BUDGET MANUAL UNIVERSITY OF SURREY April 2005

Maintained and updated by the Resource Management Group

Contents

Introduction
This Budget Manual is intended to guide new and existing staff through the complexities of how the University of Surrey is financed and how these finances should then be managed. Updates to this manual will be controlled by the Resource Management Group (RMG)

Purpose of Financial Management

Financial Management is important to the University as it support the organisation in achieving its aims & objectives. It is therefore vital that sound financial projections are available to inform the strategic planning process and to enable Budget Managers to take the necessary action to alleviate problems at the earliest opportunity. The better the financial management at the University the better use we can make of our scarce resources. Too pessimistic forecasts can mean we lose the opportunity to invest for the future; too over optimistic forecasts can mean that we over stretch ourselves and become more vulnerable to changing market conditions.

Investment Appraisals
The purpose of investment appraisal is to assist us in the decision making process within the University with regard to projects that involve a large financial outlay. This is particularly so when resources are scarce and when institutions have to establish value for money. An Investment appraisal is required in support of any application for funding for a project that is valued in excess of 10,000. Investment Appraisal techniques provide a means of evaluating projects against each other, to ensure that, within the limited amount of funding available to the University, the right amount of funds is invested in the right projects at the right time. A brief investment appraisal manual and a template are available on the website at web link. Stuart MacGregor in Central Finance should be contacted when an Investment Appraisal needs to be undertaken.

The University Financial Strategy

A financial strategy for the University forms an essential underpinning to the successful delivery of its long term academic and other enabling strategies and plans. The university financial strategy maintains an overall intention to produce a sufficient surplus from operations over a 7 year cycle (defined by RAE frequency) to enable investment in future development to fulfil strategic objectives. The sector target is to achieve a surplus of 3% of Income. In 2003/2004 the University generated a surplus i.e. Income exceeded Expenditure by 2.8m. This money allows us the cash to invest for the future and it provides a buffer for future years budgets. In 2003/2004 this surplus of 2.8m equates to a surplus of 1.8% some way below the 3% target, however our aim is to achieve this 3% surplus over the long run, therefore in some years we will be below target but hopefully in other years we will exceed that target. In broad terms the university financial strategy, seeks to: Provide sufficient surpluses that can be used to fund capital and other investment and development Ensure observance of cash-flow covenants with external lenders Provide sufficient operating cash-flow to meet both capital programme and working capital requirements Maintain sufficient reserves to underpin cash-flow and also to help provide a contingency to meet the downside effects of the risks coming to fruition

How the University is Funded

The University is funded via a number of sources. In 2003/2004 the Universitys total income of 153 million was made up as follows: 28% (43m) via Academic Fees & Support Grants 26% (40m) from other Operating Income 24% (37m) came from HEFCE for Teaching & Research 16% (25m) from Research Grants & Contracts 6% (10m) from Endowments, trust inc.& Interest

Other Operating Income

The prime contributor (26%) to the University in terms of Income is from Other Operating activities, these include: Other Services Rendered Activity (OSR) Income from Residences, Catering & Conferences Income from subsidiary companies such as SSTL and Surrey University Press (Bookshop)

Academic Fees & Support Grant Income

The University received 61m in 03/04 in respect of Teaching Income, 18m of this came from HEFCE. The remainder has come through tuition fees or income from the National Health Service (11m) payable both to the European Institute of Health & Medical Sciences (EIHMS) and the Postgraduate Medical School (PGMS). Students from the United Kingdom account for 10m of the Universitys total teaching income; 3m comes from Students from the European Union (excluding UK) & 18m from Non European Union Students.

HEFCE Income
Generally a large proportion of the funding for Higher Education establishments comes from the Higher Education Funding Council for England (HEFCE). In the University of Surreys case the Income from HEFCE accounts for 24% or 37m of the Universitys total income. The Sector average is 39%. So although the level of HEFCE income is very important to the University we are not as dependent upon it as other institutions.

Each November the Secretary of State for Education announces how much money will be allocated to HEFCE for the forthcoming Academic Year i.e. (1st August to 31st July). In March HEFCE then announce how that grant will be divided between Teaching, Research & Other. For 2004/05 HEFCE have been given a total grant of 5,993 million and they have allocated it in the following way: 3,826m to Teaching 1,081m to Research 584m Earmarked Capital Funding 486m Special funding 16m for Transfers & Other.

These funds are generally then distributed to institutions by formulaic means which tend to take account of the volume and mix of individual institutions in terms of teaching & research.

HEFCE Teaching Funds

Institutions receive teaching funds in the form of HEFCE grant and tuition fees payable by the student or by Government on behalf of the student (see section on Academic Fees & Support Grants). This combined total i.e. Teaching Grant & Tuition fees is referred to as the Teaching Resource There are four main stages in calculating the main element of HEFCE teaching funds for each institution. Stage 1- A standard resource for each institution is calculated, this is a notional calculation of what the institution would get if teaching grant was calculated afresh each year. This notional allocation is based on each institutions profile of students and takes into account: the number of students subject-related factors student-related factors institution-related factors

Stage 2 The assumed resource for the institution is then calculated, this is based on the teaching grant paid last year adjusted for inflation and any assumptions HEFCE make about student tuition fee income Stage 3 The standard resource is then compared with the assumed resource and a percentage difference is calculated.

10

Stage 4 If this difference is no more than 5% either way then the HEFCE grant will be carried forward from one year to the next. If the difference is outside the 5% band then the grant and or the student numbers will need to be adjusted so that they move within the tolerance band Outside of the funding method for teaching HEFCE allocate funding each year to recognise the additional costs of recruiting and supporting students from disadvantaged and non-traditional backgrounds or students who have disabilities. For 2004/05 273m is allocated for this purpose. This funding is allocated using a method that reflects levels of relative educational disadvantages in census wards. It is calculated pro-rata to 04/05 weighted FTEs where the weighting reflects the broad institutional mix of students from difference census wards as well as a London cost weighting.

HEFCE Research Funds

HEFCE provides funding to support the research infrastructure. This means that the money received from HEFCE should be used to contribute towards the salaries of permanent academic staff; premises; libraries and central computing costs. Any income that is received from the Research Councils should therefore be used to fund the direct project costs and contribute to indirect project costs. The Income from HEFCE for Research is distributed selectively based on the quality shown by institutions in terms of their research, reference is made to national & international standards. The Quality of the Research is measured in a periodic Research Assessment Exercise (RAE). Only establishments that achieve ratings of 4, 5 & 5* will receive such funding. However, those with ratings of 3a & 3b may receive some funding from HEFCE under the Capability heading (see below for more details). Research funding from HEFCE is allocated under two main headings Quality- related research (QR) which makes reference to both the quality and volume of research activity Capability funding this supports research in emerging subject areas where the research base is currently not as strong as in more established subjects.

HEFCE Special Funding

HEFCE recognise that not all widening participation, learning & teaching, research and related activities can be adequately supported through formula funding. So each year they allocate an amount for new initiatives that meet HEFCEs strategic aims.

11

HEFCE Earmarked Capital Funding

This is additional funding provided by the Government via HEFCE to address past underinvestment in the sector. The two major programmes are the Science Research Investment Fund (SRIF) and project capital for learning, teaching and IT.

Research Grants & Contract Services Income

In 2003/2004 the University received 39m in total in respect of Research Income: 14m of which came from HEFCE 7m from the Research Councils 1m from UK Based Charities 5m from the European Commission 12m from Other Grants & Contracts (including commercial contracts with industry)

The Transparent Approach to Costing (TRAC) and Full Economic Costing (fEC) As a result of the governments 1998 Comprehensive Spending Review, the HE sector was asked by the Treasury (the Transparency Review) to implement a costing methodology (TRAC) which provided the costs of HEIs Teaching, Research, and Other activities. HEIs continue to annually report these costs to HEFCE at institutional level showing the publicly funded and non-publicly funded elements. The aggregated results from the sector gave cause for concern that research was particularly under funded, and non-sustainable in the long term. It was decided that the dual support system of research funding should be overhauled and that university research should become more self-sustaining which required that the full economic costs (fEC) of research contracts should be calculated by each institution. fEC is an extension of the TRAC methodology and has a timetabled implementation over the next five years. It is envisaged that after full sector-wide adoption of TRAC/fEC, universities will be in a financially stronger position to compete in the world market for research contracts.

Endowments, Trust & Interest Income

12

10 million of the Universitys total income in 2003/2004 came from either Endowments, Trusts or Interest receivable. In terms of Endowments, the University generates the majority of its income through the ownership of the Science Research Park. The Park generates a surplus of approximately 4m per annum. Other Endowments are received through either Donations or Bequests. The Unis Annual Fund which is run by the Alumni & Development Office and established in 2003 is a primary source of Donation income. The fund aims to provide financial support to students in need and additional income for the University to used to enhance student facilities. 170,000 was received by the Annual fund in 2003/04. A further source of income for the University is the interest that is receivable on the Universitys Investments, these can be overnight bank deposits or longer term deposits.

13

How Is the Money Spent

In 2003/2004 the University spent 151m of the 154m it received in Income. The majority of this expenditure was on staff costs (83m). The University employs in excess of 2,000 individuals. 7m was spent on funding the Depreciation on Assets that the University owns such as the Land; the Buildings and the Equipment. A further 55m was spent on other operating expenses and 6m was spent on Interest payable both loan and bank

14

The Resource Allocation Methodology

The Resource Allocation Methodology has been designed as a way to ensure that all the Income received from HEFCE is apportioned to the Schools and that the costs associated with the support services of the University such as Finance & Registry are borne by the Schools (infrastructure charge). Under the University Resource Allocation Methodology, income flows to the Unit which is responsible for generating it and from this income the Unit must cover its own costs, make a contribution to its School costs and also make a contribution towards: those costs which are incurred by the University on behalf on the revenuegenerating units Strategic Fund which is used to finance new initiatives.

For most income streams, it is a simple matter to identify the Unit which is responsible for generating income (eg research grants and contracts.) For other income streams, eg the HEFCE Teaching and Research Grants, the University has devised a methodology for distributing the funding (which is very similar to the method used by HEFCE to determine the Universitys grants). Some of the Universitys costs are incurred centrally on behalf of the Schools (eg the University Library). These costs (the infrastructure costs) are allocated to one or more of four cost pools (Space, Staffing, Teaching and Finance) primarily on the basis of what drives the cost. Thus the costs of the University Registry will be allocated to the Teaching Cost Pool. The total costs in each cost pool are apportioned to the revenuegenerating units on the basis of their level of activity in that cost pool, eg costs in the Teaching Cost Pool are apportioned on the basis of student ftes. The University also requires each revenue-generating unit to contribute a fixed percentage of its total income to the Strategic Fund, which is used to fund or pump-prime new, primarily academic, initiatives.

15

The Tax Status of the University

The University has been granted Charitable status for its primary purpose (i.e. the advancement of education through teaching & research). This means that the Unis is exempt for VAT purposes i.e. it cannot charge VAT on its income, but this also means that it cannot reclaim any VAT on its purchases (input tax) the effect being that the budget takes the gross cost of an item not the net. The University however is not subject to Corporation tax on its primary activities. On the Universitys non-primary activities i.e. commercial activities such as Consultancy and Other Services Rendered the University is subject to the rules on VAT meaning that it can charge VAT on its income and reclaim the input VAT. We are also liable for Corporation tax. Where the activities of the University are mixed i.e. partly primary and partly nonprimary, a % of the VAT on purchases can be reclaimed as it is covered through the partial exemption calculation. With these mixed activities the budget head will still see the gross cost of the expenditure hit his/her budget. The amount of VAT that is reclaimable goes to the Centre and is used to offset part of the infrastructure charge.

16

Accountability both Internal & External

The University is accountable to both Internal & External Departments/Bodies and Requirements:-

HEFCE
The University has to comply with the financial memorandum (see below) and submit documentation to HEFCE including a strategic university plan; a corporate plan including an annual monitoring statement & a 5 year financial forecast. In addition the University has to provide mid year financial returns; the audit committee annual report and a internal audit annual report. Both the audited accounts and external auditors management letter along with the annual audit return also need to be returned Financial Memorandum Requirements Under the Financial Memorandum, we have to demonstrate to HEFCE that: Public funds received have been used for the purposes intended Sound arrangements are in place in terms of risk management, control and governance the institution will remain solvent and that it is forecast to remain solvent the institution has complied with borrowing requirements value for money has been pursued

The Financial Memorandum also requires that the financial statements should conform to the Statement Of Recommended Practice for University financial reporting (see below) A full statement of the responsibilities of the Court of the University is included in the Annual Reports and Financial Statements. The Financial Memorandum requires that the accounts should be signed on behalf of the University by the designated officer (i.e. the Vice Chancellor) and by the Chairman or one other member of the University Court as determined by the Court. The Financial Memorandum requires the University to assess and recover the full costs of research contracts, Accommodation Services and other trading activities or services provided to external parties. This established the principle that there should be no crosssubsidisation from funds provided for teaching and related activities. Where it is appropriate in particular cases for the University to provide some of its own resources towards the cost of such activities the University should be aware of the extent of the funding provided.

17

Higher Education Statistics Agency

A comprehensive Financial Statistics Return must be submitted to the Higher Education Statistics Agency (HESA) within five months of the year-end. HESA has been established to undertake data collection and analysis about higher education in order to make possible a consistent information provision about higher education throughout the UK, and to enable the University and the Funding Council to meet their obligations under relevant legislation. The formal responsibility for the provision of this information to Ministers rests with the Funding Council. HEFCE have agreed to engage HESA as their agent for this purpose. In addition to data from the Financial Statements the HESA return includes a breakdown by academic subject area of research income, staff costs and other expenditure. As well as the HESA Finance return, HESA also collects information from institutions on Students and Staff, therefore data on these areas should be consistent across the three sets of statistics

Accounting Standards
The Accounts of the University have to be constructed in accordance with the Statement of Recommended Practice (SORP) Accounting in UK Universities which has been approved by the Accounting Standards Board and which was originally issued by the Committee of Vice-Chancellors and Principals in 1989. This therefore mean that the University is subject to an external audit. The Universitys current auditors are Ernst & Young The Statement of Recommended Practice divides University income into two broad categories - "Unrestricted (or General) Income and Restricted Income. The accounting treatment of income requires that it should be dealt with under the accruals concept and be matched with associated expenditure (see below).

Fundamental Accounting Principles

As the Universitys accounts have to adhere to the Statement of Recommended Practice this in turn means the University has to comply with the four fundamental accounting principles shown below:Going Concern Accounts should be prepared on the basis that the business will continue to operate unless the entity is being liquidated or has ceased trading.

Consistency

18

The accounting treatment of particular items should be the same from period to period; if changed, the difference should be revealed. Hence the need for a Fixed Asset policy that states (in the University of Surreys case) that all items purchased over 10k will be capitalised and depreciated over the assets economic useful life. Matching Wherever possible revenue and associated costs (or vice versa) should be accounted for within the same accounting period, subject to accounting for any losses as soon as they are identified and quantified. Hence the need to raise accruals to defer income into the next financial year if the course the income relates to has not yet been run. Prudence Provision should be made for all potential costs whereas, as indicated, profits should not be accounted for until realised or when the realisation can be assessed with reasonable certainty. This means that a far more conservative approach is adopted towards accounting for profit than is the case for costs. Hence the opportunity to accrue early retirements costs if the individuals have signed the agreement by the 31st July but they dont actually leave until the following financial year

Internal Audit Requirements

Budget Managers are required by Internal Audit to ensure that the following is carried out: Run the weekly transaction reports and check transactions according to the advice issued by the Planning Department web link. These reports should be signed by the checker and stored for 12 months. Payroll Costs Report this report should be run on a monthly basis and checked to ensure that all anomalies are investigated, it should be signed and then stored for 12 months. See web link for details of how to run it

Schools only: P50 R, G & C Project Statements - These report are intended to allow the financial monitoring of Research Projects, they are aimed at School Finance Managers, Finance Administrators and Principal Investigators. The main difference between this report and other financial reports is that the numbers are project to date, rather than year to date. These statements should be run regularly and checked and then stored for 12 months. See web link for details of how to run them

19

University Committees
Council
The University Council comprises a number of ex officio, appointed, elected and coopted lay and academic persons, the majority of whom are non-executive. The University Council as governing body is responsible for the Universitys system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The University has agreed a Risk Management Policy which has been approved by Council and its risk register is regularly reviewed and updated.

Finance Committee
To advise Council on financial policy and to keep the University's financial position under review. To scrutinise the Annual Accounts of the University and of other bodies which require to be approved by the Council. [Note the Audit Committee scrutinises the Annual Accounts from a compliance with Accounting Standards perspective and gives assurance to Finance Committee and Council on this aspect] To consider the University financial forecasts and capital programme proposed by the Executive Board and to make recommendations to the Council thereon To exercise the Council's powers relating to the borrowing and investment of money laid down in Statutes 16(7) and 16(8), subject to a limit of GBP55m, above which powers revert to Council. To report to Council annually on the Universitys total borrowings, and to make recommendations when appropriate on the level of future borrowings. The Committee may delegate some or all of these powers to a sub-committee a majority of whose members are lay members provided it requires the sub -committee to report to it on the exercise of these powers at its next regular meeting To exercise the Council's powers relating to the determination of University fees and charges as laid down in Statute 16(11). To receive reports from the Executive Board in order to review the use of the University's assets and their management and the return that the University obtains from these. To approve financial regulations and related standing orders of the University. To exercise its powers on behalf of the University laid down in the Deed of the Battersea Trust. To recommend to the Council statements of the financial responsibilities of staff and of members of committees and of the Council

20

To receive the Annual Accounts of and an annual financial report and forecast from the Students' Union and the Union Club. To consider the Financial memorandum with the Students Union and to make recommendations to Council on revisions. To approve the funding requirements for capital programmes on the recommendation of the Executive Board. To exercise the Councils powers as Trustee of the Foundation Fund in all matters which are not specifically delegated to the Research Park Executive or other committee. The Committee may sub-delegate some or all of these powers to a sub-committee which shall be subject to the special quorum requirement. To approve the University's insurance arrangements. To receive reports from the Research Park Executive on the development and operation of the Research Park. To act as the vacation and emergency committee of the Council. To carry out such other functions as are delegated to it by the Council and to consider such other matters as may be referred to it by the Chairman of Council or the Vice-Chancellor.

Executive Board
The Executive Board is an advisory body which assists the Vice-Chancellor in discharging his executive authority under the Statutes for the management of the University. It currently comprises all Heads of Schools in addition to Senior University Administration staff. It is responsible for: advising on all matters relating to University strategy and for making recommendations on these as appropriate to the Vice-Chancellor and thence to Council, for its approval. advising the Vice-Chancellor on all decisions and actions necessary for the conduct of the University and for the achievement of the objectives of the approved strategy. providing advice to the Vice-Chancellor on: (i) the Universitys strategic and academic plans and operating statement, covering all of the Universitys activities, for approval by Senate and Council; (ii) guidelines for the annual planning process and for reviewing the outcomes of that process for all academic and non-academic units; setting academic, operational and financial targets as appropriate; making budget proposals and determining budgetary allocations; (iii) the approval of the plans of all of the Universitys entities in the context of the University plans approved by Senate and Council; (iv) the academic and resource implications of all new academic initiatives, including new course proposals, in the context of the Universitys and Schools academic and financial plans;

21

(v) (vi) (vii) (viii)

the progress of all of the entities within the University in achieving the objectives of their approved plans both on an annual and medium term basis; actions to be taken where progress diverges from plans; matters put to it by its sub-groups/committees or by University entities which wish to take actions not included in their latest approved plan; all major capital projects in the context of the Universitys strategic and academic financial plans.

Planning Committee
The purpose of the Planning Committee is to ensure that the University plans effectively for its future and allocates its resources consistently with those plans. In order to achieve this it will: prepare and keep under review the Universitys overall strategic plan and associated financial strategy and forecasts consider and recommend for approval by the Executive Board the developmental/operational plans put forward annually by the Schools, academic services departments and central support departments make recommendations to the Executive Board on the deployment of the Universitys strategic resources make recommendations to the Executive Board on the construction of the annual budget and the forward financial forecast for the University for the coming year guide and develop the processes by which the University produces strategic, developmental and operational plans and its annual budget make recommendations on the operation of and changes required to the Universitys Resource Allocation Methodology.

Estates Committee
To formulate and review periodically the University's key policies and strategy in relation to its estate and buildings and to make recommendations to the Executive Board thereon on behalf of the Executive Board, to oversee and monitor the effective implementation of those policies through agreed action plans to make recommendations to the Executive Board and the Finance Committee on the prioritisation of expenditure in the University estate to set performance standards for the operation, maintenance and energy utilisation of buildings and building services on the estate to arrange for such consultation, to commission studies and other exercises and to establish such groups as may be necessary in pursuit of its objectives

22

to communicate with, and to have regard to the business of other bodies, including the committees of the Senate, so as to ensure that matters within the purview of the Committee are properly identified and progressed.

Minor Works The Minor Works Fund is a relatively small funding (approx. 300k) source for Estates & Buildings projects with an estimated value of up to 50,000 that fit with the University's Strategic Plan but which can not or should not be funded by individual Schools or Departments. Applications for this funding, including outline descriptions of the proposed projects, should be submitted by the School / Departmental Manager to the Office of the Deputy Vice Chancellor, and awards will be made via the Estates Executive Committee on a quarterly basis. Projects if approved will normally be managed by the Estates & Buildings Department.

Resource Management Group

The purpose of the Resources Management Group is to attend to the management of the Universitys resources within the current operational year. In order to achieve this it will: receive periodic reports of financial and non-financial performance of academic and non-academic units for the purposes of assessing out-turn consider and approve in-year changes to expenditure and income budgets by academic and non-academic units advise the Planning Committee and the Executive Board, as appropriate, on any actions which they need to take in order to deliver the planned academic objectives and financial results for the current year and subsequently to consider and make recommendations on fee and related issues to approve the framework for the setting of general fee levels and fees for individual programmes, and to monitor its operation and effectiveness.

The group comprises of Prof. Turner (Chair), Tony Knapp, Greg Melly & Bob Gunn. The group is serviced by Sarah Heighes.

Process Improvement Committee

The purpose of the Process Improvement Committee is to create an integrated, prioritised and managed approach to improvement and change across the University by: acting as a steering group to co-ordinate and support change initiatives including those relating to Customer Relationship Management [CRM], Value For Money [VFM] and IT systems, and those derived from outcomes of the Risk Management Initiative

23

providing a methodology for running and supporting process reviews, including programme management tools and associated training, working within Charter Mark and EFQM criteria as appropriate advising the Executive Board on the inclusion of processes in a co-ordinated annual University Improvement Programme evaluating existing processes and proposed improvements against appropriate benchmarking information agreeing objectives, targets and milestones for each process review together with arrangements for the management of the project and for the appointment of external facilitators or consultants receiving regular reports on the progress of each project and post implementation reports.

24

Financial Responsibilities
Council has ultimate responsibility for the finances of the University. The Vice Chancellor is deemed to be the Designated Accounting Officer as a result he therefore has to sign the HEFCE return. The Vice Chancellor is supported by various University Committees :- Finance; Audit; Supervisory Board; Executive Board; Planning Committee; Resource Management Group; Estates Executive Committee; Process Improvement Committee (see above for more information) At the next level down the Director of Finance has financial responsibility for the University affairs. However financial management is devolved at the University thereby meaning that Schools are responsible for their own finances subject to adhering to the financial plan that has been agreed through the Academic planning round. If the School needs to go outside of that budget then they need to gain authority from the Resource Management Group.

Schools Financial Responsibilities

All Schools have a Finance Manager. Schools are responsible for preparing budgets and monitoring and controlling their Income and Expenditure. Schools raise their own purchase order and sales invoices (except for RG&C and some tuition fees) on Oracle financials. Schools also prepare costings (RC11s) for research grant applications.

Departments Financial Responsibilities

Some Central Service or Administration Departments have a desginated Finance Officer. For those Departments that do not, the finances are either managed by the Department Head him/her self or by another employee in conjunction with the Department Head. These Departments are also able to call on the Management Accounts team within Central Finance for help or assistance. Departments are responsible for monitoring and controlling their Income and Expenditure

Central Finance
Central Finance are responsible for the following functions: Accounting Section this section is responsible for preparing the annual accounts, financial forecasts and controlling the University cashflow position. Within the Accounting Section sits the Management Accounts team. They are responsible for reviewing and preparing the budgets for the Central Support and Administration Departments in association with the Department themselves. In

25

addition this team are responsible for preparing the management accounts for the Trading areas:- Residences, Conferences, Catering & UniSport Cashiers Office This Department deals with all Cash Office counter transactions such as payment of tuition/accommodation fees. They issue parking permits, travel cards, controlled stationery. In addition they issue student loan cheques and bursary payments Procurement & Payments The Departments aim is to create a professional procurement environment that supports the University as customers, provides excellence, improves the buyer/supplier relationship and demonstrates best value for money. Payroll & Pensions The payroll section is responsible for ensuring that all employees are correctly paid and ensuring that the relevant amounts are paid over to the Inland Revenue. Accounts Receivable This section is responsible for checking and posting sales invoices raised by Schools & Departments. Accounts receivable are also responsible for chasing debtors Finance System Support Team This team is responsible for implementing and developing the new Finance System - Agresso. Vat Officer The Vat Officer is responsible for ensuring that the University correctly accounts for Value Added Tax. He is also responsible for preparing the Universitys VAT return and calculating was is due to be paid over to Her Majestys Customs & Excise.

26

Budgetary Planning
Central Support & Administration Services Planning (CSAS)
The planning round for the Central Support and Administration in an annual cycle, normally beginning in September with a workshop where the Schools are invited to attend to make suggestions as to where they believe the priorities are for CSAS departments. Excel workbooks are then distributed to CSAS departments at the beginning of October to enable the plans to be drawn up. The completed plans are then returned in late November. The outcomes from the CSAS planning round are the agreed departmental budgets for year one and plans for years two to four, this provides the Infrastructure cost, which is then fed into the Academic Planning as it forms the basis of the Infrastructure Charge to the Schools.

Academic Planning
The Academic Planning round is also an annual cycle that starts in February. Although the CSAS workshop will be held in October to which the Schools are invited to make suggestions as to what they believe the priorities should be for the CSAS departments. Like the Schools a planning workbooks is completed for each cost centre within a School. Schools plan for the next financial year and the following three years, the figures for the next financial year once approved are then uploaded into the Finance system and will form the basis of the budgets shown on the P12 reports.

27

Monitoring Your Budget

A budget is not an allocation of cash, but an expression of authority to commit the University up to a net expenditure ceiling in pursuit of an approved plan. Such authority to commit the University is not irrevocable. Budget holders should control their net expenditure so that it matches their budget for the year. An overspend should be avoided because it means that expenditure exceeds available resources. An underspend is not necessarily desirable because it represents resources wasted and plans unfulfilled. To ensure that plans are fulfilled and that the allocated resources are used to optimum effect, budget holders must exercise close Financial Control over their areas of responsibility. This is facilitated by careful Monitoring of the financial position. Subsequent sections explain how the preparation of a financial forecast for the year, the construction of a budget profile, the incorporation of that budget profile into the University's management reports and the budget holder's close and regular scrutiny of the monthly management reports are all essential tools in the required financial control and monitoring. Where a department contains a multiplicity of cost centres and activity codes, financial monitoring is best achieved when the Head of Department/School Manager allocates budgets to those cost centres and activity codes to reflect agreed plans. Those to whom responsibility has been delegated for running particular areas of activity or specific projects should have access to Management Reports for their areas of responsibility and such reports should include reference to the Budget as well as to the actual expenditure. For this reason Heads of Departments/School Managers should, where appropriate, distribute their Budgets down to the level at which projects or activities are being reported. A budget should be managed in conjunction with the financial regulations web link. The main tool for monitoring ones budget is the P12 report produced by Central Finance. (See P12 section for further detail)

28

Chart of Accounts
The current coding structure has five parts to it. The first is the company code, this is a two character numeric code. 01 is mostly used as this denotes the University, companies such as Surrey University Press (Bookshop) have their own company code. The second part of the code is the costcentre this is a 5 character numeric code. A cost centre identifies where the charge should be made, i.e. the department or unit to which income or expenditure should be charged and which area has spent or earned the money. The third aspect is the activity code this is a six character code which is a mix of letters and numbers. Activity codes provide the ability to split income/expenditure down to project level. We then have a fourth aspect which is a four digit natural account code. This denotes the what is being coded, i.e. income or expenditure and the nature of the income (e.g. fees) or what the money has been spent on (e.g. salaries, rent, rates etc.). The final aspect of the code is that last two character alpha code called the funding source, this should be used to denote where the money has come from i.e. HEFCE or EU Funding. Example 01.31201.RC1234.3408.AE Requests for new cost centres and activity codes should be sent to Sarah Eade in the Central Finance Department. In order to raise a transaction against a cost centre you must be an authorised signatory on that cost centre. To update the list of authorised signatories please contact Sarah Postles in the Central Finance Department.

29

Frequently Asked Questions on Coding under construction

Internal Sales Sales within Schools or other Departments should be completed via an Internal Requisition (IR) and should be coded to the Funding Source AE as these transactions are eliminated on consolidation. Accounting for Conferences When UniS organises a conference on behalf of another organisation, only UniS's agreed commission/profit share should be included in UniS's accounts, not the gross income and expenditure of the conference. This is important not only for the year end accounts, but also for the monthly P12s. You should therefore ensure that the gross income and expenditure relating to non-UniS conferences is removed at month end. Once the conference accounts are finalised, the net surplus should be shown as income. Until that time, the difference between total income and total expenditure should be coded to the Balance Sheet using the accrued or deferred income codes. There is no need to debit and credit each individual income and expense code, as long as the total for the P12 line is nil. Internal Requisitions

30

Reports Available for Budget Monitoring

P12 Reports
The P12 series of reports are the Universitys main financial monitoring tool. The P12 report is called such because it used to be page 12 of a monthly reporting pack. The reports show on-screen monthly snapshots of Income & Expenditure compared to Plan (Budget). Available for Schools & Administration Departments at four different organisational levels:P12 A All Schools, / All School-Level Admin Grouping P12 S - One per School / School-Level Admin Grouping P12 D - One per Department (Or AOU) P12 CC - One per Cost Centre. P12 M One per School, with a sheet per Cost Centre. Users can drill-down within a P12 line to see further levels of detail within the General Ledger, grouped by Activity codes and Natural Account codes. The plan figures showing in the P12 reports come from those figures that are approved during the Planning rounds. HEFCE income lines. Actuals showing on the P12 are set to equal the Plan figure, there is no actual transaction in the financial ledger. Hence there will be no variances showing on this line

HEFCE Teaching Allocation line 012

The total HEFCE teaching allocation is determined by HEFCE and is shared between the Schools via the Resource Allocation Methodology.

HEFCE Research Allocation line 017

The total HEFCE Research allocation like the teaching grant is shared between the Schools via the Resource Allocation Methodology. The total Research grant for the University is also determined again by HEFCE and is based on the Universitys ratings in the most recent Research Assessment exercise.

HEFCE Other Grants line 042

At present this budget represents the School or Departments share of the HEFCE Human Resources grant. All future Non Teaching or Research Grants will be apportioned here.

31

Tuition Fee Income (H/EU) & (O/S) line 052 & line 54
Schools plan for their tuition fee income in terms of number of students and type of students i.e. whether they are home, overseas, full-time or part-time. The actual shows the portion of the invoices raised that applies to the year to date period. Invoices are profiled equally across the financial year if set up by Registry within Oracle Financials. Invoices not created by Registry are raised by the School, so Schools need to bear this in mind when profiling the budget for tuition fee income. These P12 lines picks up the following natural account codes 1100 to 1117 plus 1120.

NHS Contracts line 062

This line represents Income received from the National Health Service the primary recipients of which are EIHMS and PGMS, this income is picked up by the P12 on the basis of the Funding Source used i.e. FH - NHS

Research Grants & Contracts Activity line 120 & line 290
All transactions on activity codes beginning with R will appear on either the RG&C Income or RG&C Expenditure lines of the P12, thus, Research Staff costs do not appear on Line 155 Establishment Staffing instead they will appear on line 290 Research Grants and Contract Costs. Income is calculated for every project at the end of each month. It is created from Expenditure on the ledger plus Overheads and Direct Cost Recoveries (DCRs) apportioned on the same basis as Overhead and DCR information from the project budget, which is contained in the Research Project Management System (RPMS). Calculated income accruals are added to invoiced values in order to display the calculated income (Income Earned). The basis of this income calculation depends on the type of research contract. For most contracts it is based upon expenditure plus a defined level of contribution. RG&C Income is calculated in this way for Management Information monitoring purposes, as the actual amount invoiced to sponsors (i.e the actual income appearing on the ledger), is not very meaningful, and it is more accurate to record the Income Earned, i.e. the amount that would have been invoiced had it been carried out monthly and based on expenditure.

Other Services Rendered Activity line 130 & line 310

This relates to all the Income & Costs associated with the provision of services to external bodies, including the supply of non-teaching goods and consultancy. Such activities should be assigned an activity code beginning with a Q. Income from Other Services Rendered should be shown to the extent of the completion of the contract or service concerned. This is generally equivalent to the sum of the relevant expenditure incurred during the year and any related contributions towards overhead costs. Again staff costs coded to an OSR activity will be shown on the Other Services Rendered Costs line rather than Establishment Staffing

32

Short Course Activity line 140 & line 330

This relates to the Income and Costs associated with the provision of short teaching courses i.e. those that are non credit-bearing. Such activities should be assigned an activity code beginning with a S. Again like with OSR and Research the staff costs associated with Short Courses will appear under the Short Course Costs line on the P12 report and not the Establishment Staffing line.

Bench Fees Earned & Support Grants line 060

Equal to spend on Bench Fee and Support Grant Activity Codes (Normally E*****) where there are sufficient funds.

Service Teaching Activity line 080

Under the resource allocation methodology, teaching resource (Composition Fees and, if appropriate, HEFCE Teaching Grant) are allocated to the Cost Centre which owns the course upon which students are registered. From this income, the Cost Centre must pay the total costs of teaching the course. Some of this teaching will be provided by staff employed in the Cost Centre but other teaching may be provided by staff in other Cost Centres service teaching. The Cost Centres receiving and providing the teaching are responsible for agreeing a student FTE and financial value of the service teaching being provided and for ensuring that the financial transfer is made. The P12 has two lines for Service Teaching one for Income and one for Expenditure. This activity relates to the use Schools make of each other in terms of teaching. For example the School of Engineering may use lecturers from the School of Management to teach on their Mechanical Engineering with Business Management Degree. The School receiving the service i.e. Engineering have to pay Management based on the number of students attending the course. The School of Management will receive the income from Engineering but on top of that they will receive a premium of 25% for providing the service. Conversely the School receiving the service will also receive a rebate of 25%. Service Teaching only happens between Schools, it does not take place within Schools.

Endowment & Deferred Grant Income line 070

Some sources of Income are treated as Deferred grants this means that the Income is only released to the Income & Expenditure account as the expenditure is incurred. The remaining Income will sit on the Balance Sheet as a Creditor and can then be carried forward from one financial year to another without the need for an accrual.

33

Grants or donations received for the purpose of funding the acquisition or construction of land or buildings are also treated as deferred capital grants. The receipts are treated as long term funding and not income. These deferred grants are released to income over the expected useful life of the buildings in line with the depreciation policy. Specific Endowments are those endowments where the use of the capital and income, or only the income, is for a specific purpose or activity so designated by the donor and which may be used only for that purpose or activity. Each month prior to month end Central Finance run a download on all the activity code where the second character is an N. A journal is then processed to release Income to the I&E account to match the expenditure incurred. The journal also does a quick check to ensure that the amount of income received originally from the donor has not been exceeded. The associated expenditure will appear on the relevant line of the P12 i.e. Staff Costs or NSR. Therefore the profiling for this budget should match the profile of the associated expenditure.

External Studentship Activity line 075 & line 185

Schools receive money from external bodies to fund student scholarships, in these situations the university simply acts as a middle man because as the School receives the money it then passes it over to the student, therefore the sum of the income received should match the sum of the expenditure paid

34

Other Direct Income line 100

All other income received by Schools/Departments not covered by one of the other Income headings will appear under this P12 line

Support from All Central Sources line 091

The Strategic Fund is funded partly through income received from the Foundation Fund group and partly through the Income received from Schools via what was the Recycled Academic Funds charge now called the Strategic Funds Charge. Applications to the Strategic Fund can be made during the Planning round or in-year via ARE 1s or SRE 1s to the Resource Management Group. Income from this source is generally transferred on the basis of expenditure incurred. This is why it is important to create a separate activity code for this type of expenditure and then let Finance know so that they can download the level of expenditure each month and then transfer the relevant amount of income

Correct re Income At Risk line 400

During the planning rounds Schools are asked to estimate how much of their income they believe is at risk, this is then entered as an Income at Risk budget. In order to ensure that the overall bottom line remains unchanged an expenditure line is reduced by the same amount. During the year if it is thought that the School is going to meet its income target then this is removed and the hold back on expenditure is released

Salary Costs Establishment line 155

The budgets for this line of the P12 is driven by the information held on the EMMA system. Each month Finance download the budget information from the EMMA system and upload it into Oracle Financials. Therefore highlighting the importance of keeping the information stored on EMMA up-to-date. Inaccurate data can cause a distortion of the Balance of Resource Allowance which is monitored by the centre. Please see section on EMMA for more information. Actual amounts are in the range 2000 to 2498.

Staff Costs Non Contracted line 160

Expenditure on this line primarily relates to staffing costs for individuals who do not have a contract of employment with the University. Any expenditure on the natural account range 2500-2999 will be charged to this P12 line. Primarily this should include staff employed through Kellys and some types of Associate staff. Consultants and similar should not be charged to a natural account code beginning 25%%, but to a code such as 3214.

35

Non Staff Recurrent line 170

The non-staff line of the P12 relates to the routine running costs of the cost centre e.g. Telephones; photocopying etc. It includes all expenditure made by a School or Department that is not picked up on any of the other P12 lines.

Equipment Expenditure line 230

This line of the P12 represents all Equipment Purchases under 10,000 i.e. those items where the natural account code begins with a 31 excluding Equipment Maintenance, Equipment Hire, Computer Software, Computer Consumables, Computer Maintenance & Computer Software Maintenance all of which appear on the Non Staff Recurrent line. Any piece of equipment over 10k is capitalised in accordance with the University's Accounting policy and then depreciated, hence the expenditure will not appear on this line.

Depreciation line 430

Depreciation is charged on items purchased that conform to our Fixed Asset policy, generally the item has to be tangible and has to exceed 10,000 in value. Depending on the recommended useful life of that asset, the P&L (cost centre report) is then charged a portion of that assets cost each year for a number of years. For example if a car was purchased for 15,000, this item would be capitalised which means that the cost of it will sit on the Balance Sheet as an Asset and then each year a portion will be charged to the P&L account as depreciation. In this case the University deems Motor Vehicles to have a useful life of 5 years, so 3,000 will be charged to the P&L each year for five years. Any items that were bought and capitalised prior to the implementation of Oracle Financials were treated differently in that the School or Department concerned were charged the full cost i.e. 15k in the year of purchase. The centre then took that 15k into a reserve behind the scenes and made the correct accounting adjustments to ensure that we were conforming to the accounting laws.

Inventory
Any assets over 500 need to be recorded on the University inventory primarily for Insurance purposes. For further information please contact Lisa Daly in the Central Finance Department

Internal Studentships line 175

36

Expenditure relating to bursaries/tuition fees paid to students by the School/Departments itself should appear on this line

Contribution to School Costs line 245

This line is meant to reflect the charge of the School admin unit which is not income generating across all the various costcentres. The idea being at the School level this charge will net out to zero.

Infrastructure Charge line 250

Actuals showing on the P12 are set to equal the Plan figure. The infrastructure charge is the mechanism by which the School pay for the cost of the Central Support and Administration Services (CSAS) i.e. Finance, Human Resources, Registry. This is not to say that the total Infrastructure charge equates to the total costs of the Administration of the University because certain expenditure within the CSAS areas are not a fair charge to the Schools.

Strategic Funds Charge line 390

Actuals showing on the P12 are set to equal the Plan figure. This charge is paid for by the Schools and goes towards providing a fund that Schools/Departments can bid from, see Support from Strategic Fund for more details

Capital Spend Allowance line 420

This is simply a memorandum item that shows the value of all the fixed assets over 10,000 that a School/Department has purchased in the year.

RG & C memo box : This shows the RG&C contribution in monetary and percentage terms for the year to date actual and full year plan EMMA Balance box : This shows the EMMA Balance of Resource (BRA). A
positive number is good as it shows that the value of all the posts is less than the Planned amount. Conversely a negative amounts shows that there are too many posts, albeit that some of these posts may be vacant. However if these posts were filled for the whole of the year then the School/Department will be overspent by the value of the BRA. Variances showing on P12 reports must be explained to Central Finance and Resource Management Group if appropriate. Central Service Departments are expected to review their P12s on a monthly basis and send an explanation of the variances to the Central Finance Department who then consolidate the review and report to the Resource Management Group.

37

A Consolidated monthly monitoring report is prepared by Colin Shepherd and presented to Executive Board & Finance committee.

38

Variances & Profiling

Variances will arise on the P12 report if the year to date plan or budget doesn't match the year to date actual income or expenditure. The P12 series of reports warn when spend lines are going over budget: The triangle symbol slightly overspent; Square (amber) significantly overspent; Circle (red) more than full year plan Schools and Departments once the budgets have been approved should split them down to activity and natural account code if applicable. They should then provide a profile for that budget which will be uploaded into the Finance System. Some P12 lines lend themselves to equal twelfths, these are: HEFCE Teaching Allocation HEFCE Research Allocation HEFCE Other Grants Income at Risk Establishment Staffing Budgets these automatically come from EMMA Infrastructure Charge Strategic Funds Charge

Schools/Departments should assign an appropriate budget profile other than twelfths for the remaining lines: Tuition Fee Income NHS Contracts Research Grants & Contract Income Research Grants & Contract Expenditure Other Services Rendered Income Other Services Rendered Expenditure Short Course Income Short Course Expenditure Bench Fees Earned & Support Grants Service Teaching Provided Income Service Teaching Received Costs Endowment & Deferred Grant Income Other Direct Income Support from the Strategic Fund Staff Costs Non Contracted Non Staff Recurrent

39

Equipment Expenditure Depreciation Internal Studentship Expenditure Contribution to School Costs Capital Spend Allowance

Why Profiling is important

The purpose of a budget profile is to show the expected pattern of income and expenditure for a particular cost centre, activity or account code over a period of time so that it can be compared with the actual pattern over the same time period. A properly profiled budget is an important aid to proper financial control since it will highlight unplanned events as soon as they occur, allowing remedial action to be taken. The profile is essentially the forecast for the year constructed on a month-by-month basis. Furthermore, the profiles for each individual budget will be incorporated into the reports at a more senior level in the hierarchy, making the summary management information more meaningful. If profiling were not carried out, exceptions would not be highlighted until the year end when it is too late to act, and monitoring during the financial year would be less effective. A budget profile may be thought of as a series of milestones towards a selected destination. It is not necessary, each month, to have reached the milestone precisely, so long as it can be demonstrated that the destination remains the same and that it will be reached within the agreed time scale. A budget profile is constructed as a numerical route plan representing the Head of Department's best estimate of the monthly income and expenditure expected to arise. It is therefore apparent that to be fully effective, profiles need to be carefully considered as soon as the budget is decided. Departments with no expectation of generating any income should still construct a profile. In such cases the profile will record the monthly pattern in which the departmental budget is likely to be spent. Assistance in preparing budget profiles may be obtained from the Management Accounting section of the Finance Department. It should be emphasised, however, that budget holders themselves are responsible for their budget profiles because in-depth knowledge of the Department's plans is the prerequisite for the construction of an accurate budget profile. In certain cases, it is possible to adopt a default profile, but, before doing so, budget holders must be fully satisfied as to its appropriateness, as it will be the budget holder who must at regular intervals explain significant variances from that profile.

40

Profiles generally should be set at the beginning of the year, they should not be changed in year unless it is clear that the original profile was inaccurate. Profiles should not therefore be adjusted to offset a variance resulting from delays in activity, as such delays need to be visible and explained.

41

Why Accruals are important

Monthly accruals should be done to ensure that Income and Expenditure is matched in line with one of the fundamental accounting policies Matching. This is especially important when the income or expenditure straddles more than one financial year. Schools/Departments should raise these accruals on the general ledger. On the balance sheet side the Schools/Departments should use their own costcentre followed by 6 naughts for the activity code and then the appropriate balance sheet account code i.e. 7453 Accrued Income. Each month these journals should be reversed and re-entered if appropriate. At year end the accruals should be reversed into July and actioned if still appropriate using one of the year-end accrual forms.

When Accruals Should Be Actioned In Favour Of Profiling & Vice Versa

Accruals should always be done if any of the activity showing on the P12 report relates to the next financial year. Monthly accruals however should be done as a matter of course in the following areas:-

OSR & Short Courses

Monthly accruals rather than profiling should be used for OSR and Short Courses. If a School or Department has received money in advance of the work being carried out then all of that Income should be deferred by way of an accrual. If some of the work has been carried out but all the income has been received then the P12 should only show enough Income to match the expenditure plus a % of the contribution level. The overriding premise for both OSR and Short Courses should be that the Income reflected on the P12s should be matched with the expenditure incurred. The profile should not be adjusted in-year to take account of income being received at a different time to the expenditure being incurred.

Other Direct Income

The classification for Conferences has recently changed from Short Courses to Other Direct Income as per the HESA classification. For Conferences where the University receives non of the surplus and are simply acting as an agent then this activity should not be charged to the Income & Expenditure account, it should therefore remain as a Creditor on the Balance Sheet. For advice on coding for this please refer to Colin Shepherd within the Finance Department.

42

If the University does get a share of the surplus then the whole of the activity should flow through the Universitys accounts, but monthly accruals should be raised to match Income and Expenditure with only the surplus falling to the bottom line. In no instances should Schools or Departments simply accrue to budget. When there is uncertainty about how to address a variance the following principle should be borne in mind. A variances should show if the variance is true i.e. it is know that Tuition Fee income will be behind plan at year-end or that something is not being done i.e. invoicing for work hasnt been completed or project work is behind plan.

School Surplus/Deficit
Year end surpluses are credited to the Schools reserves, year end deficits are deducted from the Schools reserves. In the following years any positive reserves can only be spent if that expenditure is included within the school plan

Department Surplus/Deficits
Unlike the Schools the deficits incurred by Departments are debited to the Central Admin reserve. Some Departments that do make surpluses are allowed to keep these in their own reserves but this is at the discretion of the Director of Finance

43

Changes to Budgets In-Year

Schools must complete an SRE 1 (Schools) and submit this to RMG if they wish to increase or decrease their budgets relating to income or staff. If the change doesnt involve either of these P12 lines then the Schools must still submit an SRE 1 but this will go to Sarah Heighes who will change the budget in the Finance system and then on to Oliver Adams who will change the Schools planning workbook. Departments must complete an ARE 1 form if they wish to vire money between any P12 line. However both Schools and Departments must complete an SRE 1 or ARE 1 if they wish to change their overall Surplus/Deficit. In the case of the Schools the SRE 1s should go to RMG for authorisation , for the Admin areas the ARE 1s should go to the EMMA group first and then on to RMG if the effect on the bottom line exceeds 5k

44

Reserve Accounting
Prior to the introduction of statements of Recommended Accounting Practice (SORPS) Universities used reserve accounting with a number of under spends capable of being carried forward into the next for financial year if unspent at the previous year-end. This led to some serious overspends in a small number of Universities given that these did not have adequate planning and budgeting regimes in place to properly account for the shift in resources between financial years. Current Regime The University has currently in place an incentive regime which allows part of the unspent balances within Schools in any one year to be partly carried forward. The basis of this scheme is that: Schools in surplus are allowed to c/f spend up to 40% of their unspent budgets with 40% going into the Strategic Fund (SF) and the remaining 20% falling into the Schools reserves Schools in deficit are allowed to c/f spend up to 20% of their unspent budgets with 20% going into the SF and the balance of 60% being used to reduce what are likely to be their negative reserves.

Although this scheme has been reasonably successful it still enables a degree of perverse incentivisation to remain in the system. Faced with the possibility of receiving a benefit of 40% or 20% rather than 100% schools will still be incentivised to spend at the financial year end possibly on inappropriate spend such as unnecessary equipment purchases although these may end up being capitalised. Proposed Regime RMG has discussed the need to remove these perverse incentives on a number of occasions and subject to overall affordability in any one year has agreed the following based on the results from the current financial year 2004/05, therefore for expenditure in 2005/06. All schools would be allowed to automatically c/f up to 100k of an under spend from the previous year provided that the School is financially on track for the current year Under spends in the range 100k to 500k would need justified proposals to Planning Committee setting out what the school intends to spend and how this plan ties in with the academic strategy for the school. It is envisaged that these discussions would take place at the RMG September review meetings.

45

It might be necessary to have a fast track regime to approve some of the spend prior the previous years actuals being confirmed. The balance of spend would then be confirmed when the actuals are known in mid November. The regime could apply to schools that were in surplus and in deficit. Some carry forwards for those Schools which have negative reserve balances may be moderated. This regime does not apply to the support services where any requests for c/f of under spends will remain as now and will be subject to EMMA group and RMG approval.

Other Management Information Systems

As well as the P12 suite of reports the University has a number of other Management Information Systems available

EMMA Establishment Manpower Management System

The EMMA system is an in-house system that manages all established posts within the University. Every individual who has a contract of employment with the University should have a post within the EMMA system. Any changes made to the contract of that individual require a similar change to the Post within the EMMA system. The intention being that the EMMA system can be used as a means to forecast the Universitys staffing budget at cost centre level. In order to ensure that the sum of the post budgets within EMMA agree to the Staffing budget that a costcentre has approval to spend, the Balance of Resource Allowance is created. This allowance can be either positive or negative, although negative balances are closely monitored by the centre, as this can mean that if all the posts within the system are recruited to then the costcentre will be overspent by the value of that negative allowance at year end. For more information on the EMMA system please go to the EMMA User Guide web link

RPMS under construction Peoplesoft under construction

46

Glossary
Assumed Resource HEFCE grant for teaching plus assumed income from tuition fees Block Grant The funding provided by HEFCE to an institution for teaching, research & related activities. This does not include special funding FEC Full Economic Costing FTE Full-time equivalent. Full-time students count as 1 FTE. Students on their sandwich course count as 0.5FTE HEFCE Higher Education Funding Council for England HEI Higher Education Institution Out-turn The actual income and expenditure for a particular year of account QR Funding Quality-related research funding. It is allocated to research quality and the amount of research carried out Research Assessment Exercise (RAE) An exercise carried out periodically to determine the quality of research in UK HEIs. The results are used by the higher education funding bodies for England, Scotland, Wales & Northern Ireland to allocate QR funding. The next one is in 2008 Research Councils There are six Research Councils. They are government-funded through the Office of Science & Technology to support research in their fields of interest, in both their own establishments and in higher education institutions. Special Initiatives Funds for specific activities for a limited period not linked to formula funding allocations Standard Resource A notional calculation of what an institution would get if teaching grant was calculated each year. It is proportional to each institutions FTEs weighted both by price group & by any student and institutional premiums which may apply Tuition Fees Fees paid to a university or college for a student to attend a course