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Returns should be made in December 2012 and July 2013.

Executive summary


1. This document asks higher education institutions (HEIs) to send us their annual accountability returns for 2012. The accountability returns form a significant way in which HEIs can demonstrate accountability for the public funds distributed to them.

Key points

2. The accountability returns enable HEFCE to reassess HEIs’ overall risk assessments and to ensure that HEIs are meeting their accountability responsibilities.

3. The various returns cover financial performance, financial sustainability, risk management, control and governance, value for money, and the management and quality assurance of data. In addition to the documentation requested in the annual process itself (as detailed below) we will also consider other sources of assurance.

4. Following consultation with the sector, through the British Universities Finance Directors Group, we have made the decision to continue with dual submission dates in the future in respect of the financial tables and commentary. Therefore, the following requirements will apply:

  1. HEIs will be required to submit, by Monday 3 December, updated financial tables showing the actual performance and position for 2011-12, and an updated forecast for 2012-13, along with a commentary that explains any significant changes from the data submitted in the June 2012 forecasts.
  2. HEIs will be required to submit, by Wednesday 31 July 2013, financial tables showing the updated forecast for 2012-13 and forecasts for 2013-14, 2014-15 and 2015-16, along with a full commentary that answers the questions specified in paragraph 58.

By exception, we may request that some institutions submit full forecasts in December, but this will be discussed with any institutions affected in advance of the submission date.

5. We require that 2012 annual accountability returns are approved by the governing body prior to submission – this includes the returns submitted in December 2012 as well as the financial forecasts and commentary that will be submitted in July 2013. If this creates difficulties for HEIs we request that they contact their HEFCE assurance consultant to discuss. As a minimum we will expect HEIs to provide a draft of the financial forecast tables by the due date.

6. Following our review of the returns we will notify each HEI of our risk assessment through a letter to the chair of the governing body and head of HEI. This is an annual process but we may revisit an HEI’s overall risk assessment at any time if there is a significant change in circumstances. Until a new letter is issued HEIs can assume that the last risk assessment letter is still valid. We remind all HEIs of their obligation, under the Financial Memorandum with HEFCE, that they should inform us of any material adverse change in their circumstances (see ‘Model Financial Memorandum between HEFCE and institutions‘, HEFCE 2010/19).

7. The documents to be sent to us, and their submission dates, are as follows:

Annual assurance return



3 December 2012

Annual monitoring statement (AMS)

Signed audited financial statements

Financial results and updated forecast tables for 2012-13

Commentary: explanation of significant variances between the current and June 2012 submissions

Audit committee annual report

External audit management letter and management responses

Internal audit annual report

Value for money report (optional)

Higher Education Students Early Statistics Survey (HESES) 2012-13 return

11 December 2012

Transparent Approach to Costing (TRAC) return

31 January 2013

Forecast tables to 2015-16

Financial commentary

31 July 2013

8. This publication gives guidance on the returns that are to be submitted to us: by 3 December 2012; 31 January 2013 (in the case of TRAC); and 31 July 2013 (in the case of financial forecasts and commentary). Note that this guidance lays out the minimum requirements for submission, and we request that HEIs provide all of the requested information in the return; for example, please ensure that your financial commentary answers all of the questions in the guidance.

9. Detailed guidance on the requirements of the HESES return is provided in a separate HEFCE publication, ‘HESES12: Higher Education Students Early Statistics Survey 2012-13’ (expected to be published by the end of September 2012). Please note that HEFCE has issued advanced notification of changes to the HESES return for 2012-13 (‘Early notification of planned changes to HESES and HEIFES and implications for 2012-13 student number control’, HEFCE Circular letter 15/2012).

10. We will primarily use the information collected to:

  1. Monitor the use of our funds for the purposes intended.
  2. Assess compliance with the Financial Memorandum.
  3. Form a basis for discussion with HEIs about their progress in key areas, their priorities for strategic development, and their current and future performance.
  4. Largely determine our risk assessments of each HEI.
  5. Identify trends across the sector and advise the Secretary of State for Business, Innovation and Skills on the needs and development of the higher education sector.

Action required

11. The returns must be submitted by the deadlines shown in paragraph 7 via the new secure area of the HEFCE web-site (this can be accessed from the annual accountability returns section of the HEFCE web-site – see paragraph 17j). The required documents are:

  • scanned PDF copy of the completed annual assurance return (Annex E) with part 1 signed by the accountable officer and part 2 signed by an appropriately authorised trustee (note: part 2 is not required from HEIs that are either not a charity, or are registered with and make an annual return directly to the Charity Commission)
  • completed AMS template
  • scanned PDF copy of the signed audited financial statements
  • completed financial results and forecast tables (see paragraphs 51-54 for details of when each part of these returns is due)
  • financial commentary (for which detailed questions are provided in paragraph 58 and an optional template is provided in Annex C)
  • audit committee annual report
  • external audit management letter and management responses (combined in a single document)
  • internal audit annual report
  • value for money report (optional)
  • completed TRAC return reporting for 2011-12.

12. Templates for the AMS, financial tables and TRAC return will be available by early October 2012. We will write to heads of finance and our AMS contacts in each HEI at the beginning of October with details on how to access the templates and how to return information to us.

13. Templates for the financial forecast tables for the July submission will be made available in early May 2013. We will write to the heads of finance in each HEI at the beginning of May with details on how access to the template and how to return information to us.

Date: 17 September 2012

Ref: HEFCE 2012/23

To: Heads of HEFCE-funded higher education institutions, Heads of universities in Northern Ireland

Of interest to those
responsible for:

Audit, Estates, Finance, Governance, Management, Planning, Student data, Research data

Enquiries should be directed to:

HEFCE higher education policy advisers (on annual monitoring and data returns).

HEFCE assurance consultants (for financial and audit accountability returns).

There are searchable contact details for HEFCE staff at