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Institutions must submit updated financial tables by Monday 1 December 2014

Institutions must submit their annual monitoring statement by Wednesday 3 December 2014.

Executive summary

Purpose

1. This document asks higher education institutions (HEIs) to send us their annual accountability returns for 2014. The accountability returns are a significant part of the way in which HEIs can demonstrate accountability for the public funds distributed to them.

Key points

2. The various returns cover financial performance, financial sustainability, risk management, control and governance, value for money, the management and quality assurance of data, and opportunities and challenges for institutions. In addition to the documentation requested in the annual process itself, we will also consider other sources of assurance such as:

  • HEFCE assurance reviews
  • HEFCE data audits and reconciliation of data from Higher Education Students Early Statistics returns and the Higher Education Statistics Agency
  • reviews by the Quality Assurance Agency for Higher Education and the Office for Standards in Education
  • the Capital Investment Framework and Estate Management Statistics. 

3. We will primarily use the information collected to:

  • monitor the use of our funds for the purposes intended
  • assess compliance with the Financial Memorandum (Memorandum of assurance and accountability from 1 August 2014)
  • largely determine our risk assessments of each HEI
  • form a basis for discussion with HEIs about their progress in key areas, their priorities for strategic development, and their current and future performance.
  • identify issues and developments across and within parts of the higher education sector, anticipate change and develop well-informed policy responses where necessary
  • inform our advice to the Secretary of State and the Department for Business, Innovation and Skills (BIS) on the provision of higher education in England. 

4. We have made some changes to our requirements. See paragraph 16 for details.

Efficiency and value for money

5. HEFCE has been asked to work with BIS and Treasury ministers, the Research Councils and vice chancellors to build on the Diamond and Wakeham reviews to drive further and faster improvements in efficiency. Universities must continue to demonstrate good value for money and one way in which they can do so is share their annual value for money (VFM) reports with HEFCE. Therefore, HEIs are asked to submit an annual VFM report as part of the annual accountability returns in December. This is not a mandatory requirement, but we strongly encourage HEIs to submit this information to help provide a better evidence base of VFM activities in the sector. This reporting is intended as a non-burdensome opportunity to demonstrate the value for money institutions provide to students and the taxpayer.

Feedback following our review of the returns

6. We will share broad findings in a number of ways – for example, in our sector-wide report on our analysis of the financial health of the sector, and in our annual report on higher education in England. We may also use this information internally for other analyses relating to our functions, and such analyses may be shared with other public bodies (including BIS) as the need arises.

7. 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 the HEI’s accountable officer usually during April or May 2015. 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 its circumstances. Until a new letter is issued, an HEI can assume that its last risk assessment letter is still valid.

Material adverse changes

8. We remind all HEIs of their obligation, under the Memorandum of assurance and accountability with HEFCE, that they should inform us of any material adverse change in their circumstances (see ‘Memorandum of assurance and accountability between HEFCE and institutions’, HEFCE 2014/12, paragraph 57).

Action required

9. The following requirements will apply. 

  1. HEIs must submit, by Monday 1 December 2014, updated financial tables showing the actual performance and position for 2012-13 (pre-filled) and 2013-14, along with a commentary that explains any significant changes from the data submitted in the July 2014 forecasts.
  2. HEIs must submit, by Friday 31 July 2015, financial tables showing the probable results for 2014-15 and forecasts for 2015-16, 2016-17 and 2017-18, along with a full commentary that answers the questions specified.

We may exceptionally request that some institutions submit full forecasts in December, but this will be discussed with any institutions affected before the submission date.

10. More detailed guidance on the main documents to be returned is given at Annex A. Templates for the Annual Monitoring Statement (Annex B) and financial tables (see Annex C guidance) will be available by early October 2014. Templates for the financial commentary are given in Annex D. The template for the Annual Assurance Return is given at Annex E, with guidance at Annex F. Annex G gives information about where guidance on the HESES return may be found. The template for the Transparent Approach to Costing return will be available by early October 2014 (see Annex H).

11. We will write to the accountable officer, heads of finance and our Annual Monitoring Statement contacts in each HEI at the beginning of October with details on how to access the templates and return information to us.

12. Templates for the financial forecast tables for the July 2015 submission will be made available in April 2015. We will write to the heads of finance in each HEI in April with further guidance and details of how to access the template and return information to us.

Downloads

Main report

Download the Annual accountability returns 2014 as PDF (233 KB)Download the Annual accountability returns 2014 as MS Word (492 KB)

Annex A: Financial statement, audit and value for money returns guidance

Download the Annex A: Financial statement, audit and value for money returns guidance as PDF (127 KB)Download the Annex A: Financial statement, audit and value for money returns guidance as MS Word (151 KB)

Annex B: Annual monitoring statement guidance

Download the Annex B: Annual monitoring statement guidance as PDF (197 KB)Download the Annex B: Annual monitoring statement guidance as MS Word (163 KB)

Annex C: Financial results and forecast tables 2014 – guidance

Download the Annex C: Financial results and forecast tables 2014 – guidance as PDF (170 KB)Download the Annex C: Financial results and forecast tables 2014 – guidance as MS Word (154 KB)

Sample financial tables (not for completion)

Download the Sample financial tables as PDF (92 KB)

Annex D: Financial commentary guidance

Download the Annex D: Financial commentary guidance as PDF (76 KB)Download the Annex D: Financial commentary guidance as MS Word (144 KB)

Annex E: Annual assurance return template

Download the Annex E: Annual assurance return template as PDF (85 KB)Download the Annex E: Annual assurance return template as MS Word (59 KB)

Annex F: Annual assurance return (Annex E) guidance

Download the Annex F: Annual assurance return (Annex E) guidance as PDF (76 KB) | Download the Annex F: Annual assurance return (Annex E) guidance as MS Word (132 KB)

Annex G: Higher Education Students Early Statistics survey return

Download the Annex G: Higher Education Students Early Statistics survey return update as PDF (62 KB)Download the Annex G: Higher Education Students Early Statistics survey return update as MS Word (125 KB)

Annex H: Transparent Approach to Costing return 

Download the Annex H: Transparent Approach to Costing return as PDF (88 KB) | Download the Annex H: Transparent Approach to Costing return as MS Word (52 KB)

Date: 18 September 2014

Ref: HEFCE 2014/20

To: Heads of HEFCE-funded higher education institutions

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 data returns).

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

AMS helpdesk (for annual monitoring statement), tel 0117 931 7309, e-mail ams@hefce.ac.uk.

There are searchable contact details for HEFCE staff at www.hefce.ac.uk/contact/stafflist/.