30 March 2005

To	Heads of HEFCE-funded higher education institutions

Direct Line	0117 931 7300
Direct Fax	0117 931 7203

Circular letter number 07/2005

For further information contact Paul Greaves, tel 0117 931 7378; e-mail p.greaves@hefce.ac.uk

Dear Vice-Chancellor or Principal

HEFCE's institutional risk assessments

1. In 2004 we consulted on a new code of practice on audit and accountability (HEFCE 2004/27). Respondents to the consultation supported the proposal that we should be transparent with the higher education institutions (HEIs) we fund about our risk assessments of them.

2. We have been developing our risk system to put this approach into practice. Within the next few weeks, a small number of institutions will receive a letter from us stating that we consider them to be at risk, unless they, with our support, continue to mitigate the risks specified.

3. From 2006 we will give a formal risk assessment to all HEIs, not just those we consider at risk. This will incorporate the existing annual audit letter we send summarising our assessment of how an HEI has met its reporting obligations under the Audit Code. The audit letter will be issued separately for this year.

4. We will be consulting on aspects of the accountability process later in 2005, and our plans may change as a result.

Yours sincerely

Howard Newby
Chief Executive