September 2010 | ref: Circular letter 23/2010
Dear Vice-Chancellor or Principal
1. This letter asks English higher education institutions (HEIs) that are exempt charities to review and confirm some details regarding subsidiary, associated or linked charitable entities, to ensure that all such entities are appropriately regulated. It also asks for comments on proposals intended to improve the consistency of reporting about those entities.
2. On 1 June 2010, HEFCE became principal regulator of English HEIs that are exempt charities. HEFCE’s remit extends to those exempt charities that are administered by or on behalf of an exempt charity HEI and fall within paragraph (w) of Schedule 2 of the Charities Act 1993 ('paragraph (w) charities').
3. When we consulted about our information requirements as principal regulator ('Regulating higher education institutions as charities: Consultation on HEFCE's information requirements as principal regulator', HEFCE 2009/45) we suggested that there are inconsistencies in the identification of and accounting for paragraph (w) charities. We proposed – and 94 per cent of respondents agreed to – a one-off exercise by exempt charity HEIs to ensure that all charitable entities with which an HEI is associated are appropriately regulated, either by HEFCE or by the Charity Commission.
4. Accordingly, we now ask exempt charity HEIs:
As far as possible, tasks a, b and d should be completed by the time the 2010-11 financial statements are approved. Comments on the reporting proposals (task c) should be sent to us by Wednesday 15 December 2010.
5. We assume that HEIs are already able to identify their paragraph (w) charities and provide core information about them. However, confirming the classification of paragraph (w) charities may not be straightforward in all cases. Annex A provides guidance to help HEIs determine the charitable status of entities with which they are associated.
6. Annex A has been written with input from the Charity Commission, and interprets for HEIs the Commission's operational guidance on paragraph (w) charities and the regulation of 'linked' registered charities. The latter is not directly applicable to exempt charities, but the sections dealing with 'distinct' (or separate) charities are relevant.
7. In carrying out the review, we expect some HEIs will find anomalies or will be uncertain about the classification of some entities. It is possible that some entities will need to apply for registration with the Charity Commission. We would ask HEIs to raise these issues with us as they arise. Where necessary, we will discuss the circumstances with the Charity Commission. HEFCE and the Commission wish to resolve issues by negotiation with the HEI concerned, with a view to ensuring appropriate future regulation.
9. HEFCE's Financial Memorandum with HEIssee note 1 requires that, by 31 January 2011, each exempt charity HEI will have created on its web-site a 'gateway' page through which there is ready public access to information about itself as a charity. We suggest, but do not require, that HEIs use the same gateway to enable access to the above core information about those paragraph (w) charities whose details are separately disclosed in the annual financial statements (see paragraph 11).
10. Ideally, HEIs would report in the notes to their consolidated financial statements on the performance of all of their paragraph (w) charities. For some HEIs, this might be possible. But there are many HEIs with large numbers of paragraph (w) charities, for whom that level of reporting would be disproportionate.
12. When it has completed its review, the accountable officer should write to confirm that the institution has accurate and up-to-date records of all of its paragraph (w) charities and would be in a position to provide details to HEFCE as principal regulator, on request. The letter should also indicate whether those records are or will be accessible on the institution's web-site.
13. If an HEI has no paragraph (w) charities the accountable officer should write to us accordingly.
14. By Wednesday 15 December 2010, institutions should send us any comments on the proposed disclosures of information about paragraph (w) charities in annual consolidated financial statements.
15. In both cases, letters should be sent to Andrew Malin at HEFCE, Northavon House, Coldharbour Lane, BRISTOL BS16 1QD. Any questions about this circular letter should be e-mailed to email@example.com.
Sir Alan Langlands
|Enquiries should be directed to:||Andrew Malin (tel 0117 931 7332, e-mail firstname.lastname@example.org)|
Page last updated 22 February 2012