Dear Vice-Chancellor or Principal
Annual accountability return requirements
1. This letter clarifies our requirements for the submission of annual accountability information by Wednesday 31 July 2013. A response is required from all higher education institutions.
2. Following consultation with the sector, through the British Universities Finance Directors Group, we decided to continue with dual submission dates for the financial tables and commentary respectively (‘Annual Accountability returns 2012’, HEFCE 2012/23). Institutions’ financial forecasts and associated commentaries are therefore required at the end of July.
3. Institutions are required to submit full financial forecasts for 2013-14 to 2015-16, and to update the 2012-13 forecasts submitted in December. These should take into consideration our recent grant announcements and any other information that the institution considers pertinent.
4. In the commentary that accompanies the financial forecasts institutions must answer the following questions (as stated in paragraph 58 of HEFCE 2012/23).
- Explain how the institution is ensuring its sustainability, including the institution’s strategy, quality of teaching and research, management of its key risks and investment in its estates and infrastructure.
- Explain the assumptions about student recruitment over the period of the forecasts, including how the institution is mitigating any risk and what scenario planning or sensitivity analysis has been undertaken.
- Explain significant movements (±10 per cent in any one year) on the income and expenditure account and material changes on the balance sheet (including the detail on any material exceptional items).
- Explain the key assumptions made in developing the financial forecasts.
In addition, we expect the commentary to explain any significant changes in the 2012-13 forecast from that submitted in December 2012.
5. We expect the financial forecast submission to have been approved by the governing body.
6. We will send detailed guidance directly to heads of finance by the end of May on how to make the submission of annual accountability information.
7.This year we issued annual risk assessment letters to institutions in April and May following our assessment of their December accountability returns, and this will be the normal timing in future years. However, if issues are raised in individual institutions’ forecasts, or at any other time in the year, that materially affect future financial sustainability, this may lead to a review of the institution’s risk status and a revised risk letter.
8. We will issue guidance about the annual accountability returns process for 2013 at the end of September.
Sir Alan Langlands