Finance Regulations September 2014 Regulations.docx · Web viewAdherence to the system of financial regulation will help to ensure that accurate and complete accounting records are

Arts University Bournemouth

Financial Regulations

Effective from November 2014

Review date: 23 May 2014Next review date: May 2015

Contents


1. Introduction………………………………………………………………… Page

1.1 Scope……………………………………………………………………… 11.2 Purpose……………………………………………………………………...... 11.3 Definitions………………………………………………………………….. 11.4 Review of the Financial Regulations …...……………………................ 1

2. Financial Responsibilities……………………………………………… 2

2.1 HEFCE Financial Memorandum………………………………………… 22.2 The Governing Board………………………………………………… 22.3 Principal & Vice Chancellor……………………………………………........ 22.4 Director of Finance & Planning…………………………………………… 2

3. Irregularities including fraud and corruption…………………………… 4

3.1 Responsibilities………………………………………………………........ 43.2 Procedures for dealing with suspected Fraud or Corruption............... 43.3 Procedures for dealing with financial errors and breakdowns of control 5

4. Budgets, forecasts and management reporting ……………………… 6

4.1 Budgets ………………………………………………………………………. 64.1.1 Preparation……………………………………………………….......... 64.1.2 Budget Statements………………………………………………………….. 64.1.3 Procedures………………………………………………………………… 64.1.4 Approval………………………………………………………………… 64.1.5 Authorisation………………………………………………………………. 64.2 Financial Forecasts………………………………………………………….. 74.2.1 Preparation………………………………………………………….... 74.2.2 Approval ………………………………………………………………....... 84.2.3 Authorisation…………………………………………………………........ 84.3 Financial Results monitoring and Management Reports ……………… 84.3.1 Responsibilities ………………………………………………………… 84.3.2 Management Reports…………………………………………………… 94.3.3 Annual Financial Statements…………………………………………… 9

5. Cash ……………………………………………………………………............ 10

5.1 Treasury Management ……………………………………………………. 105.1.1 Responsibilities………………………………………………………...… 105.1.2 Cashflow Management and Reporting…………………………........... 105.1.3 Borrowings……………………………………………………………….. 105.2 Banking………………………………………………………………………... 105.2.1 Bankers…………………………………………………………… 105.2.2 Payments…………………………………………………………… 115.2.2.1 Authorisation Limits ….......………………………………………… 115.2.2.2 Cheque Payments ……………………………………………........... 115.2.2.3 BACS, Direct Debits and Standing Orders ……………………… 115.2.2.4 Payments over the Internet and telephone ……………………… 11


5.2.3 Cheque and Cash Receipts………………………………………….. 115.3 Petty Cash …………………………………………………………… 125.3.1 Float Amounts……………………………………………………............ 125.3.2 Petty Cash Procedures ………………………………………………… 12

6. Expenditure ..……………………………………………………….............. 13

6.1 Responsibilities……………………………………………………………... 136.2 Purchasing Procedures…………………………………………................ 136.3 Purchase Orders………………………………………………................... 156.4 Contracts, other than Major Projects………………………….................. 166.4.1 Contracts for one-off provision of goods or services…….................. 16

6.4.2 Contracts for pre-defined provision of goods or services over a period of time………………………………………………………….. 16

6.4.3 Contracts for provision of goods or services on an as-needed basis over a period of time ………………………………............................... 17

6.4.4 Contracts clauses……………………………………………..………….. 186.5 Major Projects……………………………………………………………..... 186.6 Authorising invoices for payment……………………………………...... 196.7 Expenditure Internal Transfer of Goods 206.8 Credit Cards…………………………………………………………………. 206.9 Caxton Cards 20

7. Income….…………………………………………………………….............. 21

7.1 HE and FE Funded Courses ………………………………………...... 217.2 Fees ………………………………………………………………………….. 217.3 Commercial Activities ……………………………………………................ 217.4 Other Income, including Grants…………………………………………. 217.5 Credit Notes. 227.6 Debit Collection and Bad Debt Write-off ………………………......... 22

8. Fixed assets…………………………………………………………………... 23

8.1 Safeguarding of Assets …………………………………………………...... 238.2 Disposals, Loss or Damage and Location Movements……………........ 238.2.1 Asset Disposals ………………………………………...... 238.2.1.1 External Disposals 238.2.1.2 Internal Disposals 248.2.2 Asset Loss or Damage 248.2.3 Asset Location Movement ..……………………………………….... 248.3 Asset Depreciation..…………………………………………………….... 248.4 Asset Valuation………………………………………………………….... 24

9. Stocks and Stores………………………………………………………… 25

10. Salaries and Expenses……………………………………………………. 26

10.1 Authority to Appoint and Pay Employees ………………………………… 2610.2 Full-time and Part-time Employees ……………………………………... 2610.2.1 Contracts of Service …………………………………………………… 2610.2.2 Monthly Payroll Changes ……………………………………………….. 26


10.2.3 Procedures for Payment of the Monthly Payroll ……………………… 2710.3 Guest Speakers and Other Consultants ……………………………......... 2710.4 Actors & Life Drawing Models..………………………………………….. 2710.5 Responsibility for Inland Revenue Returns ………………………………. 2710.6 Travel, Subsistence and Entertaining Expenses ………………………… 28

11. Insurance….………………………………………………………………… 29

11.1 Arrangements…………………………………………………………………... 2911.2 Responsibilities……………………………………………………………….... 2911.3 Monitoring………………………………………………………………………. 29

12. Taxation………………………………………………………………………... 30

12.1 Corporation Tax……………………………………………………………... 3012.2 Value Added Tax (VAT)…………………………………………………..... 30

13. Computer access and security ………………………………………….... 31

13.1 Organisation …………………………………………………………………. 3113.2 Security ……………………………………………………………………..... 3113.3 Changes to Programmes and Reports ………………………………….... 3113.4 Segregation of Duties and Computerise Access Controls …………..... 3113.5 Operations and Maintenance …………………………………………….... 3213.6 Disaster Planning …………………………………………………………… 32

14. Audit ……………………………………………………………………………. 33

14.1 Audit Code of Practice ……………………………………………………... 3314.2 Internal Audit ……………………………………………………………....... 3314.2.1 Role…………………………………………………………………………… 3314.2.2 Appointment………………………………………………………………….. 3314.2.3 Scope …………………………………………………………………....... 3314.2.4 Responsibilities and Reporting ………………………………………..... 3414.2.5 Independence ………………………………………………………......... 3414.2.6 Access and confidentiality ……………………………………………..... 3514.2.7 Irregularities, including Fraud and Corruption ………………………... 3514.3 External Audit……………………………………………………………....... 3514.3.1 Role ……………………………………………………………………...… 3514.3.2 Scope …………………………………………………………………....... 3514.3.3 Appointment………………………………………………………………….. 3514.3.4 Responsibilities and Reporting ……………………………………...….. 3514.3.5 Access and Confidentiality ………………………………………..…… 3614.3.6 Irregularities, including Fraud and Corruption ……………………....... 3614.3.7 Other Work.…………………………………………………………...….. 3714.3.8 General Meeting …………………………………………………...…….. 37Error: Reference

Audit & Risk Committee …………………………………..……… 37


Appendix I Audit & Risk Committee Terms of Reference……...............................… 38Appendix II Nominated Signatories …………………………...............................……… 40Appendix III Authorised Petty Cash Floats……………………….............................… 42Appendix IV Tendering Procedures………………………………................................… 43Appendix V Schedule of Delegated Authorities…………………………....................... 46Appendix VI Treasury Management Policy Statement 47


1. INTRODUCTION

1.1 ScopeThe Financial Regulations are determined by the Governing Board under powers conferred to them by the Articles of Government.

The Financial Regulations apply to the University and to any subsidiary company. They are binding on all staff and students of the University and any subsidiary company. Where the Financial Regulations refer to the University, this shall be taken to mean the University and all subsidiary companies unless specifically stated otherwise.

1.2 PurposeThe Financial Regulations detail the financial management responsibilities within the University and any subsidiary company and provide detailed guidance to all staff with regard to financial matters.

Adherence to the system of financial regulation will help to ensure that accurate and complete accounting records are maintained which allow for:

the safeguarding of assets and; the effective and efficient use of resources,

in accordance with the provisions of the Further and Higher Education Act 1992, the Charities Act 2011 and the requirements of the Higher Education Funding Council for England, the Skills Funding Agency and the Education Funding Agency.

1.3 DefinitionsFor ease of use the following terms have been abbreviated:

AUB - Arts University BournemouthHEFCE - Higher Education Funding Council for EnglandSFA - Skills Funding AgencyEFA - Education Funding Agencythe Board - the Governing Board

1.4 Review of the Financial RegulationsThe Director of Finance & Planning is responsible for ensuring that the Financial Regulations are reviewed each year by the Finance & Resources Committee. This review must include obtaining the views of the Internal Auditors and their views must be passed to the Audit & Risk Committee.

Any amendments to the Financial Regulations must comply with directives issued by HEFCE, SFA, EFA and with statutory legislation as appropriate.


2. FINANCIAL RESPONSIBILITIES

2.1 HEFCE Financial MemorandumThe University will comply in all respects, with the Financial Memorandum issued by HEFCE.

2.2 The Governing BoardHEFCE’s Financial Memorandum stipulates that the Board is responsible for:

exercising proper stewardship over public funds; designation of an accountable officer of the institution; ensuring that the University remains financially solvent; ensuring that the University has a sound system of internal control and an effective risk

management policy; delivering value for money from public funds; adopting and complying with the Committee of University Chairs (CUC) Governance

Code of Practice; providing information reasonably requested by HEFCE or its agents; having due regard to the Equalities Act 2010 and the nine protected groups; subscribing to HESA, JISC and QAA; and connecting to JANET or SuperJANET.

2.3 Principal & Vice ChancellorThe Principal & Vice Chancellor is the Accountable Officer of the University in accordance with HEFCE’s Financial Memorandum. The Principal & Vice Chancellor is responsible for the University’s application of public funds and for ensuring that a robust system of control is in place to safeguard against corruption, fraud and negligent financial management.

As executive head of the University, the Principal & Vice Chancellor is personally responsible to the Board for ensuring that the University honours all the legal, financial, personnel and commercial obligations determined by the Board. These objectives must be in accordance with the stipulations of the Articles of Government.

A key element of the Principal & Vice Chancellor's duties is the presentation of periodic capital and revenue budgets to the Board, for their consideration and approval.

Once budget approval has been obtained from the Board, the Principal & Vice Chancellor may designate members of staff as budget holders. Each budget holder is responsible for the control and monitoring of funds allocated to them, and must ensure that all transactions authorised by them are in accordance with the Financial Regulations.

2.4 Director of Finance & Planning The Director of Finance & Planning, acting on the Principal & Vice Chancellor’s behalf, will regularly monitor financial performance and will ensure that appropriate action is taken whenever significant unexpected variances occur. It is the Director of Finance & Planning’s duty to keep the Principal & Vice Chancellor informed of significant developments as soon as they have been identified.

The Director of Finance & Planning’s duties include:

setting up and maintaining a satisfactory financial control system; advising the Principal & Vice Chancellor on important aspects of the University’s

financial management policy; preparing budgets and forecasts in accordance with HEFCE guidelines and otherwise

as required by the Board and/or management; preparing periodic financial reports for the Board and management; and preparing financial statements in accordance with HEFCE guidelines and

recommended accounting practice.

Review date: 17 May 2013Next review date: May 2014 Page 8

In relation to the maintenance of a satisfactory system of control, this will include:

the maintenance of a clearly defined structure, roles and responsibilities within the finance function;

the maintenance of an up to date and accurate accounting procedures manual; and the maintenance of clearly defined expenditure authorisation and delegated authority

levels.

In relation to the approval of the financial statements, the Principal & Vice Chancellor will present them to the Board for their formal approval, normally at the last meeting of the calendar year. The Board’s approval will be evidenced by the signature of the Chairman, or his nominated deputy, the Principal & Vice Chancellor and the Director of Finance & Planning.


3. IRREGULARITIES INCLUDING FRAUD AND CORRUPTION

3.1 ResponsibilitiesThe Board is responsible for ensuring that the University operates policies and procedures which discourage fraudulent and corrupt practices. They must actively seek to discourage fraud by putting in place effective checks and controls and by ensuring that where fraud and corruption do occur that the reporting of such practices can ensure that quick corrective action is taken.

The Principal & Vice Chancellor is responsible for ensuring that the University operates policies and procedures which minimise the possibility of errors occurring. Errors are differentiated from fraud and corruption by the absence of intent. An error can be an isolated occurrence or may be repeated consistently on a number of occasions: in each case this is regarded as a single error. Errors may result either in incorrect cash transactions or in inaccurate financial reporting.

All staff with budgetary responsibility are responsible for adhering to the Financial Regulations and procedures to ensure that the internal system of financial control is maintained. Breakdowns of financial control may, or may not, be intentional and they may, or may not, result in actual loss or error.

The Audit & Risk Committee is responsible for overseeing the internal system of control. The Committee must ensure that University practices do not allow for the possibility of fraud, corruption and error without unduly restricting operational efficiency.

The responsibilities of the Internal Audit Service and the External Auditors regarding irregularities, fraud and corruption are set out below.

The Principal & Vice Chancellor is responsible for ensuring that the internal system of control is enforced throughout the University. The Director of Finance & Planning is responsible on the Principal & Vice Chancellor’s behalf for monitoring on a day to day basis that compliance with the internal system of control is observed.

3.2 Procedures for dealing with suspected Fraud or CorruptionWhere an employee suspects that fraudulent and/or corrupt practices have occurred or may be about to occur, these suspicions must be reported to the Director of Finance & Planning. The Director of Finance & Planning must immediately report these suspicions to the Deputy Vice Chancellor and the Principal & Vice Chancellor; and convene a project group to decide on the initial response to the suspected fraud or financial irregularity.

The responsibilities of the Internal Audit Service and the External Auditors in such circumstances are set out in section 14. These regulations should also be read in conjunction with the University’s Public Interest Disclosure (Whistleblowing) Policy and with the Fraud Policy & Response Plan which are both available on the University Intranet.

The project group must arrange for these suspicions to be investigated as they consider appropriate. This may or may not involve the Internal Audit Service but in any event the Chair of the Audit & Risk Committee, the Head of the Internal Audit Service Provider and the Chair of Governors should be advised at the earliest possible time that an investigation is taking place. This may also include the reporting of the suspicions to the police.

Where there is suspected fraud, the project group must undertake action to prevent further loss and to secure evidence as appropriate.

Where the chain of reporting set out above cannot be observed for any reason e.g. due to the suspected involvement of one or more of these people, then suspicions must be reported at any level of this chain. Where it is not possible to report to any of these, then approaches must be made to any Governor or ultimately to HEFCE’s Assurance Service.


3.3 Procedures for dealing with financial errors and other breakdowns of controlWhere an employee suspects that a financial error or a non-fraudulent breakdown of financial control has occurred these suspicions must be reported to the Director of Finance & Planning. The Director of Finance & Planning must immediately conduct an investigation to establish the veracity of the suspicions and must simultaneously instigate special procedures in the area affected by the suspicions to ensure no further error occurs during the investigation period.

Where the cash impact of an error(s) is expected to exceed £5,000 the Director of Finance & Planning must immediately report it to the Principal & Vice Chancellor.

Where an error is confirmed and it results in a total irrecoverable cash loss exceeding £10,000 the Principal & Vice Chancellor must in turn report it to the Head of Internal Audit. In any event, all confirmed errors exceeding £20,000 must be so reported, even where the cash is subsequently recovered.

Breakdowns of financial control must be dealt with within the University’s Disciplinary procedure at the discretion of the Director of Finance & Planning, the employee’s line manager and/or the Principal & Vice Chancellor.


4. BUDGETS, FORECASTS AND MANAGEMENT REPORTING

4.1 Budgets4.1.1 PreparationThe Director of Finance & Planning is responsible to the Principal & Vice Chancellor for the preparation of detailed budgets over specified HEFCE financial periods, based on the current strategic and operational plans and other resource strategies e.g. the accommodation strategy, the HR strategy etc.

In preparing the budget, the Director of Finance & Planning must liaise with the Principal & Vice Chancellor, the Deputy Vice Chancellor and the individual members of the Faculties and Directorates. The budget must incorporate all planned capital and revenue expenditure for the period.

Budgets must be prepared in accordance with the procedures set out at 4.1.3 below and in accordance with the issued budget timetable and guidance issued from time to time.

Budgets must be prepared in accordance with the following timescale:

May meeting of University Management Team (UMT) to review and consider the composite budget;

June meeting of Finance & Resources Committee to consider the final draft; and July meeting of the Board to approve the final version.

The Board’s approval of the final version will form the authority to incur expenditure.

4.1.2 Budget StatementsSeparate budgets must be prepared for the University and each subsidiary and/or associated company. A consolidated budget must also be prepared.

For each company and for the consolidation, the following statements must be prepared:

a) an income & expenditure (or profit and loss) account,b) a forecast balance sheet as at the end of the budget period,c) a cash flow forecast,d) specific details of the University’s capital expenditure,e) a commentary including the financial objectives on which the budget is based,f) key indicators, key ratios and assumptions contained within the budget,g) a sensitivity analysis.

For presentational purposes, the proposed budget must be compared to the previous year’s forecast out-turn and significant variances must be explained.

4.1.3 ProceduresBudgets must be calculated for academic areas based on planned student recruitment. Budgets for non-academic areas must be prepared on zero based budgeting principles and the activities included must be clearly linked to the University’s annual operating statement.

4.1.4 ApprovalThe Board indicates its approval of the final budget by passing a resolution, evidenced in the minutes of the meeting.

4.1.5 AuthorisationOnce the Board has approved the budgets, the Principal & Vice Chancellor is authorised to incur expenditure in accordance with the University’s Financial Regulations and the terms of HEFCE’s Financial Memorandum for the following areas:


all revenue budgets contained within the income & expenditure account; the annual minor works programme; and the annual minor capital programme (see 6.4 below for further definition).

The Principal & Vice Chancellor may vire between individual budgets at his discretion and such amendments must be reflected in the budgets reported in the management accounts. Such virements may occur where:

there is a mutual agreement between budget areas to transfer amounts between one another and the Principal & Vice Chancellor concurs with the agreement;

there is a need to finance new requirements of a higher priority than those known at the time of the initial budget allocation;

some emergency arises which requires urgent action; and there is a transfer to/from the contingency budget.

Amendments which are in excess of £250,000 or which affect the operating surplus/(deficit) must be approved by the Board, normally via the Finance & Resources Committee.

In this way, the University has a constant yardstick against which to monitor and compare its actual results, but is able to react to circumstances on a day by day basis. Significant variances must be investigated and brought to the attention of relevant parties by the Director of Finance & Planning in the form of regular management reports.

Virements between capital and revenue budgets are not permitted without the authorisation of the Principal & Vice Chancellor.

Unspent capital budgets may be vired between financial years with the agreement of the Principal & Vice Chancellor. Virement of unspent revenue budgets between financial years is not permitted.

Although indications of planned major capital must be included in the annual budget approved by the Board, actual expenditure can only be incurred in accordance with the Financial Regulations section 6.5.

4.2 Financial Forecasts4.2.1 PreparationFinancial forecasts for the current year will be prepared as follows:

a mid year update, based on the recruitment as at 1st December is presented to the Finance & Resources Committee and then to the Board at the spring term meetings; and

a further update is prepared based on the April management accounts and is presented to the Finance & Resources Committee and then to the Board at the final summer term meetings as part of the 5 year forecast.

A 5 year financial forecast is presented to Finance & Resources Committee and then to the Board at the final summer term meetings. This forecast must be based upon the activities included in the University’s Strategic Plan, with any significant departures clearly highlighted.

This cycle does not preclude the preparation of additional forecasts where the Director of Finance & Planning is aware of significant variances in either capital or revenue budgets.

In the preparation of financial forecasts, the basic principles set out under 4.1.3 Budget Procedures must be followed.

Once the mid year forecast is approved by the Board it must be used as the basis for comparisons in the management accounts.


4.2.2 ApprovalThe Board must indicate its approval of the forecast by passing a resolution, evidenced in the minutes of the meeting.

4.2.3 AuthorisationOnce the Board has approved the forecast, the Principal & Vice Chancellor is authorised to incur expenditure in accordance with the University’s Financial Regulations and the terms of HEFCE’s Financial Memorandum. The Principal & Vice Chancellor may vire between individual budgets at his discretion and such amendments must be reflected in the budgets reported in the management accounts. Amendments which affect the operating surplus/(deficit) must be approved by the Board, normally via the Finance & Resources Committee.

4.3 Financial Results Monitoring and Management Reports4.3.1 ResponsibilitiesThe Principal & Vice Chancellor is responsible to the Board for effective control within the approved capital and revenue budgets. One of the key ways of monitoring the University’s performance will be through the Director of Finance & Planning’s management reports.

The Director of Finance & Planning is responsible to the Principal & Vice Chancellor for producing regular management reports, which give details of actual against latest forecast, as set out in 4.3.2. Separate management accounts must be prepared for the University and all subsidiary companies. All such reports must be considered by the Board and the Directorate as the operations of subsidiary companies impact upon the performance of the University.

It is the Deans and Directors’ responsibility to monitor actual spend against budgets and to ensure that their area does not fall into deficit by the end of the financial year.

Although the Deans and Directors remain accountable for all budgets in their area, they may delegate signing authority for any non pay budget to others in their area. However, they may not delegate signing authority for any pay budgets which are authorised by the Board and they remain accountable for the management of all budgets in their area.

Where budgets, either pay or non pay, are managed in areas not within the control of any of the Deans and Directors, then the Principal & Vice Chancellor shall either be the authorised signatory or shall delegate this authority to another nominated person, including the manager responsible for the area.

Where budgetary authority is delegated, a written record must be kept in the Finance Section with the specimen signature of the Principal & Vice Chancellor, or other authorised signatory, delegating the authority and the budget holder receiving it. This requirement must be complied even if the signing authority is delegated only on a temporary basis due to the budget holder‘s absence.

Deans and Directors must inform the Director of Finance & Planning immediately if it appears that any area under their control may fall into a deficit so that appropriate action can be taken.

Budget holders are responsible for University funds allocated to them and must ensure that they:

authorise expenditure against their allocated budgets, in accordance with the Financial Regulations;

monitor actual and committed expenditure levels against budget; and inform their Dean or Director immediately if it appears that their budget may fall into

deficit by the end of the financial year so that appropriate action can be taken.


Where a budget holder mismanages their delegated budget, the Director of Finance & Planning may remove their delegated authority, even where such authority is given by another Dean or Director. Appeals against such debar must be made to the Principal & Vice Chancellor via the relevant Dean or Director. The Principal & Vice Chancellor’s decision is final.

4.3.2 Management ReportsAll monthly management reports and accounts must be issued within 10 working days of the end of each month. They must contain the following information:

a summarised income & expenditure account for the year to date which provides a breakdown of actual against the latest forecast;

a balance sheet as at the end of the reporting period; a cash flow analysis for the reporting period; a cash flow forecast to the end of the financial year; a commentary giving explanations for any significant variances in the above schedules

and highlighting any potential changes to the current forecast; and where significant variances likely to affect the out turn have occurred in any area since

the last update was approved, a revised statement must be prepared.

The monthly management report and accounts must be distributed and discussed at the University Management Team meeting (UMT). In addition to the monthly management accounts, the Deans and Directors must also receive a summary of their area’s accounts.

The monthly reports for budget holders must provide a detailed statement showing year-to-date actual commitments and payments against the latest approved cumulative forecast indicating the amount of budget left to spend.

The monthly management report and accounts must be sent to the University’s bank. The latest reports and accounts must be discussed at each meeting of the Finance & Resources Committee which then reports to the Board.

In addition to receiving the report of the Finance & Resources Committee, the Board must receive a summary financial statement at each of its main termly meetings. The content of these reports may vary but should include reference to the following as appropriate:

progress against the achievement of University annual objectives and any financial impact (this will provide the basis for setting future KPI’s and outcomes);

the management of financial risk; the University’s summary operating position based on the latest available accounts; identification of any major variances or other relevant issues; and forecast annual outturn.

4.3.3 Annual Financial StatementsThe financial statements are prepared annually in time for audit by the External Auditors who commence their work usually at the beginning of the third week in September following the year end of 31st July. The Director of Finance & Planning is responsible for their production along with all the support reports on the financial review, charitable activities, risk and governance.

The accounts are reviewed by both the Audit & Risk and Finance & Resources Committees in the autumn term and recommended for full Board of Governor approval at its meeting following that of the committees.

The Director of Finance & Planning is responsible for submitting the financial statements to HEFCE as part of the ‘single conversation’ by the 1st December deadline.


5. CASH

5.1 Treasury Management5.1.1 ResponsibilitiesThe Principal & Vice Chancellor is responsible to the Board for the management of the University’s cash position. The Principal & Vice Chancellor may authorise overdraft arrangements but must ensure that such decisions are reported immediately to the Chair of the Governors.

The Director of Finance & Planning must inform the Principal & Vice Chancellor immediately if it becomes apparent that the University may need to operate an overdraft or if an overdraft unexpectedly occurs.

The Director of Finance & Planning is responsible for monitoring cash on a weekly basis, and must ensure that surplus funds are invested either directly or through the approved cash fund managers, Tradition, with counterparties as approved by the Board, so as to maximise the University's investment returns without exposing the University’s cash balances to excessive risk.

The Director of Finance & Planning may negotiate with providers to obtain investment agreements and overdraft facilities within the powers delegated by the Financial Regulations and the Financial Memorandum. Any such agreements must be reported immediately to the Principal & Vice Chancellor and must be highlighted in management reports.

The Director of Finance & Planning shall adhere to the requirements of the Treasury Management Policy Statement.

5.1.2 Cashflow Management and ReportingThe Director of Finance & Planning must manage the University’s cashflow as follows:

the information received daily from the Lloydslink connection must be checked on a daily basis by the Assistant Accountant, who must report any unusual or unexpected transactions immediately to the Director of Finance & Planning; and

monthly cash flow forecasts for both the following quarter and the following 12 month income period must be prepared by the Financial Accountant, who must report any unexpected variances to the Director of Finance & Planning.

5.1.3 BorrowingsThe Principal & Vice Chancellor may only authorise short term borrowings, less than a month, within the limits determined by HEFCE’s Financial Memorandum. Any such borrowings must be reported immediately to the Chair of Governors and advised to the Board at the next subsequent meeting.

Long term borrowings, longer than a month, require the prior agreement and authorisation of the Board and must also comply with HEFCE’s Financial Memorandum.

5.2 Banking5.2.1 BankersThe Board must formally ratify the appointment of the University’s bankers. The provision of banking services must be reviewed every five years.

The Director of Finance & Planning has the delegated authority to deal with the appointed bankers on a daily basis, including the opening and closing of bank accounts and the issue of cheques provided that these actions comply with the Financial Regulations.

The Director of Finance & Planning must ensure that the Finance Section performs monthly bank reconciliations on all bank accounts, and is responsible for reviewing these reconciliations.


University employees, other than the Finance Section, and students are not allowed to operate a bank account in the University’s name or in a name which may be construed as being a part of the University. Any University employee or student found to be operating such a bank account will be exposed to disciplinary action by the Principal & Vice Chancellor.

5.2.2 Payments5.2.2.1 Authorisation LimitsPayments by the University can only be made through the Finance Section as this is the only area in the University authorised to hold and maintain bank accounts on the University’s behalf.

The authorisation limits and nominated signatories of cheques, standing orders and BACS payments from all University bank accounts are as shown in Appendix II.

By following the authorisation rules every payment must, therefore, be signed by two signatories.

5.2.2.2 Cheque PaymentsAlthough the University aims to make most of its payments by BACS, direct debit or standing order there will be occasions where cheque payments will be necessary. Authority levels for cheque payments are set out at Appendix II.

Where an advance payment or emergency loan is made, arrangements to recover the money must be made at the time of the payment e.g. by taking credit card details or post dated cheque.

5.2.2.3 BACS, Direct Debits and Standing OrdersWhere regular payments are made the University intends to pay by BACS, direct debit or standing order (fixed payments). All payments made in this way must be authorised by the designated signatories as shown in Appendix II and supporting documentation must be systematically filed.

5.2.2.4 Payments over the Internet and TelephoneWhere goods are ordered and pre-paid over the Internet or by telephone, then the relevant paperwork must still be raised. Payment can be made through the Finance Section using the credit card held in the name of the Procurement Manager or those credit cards held by the posts detailed at Appendix II. VAT receipts must still be obtained in the normal way.

Credit card purchases should not be used when goods can be purchased on credit in accordance with the University’s standard purchasing procedures.

5.2.3 Cheque and Cash ReceiptsWherever possible, payments must be made only to the Finance Section. If cash is received in areas other than the Finance Section, it must be handed into the finance office immediately upon receipt.

When cash or cheque receipts are collected from staff or students the employee responsible for the safeguarding and accounting of funds must issue the payee with a receipt. On receipt of the money from other areas, the Finance Section must issue a till receipt.

In those cases where it is identified that receipts have been deliberately sent to employees or staff outside the Finance Section, without the prior knowledge and consent of the Director of Finance & Planning, detailed explanations will be required as to the nature and reason for such transactions. If as a result of these discussions, it appears that University funds are being invoiced and/or held outside the Finance Section, then the staff or students concerned will be referred to the Principal & Vice Chancellor for appropriate disciplinary action to be taken.


Cash receipts exceeding £10,000 in a single transaction will not be processed without the authority of the Director of Finance & Planning. Where such transactions are accepted, then the Director of Finance & Planning is responsible for ensuring that the University is in full compliance with statutory anti-money laundering regulations.

5.3 Petty Cash5.3.1 Float AmountsUnder normal circumstances, petty cash floats will only be operated in those areas set out in Appendix III. The Director of Finance & Planning may from time to time, authorise other areas of the University to run temporary floats providing they adhere strictly to the petty cash procedures.

5.3.2 Petty Cash ProceduresThe following rules apply to all University petty cash floats:

employees in charge of floats must ensure that their staff always obtain valid VAT invoices, where petty cash is spent on obtaining VAT-rated supplies;

petty cash payments must not relate to routine creditor items nor staff subsistence/travel claims and all employees must, therefore, enquire of the Purchase Ledger Administrator whether or not the University holds a credit account with the intended supplier, before requesting any cash;

individual petty cash transactions must be authorised by the relevant budget holder and must never exceed £100 without the prior permission of the Director of Finance & Planning or the other University Accountants;

all receipts must be attached to the back of the authorised petty cash voucher so that the University can recover all the VAT to which it is entitled and any unspent cash must be paid back into the float;

where an advance payment or emergency loan is made, arrangements to recover the money must be made at the time of the payment e.g. by taking credit card details or post dated cheque.

income receipts must never be paid into petty cash floats; at any one time the total of cash and vouchers must equal the totals set out in

Appendix III; employees in charge of floats, will be directly responsible for the safekeeping of their

respective floats, and will be held personally liable for any identified shortfalls; the Director of Finance & Planning will have a right of access to all books and records

relating to petty cash floats. All floats will be audited on a regular basis, and explanations required from relevant employees where an unusual transaction and/or a shortfall is identified; and

the Director of Finance & Planning must ensure that a float is intact before the employee in charge leaves the University’s employment.


6. EXPENDITURE

6.1 ResponsibilitiesThe Principal & Vice Chancellor is responsible for all expenditure made on the University’s behalf.

The Principal & Vice Chancellor is authorised to delegate the routine expenditure decisions to individual budget holders via the relevant Dean or Director. Budget holders may only authorise expenditure in their areas of responsibility once they are satisfied that they are complying with the Financial Regulations and have checked that they have sufficient funds within their budget to cover the transaction.

6.2 Purchasing ProceduresThe Principal & Vice Chancellor is responsible for securing value for money in terms of the economy, efficiency and effectiveness of the University in the deployment of its resources.

All procurement practice and procedure shall be fully conducted in adherence to EU Procurement Directives and Public Procurement Law and shall follow the principles as set in the University’s Value for Money Strategy and Procurement Policy.

Each budget holder shall to use the funds allocated to their area in a demonstrably expeditious and effective manner. All goods and services purchased by the University must be made on the most favourable rates and terms available, based on figures from estimates, quotations or competitive tenders quoted by suppliers, depending on the magnitude of the purchase providing Value for Money.

To this end, budget holders must adopt the following purchase procedures for all purchases except for building works:

(i) Where a formal contract or framework agreement is in existence:

This is where the University has formally awarded a contract through an approved tendering procedure or where the supply of goods or services is being called off from a Consortia Framework e.g. Southern Universities Purchasing Consortia (SUPC), Crescent Purchasing Consortia (CPC), Crown Commercial Service (CCS).

Aggregate Value of Supply Process & Requirement

< £10,000

One quotation from your preferred contracted supplier in response to a formal specification together with details which include but are not limited to: method of provision e.g. telephone, time and date obtained, name of person who provided quotation, evidence regarding validity of quote (email/fax/written quotation).

£10,000 - £49,999

Quotations from all contracted suppliers in response to a formal specification together with details which include but are not limited to: method of provision e.g. telephone, time and date obtained, name of person who provided quotation, evidence regarding validity of quote (email/fax/written quotation).

> £50,000 Check with the Procurement Manager whether mini competition is required under Framework Terms.


(ii) Where a formal contract or framework agreement is not available:

(iii) For building works, the following limits


< £29,999

Obtain up to three estimates in response to formal specification together with details which include but are not limited to: method of provision e.g. telephone, time and date obtained, name of person who provided quotation, evidence regarding validity of quote (email/fax/written quotation).

£30,000 - £74,999

Obtain three written quotations in response to a formal specification together with details which include but are not limited to: method of provision e.g. telephone, time and date obtained, name of person who provided quotation, evidence regarding validity of quote (email/fax/written quotation).

£75,000 – EU Regulations *

Light touch Tender to be conducted with the involvement of Procurement Manager in compliance with University/Funding Body Regulations

EU Tender Requirement *

Tender to be conducted by the Procurement Manager in accordance with EU Regulations.

Note: the values quoted in 6.2 above are VAT inclusive (at the prevailing rate) and take into consideration the Rule of Aggregation - Regulation 8 (11) of the Public Contracts Regulations 2006 - which relate to the full life costing of the contract.



< £100 Spot Purchase (a one-off provision of goods of services)

£100 - £9,999

Obtain up to three estimates in response to a formal specification together with details which include but are not limited to: method of provision e.g. telephone, time and date obtained, name of person who provided quotation, evidence regarding validity of quote (email/fax/written quotation).

£10,000 - £49,999

Obtain three written quotations in response to a formal specification together with details which include but are not limited to: method of provision e.g. telephone, time and date obtained, name of person who provided quotation, evidence regarding validity of quote (email/fax/written quotation).

£50,000 – EU Regulations *

Light touch Tender to be conducted with the involvement of Procurement Manager in compliance with University/Funding Body Regulations

EU Tender Requirement *

Tender to be conducted by the Procurement Manager in accordance with EU Regulations.


The University shall commit itself to the supplier offering the best value for money and the University accepts that this may not necessarily be the Supplier offering the cheapest goods and/or services. Any procurement which does not meet this requirement must go through an Exemption process prior to the University financially committing itself to said purchase/contract. In these circumstances the Director of Finance & Planning’s written authorisation is required (or the Principal & Vice Chancellor’s for expenditure in excess of £50,000).

Commitments must not at any time be broken down artificially into separate orders to circumvent the above limits. Where a series of orders to the same supplier is made in close succession they must be treated as a single order unless otherwise agreed with the Principal & Vice Chancellor.

Extension of a contract means extending an existing contract typically on the same terms using an option to extend. All Contract extensions must be formally agreed in writing between the University and the Supplier.

Fixed term contracts must not be extended unless there is a specific term in the contract which would allow this.

Contracts cannot be extended where this would result in the value of the Contract, over the lifetime of the Contract exceeding the Threshold of the EU Directives.

Ongoing Contracts with no formal end date must be reviewed annually and competitive quotations sought to determine whether the existing contract should continue. If the contract is continued a formal note should be made to record the reasoning and a copy of the review must be provided to the Procurement Manager.

There are specific provisions about the maximum term of framework agreements (which in general should not exceed four years).

Extensions which are over or result in the lifetime value of the Contract exceeding £50,000 must have approval in writing from the Principal & Vice Chancellor to proceed, prior to any budget holder committing expenditure.

6.3 Purchase Orders An order requisition must be raised for all expenditure to be incurred by purchase order. Order requisitions must be approved by the relevant budget holder and, if appropriate, countersigned in accordance with Appendix V.

Each order must clearly indicate the nature and agreed quantity and quality of the goods and services required, the estimated purchase price (inclusive of VAT), delivery costs where applicable and details of any discounts being offered.

6.4 Contracts, other than Major Projects


* The EU Thresholds are exclusive of VAT and the following thresholds apply from 1st

January 2014:

Supplies and Services Contracts £172,514 (Euro 207,000)Works Contracts £4,322,012 (Euro 5,186,000)

Where Prior Information Notices are published in advance of any tenders proceeding, the current thresholds for Supplies and Services Contracts change and allow for greater scope in activity. The thresholds currently stand at £652,050 (Euro 750,000) and this option shall be exercised at the discretion and direction of the Procurement Manager.

Contracts may fall into any of the following categories:

a one-off provision of goods or services (spot purchase); a contract with a supplier for the pre-defined provision of goods or services over a

period of time; and the purchase of a defined category of goods on an as-needed basis over a period of

time (call-off).

Copies of all signed contracts must be lodged with the Finance Section and recorded on a centrally held Contracts Database.

Contractors must provide evidence of valid and current public liability insurance on an annual basis. The responsibility for acquiring and retaining such evidence and other due diligence lies with the relevant budget holder.

6.4.1 Contracts for one-off provision of goods or servicesThe contractor must be selected in line with the procedures set out in 6.2 above ensuring transparency and equity in process.

Prior to obtaining estimates, quotes or tenders, a comprehensive specification must be prepared including in relevant cases a draft contract which must be approved by the relevant budget holder and, if appropriate, countersigned in accordance with Appendix V. Where applicable, support in this process shall be given by the Procurement Manager.

The specification or draft contract must then be used as the basis for obtaining costs.

The final agreed contract must be signed by the relevant budget holder and/or the appropriate authorised delegated signatory as detailed in Appendix V. It is best practice that the contract is signed by the line manager of the staff member who negotiated the contract. The person signing the contract is responsible for checking any changes from the original approved draft version.

Where a repeat supply is required, a new contract must be entered into and before proceeding with any new contracts budget holders must take into consideration The Rule of Aggregation and the wider procurement impacts on the University as a whole.

6.4.2 Contracts for pre-defined provision of goods or services over a period of timeThis covers contracts for goods or services where the service levels are defined in advance e.g. cleaning, grounds maintenance, software licences.

The contractor must be selected in line with the procedures set out in 6.2 above ensuring transparency and equity in process.

Prior to obtaining estimates, quotes or tenders, a comprehensive specification must be prepared including in relevant cases a draft contract which must be approved by the relevant budget holder and, if appropriate, countersigned in accordance with Appendix V. Where applicable, support in this process shall be given by the Procurement Manager. Where the commitment extends into future accounting periods for which no budgets have yet been agreed, then the authority of the Director of Finance & Planning is required. Where this is expected to exceed £50,000 in any one year, the authority of the Principal & Vice Chancellor is required and where it is expected to exceed £250,000 the authority of the Board is required.

The specification or draft contract must then be used as the basis for obtaining costs.


The final agreed contract must be signed by the relevant budget holder and/or the appropriate authorised delegated signatory as detailed in Appendix V. It is best practice that the contract is signed by the line manager of the staff member who negotiated the contract. The person signing the contract is responsible for checking any changes from the original approved draft version. Where final annual costs vary from estimated costs and as a result exceed either £30,000 or £250,000 then a retrospective report, to either the Principal & Vice Chancellor or the Board respectively, is required.

Variations, or extensions, which do not significantly deviate from the original intentions of the original contract may be agreed if the budget holder is satisfied that this represents best value for the University

6.4.3 Contracts for provision of goods or services on an as-needed basis over a period of time

This covers contracts for goods or services where the level of activity cannot be defined in advance e.g. purchase of gas, electricity, stationery and computer support agreements.

The contractor must be selected in line with the procedures set out in 6.2 above ensuring transparency and equity in process.

Prior to obtaining estimates, quotes or tenders, a comprehensive specification must be prepared including in relevant cases a draft contract which must be approved by the relevant budget holder and, if appropriate, countersigned in accordance with Appendix V. Where applicable, support in this process shall be given by the Procurement Manager. Where any commitment to standing charges (i.e. any costs chargeable in the event of zero activity) extends into future accounting periods for which no budgets have yet been agreed, then the authority of the Director of Finance & Planning is required. Where this is expected to exceed £50,000 in any one year, the authority of the Principal & Vice Chancellor is required and where it is expected to exceed £250,000 the authority of the Board is required.

The draft contract or specification must then be used as the basis for obtaining costs.

The final agreed contract must be signed by the relevant budget holder or the appropriate counter signatory in accordance with Appendix V. It is best practice that the contract is signed by the line manager of the staff member who negotiated the contract. The person signing the contract is responsible for checking any changes from the original approved draft version. Where final annual costs vary from estimated costs and as a result exceed either £30,000 or £250,000 then a retrospective report, to either the Principal & Vice Chancellor or the Board respectively, is required.

Variations, or extensions, which do not significantly deviate from the original intentions of the original contract may be agreed if the budget holder is satisfied that this represents best value for the University and should not then exceed the approval levels set out in the previous paragraph. However, no contract can be extended beyond four years from the date of the start of the original contract without a tender exercise being held and obtaining the approval of the Board. Where such approval is given by the Board, then they must satisfy themselves that there are particular circumstances that warrant such an extension and they must also assure themselves that the University can demonstrate that continuing value for money is being secured e.g. by conducting a best value exercise.


6.4.4 Contract clausesThe contents of contracts will vary depending on the nature of the goods or services provided. However, as a minimum the contract must contain clauses covering the following areas:

the agreed price or the basis for the calculation of the price, including the basis for any periodic price revisions during the life of the contract;

details of the goods and/or services to be provided (a specification); service levels, including, where appropriate clauses regarding details of performance,

quality and outcomes; clearly defined start and end times; and procedures in the event of dispute.

6.5 Major ProjectsA major project is either:

any project not included in the approved income & expenditure account or the approved minor capital programme,; and

any project included in the approved income & expenditure account or the approved minor capital programme with a total cost in excess of £250,000.

It may cover capital and/or revenue expenditure.

Preliminary investigation and enabling works for new projects may be authorised by the Principal & Vice Chancellor. Preliminary investigation may cover all pre-project stages up to tender stage, but may not cover expenditure on the project itself.

Such expenditure on initial investigation and feasibility studies may not exceed £15,000 per project and total expenditure must not exceed £50,000 in any one financial year. Commitment and authorisation of such expenditure must comply with the Financial Regulations for routine expenditure and minor works.

The budget for preliminary investigation work must be contained within the annual minor capital programme. Reporting of the expenditure will therefore be made in the management accounts by means of a breakdown of this expenditure line as required.

Once costs have reached the limit, or once the investigation work has been completed and it has been decided that the project should proceed, the project must be taken to the Board by the Principal & Vice Chancellor. Reports to the Principal and Vice Chancellor should be presented in a formally written Project Initiation Document (PID) and include but not be limited to the following information:

full details of the proposed scheme, including justification, scope, timing, option appraisals;

a proposed timetable for implementing the project, including key dates; financial information to include a full cost forecast (including costs already incurred),

grants receivable, the impact on existing forecasts, sources of funding and project appraisal(s);

consents required e.g. HEFCE; andany other information which may influence the decision of the Board.

The matter may first be considered by the Finance & Resources Committee but authority to proceed must be given by the Board. The decision must clearly set out the stage to which the project may be taken and the approved budget for the work.

Final approval to proceed with the implementation of the project and formal tender must be given by the Board based on the following information:


full details of the proposal; purchasing methodology; financial appraisal; the impact on existing financial plans; financial liabilities being incurred; details of financing arrangements e.g. loans; sensitivity analysis; details of any charges, covenants or other legally binding agreement entered into in

connection with the project; confirmation of any consents, e.g. HEFCE; and any other information which may influence the decision of the Board.

The Board may then authorise the implementation of the project, clearly specifying the budget for the project. Reporting of the expenditure must be made in the management accounts by means of a breakdown by individual project.

On project completion a post project implementation report must be compiled and submitted to the Board. The report should include but is not limited to details of project successes and failures, lessons learned, a comprehensive breakdown of project income and expenditure and an assessment of the value for money achieved.

6.6 Authorising Invoices for PaymentBudget holders must always ensure that suitable VAT invoices are obtained, so that the University can recover all the VAT to which it is entitled. All purchase invoices must be sent directly to the finance office, by suppliers.

The Finance Section is responsible for invoice payment, and will only exceptionally pay over monies against documentation other than an authorised invoice e.g. Architect’s Certificates. Only budget holders or their delegated representatives may authorise invoices for payment. The Finance Section must hold a list of authorised signatories and their financial limits, and may only pass for payment those invoices which have been signed by the relevant signatory(ies).

In exceptional circumstances, when a supplier will not give credit terms, special arrangements may be made whereby the finance office will pay money out either directly to the supplier in advance of receipt of the goods or, more exceptionally, to a designated employee. In either case, the authorisation of the Director of Finance & Planning is required and a valid receipt, such as a VAT invoice, must be returned the same day. Section 5.3.2 fully explains the procedure to be followed in respect of petty cash purchases.

Budget holders, and not the Finance Section, are responsible for ensuring that the following checks are carried out before signing invoices for payment:

that the correct type of goods and/or services have been received which agree to the delivery note;

that the goods and/or services comply with the purchase order; that the goods and/or services are of acceptable quality; that the purchase invoice details regarding price and quantity are correct; that the invoice is arithmetically correct; and that the invoice has not been previously passed for payment.


6.7 Internal Transfer of Goods and ServicesBudget areas that require internally transferred goods and/or services must go through the following procedures:

they must ask the producer, or the budget area offering to transfer out the goods and/or services, for an estimated transfer price;

if the proposed transfer price is acceptable, the consumer, or the budget area transferring in the goods and/or services, must produce a transfer request form. The estimated transfer price will be used to automatically update the consumer's commitment records by recharging the necessary amount across to the producer's income records; and

an internal billing journal will be raised by the producer when the goods and services are actually transferred.

The consumer buying the goods and services will only pay the difference between the estimated transfer and internal billing price, if a satisfactory explanation is provided by the producer as to why these figures should vary.

The Director of Finance & Planning will be the final arbiter in case of dispute except where the dispute involves the Director of Finance & Planning, in which case the final arbiter will be the Deputy Vice Chancellor.

6.8 Credit cardsThe University has a limited number of credit cards which are issued on the authority of the Principal & Vice Chancellor. Such cards may only be issued to staff who incur expenses on a regular basis while carrying out their duties away from the University or are required to facilitate telephone and internet purchases in accordance with section 5.2.2.4. A list of approved credit card holders is detailed in Appendix II

The intended purpose of such cards is to cover expenses incurred in connection with University business. All expenditure must be agreed in advance with the relevant budget holder and must not exceed these pre-arranged levels. Credit cards must not be used to pay for goods and services, except in line with section 5.2.2.4 above and they must not be used to withdraw cash from University accounts.

All expenditure must be evidenced by VAT invoices and/or receipts and must be submitted to the Finance Section on a credit card expenses form which must be authorised in line with normal procedures.

All staff who hold a credit card must sign a proper use agreement. This must be renewed on an annual basis. It is the responsibility of the Director of Finance & Planning to ensure that cards are recovered from holders who leave the employment or association of the University.

The Director of Finance & Planning shall review the use of credit cards to ensure that it is appropriate and will recommend to the Principal & Vice Chancellor the removal of a credit card if this is not the case.

6.9 Caxton FX CardsThe University will provide staff who are travelling overseas on University business with Caxton foreign exchange cards which are prepaid and can be used as a debit card to pay for goods and services or withdraw cash in the local currency. These cards will be issued as per trip once line manager approval has been given.

All expenditure and cash withdrawals must be evidenced by VAT invoices and/or receipts and must be submitted to the Finance Section on a expenses claim form which must be authorised in line with normal procedures. Any unused foreign currency should be returned to the Finance Section.


7. INCOME

7.1 HE and FE Funded CoursesWhere a proposal for a new course is assuming eligibility for either HEFCE, EFA or SFA funding, this must be checked and authorised by the Director of Finance & Planning.

7.2 FeesThe Director of Finance & Planning is responsible for ensuring that all students are formally registered by a specific date during the Autumn Term.

The Director of Finance & Planning is responsible for ensuring that: invoices are issued to the relevant person/authority for each student immediately after

enrolment, the collection of the various fees and charges are made in accordance with the relevant

University policy, policies are in place to cover the collection of each type of fee or charge and that these

policies are reviewed on an annual basis and, if appropriate, updated.

7.3 Commercial ActivitiesAll commercial activities must be negotiated and arranged only through the Director of Finance & Planning. The Director of External Affairs will have oversight of such activities.

It is the responsibility of the Director of Finance & Planning to:

ensure that all such activities are covered by a written contract which clearly states the nature of the agreement, the specific requirements and contract terms, the agreed price and the agreed schedule and method of payment;

ensure that the contract costing and pricing are in accordance with the University’s procedure for the implementation of new services;

ensure that contracts are only drawn up after the relevant Dean or Director has agreed to the terms and conditions and after the Principal & Vice Chancellor’s formal approval to proceed has been obtained;

ensure that a copy of all agreements is lodged are in the finance office; and act as budget holder, or nominate another officer to so do: specifically this includes

raising invoice requests to the Finance Section, ensure that the all income due is collected and authorising expenditure incurred in connection with the project.

Only the Finance Section may invoice third parties on behalf of the University. For this reason, University sales invoices must be treated as controlled stationery and must be held in the finance office.

Any University employee or student who invoices a third party on the University’s behalf, without using the finance office, thereby misleading such a party into believing that they are entering into an officially authorised contract with the University, will be subject to disciplinary action.

7.4 Other Income, including GrantsFor each activity or project which generates income from whatever source, and not covered in 7.3 above, the Principal & Vice Chancellor or Deputy Vice Chancellor must nominate a project manager. Prior to incurring any expenditure, the project manager must draw up a budget plan for the activity or project, which must be approved by the Principal & Vice Chancellor.

It is the responsibility of the project manager and not the Finance Section, to instigate the raising of invoice requests on a timely basis, to monitor and authorise all expenditure, to keep all relevant paperwork and to ensure that all external returns are submitted as required. It is the responsibility of the Finance Section to keep financial records of income and expenditure for the project or activity to support the project manager.


7.5 Credit NotesCredit notes can only be issued by the Finance Section. Every credit note request must be signed by an authorised signatory.

In instances of student debt the procedure is as follows:

(i) in the case of a re-assessment by the Student Loan Company an internal credit note is raised and approved by the Management Accountant;

(ii) in the case of students withdrawing from a course the current Fees & Charges Payment Policy will be applied. Internal credit notes will be raised subject to confirmation by Course Leaders and will be authorised by the Management Accountant.

Credit notes raised in connection with overseas tuition fees must be authorised by the Principal & Vice Chancellor.

All other credits notes shall be authorised as follows:

Credit Note Amount Authorised Signatory

Up to £4,999 The Director of Finance & Planning or the relevant Budget Holder

£5,000 to £24,999 The Principal & Vice Chancellor More than £25,000 The Governing Board

7.6 Debt Collection and Bad Debt Write-offIt is the responsibility of the Director of Finance & Planning to ensure that there is an efficient and effective system of debt collection in place.

The Director of Finance & Planning is responsible for implementing an acceptable bad debt provision policy regarding overdue debts.

If a bad debt needs to be written-off, it must be corroborated by supporting documentation. The authorisation limits for such write-offs are as follows:

Write-off Amount Authorised Signatory

Up to £4,999 The Director of Finance & Planning or the relevant Budget Holder

£5,000 to £24,999 The Principal & Vice Chancellor More than £25,000 The Governing Board

Bad debt write-off in connection with overseas tuition fees must be authorised by the Principal & Vice Chancellor.

If a bad debt is written off, any cost incurred in raising that debt must be borne by the relevant budget area, unless it is clear that the debt became irrecoverable through factors outside their control.

Bad debt written off must be reported in the management accounts on a monthly basis.


8. FIXED ASSETS

8.1 Safeguarding of AssetsThe Principal & Vice Chancellor is responsible for safeguarding the University’s land & buildings, fixtures & fittings and plant & equipment, and for ensuring that assets are used only on University business.

The Director of Finance & Planning, on behalf of the Principal & Vice Chancellor, must ensure that an accurate and up to date fixed asset register is maintained, which includes details of all assets with a purchase price of more than £1,000 (including VAT). Each asset must be allocated a unique sequential asset number, which must be recorded in the asset register, along with the location of the new asset. It is the responsibility of the authorised signatory to notify the initial location of the new asset to the Finance Section.

It is the responsibility of the relevant Dean or Director to ensure that all equipment in their area, with the exception of IT items, are clearly identified with these individual numbers using an anti-theft device, so that they can easily be identified and their movements subsequently controlled. The Head of ITCS is responsible for the identification of all IT items including software.

Deans and Directors are also responsible for the security marking of non-consumable items in their areas which have been purchased from revenue budgets e.g. printers, cameras etc. Deans or Directors must ensure that up to date inventories of such items are held within their areas.

The relevant Dean or Director is responsible for ensuring that regular spot checks are performed on items in their area, to ensure the completeness and accuracy of the asset register and other inventories. The asset register and inventories must be maintained in a form acceptable to the Governors and the directives of the HEFCE, the EFA and the SFA.

Any asset disposals or location movements must be made in accordance with the Financial Regulations detailed in section 8.2.

8.2 Disposals, Loss or Damage and Location Movements8.2.1 Asset Disposals 8.2.1.1 External DisposalsThe sale of land or buildings may only take place after the passing of a resolution by the Governors.

In the case of plant & equipment and furniture & fittings, details of the asset of which it is proposed to dispose must be submitted to the following authorised signatories, according to the asset’s net book value:

Net Book Value on Disposal Authorised Signatory

Up to £4,999 The Director of Finance & PlanningFrom £5,000 to £24,999 The Principal & Vice ChancellorMore than £25,000 The Governing Board

The net book value of individual assets can be obtained from the Finance Section.

Once the disposal has been approved, the asset may be sold, disposed of, or scrapped. Any invoice must be raised by the Finance Section. The final disposal must be notified to the Finance Section in order that the Fixed Asset Register can be updated.

The proceeds from any disposals are credited centrally unless agreed otherwise by the Principal & Vice Chancellor.


8.2.1.2 Internal DisposalsInternal disposals commonly described as staff disposals require the authorisation of the Director of Finance & Planning. This is to ensure that the VAT consequences of the transaction are considered, it is correctly accounted for and the Fixed Asset Register is updated.

Such disposals will only be authorised in exceptional cases and the University does not provide any warranties in respect of such disposals.

8.2.2 Asset Loss or DamageThe Head of Facilities must be informed in writing as soon as any assets are missing or damaged. It will be the Head of Facilities’ role to ascertain the reasons for such events, to take the necessary action regarding insurance claims and to ensure that the Finance Section is advised in order that the accounting records are updated accordingly.

If the Head of Facilities finds that an asset is lost or damaged as a result of factors that could have been prevented by University employees or students e.g. by not locking up equipment overnight, details of the asset together with the reasons for its loss or damage must be reported to the Principal & Vice Chancellor. The Principal & Vice Chancellor will decide on the appropriate course of action that must be taken.

8.2.3 Asset Location MovementsNo property must be temporarily removed from the University premises unless it is in the ordinary course of business, such as a film shooting session by way of example. The relevant Dean’s permission must be obtained before property can be removed for purposes outside the ordinary course of business.

All property temporarily removed from the University premises must be recorded on a schedule maintained by the responsible person.

Property which is permanently transferred to a different internal location must be notified to the Finance Section to ensure that the asset register is updated.

Transfers of assets between the University and any subsidiary may only be made with the prior agreement of the Director of Finance & Planning.

8.3 Asset DepreciationThe Director of Finance & Planning is responsible for implementing acceptable depreciation policies for different classes of assets, which must be in accordance with HEFCE requirements and appropriate accounting standards.

8.4 Asset ValuationThe University’s land and buildings and other assets must be maintained adequately to retain their book value. In accordance with the application of Accounting Standard FRS15 the assets are not re-valued at regular intervals.


9. STOCKS AND STORES

The Director of Finance & Planning is responsible for the maintenance of adequate accounting records in regard to stocks sufficient to comply with applicable accounting policies. Finance records maintained will be commensurate with the value of the stocks and the level of risk and materiality.

All Deans and Directors will be responsible for the care and custody of stores under their control and must maintain records in a form recommended by the Director of Finance & Planning. The Assistant Accountant must provide details on all stores received and issued over an accounting period and the balance on hand at any given time.

The relevant Dean or Director must ensure that store checks are performed at least once a quarter, and that stock values, where appropriate, are correctly recorded in the accounts. The stock take must identify the range, quantity and value of each item held, the date of the stores check and the name of the person undertaking the count.

Where significant book to physical discrepancies are identified from the count, the relevant Dean or Director must inform the Director of Finance & Planning immediately. The Director of Finance & Planning must investigate the reasons for the discrepancy. A significant discrepancy is defined as the lower of 50% of the store’s total book value or £500.


10. SALARIES AND EXPENSES

10.1 Authority to Appoint and Pay EmployeesThe Principal & Vice Chancellor has overall responsibility for the recruitment, appointment and payment of all employees via the Head of Human Resources.

Deans and Directors may only seek to appoint a new member of staff if:

the request is reviewed by the monthly Human Resource Monitoring Meeting (HRMM) which is chaired by the Deputy Vice Chancellor;

the Director of Finance & Planning has confirmed, that there are sufficient funds within the area budget, to cover the appointment; and

the request has been authorised by the Principal & Vice Chancellor.

10.2 Full-time and Part-time Employees10.2.1 Contracts of ServiceAll full-time and part-time teaching staff who work more than three days in any three month period, must be issued with a contract of service.

Full-time employees must be issued their contracts by the Head of Human Resources within eight weeks of appointment. Part-time employees must be issued with contracts of service on appointment. Each contract of service must provide a detailed job description and must clarify the employee’s terms and conditions of service and salary level.

The contracts of service must act as the basis for compiling the University’s monthly payroll.

10.2.2 Monthly Payroll ChangesThe Head of Human Resources is responsible for informing the bureau of any changes in the monthly payroll due to starters, leavers, salary rate adjustments, changes in the standard number of hours worked and temporary changes due to additions or deductions.

The procedures by which the Head of Human Resources must be made aware of any payroll changes that are to be communicated to the payroll bureau are as follows:

a) Starters and LeaversDeans and Directors must inform the Head of Human Resources as soon as an employee has been appointed or leaves, so that a contract of service can be issued or terminated and the University’s personnel records can be amended accordingly.

The Head of Human Resources must inform the payroll bureau of all details regarding starter or leaver dates, during the month, together with associated salary information, before the monthly payroll run.

b) Salary Rate ChangesAll salary rate changes and/or re-gradings must be approved by the Principal & Vice Chancellor as recommended by the HRMM.

Deans and Directors must inform the Head of Human Resources in writing of the required changes to be implemented, which must be signed and authorised by the Principal & Vice Chancellor.

c) Changes In the Number of Hours and Overtime WorkedThe Head of Human Resources must be informed each month by the relevant Dean or Director, if any employees have been working outside those hours specified in their contracts of service, or if an employee has been absent for any reason.


Full-time - Where a full-time employee wishes to claim for overtime, the extra hours worked must be logged on a monthly overtime claim form, which must be signed and authorised by the relevant Dean or Director before being sent on to HR;

Part-time - in respect of academic part-time employees, if hours are worked outside those specified in the original contract, Deans and Directors must raise an additional contract to cover the extra hours. Non-academic part-time employees must follow the same procedure as for full-time employees;

Absence - the Head of Human Resources must be informed of all absences, for whatever reason. The Head of Human Resources must also be informed when a member of staff returns from a period of absence; and

Changes in monthly deductions, e.g. private pension contributions and maintenance payments, must be requested in writing by individual employees and submitted to the Head of Human Resources.

10.2.3 Procedures for Payment of the Monthly PayrollThe payroll bureau must pay registered full-time and part-time salaries a month in arrears by a specified date each month. The monthly BACS payment from the bureau must take account of all payroll changes highlighted by the Head of Human Resources, earlier in the month.

The Head of Human Resources must review the payroll bureau's monthly salary return, to ensure that all the salary rates agree to those documented on the individual employee personnel records. The Head of Human Resources must also ensure that monthly payroll changes notified to the bureau during the month have been properly processed. If the Head of Human Resources identifies any discrepancies, these must be followed up with the bureau and resolved.

The Director of Finance & Planning must review the payroll return and perform a reasonableness check on the tax and national insurance deductions. Any anomalies must be followed up with the bureau and resolved. The Director of Finance & Planning must also compare the actual monthly payroll figures to those budgeted and must investigate and report on the reasons behind significant variances.

10.3 Guest Speakers and Other ConsultantsAny consultants who are paid for less than three days’ work in a three month period need not be included on the University’s payroll.

Such consultants must present the Finance Section with an invoice which itemises any work performed on the University’s behalf. After obtaining the relevant budget holder’s authority, the Finance Section must pay the invoice as if it were a normal University supplier.

10.4 Actors & Life Drawing ModelsAll actors and models must complete an actor/models claim form and submit it to the finance office by the end of the working month. Each week worked within the month, must be authorised by the relevant Dean or Director.

10.5 Responsibility for Inland Revenue ReturnsThe payroll bureau are authorised to complete and submit returns required by the Inland Revenue, in respect of all University employees. All penalties for incorrect completion and/or late submission of the returns must be borne by the payroll bureau, if they are found to be culpable, in accordance with the terms of the Service Level Agreement.

The Director of Finance & Planning is responsible for ensuring that P11D returns are made for all employees. The Director of Finance & Planning is also responsible for ensuring that a valid and up to date P11D Dispensation is in place at all times.


10.6 Travel, Subsistence & Entertaining ExpensesThe University must reimburse all Governors and staff who incur travel, subsistence & entertaining expenses on the University’s behalf in the ordinary course of University business. Staff must be reimbursed in accordance with the University’s Travel, Subsistence & Entertaining Policy.

All expenditure must be authorised in advance by the relevant budget holder.

Claims must be authorised by the relevant budget holder and counter signed as set out below:

Claimant Authorised byGovernors Clerk to the GovernorsClerk to the Governors Principal & Vice ChancellorPrincipal & Vice Chancellor Director of Finance & Planning, periodically reviewed by the

Chair of Governors Deputy Vice Chancellor Principal & Vice ChancellorDeans and Directors Deputy Vice ChancellorOther Staff Line Manager (Must be budget signatory)

All Head of International Development claims for expenses in connection with overseas trips in relation to the recruitment of students must be counter signed by the Principal & Vice Chancellor as well as the authorised signatory for the budget being charged.

A report of all overseas travel and subsistence expenditure must be included in the monthly management accounts.

All claims will normally be paid by BACS. Cheque payments will be made only in exceptional circumstances and only upon the authority of Director of Finance & Planning.


11. INSURANCE

11.1 ArrangementsArrangements for insurance must be for at least a three year period, subject to satisfactory performance. Periodic market testing must be conducted in accordance with section 6 above.

11.2 ResponsibilitiesThe Head of Facilities is responsible for placing all insurance cover on behalf of the University, in line with Governors’ policies.

The Head of Facilities is also responsible for negotiating and recovering insurance claim monies, after consulting the relevant Dean or Director.

Deans and Directors must notify the Head of Facilities immediately whenever there is some loss, damage, liability or potential liability in their area of responsibility.

11.3 MonitoringThe Head of Facilities is responsible for undertaking a quarterly review of the University’s activities and assets profile, to determine whether or not there are insurance cover implications from any changes that may have occurred.

Every Dean and Director must immediately inform the Head of Facilities of new risks which could cause the University to amend its insurance cover terms. Risk changes could arise from:

the purchase of a significant asset; the occurrence of an accident; and from an operational change in an area's functions and/or duties which could reduce or

increase the University’s insurance risks.


12. TAXATION

12.1 Corporation TaxThe University is exempt from Corporation Tax under the provisions of Section 505(1) (e) ICTA 1988. Subsidiary companies are liable for Corporation Tax and the Director of Finance & Planning is responsible for ensuring that statutory returns are completed as required by the HMRC.

12.2 Value Added Tax (VAT)The University and the subsidiaries are registered for VAT and must submit the requisite VAT returns to the HMRC, within the specified time limits.

The Director of Finance & Planning is responsible for ensuring that adequate accounting records are maintained, sufficient to satisfy HMRC requirements. The Director of Finance & Planning is also responsible for paying or receiving VAT monies, in line with the University’s VAT returns.

Deans, Directors and budget holders must assist the Director of Finance & Planning in VAT matters, by maintaining accurate and timely VAT records and through ensuring that:

wherever applicable, VAT invoices are obtained and retained by staff; invoices are passed to the Finance Section promptly, so that they are included in the

correct VAT return period; and sales to third parties are rapidly identified and their VAT treatment discussed, so that all

the relevant details, including the tax point, are passed to the Finance Section thereby ensuring that they are included in the correct VAT return period.


13. COMPUTER ACCESS AND SECURITY

13.1 OrganisationAll financial records are held on the Access Dimensions financial package. A full backup of all financial data must be performed daily.

The Director of Finance & Planning, acting on the Principal & Vice Chancellor’s behalf, is responsible for ensuring that an adequate financial computer control system is installed within the University, to back up, strengthen and develop all internal systems.

13.2 SecurityOnly finance staff are allowed to input to the finance system. Access to the system is via a login and password procedure.

Finance staff are allowed varying degrees of access to the system. The Director of Finance & Planning, Head of Finance and the University Accountants have access to all modules and system manager’s rights, i.e. without restrictions. Other members of the section have access only to those modules necessary to perform their given duties.

It is important that authorised computer users adhere to a stringent set of computer controls, to help prevent the following occurrences:

computer fraud; breakdown in segregation of duties; theft of confidential data; access to the financial system by hackers; and hardware or software failures.

The key controls relating to computer use are detailed in the University’s Computer Information & Data Security Policy Document.

The framework of the computerised control system is detailed below.

13.3 Changes to Programmes and ReportsAny University employee or student who is found to be amending financial reports and/or programmes, without the express permission of the Director of Finance & Planning, will be subject to disciplinary action and could be liable to a civil court action from the software company.

13.4 Segregation of Duties and Computer Access ControlsBecause routine purchasing is performed through the computerised accounting system, computer access controls must be implemented to ensure that the designated employees, who input purchase orders, are not the same as those who authorise orders, which in this context must be the budget holders.

The computer access controls must take the form of passwords, which are linked to a configuration which only allows user access to relevant areas of the finance database. Passwords must never be given to other employees or written on accessible pieces of paper.

The use of the password system must enable audit trails to be installed which in turn highlight any system misuse by unauthorised users. A system log must be generated by the system to check that security has not been violated.

Users must log out of the system whenever they leave a terminal unattended.

Access to the finance system will be removed immediately for any staff who leave the employment of the University or transfer to another section.


13.5 Operations and MaintenanceA comprehensive software support agreement must be entered into which defines acceptable response times.

Each request for support must be logged in an operations book and the response time for each visit must be noted.

13.6 Disaster PlanningThe Director of Finance & Planning is responsible for the maintenance of an up to date strategy for recovery in terms of accounting records.


14. AUDIT

14.1 Audit Code of PracticeThe University’s audit arrangements must comply with the Audit Code of Practice issued by HEFCE.

14.2 Internal Audit14.2.1 RoleThe role of the Internal Audit Service is to provide management with an objective assessment of whether systems and controls are working properly to achieve management’s objectives. It is a key part of the University’s internal control system because it measures and evaluates the adequacy and effectiveness of other controls so that:

a) the Board and the UMT can know the extent to which they can rely on the whole system of internal control of the University,

b) individual mangers can assure themselves that the systems and controls for which they are responsible are reliable.

14.2.2 AppointmentThe Internal Audit Service must be appointed by the Board for an initial term not to exceed five years but may be extended by two years. This is subject to satisfactory annual review by the Audit & Risk Committee and recommendation by the Board. Remuneration shall be fixed by the Board on the advice of the Audit & Risk Committee. A new competition for the selection of the Internal Audit Service must be held at least every five or seven years as applicable.

14.2.3 ScopeThe work of the Internal Audit Service must embrace the whole internal control system of the University including all its activities and all its locations, funded from whatever source. This includes all University subsidiary and associated companies, the University’s partners in collaborative provision, and contractors of the University that provide any Service that handles or processes University finances or management information in any form.

The Internal Audit Service must consider the adequacy of systems and controls necessary to secure propriety, economy, efficiency and effectiveness in all areas. It must seek to confirm that management have taken the necessary steps to achieve these objectives and manage the associated risks.

The scope of internal audit work must cover all operational and management controls and must not be restricted to the audit of systems and controls necessary to form an opinion on the financial statements. This does not imply that all systems will be subject to review, but that all will be included in the audit risk assessment and hence considered for review following the assessment of risk. It follows that if internal audit is to give an opinion on the whole system then that must include academic operations. The role of internal audit in this area is to confirm that there are adequate systems for the management of teaching and learning, but it does not extend to forming academic judgements.

It is not within the remit of the Internal Audit Service to question the appropriateness of policy decisions. However, the Internal Audit Service is required to examine the arrangements by which such decisions are made, monitored and reviewed.

The Internal Audit Service may also conduct any special reviews requested by the Board, Audit & Risk Committee or Principal & Vice Chancellor provided such reviews do not compromise their objectivity, independence or achievement of the approved audit plan.


14.2.4 Responsibilities and ReportingIn order to provide the required opinion, the Internal Audit Service must perform an audit needs assessment in order to formulate a programme of work over a cycle authorised by the Board on the advice of the Audit & Risk Committee. The needs assessment must be reviewed annually and the resulting annual programme must be approved by the Board, through the Audit & Risk Committee, before the start of each year.

The Internal Audit Service will provide an annual opinion to the Board and the Principal & Vice Chancellor, through the Audit & Risk Committee, on the adequacy and effectiveness of the arrangements for risk management, control and governance and for economy, efficiency and effectiveness (value for money) within the University and the extent to which the Board can rely on them. Internal Audit must also comment on other activities for which the Board is responsible and to which the Internal Audit Service has access.

The Internal Audit Service’s annual report to the Board must include:

a) Internal Audit’s assessment of the adequacy and effectiveness of the internal control system and the extent to which the Board can rely on it. In providing this assurance the scope of the work performed, any limitations placed on internal audit and any factors affecting the quality of the assurance given must be clearly identified,

b) an analysis of common or significant weaknesses arising,c) report on achieved coverage against the audit plans and explain any variation from

previously approved plans,d) report on the extent to which the audit needs of the University have been met,e) draw attention to any audit recommendations which Internal Audit considers have not

received adequate management attention,f) the extent of achievement of any objectives (including targeted performance indictors)

which may have been agreed for the Internal Audit Service.

The Internal Audit Service must produce its reports, usually within one month of completion of each audit visit, giving an opinion on the area reviewed and making recommendations where appropriate. Recommendations must be prioritised. All reports must be provided to the Principal & Vice Chancellor and copied to the Audit & Risk Committee. Heads of Sections must respond to each audit report within one month of issue. In their response, they must state their agreed recommendations, their proposed action, the person responsible for implementation and a date by which action must be completed. Material recommendations must be followed up some six to twelve months later. In addition, the Audit & Risk Committee must monitor the implementation of audit recommendations by management.

14.2.5 IndependenceThe Internal Audit Service has no executive role, nor does it have any responsibility for the development, implementation or operation of systems. It may provide advice, however, on control and related matters, subject to the need to maintain objectivity and resource constraints.

The Audit & Risk Committee is responsible for advising the Board on all matters concerning internal control. Within the University, responsibility for internal control rests fully with management who must ensure that appropriate and adequate arrangements exist without reliance on the University’s Internal Audit Service. In order to preserve the objectivity and impartiality of the Internal Audit Service’s professional judgement, responsibility for implementing audit recommendations rests with management.


14.2.6 Access and ConfidentialityThe Internal Audit Service has rights of access to all the University’s personnel, premises, documents, records, information, assets, its companies and collaborative partners and is authorised to obtain such information and explanations which it considers necessary to fulfil its responsibilities.The Head of the Internal Audit Service has a direct right of access to the Chair of the Audit & Risk Committee and the Principal & Vice Chancellor and, if necessary, to the Chair of the Board.

The Internal Audit Service must comply with any requests from the External Auditors and HEFCE’s Assurance Service for access to any information, files or working papers obtained or prepared during audit work that they need to discharge their responsibilities. The confidentiality of all information made available to the Internal Audit Service by the University must be maintained at all times.

14.2.7 Irregularities, including Fraud and CorruptionThe University Internal Audit Service must report to HEFCE’s Assurance Service, copied to the Chief Auditor, without delay, serious weaknesses, significant frauds, major accounting and other breakdowns.

It is the responsibility of management to report details of fraud or any other irregularities to the Internal Auditors immediately on discovery.

Specific procedures relating to the discovery or suspicion of irregularity, fraud and/or corruption are included in section 3 above.

14.3 External Audit14.3.1 RoleThe main purpose of the External Audit Service is to report on the financial statements of the University.

14.3.2 ScopeThe External Auditors may carry out such examination of the statements and underlying records and control systems as is necessary to reach their opinion on the statements.

14.3.3 AppointmentThe Board must consider annually the reappointment of the External Auditors and their remuneration must be fixed by the Board on the advice of the Audit & Risk Committee. A new competition for the selection of the External Auditors must be held at least every five years or exceptionally seven if the initial term is extended subject to satisfactory performance.

14.3.4 Responsibilities and ReportingThe External Auditor is responsible for reporting to the Board on the financial and statistical statements which they have examined.

The report must state whether in the External Auditor’s opinion, the financial statements show a true and fair view and whether they have been properly and accurately prepared in accordance with HEFCE guidance, the Statement of Recommended Practice on Accounting in Higher Education Institutions, the Companies Act 2006, the Charities Act 2011 and any other legislative or regulatory requirements.


The External Auditor must also report to the Board whether:

a) proper accounting records have been kept by the University,b) the financial statements agree with the accounting records,c) in all material respects, monies expended out of funds from whatever source, administered

by the University for specific purposes have been properly applied to those purposes and, if relevant, managed in compliance with relevant legislation such as the Trustees Investment Act 1961,

d) in all material respects monies expended out of funds provided by the HEFCE, SFA & EFA have been applied in accordance with the Financial Memorandum between HEFCE and the SFA & EFA funding contract, the University and/or any other terms and conditions attached to them,

e) they consider that the University’s statement of internal control is consistent with their knowledge of the University,

f) the External Auditor has obtained all the information and explanations which they consider necessary for the purposes of their audit.

The External Auditor must report by way of management letter, when they issue their opinion on the annual financial statements to the Board through the Audit & Risk Committee. The management letter must include any significant matters arising out of the audit which might lead to errors or impact upon future audits and on any other significant issues of economy or effectiveness. It must also recommend improvements, particularly in the following areas:

a) weaknesses and deficiencies in the structure and/or operation of accounting systems and internal control, including, where appropriate, internal audit,

b) inappropriate accounting policies and practices,c) non compliance with legislation, accounting standards, other regulations and HEFCE

requirements,d) matters raised in previous management letters where remedial action remains incomplete.

The management letter must incorporate the management response to all issues raised. Where a serious weakness or an accounting or other breakdown is identified, it must be reported to the Principal & Vice Chancellor, the Chair of the Governors and the Chair of the Audit & Risk Committee without delay. Such weaknesses or breakdowns must be reported to HEFCE’s Assurance Service.

14.3.5 Access and ConfidentialityThe External Auditor must review the work of the Internal Auditors and indicate in the management letter the extent to which they are content to rely on it. The External Auditor has unrestricted access to the files and working papers of the University Internal Audit Service and has a right to regular meetings with Internal Audit personnel.

The confidentiality of all information made available to the External Audit Service by the University must be maintained at all times.

14.3.6 Irregularities, including Fraud and CorruptionEnsuring the establishment and maintenance of an adequate system of internal control is the responsibility of the Board with whom rests also the responsibility for ensuring compliance with statutory and other regulations and for the prevention and detection of irregularities, including fraud and corruption. The External Auditor must plan their audit so that they have a reasonable expectation of detecting material misstatements in the accounts resulting from irregularities, including fraud or corruption or breach of regulations. The External Auditor is not required to search specifically for irregularities and fraud or corruption and their audit should not therefore be relied on to disclose them. The External Auditor must report to HEFCE’s Assurance Service without delay, any significant frauds of which they are aware.


Specific procedures relating to the discovery or suspicion of irregularity, fraud and/or corruption are included in section 3 above.

14.3.7 Other WorkWhere the External Auditor is asked to provide additional Services beyond the scope of the normal external audit, e.g. value for money or other investigations, the precise requirements must be agreed between the External Auditor and the Board, who must be satisfied there is no conflict of interest.

14.3.8 General MeetingThe External Auditor is entitled to attend any general meetings of the Board or Directors of subsidiary companies, to receive all notices or other communications relating to any such meetings which any governor is entitled to receive and to be heard at any general meeting which they attend on any part of the business of the meeting which concerns them as the University’s External Auditor.

14.4 Audit & Risk CommitteeBoth the Internal and External Auditors report directly to the University’s Audit & Risk Committee, which must be comprised of Governors and may also include co-opted members.

The Committee must provide an annual report to the Board and the Principal & Vice Chancellor. This report is sent to HEFCE’s Assurance Service as part of the annual returns process.

The Audit & Risk Committee’s terms of reference as attached at Appendix I, are set by the Board.

The Arts University Bournemouth is committed to the provision of a working and learning environment founded on dignity, respect and equity where unfair discrimination of any kind is treated with the utmost seriousness. It has developed and implemented an Equalities Strategy and Action Plan to guide its work in this area. All the University’s policies and practices are designed to meet the principles of dignity, respect and fairness, and take account of the commitments set out in the Equalities Strategy 2012 – 2015 'Diversity Enhancing Creativity'

This policy has been subject to an equality analysis to ensure consideration with regard to the provisions of the Equality Act 2010.

Date of the last EA review: 27/02/2013


APPENDIX I

AUDIT & RISK COMMITTEE TERMS OF REFERENCE

The Committee’s terms of reference are:

a) To advise the governing body on the appointment of the external auditors, the audit fee, the provision of any non-audit services by the external auditors, and any questions of resignation or dismissal of the external auditors

b) To discuss with the external auditors, before the audit begins, the nature and scope of the audit

c) To discuss with the external auditors problems and reservations arising from the interim and final audits, including a review of the management letter, incorporating management responses, and any other matters the external auditors may wish to discuss (in the absence of management where necessary)

d) To consider and advise the governing body on the appointment and terms of engagement of the internal audit service (and the head of internal audit if applicable), the audit fee, the provision of any non-audit services by the internal auditors, and any questions of resignation or dismissal of the internal auditors

e) To review the internal auditors’ audit risk assessment, strategy and programme; consider major findings of internal audit investigations and management’s response; and promote co-ordination between the internal and external auditors. The committee will ensure that the resources made available for internal audit are sufficient to meet the institution’s needs (or make a recommendation to the governing body as appropriate)

f) To keep under review the effectiveness of the risk management, control and governance arrangements, and in particular review the external auditors’ management letter, the internal auditors’ annual report, and management responses

g) To monitor the implementation of agreed audit-based recommendations, from whatever source

h) To ensure that all significant losses have been properly investigated and that the internal and external auditors, and where appropriate the funding council’s accounting officer, have been informed

i) To oversee the institution’s policy on fraud and irregularity, including being notified of any action taken under that policy

j) To satisfy itself that suitable arrangements are in place to promote economy, efficiency and effectiveness

k) To receive any relevant reports from the National Audit Office (NAO) and its equivalents in Scotland, Wales and Northern Ireland, the funding councils and other organisations

l) To monitor annually the performance and effectiveness of the external and internal auditors, including any matters affecting their objectivity, and make recommendations to the governing body concerning their reappointment, where appropriate.

m) To consider elements of the annual financial statements in the presence of the external auditors, including the auditors’ formal opinion, the statement of members’ responsibilities and the statement of internal control, in accordance with the funding councils’ accounts directions


APPENDIX I (continued)

n) In the event of the merger or dissolution of the institution, ensure that the necessary actions are completed, including arranging for a final set of financial statements to be completed and signed.

o) To ensure that in accordance with the primary statement of responsibilities of the Board that equality and inclusivity, health and safety practices and procedures are observed and that equal opportunities are promoted within the remit of the Committee.

p) To consider any other matters referred to the Committee by the Board of Governors.


APPENDIX II

NOMINATED SIGNATORIES

1. Lloyds TSB Bank Accounts

All payments including cheques, standing orders, BACS, CHAPS, direct debits, foreign transfers must be signed by two signatories from the following pool within the limits set out below:

Principal & Vice ChancellorDeputy Vice ChancellorDean of the Faculty of Media and PerformanceDean of the Faculty of Art and DesignDean of Creative LearningDirector of Finance & PlanningDirector of External AffairsUniversity Secretary/Director of Student ExperienceHead of FinanceManagement AccountantFinancial Accountant

Payment value Authorised signatories(a) Individual Payments to third parties except Dorset County Council monthly payroll payments:

Up to £50,000 Any two signatories

£50,001 to £300,000

1 of the following, Principal & Vice Chancellor or Deputy Vice Chancellor or Director of Finance & Planning and any other signatory

Over £300,000 2 from the following, Principal & Vice Chancellor and Deputy Vice Chancellor and Director of Finance & Planning

(b) Transfers between Group accounts:

Any amount Any two signatories

(c) Dorset County Council monthly payroll payments:

Any amount 1 of the following, Principal & Vice Chancellor or Deputy Vice Chancellor or Director of Finance & Planning and any other signatory

2. Barclays Bank – AUB Charitable Foundation

Payments to be authorised as follows:

Payment value

Authorised signatories

(a) Up to £5,000 Any 2 of the Principal & Vice Chancellor, the Director of Finance & Planning and the Clerk

(b) £5,000 to£20,000

1 Trustee (other than the Principal & Vice Chancellor) plus 1 of the other signatories in (i) above

(c) Over £20,000

Any 2 Trustees


APPENDIX II (continued)

3. Rail Warrants

Any two signatories from the following:

Principal & Vice ChancellorDeputy Vice ChancellorDean of the Faculty of Media and PerformanceDean of the Faculty of Art and DesignDean of Creative LearningDirector of Finance & PlanningDirector of External AffairsUniversity Secretary/Director of Student ExperienceHead of FinanceManagement AccountantFinancial Accountant

Note: Rail Warrant requests must be authorised by the relevant budget holder in line with the Financial Regulations.

4. Credit Card Holders

Posts approved as credit card holders are as follows:

Principal & Vice ChancellorDeputy Vice ChancellorDean of the Faculty of Media and PerformanceDean of the Faculty of Art and DesignDean of Creative LearningDirector of Finance & PlanningDirector of External AffairsUniversity Secretary/Director of Student ExperienceProcurement ManagerHead of Business and Regional DevelopmentHead of Short CoursesHead of International DevelopmentHead of Library and Information ServicesHead of Marketing and CommunicationHead of Human ResourcesInternational OfficersMarketing OfficersFaculty Registrars


APPENDIX III

AUTHORISED PETTY CASH FLOATS

Float Location Imprest

University petty cash Finance Office £3,000 (£5,000 at summer show period)

Till float Finance Office £20Library till float Library £100Change machine Library £180Short Courses Enterprise Pavilion £10


APPENDIX IV

TENDERING PROCEDURES

The Procurement Manager shall have oversight of all tendering activity within the University and shall ensure all procurements are issued fully in accordance with EU Directives and Public Procurement Regulations and these financial regulations.

It is important that Budget Holders proactively work with the Procurement Manager at all stages of the procurement cycle and inform the Procurement Manger of any potential/likely tendering requirements as soon as they are identified. Early engagement is critical to procurement best practice and shall enable the optimum procurement solution to be utilised in regard to securing and demonstrating value for money.

The University can take advantage range of tendering processes and the Procurement Manager shall advise Budget Holders on their application and relevancy to their requirement:

Open Procedure Restricted Procedure Negotiated Procedure Competitive Dialogue Innovative Partnerships

Where ever possible a light touch regime shall be applied by the University; however Budget Holders must be aware on occasion this may not be possible and full EU process must be applied. The Procurement Manager will formally advise on a case by case basis.

The most common route to market that the University shall utilise is the Restricted Procedure, which is a two phase procedure. Organisations expressing an interest in the opportunity undergo an initial pre-qualification assessment to test their capacity and capability for undertaking the contract. The most suitable applicants are then “Invited to Tender” and the bids are then scored against a set of predetermined “Quality” criteria.

For illustrative purposes, the process is outlined overleaf:


Stage 1 – Pre Qualification

University Contractor

Advertise contract Request PQQ

Receive request

Send out PQQ Complete and check PQQ

Record PQQ received Return PQQ by deadline

Evaluate PQQ’s

Decide shortlist

Advise shortlisted and unsuccessful contractors Receive outcome of shortlisting


Stage 2 – Invitation to Tender

University SupplierSend out tender documents Receive documents

Attend pre-tender confirmation meeting

Complete tender bid

Check tender bid

Record tender received Return tender by deadline

Evaluate tenders Presentations

Determine successful tender bid Site visits

Inform all suppliers of outcome10 day

standstillperiod

Confirm award

Inform EU journal

Advisory Note:


Budget Holders should not underestimate the amount of time or effort that is required in preparing a work package for tender. With the Procurement Manager’s assistance it is the Budget Holder’s responsibility to define and agree the specification and assessment criteria and relate this to the respective procurement methodology. In some cases this may necessitate the preparation of reports to Board prior to approval to tendering and this should be accounted for in project timelines and proposals.

The Procurement Manager is in the process of developing a Procurement Handbook to further assist Budget Holders in all aspects of procurement. This document has not yet been finalised and in the interim period Budget Holders are advised to seek further guidance and support from the Procurement Manager as and when required.

APPENDIX V

SCHEDULE OF DELEGATED AUTHORITIESMajor WorksMinor WorksPMP

Revenue Purchases

-Orders

Contracts

Grantsand Income Generating Contracts

Capital Equipment

Leases(operating

or financial)

Network/Franchise

agreements/ Education contracts

Board of Governors

Over £250K

Over £250K

Over £250K per

annum

Over £250K

Over £250K

Over£250K

Principal & Vice Chancellor*

Up to £250K

Up to £250K

Up to £250K

per annum

Up to £250K

Up to £250K

Up to £250K

Director of Finance & Planning*

Up to £200K

Up to£200K

Up to £200K per

annum

Up to£200K

Up to £200K

Up to£200K

Deans and Other Directors

NIL Up to £25K NIL Up to £50K NIL NIL

Head of Facilities

Up to £75K Up to £25K NIL Up to £50K NIL NIL

Head of ITCS NIL Up to £25K NIL Up to £25K NIL

Section Heads:(Directorate, Human Resources, Estates, Facilities, Library, Student Services, Registry, Finance,Marketing, International, Short Courses)

NIL Up to £10K NIL NIL NIL NIL


Estates Manager

Up to £50K Up to £10K NIL NIL NIL NIL

Faculty Technical Manager

NIL Up to £5K NIL Up to £5K NIL NIL

Other budget holders NIL Up to £5K NIL NIL NIL NIL

*or Deputy Vice Chancellor acting in place of the Principal & Vice Chancellor

NOTE:Unless otherwise stated, all values refer to contract life value and not annual value.


APPENDIX VI

1. Treasury Management Policy Statement

This statement sets out the policies, practices and objectives of the Arts University Bournemouth’s treasury management activities, as agreed by the Board of Governors.

a) The University adopts the key recommendations of the Chartered Institute of Public Finance and Accountancy’s (CIPFA) Treasury Management in the Public Services: Code of Practice.

b) The University in compliance with the CIPFA Code of Practice, defines treasury management activities as:

The management of the University’s cash flows, its banking, money market and capital market transactions; the effective control of the risks associated with those activities; and the pursuit of optimum performance consistent with those risks.

c) The University regards the successful identification, monitoring and control of risk to be the prime criteria by which the effectiveness of its treasury management activities will be measured.

d) The University acknowledges that effective treasury management will provide support towards the achievement of its business and service objectives. It is therefore committed to the principles of achieving best value in treasury management and to employ suitable performance measurement techniques within the context of effective risk management.

2. Risk Management

General Statement

The Director of Finance & Planning will design, implement and monitor all arrangements for the identification, management and control of treasury management risk, will report at least annually on the adequacy/suitability thereof and will report, as a matter of urgency, the circumstances of any actual or likely difficulty in achieving the institution’s objectives in this respect.

In respect of each of the following risks, the arrangements, which seek to ensure compliance with these objectives, are set out.

a) Liquidity Risk Management

Liquidity risk is defined as the risk that cash will be available when it is needed, that ineffective management of liquidity creates additional unbudgeted costs, and that the University’s business objectives will be thereby compromised.

The University will ensure it has adequate though not excessive cash resources, borrowing arrangements, overdraft or standby facilities to enable it all times to have the level of funds available to it which are necessary for the achievement of its business objectives.

b) Interest Rate/Inflation Risk Management

Interest rate risk is defined as the risk that fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on the University’s finances, against which the University has failed to protect itself adequately.


The University will manage its exposure to fluctuations in interest rates with a view to containing its interest costs, or securing its interest revenues while maintaining the security of the invested funds. It will achieve this by the prudent use of its approved financing and investment instruments, methods and techniques, primarily to create stability and certainty of costs and revenues but at the same time retaining a sufficient degree of flexibility to take advantage of unexpected, potentially advantageous changes to the level or structure of interest rates.

c) Exchange Rate Risk Management

Exchange rate risk is defined as the risk that fluctuations in foreign exchange rates create an unexpected or unbudgeted burden on the University’s finances, against which the University has failed to protect itself adequately.

The University will retain funds in currencies only to the extent that payments are due to be made in these currencies. Currency receipts surplus to this will be transferred into sterling at the best rate achievable, but always retaining a sufficient degree of flexibility to take advantage of unexpected, potentially advantageous changes in the level of exchange rates.

d) Credit and Counterparty Risk Management

Credit and counterparty risk is identified as the risk of failure by a third party to meet its contractual obligations to the University under an investment, borrowing, capital, project or partnership financing, particularly as a result of the third party’s diminished creditworthiness, and the resulting detrimental effect on the University’s capital or revenue resources.

The University regards the prime objective of its treasury management activities to be the security of the principal sums it invests. Accordingly, it will ensure that its counterparty list is constructed with security in mind, but with a reasonable spread to make the most of market conditions. The list will be reviewed on a continuing basis and at least annually.

e) Refinancing Risk Management

Refinancing risk is defined as the risk that maturing borrowings, capital, project or partnership financings cannot be refinanced on terms that reflect the provisions made by the University for those refinancings, both capital and revenue, and/or that the terms are inconsistent with prevailing market conditions at the time.

The University will ensure that its borrowings, private financing and partnership arrangements are negotiated, structured and documented and the maturity profile of the monies so raised are managed, with a view to obtaining offer terms for renewal or refinancing, if required, which are competitive and as favourable to the University as can reasonably be achieved in the light of market conditions prevailing at the time. The University will manage its relationship with its counterparts to secure this objective and will avoid over-reliance on any one source of funding.

f) Legal and Regulatory Risk Management

Legal and regulatory risk is defined as the risk that the University itself, or a third party which it is dealing with, fails to act in accordance with its legal powers or regulatory requirements, and that the University suffers losses accordingly.

The University will ensure that all of its treasury management activities comply with its statutory powers and regulatory requirements.


APPENDIX VI

g) Liquidity Risk Management

Liquidity risk is defined as the risk that cash will be available when it is needed, that ineffective management of liquidity creates additional unbudgeted costs, and that the University’s business objectives will be thereby compromised.

The University will ensure it has adequate though not excessive cash resources, borrowing arrangements, overdraft or standby facilities to enable it all times to have the level of funds available to it which are necessary for the achievement of its business objectives.

h) Interest Rate/Inflation Risk Management

Interest rate risk is defined as the risk that fluctuations in the levels of interest rates create an unexpected or unbudgeted burden on the University’s finances, against which the University has failed to protect itself adequately.

The University will manage its exposure to fluctuations in interest rates with a view to containing its interest costs, or securing its interest revenues while maintaining the security of the invested funds. It will achieve this by the prudent use of its approved financing and investment instruments, methods and techniques, primarily to create stability and certainty of costs and revenues but at the same time retaining a sufficient degree of flexibility to take advantage of unexpected, potentially advantageous changes to the level or structure of interest rates.

i) Exchange Rate Risk Management

Exchange rate risk is defined as the risk that fluctuations in foreign exchange rates create an unexpected or unbudgeted burden on the University’s finances, against which the University has failed to protect itself adequately.

The University will retain funds in currencies only to the extent that payments are due to be made in these currencies. Currency receipts surplus to this will be transferred into sterling at the best rate achievable, but always retaining a sufficient degree of flexibility to take advantage of unexpected, potentially advantageous changes in the level of exchange rates.

j) Credit and Counterparty Risk Management

Credit and counterparty risk is identified as the risk of failure by a third party to meet its contractual obligations to the University under an investment, borrowing, capital, project or partnership financing, particularly as a result of the third party’s diminished creditworthiness, and the resulting detrimental effect on the University’s capital or revenue resources.

The University regards the prime objective of its treasury management activities to be the security of the principal sums it invests. Accordingly, it will ensure that its counterparty list is constructed with security in mind, but with a reasonable spread to make the most of market conditions. The list will be reviewed on a continuing basis and at least annually.


k) Refinancing Risk Management

Refinancing risk is defined as the risk that maturing borrowings, capital, project or partnership financings cannot be refinanced on terms that reflect the provisions made by the University for those refinancings, both capital and revenue, and/or that the terms are inconsistent with prevailing market conditions at the time.

The University will ensure that its borrowings, private financing and partnership arrangements are negotiated, structured and documented and the maturity profile of the monies so raised are managed, with a view to obtaining offer terms for renewal or refinancing, if required, which are competitive and as favourable to the University as can reasonably be achieved in the light of market conditions prevailing at the time. The University will manage its relationship with its counterparts to secure this objective and will avoid over-reliance on any one source of funding.

l) Legal and Regulatory Risk Management

Legal and regulatory risk is defined as the risk that the University itself, or a third party which it is dealing with, fails to act in accordance with its legal powers or regulatory requirements, and that the University suffers losses accordingly.

The University will ensure that all of its treasury management activities comply with its statutory powers and regulatory requirements.

m) Fraud, Error and Corruption and Contingency Management

This is defined as the risk that a University fails to identify the circumstances in which it may be exposed to the risk of loss through fraud, error, corruption or other eventualities in its treasury management dealings and fails to employ suitable systems and procedures and maintain effective contingency management arrangements to these ends.

The University will ensure that it has identified the circumstances which may expose it to the risk of loss through fraud, error, corruption or other eventualities in its treasury management dealings. Accordingly, the University will employ suitable systems and procedures, and will maintain effective contingency management arrangements, to these ends. Insurance cover will be taken out and the responsible officials included within it.

n) Market Risk Management

Market risk is defined as the risk that, through adverse market fluctuations in the value of the principal sums the University invests; its stated treasury management policies and objectives are compromised, against which effects it has failed to protect itself.

The University will seek to ensure that its stated treasury management policies and objectives will not be compromised by adverse market fluctuations in the value of the principal sums it invests and will accordingly seek to protect itself from the effects of such fluctuations.

3. Performance Measurement

The University is committed to the pursuit of best value in its treasury management activities and to the use of performance measuring in support of that aim.

Accordingly, the treasury management function will regularly examine alternative methods of service delivery to ensure best value and will measure its performance using appropriate benchmarks.


4. Decision Making and Analysis

The University will maintain full records of its treasury management decisions and of the processes and practices applied in reaching those decisions, both for the purposes of learning from the past and for demonstrating that reasonable steps were taken to ensure that all issues relevant to those decisions were taken into account at the time.

5. Approved Instruments, Methods and Techniques

The University will undertake its treasury management activities by employing only those instruments, methods and techniques as detailed in Schedule C and within the limits approved by the University.

6. Organisation, Clarity and Segregation of Responsibilities and Dealing Arrangements

For purposes of effective control and monitoring of its treasury management activities, the University, through the Director of Finance & Planning will ensure that there are clear written statements of the responsibilities for each post engaged in treasury management and the arrangements for absence cover.

7. Reporting Requirements and Management Information Arrangements

The University will ensure that regular reports are prepared and considered on the implementation of its treasury management polices; on the effects of decisions taken and transactions executed in pursuit of those policies.

As a minimum the Board of Governors will receive:

An annual report on the strategy and plan to be pursued in the coming year; An annual report on the performance of the treasury management function, on

the effects of the decisions taken and the transactions executed in the past year, and on any circumstances of non-compliance with the University’s treasury management policy statement and policies; and

An annual report on the performance of any external service providers.

8. Budgeting, Accounting and Audit Arrangements

The Director of Finance & Planning will prepare and the University will approve and, if necessary, from time to time will amend, an annual budget, which will include income and costs associated with treasury management activities. The matters to be included in the budget will as a minimum be those required by statute or regulation.

The University will account for its treasury management activities, for decisions made and transactions executed, in accordance with appropriate accounting practices and standards and with statutory and regulatory requirements in force for the time being.

The University will ensure that its auditors, both external and internal and those charged with regulatory review, have access to all information and papers supporting the activities of the treasury management function as are necessary for the proper fulfilment of their roles and that such information and papers demonstrate compliance with external and internal policies and approved practices.


9. Cash and Cash Flow Management

The Director of Finance & Planning is responsible for all University monies. All funds will be aggregated for cash flow and investment management purposes. Cash flow projections will be prepared on a regular and timely basis, and the Director of Finance & Planning will ensure that these are adequate for the purposes of monitoring compliance with Treasury Management Practice Liquidity Risk.

10. Money Laundering

The University is alert to the possibility that it may become the subject of an attempt to involve it in a transaction involving the laundering of money.

Accordingly it will maintain procedures for verifying and recording the identity of counterparties, reporting suspicious activity and ensuring that staff involved in this are properly trained. Staff will be made aware of the provisions of the Money Laundering Regulations 2007 and associated legislation such as the Terrorism Act 2000 and the Proceeds of Crime Act 2002.

11. Staff Training and Qualifications

The University recognises the importance of ensuring that all staff involved in the treasury management function is fully equipped to undertake their duties and responsibilities. The University will therefore seek to appoint individuals who are both capable and experienced and will provide training for staff to enable them to acquire and maintain an appropriate level of expertise, knowledge and skills. The Director of Finance & Planning will take responsibility for the necessary arrangements.

12. Use of External Service Providers

The University will evaluate the costs and benefits involved when employing external specialists. It will also ensure that the terms of such external providers are assessed and properly agreed and documented and subjected to regular review. Where services are subject to formal tender or re- tender arrangements, legislative requirements will always be observed.

13. Corporate Governance

The University is committed to the pursuit of proper corporate governance throughout its businesses and services, and to establishing the principles and practices by which this can be achieved. Accordingly, the treasury management function and its activities will be undertaken with openness and transparency, honesty, integrity and accountability.


Schedules to the Statement of Treasury Management Practices

Schedule A - Risk Management

1. Liquidity

The University’s policy is to maintain cash facilities up to 1 month’s operating and payroll costs, to allow for unforeseen liquidity requirements.

The Director of Finance & Planning is authorised to arrange short-term overdraft facilities with the University’s bankers.

2. Exchange Rate Exposure Policy

The University’s policy is to avoid exposure to exchange rate fluctuations.

Currency receipts should be transferred into sterling within one month of receipt, except where currency payments are due to be made. In this situation, sufficient currency should be retained on deposit to cover the payments.

The Director of Finance & Planning is authorised to buy and sell currencies with any of the organisations listed below:

University LimitsUniversity ‘house bank’ - Lloyds TSB No LimitsOther UK Clearing Banks £50,000Others - Western Union £50,000

3. Credit and Counterparty Lists

The Director of Finance & Planning is responsible for monitoring closely the credit standing of approved counterparties. Where there is reason to believe that a counterparty credit standing is, or may, become impaired, lower limits should be applied. Any change to the counterparty list should be advised to the Board of Governors.

Funds may be invested with approved counterparties providing they carry a minimum AA rating or better from one of the recognised credit rating agencies, i.e. Standard & Poor’s or Moody’s.

The list of approved counterparties is provided in Schedule E. The maximum deposit to be invested with any counterparty is £1 million excluding any interest gained and rolled over as part of the same investment. Where the University has borrowings with a counterparty the maximum deposit is the balance of those borrowings plus £1 million. The period of investment should typically not exceed 3 months but longer periods may be agreed with the prior approval of the Director of Finance & Planning but they should not exceed one year.

4. Financing and Refinancing

Capital Finance may only be raised subject to the approval of the Finance & Resources Committee.

Long Term Borrowing will only be sought for projects that will generate cash flow sufficient to service the debt. It will be in the form of agreed arrangements with the University’s bankers or other major clearing banks and will be repaid in the shortest possible timescale consistent with financial prudence.


Security will be offered if commercial advantage will thereby accrue but policy is to offer a negative pledge.

Fixed rate interest finance will be preferred unless there are overriding reasons to accept variable rates e.g. maintaining a balanced portfolio of borrowings.

Should the University intend to raise capital for new projects and/or intends to refinance the whole or part of the existing debt portfolio; the Director of Finance & Planning will have regard to:

the level of security required for the project (if required) the maximum level of assets that could be provided as security without adversely

effecting the stability of the University the value of assets already pledged as security on any existing facilities requirements of HEFCE (under the Financial Memorandum) any statutory restrictions and the University’s own powers/rules restrictions on the University’s use of its property assets required by loan

documentation/and other covenants the costs involved in the negotiation and execution of the new agreements the level and nature of interest rates charged and structure in the current market

place


Schedule B - Best Value and performance measurement

1. Frequency and Process for Tendering

The following services may be subject to tender every 3 to 5 years where applicable and after discussion with the Finance & Resources Committee.

Banking services Fund management services Financial adviser/Merchant Bank Cash management, money broking services and general finance advice

2. Performance Measurement

a) In house performance

The table below sets out the target benchmarks

Benchmark Target£ - under £0.5million Base rate +/-0.25%£ - over £0.5million Base rate +/-0.50%

b) Investment Managers (If applicable)

Benchmarks for the above are normally agreed with the Investment Manager and documented as such.

c) Debt Management

The Director of Finance & Planning will, having regard to the annual budget, set targets to quantify:

Borrowing costs Interest rates Debt levels


Schedule C - Approved Instruments, Methods and Techniques

1. Investment and Deposit of Surplus Funds

a) The overriding principle guiding the investment of surplus funds is to achieve a satisfactory return while keeping risk to an acceptable level.

b) Surplus cash balances may be invested as follows:

Deposits with approved banks Deposits with approved Building Societies Deposits with COIF (Charity funds run by CCLA Investments Ltd) Deposits with approved Money Market Funds

as per the current approved Counterparty list


Schedule D - Organisation, Segregation of Responsibilities and Dealing Arrangements

Responsibilities of Treasury Management Posts

1. The Board of Governors

Receiving and reviewing reports on treasury management policies, practices and activities.

Approval of any amendments to the treasury management policy statement and practices.

Budget consideration and approval. Approval of the division of responsibilities. Receiving and reviewing external audit reports and follow up action Approval the selection of external service providers and agreeing terms of

appointment.

2. Director of Finance & Planning (DFP)

Recommending clauses, to be incorporated in treasury management policy and practices for approval, reviewing the same regularly and monitoring compliance.

Submitting regular treasury management policy reports. Submitting budgets and budget variations. (Joint responsibility with FA) Receiving and reviewing management information reports. Reviewing the performance of the treasury management function and

promoting best value reviews. Assess credit rating of Banks (Joint responsibility with FA) Consider potential interest rate movements (Joint responsibility with FA) Monitor costs involved in pursuing best deals (Joint responsibility with FA) Ensuring the adequacy of treasury management resources and skills and the

effective division of responsibilities within the treasury management function. Recommending the appointment of external service providers. Assess available amounts and periods of availability for investment (Joint

responsibility with FA) Confirmation of bank signatories for the University and its associated entities. Seek external advice where appropriate (Joint responsibility with FA) Review mandate/facility agreements/security given (Joint responsibility

with FA) Ensure compliance with any mandate requirements (Joint responsibility

with FA) Minimise Banking Costs (Joint responsibility with FA) Assess borrowing requirements and consider following:

- The likely terms applicable to any financing requirement- Whether to borrow on a fixed or variable basis- The period of loans undertaken- The repayment options available

3. The Financial Accountant (FA)

Execution of transactions. Adherence to agreed policies and practices on a day to day basis. Maintaining relationships with third parties and external service providers. Supervising treasury management staff. Training and Development of Treasury staff (Joint responsibility with DFP) Monitoring performance on a day to day basis. Prepare and monitor cash flow forecasts (Joint responsibility with DFP)


Submitting management information reports to the Director of Finance & Planning

Assess available amounts and periods of availability for investment (Joint responsibility with DFP)

Identifying and recommending opportunities for improved practices Payment scheduling Payment Terms Prompt payment discounts Debtor identification and collection terms Obtain value for receipts Contribute to pricing policy and options re-pay in advance/arrears/by

instalment

4. Reporting Requirements

The following matters should be included in reports to the Board of Governors:

a) Annual Report to Governors

Commentary on treasury operations for the year. Cash flow compared with budget and commentary on variances Annual financial strategy for the next financial year. Proposed amendments to the treasury management policy statement. Matters in respect of which the treasury management policy statement has

not been complied with.

b) Periodic Reports

Analysis of currently outstanding loans, deposits and investments by instrument, counterparty, maturity and interest rollover periods.

Commentary on treasury operations for the period. Cash flow compared with budget and commentary on variances Commentary on continued applicability of annual financial strategy and

proposals for amendments. Revisions/adjustments to future 12 month cash flow forecast and an

estimation of future interest rates and the effect on annual financial strategy and revenues.

Proposed amendments to list of approved counterparties and to limits attached thereto.

Proposed amendments to treasury systems document. Matters in respect of non compliance with treasury management policy.


Schedule E – Approved Counterparties

CREDIT RATINGS TAKEN FROM MOODY'S GLOBAL RATINGS: May 2014

THE ENGLISH AND SCOTTISH CLEARING BANKS AND THEIR SUBSIDIARIESLong LongTerm Term

Barclays Bank P1 A2 HSBC P1 Aa3

Royal Bank of Scotland P2 A3 Lloyds Banking Group P1 A2

EUROPEAN & OVERSEAS BANKS

France NetherlandsBNP Paribas P1 A2 Rabo Bank P1 Aa2Societe Generale P1 A2 ING Bank P1 A2

Germany SwitzerlandLandesbank Berlin P1 A1 UBS AG A2

Finland SingaporeNordea Bank P1 Aa3 Development Bank of Singapore P1 Aa1

United Overseas Bank P1 Aa1Australia OCBC Bank P1 Aa1Australia & New Zealand Banking Group P1 Aa2Commonwealth Bank of Australia P1 Aa2 United Arab EmiratesNational Australia Bank P1 Aa2 National Bank of Abu Dhabi P1 Aa3

BUILDING SOCIETIES WITH ASSETS IN EXCESS OF £5 BILLION

Coventry P2 A3 Skipton Ba1

Leeds P2 A3 West Bromwich B2

Nationwide P1 A2 Yorkshire P2 Baa2

Principality Ba1

OTHER UK INSTITUTIONS

Clydesdale Bank P2 Baa2 Close Brothers P2 A3


Documents

Finance Regulations September 2014 Regulations.docx · Web viewAdherence to the system of financial regulation will help to ensure that accurate and complete accounting records are