations
• Master forms
• Fraud and corruption response plan
• Expenses and benefits procedures manual
• Guidance notes (budgets, etc…)
• Treasury management policy
• Insurance guide
Fraud and Corruption Plan

The plan defines the process to enable the University to:
•   Prevent further loss
•   Notify the Police of any potential criminal act
•   Establish and secure evidence necessary for disciplinary action
•   Notify HEFCE, if appropriate
•   Keep all personnel with a need to know suitably informed
•   Inform the police and establish lines of communication with them
•   Assign responsibility for investigating the incident
•   Review the reasons and prevent a recurrence
•   Recover losses
•   Take appropriate disciplinary action
Transparency Review at Huddersfield

• Costing the activities of the University of Huddersfield
• Process is driven via a web site -
  http://tranrevw.hud.ac.uk.
• Assistance available from the costing team and
  school/service champions
• Objective is to minimise the burden on staff
• Full economic costing
 Financial Support for Students
Academic Year 2011/12 Onwards
Tuition Fee Rates 2011/12


 • Fees of up to £3,375 from 2011/12 are to be charged in
   respect of full-time courses at HEFCE funded
   institutions.
 • Excludes NHS, TDA, post-grad, part-time courses.
 • Part-time fees are set by each university for each
   course, usually pro-rata to the standard full-time fee.
Key Point

• Parents don’t pay tuition fees.


• Students don’t pay tuition fees.

• Graduates pay tuition fees.
Tuition Fees


• Universities can charge up to £3,375 per year.
• No student now needs to pay up front.
• Tuition Fee Loans to cover cost – administered by the
  government.
• Tuition fee income helps the University to improve
  facilities and offer a better student experience.
Student Financial Assistance

 • Means tested Maintenance Grants of up to £2,906.

 • Means tested University Bursaries.

 • Student Maintenance Loans.

 • Tuition Fees of up to £3,375 – No Means Testing.
Grants – for living expenses

• Means tested non repayable grant of up to £2,906
  from the government.

• Each university will have to pay a minimum £338
  bursary to students that receive the full grant.

• Huddersfield offers up to £500 means tested bursary
Student Maintenance Loans

• Available to all full time students
• Elsewhere - £4950
• Living at Home - £3838

• The amount of loan you will be eligible to apply for will
  depend on the amount of state grant you receive. Eg.
  The loan will be reduced by £0.50 for every £1 of grant
  the student receives up to a maximum reduction of
  £1453.
Financial Support (non-repayable grants)

Government                     Additional support from Huddersfield
Grant
Government Grant               Students with family income up to £25,000 per year
For students with family
income up to £25,000.
Partial grants available for
students with family income
up to £50,020




£2,906                         £500 per yr
Paying it Back

 Income Each Year   Monthly repayment   Repayment as a
                                        Percentage of
                                        Income
 Up to £15,000              0                   0

 £16,000                  £7.50                0.6

 £17,000                   £15                 1.1

 £18,000                  £22.50               1.5

 £19,000                   £30                 1.9
Income of Huddersfield students or their families


                                                               Income distribution University of Huddersfield 2007-08
                                                                           (Student Loan Company data)


                            70.0




                            60.0




                            50.0
       Cumulative percent




                            40.0




                            30.0




                            20.0                                                                                                    Dotted purple line
                                                                                                                                indicates anticipated grant
                                                                                                                                  eligibility in 2008-09
                            10.0




                             0.0
                                   0   2.5   5   7.5   10   12.5   15   17.5   20   22.5   25   27.5   30   32.5   35   37.5   40   42.5   45   47.5   50   52.5   55   57.5   60
                                                                                            Residual incom e £k
Part-time students

Will generally pay at half the full-time rate (of £562.50 per
20 credit module) ie £300 per 20 credit module.

Currently these fees continue to be paid “up-front” (ie
are not included in the new deferred fees regime for
full-time students).
2012/13 onwards



• Changes to the student support system
• We are charging £7950 per year for our undergraduate
  degree courses.
• Tuition Fee Loan covers all the fees
• Student Loans and Grants available as before
• New National Scholarship Scheme
• Students repay after graduation – threshold rises to £21k
Points to remember

• Students don’t pay fees up front
• Students from lower income families will be better off
  while they study
• Graduates earn an average income premium of 40%
  over a lifetime
• Not a debt – an investment!
Useful contacts – internal/external

•   Student Fee and Bursary Manager [U]   •   Inland Revenue
    – Jonathan Croall                         www.inlandrevenue.gov.uk/taxcredits
    01484 472536
                                          •   DfES
    Student Support Manager [U]               www.dfes.gov.uk/studentsupport
    – Jean Adams-Mack
    01484 473201                          •   Teacher Training
    www.hud.ac.uk/finance/index.htm           0845 6000 992
                                              www.canteach.gov.uk
    Student Income Manager [U]
    – Kirsty White                        •   Disabled Students’ Allowances
    01484 472569                              0800 731 9133
                                              www.dfes.go.uk/studentsupport/formsandguid
•   Student Loans Company                     es/index.shtml
    0800 405 010
    www.slc.co.uk                         •   Child Tax Credit helpline
                                              0800 500 222
•   NHS Student Grants Unit
    01253 655655                          •   National Union of Students
                                              www.nusonline.co.uk
•   Scholarship Search UK
    www.scholarship-search.org.uk

•   Educational Grants Advisory Service
    www.egas-online.org.uk
 Want to know more about university
 finances?

Information is available from:
• University web site (www.hud.ac.uk/finance/index.htm)
• HEFCE web site (www.hefce.ac.uk)
   – A guide to UK HE
     (http://www.hefce.ac.uk/pubs/hefce/2009/09_32/)
   – How HEFCE allocates its funds
     (http://www.hefce.ac.uk/pubs/hefce/2008/08_33/)
• Student Finance Office (level 8)
• Financial Services Department (level 8)
• Published accounts and other financial reports

								
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