HEFCE Circular 3/96
1996 Mid-Year Financial Return
To Heads of Higher Education Institutions
Heads of DENI-funded Universities
Summary This Circular requests an update on the financial forecasts and student enrolments submitted in June 1995.
Reference 3/96
Publication Date February 1996
Response by 22 March 1996
Enquiries to Regional Financial Officers
1. In June 1995 institutions provided consolidated financial forecasts and student number projections over a five year period. This circular asks institutions to provide an update for the academic years 1995-96 and 1996-97 in a form broadly similar to the information requested in last year's mid-year financial return (Circular 8/95).
2. This information is needed for two purposes:
a. To help the Council monitor the financial health of institutions and their compliance with the requirements of the Financial Memorandum, for example on levels of unsecured borrowing.
b. To assist the Council in preparing advice for the Secretary of State for Education and Employment on the financial needs of the sector for the 1996 Public Expenditure Survey.
Outturn for 1995-96 and Revised Forecast for 1996-97
3. Institutions are asked to provide estimates of outturn for the academic year 1995-96 and a revised forecast for the academic year 1996-97. Reasons should be given for variances in income and expenditure compared with the June 1995 forecasts.
4. In interpreting the revised forecasts for 1996-97, the Council recognises that institutions will have had little time to assess the impact of the funding allocations for that year and to have reflected fully in their revised forecasts any action that may be necessary in the light of reduced allocations. Institutions will have an opportunity to take into account the impact of the funding allocations in their 1996 financial forecasts, to be provided at the end of June 1996.
5. Institutions are asked to provide their returns on the forms at Annex A which is consistent with the format at Table 1a of the 1995 financial forecasts (Circular 12/95 1995 Strategic Plans and Financial Forecasts).
Unsecured Borrowing
6. Information is also requested on levels of unsecured borrowing, in accordance with paragraph 27 of the Financial Memorandum between the Council and institutions. Institutions are asked to provide this information in the format at Annex B, in two parts as follows:
Short-term
7. Institutions are asked to provide information on negative net cash or cash equivalents (as defined under Financial Reporting Standard 1 Cash Flow Statements (FRS 1)) at the beginning of the academic year 1995-96; the highest level of negative net cash or cash equivalents during the academic year 1995-96 up to 29 February 1996; and the forecast level at the end of the academic year 1995-96. Where the net level of cash or cash equivalents is positive, institutions should record 'nil' in that section of the return.
Long-term
8. Institutions are asked to show the net position of long-term unsecured borrowing which exceeds the FRS 1 definition of cash equivalents.
General Reserves
9. Annex B also requests institutions to provide the estimated level of general reserves at 31 July 1996 and the revised forecast level of general reserves at 31 July 1997, taking account of the revised surpluses or deficits at Annex A.
Fundable and Non-Fundable Student Numbers
10. Institutions are asked to provide, at Annex C, updated student number projections for the current academic year and the following two academic years. These should cover total fundable and non-fundable registrations and new entrants and be prepared on the same basis as column 1 plus column 2 of the 1995 Higher Education Students Early Statistics (HESES) return.
11. Annex C also requests all institutions to provide updated projections of the number of UK, EC and Island undergraduate and postgraduate students expected to receive awards from English or Welsh LEAs, SAAS or DENI at the mandatory undergraduate fee levels, disaggregated according to the three fee bands. Institutions should provide this breakdown according to the fee band they expect a particular course to attract. These revised projections should then be on the same basis as those provided to the Council in June 1995 in response to Circular 12/95 Strategic Plans and Financial Forecasts.
Date of Return
12. All returns should be approved and signed by the head of the institution.
13. Two sets of hard copies of the tables and the completed disk, with files stored in Lotus 123.WK1 format or Excel version 4, should be returned to:
Joanne Iles
Analytical Services Division
HEFCE
Northavon House
Coldharbour Lane
Bristol
BS16 1QD
by Friday 22 March 1996.
14. Disks containing blank tables will be sent to Directors of Finance separately, together with a copy of this circular.
Further Information
15. Any queries arising from this Circular should be addressed to your Regional Financial Officer:
Team 1
Emma Lewis (0117 931 7377)
Heather Williams (0117 931 7113)
(North East, North West, North Midlands, Yorkshire, Open University, Northern Ireland)
Team 2
Richard Allen (0117 931 7389)
Philip Summers (0117 931 7376)
(Midlands, Home Countries, South Coast, South West)
Team 3
Brian Fenelon (0117 931 7217)
Linda Josh (0117 931 7225)
Karen Pritchard (0117 931 7328)
(London and South East)
Annex A Institution Probable Outturn Revised Forecast 1995-96 1996-97 #000 #000
Income
1. Funding Council Grants
2. Academic Fees and
Support Grants
3. Research Grants and Contracts
4. Other Operating Income
5. Endowment Income and
Interest Receivable
6. Total income
Expenditure
7. Staff Costs
8. Depreciation
9. Other Operating Expenses
10. Interest Payable
11. Total expenditure
12. Surplus/(Deficit) after
Depreciation of Assets
at Valuation and Before Tax
13. Taxation
14. Minority Interest
15. Surplus/(Deficit) after
Depreciation of Assets
at Valuation and Tax
Note of Historical Cost Surpluses and Deficits
16. Surplus/(Deficit) after
Depreciation of Assets
at Valuation and Tax
17. Difference between a
Historical Cost Depreciation
Charge and the Actual
Depreciation Charge for the
Year Calculated on the
Revalued Amount
18. Realisation of Property Revaluation
Gains of Previous Year
19. Historical Cost Surplus/(Deficit)
after Tax
Annex B Unsecured Borrowing Institution
At start of Highest level Forecast at
1995-96 to 29 February end of 1995-96
academic year 1996 academic year
Net Unsecured Borrowing
Short-term
Long-term
General Reserves Estimated Revised
Balance Forecast
at 31 July 1996 at 31 July 1996
General Endowments
Income and Expenditure Account
Total General Reserves
Annex C Student Numbers Fundable and Non-fundable Institution
1995-96 1996-97 1997-98
UK, EC Overseas UK, EC Overseas UK, EC Overseas
and Islands and Islands and Islands
Total Enrolled Numbers
Full-time and
Sandwich Year
Out
Part-time
New Entrants Full-time and sandwich Year Out Part-time
Award Holders Total Fee Band 1 Total Fee Band 2 Total Fee Band 3
Total
Approval by Head of Institution I confirm that I have approved the information at Annexes A, B and C. Signature ........................................... Name............................ Date ................